South Africa, along with five other countries in the Southern African region, has concluded a new trade agreement with the United Kingdom.
The new agreement will govern the bilateral trading relationship between countries, which include South Africa, Lesotho, Eswatini, Namibia, Botswana and Mozambique and the UK in the event that the UK leaves the European Union without an Agreement between the UK and the EU (or what is called a ‘no-deal Brexit’).
At the moment, trade between the UK and involved countries is facilitated under the SADC-EU Economic Partnership Agreement (EPA), which provides preferential market access with substantially all trade between the regions.
The UK is currently due to exit the European Union (EU) by October 31 (though recent developments in the British parliament may impact on this process and date).
A ‘no-deal Brexit’ will have a negative impact on the SA economy, jobs and exports.
Speaking after a briefing to the South African Cabinet Committee, the Minister of Trade & Industry, Ebrahim Patel said: ” I am pleased that we have concluded this agreement with the United Kingdom. An exit in which the UK leaves the EU without any agreement of succession would add significant additional costs to exporting and importing goods for both sets of countries, as higher tariff duties will need to be added to the cost of trading between the UK and South Africa. This would impact a range of industries, including our vehicles and auto components sectors, wine and food products. In some cases, this may lead to a loss of exports completely.”
The UK remains one of South Africa’s key trading partners. Last year , the UK was the fourth largest destination for South African exports, with bilateral trade between the two countries amounting to more than R140 billion.