A Post Brexit Trade Agreement Will Bring Certainty and Continuity

The Minister of Trade and Industry, Mr Ebrahim Patel, says the conclusion of a post-Brexit trade agreement will ensure certainty and continuity in the trade and investment relations between South Africa, Botswana, Lesotho, Namibia, Eswatini and Mozambique (SACUM) and the United Kingdom (UK). Minister Patel was briefing Parliament on Brexit and its impact on South Africa’s economy.  The aim of the trade agreement is to safeguard a seamless and undisrupted trade between SACUM and the UK post Brexit.

“Current trade between UK and SA is governed by the SADC-EU Economic Partnership Agreement.  Once completion of the withdrawal process from the EU (“Brexit”), the UK will not be part of the EPA. To avoid trade disruption, SACU+Mozambique and UK have
decided to roll-over the EPA into a standalone trade agreement with the UK. The EPA provides for the tariff arrangements applicable to trade between us any of the 28 EU member states. A number of products are duty free and there are detailed trade rules set out in the EPA to make trade easier between ourselves,” said Patel.

Minister Patel noted the importance of the trade with the United Kingdom

“The United Kingdom is one of South Africa’s most important trading relationships. In 2018, bilateral trade between our countries was worth R142 billion. The United Kingdom is our fourth largest market for exports, behind only China, Germany and the United States; and it is the seventh largest supplier of imported goods. It is estimated that our exports to the United Kingdom supports 56 500 direct jobs and a further 117 500 indirect jobs, bringing the total number of jobs supported by exports to the UK to nearly 175 000”, indicated the Minister.

Minister Patel told Parliament that the current EPA that will be replicated, is benefitting the country at large.

“Our exports to the UK support jobs in platinum mines in North West and Limpopo. It supports our citrus industries in Eastern Cape, Western Cape, Limpopo and Mpumalanga. It supports our wine, grape, apple and berry industries. It supports the automotive industries in Eastern Cape, KwaZulu-Natal and Gauteng. It supports the beneficiation of platinum, through the sale of about R1,4 billion worth of catalytic converters used in British-assembled cars.  Across the country, trade with the UK supports industry and jobs”,

According to Patel, the new Economic Partnership Agreement will support regional value chains.

“The UK asked for the right of component-products made in the EU, and used in final British products, to qualify for preferential access to South Africa. We agreed, subject to the same facility being available for SA exports to Britain that uses components any of the EU countries as well as from any of the other SACUM countries. This is important for example in the auto-sector given that the supply-chains have become global and SA car-makers use components manufactured elsewhere; and in food products.”

The new EPA will come into effect in the event that the UK leaves the EU on 31 October 2019, and will govern bilateral trade between the six SACUM countries on the one side, the UK on the other.

Minister Patel addressing Parliament

Sidwell Medupe-Departmental Spokesperson
Tel: (012) 394 1650
Mobile: 079 492 1774
E-mail: MSMedupe@thedti.gov.za
Issued by: The Department of Trade and Industry
Follow us on Twitter: @the_dti

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