SA-UK TRADE TIES
Rob Davies puts to rest Brexit fears
SA and the UK have ‘reached an understanding’, while the regional customs union has contacted the UK on trade terms
Brexit will not cause any interruption to SA’s trade and investment ties with the UK. The two countries having agreed to continue under a deal that parallels the new European Partnership Agreement (EPA) signed in 2016.
Trade and Industry Minister Rob Davies said late last week that SA and the UK had reached an understanding and the Southern African Customs Union had written to the UK government three weeks ago to confirm that the relationship with the UK would continue on the same favourable/preferential terms as the EPA. But he said his priority was regional integration on the continent, and SA was not yet looking to explore other opportunities for trade with the UK which would open up once it left the EU.
Though commentators have identified agricultural products, including fruit and wine, as areas where SA would have the potential to achieve even more favourable access to the UK market than it has to the EU single market, Davies indicated that the UK would have to build the international trade negotiating capacity to negotiate at least 50 other bilateral agreements and SA’s approach for now was "let’s just roll this over".
The UK is due to leave the EU in two years after Prime Minister Theresa May triggered Brexit at the end of March, and she has sought firm support for the process by calling a surprise June 8 general election.
Speaking at the British Chamber of Commerce in SA last week, Davies said he engaged with the UK government in January and agreed on overall parameters and a framework for ensuring there would be no interruption in trade and investment relations.
SA’s bilateral trade with the UK had recovered to the levels of 2008 over the past four years, Davies said, and SA ran a significant trade surplus with the UK, which is second only to Germany as SA’s largest trade partner in Europe.
There were more than 300 UK direct investment projects in SA worth R63.5bn in 2003-16, creating 4,857 jobs and 79 foreign direct investment projects from SA into the UK worth R1.87bn. Davies also emphasised the importance for SA of the trade in services and of the key role of London in investment transactions involving SA.