Cape Town – The nature of new trade agreements between South Africa and the United Kingdom post-Brexit will hinge on the ease with which Britain can negotiate trade pacts with the Europe Union.
This is the view of Asmita Parshotam, a researcher at the South African Institute of International Affairs (Saiia) who specialises in economic diplomacy.
British Prime Minister Theresa May on Tuesday delivered her much anticipated speech about the UK’s approach and objectives when finally leaving the European Union.
READ: Pound climbs as Theresa May outlines how Brexit will happen
In her speech she said the final Brexit deal would be put to a vote by both Houses of the British Parliament before it takes effect. She also made it clear that the UK will not remain part of a single market, but would seek free trade agreements beyond EU countries.
Saiia’s Parshotam told Fin24 by phone that the UK may regard trade agreements with African countries as “easy wins” which they would want to cement while they’re negotiating new deals with EU countries separately.
New trade agreements with the UK, following their exit from the EU may be similar to the existing Economic Partnership Agreement (EPA) that South Africa and other South African Development Community (Sadc) member states signed in 2016.
The EPA that was signed last year, replaced the former Trade Development and Cooperation Agreement (TDCA) with the EU, which had less favourable terms.
READ: How Brexit can be a boost for SA trade
“The EPA has favourable conditions for both parties and it’s likely that the UK under May will follow a similar agreement that is equally favourable,” Parshotam said. “Such an agreement (with the UK) may be tweaked a bit to suit both parties.”
She cautions however that the benefits derived from new trade agreements with the UK will depend a lot on the UK’s economic growth during this period and post-Brexit.
Some statistics show that South Africa is one of the largest recipients of British foreign direct investment (FDI) within Africa. But if the UK doesn’t experience sufficient growth it will have a knock-on effect on our key industries that are exporting to the UK,” Parshotam said.
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