Brexit: Africa least of UK’s worries


Magreth Nunuhe

Windhoek – The United Kingdom (UK) will give priority to huge markets such as the US, Japan and China, leaving African markets at the bottom of the priority list should the UK, which has less than three months to exit the European Union (EU), says Namibian Ambassador to the EU, Dr Kaire Mbuende.

But, he said, when it comes Southern African countries, there can be a continuation of transitional measures even in the case of a Brexit no-deal because of their bilateral nature with the UK, which includes the Economic Partnership Agreement signed in 2016 between the EU and Southern African Development Community member states.

Just las year in August, the British Prime Minister Theresa May paid a visit to Southern African nations, where she sealed cooperation deals of around 10 billion Pound of free trade, if and when her country leaves the bloc.

May reportedly expressed the UK’s keenness to transfer any existing EU free trade agreement with six Southern African countries, namely Mozambique and SACU member states consisting of Botswana, Lesotho, Namibia, South Africa and eSwatini after the exit, which would allow those countries to have similar access to the UK's markets as is currently with EU markets.

However, Mbuende is of the view that the UK-EU relationship has been affected adversely by Brexit so much that when preparing for the worst scenario, lots of details need to be worked out, especially transitional measures that are detrimental to the movement of goods in European countries for products going through the UK, which can affect value chains.

“It will affect the flow of factors. We have a sizeable amount of exports – more than a billion Euro in exports – UK will significantly be affected,” he pointed out.

The Namibian Ambassador is convinced that it is still advantageous for the UK to remain within the EU, especially for developing nations as it has been contributing significantly to the European Development Fund.

“It is important that countries work together - integration is better than disintegration. A united EU market is better than fragmented regimes,” he said.

There has been growing anxiety over UK’s exit from the EU, with trading partners left in a state of anxiety over what will happen in terms of trade arrangements when Britain leaves the union.

British Prime Minister Theresa May, whose deal was rejected by an overwhelming 432 votes to 202 votes on Tuesday, survived a no-confidence vote the next day as British MPs are split over the impact of a no-deal Brexit.

May’s Brexit deal, also known as the Withdrawal Agreement aimed to work out a settlement, which would allow the UK to exit the EU seamlessly.

This includes a transition over a limited period of between March 29 to December 2020 to preserve stability with their trade partners during free trade negotiations and political and security agreements. 

During that period, the UK would have no negotiating rights in matters of the EU, but would still continue to contribute to the EU budget, while the transition period could also be extended.

The Britons voted on 23 June 2016 to leave the EU, following 2015 Conservative election victory, which activated a manifesto pledging to hold an in/out referendum on Britain's membership of the EU by the end of 2017.

Among advantages of the UK leaving the EU is immediate cost saving, as the country would no longer have to contribute to the EU budget and while Britain’s risks losing some of the negotiating power by leaving the EU, it would be free to establish its own trade agreements.

It is harder to determine whether the financial advantages of EU membership, such as free trade and inward investment outweigh the upfront costs, but on the other hand, Britain benefits from trade deals between the EU and other world powers as the EU is a single market in which no tariffs are imposed on imports and exports between member states.

The EU has now asked Britain to clarify its intents on Brexit after the outright defeat of May’s deal in Parliament.

By now experts are raising concerns about the nature and severity of the impact Brexit could have on different countries and industries, which would largely depend on the UK and Europe’s willingness to negotiate new terms on trade arrangements.

Mbuende said in the event of no-deal, the UK can actuate Article 50 and leave the EU, which can create a chaotic situation if there is no smooth transition.

He is of the opinion that willingness, further engagement and an extended Brexit deadline on the agreement could salvage the situation.

Some of the suppositions are that Britain’s exit could trigger other EU countries, such as Slovakia and the Netherlands to follow in the UK's footsteps, while Scotland may opt to leave the UK and retain its EU membership.

“It is a state in which everybody is unsure as the deadline of 29 March is approaching. The critical issue is around trade and single markets,” said Mbuende.

There is also the possibility of a second Brexit referendum, which would allow the public to vote on whether to accept May’s exit plan or choose to remain in the EU, but that possibility has been ruled out for now.

The majority of British Parliamentarians reject a move which would see the UK exiting the EU without a deal, as that would wreak havoc.

If there is no-deal agreement, Mbuende predicts, the UK would automatically fall back on World Trade Organization trade terms, which would have dire consequences.

Those terms could automatically apply automatically to UK trade with the EU and other countries with which the EU has free-trade deals, which could see an increase in tariffs, while the movement of people will be affected as they may need visas out of Britain.

The average EU tariff is about 2.6% for non-agricultural products, while under WTO rules goods could be taxed at 10% up to 35% every time they cross the UK-EU border. 

But the UK could also decide to lower tariffs or waive them to stimulate free trade.





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