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Minister of Trade and Industry Rob Davies
Minister of Trade and Industry Rob Davies

Trade and Industry Minister Rob Davies to seek a post-Brexit preferential trade pact

ECONOMIC NEWS - Jan 24th 2017, 10:20

Trade and Industry Minister Rob Davies will seek a commitment from his British counterpart, Liam Fox, that the UK is willing to enter into post-Brexit trade negotiations with SA as soon as possible. 

Davies wants a trade deal to be concluded by the time Britain leaves the EU. He is expected to meet Fox in the UK on Tuesday.

Such an outcome of the meeting between the two ministers would be extremely good news, Trade Law Centre of Southern Africa (Tralac) executive director Trudi Hartzenberg said.

It was essential to avoid a situation "where the UK leaves the EU and we have no preferential trade agreement in place", Hartzenberg said.

Davies said in an interview from London ahead of his meeting with Fox that SA would request that the economic partnership agreement which the Southern African Customs Union (Sacu) and Mozambique have signed with the EU should be the template for a post-Brexit trade deal with the UK.

The agreement took effect from October 2016.

A key issue, however, would be to negotiate the size of the quotas for agricultural products such as wine, sugar, and fruit with the UK.

These could be more generous than EU quotas as SA does not compete with Britain on these products.

"In our case, the objective would be to roll over the economic partnership agreement while at the same time addressing the quotas," Davies noted.

He would try to reach an understanding with Fox about when the negotiations could begin with the aim of ensuring a smooth transition in the framework for bilateral trade when the UK left the EU, Davies said. SA had been given "every indication" that its trade deal with Britain would be at least as good as its economic partnership agreement with the EU, he said. He did not believe that there would be sensitivities or setbacks on Britain’s part, as most of the sensitivities in Europe came from countries that competed with South African products, such as Spain over oranges.

Other members of Sacu and Mozambique would probably simply roll over the terms and conditions of the economic partnership agreement with the EU as, unlike SA, they received duty-free and quota-free market access for qualifying products.

A trade agreement in services, investment, and other new-generation issues was something to be discussed in the longer term, Davies said.

SA had to ensure it received at least as good a trade deal from the UK as it has with the EU.

British Prime Minister Theresa May has indicated that the UK would adopt EU law on standards, technical regulations and other matters subject to changes by the British Parliament. Hartzenberg said SA could raise any issues it had with these technical regulations during the trade negotiations with the UK.

According to the Department of Trade and Industry trade rankings up to August 2016, the UK was ranked SA’s seventh-largest export partner in the world and was ranked second-largest export partner in the EU region after Germany. According to Tralac figures SA exported goods worth $3bn to the UK in 2015, 4.4% of its total exports with metal products such as platinum, motor vehicles, grapes, wine and citrus fruit high on the list.
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