A group of southern African leaders recently visited London to finalize a post-Brexit trade deal with the UK. The new deal is focused on maintaining status quo ante to ensure continued exports to Britain from Southern African Customs Union (SACU) states and Mozambique even after the UK leaves the EU this month.
The deal was signed by the UK and six southern African countries – Mozambique, South Africa, Botswana, Lesotho, Namibia and Eswatini – in Botswana’s capital Gaborone on September 10 and later ratified in London on October 10.
“Continuity and certainty” in the trading relationship between the UK, Mozambique and SACU countries after the UK exits the EU on October 31 is the main feature of the agreement. The EU’s existing tradedeal with SACU member states, guarantees EU market access without any duties or quotas for Botswana, Lesotho, Mozambique, Namibia and Eswatini. This arrangement will allow businesses to keep trading after Brexit without any additional barriers. The volume of trade between the UK and the SACU nations in 2018 was pegged at £9.7 million in 2018. That included electronics and food and beverage.
Southern African countries and Mozambique (SACU plus M) nations are an important market for UK exports of machinery and mechanical appliances, which was worth £409 million in 2018- motor vehicles worth £335 million, and beverages including whisky worth £136 million.
Botswana’s Minister of Investment, Trade and Industry Bogolo Kenewendo led the negotiation team of African countries, which clinched the deal. The UK has now signed 16 trade continuity agreements, accounting for £100bn of its external trade, as a prelude to its departure from the EU. The UK signed a trade and political continuity agreement with Tunisia and the trade volume involved was valued at £378 million in 2018, an increase of 3% on the previous year. The agreement is subject to domestic procedures in both the UK and Tunisia.
Similar agreements were signed with other African countries like Madagascar, Seychelles, Mauritius and Zimbabwe, known as the UK-Eastern and Southern African Economic Partnership Agreement (ESA-UK). The UK trade to this region was valued at £1.5 billion in 2017. Based on current trade flows, meat and fish exporters in Eastern and Southern Africa could save £30 million a year in tariff charges that could apply if the agreement wasn’t in place, while clothing exporters could save more than £10m and sugar exporters could save around £8m.
