It can be difficult to cut through the noise and understand what Brexit really means for South Africa. The implications, depending on the outcome, will be far-reaching, but it is clear, the export of goods will be one of the areas most tangibly affected.
Top competitors for these products include Spain, Chile and France. So what does Brexit mean for South African exports? Well, there are a number of variables. These include, first, what happens between the UK and EU, and second, what happens between the UK and South Africa. Whether or not the UK will ultimately leave the EU customs union appears to be up in the air after the events of the week past. The UK may well still opt for a “soft Brexit”, in other words, to remain in the EU customs union after Brexit. This is the option favoured by opposition leader Jeremy Corbyn.
If there is a no-deal Brexit in April, it is unlikely that the roll-over agreement will be in place, because even if an agreement is reached, the South African Parliament will be unable to ratify it as Parliament has been dissolved in anticipation of the elections. Minister Rob Davies has however indicated that it could be possible for the countries to enter an informal agreement of sorts in the interim, should an agreement be reached on the outstanding issues.
A few weeks ago the UK published their temporary customs duties, which will be applied for one year on an MFN basis in case of a no-deal Brexit. These are thus the tariffs that South African goods will face upon entry into the UK in case there is a no-deal Brexit, and if we do not have a roll-over agreement in place at the time.
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