Brexit and the customs union: How does it affect South Africa?

Flickr / Tyler Merbler

UK post-Brexit won’t be more limiting than EU – Davies

There’s no reason to believe Britain will be more restrictive than the European Union (EU) when it comes to trade agreements with South Africa, said trade and industry minister Rob Davies.

Brexit and the customs union: How does it affect South Africa?

Flickr / Tyler Merbler

Briefing journalists on an incoming state visit by India and an outgoing visit to France on Monday, Davies was asked how the Britons’ recent vote to leave the European Union (dubbed Brexit) would affect trade relations with South Africa.

Davies said Britain has in the past been much less vocal about the standards of South African agricultural goods than the rest of the EU and he, therefore, doesn’t believe Brexit per se will have an impact on trade agreements with Britain.

“But the overall health of certain sectors of the British economy will be a determinant of the level of and desire to investment in South Africa,” Davies said.

India’s state visit

On Friday, India’s Prime Minister Narendra Modi will pay a visit to South Africa to discuss new trade initiatives. India is currently South Africa’s sixth largest trading partner with trade totalling close to R95bn in 2015.

India’s exports to South Africa increased from R29bn in 2011 to R54bn in 2015, while South Africa’s exports to the country climbed from R24bn in 2011 to R41bn. Although the trade surplus is currently in favour of India, the Department of Trade and Industry is working towards adding South Africa’s exports of specifically value-added products to India.

Outgoing visit to France

In addition to furthering trade relations with India, President Jacob Zuma and a ministerial and business delegation will pay an official visit to France on 11 and 12 July.

The main purpose of the visit is to attract French investment into South Africa’s agro-processing, automotive manufacturing, aircraft and electro-engineering sectors, among others.

As with India, the trade surplus is also currently in favour of France, but Davies is the view that South Africa could increase exports heeled tractors and vacuum cleaners.

Beitbridge border post

Asked about the status of quo of a demonstration at the Beitbridge border post between South Africa and Zimbabwe over the weekend, Davies said over the last few years the Zimbabwean authorities have been imposing restrictions on imports of South African goods. Over the weekend, a group of South African traders blockaded the border post following a clampdown on trade with South African businesses by the Zimbabwean authorities.

“There have been various surcharges on South African goods and we’ve been raising the matter bilaterally and though the Southern African Development Community (SADC).”

Davies said the South African government agreed to differentiate between products from South Africa that could create difficulty for Zimbabwe’s existing industries and those that compete with products from other countries.

“We won’t play hardball if it’s in competition with Zimbabwe, so we’ll condone fall back. But if it’s products that are competing with other third countries, we won’t agree, as there is an SADC trade protocol in place.”