A ministerial meeting between the trade ministers of the UK, Mozambique and members states of the Southern African Customs Union (Sacu) is scheduled for Friday to finalise a trade agreement for when the UK leaves the EU.
The agreement will replace the existing economic partnership agreement, which Sacu (SA, Botswana, Namibia, Lesotho and Eswatini) and Mozambique have with the EU. The new agreement tweaks and improves on the economic partnership agreement but there are a few outstanding matters that have to be negotiated before Friday’s meeting.
By Friday there is expected to be clarity on the way forward for the UK in relation to Brexit and whether it will apply for an extension of time in which to negotiate a deal with the EU. On Tuesday the British parliament rejected the agreement negotiated with the EU by UK prime minister Theresa May.
The outstanding issues to be negotiated relate to cumulation.
Department of trade and industry director-general Lionel October said in an interview on Wednesday, ahead of a briefing to the portfolio committee on trade and industry, that if the terms of the new agreement cannot be agreed before the UK leaves the EU on March 29, there is always the fallback position of agreeing to simply roll over the existing economic partnership agreement.
Rolling over the existing agreement will occur under a bridging agreement with the UK, which would apply for a period of six months while the replacement agreement is being finalised.
An agreement between Sacu, Mozambique and the UK is necessary because after Brexit the UK will no longer form part of the economic partnership agreement. October said an agreement with the UK will provide continuity and prevent a disruption of trade after March 29.
The department’s deputy director-general of international trade and economic development Xolelwa Mlumbi-Peter told the committee that negotiations on the rollover agreement into a standalone one have progressed well with the consolidated text drafted and most of the provisions agreed.
She noted that the UK is SA’s biggest trading partner in the EU with total trade between the two countries in 2017 amounting to R70.6bn, excluding gold. Eighteen percent of SA exports to the EU go to the UK and 10% of its imports come from the UK.
On Thursday, the British parliament will vote on whether to vote for an extension of the period in which to negotiate a Brexit deal.
Mlumbi-Peter said, “If agreed, the UK will stay part of the EU for the further period agreed with the other EU member states. This will provide more time to finalise the rollover agreement between Sacu member states, Mozambique and the UK.”