The Impact of Brexit on South Africa

By the end of 2019, at the latest, the UK will not legally be part of the EU, nor a signatory to the EU’s myriad trade agreements, including the recently agreed Economic Partnership Agreement (EPA) between the EU and SADC. ThisDiscussion Paper by British trade expert Professor Richard Gibb examines how South Africa might be affected by Brexit. Of primary concern to South Africa’s interests, especially exports, is the impact Brexit will have on the UK economy. The biggest threat to South Africa will be reduced export demand if the Brexit negotiations damage the UK economy. Predicting the impact of Brexit on South Africa is further complicated by the need, by 2019, to negotiate a new South Africa–UK trade agreement to replace the existing South Africa–EU agreements, which will no longer apply to South Africa–UK bi-lateral trade after Britain leaves the EU.

This Paper argues that, overall, Brexit is unlikely to damage South African exports to the UK. It could even open up certain opportunities for South Africa, especially in agriculture, after the UK leaves the EU’s Common Agricultural Policy.

However, the main threat to South Africa is that, by default, Brexit could lead to a worsening of its access to the UK market until such time as a new South Africa / SACU / SADC – UK trade agreement is negotiated. The priority for South Africa, Gibb argues, is to avoid this default position, and negotiate, even temporarily, a UK trade deal that is close to, or better than, the existing EU arrangement. A secondary priority would be to focus on identifying and supporting, both domestically and through trade agreements, trade interests which stand to gain from the Brexit change.