Brexit’s threat to Africa trade

Economics
United Kingdom
Africa

Campaigners are concerned about the effect Brexit will have on economies in Africa, worrying that it may harm their ability to export goods to the UK.

Many African countries have preferential access to the UK because of trade deals hashed out over the years with the European Union, such as Economic Partnership Agreements (EPAs) and the Everything But Arms (EBA) initiative. Carribean and Pacific countries are also affected by the deals.

EPAs are controversial because they force poorer countries to slash tariffs on imports from Europe – by up to 80 per cent over time. But they also provide Global South exporters with access to key markets, like Britain.

Botswana, which is in an EPA, exports the majority of its goods to Britain. In East Africa, Britain accounts for 17 per cent of exports to the EU, a figure which rises to over 35 per cent for two of Kenya’s most important agricultural sectors – edible vegetables, plants and flowers.

In the case of the islands of Saint Lucia in the Carribean and Tuvalu in the Pacific, the UK accounts for over 70 per cent of their exports to the EU.

The East African bloc has finished negotiating an EPA with the EU, despite domestic opposition and discord within the bloc: Tanzania is opposed to the deal – even taking the issue to the East African Court of Justice in an unsuccessful attempt to prevent other countries signing – while Kenya has already ratified the deal.

Some are now suggesting that Brexit makes an even stronger case for rejecting the deal. ‘The EPA is a free trade agreement between unequal partners and [threatens] food security and employment,’ says Africa Kiiza, programme officer at the SEATINI trade institute in Uganda. ‘Brexit means the market [our goods can reach] has dwindled, and we need to reassess.’

Kiiza also says that the EU’s pursuit of the new trade deal has harmed regional integration efforts. At one point Kenya threatened to go it alone and join the deal without the rest of the region if no agreement could be reached.

Falling foul of WTO rules

The Everything But Arms agreement, the predecessor to the EPA deals, made all exports except armaments from African, Carribean and Pacific (ACP) countries to the EU tariff-free. However, unlike the newer trade deals, it did not force these countries to liberalize imports in return.

This was criticized by other World Trade Organization members – according to its rules, trade deals are generally expected to be reciprocal. The EPA deals are an attempt to resolve this, but some countries and campaigners have argued that other options could have been pursued – such as a WTO waiver for developing country regions.

Instead, after over a decade of negotiating, the EU set an October 2014 deadline for the new deals, threatening to remove trade privileges for countries that did not sign in time.

Regardless of whether countries sign the EPA deals, replacing current trade arrangements after Brexit will be difficult and time-consuming, due to complex World Trade Organization rules and overlapping regional trade blocs.

A spokesperson for the Department for International Trade said, ‘As we leave the EU, we will secure existing duty-free access for the world’s poorest countries to UK markets… around 48 least developed countries across the globe will continue to benefit from duty-free exports into the UK’.

However, the promise to maintain market access for ‘Least Developed Countries’ excludes countries like Kenya. The department says proposals in the recent Trade White Paper include maintaining EPA agreements, including the mandate for the gradual opening of ACP markets.

‘Avoiding a negative impact [on less developed countries] depends on the UK government taking action sooner rather than later to make sure poor producers of agricultural exports from African countries don’t face new tariffs’, says the University of York’s Peg Murray-Evans.

‘The UK should also acknowledge that rolling over existing EU arrangements with these countries may not be straightforward, and that while doing so would preserve existing levels of market access it would also perpetuate the various shortcomings of the EU’s development-related trade regime.’

mag cover This article is from the November 2017 issue of New Internationalist.
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