Davies: SA preparing for all Brexit outcomes

South Africa's Department of Trade and Industry (dti) is preparing for all eventualities regarding Brexit, Minister of Trade and Industry Rob Davies told Fin24 on Tuesday.

SA has been discussing the issue with the UK for some time already, said Davies, with the dti focusing on "making sure that whatever unfolds won't interrupt trade".

The prolonged uncertainty has, however, been a complicating factor, he acknowledged.

"The status quo will largely remain intact, I think.

"What complicates the process is what the nature will be of the UK reaching an arrangement or not with the EU," said Davies.

Safeguarding trade

Davies is confident that the Southern African Customs Union, or Sacu, will be able finalise a deal with the UK in January that aims to ensure no interruption of trade with the UK, regardless of the progression of Brexit.

"The hypothesis we work on is that there is so much uncertainty that it creates any number of possibilities," Davies explained. "We are just making sure that whatever unfolds won't interrupt trade."

According to Davies, the dti has for some time been discussing a parallel rollover agreement with the British, which he hopes will be finalised by mid-January.

The UK has already announced they have reached an agreement with Switzerland, so Davies argues finalising an agreement with SA should "not be too far down the line".

UK a key export market

According to Davies, if the withdrawal agreement reached between UK Prime Minister Theresa May and the European Union comes into force, then the customs union – a trade bloc made up, by agreement, of a free trade area with a common external tariff – will come to an end at the end of 2020.

In this case, the agreement between SACU and the UK would only come into play at the end of 2020.

"If, however, the British leave the EU in March without an agreement, then our agreement will come into play," said Davies.

Fin24 reported in November that British High Commissioner to South Africa Nigel Casey had given the reassurance the UK was working hard to ensure there was no disruption in trade between SA and the UK after Brexit.

There may also be more scope for areas and products that weren't previously included in trade deals under the banner of the EU, he told the Cape Town Press Club at the time.

He acknowledged that the UK was an especially important export market for some of SA's high-profile exports like cars, wine, fruit and vegetables.

The UK is set to officially leave the European Union on March 29, 2019, but whether this will be a so-called 'soft', 'hard' or 'no-deal' Brexit is still up for debate. 

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