Brexit on Tour in Africa
Prime Minister Theresa May made a brief visit last week to South Africa, Kenya and Nigeria. These are the large, anchor economies of Southern, East and West Africa. They are also all members of the Commonwealth. British media reports said she was hoping to strengthen ties with growing African economies ahead of Brexit. This may prove to be rather challenging. The UK’s historical relationship with many African countries still counts for something but once the UK has left the EU, it will have to compete with an ambitious China, the huge European Union bloc, and perhaps even the United States.
This visit may be viewed as a precursor to the development of a new chapter in Anglo-African relationships, but there are many technical and political questions still to be sorted out. One such issue is the uncertainty about the outcome of the Brexit process. It will take time before the UK will have finality about its future relationship with the EU (its main trading partner) and the post-Brexit legal basis from which to enter into new trade agreements with third parties. A hard Brexit may, for example, mean that the UK will fall back on WTO membership and, for some time, trade with other nations on an MFN basis. If it then wants to enter into preferential arrangements with African states (under, for example, its own Generalized System of Preferences), it will need a WTO waiver. If new African trade agreements are foreseen (about goods, services, investment and whatever the UK would push for), it may take years to conclude them. The UK’s immediate priorities may lie elsewhere.
As matters presently stand, Brexit arrives on 29 March 2019, most likely, it seems now, without a final agreement. It is hoped that a deal about principles for a future UK-EU relationship can be reached by the end of October 2018. That will presumably allow for a two-year transitional phase to negotiate the final Brexit deal; provided the May government stays in power and succeeds in launching this agreement through Parliament. It may make sense for the EU and the UK also to put the future of existing arrangements with developing countries on this agenda. That may be a positive signal to African capitals.
A new Anglo-African trade-plus-development relationship (the UK’s version of its own EPAs) will require careful preparation and many follow-up visits. The immediate challenge will be that such a deal will have to be a reciprocal and WTO-compatible arrangement. Africa’s needs and expectations (or rather those of specific African countries) will require compromises with the new disciplines (such as trade in services, public procurement and investment) which the UK would presumably want to include. Many African countries presently show very little appetite for such a comprehensive partnership agreement. The African global trade agenda is still very much focused on pushing for the realization of the promises made in 2001 when the WTO members adopted the Doha Development Agenda (DDA).
The adoption of the African Continental Free Trade Agreement (AfCFTA) in March 2018 in Kigali has been a boost for African solidarity. Member states of the African Union have embraced an ambitious agenda. It is intended to culminate in a comprehensive deal among all AU members. However, these countries are at very different levels of economic development. Such a “deal” will, by necessity, include general commitments only, several qualifications and incremental progress over an extended period of time. It is unlikely that the UK will see benefits in such a strategy.
The difficulties encountered by Brussels since the early 2000s when it launched its Economic Partnership Agreement (EPA) initiative, serve as a reminder that London may be in for a rough ride when it negotiates its own new African trade deals. Only one African EPA has been concluded; the Southern African Development Community Economic Partnership Agreement (SADC EPA). It entered provisionally into force in October 2016 and only covers trade in goods. The African members are South Africa, Botswana, Lesotho, Namibia and eSwatini (all members of the Southern African Customs Union) and Mozambique. The UK is a party to this agreement and has promised to “roll over” the existing benefits for the post-Brexit phase; with perhaps adjustments to certain tariff rate quotas. As long as the UK stays in the EU customs union (which is a possibility if a soft Brexit is achieved), trade-in-goods governance vis-à-vis SACU can continue on the present basis (in terms of the SADC EPA).
Whatever transpires in terms of Brexit, these African member states have an agreement that is being implemented. The legislative basis of the SADC EPA may well be a practical launching pad for a future relationship with SACU: keep what is already agreed and strive for improvements in agreed areas. Special preferences (beyond what is in the SADC EPA) or UK goods will, of course, result in demands by Brussels to be granted the same new benefits.
Kenya and Nigeria have not concluded EPAs. In their case, the first aim for a special post-Brexit deal with the UK will presumably be to “roll over” the preferences enjoyed under the EU’s GSP. However, these arrangements do not constitute agreements in the technical sense; they can be changed unilaterally (without the possibility of contestation by the beneficiaries) and the rules of origin for some products may well limit competitive input choices by firms. Eventually, they should be transformed through negotiations into comprehensive, reciprocal and WTO-compatible trade agreements. Given the impasse in the WTO and the lack of developed country support for the DDA, future trade liberalization and technical support (outside the African continent) may have to follow this route.
Both Kenya and Nigeria are members of African Regional Economic Communities (RECs). Kenya is a member of the East African Community (EAC) and Nigeria belongs to the Economic Community of West African States (ECOWAS). Both RECs are implementing their respective common external tariffs as customs unions. For each REC, a joint deal with the UK is inevitable. To do otherwise would undermine their own regional integration agendas. But within each of the RECs, significant diversity means that member states may have different expectations of a deal with the UK.
What about development assistance to African countries? It has been reported that PM May will set a condition that the UK’s aid spending matches “wider national security priorities” as well as tackling poverty. She will recommit to maintaining the aid budget at 0.7% of GDP but will seek to deflect criticism of the level of spending by the right of the Conservative party by saying it has to have a wider political and security purpose. And she has committed to a more strategic approach to development assistance to support development outcomes.
The Prime Minister’s African tour is not inked in a new and original initiative – it seems to be undertaken with developments at home in mind, and as a first step to engage Africa in the context of a post-Brexit global trade and economic strategy. This process will require many further installments.
 Under the SADC EPA, 110 million litres of South African wine can enter the EU markets duty free. Beyond that quota, tariffs apply. Of this total, approximately 30% was destined for the UK market in 2017. See the Joint statement on UK, SACU and Mozambique EPA, 29 August 2018.
 A soft Brexit would keep Britain in either the EU’s single market or the customs union or both.
 The SADC EPA contains a “regional MFN clause” which provides for the automatic extension of new preferences granted to third parties representing major economies.
 ‘May begins Africa trip with nod to rightwing Tories on overseas aid’. The Guardian, 27 August 2018.
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