JOHANNESBURG (Reuters) – South Africa is close to signing an interim trade agreement with Britain that would replicate arrangements with Europe and ensure trade will not be disrupted in the event of a hard Brexit, South African Trade Minister Rob Davies said on Monday.
With just a month to go before Britain is due to leave the European Union, London has been trying to strike agreements with trade partners around the world to replicate the terms it now has as a member of the bloc.
“We are very, very close to concluding a bilateral agreement with the UK which is essentially a roll over … of the partnership agreement,” he said in a phone interview, referring to South Africa’s current agreement with the EU.
South Africa is Britain’s biggest partner in Africa with trade worth over 9 billion pounds ($11.77 billion) in 2017. Metals and other commodities, cars and car parts, machinery, fruit and beverages are among the main traded goods.
Without an agreement in place, that trade would become subject to higher tariffs that would hit key industries in both countries essentially overnight in the event of a hard or no-deal Brexit on March 29.
The deal being finalised would create a transition period for the two sides to reach a more permanent deal, once Britain’s future relationship with the EU and its new trade profile becomes clear.
Davies said some elements couldn’t simply be recreated in the bilateral agreement, and required negotiation.
Some of those provisions were still being discussed, he said, though other difficult issues including tariff quotas on agricultural exports had already been settled.
However, some Brexit risks, such as the impact of an economic slowdown in the EU, could not be mitigated against, he said.
“If supply chains in Europe are adversely affected and Europe starts to have some kind of external shock challenges, there’s not too much we can do about that,” he said, adding this could hit industries like South Africa’s auto sector.
($1 = 0.7648 pounds)
Reporting by Emma Rumney and Joe Bavier; Editing by Peter Graff