14 Dec UK-Africa trade after Brexit: Time for a reset
As the UK prepares to leave the transition period with the European Union at the end of December 2020, there has been much discussion of what its newly independent trade strategy will look like. Much of this debate has focused on potential trading agreements with the EU and US, but far less on Africa.
This may be understandable given that trade with Africa, amounting to £36.2 billion ($48 billion), represented just 2.5% of the UK’s total in 2019. However, Brexit combined with changing dynamics on the continent provides a huge opportunity for the UK and African countries to rethink their trade relations.
As the continent is predicted to face its first recession in a quarter of a century and the UK cuts its aid spending from 0.7% to 0.5% of Gross National Income, the need for a more progressive trade relationship is more vital than ever.
Rushing through continuity
Unfortunately, however, the UK has so far mostly tried to ensure its existing trade relationships with Africa continue after 2020. In the immediate term, this has led to complications and potential hazards for some African countries.
For many states on the continent, existing trade arrangements with the UK will continue into 2021 under the ‘Everything but Arms’ agreement. The UK has committed to maintain this framework, which offers duty-free and quota-free market access to “least developed countries”, after the EU transition period. However, the UK has also been negotiating continuity deals with African countries who had already agreed Economic Partnership Agreements (EPAs) with the EU. It has been using the 31 December 2020 deadline and the prospect of these African partners losing their existing access to the UK market to apply pressure.
Thus far, “roll-over” agreements have been signed with Côte d’Ivoire, the member states of the Eastern and Southern Africa (ESA) group, and those of the Southern African Customs Union (SACU) plus Mozambique.
Other efforts have been messier. On 8 December, Kenya signed a continuity agreement with the UK. However, its regional neighbours raised concerns that this bilateral deal will undermine the East African Community’s (EAC) Common External Tariff. Ironically, this could damage efforts by TradeMark East Africa (funded by the UK government and other international donors) to support intra-regional trade within East Africa.
Elsewhere, Cameroon and Ghana have refused to agree continuity deals. It is reported that Ghana, in particular, is holding out because it is determined to honour its commitments to the Economic Community of West African States (ECOWAS).
If arrangements are not in place by the end of 2020, states not classified as “least developed countries” will revert to the Generalised System of Preferences under which exporters such as banana producers will face significant tariff barriers. This eventuality, however, does not have to be inevitable. The UK could and should reinstate the Transitional Protection Mechanism that it offered to Kenya, Ghana, Cameroon and Côte d’Ivoire as protection against a potential no-deal Brexit in October 2019. This would ensure that market access is preserved but without the potential damage caused by a bilateral continuity trade deal.
Chance for a rethink
Beyond these immediate pressures, the UK government’s desire to replicate the terms of EPAs, the EU’s trade agreements with five Africa sub-regions, is problematic. Many African states as well as civil society organisations on both continents have long raised concerns over these deals’ impacts on the prospects for Africa’s development.
Firstly, the reciprocal trade liberalisation required by EPAs reduces the “policy space” available to African governments to pursue the industrial strategies that would be necessary for them to diversify their economies. Secondly, EPAs have been criticised for undermining regional integration.
As a recent report by the All Party Parliamentary Group for Africa outlines, there is scope for the UK to improve upon, rather than simply replicate, the EU’s existing trade arrangements with Africa.
Firstly, African partners have long raised concerns over the EU’s trade agenda. The UN Economic Commission for Africa, for example, has argued that EPAs will result in an influx of industrial goods from the EU, undermining the prospects for African countries’ own economic diversification. The UK should reflect on rather than repeat the same approach.
Secondly, an emerging continental development agenda is taking shape, which is reflected in both the African Continental Free Trade Area (AfCFTA) and the African Union’s visionary ‘Agenda 2063’. These plans and aspirations should be at the heart of a more progressive UK-Africa trade relationship.
Thirdly, African partners should be given the space to develop strategies that enable them to move away from their historical role of exporting largely minerals and primary goods to the UK.
Finally, in both the UK and African countries, there is a need to democratise the trade policymaking process so that both elected politicians and wider stakeholders have a say in any future negotiations.
Post-Brexit trade negotiations with Africa bring into sharp relief some of the difficulties the UK government faces in trying to put its “Global Britain” agenda into practice. As the UK develops an independent trade policy outside of the EU, Africa appears to be moving in completely the opposite direction. It is the ambition of the AfCFTA and the broader Pan-African vision for continental development that should be the starting point for post-Brexit UK-Africa trade relations, rather than continuity based on EPAs. The UK now needs to demonstrate the written commitments it has made to the African Union’s regional and continental trade agenda through its policymaking.