A trade continuity agreement will see British businesses and consumers benefitting from continued trade with the Southern African Customs Union (South Africa, Botswana, Lesotho, Namibia, Eswatini) and Mozambique (SACUM) after the UK leaves the European Union.

International Trade Secretary Liz Truss is signing the SACUM-UK Economic Partnership Agreement during the Commonwealth Trade Ministers Meeting in London with Ministers and High Commissioners representing the SACU states and Mozambique.

The parties also signed a Memorandum of Understanding, which will provide a bridging mechanism to enable continued market access in the event that the UK leaves the EU without a deal on 31 October 2019, pending ratification of the agreement.

The agreement allows businesses to trade much as they do now, without any additional barriers or tariffs. It eliminates tariffs and quotas on all goods imported from Botswana, Eswatini, Lesotho, Mozambique and Namibia into the UK after we leave the European Union, as well as on products covering around 96% of goods imported from South Africa.  Botswana, Lesotho, Namibia, Eswatini and South Africa also remove all tariffs and quotas on products covering around 85% of UK exports, with products covering around a further 13% of UK exports benefiting from reduced tariffs or tariff-rate quotas.

These preferential terms are part of the UK government’s commitment to supporting developing countries to reduce poverty through trade. It will help them to grow their economies, create jobs, increase incomes and reduce reliance on overseas aid in the long-term.

The agreement will help to strengthen further the trading relationship between the UK and SACUM nations, which was worth £9.7 billion last year.

The SACUM nations are an important market for UK exports of machinery and mechanical appliances worth £409 million in 2018, motor vehicles worth £335 million, and beverages including whisky worth £136 million.

Consumers and businesses in the UK will continue to benefit from more choice and lower prices on goods imported from SACUM countries. Major imports to the UK from these countries last year included edible fruit and nuts (£547 million) and motor vehicles (£409 million).

Exports from Southern Africa help to support jobs and growth in these developing economies, as well as to strengthen regional production networks and support industrialisation, including in the crucial automotive industry. In 2018, the UK market accounted for 20% of total exports of wine from South Africa, in addition to 18% of total South African exports of platinum, 16% of fruits and nuts, and 7% of motor cars. The UK also accounted for 24% of total exports of beef from Botswana, and 19% of beef exports from Namibia.

International Trade Secretary, Liz Truss said:

"I am delighted to sign this agreement today with the Southern African Customs Union and Mozambique, which ensures that businesses will continue to trade with our friends from the African continent after Brexit.

This agreement marks a major milestone as the UK prepares to become an independent trading nation once again, and provides a solid basis to strengthen the UK’s trade relationship with Southern African nations in the future as we work towards our shared ambition to boost economic growth.”

International Development Secretary Alok Sharma said:

“Breaking down barriers to trade helps create millions of new jobs and economic growth, delivering opportunities for the world’s poorest to move beyond aid dependency to become our trading partners of the future.”

Nkoko John Mahasela, Board Member at Lesotho National Farmer Union (LENAFU)

“The signing of Economic Partnership Agreement (EPA) that is intended to facilitate international trading between the SACU+M nations and the UK is highly appreciated by the producers (farmers) in Lesotho. From the agricultural value chain point of view, EPA shall create the market outlet for the food commodities at the international level. Thus, supplementary to the local market for the agricultural commodities, there is going to be another window where farmers can sell their produce. Characteristically, Lesotho has got a good potential for production of organic horticultural crops, however, the scale of production has been very minimal due to lack of reliable markets. Therefore EPA is regarded as a motivator to the farmers to produce food commodities that are essentially targeted to be supplied to well-identified and reliable international markets.”

Catherine Grant Makokera, Director, Tutwa Consulting

“The signing of this agreement is critical for maintaining and growing the economic relationship between the UK, SACU and Mozambique. In this uncertain global trade climate, the relatively fast conclusion of the agreement provides welcome stability for business.  It enables trade to continue, jobs to be retained in exporting firms and cements the UK’s role as a partner in the ongoing economic development of Southern Africa.”

NOTES TO EDITORS

The agreement was signed by the UK, Botswana, Namibia, Eswatini, Lesotho and Mozambique on Wednesday 9 October 2019. South Africa is expected to sign the agreement shortly.
Including this agreement, the UK has secured agreements with countries that account for £100 99 billion of trade. This has increased from £39 billion since March 2019. A regularly updated list of all signed agreements is available on GOV.UK.
Total trade between the UK and SACU+M was worth £9.7 billion in 2018 and has increased by an average of 2.8% per year since 2016. In 2017, HMRC estimated that 9,053 VAT registered UK businesses exported goods to South Africa, and 3,218 UK businesses imported goods from South Africa.
The agreement will now be laid before Parliament under the Constitutional Reform and Governance Act 2010.
Source for trade statistics: ONS ‘UK total trade: all countries, non-seasonally adjusted January to March 2019 release’. Figures are provided on a nominal basis.
Source for goods trade: HMRC overseas trade statistics.
Further information on trade agreement statistics can be found here: www.gov.uk/government/statistics/uk-trade-agreement-continuity-statistics-and-analysis.

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Lineo Tsikoane

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British High Commission, Maseru

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