Western Cape businesses have discussed the implications for the province’s economy of the anticipated United Kingdom exit from the European Union.
Alan Winde, Minister of Economic Opportunities, yesterday chaired a seminar of 30 local businesses from various sectors. The seminar was hosted by Wesgro and was attended by the British Consul, Ed Roman.
Minister Winde has been liaising with the office of the British Consul since the historic ‘Brexit’ referendum results were announced.
Minister Winde said the UK was the second strongest export market for the Western Cape in the last financial year and the largest source market for FDI into the province. According to Wesgro, exports to the UK were valued at R8.9 billion in 2015, and the province had a positive trade surplus of R877 million. Exports to the entire European Union (EU) were valued at R33 billion in 2015, with the UK accounting for 36% of these purchases.
Winde said: “The UK has long been a major market for Western Cape agriculture and agri-processed products. Last year, the UK bought R1.5 billion worth of wine, R1.2 billion worth of apples and pears, and R4.8 billion of citrus from the Cape.
“Brexit will no doubt cause big shifts in trade patterns. As a province we have been determined to commence engagements on future trade arrangements with the UK as early as possible to ensure that we remain a trading partner of choice. We need to make sure we forge mutually beneficial trade and investment relations with that market, while growing our strong relations with the EU.”
South African exports to Europe are covered by European treaties like the Trade, Development and Co-operation Agreement, and the recently signed Southern African Development Community-EU Economic Partnership Agreement (EPA).
Once Brexit becomes official, South Africa would need to sign a Free Trade Agreement or similar trading arrangement with the UK, or risk the "Most Favoured Nation" principle becoming applicable, putting our exporters at a significant disadvantage.
British Consul General, Ed Roman, provided those in attendance with the British Government’s perspective on Brexit and the way forward. “Rejuvenating traditional relationships outside the EU, particularly the Commonwealth, is a high priority for Britain post-referendum. We have been working closely with the South African government and businesses to limit uncertainty during the transition phase, and find the best arrangement for South Africa.”
Wesgro CEO, Tim Harris, said: “Wesgro is working to mitigate any negative effects on trade and investment relationships Brexit may cause, and remind the UK that the Cape is a safe, secure investment destination that can provide a stable base for them to grow new markets in South Africa and the rest of Africa.”
For media queries, kindly contact:
Spokesperson: Alan Winde, Minister of Economic Opportunities
Responsible for Tourism, Economic Development and Agriculture
Western Cape Government