The UK and European development NGO platforms have sought engagement with the UK administration and the EC’s Brexit task force on the importance of ‘putting people and our planet first’ in the Brexit process. NGO concerns appear to be focused on securing continued engagement by the UK in EU and international development financing initiatives and continued collaboration in pursuit of the globally defined development agenda. However, it is likely to be in the trade sphere where the effects of Brexit are first felt by developing countries. The economies of a number of ACP countries will be strongly adversely affected, unless the UK government establishes alternative national regulations extending the preferential market access currently enjoyed under EU trade agreements from day 1 of the UK’s formal departure from the EU (30 March 2019).
In March 2017 the Director of the UK national development NGO platform, BOND, and the President of the European development NGO platform CONCORD, addressed an open letter to the EC’s chief Brexit negotiator, Mr Barnier and the UK Secretary of State for Brexit, David Davis setting out three demands for putting people and the planet first in the forthcoming EU27-UK Brexit negotiations.
The letter called on ‘both the EU and the UK to continue to lead on eradicating global poverty, promoting human rights and realising the Agenda 2030 for Sustainable Development’. It called for both to ‘develop a new relationship as responsible, progressive and collaborative actors on the world stage, putting our planet and people first, and leaving no one behind’ (1).
It called on the UK and the EU27 to ‘craft a deal that strengthens cooperation in multilateral structures’ and specifically called for a way to be found through which the UK can ‘remain an active partner in existing frameworks like the European Development Fund and European Investment Bank’ (1).
It called on UK and EU leaders to ‘keep the debate dignified and inclusive – avoiding stereotyping and negative public grandstanding’. It asserted a ‘re-nationalisation of the global agenda and short-term domestic interests will lead neither the UK nor the EU into a future that puts people and the planet first’ (1).
In response the EU Brexit task force reiterated the importance attached to maintaining the unity of the EU27 and the need for proper sequencing of the process of Brexit negotiations. It maintained an ‘orderly withdrawal is a prerequisite for a good future partnership’, with negotiations initially focusing on ‘removing the current uncertainty surrounding the rights of EU citizens in the UK and of UK citizens in the EU’. In addition it asserted ‘the issues of legal and budgetary commitments undertaken by the EU28 and the challenges of new external borders must also be dealt with at an early stage’(2).
The principles underpinning the new EU27-UK relationship were also reiterated. It noted ‘market access and trading will continue and will need to be based on a level playing field’ and called for a ‘continued framework for EU-UK cooperation on security and defence’. It noted the EU 27 member states wanted to ‘reach an agreement on the essential elements of the withdrawal agreement before opening discussions on the future relations’ but noted that ‘a fair deal has to be inferior to full membership’ (2).
It closed by noting ‘multilateral cooperation and sustainable development are likely to be among the issues the EU and the UK will discuss in the context of the new partnership after the UK withdrawal from the EU’ (2).
In a separate press release in April 2017, CONCORD announced UK development NGOs could lose out on €140 million of funding per year as a result of the UK’s departure from the EU. This was based on research undertaken by the UK national platform BOND. This would arise from the loss of eligibility of UK NGOs for EU financing, once the UK formally departs the EU. It is suggested smaller UK development NGOs probably would be worst affected, since larger pan-European NGOs could ‘replace’ lost development funding through their UK affiliates by increased funding to their EU27 affiliates (3).
|Comments and Analysis
As stated in the EC response to the CONCORD/BOND letter, issues related to EU27/UK ‘multilateral cooperation and sustainable development are likely to be among the issues the EU and the UK will discuss in the context of the new partnership after the UK withdrawal from the EU’. In terms of overall development financing, dealing with this issue after the UK’s departure from the EU is unlikely to pose major challenges, since the UK is likely to continue to live up to its international target for aid commitments (with UK financing currently channeled through EU facilities – including the EDF – being redirected to bilateral UK programmes). It even seems likely that as part of the ‘divorce settlement’ the UK will be required to fulfill its existing financial commitments to multi-annual EU development cooperation programmes, such as the EDF through which cooperation programmes with ACP countries are financed (the implementation of which could run to 2023).
Of more immediate concern is the fate of EU trade arrangements which currently govern access for ACP exporters to the UK market. This issue was notably absent from the EU/UK development NGO letter, yet this is likely to be an area where the Brexit process will first impact on ACP developing countries.
Existing arrangements for access to the UK market are governed by EU negotiated trade agreements. These trade agreements will lapse from the very first day of the UK’s formal departure from the EU (now scheduled for 30th March 2019). From this date, unless alternative regulations are set in place by the UK authorities perpetuating current market access arrangements, ACP exporters will face standard MFN import tariffs on their exports to the UK. This could lead to serious commercial losses to ACP exporters and even the commercial exclusion of certain ACP exports from the UK market.
In 2015 five ACP countries had an exceptionally high dependence on the UK market in their trade with the EU, nine had a high dependence on the UK market while seven had an above average dependence on the UK market in their trade with the EU (see table).
For most of these countries exports to the UK were concentrated in products where current tariff preferences are commercially significant to the concerned ACP exporters.
ACP Countries with an Exceptionally High Dependence, High Dependence and Above Average Dependence on the UK Market in their Trade with the EU28
Beyond this core group of ACP countries, there are other ACP countries which, in individual sector,s have a high dependence or above average dependence on the UK market in their export trade into the EU. Specific sectors in these ACP countries could also face significant commercial losses if alternative arrangements for access to the UK market are not set in place by 30 March 2019.
The situation however is more serious than the deadline for the completion of the Brexit negotiations implies, for sourcing decisions and contract negotiations are likely to take place in the 15 months preceding the scheduled formal departure of the UK from the EU. In this context continued uncertainty over the future basis for ACP exports to the UK beyond 30th March 2019 could begin to carry commercial consequences from as early as December 2017.
Put simply, if reassurances are not forthcoming with regard to the terms of access for ACP exporters into the UK by the end of 2017, one of two things will probably happen: UK importers will shift to other sources of supply or UK importers will factor MFN duties into their price offers to ACP suppliers, leading to commercial losses for ACP exporters.
Unfortunately despite the active engagement on this issue of individual UK development NGOs involved in supporting the import of developing country products into the UK, CONCORD and BOND do not appear to have taken up this trade dimension of Brexit in their formal approaches to the EC and UK authorities.
(1) CONCORD/BOND, ‘Our three demands for a Brexit putting people and our planet first’, 28 March 2017
(2) EC Task Force for the preparation and conduct of the negotiations with the United Kingdom under Article 50 of the TEU, response to CONCORD/BOND letter, 25 April 2017
(3) Concord, ‘140 million euros of EU funding a year at risk for UK NGOs after Brexit’, 7 April 2017
|Key words: Brexit, BOND, COPNCORD