Summary
The UK needs to recognise its ‘inherited’ trade obligations to ACP/LDC countries and take regulatory measures to extend unilaterally current market access arrangements from day 1 of BREXIT. This should be seen as ‘transitional’, with the re-fitting of existing EPAs into bilateral trade arrangements taking place once the UK administration is in a position to undertake such an exercise. This agreement should both improve access for ACP countries to the UK market and address preference erosion concerns.
- The Need for UK Government Policy Initiatives
The starting point needs to be a recognition of the need for concrete policy initiatives by the UK government, if the disruption of ACP/LDC exports to the UK market is to be avoided from day 1 of the UK’s departure from the EU. In the absence of any concrete regulatory action by the UK government, with the lapsing of existing EU market access arrangements, UK customs officials would have no option but to apply standard MFN duties to imports from ACP/LDC countries. It would appear essential that this outcome be avoided.
- The Starting Point for UK Government Initiatives
It would appear appropriate as part of the process of BREXIT for the UK government to be held to its ‘inherited’ trade obligations. The easiest and most obvious ‘inherited’ obligation would appear to be towards least developed countries. Since 2001 all LDCs have enjoyed duty free-quota free access to the UK market as part of the EU’s Everything but Arms initiative (EBA). It would appear straight forward for the UK government to take unilateral action to replicate the EBA trade regime in favour of LDCs on a bilateral basis, since this would be wholly compatible with its WTO obligations and would meet no objections from other WTO members.
However the UK also has ‘inherited’ trade obligations to other ACP members who have come to progressively enjoy full duty free-quota free access to the UK market under a trade regime initially established in 1975. This being stated the UK government may be less likely to automatically accept ‘inherited’ obligations in its trade with non-least developed ACP countries. This is likely to be an area where the UK authorities will need to be persuaded to act early, so as to avert trade disruption.
Potentially this could be dealt with through a two stage approach. The first stage would involve establishing transitional arrangements, which from day 1 of the UK’s departure from the EU would avoid any disruption of the export trade to the UK from most ACP countries. Stage two would involve looking at establishing a new longer term relationship with the UK which would restore parity of treatment for UK exporters with those of EU27 exporters, since unlike UK exporters, EU27 exporters would continue to export to most ACP countries under the terms of the existing Economic Partnership Agreements.
Clearly a link will need to be made between stage 1 and stage 2. If arrangements under stage 1 are clearly seen as ‘transitional’, this would minimise the possibility of any challenge in the WTO.
This may require ACP governments which are part of an existing EPA process to commit to re-fitting the various “EPAs” into bilateral trade agreements with the UK, in a way which would restore parity of treatment for UK exporters compared to EU27 exporters. Given likely UK trade negotiation priorities, this would take place once the UK government was in a position to handle such a refitting process.
This second stage could also address a range of issues in relation to how ACP access to the UK market could be improved (e.g. through improvements in rules of origin and the design and application of sanitary and phytosanitary – SPS – control arrangements) and could also establish a framework for addressing ACP concerns over preference erosion.
Sources:
ICTSD, ‘Brexit: Opportunity or peril for trade with small and poor developing economies?’, August 2016
http://www.ictsd.org/opinion/brexit-opportunity-or-peril-for-trade-with-small-and-poor-developing-economies
indepthenews.com, ‘Brexit Implications for 79 ACP Countries Yet Unknown’, 24 July 2016
http://www.indepthnews.net/index.php/global-governance/acp-group-of-states/554-brexit-implications-for-79-acp-countries-yet-unknown
Quartz Africa, ‘Brexit will be terrible for Africa’s largest economies’ 24 June 2016
http://qz.com/715710/brexit-could-be-terrible-for-africas-largest-economies/
| Comment and Analysis In the context of scarce negotiating capacity in the UK and competing and pressing demands on the UK governments negotiating capacity, the approach outlined above would address two major areas of concern in future UK-ACP relations, namely: a) providing a simple and immediate way of avoiding any disruption of the current basis of ACP exports to the UK market; b) establishing a simple basis for the restoration of parity in market access to ACP markets for UK exporters compared to their EU27 competitors. |
| Key words: BREXIT, LDCs, non-LDCs Area for Posting: BREXIT, EPA General, SADC EPA, West African EPA, central African EPA EAC EPA, ESA EPA, Caribbean EPA, Pacific EPA |