After Brexit - Securing ACP Economic Interests
After Brexit - Securing ACP Economic Interests
After Brexit - Securing ACP Economic Interests
Copyright:
Text 2017 by The Ramphal Institute
Design and layout Rila Publications Ltd, London, 2017
4
Acronyms
ACP: African Caribbean and Pacific Group
AFDB: African Development Bank
AU: African Union
EuroMed: Euro-Mediterranean partnership
Brexit: The UKs withdrawal from the EU
FTA: Free Trade Area
CARICOM: Caribbean Community and
GDP: Gross Domestic Product
Common Market
GNI: Gross National Income
CDB: Caribbean Development Bank
GSP: Generalised System of Preferences
CETA: Comprehensive Economic and Trade
Agreement (EU-Canada) HMG: Her Majestys Government (UK)
DAC: Development Assistance Committee IMF: International Monetary Fund
of the OECD
ITC: International Trade Centre
DFID: Department for International
LDC: Least Developed Country
Development (UK)
MFN: Most Favoured nation
DFQF: Duty free and quota free
NGO: Non-Governmental Organisation
EAC: East African Community
OCTs: Overseas Countries and Territories
EBA: Everything but Arms
(EU)
ECOWAS: Economic Community of West
ODA: Official Development Assistance
African States
OECD: Organisation for Economic
EDF: European Development Fund
Co-operation and Development
EEA: European Economic Area
PIFS: Pacific Island Forum Secretariat
EEC: European Economic Community
SADC: The Southern African Development
EPA: Economic Partnership Agreement Community
ERDF: European Regional Development SDGs: Sustainable Development Goals
Funds ESA Eastern and Southern Africa.
TEU: Treaty of European Union
(EPA Group)
TPP: Trans-Pacific Partnership
EU: European Union
TRQ: Tariff rate quotas
EU 28: All members European Union
including the UK TTIP: The Transatlantic Trade and
Investment Partnership
EU 27: Members of the European Union
without the UK WTO: World Trade Organisation
5
Foreword
This paper follows extensive research and consultation into how the UKs
withdrawal from the European Union (Brexit) will affect trade and economic
relations with the Africa Caribbean and Pacific (ACP) Group of countries.
When UK voters decided to leave the European Union on the 23rd June 2016,
they would understandably have been guided by what they thought best for their
country; but withdrawal will have major and far reaching consequences; way
beyond the UK. ACP countries are among those expected to be most affected.
Therefore, it would be essential for them to have as clear an understanding as
possible of the precise implications of Brexit so that they could seek to avoid or
minimise any negative consequences and identify and capitalise on opportunities
that arise or which they might create.
This publication has been prepared for the ACP Secretariat by a team from the
Ramphal Institute, a not-for-profit organisation which bears the name of Sir
Shridath Ramphal as it continues his pioneering work to advance sustainable
development, global justice, social equity and good governance. It seeks to
expand and share knowledge and understanding in these fields that will contribute
to better informed international debate among policy makers and the public.
The threats that Brexit can pose to ACP economic interests are real and should
not be underestimated or ignored. A united Group that pursues a well-informed,
comprehensive and effective strategy, will enhance the prospect of achieving its
shared objectives and prospering in the post-Brexit era.
It is hoped that the issues highlighted in this book will provide a valuable initial
contribution to the ACP as it develops its strategy.
Edwin Laurent
Director
The Ramphal Institute
London
Content
List of Figures............................................................................................................................................. 10
List of Tables............................................................................................................................................... 10
Executive Summary.................................................................................................................................. 11
Introduction................................................................................................................................................. 16
Trade............................................................................................................................................................... 35
The EU Framework for Trade relations between
the UK and the ACP......................................................................................................................... 35
Importance to the UK of exports to ACP countries........................................................... 37
Importance to the ACP of exports to the UK........................................................................ 39
ECOWAS........................................................................................................................................ 41
EAC................................................................................................................................................. 41
Central Africa EPA Signatories........................................................................................... 42
SADC EPA Signatories........................................................................................................... 42
Eastern and Southern Africa (ESA) EPA Signatories................................................ 43
Pacific EPA Signatories.......................................................................................................... 43
Caribbean EPA signatories................................................................................................... 44
Understanding ACP Trade............................................................................................................. 45
8
Possible different UK-EU trade relationships post Brexit........................................................ 47
Implications for ACP countries................................................................................................... 47
UK-EU customs union............................................................................................................. 47
UK-EU FTA................................................................................................................................... 49
The WTO option......................................................................................................................... 50
Compensation from the EU for the loss
of the UK from the epa?........................................................................................................ 53
Conclusion.................................................................................................................................................... 68
Annex 1......................................................................................................................................................... 70
EAC.......................................................................................................................................................... 72
Central Africa EPA Signatories................................................................................................... 73
SADC EPA Signatories.................................................................................................................... 74
ESA EPA Signatories....................................................................................................................... 75
Pacific EPA Signatories................................................................................................................... 76
Caribbean EPA signatories........................................................................................................... 77
Annex 2......................................................................................................................................................... 78
Visualising Data................................................................................................................................. 78
Annex 3......................................................................................................................................................... 81
Overview of Economic Partnership Agreements................................................................ 81
Annex 4......................................................................................................................................................... 84
Address by Baroness Kinnock.................................................................................................... 84
9
List of figures
Figure 1:
2015 GDP (Nominal) in the EU..........................................................................9
Figure 2:
Original and Revised Economic Growth Forecasts..........................................14
Figure 3:
Depreciation of Pound Sterling.......................................................................14
Figure 4:
Principal destination of UK exports of goods and services 2010-15..............22
Figure 5:
UK Export to Partners (2014)...........................................................................22
Figure 6:
ACP Export to the UK.......................................................................................23
Figure 7:
Brexit Models...................................................................................................32
Figure 8:
UK exports to partner countries from 2010 to 2015......................................49
Figure 9:
ACP Aggregate Breakdown..............................................................................49
Figure 10:
Five Year Bar Chart UK Imports....................................................................50
Figure 11:
Business Investment and GDP Growth............................................................50
List of tables
Table 1:
Top 20 recipients of UK Bilateral ODA in 2014................................................17
Table 2:
Top 20 Recipients of UK Core Funding
to Multilateral Organisations in 2014..............................................................18
10
Executive Summary
The UKs withdrawal from the EU, Brexit as it is commonly referred to, will see the
EU losing its second largest economy or 17% of its GDP and the UK ceasing to
apply all EU treaties to which it is party. There will be major consequences for ACP
countries because a substantial portion of the development assistance provided
by the UK is via the EU and trade with the UK is conducted within the regulatory
and institutional framework of the EU.
Most predictions are that Brexit will negatively impact on the UK economy, and
currency markets have already anticipated this by devaluing the pound sterling.
The combination of those two factors will reduce the attractiveness of the UK
as a market for ACP goods and services, and a provider of remittances, tourism
expenditure and development aid.
Development Cooperation
Brexit will result in the loss to the EDF of its third largest contributor that is putting
in nearly 4.5 billion to the 11th EDF. The UK is also a major contributor to the
EU Development Budget. ACP countries will need to ensure that they continue to
receive at least the same quantum of aid and that it is disbursed in line with their
development priorities.
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After brexit...
Trade
Upon leaving the EU, the UK will be free, both to apply whatever import duty
rates it wishes as long as they do not exceed those that currently exist, and to
replace the EU wide trade regime that it operates with one of its own and directly
negotiate trade agreements. Exports to the UK are substantial for all ACP regions
and for many countries. This totals US$12.3 billion. Much of this trade is governed
by preferential arrangements, EPAs, GSP and EBA, which help keep exports viable
and competitive where high import tariffs are levied, from which ACP countries
are often exempted. For the UK, its exports to the ACP are very important, US$8.3
billion in 2015, even though many individual ACP country markets are not large.
In 2015 almost 40% of the UK exports to ACP countries took place under EU
preferential trade agreements, which will most likely fall away with Brexit, placing
UK exports at a disadvantage in terms of the tariffs applied compared to their
EU27 competitors.
There are different possible trading relationships that the UK can have with the EU
after Brexit, the only one that would be likely to permit the automatic continuation
of the current trading arrangements with the ACP would be a Customs Union. This,
however, is unlikely to materialise. Other more likely arrangements could see an
FTA or some less comprehensive trading arrangement with the EU. If no agreement
is reached the UK would not enjoy full access to the single market and customs
union, and trade with its former EU partners on the basis of WTO rules (hard-Brexit).
2. That the ACP countries trading positions in the UK are safeguarded and
any hiatus to trade is avoided which, otherwise, would be very damaging
to their economies. Consequently, duty and quota-free (DFQF) and other
favourable access terms to the UK market, currently provided under the
EBA, EPA and GSP must continue and the preferential margins that help
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Securing ACP Economic Interests
Elements of a Strategy
As a group, the ACP is in a much better bargaining position than any of its
members or regions, given the total value of UK exports to the countries that are
also major suppliers of many important mineral products and commodities and
host to substantial UK investment. In addition, such a large group of countries
has considerable potential international political authority and influence. It needs
to show that its role and significance is more than just an economic cooperation
vehicle with the EU but a valuable and credible international political partner
and ally on issues of mutual interest. For the ACP countries this will require the
following:
1. Adopt a common position and strategy for advancing ACP interests post-
Brexit.
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After brexit...
3. Actively engage with the media and supportive organisations to help ensure
favourable public attitudes to safeguarding ACP interests, post-Brexit.
Conclusion
Brexit poses serious threats to ACP economic interests, which should not be
underestimated or ignored. The ACP will have to rapidly mobilise all available
resources and engage with allies to vigorously and coherently pursue its shared
interests. As a group ACP countries are of considerable economic importance to
the UK. It therefore would be in the UKs own interests to safeguard and cultivate
its substantial trade and investment with those countries.
The ability to effectively prepare and organise for and deal with Brexit will be a
major test of the solidarity, coherence and maturity of the ACP Group and its
ability to successfully address modern day challenges.
The United Kingdom (UK) is set to withdraw from the European Union (EU), Brexit
as it is commonly referred to, and as soon as this happens all EU treaties will
cease to apply to the UK. The loss of the second largest economy in the single
market which accounts for 17% of EU GDP will have major consequences for ACP
countries because much of their economic engagement with the UK is within the
framework of the latters membership of the EU:
1. The ACP countries trade with the UK is governed by EU treaties and EU law.
2. The ACP countries will lose the substantial UK contribution to the European
Development Fund (EDF) and the EU Development Budget.
Understanding the precise impact of withdrawal and how it will proceed and, on
that basis devising and implementing a strategy to safeguard and advance ACP
interests will be essential.
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15
Introduction
The 23rd June 2016 referendum set the United Kingdom on a path to leave the
European Union. Whilst the choices made by voters would have been according to
what they wished for the future of their country, the UKs withdrawal (Brexit), will
have major consequences for the rest of the world, in particular the ACP group
of countries whose trade and economic relations with the UK and Europe have
been intricately linked for over 40 years. Not all of the consequences though are
predictable since they will be influenced by various factors including the terms of
Brexit and the policy choices of the UK and the EU as well as the responses of the
markets.
What is not in doubt is that the UKs withdrawal from the EU single market and the
resultant regulatory and organizational changes will have foreseeable and undeniable
consequences. These will stem from changes in the provision of development finance
and to the ACP countries continued ability to access the UK market on a viable
basis. Changes are expected in terms of the UKs and EUs demand for imports,
market prices, provision of development assistance, remittances and spending by
their tourists. Then there will be commercial consequences resulting from changes
in the business climate and changing levels of prosperity in the UK and the EU which
could have secondary impacts on the domestic market.
As shown in the pie chart (Figure 1), the UK is the second largest economy in
the EU accounting for 17% of total GDP. It is also the fifth largest economy in
the world. The regulatory and the direct and indirect economic consequences of
Brexit will undoubtedly be far reaching for all parties: the UK itself, the rest of the
EU, the global economy and the ACP.
The challenge facing ACP countries is to safeguard their interests and ensure
that any damage that they suffer is kept to a minimum and that they position
themselves to make the most of post-Brexit opportunities that arise or which
they can create. To do this, ACP countries will need a full understanding of the
implications and consequences of Brexit, the processes that will be involved and
the various options and policies that might be pursued by the UK and the EU. This
understanding will provide the ACP with the foundation for devising and pursuing
optimal policies and strategies for advancing their interests.
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Securing ACP Economic Interests
This publication will seek to provide an understanding of the direct and indirect
consequences of Brexit and place it in its policy context. It will focus on the
implications for development cooperation, trade and regulation. It will consider
the various alternatives scenarios for the future relations between the UK and the
EU and explore the importance to both the UK and to the ACP of their economic
and commercial relationships, notably, in development cooperation and trade.
This will be followed by recommendations regarding strategic options that the
ACP might adopt and pursue.
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Background and Context
Upon joining the European Common Market in 1973, the UK ended the
Commonwealth preferential trading arrangements. Its membership of the Common
Market and later the Single Market in 1993, has since then precluded the UK from
setting or negotiating its own tariffs or trade regime. The EU collectively handles
these matters.
From the outset, with the signing of the first Lom Convention in 1975, ACP
countries enjoyed duty and quota-free (DFQF) access for most of their products
exported to the EEC and later the EU. The system, enabling qualified duty and
quota-free (DFQF) access for the ACP, was renewed in subsequent Lom
Conventions, and then, with the help of a 2001 WTO waiver, for seven years
under the Cotonou agreement. This system, which remained largely unchanged,
was non-reciprocal in that ACP countries did not have to provide in exchange, free
access to their markets for imports from the EU. Preferential ACP trade under the
Cotonou Agreement ended in 2008, when it was replaced by reciprocal Economic
Partnership Agreements (EPAs), the Generalised System of Preferences (GSP)1
and the Everything But Arms (EBA) initiative2. Other exports from the ACP that
are not covered by any of these trading arrangements are on an MFN3 basis; in
other words, import duties are charged according to whatever is stipulated in the
EUs WTO approved schedule.
1. The GSP is a system permitting developed countries to charge reduced or zero duties on
selected imports entering their markets from developing countries that fall within eligible
and specified categories.
2. The arrangement, introduced by the EU in 2001, for the removal of import duties and
quotas on most products imported from LDCs.
3. The Most Favoured Nation Principle (MFN) is the basis on which WTO Members trade with
each other in the absence of preferences for instance under the GSP or an EPA.
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Securing ACP Economic Interests
11th EDF. This is funded by voluntary contributions from Member States and is
exclusively for the ACP and the OCTs4.
Leaving Europe
Unlike much of continental Europe, the UK, with its particular history and view of
its position in the world, has never wholeheartedly embraced integration. Ever
since joining the EEC in the early 1970s there has always been some antipathy
to the concept in certain political and public quarters. In more recent years, this
crystalised into a political movement seeking a referendum that would directly ask
the electorate whether the country should remain in the EU. After many years of
campaigning it was held on the 23rd June 2016 and a majority voted to leave.
Although the decision was only advisory, given the political context, including the
commitment of the Government to leave the EU, ACP countries should operate on
the premise that Brexit will happen and therefore plan and act accordingly.
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The Brexit process
The following sets out a legal analysis of the Brexit process according to the
provisions of Articles 50 (1) and (2) of the Treaty on European Union (TEU).
Formally, the Brexit process will begin when the UK, having decided to withdraw,
notifies the EU of its intention. This will be in accordance with Articles 50(1) and
(2) of the Treaty on European Union.5 Once such a notification has been made, the
EU is obliged to negotiate and conclude an agreement with the UK setting out the
arrangements for [the UKs] withdrawal. these arrangements will cover matters
such as pensions and residency rights for UK and EU-27 nationals by the other
party respectively.
There is the theoretical possibility of extending the two-year period, but this
requires unanimity among all other EU Member States, which may be difficult to
obtain, and in any case from their negotiating perspective it is unlikely that they
would agree to extend the deadline.
5. There is presently some uncertainty as to the constitutional aspects of this process, which
may delay the Governments stated intention of notifying the EU by the end of March 2017,
but that is of little concern for present purposes. It is unlikely that a notification would not be
given at least within some months after March 2017 due to pressure from the government
to this effect, and an absence of serious resistance to the overall result within parliament.
Less important, early notification is also desired by the EU-27 and its Member States. There
is also some uncertainty as to whether a notification, once given, can be withdrawn; the
following is based on the assumption that it either cannot or will not be withdrawn.
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Securing ACP Economic Interests
The withdrawal agreement does not itself cover economic issues such as trade,
but Article 50(2) states that it shall take account of the framework for [the UKs]
future relationship with the Union. This clearly includes the economic relationship
between the UK and the EU. However, there is debate on whether this means that
the terms of that relationship can be negotiated during the two-year period, or
only afterwards.
Also, as far as the UKs third-country trade relations are concerned, there is an
unsettled question concerning the ability of the UK to commence negotiations
with third-countries during the two-year period. The difficulty is that the UK
remains a full EU Member State during this period and as such, would ordinarily
be precluded from negotiating an agreement in the areas of EU competence, such
as the common commercial policy, as to do so could jeopardise the attainment of
the Unions objectives (Art 4(3)(3) TEU, as interpreted.
The question is whether such negotiations pose the same threat to the attainment
of the EUs objectives if the resulting agreement only takes effect after the
UK has already left the EU. For most third countries, this question is of lesser
importance, because they appear to be waiting for a UK-EU free trade agreement
to be negotiated before commencing their own negotiations with the EU. This
may be due to pressure from the EU, or to a desire to know about the expected
competition from EU products in the UK market, or to understand the market for
UK downstream products using their components in the EU. For ACP countries,
these reasons may be outweighed by the advantage of preserving or even
improving their market access in the UK market as soon as possible.
Clearly, it would be more convenient for both the UK and the EU to be able to
negotiate an economic agreement in parallel with the withdrawal agreement. A
strong legal argument can also be made in favour of early negotiations, on the
basis that the reference to the framework implies that the existence of such
a framework which could take the form of an agreed framework cannot be
precluded during the two-year period. On the other hand, there is no obligation
on the part of the EU to negotiate any such agreement if it chooses not to do so.
In that event, trade relations between the UK and the EU would be on WTO terms.
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After brexit...
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Securing ACP Economic Interests
Goldman Sachs6 estimates that during the 18 months following the vote, Brexit
will see a cumulative drop of 2.75% in UK GDP due to increased uncertainty and
deteriorating terms of trade. Reconfiguration of the economy and a reallocation of
resources will be necessary as the UK emerges from a 40-year relationship shaped
by access to the single market. In the process leading up to and immediately after
the triggering of Article 50 the UK economy could find itself in stormy seas. The
economic and policy uncertainty during this period of reconfiguration could drag
down investment7 and drive the economy into recession8.
Figures 2 and 3 show the revision of the IMF forecasts for UK economic growth
and the sharp devaluation of sterling as the market anticipates and prepares for
that eventuality.
6. Goldman Sachs (2016, June). Podcast Episode 41: Brexit After the Vote. http://www.
goldmansachs.com/our-thinking/podcasts/episodes/06-28-2016-huw-pill.html
7. With an estimated fall in FDI inflows of 22% according to: Bruno, R., Campos, N., Estrin,
S., & Tian, M. (2016). Technical Appendix to The Impact of Brexit on Foreign Investment
in the UK Gravitating Towards Europe: An Econometric Analysis of the FDI Effects of EU
Membership. Centre for Economic Performance.
8. Zenghelis, D. (2016, August). Building 21st Century Sustainable Infrastructure (Part
1): Time to Invest. Policy Brief. Grantham Research Institute on Climate Change and the
Environment and Centre for Climate Change Economics and Policy.
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After brexit...
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Securing ACP Economic Interests
One of the immediate aftermaths of Brexit was seen in the weakened currency. If
inflation increases (projected at 3%), the value of the pound could drop further
or stabilise at a lower level. For countries that depend heavily on UK aid, such as
Sierra Leone and Ethiopia, this could mean the levels of assistance that they are
able to receive might fall.
Most predictions are that Brexit will negatively impact on the UK economy and
the currency markets have already anticipated this by devaluing the pound
sterling. The combination of these factors will reduce the attractiveness of the UK
as a market for ACP goods and services and a provider of remittances, tourism
expenditure and development aid.
25
Implications for ACP
Countries After Brexit
Development cooperation
Brexit will have immediate implications for ACP countries development
cooperation even if, as has already been mentioned, this is not an area of exclusive
EU competence.
The ACP benefit from the EUs Development Budget and the European
Development Fund (EDF). The latter is exclusively for them and the OCTs11.
The 11th EDF (2014-2020) is set at 30.8 billion. The UK is the third largest
contributor to the EDF behind Germany and France, providing nearly 4.5 billion
or 15% of the total. The UK also makes a major contribution, estimated at 8.3
billion in 2015, to the EUs overall budget, which provides the finance for the EUs
Development Budget line.
Brexit will result in the loss of the UKs contribution to the EU development budget
and, more pertinently to ACP countries, the EDF. Change is inevitable and since the
referendum, the UK has already suspended certain previously agreed payments
under the European Regional Development Funds (ERDF).
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Securing ACP Economic Interests
Will the changes though necessarily signal a loss to the ACP? That will depend
very much on the EUs and the UKs policy choices.
Regarding EU funding for the ACP post Brexit, the 11th EDF, which runs to 2020,
is already set so ACP countries should continue to receive the total committed
amount even if the UK leaves before then. Of course, the ACP Group will need to
be vigilant to ensure that disbursement is actually effected.
Given the two years for Article 50 negotiations, the earliest possible date for
Brexit will be in 201912 which will be just months before the end of the life of
the 11th EDF. The ACPs major concern will be whether the remaining member
States will agree in future EDFs to make up for the substantial UK contributions
that will be lost. There is ongoing discussion as to whether in future the EDF should
be brought into the EU budget, which would then call for mandatory rather than
voluntary contributions. This would have its own implications depending on any
changes in the volumes of resources that would be available to the ACP and any
simultaneous adjustments to policy and management.
12. Since the UK Government has indicated that it will trigger Article 50 by March of 2017, the
country will not exit until negotiations end in 2019.
27
After brexit...
UK Development Policy
The other factor that will affect outcomes for the ACP would be UK development
policy. Will there be any change in overall policy in the run-up to or post-Brexit?
The UK will no longer contribute to the EUs Development Fund and the EDF, but
will it maintain overall aid levels, redirecting and disbursing the funds via other
multilateral agencies or doing so bilaterally?
Firstly, it is likely that the UK will maintain its 0.7% of GNI aid target. It is a leading
player in global development cooperation and was the first G7 country to meet
the international 0.7% of GNI target. In 2014 it disbursed the second largest
amount of development assistance among OECD DAC countries.
It of course will be important for the ACP to engage with the UK government
(HMG) to help it appreciate that its aid can also serve a more fundamental and
valuable purpose than securing the UKs place in the world. Instead, it can
support economic growth, and sustainable development that will transform lives
and reduce poverty making the world more prosperous and secure.
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Securing ACP Economic Interests
The UK particularly through DFID has a direct presence in all ACP regions and
in several other countries. It also contributes to and supports specific African
Union-led operations in some ACP countries such as Somalia, under the African
Peace Facility. The bulk of its aid though, 60%, is bilateral while the remainder
is channeled through multilateral agencies like the IDA and EU. Most of the
UKs multilateral ODA was spent by DFID, which accounts for 86.2% of total
UK multilateral ODA. The remaining 13.8% of UK aid was provided by other
agencies like the Department of Energy and Climate Change and the Foreign and
Commonwealth Office.
Policy areas: Those policies that have hitherto been the hallmark of UK
development cooperation will doubtlessly continue to be promoted to the extent
that they have direct bearing on the UKs vision of itself as a global player and
where the UK believes that it has greater expertise and can have the best impact.
These include poverty reduction, security, humanitarian aid, climate change and
disaster risk reduction, good governance, education, wealth creation, extractive
industries, migration and the SDGs.
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After brexit...
Table 1 sets out the 20 largest recipients of bilateral aid which account for 80.8%
of the total.
Table 2 shows the main multilateral organisations through which the UK disburses
development assistance.
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Securing ACP Economic Interests
14. Ibid
31
After brexit...
The loss of the UKs perspective and influence will undoubtedly affect the direction
of future EU development policy. This might not necessarily be in ways that the
ACP would have wished since the UK has often been an advocate and strong
supporter of various causes adopted by the ACP such as the attainment of 0.7%
GNI as ODA and climate change mitigation and adaptation support.
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Securing ACP Economic Interests
33
Trade
Immediately on Brexit, the UK will be free, firstly, to apply whatever import duty
rates it wishes, as long as they do not exceed those that currently exist, and
secondly to replace the EU wide trade regime that it operates with one of its own.
It will also have an independent voice and vote in the WTO and be free to directly
negotiate trade agreements. Its operations would of course have to conform with
WTO rules and norms including MFN principles.
In order to understand what this might mean for the ACP and what would be its
optimal strategy, it is essential to appreciate the regulatory basis on which ACP
countries currently trade with the UK and its importance to them as well as the
possible alternative post-Brexit arrangements and the considerations that will
underlie the negotiations.
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Securing ACP Economic Interests
4
0 ACP countries can export to the EU under the EBA, which is a non-
reciprocal trade arrangement that grants full duty and quota-free access
to the EU market, for all products except arms and ammunitions. (It should
be noted that half of these LDCs are also participants in EPA processes
which have established or will establish reciprocal preferential trade
arrangements with the EU).
The 49 ACP countries (including 20 LDCs) that have concluded (or are
in negotiations to conclude) WTO compatible economic partnership
agreements, with trade preferences and duty and quota-free access for
their exports to the EU, (except for South Africa where TRQs15 apply
across a range of products), and for the EU tariff elimination commitments
from the ACP partners. The status of EPAs with ACP partners is presented
in Annex 3
35
After brexit...
Figure 4 shows the value and destination of UK exports and Figure 5 UK exports
to partners.
When services are added the ACP still retains its overall ranking.
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Securing ACP Economic Interests
17. Ibid
37
After brexit...
In 2015 UK imports from ACP countries were worth US$12,295 million. Figure
6 shows the principal exports and the trends of the last three years.
It will help in analysing the relative importance among ACP countries of their
exports to the UK market as a share of their trade with the EU, to classify them
by country as well as by sector, according to their dependence on the UK market.
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Securing ACP Economic Interests
Using this first level classification we find 16 out of 49 EPA signatories have a
higher than average dependence on the UK market in terms of their exports to
the EU. The most exposed ACP countries being: St Lucia, Belize, Fiji, Seychelles,
Guyana, Jamaica, Gambia, Dominica, Mauritius, Kenya, South Africa and the
Dominican Republic. The country breakdown according to EPA region is at
Annex 1.
It should be noted that, with the exception of the Dominican Republic, all of these
ACP countries are members of the Commonwealth.
However, the key issue is less the total share of the UK in ACP exports to the
EU, than the importance of the UK market for ACP exports where high tariffs are
still applied and/or where non-tariff measures are important to market access.
For example, in the agro-food sector, the EU often maintains high levels of tariff
protection and hence duty and quota-free access granted is most significant.
Even where an ACP country may have a low dependence on the UK market in its
overall exports to the EU, there may be sectors with a high dependence or even
exceptionally high dependence on the UK market.
39
After brexit...
To properly and fully understand the ACP export data, it would be helpful to
disaggregate the figures since there are some factors that should be taken into
account which include:
Trade falling into these two categories then needs to be factored out in order to
fully assess the overall dependency on the UK market and appreciate the value of
the preferences.
The following analysis outlines the degree of overall dependence among EPA
members, existing or acceding.
ECOWAS
19. Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea-Bissau,
Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, Togo, Mauritania
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Securing ACP Economic Interests
EAC
Of the five EAC EPA member countries Kenya, Tanzania, Uganda, Burundi, Rwanda,
two have a disproportionate dependence on the UK Market; Kenya, with 27.8%
of exports to the EU going to the UK and Rwanda with 17%. The other three
members all have less than 6% of their total exports to the EU going to the UK.
Cameroon, EPA signatory in Central Africa has a less than average dependence
on the UK market, with 8.6% of exports to the EU destined for the UK market
41
After brexit...
Namibias situation also underlines the value of assessing the relative importance
of the UK market vis a vis the alternative markets in the rest of the EU. In 2015
Namibia exported 3,829 tonnes of quality differentiated beef to the UK market, in
a context where the estimated size of the EU27 market for quality differentiated
beef is around 900,000 tonnes. The affected Namibian beef exports to the UK
would thus be equivalent to only 0.4% of the consumption of quality differentiated
beef in the EU27.
The two Pacific ACP signatories Fiji and Papua New Guinea, have a higher than
average dependence on the UK market in their exports to the EU, with Fiji (44.9%)
having a very high dependence despite the recent success in diversifying away
from the UK market.
Papua New Guinea also has an above average dependence (19.2%) on the UK
market, with 33.9% of its palm oil exports going to the UK.
Given the processing of PNGs fully certified palm oil takes place in the UK for
the whole of the EU28 market for sustainably certified palm oil, the nature of the
future UK-EU27 trade relationship will be particularly important for PNG.
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Securing ACP Economic Interests
In the case of St Lucia 80% of exports to the EU are in agro-food products with a
high dependence on trade preferences. In the case of Belize the figure is 73% of
total exports to the EU which go to the UK and have a high dependence on tariff
preferences provided under trade agreements with the EU. These countries thus
have an exceptionally high dependence on the UK market in terms of their overall
export trade with the EU
43
After brexit...
It is argued20 that as the UK leaves the EU, third party countries can benefit
through better trade. The UK must implement trade reform in a manner that does
not undermine its commitments under the SDGs. Goal 17.11 states: Significantly
increase the exports of developing countries, in particular with a view to doubling
the least developed countries share of global exports by 2020. The ACP
countries need to urge the UK government to ensure this is not at the expense of
their long-standing trade interests.
20. Anderson, M., Juden, M., Rogerson, A. (2016). After Brexit: New Opportunities for Global
Good in the National Interest. CGD Policy Paper 089.
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Securing ACP Economic Interests
45
Possible different UK-EU
trade relationships post
Brexit
Implications for ACP countries
As it leaves the EU, the UK will negotiate its future relationship with the other
Member States, the EU27. The nature of that eventual relationship will affect the
outcomes for the ACP countries and their future trade situation.
The following analyses cover various options for UK-EU trade relations and what
these mean for ACP countries, not only in economic terms, but also in terms of
the types of issues ACP countries will need to focus on in their representations to
the UK (and to some extent the EU).
One option is that the UK remains within the EU/Turkey customs union. Under
this arrangement there is unrestricted circulation of goods of whatever origin
that would be able to freely transit between the UK and the EU and vice versa.
Politically, at this stage this option seems unlikely.
The UK is a net importer of goods from the EU (8bn deficit), but a net exporter of
services (20bn surplus), so it is in the UKs interests not to conclude a customs
union agreement without an accompanying services agreement. However,
the closer the trade arrangements with the EU resemble the existing situation,
the more intransigent the remaining EU Member States are likely to be in their
demands for the UK to continue permitting free movement of persons, to which
the UK is also unlikely to agree.
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Securing ACP Economic Interests
Placing aside that this model most probably wont be realised, one can predict
what would be the consequences for ACP states of the UK remaining part of a
customs union with the EU, based on Turkeys experience as a non-EU Member
State in the EU customs union. Article 16 of the EU-Turkey Association Council
Decision No 1/95, which established the customs union, states that:
With a view to harmonising its commercial policy with that of the EC, Turkey shall
align itself progressively with the preferential customs regime of the EC within five
years as from the date of entry into force of this decision. This alignment will concern
both autonomous regimes and preferential agreements with third countries.
Turkey has fully harmonised its own GSP program with the EUs GSP program,
including the EUs rules of origin.21 The UK, which already is party to the
preferential customs regime and all the agreements, would be likely to enter into
an equivalent undertaking. Indeed this is a condition of free circulation of imports
within the customs union.22 This means that the UK will aim to continue its rights
and obligations under any FTAs, including the EPAs, to which it is currently a party
as an EU Member State,23 and that it will have the EUs support in this endeavor.
There seems little reason for a third country to object to any such continuation,
and, practically speaking, all that would be required would be a formal agreement
noting the UKs change of status to the EPA as a non-EU Member State. As for
preferential trade with ACP states, the same conclusion can be drawn.
47
After brexit...
UK-EU FTA
The EU has concluded numerous FTAs over the years, the most comprehensive,
in terms of coverage, being the Deep and Comprehensive Free Trade Agreements
(DCFTAs) with Ukraine, Georgia and Moldova. Services were excluded from the
EU-Switzerland agreements, and agriculture from the EEA Agreement.24 A key
difference between FTAs and a customs union is that FTAs have rules of origin used
to determine when products are sufficiently worked to be considered originating
products that can benefit under the FTA. Rules of origin are unnecessary for
customs unions, insofar as they adopt the alternative model of free circulation.
Other internal aspects of such an FTA, relevant to ACP, exports can be negotiated
between the UK and the EU, but ACP countries need to ensure that this is actually
done. For example, it would be desirable to ensure that shipments to the UK
continue to be counted for purposes of determining the size of shipments subject to
SPS inspections. Beyond this, the main feature of an FTA, as opposed to a customs
union, is that its parties can operate their own tariff regimes, and conclude their own
free trade agreements with third parties. One need not be unduly concerned, from a
regulatory or duty standpoint, about products that are landed, e.g., in Rotterdam or
Felixstowe, and then exported to the UK or the EU respectively. Goods in transit are
not subject to duties in the country of first landing. Since most ACP exports have free
entry into the EU there will not be any duty payable. If on the other hand, they are
shipped to the UK after first landing in Europe, there would only be duty if the ACP
does not continue to enjoy duty free treatment in the UK.
24. The Agreement on the European Economic Area, entered into force on 1 January 1994,
and brings together into Single Market, the EU Member States, Iceland, Liechtenstein and
Norway
25. Entered into force 26 February 2013, replacing earlier similar arrangements.
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Securing ACP Economic Interests
If the UK and the EU only manage to negotiate a looser type of FTA, such as
CETA26 or the EU-Korea agreement, matters become more complex for ACP
countries. This is for four main reasons. First, the rules of origin adopted under
such an agreement will be sui generis, and are therefore much less predictable.
Second, it is more likely that the FTA will not abolish duties on all trade, with
implications for any ACP products used in the production of affected UK or EU
products (albeit duty drawbacks can be negotiated). Third, the more that the UK
regulatory regime can diverge from the EUs, the more difficult it will be to ensure
that ACP trade to the UK and to the EU respectively can be bundled, as at present.
This has implications, inter alia, for SPS sampling, as well as administrative costs.
Fourth, the UK will not only cease to be a party to the EU-ACP EPAs, but it will be
highly unlikely that the EU and the UK would be willing to reinstate the UK as a
non-EU Member State EPA party.
Given the scope and complexity of the negotiations it is quite conceivable that
the UK and the EU fail to agree on a customs union agreement or FTA prior to
the expiry of the two-year negotiating period. The result, at least in the immediate
term, would be that they must treat each other as any other third country. That
means that in the immediate term the EU will impose its MFN tariff on UK products,
and the UK will impose, quite likely identical, MFN tariff on EU products.
For ACP countries, this has several implications. First, as mentioned, this could
affect trade in processed UK/EU products using ACP inputs, and therefore the
demands for those inputs themselves. Second, the reduction in competition in
each others markets could lead to higher prices, which could be to the advantage
of ACP countries. Probably most fundamentally, though, such a scenario would
49
After brexit...
A London and Brussels based advisory firm, Global Counsel that helps companies
and investors across a wide range of sectors anticipate the ways in which politics,
regulation and public policymaking create both risk and opportunity and to
develop and implement strategies to meet these challenges. It has put out a
summary of Brexit models and provides its summarised assessment of each of
the possible scenarios (Figure 7).
27. Global Counsel. (2015). Brexit: the Impact on the UK and the EU. Retrieved from: https://
www.global-counsel.co.uk/sites/default/files/special-reports/downloads/Global%20
Counsel_Impact_of_Brexit.pdf
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Securing ACP Economic Interests
51
After brexit...
Since Brexit will reduce the economic size of the EU by 17%, two main concerns
arise following the UK ceasing to be a party to the ACP-EU EPAs. First, the ACP
EPA countries will lose the valuable preferential access to this major market.
Second, as a result of losing the range of benefits including market access to
the UK, the balance of concessions negotiated with the EU-28 will change
dramatically. In essence, the concessions negotiated by the ACP side will in the
changed circumstances turn out to have been made in exchange for benefits that
are much reduced in value from what was initially expected from the EU and would
be realised post-Brexit.
There could be a case for highlighting the reduced value of current EPA trade
preferences for a range of ACP countries resulting from the departure of the UK
from the EU, and using this to argue for:
Highlighting that the ACPs EPAs expectations will be curtailed, might be cited in
encouraging the EU27 to make the issue of the UKs respect for inherited trade
obligations towards ACP countries an integral part of the Article 50 discussions or
the negotiations on future EU27-UK trade arrangements (which is likely to include
some trade concerns related to trade with third parties, given the expected EU
interest in dividing the EU28 WTO TRQs with the UK).
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Securing ACP Economic Interests
Frustration of the ACP countries expectations of the EPA can constitute the basis
for denunciation of the agreement, or plausible threat to do so, in accordance with
its own terms, or termination on the basis that the circumstances in which the
agreement was concluded have changed. Article 62 of the Vienna Convention on
the Law of Treaties states relevantly, as follows:
Article 62
It would be for the ACP to decide how best they might use this lever in negotiations
with the EU.
53
What might happen to ACP
Trade
Upon Brexit, the UK can have its own tariff schedules, but if the rates were to
be higher than those that it currently applies, it would need to negotiate them
in the WTO. If the changes are significant and its trading partners consider that
their exports might be harmed, this would invariably be a lengthy and exceedingly
difficult task.
EU tariffs were largely designed to protect EU-wide production and therefore the
rates are necessarily overall more protectionist than required for the UK. Hence
there have been calls from certain UK business interests and politicians to reduce
MFN tariffs. Also the Government has declared its desire to champion free trade
post-Brexit.
The ACP would wish the preservation of higher tariffs on third country imports on
products of concern to them. The UK, post Brexit will pursue its own independent
trade and agricultural policy which could lead to the dismantling of those MFN
tariffs particularly where the UK has no production interest.
ACP agro-food exports tend to be among the products with the highest MFN
import duties, and consequently where the ACPs margins of tariff preferences are
highest. Therefore, if the tariffs were to be eliminated or substantially reduced on
products of export interest to ACP countries, preference erosion would be rapid
and extensive even if their exports continue to be duty and quota free.
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Securing ACP Economic Interests
For Brexit not to damage the ACPs exports by undermining their competitiveness
on the UK market, preferential margins must be preserved. This will require the
retention of high import duties from which ACP countries are exempted.
Given the importance of tariffs on products of interest to ACP countries, they will
need to be alert to the prospect of preference erosion and represent their interests
to the UK before any reductions are decided upon, whether in MFN schedules or
in FTAs with third countries.
55
After brexit...
EBA
Since, according to WTO rules, the duty and quota-free access, EBA, which is
provided to LDCs as a unilateral measure, the UK would be able on its own to
grant the preferences. The UK has long been a champion of this arrangement so
re-establishing or avoiding an interruption of this trading preference should not be
a problem, since there are no WTO complications.
However, agreement with the EU27 may be needed to allow the UK to set in place
a regulation granting LDCs free access to the UK market from day one of Brexit,
in advance of their formal departure from the EU.
With 40 of its members being LDCs, the future application of the EBAs duty and
quota-free treatment of imports from LDCs would be very important to the ACP.
Given the UKs longstanding political support for LDCs and its role in getting the
measure adopted by the EU, it would seem safe to assume that the arrangement
would continue post-Brexit.
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Securing ACP Economic Interests
GSP
The EBA regime covers all least developed countries. Of the 16 GSP+ beneficiaries
none are ACP countries28.
28. The current GSP+ beneficiaries are: Armenia, Azerbaijan, Bolivia, Colombia, Costa Rica,
Ecuador, El Salvador, Georgia, Guatemala, Honduras, Mongolia, Nicaragua, Peru, Paraguay
and Panama, Sri Lanka (currently suspended).
57
After brexit...
The standard GSP provides for zero tariffs or tariff reductions (typically 3.5
percentage points on ad valorem duties) on a large number of both non-sensitive
and sensitive imports.
The UK could formulate its own autonomous GSP scheme, with a broader country
coverage (i.e. including EPA beneficiaries since the EPAs would no longer apply)
and deeper levels of tariff preferences. This could be unilaterally established and
would require no negotiation, though needing to comply with WTO requirements.
However, such a scheme would take some time to design and set in place.
If, however, it included duty free access (and improved rules of origin) for an
extensive range of products, such a new scheme could possibly be subject
to challenge in the WTO by a Member that considered that its rights had been
infringed.
The GSP, is of interest to non-LDCs for exports that are not covered by an EPA or
an FTA. Since the principle of support for developing countries is firmly entrenched
in HMG policy, one can safely assume that the UK will continue to operate some
such arrangement for developing countries.
It can be presumed that for various products the UKs domestic concerns would
be different from those of the EU. It might well switch political focus in favour
of some developing countries and categories that do not precisely reflect the
EUs traditional focus. Secondly, the UKs domestic economic interests are likely
to have implications for the design of its GSP scheme. For both reasons, ACP
countries have an interest in making representations to the UK government as
soon as possible on these points.
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Securing ACP Economic Interests
The ACP should urge HMG to ensure that ACP trade under GSP is not interrupted or
disadvantaged by Brexit and that ACP interests are preserved. It is recommended
that the UK puts in place the inherited EU GSP scheme pending possible further
review and improvement.
UK-ACP FTAS
It is first of all necessary to recall that upon Brexit, the UK will immediately cease
to be a party to the EPAs, which the country had concluded on the basis that it
was an EU Member State. This means that trade preferences between the UK and
ACP EPA parties will need to be restored in some replacement framework. For
the purposes of WTO consistency, that will have to be in the form of a new FTA.29
How can the current preferential trading arrangements, which benefit non-LDC
(and indeed many LDC) ACP countries, be preserved?
The main area where the ACP could address this issue of erosion of the value of
trade preferences would be through the conclusion of new trade agreements, which
included provisions related to the extension of adjustment support where new
trade agreements lead to the erosion of pre-existing ACP preferences. This could
be included as an integral part of any EPA+ arrangements negotiated with the
UK, which also restores UK exporters to parity of trade treatment with their EU27
competitors.
59
After brexit...
One option which has been advanced is that ACP regional groupings should explore
with the EU the possibility of adding the UK as a third party to their EPAs. This it is
held would require the consent of the EU27 as well as appropriate amendments to
the final provisions of the EPA:
While this is one option which could be explored, this is very much a second-best
option since
a. it does not allow ACP countries to explore any EPA+ gains from Brexit;
The UK may opt for the negotiation of new free trade area agreements with
individual countries, existing configurations or new configurations of ACP partners.
However, it needs to be recognised that this is normally a very protracted process.
If the existing EU-ACP EPAs are accepted as a starting point, some of which took
over ten years to negotiate, the additional time and effort required for these
further negotiations would be considerably reduced.
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Securing ACP Economic Interests
61
After brexit...
Firstly, with regard to development assistance the ACP would wish to ensure that
the quantum of funding received is at least as much as would have been disbursed
in the absence of Brexit and that it is in line with ACP countries priorities. For this
purpose, it will be necessary that:
2. UK contributions intended for the ACP which were transmitted via the
European Development budget and EDF will now be diverted principally
to the ACP, its countries and regions, as opposed to going via other donor
agencies.
With respect to trade, ACP countries need to safeguard their long-term trading
position and avoid any hiatus to their export trade with the UK, which would be
very damaging.
It will be necessary that duty and quota-free and other favourable terms of access
to the UK market, currently provided under the EBA, EPA and GSP continue and
that preferential margins which help ensure the viability of ACP exports to the UK
are preserved.
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Securing ACP Economic Interests
Specifically, the ACP needs an early political commitment from HMG that it will,
upon Brexit, continue without interruption to:
a. offer EBA and the favourable GSP concessions to eligible ACP countries
63
After brexit...
A group of states as large as the ACP that is coherent and can unite to forcefully
pursue agreed international objectives will inevitably be influential and an
attractive political partner to other countries and groupings.
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Securing ACP Economic Interests
2. Actively engage with and lobby HMG, not only in formal government to
government meetings but also in other interactions with parliamentarians
and officials.
65
After brexit...
5. The ACP Group and Secretariat should actively engage with the media
and supportive organisations to help ensure favourable public attitudes to
safeguarding ACP interests, post-Brexit.
66
Conclusion
Whilst Brexit poses serious threats to ACP economic interests, which should not
be underestimated or ignored, the new era does not have to be disastrous if the
group mobilises all available resources and engages with allies to vigorously and
coherently pursue their shared interests.
Given how high the stakes are for the ACP, it needs absolute conceptual clarity
on both the short term and medium term challenges. This is particularly the case
with respect to safeguarding preferential margins, which would be the foundation
of the ACPs post-Brexit demand in trade.
It is vital that ACP moves as quickly as possible on its Brexit campaign. The
demands on the UK authorities are exceedingly great and it will steadily become
increasingly difficult to get the attention of relevant Ministers and officials. This
situation is likely to worsen after the launch of the Article 50 process. The
campaign for securing ACP interests needs to start as soon as a plan and strategy
have been agreed. Positions and policies are being discussed both within and
outside the UK government and the ACP needs to get to and convince policy
makers and those with influence, before positions are finalised.
Unlike many previous joint ACP campaigns, this one will be very much centered
in London and will be particularly political in character. The extensive bilateral
engagements that ACP countries have with UK ministers and other representatives
in their capitals and in London can be invaluable in supporting common positions.
In addition ACP High Commissioners and Ambassadors in London must be key
participants in the campaign. Pro-active engagement in the coming months will be
vital if the ACP is not to slip off the UKs agenda of concerns.
67
After brexit...
Preparing for and organising to deal with Brexit will be a major test of the solidarity
and coherence of the ACP Group and its maturity and ability to successfully
address modern day challenges.
68
Annex 1
Table 3: West African Exports to the UK and the EU (,000)
Country 2010 2011 2012 2013 2014 2015
Benin
EU 31,318 68,394 34,714 37,221 45,923 45,982
UK 19 17,568 72 39 199 1,160
UK % EU 2.50%
Burkina Faso
EU 97,499 62,509 64,555 46,896 113,740 54,486
UK 283 20 65 401 1,238 1,796
UK % EU 3.90%
Cape Verde
EU 36,152 45,992 55,156 48,075 97,249 63,563
UK 56 153 160 242 56 127
UK % EU 0.20%
Ivory Coast
EU 3,218,722 3,191,839 3,262,248 3,293,856 3,257,528 3,685,797
UK 206,855 105,467 213,394 153,300 166,130 264,582
UK % EU 7.20%
Gambia
EU 17,990 20,554 15,553 9,080 17,977 17,187
UK 4,589 5,722 4,683 2,538 6,699 5,156
UK % EU 30%
Ghana
EU 1,474,689 3,480,937 3,299,994 3,378,956 2,884,926 2,394,209
UK 274,071 326,946 265,079 330,250 315,862 277,005
UK % EU 11.60%
Guinea
EU 472,081 471,910 523,426 439,385 455,335 581,972
UK 2,513 3,476 4,027 1,921 2,395 1,177
UK % EU 0.20%
Guinea Bissau
EU 5,669 4,201 5,922 1,476 3,347 2,041
UK 8 2 67 - - 3
UK % EU 0.10%
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After brexit...
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Securing ACP Economic Interests
EAC
71
After brexit...
Table 5: Central African EPA Participants exports to the UK and the EU (,000)
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Securing ACP Economic Interests
Table 6: SADC EPA members exposure to the UK Market in their exports to the
EU (,000)
73
After brexit...
Table 7: ESA EPA Group Members exports to the UK and the EU (,000)
Country 2010 2011 2012 2013 2014 2015
Mauritius
EU 884,886 930,499 1,049,880 1,086,291 959,639 904,552
UK 71,667 279,026 301,254 288,481 246,708 243,036
2010 2011 2012 2013 2014 2015
UK % EU 26.90%
Madagascar
EU 481,500 549,098 583,090 737,967 840,356 936,337
UK 33,796 35,344 28,958 37,190 52,559 53,807
UK % EU 5.70%
Seychelles
EU 71,667 279,026 301,254 288,481 246,708 243,036
UK 53,512 59,490 62,956 85,824 79,913 83,348
UK % EU 34.30%
Zimbabwe
EU 299,400 446,024 417,489 387,621 510,294 400,430
UK 33,712 66,751 23,638 40,472 34,478 46,136
UK % EU 11.50%
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Securing ACP Economic Interests
75
After brexit...
76
Annex 2
Visualising Data
Whilst less than the UKs top five trading partners ( US, Germany, France,
Switzerland, and China) exports to ACP countries still exceed Australia, Brazil,
Canada, and India.
77
After brexit...
Here we see UK imports from partner countries, again the ACP precedes India,
Brazil and Australia.
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Securing ACP Economic Interests
The following graph shows business investment and GDP Growth projections
for the UK. Investment drops and levels off with GDP growth post Brexit in this
projection.
32. Goodwin, A., & Beck, M. (2016). The UK Economic Outlook. Institute for Fiscal Studies.
Retrieved from: https://www.ifs.org.uk/uploads/gb/gb2016/gb2016ch2.pdf
79
Annex 3
Overview of economic partnership
agreements
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Securing ACP Economic Interests
81
After brexit...
82
Annex 4
Address by Baroness Kinnock
Opening Address by
Baroness Glenys Kinnock of Holyhead
At the Ramphal Institute Workshop
After Brexit: Securing ACP Economic Interests
Tuesday 9:30 a.m. the 8th November 2016
At the Policy Institute 1st floor of the Virginia Woolf Building
Kings College London
Chair of the Ramphal Institute, Patsy Robertson, who has welcomed us so warmly
to Kings College this morning; Mr Viwanou Assistant Secretary General of the
ACP who is joining us via Skype; Dear colleagues and friends -
After the UK joined the EEC in the early 70s, Sir Shridath was a leading architect
of the arrangement that forged its new economic relationship with ACP countries
- which is the Lom Convention.
Now that it is leaving, it seems fitting that the Institute that bears his name, and
seeks to continue his pioneering work in support of the international development,
should be active as well.
This time, however, not in the creation of an ambitious and new opportunity for
trade and development cooperation, but more modestly, to help the ACP group
protect and preserve its vital interests and to ensure that it does not find itself
being an unwitting victim of Brexit.
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After brexit...
Today I want to compliment and to thank the authors of the brief and for putting it
together in what has been a remarkably short time.
Like all of you, I only saw the notes last night so I have only been able to skim
through them.
I can, however, confirm that the right questions are indeed being asked, and in
addition the issues which need to be grappled with are being aired.
What will happen to ACP countries that have been exporting to the UK under EPA
or one of the other EU arrangements?
What we really, need to know is that if Brexit reduces the benefits that EPAs
provide, where exactly does that leave the ACP?
This issue is not just important for the ACP, it is definitely critical for the United
Kingdom itself.
Even though the media focuses mainly on markets like China, India, the US,
Canada and of course the EU itself, the UKs trade, investment and other economic
relations with the ACP countries are vital to the health and wellbeing of the UK
economy.
A couple of weeks ago, I tabled a written question to the Minister in the House of
Lords, who is responsible for international trade.
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Securing ACP Economic Interests
That statement, as the UK prepares to leave the EU, left me, and others absolutely
none the wiser!
It is no secret that in Parliament many of us are most concerned at the lack, both
of transparency in the Governments approach, and of clarity over its exit strategy.
You can certainly rest assured that I will be continuing to seek clarity and clear
answers from the government on its negotiations and on its preparations.
We need to be sure, not only that the UKs own economic interests are safeguarded,
but also that those of our long-term ACP partners are not sacrificed.
That should, at least, remind the British government of the need to be open with
us - rather than to keep us in the dark until it has invoked Article 50 and concluded
its negotiations!
The legislature would then be faced with the Hobsons choice of accepting
whatever fait accomplit was negotiated and without the option of a real alternative.
So much hangs on the deliberations taking place here and elsewhere, and it
is particularly important that we all seek to come to credible, and realistic,
conclusions which are founded on sound, reliable analysis of the facts, rather than
sentiment, or wishful, or selective assumptions.
Let me finally wish you every success, and all the very best with your critical, and
essential, deliberations which are so important and indeed when so much is at
stake, for so many people, who understandably, fear the effects of Brexit and who
will definitely need our continued support.
85
The UKs withdrawal from the European Union will have major and far reaching
consequences, way beyond the UK. Countries of the African Caribbean and
Pacific (ACP) Group are among those expected to be most affected since
the UK in an important development partner and total trade is substantial;
US$18.6 billion in 2015. However ACP countries relations with the UK
for the last 40 years have been within the EUs regulatory and institutional
framework.
This study examines the implications for both the UK and the ACP and its
findings are expected to help avoid or minimise any negative consequences
of Brexit and identify and capitalise on opportunities that might arise or be
created.