So, you’ve heard about Brexit in the news and some of you would have wondered what exactly is this Brexit and will it affect me? In a stunning result, the United Kingdom voted to serve the EU with “divorce” papers in a bitterly fought referendum in June 2016.
Just to take a step back, one needs to appreciate that the relationship of Britain with Europe has always been complicated. “The fact that Britain is an island, physically separated from Europe, that it has not been invaded for nearly a thousand years, that not so very long ago it ruled half the world. All this fit in the sort of British exceptionalism.” (The Story So Far - Brexit Means… 2016).
When the European integration project began, England was not willing to participate. Only when the venture of creating the community of European states proved to be successful enough, Great Britain expressed the desire to join in.
The words of David Cameron in 2015 perfectly summarise the intentions of the UK then and now: “We see the European Union as a means to an end, not an end in itself”. (Chatham House 2015) This in turn points to the supposition that “Brits always saw the EU as a business, not a political proposition”. (The Story So Far- Brexit Means… 2016).
In any case, let’s not just give the Brits a side eye as many people, the EU citizens included, have a very obscure understanding of the ways in which the EU functions. So let’s have a look at the road we’ve travelled so far:
The Withdrawal Agreement which was evoked by the UK post their June 2016 Referendum is currently under negotiation. The current position effectively keeps UK in the EU Single Market until 31 December 2020, so no need to panic just yet. What this means is that all current trade relations are to be maintained, as if the UK were still a full EU member. When the negotiators finally reach an agreement, EU Member State Agreement will be needed. On top of that, ratification in both the EU & UK Parliament is necessary for the agreement to come into effect.
Upon departure from the EU, the EU & UK will start to formally form the basis of their new relationship, which will most likely be in the form of a Free Trade Agreement.
The Withdrawal Agreement (as it stands) allows continuity of existing trade relationships for a transition period (December 2020). If we experience a “hard Brexit” (a no deal Brexit), no EU trade agreements will apply to the UK. World Trade Organisation (WTO) Most Favourable Nation (MFN) rates & minimum access commitments would apply from April 2019. Without transitional arrangements the UK could be in a position to unilaterally apply Everything But Arms (EBA). EBA schemes grant full duty free and quota free access to a particular market for all products (except arms and armaments).
The UK could also be in a position to apply autonomous Tariff Rate Quotas (TRQ). A TRQ is a mechanism that allows a set amount of specific products to be imported at a low or zero rate of duty. South Africa is currently negotiating that sugar falls under a TRQ regime, this would mean additional consignments will be heading up North, with South Africa already having secured a 150 000 tons TRQ into the EU (effective 2017).
With all said and done, we must be mindful that there is currently no legal certainty for how products such as sugar will access the UK post Brexit. Without a transitional arrangement, access to the UK will be limited to WTO provisions and any other unilateral measures the UK decides to impose. Either way, application of “UK EBA” & “UK EPA’s” will define future trade relationships. And as the 29 March approaches, the sugar industry will be keeping a keen eye on developments in Westminster and Brussels.