Trade ISSUE 137 Hot Topics Post-Brexit UK-ACP Trading Arrangements: Some Reflections Mohammad Razzaque and Brendan Vickers*

Background avoid possible trade disruptions arising as a result of post-Brexit policy shifts. The prospect of the UK formulating its own trade policy following Brexit is likely to have implications Economic Partnership Agreements for the existing Economic Partnership Agreements The EU and its ACP partners have negotiated (EPAs) between the European Union (EU) and some seven regional EPAs that are at different stages of African, Caribbean and Pacific (ACP) countries, finalisation or implementation (Table 1). During the and the UK’s future trading arrangements with the withdrawal negotiations, once the UK has triggered ACP. The latter will be determined by the nature of Article 50 of the Lisbon Treaty, the UK will continue the UK’s trade deal with the EU post Brexit and the to implement the EU’s common commercial policy trading regime it sets up with those ACP countries and all bilateral and regional trade agreements, such that have an EPA. ACP countries receive duty-free as the EPAs. Once the UK has formally exited the and quota-free (DFQF) market access into the EU for EU, however, all rights and obligations under these all goods (except arms and ammunition) under the various agreements will cease to apply and the UK EPAs1, while the same treatment is offered by the will devise its own trade policy. EU to least-developed countries (LDCs) through the Everything-but-Arms (EBA) scheme. In the absence Because the EPAs provide ‘better-than-MFN’ of equivalent market access, these countries may market access, the immediate impact could be that face higher most-favoured nation (MFN) tariffs in the ACP exporters face MFN conditions in the UK market. UK market. In the short-term, the challenge for the While there is debate on what these MFN conditions UK is to ensure trade continuity on terms that are would look like in a post-Brexit UK, one dominant at least as favourable as those provided under the view is that the EU MFN regime would be the starting EPAs. This issue of Commonwealth Trade Hot Topics point. Although current EU-UK MFN duty rates tend examines the implications of Brexit for existing to be low, certain product categories, including those EPAs, and options for trade arrangements that could where ACP countries have export interests, attract

* Mohammad Razzaque and Brendan Vickers are respectively Adviser and Head and Economic Adviser at the International Trade Policy Section, Commonwealth Secretariat. The authors would like to thank Chris Stevens and Sanoussi Bilal for their comments on an earlier draft. Comments and suggestions from Fredrick Kamusiime and Radika Kumar are also gratefully acknowledged. Any views expressed in this article are those of the authors and do not necessarily represent those of the Secretariat or the persons named above. 1 EPAs provide DFQF market access for all developing-country signatories under reciprocal arrangements that also require ACP countries to open up their markets to the EU, albeit with longer transitional periods. The exception is South Africa, which does not obtain full DFQF access into the EU market under the Southern African Development Community (SADC) EPA. The EU continues to provide the other members of the SADC EPA Group better access to its market than it offers South Africa. Nevertheless, the region-wide SADC EPA still improves South Africa’s market access when compared to its bilateral Trade, Development and Cooperation (TDCA) Agreement with the EU, signed in 1999. Issue 137 | 2016 Issue 137 | 2016 | Page 2 Source: Authors’ summaryasat19October 2016. Table 1:Overview ofEU-ACP EPAs UK market for ACPexports. the of significance relative the on however,depend ACP developingcountries. The overall impactwill, competition intheUKmarket, particularly from non- greater to them expose would this Second, tariffs. First, certain products could face higher MFN ACP exportsto theUKcould face adoubleimpact. the In peaks. absence ofmore favourable trading tariff arrangements, as known rates, higher much Pacific Islands Caribbean Region (SADC) Community Development Southern African (EAC) Community East African (ESA) Southern Africa Eastern and Central Africa West Africa 3 2 CARIFORUM isCARICOM andtheDominican Republic (Table 1). Although theUKisanimportantexport destinationfor someACP countries, especially where exportsare concentrated insuchproducts development. Anessay series a catalyst for EPAexit?’inMendez-Parra, M., te Velde,D. W.andL.AlanWinters (eds) that are heavily reliant ontheUKmarket. Furtherdiscussionsontheseissuescanbefound inStevens, C.andKennan, J.(2016)‘Brexit: of ACP exportsbeing impacted byBrexit could besmall,there willbesignificantanddisproportionate consequences for certain sectors as sugar, bananas, vegetables, rum, etc., itisnot adominantEUimporter inmostinstances. Whiletheoverall effect ontheproportion ratification SACU; Mozambique finalising provisional implementationfor Ratified byall SACU members; will not signtheEPA Rwanda. Tanzania hasindicatedit Ratified by Kenya; signed by with theother parties Zimbabwe; ongoingnegotiations Madagascar, Mauritius, Seychelles, Provisional implementationby negotiations withtheother parties Ratified byCameroon; ongoing d’Ivoire EPAs ratified byGhanaand Côte Signing process underway; Interim suspended for three years Comprehensive EPAnegotiations by PapuaNew GuineaandFiji; Interim Partnership Agreement Provisional implementationof (except Haiti) provisional implementation Signed; ratification ongoing; Status . London: Overseas Development Institute. 2 while the UK is not a dominant EU importer of goods while theUKisnot adominantEUimporterofgoods for about one third of those exports. This means went to theUK(about23percent).Sugar accounts the EU, includinggoodsworth US$718millionthat countries exportedaboutUS$3.1billionofgoodsto partner, aftertheUSA. The EUis CARIFORUM’s second largest trading EPA The CaribbeanForum(CARIFORUM) Congo, theDemocratic Republic ofCongo, Cameroon, theCentral AfricanRepublic, Chad, Mauritania, whichisnot anECOWAS member Nigeria, Senegal,Sierra LeoneandTogo) and Ghana, Guinea,GuineaBissau,Liberia,Mali,Niger, Faso, CapeVerde, Côte d’Ivoire, The Gambia, (ECOWAS) memberstates(i.e.Benin,Burkina Economic Community ofWest AfricanStates Tuvalu andVanuatu Guinea, Samoa,theSolomon Islands, Tonga, Micronesia, Nauru,Niue,Palau,PapuaNew Cook Islands, Fiji,Kiribati,theMarshall Islands, Trinidad andTobago) andtheDominicanRepublic Saint VincentandtheGrenadines, Suriname, Haiti, Jamaica,SaintKitts andNevis, SaintLucia, Barbados, Belize, Dominica,Grenada, Guyana, states (i.e.AntiguaandBarbuda,The Bahamas, Caribbean Community (CARICOM) member Parties (includingnon-Commonwealth states) has anoptionto jointheagreement inthefuture South Africa,Swaziland) andMozambique. Angola member states(i.e.Botswana, Lesotho, Namibia, Southern AfricanCustoms Union(SACU) bloc membership assentationperiod. to signtheEPAuntilitcompletes thetwo-year Sudan, theEAC’snewest member, does not need Burundi, Kenya, Rwanda, Tanzania, Uganda.South and Zimbabwe Malawi, Mauritius, theSeychelles, Sudan, Zambia Comoros, Djibouti,Eritrea, Ethiopia, Madagascar, Equatorial Guinea,Gabon,SãoTomé andPríncipe The impactoftheUK’s post-Brexit trade policy on 3 In2015,CARIFORUM Note: EUmeansEU28minusUKSource: Authors’ calculationsusingdatafrom UNCTADStat. primary reasons for thispoortrade performance. constraints oftheAgreement are considered to be capacity, institutional bottlenecks, aswell asbuilt-in the by offered access EPA. Many CARIFORUM states’weak supply-side market DFQF the from benefits commercial exploit fully to able been not CARIFORUM and the EU. CARIFORUM states have some anticipated impactonoverall trade between with that, exceptions, confirms theagreement hasnot yet hadthe EPA CARIFORUM growth. The mandatedmid-termreview ofthe CARIFORUM states, undermining their economic slowdown, and natural disasters that hit several contraction inEuropean demand,aglobaltrade crisis, theEurozone crisisandacorresponding time, coinciding with the start of the global financial CARIFORUM EPAcameataparticularly challenging performance. The implementation of the There are several reasons for thisdisappointing million to US$718millionduringthesameperiod. 2015, while exports to the UK declined from US$905 from aboutUS$6.2billionin2008to US$3.1 billionin with Europe. CARIFORUM exportsto the EUhalved since 2008,whenCARIFORUM hadatrade surplus exports to both theUKandEUhavecontracted the EUbetween 2000and2015(Figure 1).However, CARIFORUM increased itsoverall goodsexportsto the sugarexportsfrom Belize andGuyana). Jamaica’s rumexports, andmore than80percentof banana exportsfrom SaintLuciaandDominica, exports from afew countries (e.g.almostallofthe from theCaribbean,itabsorbsamajorshare ofkey Figure merchandise 1:CARIFORUM trade withUKandEU, 2000-2015 4 Joint Communique oftheThird MeetingoftheJointCARIFORUM-EU Council, Georgetown, Guyana, 16July 2015. 4 beneficiary of the EPA’s DFQF market access for access market DFQF EPA’s the of beneficiary in 2015.The DominicanRepublic isthemajor of itsoverall bananaimportsfrom theCaribbean market for bananas, sourcing around 25percent It is, for example,arapidly growing consumer The UKisanichemarket for somekey exports. • • • • • • below, include: to higheraverage EU/UKMFNduties, as listed At abroad level,theproducts mostvulnerable competition from non-ACP developing countries. MFN tariff rates in the UK, resulting in increased Caribbean exportspost-Brexit could face higher the absenceofsimilartreatment, several receive DFQFaccessinto theEUmarket. In Under theCARIFORUM EPA,allgoodsexports example, LatinAmerica. for in, suppliers cost-effective banana more from would face greater competition intheUKmarket well assmallerproducers intheWindward Islands, treatment, theDominicanRepublic andBelize, as exports. WithoutEPA-equivalent preferential with bananasmakingup54percentofitsUK of itstotal exportsto theUK,followed byBelize, bananas, whichaccount for around 75percent (13.4 percent) footwear (9.95percent). clothing (11.6percent) plastic andarticles(5.59percent) products foodprepared nut and fruit vegetable, edible fruits(5.46percent) fish andseafood products (11.21percent)

Issue 137 | 2016 | Page 3 Issue 137 | 2016 | Page 4 orientation ofservicestrade between CARIFORUM, sectoral the in composition, degree ofspecialisationandmarket differences substantial are There difficulties inobtainingvisas. related to themutual recognition ofstandards and advantage oftheagreement, asthey face barriers service suppliers havenot, sofar, beenableto take Caribbean confirms, EPA the of review mid-term at themultilateral level.However, asthemandated generally more attractive thatanything available EPA thatincludesservicesanditsprovisions are cent oftheirGDP.The CARIFORUM EPAisthe only for mostCARIFORUM states, accounting for 70per Services are key economic drivers for theEUand suspending theC-EPA negotiations for three years. states ACP Pacific have beenslow andinMarch 14 2016theEUproposed all involving (C-EPA) EPA ACP state.Negotiations towards aComprehensive Pacific the in processed and landed was it provided product, originating ACP Pacific as market EU the (from anywhere andcaughtbyany vessel)to enter fish sourced globally allows It EPAs. other the than Agreement origin of more rules has fisheries flexible access into theEUmarket, theInterimPartnership non- EU’s the reciprocal EBAscheme.Aswell asproviding DFQF Solomon from benefit chiefly to EU, continue the Islands, to exports some with Pacific the in LDCs while Agreement, Partnership Papua New Guinea(PNG),concluded anInterim and Fiji states, ACP Pacific two and EU the 2007, In The PacificEPA significant for certain countries. the Caribbean to spend seven times more than the average tourist in less competitive. GiventhatUKtravellers are reported spending willmake the Caribbean’stourism sector performance andgreater cautionaround consumer The weaker pound,potentially lower UKeconomic medium-term, have an impact on Caribbean tourism. communications. The Brexit shock will, in the short to exports to theUKincludetravel, tourism and and licencing,whilethemajorCARIFORUM services royalties finance, business, include CARIFORUM to the EUandUK.The UK’smajorservicesexports 6 10 9 8 7 opportunities inthegrowing East Africanmarkets, suchasKenya andTanzania. of themore efficient ACP producers withgoodlonger-term prospects ofsupplying theEUpost-quota. Swaziland and Zambia could find value products overthisperiod. Economist MarlaDukharan’ (https://globalnewsmatters.com/wp-content/uploads/2016/06/Marla-Interview.pdf). Topics Greene, G. (2015)“The CARIFORUM Economic Partnership Agreement: Lessonsfrom Implementation”. Sugar isalsoimportantfor sub-Saharan Africa,whichexportsabout20percent ofitsannual sugarproduction to theEU.Mauritiusisone Based on average EU imports between 2013-2015. However, the share of the EU market may be influenced by exports of just a few high- One majorfactor leadingto thisstandstillhas beendisagreements overfisheries-related conservation andmanagementmeasures. Global News Matters. Caribbean Research (2016)‘BREXIT Implicationsfor theCaribbean–AnInterview withLeadingCaribbean , Issue121. 7 , themagnitude ofthisshockmay be 6 8 Micronesia (38percent). Vanuatu (48percent),Samoa(46cent)and per centofitsEUexportsare destinedfor theUK), (74 including Tuvalu some, for significant remains have substantialexportsto theEU, theUKmarket not do states ACP Pacific the of rest the Although absorbing approximately onethird ofthis. PNG’s second largest exportto theEU, withtheUK is fish Processed UK. the for destined cent per 35 main exportto theEUispalmoil,withjust over PNG’s market. UK the in interests export specific (or 18percent)went to theUK.PNGhasproduct- million to theEUin2015,ofwhichUS$96 million The other EPAsignatory, PNG,exportedUS$520 the UK. almost 95percentofFiji’sexportearningsfrom destined for theUKmarket. Sugar accounts for EU, includingaboutUS$97million(or77percent) exported goodsworth about US$125millionto the is animportantexportmarket for Fiji.In2015,Fiji Pacific and ACP statesisextremely limited.The EU UK,however, the between goods of trade The efficient producers, especially Brazil. from increased EUoutputandimportsfrom more losing theirmarket share becauseofcompetition in October 2017meansthatACP producers risk ACP sugarproducers. The endofproduction quotas affect will that shock external only the not is Brexit the UKcontinues to apply similarEUpolicies.But impact ofBrexit will,therefore, dependonwhether higher pricesasaresult ofproduction quotas. sugar EU: DFQFaccessundertheseagreements, plus EPA Pacific-EU suppliers enjoy and favourable market conditions inthe CARIFORUM The Corporation andTate &Lyle Sugars inLondon. UK through a direct contract between the Fiji Sugar its of bulk the sells Fiji, side, Pacific raw sugar the to and sugarconfectionery from CARICOM. Onthe for about95percentoftheEU’simportssugars bilateral trade inthiscommodity. The UKaccounts raised abouttheimplicationsofBrexit for future importer ofsugarinto theEU, concerns havebeen largest the is UK the that Given economies. Pacific Sugar isavitalexportfor several Caribbean and 9 Commonwealth Trade Hot 10 The Note: EUmeansEU28minusUKSource: Authors’ calculationsusingdatafrom UNCTADStat (SADC), theEast African Community (EAC)and the Southern AfricanDevelopmentCommunity In 2014,theEUconcluded three regional EPAs with about 10percentoftheiroverall exportsto theUK. and Zambia). Southern Africancitrusproducers sell gold products (South Africa)anddiamonds (Botswana and Seychelles), fresh orfrozen Mauritius beef(Botswana andNamibia), (Ghana, products fish and Malawi), fresh vegetables (Kenya), processed of particular products to the EU, such as tea (Kenya also dependheavily ontheUKmarket for exports and South Africa(26.3percent). cent), Mauritius(29.3perKenya (28.7percent) Gambia (32.5percent),Equatorial Guinea(32.4per than 20percentoftheirEUexportsto theUK: The more send countries five another while UK, the for Botswana andSeychelles to theEUare destined countries. More than40percentofexportsfrom export destinationfor several sub-Saharan African with the overall EU market, the UK is an important Despite itsrelatively low market share compared grown from justover US$30billionto US$71billion. exports from sub-Saharan Africato theEUhave billion to aboutUS$12billion(Figure 2),whileoverall to the UK over the period 2000-2015, from US$6.5 countries almostdoubledtheirmerchandise exports for many sub-Saharan Africancountries. These investment and development cooperation partner The EU, including the UK, remains a major trade, EU, UKandsub-Saharan AfricaEPAs Figure 2:Sub-Saharan Africamerchandise trade withUKandEU(2000-2015) 11 See footnote 9. 11 Several countries

2016 to signandratify theseagreements, after West Africa. The EUset a deadline of 1 October on 20September2016. EPA to 2 February 2017, the agreement was ratified extended thedeadlinefor Kenya to ratify theEAC penalise Kenya. AlthoughtheEuropean Parliament members’ concerns andcalled ontheEUnot to a three-month extensionto clarifysomeofthe Heads ofState on8September 2016requested producers andindustries.ASummit ofEAC the consequences for itsrevenues anddomestic while Tanzania hasdeclared itwillnot doso, fearing agreement, the signed has Rwanda ratified and has agreement before it can be implemented. Kenya that all five EAC members must collectively sign the The EACEPA isafull‘regional’ EPA,whichmeans ECOWAS common externaltariff. EPAs. Infuture, thismay haveimplicationsfor the Interim 2007 the ratified Ghana and d’Ivoire Côte their industrialisation. To avoid higher GSP duties, yet signed,amidconcerns thattheEPAwillharm but The Gambia,MauritaniaandNigeriahavenot States (ECOWAS) endorsed the EPA for signature, from the Economic Community of West African on 10October 2016.InWest Africa,HeadsofState agreement anditwas provisionally implemented ratified the have EPA SADCto the parties SACU All African countries. System ofPreferences (GSP) dutiesfor non-LDC which theEUwould revert to higherGeneralised

Issue 137 | 2016 | Page 5 Issue 137 | 2016 | Page 6 if theUKisnolongeraparty to theagreement. balance ofliberalisation commitments intheEACEPA bound to declinepost-Brexit. This may upsetthe to Europe), Kenya’s overall exportsto theEUare the EU(andthisincludesbulkofitsmajorexports absorbs justunder30percentofKenya’s exportsto or chilledvegetables(80percent).BecausetheUK cut roses and buds (16.5 per cent) and other fresh to theUK),fresh orchilledbeans(58percent), fresh black tea(withabout80percentofitsexportsgoing Kenya. Kenya’s mostimportantexportsto theEUare (US$2.6 members EAC billion) andabout28percentofallEUimportsfrom five the from imports EU Kenya. In2015,theUKreceived 16.5percentoftotal But Brexit may complicate thingsstillfurtherfor • • • • • • • • • • • average EU/UKMFNduties, aslistedbelow, include: a broad level,theproducts mostvulnerable to higher competition from non-ACP developingcountries. At face higherMFNdutiesintheUKmarket, aswell as treatment post-Brexit, arange ofproducts could EBA schemefor LDCs. Intheabsenceofsimilar the EPAs, where thesehavebeensigned,orthe EU currently receive DFQFmarket accessunder Most exports from sub-Saharan Africa to the destined only for theUKmarket inEurope. and Nigeria,yet to signanEPA,203products platinum (CN71081310).Kenya has213products EU, namely goldproducts, includinggoldplatedwith about 98percentofitslargest singleexportto the are importedonly into theEUbyUK,including the future. Forexample,241South Africanproducts may havesimilarconcerns ifEPAsexcludetheUKin signatories withstrong exportexposure to theUK EPA other several flows, trade related and Market Given thepossibility ofa‘smaller’EUSingle 14 13 12 (13.4 percent) (13.83 percent) vehicles (6.37percent) aluminium (6.45percent) footwear (9.95percent) clothing (11.6percent) carpets (7.38percent) tobacco andtobacco products (21.46per cent) products foodprepared nut and fruit vegetable, products food prepared seafood and fish meat, edible vegetables(7percent) floricultural products (5.94percent) fish andseafood products (11.21percent) Countries’. requirements interms ofexternal trade statistics (both intra- andextra-Community) andcustoms tariffs. The legalbasisfor thisisuncertain (seeStevens andKennan, ibid.) Based ontheinformation provided inStevens, C.andKennan, J.(2016) ‘Trade Implications ofBrexit for Commonwealth Developing These products are definedatthe Combined Nomenclature (CN)8-digit code. CNistheEU’sclassification ofgoods, whichmeets Commonwealth Trade Hot Topics , Issue133. 12 also beimpacted,facing apotential ‘taxbill’equal SADC EPA states, Swaziland and Namibia, would considerably lessthanSouth Africa,two fellow duties (aboutUS$80million).Althoughthey export South Africamay haveto pay thelargest import a‘new face tax’ ofaboutUS$250million.Inabsoluteterms, could countries these effect, In UK. more than1percentoftheirtotal exportsto the to equivalent hike tariff MFN calculable potential a 2015, 22ACPcountries, excludingtheLDCs, face Based onaverage annualEUimportsin2013- duties andcompetitive pressures intheUKmarket. many ofthesecountries may face higherMFN equivalent market accessastheEPAspostBrexit, ACP countries. Asnoted earlier, intheabsenceof The UKisanimportantexportdestinationfor some The potential impactonACP exports the AfricanUnion’sdevelopmentplan, structural economic transformation, asoutlinedin an adverse impactonthecontinent’s plansfor many of these value-added products could have Any erosion ofpreferences intheUKmarket for for ACPcountries thathavesigned thedealswith separately to existingEPAs One key issueiswhethertheUKcanaccede Organization (WTO). with theagreed LDCWaiver undertheWorld Trade preferences shouldbeextendedto services, inline reducing barriers.non-tariff offer UK’s The of trade value for goodsto qualifyfor duty-free access)and recipient countries to addonly 25percentlocal rules of origin (e.g. Australia and Canada require further byintroducing relaxed andmore generous of market accessfor LDCs. However, itcould go Government shouldatleastmaintainthislevel such astheEU’sEBAscheme.Post-Brexit, theUK arrangements for theworld’s poorest countries, own GSP thatbuildsuponandimproves current the bestoptionwould befor theUKto deviseits such adverse outcomes. FortheLDCs, perhaps future trading arrangements withtheACPto avoid There are various ways to frame and shape the UK’s UK policyoptionsfor EPA countries Seychelles, followed affected: byMauritius. worst the be would members EPA ESA However, proportional to current exports, two to 8percentormore oftheirexportsto theUK. 14 orinstallEPA-replicas 13 Agenda 2063 . 2007, pending the signing and ratification of EPAs. ratification of and signing the pending 2007, to provide suchaccessfor someACPcountries since the EUhasusedvariousMarket AccessRegulations FTAs andEPAs.EventhoughthisviolatesWTO rules, currently haveaccessto theUKmarket through unilateral temporary, preferential offering accessto developingcountries that explore could UK To avoidany immediateadverse outcomes, the but whetheritshouldbepursued. not only whetherthereplication ofEPAsispossible, trading reciprocal regimes withEurope. The UKwillhaveto consider different five establishing by the existingRegional Economic Communities in Africa,theEPAshaveactually fragmented that rather thanstrengthening regional integration could drag onfor years. Some havealsoargued same bargaining position as theEU, andtheprocess given themarket size –theUKwould not havethe negotiations on many contentious issues, as – readily availableframeworks, thiswould re-open the EU.WhileexistingEPAscould provide by 2019. states aimto launchanAfricanCustoms Union African Union’sformal integration plan,member trade agreements withACPregions. Underthe development-friendly andWTO-compatible longer-term optionfor theUKcould beto negotiate and avoidtrade disruptions, onemedium-to measures are inplaceto provide policycontinuity Once theshort- to medium-termtransitory preferential treatment. at ACP countries this stage,whileensuringthecontinuity oftheir with negotiations difficult for Act, AGOA). and Africa(i.e.theAfricanGrowth andOpportunity the Caribbean(i.e.BasinInitiative) WTO waivers for itstrade preference initiativeswith are precedents for sucharrangements: theUSA has preferences to ACPdevelopingcountries. There the UKto request waivers to grant non-reciprocal A more WTO-consistent approach would be for 19 18 17 16 15 The shortcomings ofAGOA shouldhowever be noted: itisunilateral, setspoliticalandeconomic eligibility criteria, and excludesseveral approved arequest from theUSA for theextension ofa2009waiver for AGOA. AGOA IVhasbeenrenewed for 10years, upto 2025. Caribbean countries andterritories from 1January2015until31December 2019. InNovember2015,theWTO’s GoodsCouncil (eds), op.cit. Spain-20150318 (accessed 2September 2016). trade agreements thatare similarto theEU-EPAswithsub-Saharan Africancountries. customs union. Both targets are extremely ambitious, andwillbecomplex and challengingto achieve. Negotiations to establishtheContinental Free Trade Area (CFTA) by2017are underway. The CFTA isaprecondition for progressing to a economic integration. The AbujaTreaty lays outaroadmap to establishtheAEC through sixstagesoveraperiodof34years, upto 2028. important products ofexportinterest to Africa. ‘SA cutscitrus exportsto Spain’,18March 2015.At: http://www.fin24.com/Companies/Agribusiness/SA-cuts-citrus-exports-to- The AGOA Extension and Enhancement Act of2015directs theUSA Trade Representative to begin theprocess ofnegotiating reciprocal The 1991Treaty Establishing theAfricanEconomic Community (AEC), known astheAbujaTreaty, provides theblueprintfor Africa’s A WTO waiver permitstheUSA to provide duty-free treatment to eligibleproducts originating inbeneficiaryCentral Americanand Jones, E.(2016)‘Brexit: opportunity orperilfor trade withdevelopingcountries’ inMendez-Parra, M.,te Velde,D.W.andL. AlanWinters 17 Whilethisisanextremely ambitious 16 This optionwould avoidtheneed 15

compliance withthehighstandards andregulations One key challengefor many ACPexporters is the commercial interests ofpost-Brexit Britain. excludes servicesandinvestmentwould satisfy side, itisunclearwhetheratrade agreement that substantially, asrequired bytheWTO. OntheUK’s to negotiate anagreement thatliberalises alltrade unclear whetherAfricancountries would bewilling concerns raised byLDCs aboutreciprocity, itis ambition for structural transformation andthe expires in2025. sub-Saharan Africancountries whenAGOA IV greater reciprocity initstrading relations with and supply capacities.The USA alsoenvisages countries buildanddiversify theirproductive approach to overall Aidfor Trade to helpAfrican This agreement could alsoframe theUK’s also reinforce African continental integration. Free Trade Agreement (FTA) ingoodsthat will post-Brexit UKandAfricato negotiate asingle arrangement could provide anopportunity for target withmany challenges, suchacustoms health andfood safety. Forother goodsimports, by ACPproducers, ifthisdoesnot jeopardise plant EU measures regarded asunfair orprotectionist some rescinding for and flexibility greater for case producer andrelies onfood imports, there may bea accordance withtheWTO. SincetheUKisnot acitrus based oninternationally recognised scienceandin to developitsown setofagricultural regulations Post-Brexit, theUKwould havetheautonomy spot, losingmarket share to Spainasaresult. and phytosanitary (SPS)standards for citrusblack the EUhavebeenimpaired bystringentsanitary citrus exportsfrom South AfricaandSwaziland to and should bereviewed orrescinded. For example, unnecessarily onerous andevenprotectionist, suppliers feel thatsomeoftheseregulations are body oftrade-related standards. However, ACP the UK could retain most of the EU’s current required for accessto theEUmarket. Intheinterim, 18 However, giventhecontinent’s 19

Issue 137 | 2016 | Page 7 Issue 137 | 2016 | Page 8 its withdrawal from theEUwillbejustas that theirmarket accessto theUKfollowing policymakers shouldreassure thesecountries the impositionofhigherMFNduties.UK for thesecountries, especially through trade disruptionsorunfavourable outcomes therefore, thatBrexit doesnot result in ACP countries and LDCs, anditisimperative, The UKisanimportanttrade partnerfor some Conclusion compliance andcertification. ACP trade costs byrequiring ‘one-time only’ recognition ofstandards, whichwould reduce the UKandEUcould consider mutual nations. countries, especially theworld’s poorest development cooperation withdeveloping that theUKcontinues itsbilateral trade and capacity building.Post-Brexit, itiscrucial help developing countries with supply-side role inadvocatingfor Aidfor Trade asaway to assistance. The UKhasalsoplayed acritical national income asoverseas development the fulfils UN target ofproviding 0.7percentofgross that countries high-income few well asLDCs andsmallstates.Itisoneofthe particularly thoseinSub-Saharan Africa,as needs and challengesfaced by ACP countries, recognised andchampionedthespecial development. The country hasalways its role inpromoting trade-led economic It isalsoimportantthattheUKstrengthens for investmentdecisionsandfuture planning. such reassurances oftrade continuity are vital Given alloftheuncertaintiesaround Brexit, favourable astheexistingarrangements. please [email protected] For furtherinformation orto contribute to theSeries, Secretariat Produced byTrade DivisionoftheCommonwealth Series editor: DrMohammadARazzaque Commonwealth Secretariat andinternationalexperts. analyses ontrade andrelated issues, prepared both by publication whichprovides concise andinformative Commonwealth Trade Hot Topics isapeer-reviewed ISSN: 2071-8527(print)ISSN: 2071-9914(online) Topics Trade Hot Issue 130: Issue 131: Issue 132: Issue 133: Issue 134: Issue 135: Topics Series Commonwealth Trade Hot Previous Ten Issuesofthe Issue 126: Issue 127: Issue 128: Issue 129: after theParisOutcome Saharan Africa’sDevelopment? Architecture: Implicationsfor Sub- SDGs: IssuesandWay Forward Countries Commonwealth Developing Fisheries Sector Potential Implicationsfor thePacific Value ChainParticipation Sector: Forgotten Frontier? Sub-Saharan Africa Implementation’ aReality Implications for Trade? Trade Implicationsof ClimatePolicy The ChangingGlobalTrade Global Trade Slowdown, Brexit and Trade ImplicationsofBrexit for Graduation from LDCStatus: Modes ofServiceDeliveryandGlobal International Trade in theHealth AGOA-IV andtheTrade Prospects of Trade andtheSDGs:Making ‘Meansof The ParisClimateAgreement: What