Publications
Partners
Cape Town - The British can set up shop in South Africa to access the European market if they exit the European Union, said Trade and Industry Minister Rob Davies.
A vote to leave the EU bloc of 27 member states is slated for 23 June.
"It is still anybody's guess about what will happen in the UK next week," said Davies who briefed the media in Cape Town about an EU deal.
South Africa signed an Economic Partnership Agreement (EPA) with the EU where exports have increased from R151bn in 2011 to R216bn in 2015.
This process has been going on for 12 years and the deal was also signed by Botswana, Lesotho, Mozambique, Namibia and Swaziland. It will replace the trade chapter in the bilateral agreement between the EU and South Africa, the Trade Development and Cooperation Agreement (TDCA) signed in 2000.
However, there was concern the EPA would not take proper root should there be a British departure from the EU, which would also have consequences on the overall state of the world economy.
Davies said the UK is a significant trading partner of South Africa with exports to the UK in 2014 totalling R42bn and imports R35bn.
He said although is not appropriate for South Africa to comment on the referendum, the situation is being closely monitored.
"In the event that they did decide to leave the EU, they would have a period of time before that eventuality became a concrete reality and I think during that time we would of course engage them on their views about the trade arrangement that we should have between ourselves as South Africa and them."
One of the trade alternatives, noted Davies, being mentioned were there to be an EU exit, is for the UK to join the European Free Trade Area with other non-EU member countries like Norway and Switzerland.
Davies said that the UK could very well also approach South Africa for a deal.
"Let me just say that if the UK needed to export their products to the EU and if it had no arrangement with the EU then British companies could come to South Africa and they could establish themselves here,” he said.
"They could use South Africa as a base to access the EU market because the TDCA and now the EPA provides for that possibility."
Meanwhile, researchers from North-West University warned that Britain’s possible departure from the EU could also hurt South Africa's ailing economy.
An exit could cut about 0.1 percentage point off South Africa’s economic growth, cautioned Raymond Parsons and Wilma Viviers, professors at the business school and trade research unit at the university in Potchefstroom.
