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Wednesday, 29 June 2016

Brexit seen as ‘calamitous’ for African trade with Europe

Britain joined the EU in 1973 and it brought along its former colonies to position them for aid under an agreement that was already benefiting former French colonies. This arrangement came to be known as African, Caribbean and Pacific States (ACP), which allowed African aid and trade to be negotiated. Before Africa joined the ACP in 1975, its exports to the EU were 6% of all EU imports. But fast-forward to the end of 2000, by which time Africa’s exports to the EU had shrunk to 1%, and one may conclude that the EU subdued Africa’s capacity to export under ACP. Whereas the EU was awarding large sums of aid to Africa, it was at the same time enforcing punishing and prohibitive trade practices, which put the brakes on Africa’s growth and innovation potential. What could potentially be the implications of Brexit on African countries? Several factors might be at play here. Brexit will have an impact on the global economy; trade and investment are likely to bear the brunt of this. The only trade arrangements the UK has with African countries are negotiated through the EU, which in effect means that when the UK leaves the EU the trade relationships and agreements will be null and void.

Source: bdlive.co.za