Cape Town – There are five scenarios the United Kingdom (UK) and the European Union (EU) are facing post Brexit that could either boost or hamper South Africa’s trade relations, an economist and trade consultant said on Wednesday.
This follows a referendum, where the UK voted to leave the European Union last Thursday.
André Gouws, a consultant to the Department of Trade and Industry, said in all the divorces he’s experienced, one can only remain friends with one of the spouses.
“In this divorce, South Africa will have to use its best diplomatic skills to remain friends with both of them,” he said at a workshop on Brexit in Cape Town.
Gouws gave the following five scenarios and their effects on South Africa:
Scenario 1: The big bang Brexit or Total Exit
The “big bang Brexit”, will see a clean break between the EU and the UK. The UK would have to repeal, re-enact or negotiate 5 000 regulations, directives and decision relating to the internal market and 1 100 international treaties between the EU. This will benefit South Africa as it will break “fortress Europe”, said Gouws.
“It will reignite the Doha round of WTO (World Trade Organisation) and there will be a better focus on developmental issues,” he said. “It will reduce agricultural subsidies, African exports will grow and African growth will benefit South Africa.”