Vinpro and SA Liquor Brandowners Association (SALBA) released a statement assuring South African wine producers that they will still continue to receive the benefits of tariff-free exports.
“The UK has passed an Act in June 2020 confirming that it would not apply for a further extension of the transition period in terms of the Brexit withdrawal agreement. The UK is therefore expected to leave the EU Single Market and Customs Union on 31 December 2020,” says Michael Mokhoro, stakeholder manager of Vinpro.
Brexit debate has seen the United Kingdom taking ambivalent policy statements but on 31 January 2020, she finally managed to leave the EU.
According to the report by the British Broadcasting Corporation (BBC), Brexit now means that UK companies buying and selling goods across EU borders will be subject to tariffs (taxes).
The Institute for Government, a UK based think tank working on governance matters said the UK’s aim for leaving the EU was to “retain the freest possible access to the Single Market for services and to avoid the creation of regulatory barriers”.
Now that the UK quit the EU, it would mean that the EU-SADC EPA (economic partnership agreement), member states will no longer enjoy preferential benefits that existed since October 2016.
Vinpro and SALBA were not deterred by this, as pre-Brexit, the Southern African Customs Union members had already concluded a new SACU-Mozambique (SACUM)/UK EPA in September 2019.
“The UK, Lesotho, South Africa, Botswana and Namibia have ratified the agreement, while eSwatini is in the process of finalising their ratification processes. While the SADC/EU agreement remains intact for South African exports to EU countries, including the benefit of 114 million litres tariff-free exports (increasing by 1 million litres annually), the new SACU-Mozambique/UK agreement will come into force on 1 January 2021 for South African exports to the UK.”
Among others, the supposed deal covers rules relating to preferential tariffs, trade in goods and remedies, phytosanitary for agricultural products and geographical indications.
Vinpro and SALBA said the tariff-free quota for imports of South African wine into the UK under post Brexit will be 71.5 million litres in 2021, with 30% of bulk and 70% of packaged wine with an estimated annual increase of 656 580 litres.
Yet, there were fears that if UK/EU did not reach a deal and ratified it, it could affect the SACUM/UK EPA and open for their trade relationship to be regulated by the World Trade Organisation introducing complications for the SACUM-UK EPA.
The Institute for Government said if no deal was coming by end of 2021, “the UK and EU could introduce import charges on each other’s goods.”