WATCH: South Africa and UK agree terms on trade post-Brexit | IOL Business Report

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WATCH: South Africa and UK agree terms on trade post-Brexit

The ANC’s Minister for Economic Development, Ebrahim Patel, has concluded a groundbreaking new trade deal with the UK, ensuring all existing trade arrangements and more have been cemented prior to the UK’s departure from the European Union .

With the prospects of a no-deal Brexit having risen significantly in recent months, the onus has been on the UK to engineer new trade deals with partners across Africa and the rest of the globe in the event of a disorderly exit from the EU and immediate trade on World Trade OrganizationThe spectre of a no-deal Brexit has been the elephant in the room in terms of the financial markets for several months, with the pound looking increasingly weak against both the US dollar and the euro.

However, the pound has also become a forex market of interest among investors option trading in South Africa who are already speculating on the future price of sterling in the event that Prime Minister Boris Johnson’s new Brexit withdrawal agreement bill is approved by Parliament. Put options are also a useful hedge for those with 'long' positions on sterling in case a no-deal Brexit happens out of the blue, causing the pound to crash.

As the UK became South Africa’s fourth-largest export market in 2018, it was imperative for the South African government to have clarity and certainty as a Commonwealth trading partner, regardless of the Brexit outcome. Minister Patel has confirmed that the new trade agreement is effectively a "rollover" of the terms of trade in their existing European Partnership Agreement, which will enable "seamless" and "uninterrupted" trade to continue post-Brexit.

 

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