Within the first month of the Brexit referendum vote, the early UK-after-Brexit discussions got underway with a Ramphal Institute brainstorming session on the implications for the trade of developing countries and a UK parliamentary international relations committee interview with Commonwealth Secretary-General Patricia Scotland about the future of Commonwealth and UK ties.
The Ramphal Institute hosted its brainstorming session on 15 July to discuss the implications of Brexit for the trade of developing countries.
The Ramphal Institute’s mandate is to tackle development issues and the wider world so the focus was on Brexit and the Economic Partnership Agreements (EPAs) – the free trade deals between the European Union (EU) and the 79 countries of the African, Caribbean and Pacific (ACP) group.
The EPA deal had been Europe’s first step, under World Trade Organisation (WTO) guidelines, to wean ACP countries off their special trade relationships with the EU towards freed-up trade deals. The EPAs had been negotiated in a spirit of support, taking into account the colonial history of the ACP countries, the EU (led very much by the UK, France and Spain) had arrived at the Cotonou agreement – aimed at getting the ACP towards free trade without crippling their growing but fragile post-independence economies.
The Cotonou agreement (which expires in 2020), included a mix of trade, aid development and political co-operation to support the ACP in its changing relationship with Europe.
When the biggest economy negotiator for the EU-ACP deals and one of the biggest contributors to the aid-related programmes decided to leave whole EU network, it became clearly time for the ACP to look at its future with both the UK and with the EU in a post-Brexit world.
Secretary General of the African Caribbean and Pacific (ACP) Group, HE Dr Patrick Gomes, told the opening session of the Ramphal brainstorming session that the full implications of Brexit on such deals would not be known for some time and that studies would be needed to chart the “complex process” of post-Brexit work.
“[Brexit] has compelled us at the ACP to address a number of major issues related to the implications of the referendum,” Dr Gomes said.
The ACP Secretary-General suggested that systematic analyses will be needed to look at post-Brexit deals – a theme echoed throughout the session as global trade and services experts outlined the hurdles, and also the opportunities, in a post-Brexit world.
The UK has no bilateral agreements with the ACP and, according to Dr Gomes, the UK contributed around 15% of the European Development Fund (EDF) in 2014, which accounted for Eur4.5bn. The ACP head and other officials pointed out that, whether the UK chooses to continue making such commitments in its post-Brexit world will be another of those many questions needing answers as government and officials establish a new-look, independent Britain.
Dr Gomes said that the ACP has already started to look at the Brexit impact on EPA follow-up discussions in the future as the Cotonou agreement is due to expire in 2020.
He said that the aim of the ACP will be “to minimise the losses and to enhance new areas of co-operation”.
Speaker after speaker outlined the need for detailed research to unpick the current UK-EU-ACP arrangements in order to work out what needed to be kept in bilateral form and identify the new opportunities of a post-Brexit world.
Bangladesh’s former foreign secretary, Ambassador Farooq Sobhan, pointed to the impact already being felt of the Brexit vote on remittances and the potential impact on trade and aid.
He called it “the enormity of the task that is going to be required” to look at trade and investment in a post-Brexit period.
The Director of Trade Policy at the Commonwealth Secretariat, Paulo Kautoke, also described as the “tell tale” signs already being seen in purchasing power, resources and remittances as the pound had fallen.
David Jessop of the Caribbean Council for Europe advised that dialogue and negotiations needed to start now and advised against a “wait and see” approach to Brexit outcome.
“Pretty soon, we’re going to need to be talking details,” Mr Jessop told the session.
Former Commonwealth Deputy Secretary-General, Ransford Smith, told the session that the “uncertainty inherit in Brexit” would have to serve as the backdrop to the negotiations.
He stressed the need for EPA-type terms to survive the Brexit process and be negotiated into a mix of transferred rules and regulations and renegotiated new bilateral deals. He also stressed the need to look at ways to translate EDF contributions into post-Brexit arrangements.
Problems and opportunities
The trade, aid and investment experts at the Ramphal Institute’s post-Brexit discussion outlined both the hurdles and opportunities for a new-look Britain – from remittances and tourism to trade and aid.
Dr Mohammad Razzaque, the Head of International Trade Policy at the Commonwealth Secretariat, predicted a $4bn fall in the value of remittances in the next year. Other speakers outlined dangers of changes in tariffs, preferential arrangements and trade quotas as the UK and Europe set out to negotiate their brave new world.
Director of the Ramphal Institue, Edwin Laurent, told Round Table after the session that “Commonwealth ACP countries that export to the UK under an Economic Partnership Agreement with the EU could be greatly affected by Brexit. To ensure that their trade flourishes rather than being damaged, appropriate trade policies will have to be implemented by all concerned parties, the UK, the EU, the WTO, the rest of the international community and these ACP countries themselves.
“The Ramphal Institute in conjunction with international organisations, researchers, and others is embarking on new research, outreach, consultation and other initiatives that will be needed to help inform and support policy making and implementation.”
Expert speaker-after-speaker at the Ramphal session also outlined the new opportunities a post-Brexit world could offer if the right analyses and follow-up negotiations take place.
The opportunities became the theme taken up days later by the defacto chief executive of the Commonwealth, Secretary-General Patricia Scotland, who was invited to answer questions on UK global relations at a parliamentary select committee meeting on 20 July.
The occasion was a meeting of the parliamentary International relations Committee session to look at UK priorities for the new UN Secretary-General to which the Commonwealth Secretary-General had been invited as a witness.
However, the start of the session turned into a one-hour Q&A session with Patricia Scotland on the future of Commonwealth and UK relations in a post-Brexit world.
Commonwealth as “safe harbour”
Patricia Scotland said that she had been canvassing the views of Commonwealth leaders since the Brexit vote and that most Commonwealth countries had not wanted to see the UK outside of Europe.
She told committee members that “as a result of Britain’s choice….it has caused real concern as to what does that mean to Commonwealth countries who had become used to that strong voice [in Europe]”.
She went on to outline what Commonwealth leaders saw as the future with Britain putting “much more energy will go into the Commonwealth relationship”.
“The Commonwealth becomes more important than before,” she said.
In a comment comparing the loss of EU membership to amputation which led to some questions from committee members, Patricia Scotland made a quick recovery to point out that “people who have to adapt, they’re still winning the race”.
She pointed out that Britain in Europe had provided a “twin track advantage” for the Commonwealth but many Commonwealth leaders believed that Cyprus and Malta would be the remaining Commonwealth voices in Europe
Baroness Scotland outlined how this could include using the work already done on intra-Commonwealth trade with the report presented to heads of government in Malta. She described the Commonwealth trade report as a “springboard” to “turbo charge” trade relations within the Commonwealth.
She did, however, remind the parliamentary committee that the Commonwealth had changed from the days when the UK had joined Europe. She used the example of how New Zealand trade had stood at 70% dependency on the UK when the UK moved closer to Europe and that this trade now stood at 7% as New Zealand, like other Commonwealth countries, had developed new deals elsewhere.
She also advised that, while the Commonwealth could be “more pivotal than ever” and a “safe harbour” for Britain in its post-Brexit world, it needed to bear in mind that the Commonwealth was now a “relationship of equals”. She told the committee members that there would need to be a “complex series of negotiations” for the UK with a Commonwealth which would want something back in return for reigniting its ties with the UK.
The example she mentioned had been migration preferences for Commonwealth countries.
Patrician Scotland said while there would be stronger relations between the UK, still the sixth largest world economy, and the rest of the Commonwealth.
“Now much more energy will go into energising the Commonwealth relationship,” she told the committee.
The two sessions provided the opening salvo in what is likely to become months of discussion on the future of UK-Commonwealth-EU relations in the wake of the Brexit vote.
Lord Howell of the parliamentary committee described the options as “avenues to the future”.
Patricia Scotland described the Commonwealth-UK relationship as “more pivotal than is had ever been”.
For the Ramphal Institute, the first brainstorming session has kick started the really hard work.
Institute Director, Edwin Laurent, told the Round Table that “helping and informing the formulation and implementation of the appropriate policies in such a short time will be a major exercise and it will be helpful if the Secretariat and associate Commonwealth organisations contribute both intellectually and financially.”
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