BREXIT: Implications for SA imports and exports

Brexit Q&A – by Michael Mokhoro – SALBA Stakeholder Relations

What is the implication of BREXIT to the South African Wine Industry?
– South African Wines would not be exercising the preference it enjoys with SADC – EPA (Economic
partnership Agreement) in terms of the allocation of quota. South African Wines will have to compete
with other established wine producing countries such as Australia and Chile on the same footing, as the
UK rolled over the EPA to them too.

What rate has the UK offered South African Wines?
– 0% rate along with other world trade organisation member countries exporting to the UK.

What is the Progress report to date of negotiations?
– Negotiations have stopped, with the hope that they will resume soon. The UK has up to 31 October 2019
to exit the EU.

Will the exit of the UK from the EU affect the SADC, EU, and EPA benefits?
– No, SACU and the EU have agreed that if any member of the EU leaves the EU or any country join the
EU, such a move would not affect the SADC – EU EPA.

Why is South Africa not opting for a rollover of the SADC – EU EPA?
– SA did propose this to the UK, but the UK objected to the proposal.
What are the outstanding issues?
– Cumulation
– Sanitary and Phytosanitary (SPS)

Do these outstanding issues affect the South African Wine Industry?
– No, but without them being resolved there is no agreement, as they impact other industries.
Will the UK ever change the 0% rate in the future?
– No one knows, but it may be difficult for the UK to come with any other high tariffs. Others are of the
view that the UK may resort to the Agreement that provides for the South African Wine quota which has
already been agreed upon.

What happens in a No deal scenario:
– Before any wine and spirit imports can be moved from Point of Entry, the UK importer will be required
to obtain an Economic Operator Registration and Identification number from HMRC in order to make a
UK customs declaration. There may be a parallel requirement for wine from the EU-27 to be followed by
a VI-1 document on export to the UK after the UK exits the EU.

Will there be any changes of Documentation on Exit of the UK from the EU?
– On the South African side, there will not be any change of documents.
– On the UK side forms will change, but minimal changes.
– Exports: In a situation where the VI-1’s are issued at ports there will be an increase in administrative
tasks of the delegated Custom Agents.
– Imports: Third country businesses exporting EU transit goods via the UK must appoint the UK bonded
warehouse prior to exporting the product. There should be no impact at the border but if businesses do
not comply with new requirements and send goods without the prior appointment of a bonded
warehouse, this would result in temporary detention of those shipments requiring temporary storage at
a Point of Entry. Points of Entry that import third country wines and spirits should ensure they have
sufficient space available