Wesgro warns of Brexit backlash

AFTER the UK voted to leave the EU, Wesgro said the referendum result introduced significant uncertainty for Western Cape businesses that export to the UK, or service British clients in the tourism sector.

Wesgro, the tourism, trade and investment promotion agency for Cape Town and the Western Cape, pledged to work to mitigate any negative effects on trade and investment relationships between Western Cape businesses and Britain and Europe.

The UK is ranked in the top two markets for the Western Cape across trade, investment and tourism.

Wesgro’s chief executive, Tim Harris, said the UK was the second most important export market for the Western Cape last year, with exports valued at R9 billion and a positive trade surplus of R877 million.

“Overall exports to the EU were valued at R33bn in 2015, with the UK accounting for 36 percent of these purchases,” Harris said.

“In particular, the UK is a major market for Western Cape agribusiness products buying R1.5bn worth of wine, R1.2bn worth of apples and pears, and R4.8bn of citrus in 2015.”

Harris said exports to Europe were covered by European treaties like the Trade, Development and Co-operation Agreement, and the recently signed Southern African Development Community-EU Economic Partnership Agreement (EPA).

“Once Brexit comes into play, however, South Africa would need to sign a Free Trade Agreement or similar trading arrangement with the UK, or risk the most-favoured nation principle becoming applicable, putting our exporters at a significant disadvantage.”

Harris said the UK was the largest investor in the Western Cape, responsible for a quarter of all investment into the province.

“Over the past 12 years, UK companies invested in 62 greenfield projects worth over R15bn. In recent years Wesgro has facilitated six UK investments worth over R330m, creating 143 jobs.”

Harris said many UK investors into the Cape chose to operate out of Britain “because of how open and connected that market was to the world”. – ANA