Since Britain voted to leave the European Union in June 2016, the former world superpower has been taking scintillating steps to hammer out trade deals with various global trading blocs.
More than four years on, though, and just one new trade deal has been signed so far – between Britain and Japan – with little mention of the much-anticipated agreements with African giants, such as the Economic Community of West African States (Ecowas).
The 15-member Ecowas bloc – which includes Benin, Burkina Faso, Cape Verde, Ivory Coast, Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo – had been pinning its hopes on a possible Free Trade Agreement (FTA) with a newly independent UK next year.
With a population of 66.5 million and a GDP of $2.8 trillion, the UK offers significant market opportunities for African products and services.
Bilateral trade between Britain and Africa stood at almost $42bn in 2018, concentrated mostly in South Africa, Morocco and the Ecowas powerhouse Nigeria.
The UK also ranks among the top five foreign investors in Africa, with a foreign direct investment of $46 billion in 2017.
While the London Stock Exchange has the largest concentration of African publicly quoted companies, with a combined market capitalisation of $70 billion.
Yet despite the considerable trade done between Britain and many of its former southern African colonies in particular – UK-South African trade is worth around $13.5bn a year – progress on post-Brexit FTAs have stalled thanks to difficult EU-UK trade negotiations and the global Covid-19 pandemic
In October last year, for instance, trade ministers from the 54-member bloc met in London to discuss ways to triple intra-Commonwealth trade to $2 trillion by 2030, with the UK Secretary of State for International Trade, Liz Truss, talking of a fight ‘against protectionism’ to ‘promote a transparent, inclusive, fair and open rules-based multilateral trading system.’
Yet while the post-Brexit FTAs still seem like blue-sky dreaming, the CEO of Nigeria-based Economic Associates, Ayo Teriba, said the UK has been working hard to ink trade deals with various trading blocs, such as Ecowas, using Commonwealth countries as a launchpad.
Analysts believe that the proposed UK-Ecowas deal, if it happens, would grow the volume and value of trade between the two blocs.
Most Ecowas members export mainly agricultural products and minerals, the bulk of which serve as raw materials to the manufacturing and processing chains of the UK industrial sector. Experts say that the proposed trade deal will give greater stimulus to the West African bloc if it is tilted towards allowing more than just the imports of raw commodities like cocoa (EU trade deals typically place low tariffs on raw commodities, yet add swinging tariffs to roasted beans in order to protect its own factories). Such a move, they maintain, would promote trade and create more employment opportunities among the 15 Ecowas members.
‘Naturally, this deal will grow the volume of trade between Ecowas and the UK,’ said Muda Yusuf, of the Lagos Chamber of Commerce and Industry (LCCI).
‘The prospects of such growth in trade would be higher for Ecowas countries that are Commonwealth countries.
The LCCI director general added: ‘Most countries in Ecowas export primary products, mainly agricultural products and minerals.
‘The UK exports mainly vehicles, electrical and electronics products, iron and steel, pharmaceutical products and processed foods.’
Not all experts agree that a UK-Ecowas FTA will prove such a boon for West Africa, with tariff reductions likely to benefit UK consumers more than African producers. Ecowas trade with the UK is centred mostly on cocoa and cocoa preparations, which constitute five per cent of exports; precious stones, which contribute three per cent; as well as other raw materials such as cotton, fruit, rubber, plastics, wood, seafood and petroleum products from Nigeria.
The UK is also one Ecowas’s smaller trading partners. At present the whole of Europe, including Britain, accounts for just 28 per cent of Ecowas exports, while the Americas account for 40 per cent.
The UK’s reliance on an EU trade deal may also frustrate its attempts to negotiate new Free Trade Agreements with African trading blocs, such as Ecowas, with the EU strong-arming the UK not to sign FTAs with third nations that have what it considers to be inferior food safety standards, including the US.
The use of food safety and ‘unfair competition’ clauses to protect European producers from cheap imports is particularly relevant for any future UK-Ecowas trade deal, as the EU has form in this area, according to Yusuf, of the Lagos Chamber of Commerce and Industry.
During the 3rd EU-Nigeria Business Forum held in Lagos in September 2014, Ecowas members’ agricultural practices were highlighted as a potential barrier to any EU-Ecowas trade deal.
Speakers at the event identified safe food and sustainability as the key demands that farmers and producers must meet. Reliability, prices, consistency, quality and adherence to regulations were also pinpointed as determining factors.
‘The issues likely to arise would be similar to the concerns raised by a section of the business community against the European Partnership Agreement in the recent past,’ added the businessman.
‘While some countries signed, many others did not sign. There were concerns about unfair competition between European products and products produced in the West African sub-region.’
But it’s not just EU threats that might bog down any post-Brexit trade deals with Britain. According to Teriba of Economic Associates, Ecowas states would likely demand easier access to British visas as a price of a trade deal – something the UK government might try to resist, given the central role that controlling immigration played in the Brexit vote.
‘To boost trade, consular issues would have to be addressed,’ added Yusuf. ‘With the deal being contemplated, concessions would have to be given.
‘Britain is a country that is good at going to other regions to extract resources and strengthen its well-being while restricting others from coming in.’
The head of the Lagos Chamber of Commerce and Industry, however, believes that the outlines for an agreement are there – and not just with Ecowas or other regional trading blocs, like the Southern Africa Customs Union and Mozambique (SACUM), which the UK already has a limited trade agreement with, thanks to its former membership of the EU.
He believes the real potential lies in a UK pact with the continent-wide African Continental Free Trade Area (AfCFTA), which is set to become the world’s largest free trade area.
‘More important are the bigger market prospects, which the AfCFTA offers to the UK if the Ecowas deal falls through,’ said Yusuf.
‘This would mean access to over $3 trillion African market.’