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Talking Points

Brexit: First post-referendum thoughts

01-07-2016

Laporte, G., Sherriff, A., Hauck, V., Bilal, S. 2016. Brexit: First post-referendum thoughts. ECDPM Talking Points blog, 1 July 2016.

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In what has been regarded as one of the most significant events in European history in the last 40 years, the UK has voted in referendum to leave the EU. This result is going to have a considerable impact on Europe and Africa, including the various specific areas in which ECDPM is working.

Since there is a large number of variables and the political process is still ‘in play’, it would be premature to draw firm conclusions and predictions at this stage. In this article, ECDPM presents a number of initial views of its experts in key policy domains.


Some facts and figures


  • The UK accounts for 12.9% of the EU-28’s exports and 15.2% of the bloc’s imports to/from non-member countries – which positions the UK as the second biggest EU trade partner after Germany.
  • The UK is one of the main contributors to the EU development aid budget, representing 14.8% of the overall commitments to the 11th European Development Fund (EDF), by far the largest development aid instrument of the EU.
  • The EU has 139 Delegations around the world often in places without UK Embassies or DFID offices with the UK with member-states and other member-state participating in EU ‘Heads of Mission’ (HoMs) meetings.
  • The EU has 17 ongoing Common Security and Development Policy civilian and military missions including 10 in Africa.

ACP-EU and future of Cotonou post-2020


“Brexit could have a major impact on the future of ACP-EU relations post-2020. The UK would no longer engage in the discussions and negotiations on a Post-Cotonou successor agreement. Moreover, a future European Development Fund (EDF) would lose the UK contribution, which currently stands for almost 15% of the total EDF (approx. 500 million Euro/year).

Probably even more important than the declining aid levels would be the further loss of influence of the ACP in the European Union. If the UK, being a former colonial power, withdraws from the EU, it might be particularly difficult for the English-speaking Caribbean to find new allies in Europe that will defend their case in Brussels.”

Geert Laporte, Deputy Director


EU development policy


“EU development policy was in a state of evolution even before Brexit, moving to be aligned more with EU self-interest and the SDGs. The UK has had an influence on the EU’s focus and expertise on the 0.7% target for aid, the SDGs, the value for money and results agenda, differentiation in EU aid to focus more on least development countries and fragile states. These issues won’t go away, but without UK influence and engagement it will certainly be different.

Key moments to look out for are the review of the European Consensus on Development – the overarching EU development policy which is due for a ten year revision in 2016 – and the dynamics around the EU-Africa Summit in 2017. Negotiating positions on whether the UK will be paying into its current EU budget due right up until the end of 2019 and the UK’s absence for negotiations on the next EU budget and its priorities post-2020 will have direct and long-term implications on the impact of EU development policies.”

Andrew Sherriff, Head of European External Action programme


EU peace, security and peacebuilding


“The UK has for a long time supported the African Union led Peace Support Operation in Somalia (AMISOM) through the EU’s “African Peace Facility” (APF). The APF is funded through the European Development Fund (EDF) to which the UK is the third highest contributor after France and Germany. EDF commitments, which need to be fulfilled, run until 2020. Assuming the likely scenario that AMISOM, or a similar support operation, will be needed beyond 2020, and that the UK would like to support this operation in partnership with other European countries, the African Union will have to negotiate with an additional international partner in securing funds for the mission in Somalia.

Moreover, the UK has been a strong advocate for peacebuilding and conflict prevention within the EU’s approach on peace, security and development. This contrasts with France, which has traditionally put more emphasis on the military/ defence side of peace and security and focused more on military cooperation with countries in Africa. What we will likely see as a rather immediate effect of the UK’s departure from the EU family, is that the EU’s approach to peacebuilding and conflict prevention will be less advocated for within the EU institutions and among EU member states.”

Volker Hauck, Head of Conflict, Security and Resilience programme


Trade and development


“When the UK leaves the EU, it will have direct consequences on all EU trade agreements. For developing countries, including the ACP, this means that they will not longer have preferential access to the UK. Neither under an EU free trade agreement (FTA), nor under economic partnership agreements (EPAs) or the EU general system of preferences (GSP), including the duty-free quota-free market access under the Everything-But-Arms (EBA) initiative. This might be a small loss for some, but will have major consequences for others. For countries like South Africa, Kenya and Mauritius, the UK accounts for about 25%-30% of their exports to the EU, and up to 75% for a small island like Fiji.

The Caribbean relations with Europe are also largely dominated by the UK. Yet, the EPAs are unlikely to be re-negotiated. The UK might wish to sign bilateral deals with some ACP countries, but could be more selective than the EU was, also to avoid another round of contentious negotiations. Trade-related support for these agreements, in the forms of aid for trade, is also likely to fall, as the UK will no longer contribute to EU endeavours. However, it is doubtful that Brexit will affect the overall dynamics around EPAs and their implementation. Still, it will require more attention from developing countries, and the ACP in particular, to assess the consequences and steps forwards, including in terms of possible new bilateral negotiations with the UK.”

San Bilal, Head of Economic Transformation and Trade programme


What are your key questions about Brexit?


ECDPM would like to consult with our partners and readers in Europe, Africa and across the world, on what key questions they have in terms of the implications of Brexit. We will use this input as we define our work on this topic, in the domains of European external action (including foreign, development policy, migration and EU aid), conflict, security and resilience (including conflict prevention and peacebuilding), change dynamics in Africa (governance issues, African Union, African Governance Architecture), economic transformation and trade (regional integration, economic governance, EPAs), and food security (including agriculture and nutrition).

At ECDPM, we are designing a specialised analytical framework to understand Brexit, yet will not limit ourselves to sharing our analytical work, as we will also adopt our usual position as non-partisan broker of dialogue amongst stakeholders.

Please use the comments function below or write directly to Weekly Compass Editor and Head of Communications Melissa Julian at [email protected].


The views expressed here are those of the authors and not necessarily those of ECDPM.

Photo courtesy of European Parliament via Flickr.

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Comments

San Bilal

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2016-07-05 18:43:31

Dear Rebecca, Thanks for your comments. The EAC, and Kenya in particular, needs easy access to the EU market, while pursuing its own regional integration. BREXIT reduces the value of an EPA in that respect. So, what EAC would need, is not to forget about the EPA, but to get similar preferential access to the UK, under a bilateral FTA or a new UK GSP. This is particularly important for Kenya, as over a quarter of its exports to the EU go to the UK. Now, if a country or region is still seeking an excuse for not concluding an EPA, BREXIT could be a good opportunity indeed - though probably self-defeating in the case of EAC.

Mr. Modest J. Mero

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2016-07-05 03:39:07

Dear Melissa, Your initial thoughts on BREXIT is timely and perfect assessment. However, we need to expand the scope by empirically asses the impact at regional and country to country mindful of implications of tectonic shift of the global economic landscape of post BREXIT!

Ryokichi HIRONO, Professor Emeritus, Seikei University, Tokyo and former Chair, ECOSOC Commitee on Development Policy

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2016-07-04 12:05:22

Dear Melissa, Many thanks for your Weekly Compass every issue of which I have enjoyed and used as source of enlightened analysis of EU's domestic and external affairs, especially with African people and governments. The Brexit decision has not only had deep short-term impact on the foreign exchange and share markets of all countries around the world, but also created greater uncertainties on economic, social and political affairs in the U.K. and EU member countries, with ramifications to non-EU countries including Japan. Not only Tokyo Stock Exchange and Money Markets have shown enormous fluctuations both in terms of unit prices and volume of transactions, precipitating further uncertainties among all sectors of our economy and among all segments of the population. The findings of the few surveys taken by mass media immediately after the Brexit decision all indicate cautious attitude among both corporations and consumers, while the Bank of Japan and the Abe Administration are contemplating additional interventions in the market in case of further deceleration of economic growh and consumer spending, as well as abnormal appreciation of Japanese yen vis-a-vis U.S. dollars.. Voices of the people in town are all clear in that, if left unattended, global economic decline, declining export/ business/investments/personal consumption in major countries, all make the people and governments to be further inward-looking and nationalistic, even to the extent of reversing the spirit of international cooperation hitherto nurtured steadily over the years since the end of the WWII. The nightmare of the world's Great Depression of the 1929-33 may not be the incidence of just the by-gone days. What is therefore required on the part of all countries is to undertake in the spirit of people solidarity all domestic reforms in our own countires in favour of Pro-Poor Growth, Narrowing Down the Widening Income and Wealth Disprities, Removing All Types of Corruptions, Promoting Environmental Sustainability and Preseving/Respectring Cultural Diversity, while keeping our doors open to international trade and investments and providing short-term relief measures to those low-income people, young and old, adversely affected by the current global crisis. We must be decisive in implementing all these domestic economic, social and political reforms for long-term stability at the national and global levels. These policy reforms, however, do not come easily from all quarters of society, as all of them have some vested interests, be they labour, farmers, business, politicians or bureaucrats. They must be well guided by the long-term visions of political and intellectual leadership concerned deeply with the lack of adaptations of our respective internal and global economic, social, environmental and political governance systems to changing needs and requirements of our peoples and societies. So, let us work together not only in the spirit of "Leaving No One Behind," as the SDGs says, but more positively in the "Renewed Spirit of Global Cooperation," as shown in the Paris Agreement concluded at the COP21 last December. On 10th this month July, we in Japan are holding the general election of our people's delegates to the House of Councillors (Upper House or Senate as called elsewhere) and this is one of the best moments for Japanese to show our own determination and commitment to these domestic and global governance reforms. Let's see how it comes out. Warm regards, Ryo

Rebecca

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2016-07-04 11:03:44

My attention is drawn to the article entitled ‘Brexit-First post referendum thoughts’. As an organization working on trade justice, our interest is drawn to the implication of Brexit on EAC-EU EPAs. Currently EAC is considering signing the scrubbed EPA with the EU but with the exit of UK from EU we are asking ourselves whether EAC should go ahead to sign the EPA as planned this month or next month. If Britain was contributing 15% to the EDF, will EAC still get the promised EDF fund for development? LDCs have Everything But Arms as a fall back if EPAs are not signed but Kenya will not enjoy the duty free – quota free market especially in the UK. What does Brexit mean for developing countries e.g. Kenya., Mauritius, Nigeria etc? Should Kenya sign and ratify EPA? Secondly if most of the exports of EAC end up in the UK should EAC sign EPA?

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