Peter Ungphakorn @coppetainPU
Time for a reminder.
"Rolling over" EU free trade deals (eg with southern Africa) for the post-Brexit UK will NOT "roll over" the whole value of those deals.
Not unless "diagonal rules of origin" are included. And yes, that's as complicated as it sounds.
UK exports now qualify for free trade with any EU FTA partner even if they contain German, Italian, Spanish, etc content. But after Brexit any German, Italian, etc content would't count: it would have to be mainly UK content to qualify for free trade.
I wonder if Liam has got his head around this?
So if a UK free trade agreement with Japan or South Africa etc is to be as valuable to UK exporters as the one they now enjoy through the EU, then the agreement would have to allow content from the EU27 to be included in UK exports. That would bring the EU into the negotiations.
Uh oh.
Sam Lowe @SamuelMarcLowe
So, one of the under-reported reasons May is actually prioritising South Africa is Ford. (Yes, cars again.)
Ford currently run a supply chain from the UK, via South Africa, back into the EU.
An engine is made in Dagenham, shipped to South Africa, put in a vehicle, and then sold back into the EU.
The engine enters South Africa tariff free, under the SADC-EU Economic Partnership Agreement.
The final vehicle can then be sold back into the EU tariff free, from South Africa, because the UK-originating engine can be accounted for as 'local' for the purpose of meeting the EPA's local content threshold thanks to provisions on bilateral cumulation included in SADC-EU.
To maintain this supply chain the UK needs to do two things:
1. Replace/replicate the EU's agreement with South Africa;
2. Negotiate a trilateral agreement between South Africa, the EU and the UK, allowing for cumulative rules of origin
And how long will this all take to negotiate?