How could Britain’s EU vote impact SA?

A man queues in the rain outside a polling station for the Referendum on the European Union in London on June 23, 2016. Picture: Neil Hall

A man queues in the rain outside a polling station for the Referendum on the European Union in London on June 23, 2016. Picture: Neil Hall

Published Jun 23, 2016

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Cape Town - Today’s “Brexit” referendum on whether the UK should remain in or exit the EU could have far-reaching effects for South Africa, according to experts.

Current polls show the “Remain” vote is slightly ahead, with a late push by UK music and sports celebrities publicly expressing why the country should remain in the EU.

More than 40 000 British citizens live in South Africa, and like the close to 1.8 million Britons living in other parts of the world, all who have not lived outside the UK for longer than 15 years are entitled to vote.

The question, though, is: how many will make their way to the British consulate-general’s offices in Cape Town to put their cross next to Remain or Exit?

David Meldrum, a British expat who has been living in Cape Town since 2010, said although he could vote, he and his wife had decided not to.

“If I was voting, I would vote Remain. I want Britain to have the capacity to trade freely. I want Britain to welcome more refugees,” said Meldrum.

He said watching the referendum campaign has been “quite hard” due to the divisive nature of the arguments on both sides.

Johannesburg businessman Martyn Williams, originally from Scotland, said he had no interest in the referendum and would not vote.

“I’ve lived here for 38 years and won’t be voting. I simply don’t have enough information,” said Williams.

Andrew Case, who has lived in South Africa since 1991, said he had no interest in the referendum.

“I don’t care. The UK is full of miserable people and I’m an immigrant, the world is full of immigrants.”

Refugee concerns and migration from poorer EU countries, and the belief that these new residents lowered wages through their cheap labour, overburdening the country’s social security system, have been some of the main motivators for those campaigning to exit the EU.

The main concern for the Cape Chamber of Commerce is that the referendum, should the UK voters decide to exit, could see several other countries follow suit, destabilising the common currency and previous trade agreements.

Cape Chamber of Commerce president Janine Myburgh said: “We already have a lot of tension in the EU as the migration crisis has shown, so we could have a completely new situation on our hands. Coupled with a potential tide of nationalism in the EU countries, a Brexit vote has the potential to create a very destabilising situation in the region.”

And should more EU countries vote to leave the union, it could have a negative effect on the already ailing South African rand.

“Our exports to Europe last year amounted to R216 billion, so the EU remains one of our biggest trading partners.

“However, the result of a ‘leave’ vote would affect trade between South Africa and the UK because of the negative economic consequences,” said Myburgh.

Earlier this week, the Southern African Customs Union signed an Economic Partnership Agreement with the EU, but a separate agreement would have to be re-negotiated with Britain should voters there decide to leave the union.

Standard Bank chief economist Kevin Lings also echoed concerns about trade relations with Britain should it decide to exit the EU.

He said negotiating new trade agreements with a UK outside of the EU could be “quite problematic” as it would take some time to negotiate and settle on a trade deal. “We might not end up with an agreement that is as favourable as we’ve got at the moment.”

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@mtyala

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