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Brexit: United Kingdom-Africa Trade and Development

Volume 782: debated on Tuesday 25 April 2017


Asked by

To ask Her Majesty’s Government what measures they intend to take to promote United Kingdom–Africa trade and development co-operation in the transitional and post-Brexit periods.

My Lords, unlocking barriers to trade to reduce poverty is an important part of our economic development strategy. As we leave the EU, our priority is to ensure that we do not disrupt vital trading relationships, including with our African partners.

I thank the Minister for his reply. I hope he is aware of the Africa All-Party Group’s report on UK-Africa trade, which underlines the potentially damaging impact of Brexit on African economies. Will the Government consider carefully the report’s recommendations, in particular the need to prioritise a transitional regime to maintain preferential, non-reciprocal market access to the UK for those African economies?

I thank the noble Lord for his Question, but I do not accept his pessimistic outlook. We have said that the economic partnership agreements we have in place through the EU are working well and we want them to continue. We set that out in the exiting the EU White Paper. Our intention is to have other measures in place by the time that exiting happens. The great benefit of this is that we will not be bound or limited to the trade preferences currently through the EU. We can have a broad new arrangement that will benefit African countries as well as our own.

My Lords, I am glad that the Prime Minister has made clear her commitment to the 0.7% figure. That is terribly important. As the House will be aware, while there is global growth, poverty is growing in Africa, where there is increasing inequality. What are the Government doing to ensure that trade and development policies are inclusive and pro-poor? Will the noble Lord agree that, as we step up our trade relationships, we must ensure that they enhance sustainable and inclusive development?

That is right. All those points were made by the Secretary of State when she launched the economic development strategy in Ethiopia in January. We have taken this matter forward seriously. No country has ever successfully defeated poverty without economic development and economic growth. We want to be at the forefront of ensuring not only that there is FDI but that those countries can have access to our markets on the most preferential terms.

My Lords, does the Minister recognise that the relationship with the African, Caribbean and Pacific countries which we have as a member of the EU covers a lot more than just trade and aid? It also covers guaranteeing the export receipts from primary materials and sugar. What plans do the Government have to look after those aspects when we have left the European Union?

Those are all important points, as the noble Lord will know, which is why we want to make sure that arrangements relating to all matters covered by the EPAs continue not just until the point at which we leave but beyond. We want also to take the opportunity to discuss with our bilateral partners in Africa, the Caribbean and elsewhere how we can improve on the current arrangements so that they might work better for those in poor countries.

My Lords, further to the point that my noble friend the Minister has just made, can he confirm that African exporters to Britain face the high EU external tariff and that, after Brexit, there will an opportunity to review that and therefore to increase trade between the UK and Africa?

My noble friend is right to raise that point. The lowest-income countries are able to come in duty free and tariff free under the Everything but Arms agreement, but there is more to be done on the middle-income countries. There is now more flexibility: we are leaving the EU, but we are still embracing the world. We want to put free trade at the heart of everything that we do—that has been set out clearly. The opportunity for free trade to lift ever more people out of poverty around the world is something that we will grasp with full measure.

The Minister may know that I am a regular visitor to Zimbabwe, where my diocese has links with four of the five Anglican dioceses there. How do Her Majesty’s Government propose to respond to the preponderance of Chinese investment both there and in other African nations, both in infrastructure and major economic undertakings?

I do not think that we see investment in Africa by any country as a problem. We see a significant gap in finance and investment, which Africa needs. The gap to meet the global goals is some $2.5 trillion per year whereas aid flows amount to only some $150 billion. The gap has to be filled by private investors. We welcome them from wherever they come. As the right reverend Prelate will know, we are certainly playing our part in Zimbabwe to encourage investment and to identify investment opportunities in both directions.

My Lords, in January this year, Dr Rob Davies, the South Africa Minister of Trade and Industry, reminded the Government that the United Kingdom is the major destination among EU nations for South African investment. It invests more here than in any other EU country. The UK also accounts for 20% of South Africa’s wine exports and 30% of its fruit exports under the current EU economic partnership agreements. What specific actions are the Government taking to allay South African concerns and to maintain the strength of what is a key strategic market post Brexit, when the UK will be excluded from some of those treaties?

That conversation happened when Liam Fox, the Secretary of State for International Trade, was in South Africa talking about how we could enhance trade co-operation between our two countries. It is important that we do that. We also need to see Africa as a tremendous opportunity—I know that the noble Lord shares my view on this. Africa will be a market of some $30 trillion by 2050 and will have a middle class the size of Europe. It is in our enlightened self-interest to build those strong links and maintain free trade.

Does the noble Lord accept that the elephant in the room in this debate is a country called China? China is growing very fast in Africa and says quite explicitly that it thinks it very important that the main Chinese relationship will be with the EU. Instead of saying that everything in the garden will be lovely, would not the Minister find it more useful to think how the constructive relationship with EU countries and the EU as such will continue?

I totally agree but refer to the point I made before that the problem in the crisis we face at the moment, particularly in sub-Saharan Africa, is a shortage of investment rather than too much. All the investments made by other countries and private investors are of course a matter between that particular country and the investor making those decisions. We do not want to get in the middle of that. We want to encourage as much investment as possible in that area so that growth can happen.

My Lords, the key to what the noble Lord said is that there are opportunities here but principles must govern them. The most important principle is a pro-poor and pro-development policy. Can the Minister assure the House that his department will be heavily involved in future trade negotiations with Africa? I do not have confidence in the Minister responsible for international trade to carry through those principles.

That is the reason we set up a cross-government programme including the prosperity fund to build economic trade and development. It is why we hosted the Commonwealth Trade Ministers’ meeting here last year. It is the reason the Secretary of State for International Trade is travelling round the world with his other Ministers, trying to put in place the groundwork for these trade agreements in future. We all recognise that free, unfettered trade is one of the best routes out of poverty ever known and we need to do more to encourage it so that people get the opportunity to come off aid dependency and into a self-sustaining economic future.

My Lords, today is World Malaria Day. I do not expect the Minister to have read and digested the report published today, Global Britain and Ending Malaria: The Bottom Line, compiled by Malaria No More and Ernst & Young, but it sets out that malaria costs this country £765 million in lost trade opportunities with the most affected countries. Does he agree that investment in malaria control not only saves lives and improves the economies of the affected countries but is a major benefit to this country in terms of life sciences investment and boosting British trade?

I am very happy to do that on World Malaria Day. I have not seen that particular report but the World Health Organization’s annual report, published in December, pointed to the fact that malaria-related deaths have reduced by some 60%, which means about 6 million lives have been saved as a result. That was why the Secretary of State announced in September that we will invest a further £1.1 billion in the global fund to tackle AIDS, TB and malaria, which is another demonstration of this Government’s commitment to the poor.