UK votes to withdraw from the EU

UK citizens have voted in favour of leaving the European Union (EU) in a referendum held on Thursday.

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According to the final results, 51,9% of people cast their votes in support of the leave campaign. The poll reflected that the majority of voters from England were in favour of exiting, while Scotland and Northern Ireland backed calls to remain a member of the EU.

The decision will have significant implications for South Africa’s agricultural trade with the UK. British agriculture also faces great uncertainty, according to Farmer’s Weekly United Kingdom. As members of the EU, farmers in Britain received subsidies from the EU’s common agricultural policy and had access to export markets in Europe.

Prof Nick Vink Chair of the Department of Agricultural Economics at the University of Stellenbosch, told Farmer’s Weekly that, in the short-term, the value of the British currency would remain at a lower level than before Brexit (a popular term for British withdrawal from the European Union).

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The Telegraph reported that the pound had fallen to its lowest levels in three decades. Vink said that this would impact negatively on South African exports but positively on imports.

However, longer term negotiations would have to get underway soon. “Britons will have to renegotiate trade treaties with everyone in the world, and South African agriculture will not be high on their list of priorities,” he said.

Agbiz agricultural economist, Wandile Sihlobo, said agricultural trade between SA and the UK would not stop immediately. “We will still be sending our agricultural products to the UK as before,” he said.

However, the UK would have to negotiate a new trade agreement with the Southern African Customs Union. In the interim, the country will most likely make transitional arrangements in the form of legislation and tariffs that would allow for a “soft landing”, he said.

At the time of publishing, the rand was trading at R20,66 to the pound.