BRIEF BACKGROUND ON BREXIT
The European Union is a political and economic union of 28 countries (now 27). This union allows them to trade with each other, and for their citizens to move freely between the countries to live and work.
On 23rd June 2016, after 43 years of membership, the UK public voted to leave the EU, in a term coined “Brexit”.
The UK is currently in a ‘transition period’ to agree new trading deals and give people time to implement any new measures, until they officially exit on 31st December 2020.
HOW DO THE UK AND MAURITIUS CURRENTLY TRADE?
The UK represents about 12% of Mauritius’ total exports worldwide, making it Mauritius’ third largest export market.
Mauritius mainly exports textiles and apparel, sugar, and seafood to the UK. Primates? Chagos?
Around 140,000- 150,000 UK tourists visit Mauritius each year, making up over a tenth of total yearly tourism figures.
Mauritius benefits from trade agreements with the EU, meaning they have special provisions when exporting to EU countries, which included the UK.
BREXIT EFFECTS ON MAURITIUS - TRADE AGREEMENTS
In 2007, Mauritius signed an agreement with the EU called the Economic Partnership Agreement (EPA). The main benefit of this agreement include lower tariff charges for Mauritius when exporting their products.
In January 2019, Mauritius and the UK signed a replica of this agreement to safeguard these trade preferences it currently enjoys, once the UK leaves the EU.
The new agreement is known as the UK-ESA EPA (United Kingdom and Eastern and Southern African Economic Partnership Agreement) and remains mostly the same as the EPA signed in 2007.
However, there are some (complicated) caveats, such as lower trade rates, and more in-depth operating procedures. This has caused uncertainty for some exporters who have complicated production processes, as the custom and trade rules for the UK and EU are now slightly different.
EFFECTS ON MAURITIUS - TEXTILES
Textile and apparel are Mauritius’ top export to the UK. Immediately after the 2016 referendum outcome, it was predicted that that Britain would reduce its Mauritian textile imports by 10%, due to the fall in UK consumerism, and depreciation of the British Pound (which has a knock-on effect on the Rupee), making it Mauritius’ most vulnerable sector to Brexit. There has been no update if this actually happened, or what the current figure is.
Mauritius’ textile industry currently enjoys preferential duty-free and quota-free status in the EU under the 2007 EPA. As the UK signed a replica of this pact in January 2019, this should continue after Brexit.
Due to the pandemic and recent retail giants announcing administration (namely Arcadia group, who Mauritius supplies to), it is still unclear how Mauritius’ apparel industry and subsequent employment will be affected in 2021, in addition to Brexit.
EFFECTS ON MAURITIUS - SUGAR
Since the UK joined the EU in 1974, Mauritius’ allocation of sugar production to the EU has been somewhat protected, under rules that give preference to ex- European colonies. This meant, as a former British colony, Mauritius had guaranteed sugar export quotas to the UK. With the UK leaving the EU, these quotas also remain uncertain.
The UK’s biggest importer of raw Mauritian sugarcane, Tate & Lyle Sugars, were one of the only large UK businesses to publicly back Brexit. In August 2020, T&L were awarded a government decision to allow more relaxed, tariff-free imports of raw cane sugar in 2021.
Under current EU rules, T&L are able to import raw cane from Mauritius without paying tariffs, but these production costs are higher as they have to adhere to stricter environmental controls. Under their new government break, T&L aim to increase imports from other major cane producers like Brazil and Australia- who can manufacture more sugar, with less controls, at a cheaper cost.
In addition to increased production of English sugar beet lowering the demand for raw sugar cane from abroad, Mauritius may lose out on its preferential allocation quota.
While the island’s large, corporate sugar plants may have the money to invest in other uses for cane like manufacturing the ‘bagasse’ for biofuel, or producing speciality sugars like Demerara, smaller, local sugar cane farmers do not have the capacity to diversify their crop. This had led to many local farmers abandoning their land, as they are being pushed out of the demand chain.
EFFECTS ON MAURITIUS- TRAVEL
Britons travelling to Mauritius and vice-versa remain unaffected post Brexit.
As Mauritius is a long-haul destination for UK tourists, and seen as a ‘luxury’ holiday destination, they tend to stay longer and spend more money. Economic uncertainty for Britons post-Brexit may mean long-haul luxury holidays are no longer seen as a ‘necessity’ reducing tourism numbers. This has not been helped by 2020’s pandemic and current restrictions on travel to Mauritius, but may change due to the recent announcement of the UK rolling out a COVID-19 vaccine.
In 1965, the UK illegally split the Chagos Archipelago from Mauritius and forcibly exiled its citizens to create a US military base. Mauritius has called for it to be handed back ever since. In 2017, the case was referred to the International Court of Justice, because most of Britain’s traditional European allies abstained from the vote, as a direct consequence of Brexit. This led to the UN ordering the UK to decolonise Chagos in 2019- which it ignored.
The UK is one of the largest primate users for research in Europe, importing around 1,000 macaques a year from Mauritius for this purpose (this jumped to 6,120 in 2020 with the pandemic). EU law states the use of macaques in animal research must be phased out by 2022. With Brexit, it is unclear if the UK will still adhere to this.