Although the implementation of Brexit from Friday evening marks a historic fork in the road in economic relations between the UK and the European Union (EU), not much will change for South Africa in the immediate future, says North West University (NWU) Business School Professor Raymond Parsons.

“Although the UK election in December last year had brought an end to the protracted uncertainty which had preceded it, today was not the end of the Brexit journey. Brexit is a process, not an event. The hard part of Brexit still lies ahead, given 'unfinished business' on the Brexit agenda,” Parsons noted in a statement.

He added that existing trade and other arrangements would remain in place until the end of 2020, while the UK and the EU negotiate the terms of their future economic relations and a possible free trade agreement.

“However, these will be tough and complex negotiations which, if not finalised by the end of the year, could generate renewed uncertainty about the UK's global trading status and its trade relations with [other] countries.

“There remain strong doubts about the technical and political feasibility of completing these negotiations by year-end.”

Parsons noted that given South Africa's major trading stake in the UK economy, its trade relations with the UK remain protected in the post-Brexit period by the agreement signed between the UK and the Southern African Customs Union towards the end of last year.

This keeps the existing tariff regime with the UK intact while the Brexit process unfolds.

“But, South Africa must still from now on regularly evaluate what new risks or opportunities may emerge from the Brexit process. Preliminary research done by NWU suggests that other bilateral deals, which a post-Brexit UK may eventually strike with various countries, such as the US, may affect South Africa’s future competitive position in the UK market.

“Post-Brexit, there are still a number of economic unknowns. South Africa must therefore remain alert to the possible unintended consequences of Brexit and be prepared to respond appropriately if they should arise,” Parsons warned.