In the spring of 2016, the British people voted by a 58% majority to leave the European Union. With a small marginal win of 2%, many conversations 3 years on, attempt to reconnect the divided nation over Brexit. Primarily political dialogue has centered on trade, immigration and governance between the UK and European Union. However, the ramifications of Brexit will be far reaching beyond Europe, not least with countries such as Nepal.
The current status of Brexit is shrouded with uncertainty and continues to divide the UK. The initial 585-page withdrawal treaty designed by British Prime Minister Theresa May and agreed by the European Union has been comprehensively rejected by the House of Commons. Which leaves the UK no indication of what a post-Brexit Britain might look like. However, within the Brexit White Paper, it clearly states that all Least Developed Countries (LDCs) will have continued access to the UK market and that the UK would support developing countries to reduce poverty via trade.
The EU is a principle trading partner of Nepal, cumulatively holding the second largest export market share of 13% behind India’s 54%. Under the Everything But Arms (EBA) policy agreed in 2001, the EU provides duty-free and quota-free facilities to Nepal among other LDCs. Furthermore, the UK is the second largest importer of Nepalese goods in Europe, accounting for 3.7% of total exports, leaving Nepal, with a value of $28.5 million USD. The value Nepal exports to the UK exceed that of China, whom only purchase $19.5 million worth of goods. As the UK’s trade contribution is important to the Nepalese economy, it would be prudent for the government to take the UK’s departure from the European Union as an opportunity for change.
In August of 2018, the first post-Brexit trade deal was secured. The product of a visit to South Africa, where talks with six Southern African countries took place to agree the reestablishment of the European Partnership Agreement outside of the European Union. Revisions and renegotiations of treaties and agreements offer potential for new deals to be brooked.
Annually, the UK commits the UN target of 0.7% of GDP, to be given as overseas aid. Beyond trade, the UK is aspiring for international aid to be spent on British national interest, analogous of investment aid model followed by China. The pursuit of this adjustment in the use of foreign aid would encourage foreign direct investment, joint-ventures and infrastructure projects in the recipient countries. Applied to Nepal, this would build a closer trade and investment partnership, sustaining the export markets, as well as act as a float for the UK at a time of great uncertainty.
With only two months left until the UK’s divorce from the European Union, Nepal needs to take this opportune time to not only transfer European agreements to the new Brexit Britain, but to establish new agreements and policies that enable amicable bilateral relations for decades to come.