(Business in Cameroon) - Cameroon recently ratified the Stepping Stone Agreement towards a Bilateral Economic Partnership Agreement signed on March 9, 2021, in London, with the UK. This was notified in a decree signed on June 28, 2021, by the President of the Republic of Cameroon. The agreement can therefore become effective.
This agreement is called a stepping stone agreement because some of the terms still need to be discussed. Elaborated based on the EPA with the European Union (EU), this agreement allows preferential access (duty-free and quota-free) to the British market for Cameroonian products. As for the UK, thanks to this agreement, it can export 80% of its products to the Cameroonian market duty-free.
The UK was a stakeholder in the EPA signed by Cameroon and the EU. However, on March 27, 2017, the country decided to leave the EU, after a referendum. As a result, it lost the benefits of the trade agreements signed by the EU with its partners worldwide. So, to avoid trade disruptions with its partners, after its exit from the EU, the UK initiated negotiations to sign new trade agreements and treaties with its trade partners.
The agreement will address several issues, trade relationships particularly. It will first safeguard trade between the two countries and secondly, boost those trades (ed. note: Currently, the UK is not one of Cameroon’s main trade partners), which are officially estimated at US$263 million and mostly benefit the UK. According to customs data, when it comes to Cameroon-UK trade exchanges, it is the UK that benefits the most by supplying manufactured goods, machinery, and mechanical and electrical equipment, vehicles, and pharmaceutical products to its partner country.
For Cameroon, the benefits of the agreement are less significant. According to a study published in 2019 by BKP Economic Advisors, 13% of Cameroon’s €10 million (XAF6.53 billion) banana exports are shipped to the UK.
As per figures published by the United Nations Conference on Trade and Development (UNCTAD), without a bilateral agreement between Cameroon and the UK after the Brexit (the UK’s exit from the EU), Cameroon’s overall exports to the UK would have dropped by 28%, representing US$17.1 million (XAF9.9 billion) only.