International Trade Secretary Liam Fox and South Korean counterpart Yoo Myung-hee signed a free trade agreement (FTA) in order to maintain trade arrangements after Brexit, BBC reported.
This is the first post-Brexit trade deal the UK has agreed with an Asian country and is on similar terms as the ones already established through the existing European free trade agreement the UK currently has with Korea.
South Korea is the fourth largest economy in Asia, producing electronics, steel and auto industry. In just 2018, South Korea exported $6.36bn (£5.0bn) worth of goods to the UK.
With the Brexit deadline set for 31 October, and the UK possibly leaving with or without a deal, the UK realises that it needs to provide continuity in its trading relationship with other countries so that businesses in the UK can be prepared, find the necessary support to maintain growth and productivity.
As Mr Fox said: “The value of trade between the UK and Korea has more than doubled since the EU-Korea agreement was applied in 2011. Providing continuity in our trading relationship will allow businesses in the UK and Korea to keep trading without any additional barriers, which will help us further increase trade in the years ahead. As we face growing global economic headwinds, our strong trading relationship will be crucial in driving economic growth and supporting jobs throughout the UK and Korea.”
Exporting to South Korea
The secured deal covers South Korean exports such as cars and auto parts. It exports cars and ships to the UK and the UK exports to Korea crude oil, cars and whisky. The deal will be ratified by the end of October and implemented in November.
According to Andrew Walker, BBC World Service economics correspondent, “Tariff-free trade with South Korea is certainly worth preserving. British goods exports to Seoul climbed sharply after the EU’s deal with South Korea was implemented in 2011. Last year the UK sold about £6bn worth of goods there.” South Korea is one of the bigger countries that the UK has enjoyed access through an EU trade deal, with UK goods imports from South Korea exceeding £4bn. The UK is South Korea’s second largest trading partner from the EU.
The South Korean international trade secretary, Ms Yoo said: “The deal is significant as it eased uncertainties sparked by Brexit, amid the already challenging environment for exports on the escalating trade row between Washington and Beijing.”
Brexit and trade
With the Brexit deadline looming, the UK is trying to seal more agreements with trading partners. If it leaves without a deal, the UK would lose many of the existing trade agreements it currently has as a member of the EU, something that will disrupt 11% of the UK’s total trade.
According to the UK government website, the UK has signed continuity trade agreements with non-EU countries so trade is not disrupted after Brexit. The UK has signed trade agreements with Israel, Iceland and Norway, Switzerland and Chile, among others.
UK Importing and Exporting
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