The UK and Korea have signed a continuity Free Trade Agreement (FTA) that will ensure that businesses can trade uninterrupted after Brexit.
As it stands, Brexit is at the centre of the UK’s political and financial struggles, with Brexiters putting more pressure on the government.
Farage: “Deliver of politically die”
During a speech at a Brexit party event, former Ukip leader Nigel Farage warned prime minister Boris Johnson that the Brexit party will fight the Conservatives in “every single seat up and down the country” if Johnson returns to Theresa May’s deal. The former UKIP leader highlighted that Johnson’s political career depended on him delivering a “clean break Brexit.” The prime minister had requested from the EU to re-open the withdrawal agreement that they reached with Theresa May in order to make changes, but he has been clear that the UK will be leaving on 31 October with or without a deal.
But beyond Farage’s threats and political braggadocio, Johnson cannot be driven by passion or instinct. Instead, now is the time to deliver politically conscious and responsible solutions that will irreparably affect the lives and livelihoods of British people in and outside of Britain.
As we increasingly move towards the possibility of a no-deal Brexit, opposition MPs have began thinking of how they can pass a law blocking a no-deal Brexit. Another solution to stop no deal is to bring down the government via a no-confidence vote. A No 10 source accused the MPs of "seeking to sabotage the UK's position.”
Trade deals that will guarantee continuity of trade post-Brexit
As the CBI warned, “trade continuity must prevail if business is to thrive.” It is essential for companies to continue trading "on pre-agreed terms, avoiding tariffs and other market access barriers." In order to avoid businesses' disruption and secure the smooth trading, the government would need to focus on securing more trade continuity agreements. With Brexit around the corner, the UK is pushing to agree on trade deals with its trading partners, signing so far 13 trade continuity agreements with 38 countries, including Norway and Chile. These trade continuity agreements cover countries accounting for £89 billion of trade, an increase from £39 billion in March 2019.
UK and Korea continuity free trade agreement
The UK and Korea continuity Free Trade Agreement which was signed on 22 August aims to help businesses continue trading freely after Brexit happens on Thursday 31 October. The Secretary of State for International Trade, Liz Truss and the Korean Minister of Trade, Yoo Myung-Hee signed the agreement, which marks the first post-Brexit deal in Asia. Trade between the two countries totalled £14.6 billion in 2018.In 2017, 6,900 British businesses exported goods to Korea, worth around £5.8 billion.
The agreement secures British jobs in such important sectors as manufacturing, technology and professional services. Secretary of State for International Trade Liz Truss MP said: “My priority is to make sure that British businesses are fully prepared for Brexit and ready to trade on Thursday 31 October. That’s why I’m delighted to sign this trade deal today with one of the biggest markets covered by existing EU trade agreements. It will allow businesses like Bentley and Denby to keep trading as they do today, and they will be able to take advantage of the opportunities that Brexit offers.”
Trade Minister Yoo said: the “signing of the FTA will remove much Brexit uncertainty out of our long, valuable economic partnership. In this challenging time, we took a proactive step, and as a result, our Free Trade Agreement today sends a signal to the world of our strong, collective support for free, open, rules-based trade. Building on today’s signing, I hope to see further deepening of our economic partnership, and Korea and the UK walking together on the path of prosperity and a brighter future.”
Businesses welcome the trade agreement
Businesses in automotive, technology, renewable energy, retail and ceramics were positive for the trade agreement as Korea is a significant trading partner. Exports to Korea include British cars, which in 2018 increased to £943 million. According to the government's press release, Bentley's classic luxury car saw a "thirty-fold increase in exports between 2006 and 2015, from 10 cars driving on Korean roads in 2006 to over 380 in 2015."
Exports of ceramic products from the UK to Korea were around £17 million in 2018, and the British ceramic company Denby sells its ceramics in over 40 department stores in Korea.
While the UK-Korea agreement is welcome news to many businesses, it is hard to see what will happen post-Brexit. If you are an importer or exporter who regularly trades within and outside the European Union, you are most likely affected when transferring funds cross-border. Ideally, getting in touch with a leading foreign exchange broker such as Universal Partners FX will help you navigate the current volatility and safeguard your funds. Give UPFX a call today and find out how much they can save you on your international money transfers.