South Korea signs FTA with Britain

Legislation | | MIC Customs Solutions |

Another continuity agreement has been agreed, this time between Britain and South Korea.

South Korea has signed an outline Free Trade Agreement (FTA) with the UK in a bid to continue existing trade agreements between the two nations after Britain's exit from the European Union (EU).

International trade secretary Dr Liam Fox met up with South Korean trade minister Yoo Myung-hee in Seoul to sign the agreement in principle, the first Britain has managed to secure in Asia since the 2016 Brexit vote.

The deal is approximately in line with the current agreement Korea has with the EU and would cover South Korean exports, including cars and auto parts.

According to the Department for International Trade, the FTA would mean British businesses could continue trading on preferential terms with South Korea, something that should provide stability post-Brexit even if a deal is not reached ahead of the new October deadline.

In 2018, 99 per cent of British exports to South Korea were eligible for export tariff-free, with Korea mostly importing crude oil, cars and whisky.

Dr 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."

It is hoped the deal will be ratified before the end of October 2019 and can be implemented in November.

South Korea is Asia's fourth-largest economy and a global leader in electronics, steel and car parts.

Meanwhile, the UK is South Korea's second-largest trading partner among EU member states, with Britain exporting around £6 billion (€6.7 billion) worth of goods in 2018 and importing more than £4 billion worth from the Asian nation.

So far, Britain has agreed so-called continuity deals with 12 countries or regions, including Norway, Israel and Chile. This accounts for around 63 per cent of the trade covered by existing EU deals, up from 28 per cent three months ago.