Zero tariff agreement
UK signs post-Brexit free trade deal with South Korea
International Trade Secretary Liam Fox signed the zero-tariff deal with his South Korean counterpart Yoo Myung-hee in Seoul. It marks the first post-Brexit trade deal the UK has secured in Asia and is broadly in line with the terms of the existing Korea-EU free trade agreement.
South Korean exports include cars, car parts and electronic equipment and the deal will provide stability to the UK whether or not it leaves the EU with a deal. The UK is South Korea’s 19th largest trading partner and second largest among EU members.
UK-Korean trade was worth £14.6bn in 2018, with UK exports growing by 9.7% since 2017. Sales of British cars to Korea increased by a third to £943m in 2018.
There were 6,900 British VAT-registered businesses exporting goods to Korea in 2017, with 5,400 British businesses importing Korean goods to the UK.
Demand for British products in Korea continues to grow rapidly and exports have increased by an average of 18% per year since 2011. Some of the fastest growing exports include sales of British cars which increased by a third to £943m in 2018.
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, 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.”
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.”
So far the UK has agreed “continuity” deals with 12 countries and regions, including Israel, Norway and Iceland, Switzerland and Chile.
Karen Betts, Chief Executive of the Scotch Whisky Association said: “Scotch Whisky is a global success story, with more than 1.2bn bottles exported last year.
“Our export success is based on free trade and open markets. By reducing tariffs and other trade barriers, Scotland’s national drink can continue to increase its global reach, in turn creating jobs and investment across the UK.
“This agreement removes the prospect of tariffs being reintroduced in South Korea – an important market for Scotch Whisky worth £70 million in shipment value in 2018.”