The UK has reached a preliminary trade deal with South Korea to avoid disruption if Britain leaves the EU without an agreement.
The two countries have agreed in principle a free trade agreementthat will allow businesses to continue trading freely after Brexit, including in a no-deal scenario.
The agreement, which will be subject to final checks before it is formally signed, is the UK’s first major trade deal in Asia since the June 2016 Brexit vote. Ministers have been scrambling to sign as many trade deals as possible before Brexit. About half of UK trade is with the EU, however.
The agreement will allow UK businesses to continue to trade on preferential terms with South Korea. In 2018, 99% of British exports to the Asian country were eligible to be exported tariff-free.
The UK international trade secretary, Liam Fox, signed the joint statement in Seoul on Monday with the South Korean trade minister, Yoo Myung-hee.
In a statement, 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.”
Trade between the two countries was worth £14.6bn last year and has increased by an average of 12% a year since the EU signed a free trade agreement with South Korea in 2011. UK exports to South Korea have increased by an average of 18% a year since 2011. British cars are particularly in demand, with exports up by a third to £943m in 2018.
Businesses including the drinks company Diageo and the law firm Clifford Chance welcomed the agreement, as did the Scotch Whisky Association. The latter said South Korea was an important market for Scotch whisky, worth £70m in shipments last year.
Fox tweeted: “This means that whatever happens with Brexit, there will be total continuity in trade between our two countries and the basis for an ambitious future free trade agreement when we leave the EU.”
🇬🇧-🇰🇷 Trade Agreement: “It will allow British and Korean businesses to keep trading and investing on the same terms as they do today.” @UKinKorea @tradegovukKOR @natalieblackuk @Nikmehta33 @SimonSmithFCO @JohnAlty1 pic.twitter.com/ybPLkbAvIB— Dr Liam Fox MP (@LiamFox) June 10, 2019
As part of its preparations for Brexit, the UK has signed trade agreements with Chile, a group of Caribbean countries, the Eastern and Southern Africa trade bloc, Iceland, Israel, Norway and Switzerland, as well as several smaller countries.