South Korea Ratifies Brexit Trade Deal
The South Korean parliament yesterday ratified a trade deal between Seoul and London, set to take effect automatically upon Britain’s imminent departure from the European Union.
This latest free trade agreement (FTA) more or less replicates the terms of the existing deal between the EU and South Korea, and is a rare sliver of assurance amid a Brexit process fraught with just as much uncertainty as ever.
British Prime Minister Boris Johnson once said the UK would formalise a departure from the EU by 31 October, “do or die.” At the last minute, however, the EU has agreed in principal to extend the deadline until 31 January 2020.
For his efforts, Johnson has managed to agree to a Brexit deal with the EU, but the bill implementing it still needs to be passed by Parliament.
Now, all eyes are on British MPs as they today vote on a short bill for an early election. If passed, the UK faces an election between 9 and 12 December. If rejected, a number of options are on the table, including a vote of no confidence, a second referendum, or the long-threatened No Deal Brexit on 31 January 2020.
The latter option remains the default position if no deal is passed by Parliament, which would see Britain withdraw from the EU customs union and single market with immediate effect. Many businesses and politicians warn of economic havoc in the case of a No Deal Brexit, while others say the risks have been exaggerated.
Following yesterday’s vote in Seoul, South Korea-UK trade flows would experience little to no disruption. According to a statement by South Korea’s trade ministry, the new FTA protects “stability and continuity” in both South Korea and Britain’s trade environment amid an “increasingly complex” Brexit ordeal.
“The two countries have completed domestic procedures and the Korea-Britain FTA will take effect automatically when Britain leaves the EU in the future,” the ministry said.
The UK has been on a campaign to secure agreements with its trading partners in recent months, with UK International Trade Secretary Liz Truss signing a continuity agreement with Seoul in August.
“My priority is to make sure that British businesses are fully prepared for Brexit and ready to trade on Thursday 31 October,” Truss said in a statement at the time.
Britain is South Korea’s second-largest trade partner in the European Union, with exports to the embattled island reaching £5.2 billion last year. Bilateral trade totalled £14.6 billion. South Korea exports mostly cars and ships to Britain, while imports are dominated by crude oil, cars and whisky.
So far, the UK has signed 13 trade continuity agreements, including Chile, Switzerland, the Eastern and Southern Africa (ESA) trade bloc and the Pacific States. The deal with South Korea was Britain’s first post-Brexit trade deal in Asia.