The UK has officially signed its latest ‘continuity’ trade agreement, this time with South Korea. Following a preliminary deal signed in June, International Trade Secretary Liz Truss signed the agreement with her South Korean counterpart, Yoo Mying-hee, in London on Thursday this week, ensuring businesses in the two countries can continue to trade freely after Brexit.
The UK has been seeking continuity agreements with trading partners around the world as it prepares to leave the EU on October 31st. The UK has signed 13 continuity agreements with 38 possible markets – including Israel, Norway and Chile. The agreements seek for continuity of the trade terms the UK presently has with key partners through its current membership of the EU.
The deal with South Korea is the first it has concluded for an Asian country, with trade between the UK and South Korea valued at $14.6bn in 2018. The deal is thought to roughly resemble the terms of the pre-existing EU-South Korea trade deal. The UK is continuing to push for further such continuity agreements with key partners including Canada, Mexico and Turkey.
A major market for the UK in Asia
Ms Truss is quote by the BBC as saying: "My priority is to make sure that British businesses are fully prepared for Brexit and ready to trade on Thursday 31 October”.
She also claimed that the agreement would enable companies like Bentley to ‘keep trading as they do today’, enabling them ‘to take advantage of the opportunities that Brexit offers’.
Her counterpart, Ms Yoo claimed the agreement would ‘remove much Brexit uncertainty’ from the economic partnership between the two countries.
South Korea is Asia’s fourth largest economy, importing significant amounts of crude oil, cars and whisky from the UK. It is a leader in the electronics, steel and automotive industries, and exported around £5.2bn to the UK last year.
Businesses nonetheless need to prepare for worst-case scenarios
While continuity agreements such as the one signed with South Korea are encouraging, the reality is that British businesses continue to face uncertainty in terms of their trade with the EU, as well as several other significant partners like Canada.
44% of UK exports went to the EU in 2017, with 53% of UK imports also coming from the bloc, according to official UK figures. Out of the 240,000 businesses who export only to the EU, only a reported 70,000 have applied for EORI numbers. Attaining an EORI number is a vital step that exporters will need to take in order to complete the customs declarations that exporting to the EU will require after Brexit – though automatic enrolment of this process for VAT-registered companies was announced earlier this week.
If you are looking to prepare for Brexit now, the Institute of Export & International Trade is providing training courses in completing Customs Declarations, alongside our Post Brexit Planning Workshop and Post Brexit Compliance & Documentation course.
If you have any questions, please feel free to get in touch:
01733 404400