U.K., S. Korea Sign Deal to Avoid Trade Chaos in No-Deal Brexit
Britain can’t negotiate a full free-trade agreement with third countries until it’s left the bloc.
(Bloomberg) -- The U.K. and South Korea signed a preliminary agreement to prevent trade being disrupted in the event of a no-deal Brexit.
“This means that whatever happens with Brexit, there will be total continuity in trade between our two countries,” U.K. International Trade Secretary Liam Fox said Monday on Twitter.
It’s the latest in a series of agreements the U.K. is pursuing to roll over the existing trading arrangements with third countries that Britain now enjoys via its European Union membership. In the event of a no-deal exit, Britain’s trade with those countries would be snarled, as well as with the bloc itself. Once this agreement is signed, the U.K. will have made arrangements with countries accounting for 63% of non-EU trade that’s now covered by deals with the bloc.
The roll-over plans -- which Britain has also negotiated with Switzerland -- are increasingly important for business as the prospect of a no-deal exit grows. Conservative Party candidates to replace Prime Minister Theresa May are wielding the threat of walking away from the negotiating table, and current favorite Boris Johnson vowed again at the weekend to take the U.K. out of the bloc on Oct. 31 with or without a deal.
Britain can’t negotiate a full free-trade agreement with third countries until it’s left the bloc. But Fox said the preliminary agreement was the “basis for an ambitious future FTA when we leave the EU.”
To contact the reporters on this story: Emma Ross-Thomas in London at erossthomas@bloomberg.net;Heesu Lee in Seoul at hlee425@bloomberg.net
To contact the editors responsible for this story: Heather Harris at hharris5@bloomberg.net, Stuart Biggs, Brendan Murray
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