For U.K. trade, non-tariff barriers could ariseKorean companies may face non-tariff barriers following Britain’s departure from the world’s single-largest economic bloc despite a new trade agreement between Seoul and London, a local think tank said Saturday.
Last week, the two sides inked a free trade agreement (FTA) centered on maintaining mutual benefits under the FTA with the European Union that took effect in July 2011 even after a no-deal Brexit, amid the looming possibility of London leaving the EU without an agreement.
“For now, Britain is highly expected to declare the no-deal Brexit on Oct. 31,” said Oh Tae-hyun, a senior researcher from the Korea Institute for International Economy Policy (KIEP).
Korean companies may still face hurdles in seeking continuity in their exports to Britain as it will take time to adjust to the post-Brexit business environment.
“Rather than tariff barriers, major risks would be other export and import procedures, including certification of pharmaceutical goods and chemical products,” Oh said.
Concerns over a no-deal Brexit have been looming as London has been facing challenges in finding common ground in the divorce agreement with the EU.
Korea and Britain are set to finalize the remaining procedures of the FTA before the end of October, when London is scheduled to depart from the union.