Brexit this week, and Korea is ready for itBritain’s separation from the European Union slated for later this week is unlikely to have a direct impact on its trade ties with Korea, as the two have already signed a back-up agreement, industry watchers said Wednesday.
Britain is expected to depart from the EU, the world’s single largest economic bloc, on Friday.
Major economies around the globe, including Asia’s No. 4 economy, have been closely monitoring the divorce from the EU, as the separation would mean that their economic and trade deals with the economic bloc will no longer be valid for Britain.
To avoid a possible hard landing, Korea and Britain signed an FTA in 2019 that will be implemented after a transition period that is set to run through the end of this year.
The Korea-Britain FTA centers on maintaining the benefits enjoyed by the two countries under the Korea-EU FTA, which went into effect in July 2011.
The two countries will not add new tariffs on major products including automobiles and auto parts.
Considering the time it will take for exporters to adapt to the new deal, the two also agreed to treat products transported via the EU the same as those shipped directly to Britain for three years after the end of the transition period.
Britain accounts for less than 2 percent of Korea’s overall trade.
Despite this small proportion, Seoul believes the FTA with Britain is still significant as it lifts uncertainties for local exporters.
Korea mainly exports automobiles, ships and marine facilities to Britain. In return, key import products from the European country include crude oil and pharmaceutical goods.
The Korea International Trade Association, meanwhile, advised Korean exporters to closely review changes in policies following Brexit, as product certifications from the EU may no longer be valid in Britain.