A trade agreement is a wide-ranging taxes, tariff and trade treaty that often includes investment guarantees. It exists when two or more countries agree on terms that help them trade with each other.
The United Kingdom has secured its first post-Brexit trade deal after signing an in-principle free trade agreement with South Korea. The agreement seeks to maintain existing trade arrangements with the country after Brexit.
A publication explains that there have been “concerns” that South Korean companies “may no longer enjoy the benefits” of current arrangements if the United Kingdom crashes out without a deal.
The United Kingdom and South Korea will largely maintain the trade terms that are in the current deal between Seoul and Brussels, which took effect in July 2011.
The Ministry of Trade, Industry and Energy said in a statement that the deal includes keeping zero-tariffs on South Korean exports such as auto parts and automobiles.
After the talks, Britain and South Korea also vowed to expand cooperation in emerging technologies such as hydrogen and nuclear energy.
The two countries plan to ratify the deal before October 31st, the new deadline for Brexit.
Although the United Kingdom is South Korea’s second-largest trading partner among the European Union members, it is its 18th-largest trading partner, accounting for less than 2% of South Korea’s overall trade.
Last year, South Korea’s exports to the United Kingdom were worth $6.36bn. The Asian country exports mostly cars and ships to Britain. Going the other way, the United Kingdom exports crude oil and automobiles to South Korea.