Walpole and The Brexit Countdown: UK/South Korea Free Trade Agreement
Walpole welcomed recent news that the UK and South Korea have signed a joint statement for trade continuity post-Brexit.
The stopgap Free Trade Agreement (FTA) will allow British businesses to keep trading without disruption and also continue to increase their presence in South Korea after the UK leaves the European Union, through which its current trade framework is ratified.
Of the £38.5 billion of British luxury goods that are exported each year, 9% are destined for the Asia Pacific region which includes South Korea and Japan, making it the fourth largest export region for luxury behind the EU, North America and China. The overall value of trade between the whole of the UK and South Korea was worth £14.6 billion in 2018 and has increased by an average of 12% per year since the EU-Korea FTA was signed in 2011.
As demand for British luxury goods including whisky, cars, menswear, shoes, fragrance and beauty continues to rise, an increasing number of British luxury businesses have entered the Korean market or significantly developed their existing presence. Over the past three years, Walpole and its members have been strengthening trading ties with this key market through close engagement with the British Chamber of Commerce in Korea and the Ambassador to Korea. Through this engagement there are now more Walpole member brands than ever with a foothold in South Korea including The Conran Shop, DAKS, Gieves & Hawkes, Molton Brown and Mulberry to name a few.
Despite not being a permanent trade deal, the stopgap agreement is a positive step as it will deliver significant savings for business, including the luxury sector, compared with trading on World Trade Organization terms post-Brexit and also provides certainty for consumers.
Once legislated in Parliament the FTA will come into effect when Britain has formally left the European Union and at the end of any Implementation Period. The stopgap agreement will need to be renegotiated within two years.
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