Britain and South Korea Extend Tariff-Free Trade for Two Years
Boost for Car Industry as Tariff-Free Trade Extended
Britain and South Korea have agreed to extend a period of low or zero tariffs on bilateral trade by two years, providing a boost for the car industry. The British government announced on Monday that this extension will precede talks to establish a new trade deal between the two countries.
Benefits for British Businesses
Without this extension, British businesses, including automakers and food and drink companies, would have faced high tariffs starting from January 1st. These tariffs would have been imposed on exports of products made using materials from the European Union, as well as on products shipped via the EU, under the rules of origin.
Significance of the Trade Relationship
The annual trade between Britain and South Korea is currently valued at 18 billion pounds ($21.9 billion). Both countries will commence negotiations later this year to establish a new trade deal. It is important to note that their existing agreement was carried over from Britain’s membership in the EU.
Welcome Certainty for Businesses
Nigel Huddleston, Britain’s Minister for International Trade, expressed his satisfaction with the extension of the tariff-free period, stating that it will provide welcome certainty for businesses. He added, “This is fantastic news for UK businesses who can continue selling their fantastic goods with confidence to South Korea.”
Impact on the Car Industry
The car industry stands to benefit greatly from the extension, as South Korea is the seventh-largest export market for British-made cars and the third-largest supplier of new cars for Britain. The imposition of new tariffs would have had negative consequences for both sides. Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders, emphasized the importance of a modernized trade deal that supports trade in electric vehicles (EVs) and related technologies.
($1 = 0.8237 pounds)
