Korea Signals Swift New FTA After Brexit

The government on Sunday said it will consider forging a separate free trade agreement with the U.K. after Britons in a shock referendum Thursday voted to leave the European Union.

Korea has an FTA deal with the EU that will no longer cover the lucrative U.K. export market once it leaves the EU.

The Ministry of Trade, Industry and Energy said tariff cuts in bilateral trade with the U.K. will disappear with its exit from the EU and a new trade pact is needed.

The U.K. is on course to ease Brexit over two years of negotiations with the EU, and for that period the terms of the Korea-EU FTA will remain effective.

But if Korea fails to forge a separate FTA within that period it will have to abide by trade rules set by London that could be more stringent than the Korea-EU FTA.

Analysts urged Seoul to get started on separate FTA talks with the U.K.

Korea's exports to the U.K. totaled US$7.39 billion in 2015, a mere 1.4 percent of total outbound shipments. But they could lose competitiveness if China and other rivals forge fresh FTAs first, which could tilt Korea's trade balance with the U.K. from a surplus last year to a deficit.