Business

U.K. admits trade deals with Japan and South Korea are unlikely before Brexit

Bloomberg

Business Secretary Greg Clark said the U.K. isn’t likely to reach agreements with Japan and South Korea to roll over existing trade deals before Britain’s scheduled departure from the European Union on March 29.

Britain benefits from about 40 free-trade agreements with 70 nations through its EU membership, and it’s been seeking to extend them after Brexit. Combined, they account for 11 percent of U.K. trade.

“Unfortunately not all of the FTAs — and I might mention the Japan and Korean ones that are important — are expected to be concluded in time,” Clark told executives and journalists on Tuesday at the annual conference of the MakeUK manufacturing lobby group. “That is one of the reasons why I think it is so important that we should not leave without a deal.”

The admission throws into stark relief Trade Secretary Liam Fox’s old promise that the deals would be ready at “one second past midnight” after Brexit day.

The two Asian nations buy about £18.6 billion ($24 billion) of British exports a year and send just under £17 billion of imports per year, according to official figures.

Clark also emphasized that it’s “unacceptable” that exporters to those markets aren’t able to know what their terms of trade will be in under 40 days’ time, and referred to the freighter the Thalassa Mana, which left Felixstowe port in eastern England on Monday and is due to arrive in Osaka on March 30.

“That is, I know, unacceptable to you and it’s unacceptable for me,” he said, adding that it’s “absolutely essential” for the U.K. to conclude arrangements as soon as possible “and not at the last minute on March 28.”

The Brexit deal Prime Minister Theresa May is struggling to get through Parliament includes a 21-month transition in which EU trading arrangements would be little-changed, though it’s still up to partner countries — including Japan and South Korea — to decide whether they want to roll over their agreements with the EU to the U.K., which will technically have left the bloc.

Fox’s international trade department has so far agreed to roll over agreements with Switzerland, Israel, the Palestinian Authority, Chile, the Faroe Islands, and Eastern and Southern Africa. The department said in an emailed statement that it’s still “seeking continuity for existing free trade agreements.”

“We will continue to engage with all our trading partners, and businesses should continue to plan for a range of Brexit scenarios — including no deal,” the department said.