As concerns are growing over a possible no-deal Brexit under the leadership of new British Prime Minister Boris Johnson, the Federation of Korean Industries (FKI), South Korea’s major business lobbying group for big conglomerates, has joined its global peers in calling on the British government to come up with a concrete divorce plan with the EU.
In a joint statement led by the United States Chamber of Commerce together with business federations from around the world including Korea, Japan, Canada, Australia, New Zealand, Egypt, and Brazil, the participating groups expressed “grave concerns” about a no-deal Brexit, referring to the United Kingdom leaving the EU immediately on Oct. 31 without any agreements in place about what the future would be like in terms of UK and EU relationship.
The eight business groups said a no-deal Brexit would “create substantial disruption for businesses, workers, farmers, and regulators,” and that “such disruptions are bound to affect jobs, consumer choices, and the cost of goods and services.”
They further warned that firms “would be forced to make decisions about supply chains and investments in the U.K. without knowing what the future terms of trade will be” and urged the U.K. and the EU to reach an agreement “that includes a meaningful transition period.”
The EU block is Korea’s third-largest export destination after China and the U.S. with the U.K. being Korea’s second-largest trading partner among EU members.
There have been concerns that Britain leaving the EU without agreements in place, or a no-deal Brexit, would increase uncertainties over exchange and immigration across Europe, which would have ripple effects on those non-EU countries that have ties with the U.K.
Boris Johnson, who became U.K. Prime Minister in July after his predecessor Theresa May stepped down as Conservative Party leader, has pledged to leave the EU on Oct. 31 as initially agreed between the U.K. and the EU, increasing the possibility for a no-deal Brexit.
Korea signed a free trade agreement (FTA) with Britain last month to maintain tariff-free trade conditions even under a no-deal Brexit scenario, but uncertainties remain in other elements apart from trade.
The FKI said it has joined forces with other business groups from around the world to express concerns about a possible no-deal Brexit that could weigh further on the Korean economy that is currently grappling with multiple challenges such as protracted trade conflicts between the U.S. and China and its own diplomatic and trade spat with Japan.
The FKI plans to hold a conference on Sept. 18 for local businesses in which UK Ambassador would share latest information on U.K. government’s Brexit plans.
By Lim Hyung-joon and Lee Eun-joo
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