International Trade Secretary Liam Fox has agreed on a preliminary deal with Korean Minister of Trade Yoo Myung-Hee in Seoul, the UK government said in a statement.
It is Britain’s first post-Brexit trade deal in Asia and follows similar agreements with nations including Chile, Iceland, Norway and Switzerland.
“The UK and South Korea have signed an in principle free trade agreement that will allow businesses to continue trading freely after Brexit,” read a government statement.
“Trading on these terms rather than on World Trade Organization terms will deliver significant savings and help to safeguard British jobs.”
The deal means British businesses can continue enjoying preferential terms with South Korea after Britain leaves the European Union at the end of October.
Trade between the two countries was £14.6 billion ($18.6 billion, 16.4 billion euros) in 2018, and has risen by 12 per cent per year on average since the EU signed a free trade deal with South Korea in 2011.
“This means that whatever happens with Brexit, there will be total continuity in trade between our two countries and the basis for an ambitious future free trade agreement when we leave the EU,” tweeted Fox.
Britain is scheduled to leave the bloc on October 31, when it will lose access to major markets covered by EU trade agreements, although it is seeking to replicate some of these.
However, without a Brexit agreement between London and Brussels, the UK will default to “third country” status with the EU, with trade relations run on World Trade Organization rules.