A new free trade deal between the UK and South Korea is expected to boost service exports by £400 million and support thousands of UK jobs.
The deal, announced on 15 December by UK trade minister Chris Bryant and his Korean counterpart Yeo Han-koo at Samsung KX in London, secures continued and permanent tariff-free access across 98% of tariff lines.
It also updates rules of origin which “will open doors for greater diversification across supply chains for sectors such as automotive and pharmaceuticals”.
Additionally, the agreement allows for the use of e-contracts and digital technology, which are expected to make trade faster and less costly for UK businesses.
UK prime minister Keir Starmer described the deal as “a huge win for British business and working people,” adding that it is the UK’s fourth major trade agreement in 2025 following deals with the EU, India and the USA.
Korean Trade Minister Yeo Han-koo said: “The upgraded Korea-UK FTA has established a considerable number of comprehensive cooperation norms, including market liberalisation, digital trade, and cooperation for supply chains stabilisation, to strengthen the Korea – UK trading relationship”.
British business reacts to free trade deal
The UK-South Korea free trade agreement has been welcomed by major businesses, including, Bentley Motors, Jaguar Land Rover and Diageo, which makes Guiness.
William Bain, head of trade policy at the British Chamber of Commerce, said: “This looks to be a well-tailored deal that will suit the commercial interests of both our countries. Around £15bn worth of goods and services is already flowing between our countries annually, which puts South Korea in the top 25 of UK trading partners.”
The upgrade free trade deal was also welcomed by the Society for Motor Manufacturers and Traders.
“South Korea remains a crucial market for UK automotive exports, with South Korean car marques being some of the most popular in Britain so there is great potential to boost jobs and growth in both countries,” stated Mike Hawes, SMMT chief executive. “Maintaining permanent tariff-free access, introducing workable rules of origin and cooperating across the supply chain are all positive steps and we look forward to seeing these key provisions ratified.”
According to the government, British businesses of all sizes stand to benefit as South Korea’s import market is forecast to grow by 26% by 2035.
