The United Kingdom has inked a significant new trade agreement with South Korea, designed to turbocharge exports of British-made cars, Scottish salmon, and Guinness brewed in Dublin but canned in Britain.
A Major Upgrade on Existing Terms
Announced by UK Trade Minister Chris Bryant and his South Korean counterpart, Yeo Han-koo, at the Samsung superstore in London's King's Cross, the deal replaces a post-Brexit arrangement from 2019. That existing framework already supports over £15 billion in annual bilateral trade. The new, enhanced pact is projected to generate an additional £400 million per year for the UK economy.
Prime Minister Keir Starmer hailed the agreement as a "huge win for British business and working people," positioning it alongside recent UK deals with India and the US, and the free trade agreement with the EU.
Key Wins for the Automotive and Food Sectors
A pivotal change in the agreement concerns rules of origin for cars. From January, the threshold for the proportion of parts that must be British or EU-made to qualify for zero tariffs when exporting to South Korea will be slashed. It drops from 55% to just 25%.
This crucial adjustment allows UK car manufacturers to source batteries or components from countries like China while still benefiting from tariff-free access to the South Korean market. Industry leaders have welcomed the move. Richard Molyneux, CFO of Jaguar Land Rover, and Frank-Steffen Walliser, CEO of Bentley Motors, both praised the deal for securing vital access to a key luxury market.
For food and drink, the deal is a boon for iconic brands. Nik Jhangiani, interim CEO of Diageo, stated the arrangement would "support export growth for Guinness," which is canned in Runcorn and Belfast. The pact also opens doors for premium exports like Scottish salmon.
Broader Access in Services and Digital Trade
Beyond goods, the agreement significantly liberalises trade in services and digital commerce. For the first time, it grants British companies the right to tender for public procurement contracts in Seoul and offer legal services in South Korea. The deal also formally recognises the use of electronic contracts, cementing the UK's role as a leader in digital trade innovation.
Minister Chris Bryant said the deal "secures the UK as a global leader in digital trade and innovation while boosting our world-class services sector." His counterpart, Yeo Han-koo, emphasised the pact's importance in strengthening the free-market system during a period of "heightened uncertainty," allowing allies to uphold a rules-based trading environment.
The finalised agreement ensures tariff-free trade on 98% of goods, bringing the UK's terms in line with the European Union's own trade deal with Seoul.
