The UK and South Korea have finalised a free trade agreement which will guarantee tariff-free access across 98% of tariff lines and is set to safeguard £2 billion worth of UK exports from an increase in tariffs. According to the Department for Business and Trade (DBT), the deal offers a £400 million boost to UK services firms.
The new deal replaces the one agreed by the EU and South Korea, the terms of which the UK had maintained after Brexit but which was due to expire in January 2026.
Trade Minister Chris Bryant said: “Today’s agreement secures the UK as a global leader in digital trade and innovation while boosting our world class services sector, supporting iconic brands and giving cast-iron protections to our key industries to speed up economic growth as part of our Plan for Change.”
Iconic goods from across the country, he went on, such as Guinness canned in Runcorn, Bentleys manufactured in Crewe and salmon from Scotland, will remain competitive in South Korea’s fast-growing import market, which is expected to grow by 26% by 2035.
Promising that the UK-South Korea trade partnership will be one of the most advanced in the world, the Minister said that the deal will legitimise the use of e-contracts and other digital technology.
Updated rules of origin (RoOs) will simplify tariff-free access and will, the DBT said, open doors for greater diversification across supply chains for sectors such as automotive and pharmaceuticals. Smaller businesses will be helped by streamlining of custom processes and reduced non-tariff barriers.
The DBT has listed the main benefits of the deal in a document available here. These include new opportunities for services firms, strengthened access to South Korea’s expanding financial market, modernised rules for digital trade and artificial intelligence (AI), and supply chain resilience.
British Chambers of Commerce (BCC) Head of Trade Policy, William Bain, welcomed the deal and said that it would get goods through ports more quickly.
Department for Business and Trade
We are the department for economic growth. We support businesses to invest, grow and export, creating jobs and opportunities across the country.
British Chambers of Commerce
The British Chambers of Commerce (BCC) sits at the heart of a business network that spans the length and breadth of the UK, with links to markets across the world.
