The United Kingdom has sealed a new trade agreement with South Korea aimed at boosting the export of cars, including cars, Scottish salmon, and Guinness canned in Britain.
This comes after deals with India, the US and the free trade agreement with the EU clinched this year by the UK
UK Prime Minister, Keir Starmer has described the deal as “a huge win for British business and working people”.
According to the UK government, the new deal covers the exports of services, automotive, pharmaceutical and food and drink, bringing an extra £400m a year to the British economy.
The new trade deal also reduces the local content requirement for cars to qualify for duty-free exports to South Korea.
Previously, 55% of a car had to be made in the UK or the EU, but under the revised rules, this has been lowered to 25% allowing carmakers to source batteries or battery components from countries like China while still enjoying zero tariffs on exports to South Korea.
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The chief finance officer at Jaguar Land Rover, Richard Molyneux, welcomed the deal, while the chief executive of Bentley Motors, Frank-Steffen Walliser, described the move as “great news”.
The interim chief executive of Diageo, Nik Jhangiani, noted the new trade arrangement would “support export growth for Guinness”, which despite been made in Dublin, is canned in Runcorn and Belfast.
The agreement will allow British firms to compete for public procurement contracts in Seoul, provide legal services, and conduct business through e-contracts for the first time as announced by the UK trade minister, Chris Bryant, and his South Korean counterpart, Yeo Han-koo, at the Samsung superstore in King’s Cross, London.
“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,” Bryant said.
Yeo in his view stated the deal would “strengthen the free-market system” at a time of “heightened uncertainty” and allows British exporters to enjoy tariff-free access on 98% of goods, bringing it in line with the EU’s trade arrangement with Seoul.
The agreement enabled UK allies to keep trading within the rule-based system disrupted earlier this year by Donald Trump’s US tariff measures.
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