UK and South Korea Sign Major Trade Deal to Boost Exports and Ease Automotive Tariffs

The United Kingdom has signed a new trade agreement with South Korea, projected to contribute an additional £400 million annually to its economy. This deal replaces the 2019 post-Brexit arrangement and builds upon the existing £15 billion annual trade relationship between the two nations.

The new accord covers key sectors, including professional services, automotive production, pharmaceuticals, and food and drink. Notably, it advances market access for British exports such as cars, Scottish salmon, and Guinness produced in Britain. The UK government highlighted the deal as a strategic win for British business and workers alike, reflecting a series of recent international agreements involving India, the United States, and the European Union.

A significant feature of the agreement is the reduction of the domestic content requirement for duty-free automotive exports. The threshold for zero tariffs on vehicles has dropped from 55 percent to 25 percent, allowing UK car manufacturers to source batteries or components from China while maintaining tariff-free access to the South Korean market. Executives from Jaguar Land Rover and Bentley Motors welcomed the revision, emphasising its benefits for continuous market presence and growth potential.

Food and beverage producers stand to gain from enhanced export opportunities, exemplified by increased support for Guinness, which is canned in Runcorn and Belfast. Pharmaceutical and services sectors will also benefit from new avenues to bid for public procurement contracts in Seoul and to provide legal and digital services under updated provisions. The agreement introduces e-contracting possibilities for the first time, modernising how business can be conducted between the two countries.

The trade accord aligns tariffs on 98 percent of goods with the EU’s existing agreement with South Korea. This approach supports the UK’s ambition to cement its role as a global leader in digital trade and innovation, while offering protections to strategic industries. The South Korean trade minister described the deal as a reinforcement of the rule-based trading environment at a volatile moment in the global economy.

British exporters can now anticipate improved and secure access to South Korean markets across a broad array of sectors, reflecting the UK’s ongoing efforts to diversify its international trade partnerships and strengthen its export growth strategy.