The United Kingdom has entered into a new trade agreement with South Korea aimed at enhancing exports of vehicles, Scottish salmon, and canned Guinness. The deal, announced in London, is expected to add £400 million annually to the British economy and replaces a previous agreement established in 2019.

Trade Agreement Overview
The trade deal was jointly announced by UK Trade Minister Chris Bryant and South Korean Trade Minister Yeo Han-koo at a Samsung superstore in King’s Cross. The agreement covers various sectors, including automotive, pharmaceuticals, and food and drink, and is designed to bolster trade relations between the two nations. Current trade between the UK and South Korea exceeds £15 billion annually under an existing arrangement.

Key Changes for Automotive Sector
One of the most significant aspects of the new deal is the reduction of the local content requirement for vehicles to qualify for zero tariffs. Previously, 55% of a vehicle had to be manufactured in the UK or the EU. This threshold has now been lowered to 25%, allowing car manufacturers to source batteries and components from China while still benefiting from duty-free access to the South Korean market. Industry leaders, including Richard Molyneux of Jaguar Land Rover and Frank-Steffen Walliser of Bentley Motors, have expressed strong support for the new terms.

Support for British Brands
The agreement is also seen as a boost for British brands, particularly Diageo, which produces Guinness. Nik Jhangiani, the interim CEO of Diageo, highlighted that the deal will support export growth for the iconic beverage, which is canned in Runcorn and Belfast. The deal allows British companies to bid for public procurement contracts in South Korea, further opening up opportunities for UK businesses.

Strengthening Economic Ties
Chris Bryant emphasized that the agreement positions the UK as a leader in digital trade and innovation, while also providing protections for key industries. Yeo Han-koo noted that the deal reinforces the free-market system during a time of global economic uncertainty and aims to maintain a rules-based trading environment that has been challenged by recent US tariff policies.

Wrap-up
The new trade deal between the UK and South Korea marks a significant step in enhancing economic ties and expanding market access for British goods and services. It is anticipated to have a positive impact on various sectors, particularly automotive and food and drink, while fostering greater collaboration between the two nations.

Sources
theguardian.com

@hoju-korean.com Editorial Team