The United Kingdom and South Korea have finalized a trade agreement aimed at preserving existing trading arrangements and fostering deeper economic cooperation between the two nations.
UK ministers say the deal will support jobs, protect billions of pounds in exports, and provide long-term certainty for businesses on both sides of the agreement. It replaces a temporary post-Brexit arrangement that was due to expire in January 2026.
Under the agreement, 98% of trade between the UK and South Korea will remain tariff-free. This mirrors the terms South Korea currently gives the European Union and protects around £2bn of British exports from new duties.
Industries expected to benefit include pharmaceuticals, automotive manufacturing, alcohol, and financial services. The government also highlighted growing opportunities linked to South Korea’s rising consumer demand and expanding middle class.
Trade minister Chris Bryant announced the deal during an event at Samsung’s flagship store in London, alongside South Korea’s trade minister Yeo Han-koo. Bryant said the agreement would provide strong protections for key UK industries and help reduce barriers that slow down trade.
Prime Minister Keir Starmer described the deal as a “major boost for British business,” saying it would make trading easier and help drive growth across the country.
Trade Slowdown Highlights Need for New Agreement
Despite strong diplomatic ties, trade between the UK and South Korea has slowed in recent years. Official data shows UK exports to South Korea fell 16.4% over the year to June, while South Korean exports to the UK dropped 10.8%.
Officials from both sides say the renewed agreement will stabilize trade flows and help the two countries recover by removing long-standing barriers and improving market access.
Han-koo said the new agreement focuses less on tariffs and more on reducing non-tariff barriers. The measures include simplified rules of origin, updated digital trade frameworks, and enhanced safeguards for investors.
He said the two economies are well matched and that deeper cooperation could help rebuild trade momentum. South Korea views the UK as an entry point to European markets, while British companies see South Korea as a strategic hub for expansion across Asia.
The agreement is the latest in a series of post-Brexit trade deals signed by the UK. Despite the government’s claims of job creation and reduced red tape, the Office for Budget Responsibility has previously expressed doubts about the significant boost the recent agreements will bring to the UK economy by 2030.
Business groups and major exporters welcomed the announcement. Bentley Motors and Jaguar Land Rover said South Korea remains a key market for UK automotive brands, while drinks giant Diageo highlighted rising demand for Guinness among South Korean consumers.
The Scotch Whisky Association also welcomed the deal, noting that Asia-Pacific is its largest regional market by value and that improved access to South Korea could benefit premium whisky exports.
The British Chamber of Commerce said the agreement would help goods move through ports more quickly and allow UK companies to better compete in a fast-growing market.
