UK and South Korea Seal Trade Deal: Thousands of Jobs and Billions for British Businesses
UK and South Korea Sign New Trade Agreement
The UK and South Korea have finalized a major trade deal, aimed at boosting British exports, creating jobs, and bringing billions into the UK economy. The agreement was announced at Samsung’s flagship store in London, with Trade Minister Chris Bryant and his South Korean counterpart Yeo Han-koo present.
The deal extends tariff-free trade on most goods and services, ensuring continuity for 98% of trade, similar to the terms previously maintained with the EU.
Economic Benefits for Key Industries
British industries expected to benefit include:
- Pharmaceuticals
- Automotive manufacturing (including Jaguar Land Rover and Bentley Motors)
- Alcohol and beverages (Diageo, Scotch Whisky)
- Financial services
The new agreement protects around £2 billion in UK exports from potential tariff increases when the previous deal was set to expire in January 2026.
Prime Minister Keir Starmer called the agreement “a huge win for British business,” adding that it would help support jobs and drive economic growth across the country.
Focus on Reducing Trade Barriers
South Korea’s Trade Minister Yeo Han-koo highlighted that the deal focuses not just on tariffs but also on reducing non-tariff barriers, such as simplifying rules on product origin and establishing new digital and investment protections.
Han-koo also emphasized that the agreement positions the UK as a gateway to Europe for South Korean businesses, while South Korea can serve as a gateway to Asia for British companies.
Mixed Record on Post-Brexit Trade Deals
The UK government has signed several post-Brexit trade deals this year, including agreements with the EU, US, and India. However, independent forecasts from the Office for Budget Responsibility (OBR) suggest these deals are unlikely to have a significant impact on the UK economy by 2030.
For example, the UK-India deal is projected to raise GDP by only 0.11% to 0.14%, raising concerns about potential effects on domestic workers.
Industry Reactions
Major British companies welcomed the new agreement:
- Bentley Motors: Chairman Frank-Steffen Walliser highlighted the importance of South Korea as a key market for luxury vehicles.
- Diageo: Interim CEO Nik Jhangiani said the deal would help meet growing South Korean demand for Guinness.
- Scotch Whisky Association: Interim international director Emily Weaver Roads emphasized improved access to the Asia-Pacific region, the largest market by value for whisky.
William Bain, head of trade policy at the British Chamber of Commerce, added that the deal helps speed goods through ports and allows companies to tap into South Korea’s expanding middle-class consumer base.
Looking Ahead
The UK-South Korea trade deal represents the fourth major post-Brexit trade agreement for the Labour government and demonstrates the country’s ongoing push to strengthen international trade. While the economic impact may be modest compared to expectations, the agreement provides long-term protections for key industries and opportunities to expand into growing markets in Asia.