SEOUL, December 16 (AJP) -South Korea and the United Kingdom have finalized an upgraded free trade agreement that locks in permanent tariff-free access across 98 percent of South Korean tariff lines, marking one of the most comprehensive post-Brexit trade resets between the two countries.
The revised agreement, signed in London on Monday by South Korean Trade Minister Yeo Han-koo and UK Trade Minister Chris Bryant, concludes two years of negotiations aimed at modernizing the bilateral pact originally rolled over from the Korea-EU FTA after Brexit.
With the temporary UK-Korea trade arrangement set to expire in January 2026, the new deal removes lingering uncertainty for exporters on both sides.
According to the U.K. Department of Business Trade, Korea is the UK's 25th largest trading partner, accounting for 0.8 percent of the UK total trade in the 12 months to the end of June this year.
At its core, the updated FTA significantly loosens rules of origin, most notably for automobiles, by lowering the domestic value-added threshold for tariff-free treatment from 55 percent to 25 percent. The change is expected to benefit Korean automakers and consumer-goods exporters while aligning UK practice more closely with EU standards. Car exports accounted for 36 percent of Korea's total exports to UK last year.
The agreement also expands tariff exemptions to K-beauty and processed food products, allowing preferential access even when key ingredients are sourced from third countries, provided substantial processing takes place in Korea.
For British exporters, the deal safeguards an estimated £2 billion worth of exports that would otherwise have faced higher duties once the temporary regime expired.
The two governments will also streamline visa system under the upgraded FTA to facilitate the entry of Korean engineers and special workforces responsible for building manufacturing plants in Britain.
Beyond goods trade, the revised FTA opens new ground in government procurement and services.
The UK agreed to open its high-speed rail market — correcting what Seoul has long described as an imbalance — while expanding access for Korean firms in online gaming, advertising, translation and emerging technologies such as artificial intelligence. Visa procedures were also streamlined to reduce risks for engineers and skilled workers dispatched for large-scale industrial projects.
A major pillar of the deal is the introduction of comprehensive digital trade norms, including freer cross-border data transfers, consumer protection standards and legal certainty for digital and audiovisual services — areas largely absent from earlier-generation FTAs. The agreement also establishes a supply-chain cooperation chapter covering joint research and development, material shortages and international standard-setting.
“This agreement will help reinforce the free-market order at a time of growing protectionism and deepen economic cooperation with the UK, our key European partner,” Yeo said, adding that Seoul would move swiftly to complete legal reviews, impact assessments and parliamentary approval.
Bryant said the deal provides “cast-iron protections” for British industries and supports growth in services, manufacturing and advanced technologies.
British business groups welcomed the pact. Rain Newton-Smith, CEO of the Confederation of British Industry, said the agreement would “power growth through collaboration in advanced manufacturing, digital, services, clean energy and creative industries,” adding that it turns ambition into “long-term, sustainable growth” for both economies.
The pharmaceutical sector also highlighted gains, with the Association of the British Pharmaceutical Industry noting expanded regulatory cooperation and new opportunities in South Korea’s fast-growing life-sciences market.
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