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UK-South Korea trade deal finalised to protect £2bn in exports
The UK and South Korea have signed a trade agreement to maintain tariff-free access for 98% of goods, safeguarding £2bn in British exports, including luxury cars, Scottish salmon, and Guinness brewed in the UK. The deal prevents tariffs from rising when parts of the existing agreement expire in January 2026.
Key industries set to benefit
British luxury brands, such as Bentley Motors and Jaguar Land Rover, stand to gain from the pact, along with Diageo, the owner of Guinness, which is canned in Runcorn, Cheshire. Scottish salmon and whisky producers also expect improved access to South Korea's growing middle-class market.
"Smooth international trade is vital to UK automotive business growth," said Frank-Steffen Walliser, CEO of Bentley Motors.
Diageo's interim chief executive, Nik Jhangiani, added that the deal would help meet rising demand for Guinness among South Korean consumers.
Non-tariff barriers and digital protections addressed
The agreement focuses on reducing non-tariff barriers, such as simplifying rules of origin for products, and introduces new digital and investment safeguards. South Korea's trade minister, Yeo Han-koo, described the economies as "complementary," with the UK serving as a gateway to Europe and South Korea as a bridge to Asia for British firms.
Trade Minister Chris Bryant announced the deal at Samsung's London flagship store, calling it "cast-iron protections for our key industries to speed up economic growth."
Trade volumes decline despite new deal
Despite the agreement, UK-South Korea trade has fallen sharply in the past year. Exports from the UK to South Korea dropped 16.4%, while South Korean exports to the UK declined 10.8% in the 12 months to June 2025. South Korea ranks as the UK's 25th-largest trading partner, accounting for just 0.8% of total UK trade.
Yeo Han-koo dismissed concerns about the relationship's importance, stating the new framework would foster closer cooperation between the two nations.
Broader trade strategy under scrutiny
The South Korea deal is the fourth major trade agreement secured by the UK government since Labour took office, following pacts with the EU, US, and India. However, the Office for Budget Responsibility (OBR) has cast doubt on the economic impact of these deals, predicting minimal GDP growth by 2030.
The UK-India deal, for instance, is projected to increase GDP by just 0.11% to 0.14%, while the US "Tech Prosperity Deal"-signed in September-has stalled due to US concerns over UK trade barriers. A government spokesperson reaffirmed commitment to the US agreement, calling the bilateral relationship "strong."
Industry reactions and economic outlook
Business groups welcomed the South Korea deal, with the British Chamber of Commerce highlighting the country's "expanding middle-class consumer base." William Bain, the chamber's head of trade policy, noted the agreement would expedite goods clearance at ports.
Emily Weaver Roads of the Scotch Whisky Association called South Korea an "important market," particularly for single malt whisky, which sees its largest regional demand in Asia-Pacific.
