UK and South Korea finalise upgraded free trade agreement

The UK and South Korea have concluded a new free trade agreement covering goods, services, digital trade and supply chains, with the government estimating a long-term £400m annual increase in UK services exports

The UK and South Korea have finalised an upgraded free trade agreement aimed at expanding bilateral trade, supporting UK exports and strengthening cooperation across services, manufacturing and digital trade.

The agreement was announced on 15 December following talks between Trade Minister Sir Chris Bryant and his South Korean counterpart, Yeo Han-koo. 

It updates the existing UK–South Korea free trade agreement and locks in permanent tariff-free access across 98 per cent of South Korean tariff lines.

UK–South Korea trade has increased by 32 per cent in current prices over the past decade, reaching £15.8bn in 2024, according to government figures. 

The Department for Business and Trade said modelling suggests UK services exports could increase by £400m a year in the long term as a result of the deal.

Keir Starmer, the UK Prime Minister, said: “This is a huge win for British business and working people and marks our 4th major agreement in 2025 after the EU, India and U.S.”

Trade Minister Sir Chris Bryant said the agreement would deepen economic ties and support UK exporters. “Today’s agreement secures the UK as a global leader in digital trade and innovation while boosting our world class services sector, supporting iconic brands, and giving cast-iron protections to our key industries to speed up economic growth as part of our Plan for Change,” he added.

The deal includes modernised rules of origin and provisions covering digital trade, customs processes and supply chain cooperation. 

The government said it would protect around £2bn of UK exports that were at risk of facing additional duties and provide greater certainty for exporters in sectors including automotive, pharmaceuticals, food and drink, and financial services.

The agreement also includes commitments intended to improve access for UK services firms to South Korea’s market, building on £1.1bn of UK financial and insurance exports to the country in 2024. Measures include commitments on data localisation, transparency and cross-border data flows.

Yeo Han-koo, South Korea’s trade minister, said: “The upgraded Korea-UK FTA will strengthen the free-market system in a trade environment with heightened uncertainty.”

Speaking after the announcement, Sir Chris Bryant said the agreement would support UK businesses and exporters. The South Korean trade minister said the upgraded agreement would strengthen economic cooperation and establish new frameworks for collaboration, including in digital trade and supply chain resilience.

Industry bodies and companies welcomed the deal. Rain Newton-Smith, chief executive of the Confederation of British Industry, said the agreement would support collaboration across sectors including advanced manufacturing, digital services, clean energy and creative industries.

“This deal will help business go further and faster, powering growth through collaboration in advanced manufacturing, digital, services, clean energy and creative industries,” she added.

The agreement includes provisions to promote smoother customs processes, including greater transparency in licensing requirements and more predictable clearance procedures, with the aim of clearing goods within 48 hours. 

It also introduces commitments on digital trade and cooperation on artificial intelligence, reflecting the fact that more than 70 per cent of UK–South Korea services trade is conducted digitally.

Representatives from sectors including pharmaceuticals, automotive, food and drink, financial services and technology also cited benefits linked to tariff-free access, regulatory cooperation and streamlined customs procedures.

Stephen Phipson, chief executive of Make UK, said the agreement sent a signal of the UK’s commitment to free and fair trade and would help manufacturers access the South Korean market.

He said:  “With the increasing rise of global trade and economic protectionism, today’s announcement of the successful conclusion to the upgrade of the existing UK-Korea FTA sends a powerful signal that the UK is open for business and remains resolute in its commitment to free and fair trade.”

The upgraded agreement builds on the 2023 Downing Street Accord and forms part of the UK government’s broader trade strategy in the Asia-Pacific region.

READ MORE: ‘UK-EU trade deal: what’s in the Brexit reset agreement?‘ The UK government today confirmed a new agreement with the European Union “to support British businesses, back British jobs, and put more money in people’s pockets”.

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