The UK and South Korea have finalized a trade agreement expected to generate thousands of jobs and billions in economic benefits for the UK. Trade Ministers Kris Bryant and Yeo Hankoo announced the deal, which extends tariff-free trade for 98% of goods and services, maintaining the same terms previously negotiated with the EU. This agreement protects £2 billion of UK exports from potential tariffs after the current deal was set to expire in January 2026.
Despite recent declines in trade figures—UK exports to South Korea dropped 16.4% and South Korean exports to the UK fell by 10.8%—the trade ministers expressed optimism about the complementary nature of both economies. The deal aims to reduce non-tariff barriers and enhance business conditions, while offering UK companies access to both South Korea and broader Asian markets.
Prime Minister Keir Starmer hailed the agreement as a significant victory for British businesses. Companies such as Bentley Motors, Jaguar Land Rover, and Diageo welcomed the deal, highlighting its importance for luxury cars and consumer products like Guinness. However, assessments from the Office for Budget Responsibility suggest that such trade agreements might have limited measurable impacts on the UK economy over the next several years.
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