UK and South Korea Finalise New Trade Agreement, Government Says Jobs and Growth Will Rise
The United Kingdom and South Korea have agreed on a new trade deal that the UK government says will support jobs and strengthen the economy.
The agreement keeps most goods and services between the two countries free from tariffs, helping key British sectors such as pharmaceuticals, car manufacturing, alcoholic beverages and financial services.
This is the fourth major trade agreement signed by the Labour government this year, following deals with the European Union, the United States and India.
Under the new arrangement, around 98% of trade between the UK and South Korea will continue without tariffs. These terms are similar to South Korea’s existing agreement with the EU and replace the temporary deal the UK carried over after Brexit.
The previous UK–South Korea trade agreement was due to expire in January 2026. The updated deal is expected to protect nearly £2 billion worth of UK exports from future tariff increases.
Prime Minister Keir Starmer described the agreement as a major boost for British businesses, saying it would help drive economic growth and protect jobs across the country.
Trade Minister Chris Bryant announced the deal in London alongside South Korea’s trade minister Yeo Han-koo. Bryant said the agreement would strengthen protections for important industries and make it easier for businesses to trade.
South Korea is currently the UK’s 25th largest trading partner. Official figures show that trade between the two countries declined over the past year, but both governments said the new deal focuses on long-term cooperation rather than short-term numbers.
South Korean officials said the agreement aims to reduce non-tariff barriers, improve digital trade rules and create better conditions for investment. They also highlighted the UK’s role as a gateway to European markets, while South Korea could help British firms expand in Asia.
Several major UK companies welcomed the deal. Car manufacturers Bentley Motors and Jaguar Land Rover said South Korea remains an important market, while drinks giant Diageo said the agreement would help meet rising demand for Guinness.
Industry groups also praised the move, saying easier access to South Korea’s growing consumer market could benefit exporters, especially in the automotive and whisky sectors.
While some economists say the overall impact on the UK economy may be limited, the government insists the agreement will help reduce red tape and support businesses looking to expand overseas.