The UK and South Korea have concluded a new trade agreement that the government says will support thousands of jobs and inject billions of pounds into the British economy.
The deal extends tariff-free trade on most goods and services, benefiting key UK industries such as pharmaceuticals, automotive manufacturing, alcohol, and financial services. It is the fourth trade agreement reached by the Labour government, following deals with the EU, the US and India though none has yet delivered a significant measurable boost to the UK economy.
South Korean culture, from music and cosmetics to food, has grown increasingly popular in the UK in recent years, adding momentum to closer economic ties between the two countries.
Trade minister Chris Bryant announced the agreement on Monday evening at Samsung’s flagship store in London, alongside South Korea’s trade minister, Yeo Han-koo.
Under the new deal, 98% of trade between the two nations will remain tariff-free, matching the terms South Korea has with the EU and which the UK temporarily maintained after Brexit. The previous UK–South Korea agreement was due to expire in January 2026, and the new arrangement is expected to protect around £2bn worth of UK exports from potential tariff increases.
Prime Minister Keir Starmer described the agreement as “a huge win for British business,” saying it would make trade easier, boost the economy and support jobs and growth across the country.
Bryant said the deal provides “cast-iron protections” for key industries and would help accelerate economic growth under the government’s Plan for Change.
South Korea is currently the UK’s 25th-largest trading partner, accounting for 0.8% of total UK trade in the 12 months to the end of June, according to the Department for Business and Trade. During that period, UK exports to South Korea fell by 16.4%, while South Korean exports to the UK declined by 10.8%.
Despite the recent downturn, Minister Yeo Han-koo told the BBC that the two economies are complementary and said the agreement is focused less on tariffs and more on reducing non-tariff barriers. These include more flexible rules on product origin, as well as stronger digital and investment protections.
He added that the UK could serve as a gateway for South Korean companies trading with Europe, while South Korea could provide British firms with easier access to Asian markets.
The agreement is the latest in a series of post-Brexit trade deals, though the Office for Budget Responsibility has previously said similar agreements with larger partners are unlikely to have a measurable impact on the UK economy by 2030.
While the government insists its recent trade deals will stimulate growth by creating jobs and cutting red tape for small businesses, its own analysis suggests the India agreement will increase GDP by only 0.11% to 0.14%. That deal also attracted criticism over concerns it could undercut British workers. India is the UK’s 10th-largest trading partner, representing 2.5% of total trade.
UK businesses have broadly welcomed the South Korea deal. Bentley Motors, Jaguar Land Rover and Diageo, the owner of Guinness, all praised the agreement.
Bentley Motors’ chairman and chief executive, Frank-Steffen Walliser, said South Korea is a vital market for the luxury carmaker. “Securing continued access to South Korea and a positive long-term trade deal is great news. Smooth international trade is essential for the growth of the UK automotive sector,” he said.
Diageo’s interim chief executive, Nik Jhangiani, said the deal would help meet growing demand among South Korean consumers for Guinness, which is canned in Runcorn, Cheshire.
Emily Weaver Roads, interim international director at the Scotch Whisky Association, noted that the Asia-Pacific region is the whisky industry’s largest market by value. She said reducing trade barriers in South Korea would further improve access for Scotch whisky, particularly single malts.
