Top Benefits for the UK-South Korea Free Trade Agreement
Top Benefits for the UK-South Korea Free Trade Agreement
- An upgraded deal to support British exports and British jobs
Our trading relationship with South Korea, the 12th largest economy in the world,1 has increased by 32% over the last decade,2 reaching £15.8 billion in 2024.3 With over 1.5 million people employed by UK firms exporting to South Korea in 2023,4 this deal aligns with the Industrial Strategy to help grow our economy and support thousands of jobs across the UK.
(a) Case study: Confederation of British Industry (CBI)
The CBI represents 850 members who themselves comprise 1,200 separate registered companies and over 150,000 trade association members. Founded 60 years ago and representing some of the biggest names in business, household brands and globally traded corporations that employ people in all sectors and across every region and nation of the UK, the CBI is the voice of business.
Rain Newton-Smith, CEO of the CBI, said:
This deal will help business go further and faster, powering growth through collaboration in advanced manufacturing, digital, services, clean energy and creative industries. Together, South Korea's world-class technology base and the UK's strength in innovation will bolster the industries shaping the next decade.
This agreement is about more than trade in goods. By strengthening supply chains, embedding green standards, and giving firms confidence to invest, it turns ambition into long-term, sustainable growth for both economies. The CBI looks forward to working with government and business on both sides to turn this agreement into a driver of future opportunity and resilience.
(b) Case Study: Make UK
Make UK is the manufacturers' association for the UK. They champion and support member companies of all sizes across engineering, manufacturing, technology and the wider industrial sector. Through their campaigning, sector expertise, leading business services, apprenticeship training and extensive network they have been supporting companies from around the UK for more than 130 years. Make UK represents the industry to Government, media and stakeholders, providing a powerful voice on policy, skills and innovation. At the heart of their work, they help manufacturers to thrive, compete and grow through expert advice, training and advocacy.
Stephen Phipson, CEO of Make UK, 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.
It will catalyse collaboration between two of the world's largest and dynamic economies and will drive greater innovation, unlock growth, and build prosperity across a long-established and rich-in heritage corridor of trade, capital and investment.
This future agreement should give British businesses the confidence they need to enter the market, trade more easily and benefit from the massive opportunity from the country's advanced manufacturing technological advancements.
2. Locking in permanent tariff-free access for British exports
The agreement delivers modernised rules of origin and continued, permanent tariff-free access across 98% of South Korean tariff lines, protecting £2 billion in exports at risk of additional duties;5 this has been welcomed by leading UK employers and Business Representative Organisations. This measure provides a stable footing for new market entrants and established exporters to trade goods with South Korea. In particular, it ensures manufacturers in key Industrial Strategy sectors remain competitive in South Korea's market.
(a) Case Study: The Association of the British Pharmaceutical Industry
The Association of the British Pharmaceutical Industry (ABPI) exists to make the UK the best place in the world to research, develop and access medicines and vaccines to improve patient care. They represent companies of all sizes which invest in making and discovering medicines and vaccines to enhance and save the lives of millions of people around the world.
Richard Torbett, ABPI Chief Executive said:
South Korea is emerging as one of the most dynamic global hubs for life sciences. This agreement strengthens regulatory cooperation between our countries, opens up trade for pharmaceutical innovations, and creates fresh opportunities to drive UK economic growth through a strengthened position on the global stage.
(b) Case Study: Jaguar Land Rover
Jaguar Land Rover (JLR) is a global automotive manufacturer and the largest vehicle producer in the UK. The company's four distinct brands are Range Rover, Defender, Discovery and Jaguar. JLR employs approximately 33,000 people in the UK and is one of the country's largest exporters.
Richard Molyneux, Chief Finance Officer at JLR, said:
We welcome this free trade agreement and the benefits it will provide our clients in South Korea, which is an important market for JLR.
(c) Case Study: Diageo
Diageo is a global leader in beverage alcohol, and their products are sold in nearly 180 countries around the world. They have an outstanding collection of brands across spirits and beer categories, which include Johnnie Walker, Smirnoff and Guinness.
Nik Jhangiani, Interim Chief Executive, Diageo, said:
I commend Sir Chris Bryant and his South Korean counterpart Jung-Kwan Kim in securing a new trade agreement between the UK and South Korea. The deal will support export growth for Guinness, canned in Runcorn, and help satisfy the growing demand from South Korean consumers for the world's number one stout.
3. New opportunities for the UK's world-leading services firms
Over the past decade, UK-South Korea trade in services has grown by 64%.6 DBT modelling estimates that UK services exports could increase by £400 million annually in the long run as a result of this agreement. This will help advance the UK's Industrial Strategy by driving innovation, enhancing competitiveness, and strengthening the global position of our high-value services sector.
(a) Case Study: City of London Corporation
The City of London Corporation is the governing body of the Square Mile dedicated to a vibrant and thriving City, supporting a diverse and sustainable London within a globally-successful UK.
Chris Hayward, Policy Chairman of the City of London Corporation, said:
This enhanced UK-South Korea Free Trade Agreement is powerful signal of the UK's commitment to open markets and a clear demonstration of the UK's ambition to lead on openness and innovation. At a time when protectionism is on the rise, the UK is not pulling up the drawbridge-we are building bridges to the future.
This agreement strengthens our partnership with one of Asia's most dynamic economies. The ambitious commitments in digital and financial services, will strengthen our position as a global financial services provider. Financial and professional services are the powerhouse of UK growth and embedding them in modern trade deals ensures we remain competitive, innovative, and globally connected.
(b) Case study: Deloitte
Deloitte is one of the UK's leading professional services firms, with around 24,000 people here in the UK. It has a presence across each of the UK's regions and nations, client relationships across the economy and deep technical expertise in areas such as AI, sustainability, capital markets, tax policy, corporate governance and trade.
Amanda Tickel, Global Leader for Trade and Tax Policy at Deloitte, said:
The UK-South Korea Free Trade Agreement represents a valuable step forward for the UK's globally competitive services sector. By improving market access and creating a more predictable, digitally enabled trading environment, the agreement will help many UK exporters unlock new opportunities in one of Asia's most dynamic economies. We welcome the government's continued efforts to deepen the UK's trade relationships and support UK businesses to grow internationally.
4. Strengthened access to South Korea's expanding financial market
Building on the £1.1 billion worth of UK financial and insurance exports to South Korea in 20247, the agreement includes unprecedented commitments that strengthen UK insurers' ability to provide a range of specialist insurance products to Korean clients, reinforcing London's position as a global risk hub. The FTA will also deliver meaningful commitments on data localisation and transparency, facilitating businesses to plan and operate in the Korean market with greater confidence.
(a) Case Study: Association of British Insurers
The Association of British Insurers (ABI) is the definitive voice of the UK's world-leading insurance and long-term savings industry, which is the largest sector in Europe and the third largest in the world. They represent more than 300 firms within our membership including most household names and specialist providers, providing peace of mind to customers across the UK.
Hannah Gurga, ABI Director General, said:
We welcome the UK-South Korea Free Trade Agreement, which will enable UK non-life insurers to continue providing cover directly into the South Korean market.
We support South Korea's pledge to publish clear guidance on cross-border data rules and limit further data localisation restrictions for UK financial services. These measures will help insurers and reinsurers operate with greater certainty and continue serving customers effectively.
South Korea is a growing financial hub and an important market for the UK insurance sector, offering significant opportunities for future collaboration.
(b) Case Study: The Investment Association
The Investment Association (IA) champions UK investment management to support British savers, investors and businesses. Their 250 members collectively manage £10.0 trillion on behalf of clients in the UK and around the world.
Chris Cummings, IA CEO, said: > We welcome the new agreement with South Korea. We support the inclusion of commitments concerning cross-border portfolio management and investment advice in particular. The principle of delegation, embodied here, allows savers to access global centres of expertise and investment opportunities, whilst benefitting from cost savings and high levels of investor protection. This will work to the advantage of both UK and South Korean investors.
5. Reduces administrative burden and costs for UK businesses
We have negotiated measures that make doing business in South Korea faster, cheaper and more predictable, such as increased publication of South Korean regulations in English and the use of e-contracts and e-invoices. These changes will make it easier for UK exporters, and particularly SMEs, to meet South Korea's growing appetite for high quality British goods and services.
Case study: Sensoteq
Sensoteq is a UK-based industrial technology company specialising in wireless condition monitoring. Its low-power sensors and machine health intelligence platform provide real-time insight into asset health, helping organisations reduce downtime, improve maintenance efficiency, and cut energy use. Headquartered in Belfast and serving customers in more than 50 countries, Sensoteq is a leader in industrial IoT and predictive maintenance solutions.
Idir Boudaoud, Founder and CEO at Sensoteq, said:
South Korea is a strategic market for Sensoteq, with its advanced manufacturing base and strong commitment to industrial innovation. Our mission to improve machine reliability through smarter monitoring aligns closely with the priorities of Korean industry.
This new agreement will help us operate with greater speed and certainty. Streamlined customs processes and strengthened trade conditions will make it easier for Korean manufacturers to adopt next-generation condition monitoring and unlock improvements in efficiency and sustainability.
The deal gives businesses like ours the access and confidence needed to grow in one of the world's most advanced industrial economies.
6. Smoother customs processes
The FTA includes dedicated provisions to promote smooth customs procedures. This includes greater clarity of export and import licensing requirements, heightened transparency when conducting import checks at the border and more predictable clearance processes for the release of goods, with clearance within 48 hours. This will support smoother cross-border operations and reduce risks to perishable products.
(a) Case study: Salmon Scotland
Salmon Scotland is the trade body for the Scottish salmon sector, and represents the interests of 3200 producer, exporter and supply chain businesses. Scottish salmon is the UK's number one food export with exports on course to reach £1 billion in 2025. Exported to 50 countries annually, the demand for fresh Scottish salmon is worldwide.
Tavish Scott, CEO, Salmon Scotland, said:
We welcome the developments and the close ties on trade with South Korea. This deal will increase support in accessing the market and provide the opportunity for our exporters to deliver fish in pristine condition, with confidence, to consumers in South Korea.
South Korea represents an important market within Asia where Scottish salmon has seen significant growth in recent years.
(b) Case study: WineGB
WineGB is the trade association for UK wine. They cultivate success for 500 grower and producer members which represents circa 70% of UK hectarage. They represent the industry to the Government, media, and trade. At the heart of their work, they help members to make and market wine.
Nicola Bates, CEO of WineGB, said:
The UK wine sector is rapidly growing from 4% to 9% in 5 years with export volumes up 35%, so all measures to open up markets are welcome, including this enhanced Free Trade Agreement between the UK and the Republic of Korea. This agreement marks an important step in deepening our trade ties with one of Asia's most dynamic markets. The inclusion of dedicated provisions to promote smooth customs procedures will help remove barriers and create a more efficient pathway for our wines to reach Korean consumers. As we deepen our ties with East Asian export markets, this FTA provides a timely boost to our long-term growth and diversification efforts.
7. Modernised rules for digital trade and AI
Over 70% of services trade between the UK and South Korea is now conducted digitally.8 The deal's transparent digital regulations will reduce compliance burdens, making it easier for our world leading digital companies to innovate and expand in South Korea. Data flows underpin all business activity across trade and the agreement enables trusted data flows and bans unjustifiable data localisation requirements, providing a more certain environment for businesses to operate and expand. We have also committed to cooperating on AI so we can use each other's technology more easily and affordably.
(a) Case study: techUK
techUK is the trade association which brings together people, companies and organisations to realise the positive outcomes of what digital technology can achieve. With over 1,100 members (650+ of which are SMEs) across the UK, techUK creates a network for innovation and collaboration across business, government and stakeholders to provide a better future for people, society, the economy and the planet.
Sabina Ciofu, International Policy and Strategy Lead at techUK, said:
techUK welcomes the agreement on an upgraded UK-South Korea FTA. With more than 70% of UK services to South Korea already delivered digitally, this deal strengthens a partnership that's become a genuine engine for growth and innovation. The enhanced digital trade provisions will give our companies clearer, more modern rules to work with - and real room to expand. We look forward to working with our government to support the tech industry in making the most of this deal.
(b) Case Study: EY
EY teams work across a full spectrum of services in assurance, consulting, tax, strategy and transactions. Fuelled by sector insights, a globally connected, multidisciplinary network and a diverse ecosystem of partners, EY teams provide services in more than 150 countries and territories.
Ioannis Melas, EY UKI Partner, Leader for Tech, Media & Telco Consulting, said:
This updated agreement provides a welcome boost to UK competitiveness through its provisions around digital trade, which are essential for the continued growth of exports in the strategically important professional services sector. The majority of cross-border professional services work is facilitated through digital delivery methods, ranging from electronic authentication to data sharing. The UK and Republic of Korea have recorded year-on-year trade growth across various service sectors and these digital trade provisions will help businesses in both countries to build on this success, providing the clarity and confidence to scale operations and investment in these key markets.
8. Supply chain resilience
The agreement includes the UK's first dedicated Supply Chains Cooperation chapter, allowing the government to support businesses by identifying and connecting them with new industry partners in South Korea. This, along with new Rules of Origin, will help them diversify sources of raw materials and components. This will support UK firms in sectors central to the Industrial Strategy, such as automotive and pharmaceuticals, in taking full advantage of the global supply chains available, making it easier to foster more resilient and flexible bases of supply.
(a) Bentley Motors
Located in Crewe, England and owned by the Volkswagen Group since 1998, Bentley Motors remains the definitive British luxury car company, crafting the world's most desirable high performance grand tourers. Bentley's colleagues design, engineer and handcraft five bespoke models: Continental GT, Continental GT Convertible, Flying Spur, Bentayga and Bentayga EWB. The combination of fine craftsmanship, using skills that have been handed down through generations and engineering expertise is unique to Bentley.
Frank-Steffen Walliser, Chairman and CEO of Bentley Motors, said:
South Korea is a key market for Bentley and the luxury vehicle market. To secure immediate ongoing access to South Korea and a positive long term trade deal, is great news. Smooth international trade is vital to UK automotive business growth. So securing trading relations with South Korea and with other partners across the 60 plus markets in which we operate is business critical. We welcome this collaborative approach from the UK government and look forward to future trade discussions.
(b) Case study: The Society of Motor Manufacturers and Traders
The Society of Motor Manufacturers and Traders (SMMT) is one of the largest and most influential trade associations in the UK. Founded in 1902, today it represents sectors ranging from R&D and manufacturing of cars, vans, trucks, buses, taxis and trailers; to tech, software, servicing and supply chain with members including large multi-nationals, SMEs and start-ups. SMMT's remit is to support, safeguard and champion these businesses, supporting their competitiveness and promoting their interests to government, stakeholders and media in the UK and globally.
Mike Hawes, SMMT Chief Executive, said:
Agreement of an upgraded UK-South Korea FTA is great news and something for which the industry has long called. South Korea remains a crucial market for UK automotive exports, with South Korean car marques being some of the most popular in Britain so there is great potential to boost jobs and growth in both countries. Reducing tariffs, introducing workable rules of origin and cooperating across the supply chain are all positive steps and we look forward to seeing these key provisions ratified.
(c) Case study: GSK
GSK is a focused, global biopharma company committed to uniting science, technology, and talent to get ahead of disease together. We innovate in Speciality Medicines and Vaccines, leveraging the science of the immune system and advanced technologies to address critical therapeutic areas like Respiratory, Immunology & Inflammation, Oncology, Long-acting HIV, and Infectious Diseases. Our ambition is to positively impact the health of 2.5 billion people by 2030, driven by a commitment to access, inclusion, and sustainability.
Rodney Leon, VP, Trade Compliance & Head of Finance Capabilities & Talent, GSK said:
Free trade agreements are vital for unlocking economic potential, driving innovation, and strengthening global partnerships that ultimately benefit patients and industries worldwide.
It is positive to see the updated Rules of Origin which will increase opportunities for companies such as GSK, and boost resilience in our supply chain ensuring we continue to deliver for patients globally.
9. Unprecedented opportunities to win government contracts in South Korea
The deal has unlocked exclusive access for the UK to government procurement opportunities in Sejong City. Sejong City is a rapidly developing smart hub with ambitious infrastructure plans, procuring on average £46.2 million worth of goods and services annually.9 This access will open up new opportunities for UK education, transport, culture and digital firms.
UK advertising agencies and media companies can now also compete for Korean government contracts in advertising services. This sector represents an average annual procurement value of £86.2 million.10
Case study: Kestrel Radar Sensors
Based in Cambridgeshire, Kestrel Radar Sensors is a UK-based designer and manufacturer of advanced radar solutions for traffic safety and monitoring. With decades of experience in high-reliability electronics, the company delivers ultra-low power radar systems for Vehicle Activated Signs (VAS), Speed Indicator Displays (SID), Safety Message Signs and Radar Speed Signs. Kestrel operates their own state of the art manufacturing facilities and manages in-house raw material procurement to final assembly to ensure they offer the best products, manufactured to the very highest standards.
Manveer Sidhu, General Manager at Kestrel Radar Sensors said:
As a small British business with a desire to broaden our partnerships in South Korea, Kestrel Radar Sensors strongly welcomes the conclusion of the UK-Republic of Korea Free Trade Agreement. The upgraded rules of origin, streamlined customs procedures, support for joint innovation and brand new access to Korean government procurement channels will provide opportunities for us to work alongside Korean companies to develop and deploy sensing solutions for modern cities that increase safety for all.
Following on from our positive experience with Innovate UK's Global Business Innovation Programme mission to South Korea in 2024, we are pleased that the Department for Business and Trade seeks to create more opportunities for British business to export to other high-tech markets. We are hopeful that these negotiated agreements will support our ability to invest further, creating skilled jobs here in the UK, and help us compete more effectively in Asia. We're proud to back any deal that strengthens the UK's position as a trading nation at the forefront of technology development.
10. Strengthening strategic ties for long-term economic opportunities in the Asia-Pacific
This deal is underpinned by a strong bilateral economic partnership, deepened by the 2023 Downing Street Accord. By strengthening ties with South Korea, the UK reinforces its strategic presence in key supply chains and innovation networks, ensuring long-term economic opportunities within the region. The Asia-Pacific is forecasted to account for 10% of global growth by 203511 and, through the upgrading of our FTA, we have ensured that trade with the region will be a key driver of growth at home.
Case Study: Virgin Atlantic
Virgin Atlantic was founded by entrepreneur Sir Richard Branson in 1984, with innovation and amazing customer service at its core. Headquartered in London, the airline flies customers to 28 destinations across four continents and alongside shareholder and Joint Venture partner Delta Air Lines, operates a leading transatlantic network, with onward connections to more than 300 cities around the world. In 2025 Virgin Atlantic announced its first direct service to Seoul, from March 2026, strengthening links between the UK and South Korea for business, trade and tourism.
Juha Jaervinen, Chief Commercial Officer, Virgin Atlantic said:
Our new direct London Heathrow to Seoul service marks an exciting new chapter as we expand our passenger and cargo network in the East, strengthening the UK's ties with South Korea - the world's 12th largest economy and home to a thriving travel, tech and beauty industry. As the only British airline flying direct between our two capital cities, this route opens new opportunities for trade, tourism and long-term collaboration across the Indo-Pacific. A modernised UK-South Korea Free Trade Agreement will help unlock even greater potential for businesses and travellers alike - supporting growth, deepening connectivity, and showcasing the best of both countries.
