The British government has announced a two-year extension of a deal with South Korea that will enable UK businesses to continue benefiting from a low and zero-tariff regime for a further two years.
It ensures that exporters will not be subject to high duties for manufactured goods containing parts originating from the EU and is expected to particularly benefit areas such as the automotive and food and drink sectors.
Time-limited clauses to allow low-tariff access were included in the UK-South Korea free trade agreement that rolled over when the UK left the EU. However, these had been due to expire on 1st January 2024. The extension will give the two sides more time to negotiate permanent rules as part of an enhanced bilateral FTA.
UK minister for international trade Nigel Huddleston said: "This is fantastic news for UK businesses who can continue selling their brilliant goods with confidence to South Korea, a fast-growing market of the future with a high demand for quality British products."
Last year, British exports to the Asian nation totaled £7.3 billion, with the majority of this being goods trade. The UK Department for Business and Trade noted that this has already doubled since the signing of the current FTA and added that, thanks to South Korea's growing middle class, it is expected that imports to the country are set to increase by a further 45 percent by 2035.
Industry groups welcomed the move, with Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders saying that extra duties would have been bad for both sides..
He noted that in the first half of 2023, South Korea was the UK's seventh-largest car export market, while the country was the third-biggest supplier of passenger vehicles to the UK.
"We look forward to the start of negotiations and swift conclusion of a modernized trade deal that delivers more benefits to our respective automotive sectors, in particular boosting trade in EVs and related technologies," Mr Hawes continued.