Yeo Han-koo, Korea’s trade minister (right), and Chris Bryant, the U.K.’s minister for industry and trade, pose for a commemorative photo in London on Dec. 15 (local time) after announcing the conclusion of negotiations to upgrade the Korea–U.K. Free Trade Agreement (FTA). (Yonhap)
SEOUL, Dec. 16 (Korea Bizwire) — South Korea and the United Kingdom signed an upgraded free trade agreement aimed at easing rules of origin for Korean exporters and expanding access to Britain’s high-speed rail and digital services markets, Seoul’s trade ministry said Tuesday.
The deal, signed in London by Korean Trade Minister Yeo Han-koo and U.K. counterpart Chris Bryant, follows two years of negotiations and updates the bilateral FTA that took effect in 2021 after Britain’s exit from the European Union.
A central provision lowers Britain’s rules-of-origin threshold for Korean automobiles, beauty products and processed foods. Korean carmakers currently must prove that at least 55% of a vehicle’s value is generated domestically to qualify for tariff-free treatment. The revised accord cuts that requirement to 25%, a shift that Seoul says will strengthen the competitiveness of Korean vehicles in a key export market. Autos accounted for 36% of Korea’s total shipments to Britain last year.
The U.K. will also ease origin rules for Korean beauty products—subject to 8% duties—and for processed foods such as dumplings, tteokbokki, gimbap and kimchi, allowing tariff exemptions even when key ingredients are sourced from third countries.
In government procurement, Britain agreed to open its high-speed rail market to Korean bidders, narrowing what Seoul has long viewed as an asymmetry in market access. The service sector commitments include expanded entry for Korean online-game providers and companies operating in artificial intelligence and other emerging technologies.
The two governments also agreed to streamline visa procedures for Korean engineers and project specialists dispatched to build manufacturing facilities in Britain, a move Seoul said was designed to prevent disruptions like those seen in Georgia earlier this year, when hundreds of Korean workers were detained in a U.S. immigration raid.
Vehicles awaiting export (Image courtesy of Yonhap)
The upgraded pact includes digital-trade rules covering cross-border data flows and consumer protections, and establishes an “innovation committee” to deepen collaboration in AI and other advanced technologies. Both sides also committed to expanding supply-chain cooperation.
“This agreement will reinforce the free-market order at a time of rising global protectionism and provide new momentum for economic cooperation with the U.K., one of Korea’s major partners in Europe,” Yeo said, adding that Seoul will move quickly to complete the remaining procedures for implementation.
M. H. Lee (mhlee@koreabizwire.com)
