It was the 12^th largest economy in the world by GDP in 2024. We do £15bn worth of bilateral trade between our two countries per annum, and in terms of UK exports 54% are in goods and 46% in services.

The major growth in the last few years has been trade in services including financial, legal, and business advisory services – with bilateral services trade up by 64% over the past decade. South Korea‘s demand for imports is set to rise by 26% in the next ten years as its middle class becomes more prosperous.

It is a consistent partner in the fastest growing area of the world economy, and South Korean inward investment has been useful in infrastructure and energy.

Current trading terms were determined by the continuity or roll-over agreement with South Korea shortly before EU exit, but there were cliff-edges on some tariff and origin clauses within the existing agreement – for key goods exports sectors like UK automotive and pharmaceuticals these would have been damaging from 2027 onwards.

Moreover the original agreement does not reflect the changes in trade policy over the past 15 years with countries having higher ambitions to make new commitments on services trade, data, customs facilitations, supply chains, and business mobility.

Overall, this agreement is forecast to raise UK services exports by £400m per annum in the long run. 

• Gives permanent certainty on tariffs, with 98% of South Korea‘s tariff lines set at zero for UK goods imports. £2bn in annual UK exports facing tariff cliff-edges are secured by the deal.

• Removes tariffs on goods moving between the UK and South Korea for servicing or repair.

• Provides security for key sectors such as automotives and pharmaceuticals by creating permanent rules on how much non-UK content is permissible in UK products exported tariff free to South Korea.

• Contains the first supply chain co-operation chapter in any UK trade agreement providing pathways for future supply of critical and growth minerals, goods (including medical supplies and batteries) and components. Also helps government in helping companies in the UK work with supply partners in South Korea.

• Commitments on maximum 48 hour processing times at ports for goods ensuring goods and cleared and flow quicker.

• Greater usage of electronic documents in trade such as e-invoicing, e-contracts, e-payment of duties, and publication of key South Korean regulations in English assisting compliance work.

• Improved mobility terms with more flexibility for short term stays for business purposes.

• Removes nationality requirements for appointments to key senior managerial posts and liberalised requirements for company board membership.

• New access for independent professional service supplier or contractual service supplier routes for UK services exporters.

• Strong provisions on data flows and preventing unjustified data localisation requirements in the digital trade chapter, vital for the 70% of bilateral UK-South Korea services trade conducted digitally by electronic or remote means.

• Commitment to resolve barriers to access for legal services professionals to the South Korean market such as those on post-qualification experience requirements.

• Common principles adopted for developing and using AI responsibly, including lowering unnecessary barriers to technology interoperability and usage.

• Regulatory transparency on digital and customs processes.

• Dedicated SME chapter outlining gains from the new trading terms and providing co-operation pathways on trade finance.

• Greater procurement opportunities with Sejong City, the administrative capital of South Korea – useful for transport, education, creative and digital services companies in the UK.

• Modernised investment chapter, including usage of ISDS on investor dispute resolution.

• Strong telecoms chapter including commitments to co-operate on reasonable and transparent roaming rates.

• Dedicated chapter on trade and gender opportunities, plus creation of Committee on Trade and Gender Equality promoting exchange of best practice and joint engagement.

• Updated annexes on pharmaceutical products and medical devices.

• Enhanced geographic indicators recognition processes. 

• Professional Qualifications annex encouraging dialogue on further recognition of professional qualifications.

Live negotiations continue with the Gulf Co-operation Council (GCC), Switzerland and Turkiye. Agreements in the first two cases could follow in 2026.

Negotiations with the US continue on the implementation of the Economic Prosperity Deal (on tariffs and trade) and the Technology Prosperity Deal (on investment and tech).

The refit agenda within CPTPP will be undertaken by the 12 members including the UK over the next 12 months.

Digital trade agreements with Kenya, Brazil, Indonesia and Thailand could be negotiated starting next year.

Economic Partnership Agreements with 8 key markets in Africa, Caribbean and the Pacific could be extended to services, starting with discussions next year.

Review of trading terms with Canada concludes soon involving No 10 and PM Carney’s office.