UK agrees trade deal with South Korea just weeks ahead of deadline

UK tradeAdd to myFTGet instant alerts for this topicManage your delivery channels hereRemove from myFTUK agrees trade deal with South Korea just weeks ahead of deadlineAnnouncement spares British exporters from threat of tariff increases UK trade minister Sir Chris Bryant, left, and his South Korean counterpart, Yeo Han-koo © Department for Business and TradeUK agrees trade deal with South Korea just weeks ahead of deadline on x (opens in a new window)UK agrees trade deal with South Korea just weeks ahead of deadline on facebook (opens in a new window)UK agrees trade deal with South Korea just weeks ahead of deadline on linkedin (opens in a new window)UK agrees trade deal with South Korea just weeks ahead of deadline on whatsapp (opens in a new window) Save UK agrees trade deal with South Korea just weeks ahead of deadline on x (opens in a new window)UK agrees trade deal with South Korea just weeks ahead of deadline on facebook (opens in a new window)UK agrees trade deal with South Korea just weeks ahead of deadline on linkedin (opens in a new window)UK agrees trade deal with South Korea just weeks ahead of deadline on whatsapp (opens in a new window) Save Peter Foster in LondonPublishedDecember 15 2025Jump to comments sectionPrint this pageUnlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The UK says it has agreed an improved trade deal with South Korea that could boost services trade by hundreds of millions of pounds a year and protect more than £2bn of goods exports, including Bentley cars, Guinness stout and Scottish salmon. The announcement came just weeks before the UK’s existing post-Brexit trade agreement was due to expire, sparing the country’s exporters from the threat of tariff increases if a deal had not been struck.

Sir Chris Bryant, the UK trade minister, called the deal a “significant upgrade” to the relationship, particularly for UK financial services firms, architects and construction businesses that would now be able to tender for South Korean government contracts.“We’re delighted to be able to target some specific areas in services trade where I’m really glad there are big new opportunities in the UK and in relation to financial services and procurement,” he said.The UK exported a total of £8.1bn of goods and services to South Korea in the year to the end of June 2025, the last quarter for which data was available. A £400mn annual boost to services exports represents a 10 per cent increase in the long term. Hannah Gurga, director-general for the Association of British Insurers, said the deal would also limit requirements for UK services companies to store data locally in South Korea while enabling non-life insurers to continue to provide cover directly in the east Asian country.“These measures will help insurers and reinsurers operate with greater certainty and continue serving customers effectively,” she said.The deal was less successful on removing barriers to legal services — an area of long-standing difficulty for UK law firms — but Korea’s trade minister Yeo Han-koo told the Financial Times that the deal committed to a review to “address the grievances” raised.Goods exporters, including automakers Bentley Motors and Jaguar Land Rover, welcomed the deal which will enable them to continue to qualify for tariff-free exports to Korea with only 25 per cent of parts coming from the UK.Bentley chief executive Frank-Steffen Walliser said a long-term trade deal that secured access to South Korea, a big player in the luxury vehicle market, was “great news”. Drinks maker Diageo said the deal would support exports of Guinness that was canned in Runcorn, north-west England. The UK government described the deal with Korea as “momentous” and a “huge win” for business. Korea’s minister Yeo said the agreement, which will be formally signed in the coming months, represented a commitment to stability at a time of turbulence in world trade. “As we all know, the trade order is going through radical changes, and it is especially important for middle-power countries like Korea and the United Kingdom to continue to work together,” he added.Trade experts were cautious about the value of the deal, however. The Office for Budget Responsibility warned last month that despite a flurry of post-Brexit UK trade deals, including with India this year, it still expected the contribution of trade to UK GDP to decline between now and 2030.In November’s Budget, the OBR said any positive impacts from bilateral trade deals were “likely to be outweighed” by global protectionism and “the continued impact of Brexit”.Still, former UK trade department official Allie Renison, now at consultancy SEC Newgate, said a deal with Korea that improved existing market access was still “nothing to sniff at” given current global uncertainties.“The devil will be in the detail to understand exactly how any new commitments can be leveraged by business — and what further talks are needed to implement and transpose them,” she added.David Henig, a former UK trade negotiator now at the ECIPE think-tank in Brussels, accused the government of “wildly overselling” a deal, but agreed that it was still useful as it reinforced the UK’s commitment to a rules-based trade order.“What we need to see is an ongoing focus on implementing and enhancing all of our trade relationships backed up with regular reporting on progress,” he said.Reuse this content (opens in new window) CommentsJump to comments sectionPromoted Content Follow the topics in this article Brexit Add to myFT UK trade Add to myFT UK financial services Add to myFT UK Government Add to myFT Government of South Korea Add to myFT Comments