The United Kingdom has finalised a crucial free trade agreement with South Korea, announced on 15th December 2025 by Trade Minister Chris Bryant and South Korean Minister Yeo Han-koo. This deal aims to increase exports, protect jobs, and promote economic growth in different sectors.

This agreement follows the UK’s landmark trade deals with the European Union, India, and the United States earlier this year, collectively projected to add billions of pounds to the British economy and create thousands of jobs.

Expanding market access and protecting key industries

The deal guarantees permanent tariff-free access across 98% of tariff lines, mirroring the terms the European Union holds with South Korea. 

This provision protects UK exports worth about £2 billion from upcoming tariff increases. This helps maintain competitiveness in one of Asia’s fastest-growing economies.

UK services firms stand to gain a £400 million boost, particularly through improved access to South Korea’s expanding financial market. The agreement also safeguards critical sectors such as automotive, pharmaceuticals, and food and drink.

Prime Minister Keir Starmer described the deal as a “huge win for British business and working people.” He also added that “From food to TV, music and more, Korean culture is already influential here in the UK. This deal making trade even easier between us will help boost the economy – supporting jobs and growth which will be felt all over the country.”

British brands to benefit from enhanced trade

The deal will support exports of British products, including Bentley luxury vehicles, Scottish salmon, and Guinness stout, which is canned in Runcorn. South Korea’s import market is forecasted to grow by 26% by 2035, presenting substantial opportunities for British businesses of all sizes.

Additionally, the agreement legitimises the use of electronic contracts and other digital trade technologies, streamlining transactions and reducing costs. This positions the UK-South Korea partnership as one of the most digitally advanced trade relationships globally.

South Korean Trade Minister Yeo Han-koo  quoted that, “the upgraded Korea-UK FTA has established a considerable number of comprehensive cooperation norms, including market liberalisation, digital trade, and cooperation for supply chains stabilisation, to strengthen the Korea – UK trading relationship.”

Recognising that over 99% of UK businesses are small or medium-sized enterprises (SMEs), the deal includes provisions to simplify customs processes and reduce non-tariff barriers. This will enable smaller firms to more easily access South Korea’s growing import market and diversify their supply chains.

What do industry leaders say?

The agreement received a positive response from various industry leaders. Frank-Steffen Walliser, Chairman and CEO of Bentley Motors, quoted that “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.”

Nik Jhangiani, Interim Chief Executive, Diageo, also added, “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.”

Richard Molyneux, Chief Finance Officer at Jaguar Land Rover (JLR), commented that “We welcome this free trade agreement and the benefits it will provide our clients in South Korea, which is an important market for JLR.”

The Association of British Insurers also welcomed provisions ensuring UK insurers can continue operating in South Korea with greater certainty, reflecting the country’s growing importance as a financial hub.

The UK-South Korea trade deal supports the UK’s goal of expanding its global trade after Brexit. 

The deal also aligns with Virgin Atlantic’s plan to begin daily flights between London and Seoul in 2026, marking a strengthening of bilateral relations.