Business and Trade Secretary Kemi Badenoch will tomorrow, 22nd November 2023, launch talks on a modernised trade deal with South Korea to boost trade and strengthen the UK’s relationship with a key ally. The UK and South Korea are major modern economies with significant digital sectors. The current trade deal, negotiated over a decade ago, does not include digital chapters reflecting the modern economy.
It comes as Korean businesses commit £21 billion worth of investment into the UK, backing renewable energy and infrastructure projects across the country and supporting more than 1500 highly skilled jobs.
South Korea is the 13th largest economy in the world, and its import demand is set to grow rapidly. With around 45 million middle-class consumers and an import market expected to grow by 45% by 2035, the market presents massive opportunities for UK companies.
With nearly 80% of UK services exports to Korea delivered digitally in 2021, securing modern digital provisions could unlock significant opportunities for UK businesses.
The UK’s trade with South Korea has more than doubled in current prices since our existing trade deal was agreed in 2011. An upgraded trade deal is expected to boost our £16 billion annual trading relationship with South Korea, supporting jobs and livelihoods up and down the UK.
Speaking ahead of the launch, Business and Trade Secretary Kemi Badenoch said:
“The government is upgrading our trade deal with South Korea to ensure that our trading relationship plays to the UK’s strengths as an advanced, high-tech economy. This refreshed, the modernised deal will boost our world-leading services sector while creating new opportunities for UK exports such as in our world-leading food and luxury goods sectors.”
Minister for Investment Lord Johnson said:
"Just weeks after my hugely productive trip to Seoul, I'm thrilled to see Korean investors committing £21bn to exciting new projects to create jobs and spur economic growth across the UK. I'm hugely focused on securing greater partnerships with sovereign wealth funds, and so I greatly welcome the Korea Investment Corporation's £9.7bn for renewable energy, fintech and life sciences - three sectors the UK is leading the world in. As we will see at next week's Global Investment Summit, the UK is one of the best places in the world to invest, thanks to the huge growth and innovation that we are fostering in our science and tech sectors. The investments secured today are yet further proof of that and how we continue to strengthen our trade and investment ties with South Korea and the wider Asia Pacific region."
British brands are also thriving in the Korean market. World-leading UK technology and green energy companies will announce more than £2.5 billion of business wins to South Korea. Bentley and Diageo are also expected to announce more than £200 million contracts in the country this year following the Department of Business and Trade support.
A new deal would also benefit the nearly 7,000 UK businesses exporting goods to Korea, of which 85% were Small and Medium Enterprises (SMEs). The new agreement is expected to include dedicated support for smaller businesses by digitalising and simplifying Customs procedures.
The UK will also work to secure simple and forward-looking rules of origin which provide continuity and long-term certainty, while helping as many businesses as possible to benefit from reduced or zero tariffs when exporting to South Korea.
Focus On: Understanding Free Trade Agreements
With the UK developing new independent trade arrangements both to encourage the export and import of goods and services from affiliated markets, this session is a must. Some knowledge of customs regulations is recommended or attendance on courses introducing this topic. This course looks at the structure of new and old UK international trade agreements, the key rules of origin and how to understand the whole agreement covering goods, services and other trade issues.
Understanding Origin & Preference
What is the difference between origin and preferential origin? This interactive workshop explains this by using case studies and exercises to help the learner understand when they are important in both export and import scenarios. It examines the documents and statements used to declare origin and preference and how to verify if your goods meet preference rules across different trade agreements. With HMRC audits increasing, you and the business need to be comfortable with this complex area.
Export Essentials: An Introduction to Exporting
Following on from the Beginners Guide to Exporting / Importing this interactive session covers the key points of exporting goods. It covers essential details about the Incoterms Rules, export documentation and working with freight forwarders to ensure goods are correctly declared. Ideal for anyone whose job has an export connection, whether sales, contracts, finance, shipping or for a managerial overview.
