The United Kingdom and the Republic of Korea (RoK) have concluded negotiations on an upgraded Free Trade Agreement (FTA). Building on the work of the previous Secretary of State for Business and Trade, and Minister of State for Trade Policy and Economic Security, the new FTA builds on our existing agreement, which we carried over from the European Union and came into force in 2021.

The agreement will support this government’s mission to deliver economic growth by making it faster, cheaper and more predictable to do business with the RoK – a country with whom the UK’s trade totalled £15.8 billion in 2024 The RoK is the world’s 12th largest economy, with a dynamic import market projected to grow by 26% in the next 10 years. We have protected and expanded key market access and agreed measures that will reduce barriers to trade. The deal reflects our shared ambition to strengthen ties while reinforcing our commitment to a rules-based trading system that promotes high standards. By concluding the agreement, the UK has also future-proofed its trading relationship with a key partner and reinforced its influence across the Asia-Pacific, a region forecasted to account for 10% of global growth by 2035.

We have secured continued tariff-free access for British business across 98% of Korean tariff lines in key Industrial Strategy growth sectors including advanced manufacturing and life sciences, as well as key sectors such as food and drink. Both established exporters and new entrants will be able to trade on a stable, predictable footing, ensuring that renowned UK goods remain competitive in the RoK’s expanding market, supported by a trade framework tailored for British supply chains.

The UK is a services powerhouse, with DBT modelling estimating that services exports could increase by £400 million annually as a result of this agreement in the long run. Building on £1.1 billion worth of UK financial and insurance exports to the RoK in 2024, the agreement strengthens access to the RoK’s expanding financial market. The UK has secured meaningful commitments on data localisation and transparency, allowing British financial services firms to enter and operate in the Korean market with confidence. The agreement includes unprecedented commitments that strengthen UK insurers’ ability to provide a range of specialist insurance products to Korean clients.

The deal secures unmatched government procurement opportunities in RoK’s Sejong City, which procures an average of £46.2 million worth of goods and services annually as well as expanded access for UK advertising firms for public contracts. It also ensures fairer access to and use of public telecoms networks and services for UK suppliers by limiting the conditions placed on them when seeking access in the RoK. This will benefit suppliers across industries that rely on telecoms networks to provide their service, further supporting economic growth.

Our services exports are supported by a new and ambitious digital commerce chapter. This chapter is designed to support the 70% of services trade between the UK and the RoK which is now conducted digitally. This underscores the UK’s commitment to tech-driven trade, creating a more dynamic and future-ready environment for British businesses. We have also agreed commitments that promote and improve compatibility and interoperability of AI governance and policy frameworks. In practice, this means reducing unnecessary barriers so that the UK’s and the RoK’s businesses can use each other’s technology more easily and at lower cost. By strengthening cooperation with the RoK’s world-leading AI sector, the UK is delivering on its National AI Strategy and showing its ambition to lead global conversations on safe, fair and innovative AI.

There will be streamlined access to import/export documents, simplified licensing rules and authorisation processes, and greater promotion of the use of English language and e-trade documents. Access to critical information such as financial regulations has also been improved. Collectively these reduce administrative burdens and allow British service suppliers, investors and SMEs to fully seize the opportunities offered by this dynamic market.

Simpler ways to qualify for tariff-free market access will make supply chains more resilient. This includes updated rules of origin that simplify how businesses prove where their products come from, reducing paperwork and speeding up processes. UK exports to the RoK supported around 92,000 jobs in 2020. Leading employers and Business Representative Organisations such as Deloitte, the Society of Motor Manufacturers & Traders, and the Confederation of British Industry have welcomed the deal as a vital protection for the competitiveness of British goods and the thousands of jobs they support.

The upgraded agreement marks the RoK’s strongest set of commitments to date for agri-food exporters, including an upgraded provision for cooperation on animal welfare and a new article on antimicrobial resistance. The deal provides certainty for traders by ensuring both the UK and the RoK can protect their biosecurity, while putting in place enhanced commitments, structures and processes that will allow us to avoid unnecessary trade barriers. These changes will help protect supply chains from disruption and ensuring administrative processes remain predictable for UK business.

The FTA will also deepen the strategic relationship between our two nations, building on the RoK’s recent and significant inward investment into the UK. To support this, the deal introduces new cooperation pathways in critical areas such as innovation, gender equality, and supply chains – the UK’s first dedicated chapter of its kind – to reinforce our shared commitment to future-facing collaboration. We have also embedded values on fairness and sustainability through collaboration on workers’ rights, through measures that address bribery and anti-corruption and through upgraded commitments in support of our ambitious environmental and climate goals.

We will now go through the steps to prepare this treaty for signature, and I look forward to updating the House further on this agreement in due course.

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