UK-South Korea trade deal: Bentleys and Scottish salmon to benefit

The UK and South Korea have finalized a trade deal aimed at boosting exports of luxury Bentley cars, Scottish salmon and canned Guinness in Britain.

The government said the deal was an extension of its current tariff-free deal on most goods and services traded between the countries and would “support thousands of UK jobs and grow the economy”.

This is the fourth trade deal reached since Labor came to power, following agreements with the European Union, the United States and India.

But the UK’s economic growth, the government’s top priority, remains sluggish and the BBC understands that part of the US deal, which promised billions of investment in British technology companies, has stalled.

The so-called “Tech Prosperity Deal” was signed by US President Donald Trump and Prime Minister Sir Keir Starmer in September.

The government said the deal secured £150 billion in US investment, which it said would create 7,600 jobs, and companies such as Microsoft and Google pledged to spend billions in the UK. It also sought to strengthen ties in artificial intelligence, quantum computing and nuclear energy.

However, the BBC understands that the deal has stalled. Reports suggest Trump is pushing for concessions in trade areas outside of the tech partnership.

A UK government spokesperson said: “Our special relationship with the US remains strong and the UK is firmly committed to ensuring the Tech Prosperity Deal delivers opportunities for working people in both countries.”

Under the deal agreed with South Korea, 98% of trade will remain tariff-free, the same terms the EU has with the country, and which the UK temporarily maintained after Brexit.

Parts of the UK’s trade deal with South Korea were due to expire in January 2026, but the new deal will protect £2 billion of UK exports from a rise in tariffs, the government said.

South Korean culture, including music, cosmetics and food, has become much more popular in the UK in recent years.

Trade Minister Chris Bryant announced the deal at Samsung’s flagship store in London on Monday night, accompanied by his Korean counterpart Yeo Han-koo.

Sir Keir said the deal was “a huge victory for British businesses”.

“This agreement which will further facilitate trade between us will help boost the economy, supporting the jobs and growth that will be felt across the country,” he said.

Bryant said the deal would give “cast iron protections to our key industries to accelerate economic growth as part of our Turnaround Plan.”

South Korea is the UK’s 25th largest trading partner, according to the Department of Business and Trade. In the 12 months to the end of June this year, it accounted for 0.8% of total UK trade.

During that same 12-month period, official figures show that UK exports to South Korea fell by 16.4% and South Korean exports to the UK fell by 10.8%.

South Korea’s Trade Minister told the BBC that the economies of South Korea and Britain “are complementary” and denied that the decline in trade between the nations suggested the relationship was not as important as it used to be.

Han-koo said the new agreement was more about reducing non-tariff barriers, such as making rules on the origin of products more business-friendly and creating new digital and investment protections.

“So these two economies stand to gain by cooperating more closely through this type of framework,” he added.

Han-koo also said Britain can serve as a gateway for South Korea in its trade with Europe, while South Korea can serve as a gateway to Asia for British companies.

The deal with South Korea is the latest in a series of post-Brexit trade deals, but the independent budget forecasting body, the OBR, has so far judged that deals made with those larger partners are unlikely to have a measurable impact on the UK economy by 2030.

The government has said the various trade deals signed this year will grow the British economy by creating jobs and reducing bureaucracy for small businesses.

But its own assessment showed that the deal with India will only increase GDP by 0.11% to 0.14%.

That particular deal was criticized for potentially undermining British workers.

India is the UK’s tenth largest trading partner, accounting for 2.5% of British trade.

UK companies including Bentley Motors, Jaguar Land Rover (JLR) and Guinness owner Diageo welcomed the news of the deal with South Korea.

Frank-Steffen Walliser, president and CEO of Bentley Motors, said South Korea is a key market for the company and the broader luxury vehicle market.

“Securing immediate continued access to South Korea and a positive long-term trade deal is great news. Seamless international trade is vital to the growth of the UK automotive business.”

Diageo acting chief executive Nik Jhangiani said it would “help meet growing demand from South Korean consumers” for Guinness, which is canned in Runcorn, Cheshire.

Emily Weaver Roads, acting international director of the Scotch Whiskey Association, said the Asia-Pacific region was the largest regional market by value for whisky.

“Reducing trade barriers in the Republic of Korea will further improve Scotch whiskey’s access to an important market, especially for single malts.”

William Bain, head of trade policy at the British Chamber of Commerce, said South Korea has an “expanding middle-class consumer base” that British businesses can now tap into.

The agreement “gets goods through ports faster,” he said.