South Korea and the United Kingdom have concluded negotiations to improve their Free Trade Agreement (FTA). The main points include easing strict rules of origin for key export items such as automobiles and K-food, and further opening the UK’s high-speed rail and major service markets. The Ministry of Trade, Industry and Energy announced on the 15th that Trade Minister Yeo Han-koo signed a joint declaration with UK Trade Minister Chris Bryant in London to confirm the conclusion of the Korea-UK FTA improvement negotiations.
The UK is the world’s 6th largest market by nominal GDP and the 2nd largest in Europe, and it is a global financial and investment hub with the highest market share in international banking and foreign exchange transactions. However, the trade volume and exports to the UK are only in the top 20 globally, necessitating improved market access through the negotiations. The revised Korea-UK FTA is expected to drive trade expansion by easing strict rules of origin for key export items and further opening the UK’s high-speed rail and major service markets.
The two countries had already opened most of their goods markets under the original Korea-UK FTA, but this negotiation focused on easing the strict rules of origin applied to key export items. For automobiles, the requirement for over 55% value-added in the country to receive tariff benefits has been lowered to 25%. Additionally, the rules of origin for promising export items such as K-beauty and K-food have been eased, laying the groundwork for expanding the entry of domestic products into the UK.
The government procurement and service markets have also been further opened. The UK’s high-speed rail market has been additionally opened to correct the previous imbalance where only South Korea had opened its market. Major institutions such as the Sejong City and Northern Ireland Housing Administration, as well as services like advertising, taxation, and translation, have also been further opened to improve market access. Additionally, the online gaming sector has been opened to provide a platform for expanding the entry of domestic games into Europe.