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 high-speed rail and major service markets. The Ministry of Trade, Industry and Energy announced that Yeo Han-koo, Head of Trade Negotiations, signed a joint declaration with Chris Bryant, UK Minister for Trade, confirming the conclusion of the negotiations in London.
The UK is the world’s 6th largest market by nominal GDP and the 2nd largest in Europe, as well as a global financial and investment hub with the highest market share in international banking and foreign exchange transactions. However, trade volume and exports to the UK are only ranked around 20th globally, necessitating improved market access through these 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 high-speed rail and major service markets.
The two countries had already opened most of their goods markets under the original Korea-UK FTA, so additional market opening was not discussed in this negotiation. Instead, the strict rules of origin applied to key export items were eased to allow Korean companies to more easily benefit from FTA preferential tariffs, and achievements were made in other market opening areas such as government procurement and services. Notably, the value-added criteria for electric vehicles, which vary greatly depending on the price of imported raw materials like lithium and graphite, were relaxed.
The revised Korea-UK FTA also introduces new trade norms, establishing comprehensive cooperation frameworks in areas such as digital trade, supply chains, and innovation. The two countries agreed to strengthen data trade norms by including new rules such as the free transfer of cross-border data, prohibition of localization requirements for computing facilities, prohibition of source code submission requirements, and online consumer protection norms. The government plans to promptly complete the procedures for formal signing, including legal review and Korean translation of the agreement text.