UK and South Korea conclude upgraded Free Trade Agreement

17 July 2026

 

The UK and the Republic of Korea have concluded negotiations on an upgraded Free Trade Agreement (FTA), marking another significant step in the UK's programme of modernising its trade agreements with key international partners.

The new agreement builds on the existing UK–South Korea trade agreement, which has been in force since 2021, and introduces updated provisions covering digital trade, services, customs cooperation, investment and supply chain resilience. It is designed to make trade between the two countries faster, simpler and more predictable for businesses.

South Korea is one of the UK's largest trading partners in the Asia-Pacific region, with bilateral trade worth around £15.8 billion. According to the UK Government, the upgraded agreement is expected to increase UK services exports by more than £400 million annually in the long term, while strengthening opportunities across manufacturing, technology, financial services and professional services.

What does this mean for UK businesses?

The upgraded agreement introduces a range of improvements intended to support businesses trading with South Korea.

Potential benefits include:

  • Modernised digital trade rules to support cross-border business.
  • Improved market access for UK service providers.
  • Streamlined customs procedures to facilitate faster trade.
  • Enhanced cooperation on supply chains and innovation.
  • Greater certainty for businesses investing or expanding into the Korean market.

The agreement also updates Rules of Origin, helping businesses continue to qualify for preferential tariff treatment while reflecting modern manufacturing and global supply chains. It provides greater certainty for exporters by preserving tariff-free access across the vast majority of goods traded between the two countries.

Opportunities for exporters

The UK Government expects the agreement to benefit businesses across a wide range of sectors, including:

  • Advanced manufacturing
  • Automotive
  • Food and drink
  • Financial and professional services
  • Digital and technology businesses

For exporters already trading with South Korea—or considering entering the market—the updated agreement aims to reduce administrative barriers while making it easier to compete in one of Asia's leading economies.

Although negotiations have concluded, the agreement must still complete each country's domestic legal and ratification processes before it enters into force. Businesses should therefore continue trading under the existing UK–South Korea Free Trade Agreement until the upgraded agreement is formally implemented.

 

By Carla Assunção, Chamber International

 

We can help businesses understand free trade agreements, Rules of Origin and the documentation required to claim preferential tariff treatment. Speak to our team.

Businesses looking to maximise the benefits of free trade agreements may also be interested in our Rules of Origin Workshop on 28 July 2026. Find out more and reserve your place.

 

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