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

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

The government said the agreement 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”.

It marks the fourth trade agreement struck since Labour took office, following deals with the European Union, the US and India.

But UK economic growth, the government’s top priority, has remained sluggish and the BBC understands part of the US agreement, regarding technology, 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 £150bn worth of US investment, which it said would create 7,600 jobs, with firms such as Microsoft and Google pledging to spend billions in the UK. It also sought to strengthen ties on AI, quantum computing and nuclear power.

However, talks on the agreement are now being held up because of US concerns about what it considers to be wider UK trade barriers.

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 opportunity for hardworking people in both countries.”

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

Parts of the UK’s trade agreement with South Korea were set to expire in January 2026, but the new deal will protect £2bn of UK exports from an increase 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 in 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 win for British business”.

“This deal making trade even easier between us will help boost the economy – supporting jobs and growth which will be felt all over the country,” he said.

Bryant said the deal would give “cast-iron protections to our key industries to speed up economic growth as part of our Plan for Change”.

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

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

South Korea’s trade minister told the BBC that South Korea and Britain’s economies “are complementary”, and denied that the fall in trade between the nations suggested the relationship wasn’t as important as it used to be.

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

“So these two economies can win by co-operating closer through this kind 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 South Korean deal is the latest in a series of post-Brexit trade agreements, but the independent budget forecaster, the OBR, has so far deemed deals done with those larger partners as unlikely to make a measurable impact on the UK economy by 2030.

The government has said that its various trade agreements struck this year will grow the British economy by creating jobs and cutting red tape for small businesses.

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

That deal in particular was criticised for potentially undercutting British workers.

India is the UK’s 10th-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 South Korean deal.

Frank-Steffen Walliser, chairman and chief executive of Bentley Motors, said that South Korea is a key market for the company and the wider luxury vehicle market.

“To secure immediate ongoing access to South Korea and a positive long term trade deal, is great news. Smooth international trade is vital to UK automotive business growth.”

Diageo’s interim chief executive Nik Jhangiani said it would “help satisfy the growing demand from South Korean consumers” for Guinness, which is canned in Runcorn, Cheshire.

Emily Weaver Roads, interim international director at the Scotch Whisky Association, said the Asia-Pacific region was the largest regional market by value for whisky.

“The reduction of trade barriers in the Republic of Korea will further enhance Scotch Whisky’s access to an important market, especially for single malts.”

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

The deal “gets goods through the ports quicker,” he said.