9:15 AM 21st November 2023
South Korean Trade Negotiations Can Boost UK
Image by Lisy_ from Pixabay
Business and Trade Secretary Kemi Badenoch will tomorrow (22 November) launch talks on a modernised trade deal with South Korea to boost trade and strengthen our relationship with a key ally. Reacting to the news William Bain, BCC Head of Trade Policy, said:
“An improved trade deal with South Korea would be very welcome. It could deliver for the UK’s food and drink sector, manufacturing companies and services providers, as well as locking in record inward investment into the UK.
“South Korea is a vital export market for our Chamber Network, but also a key source of semi-conductors for the UK manufacturing sector, as well as many everyday consumer goods - such as cars, electrical goods and electronics.
“The BCC has been at the forefront of campaigns to expand and simplify digital trade for services as well as goods. Building on the ideas in our Trade Manifesto, these negotiations can create a new bespoke agreement which fires up online trade and e-commerce between our countries.
“We have clear interests to defend too. This includes continuing flexibility for manufacturing exports, preferential tariff treatment in the South Korean market, and trading terms for data flows and intellectual property.
“But we enter this process with hope and optimism. If Government works closely with business, throughout these negotiations, we can produce the best trading terms for economic growth with a key partner. This would benefit small, medium and large firms, across the UK.”
It comes as Korean businesses commit £21 billion of investment into the UK, backing renewable energy and infrastructure projects across the country and supporting more than 1500 highly skilled jobs.
South Korea is the 13th largest economy in the world and its import demand is set to grow rapidly. With around 45 million middle class consumers and an import market expected to grow by 45% by 2035, it presents massive opportunities for UK companies.
The UK and South Korea are both major modern economies with big digital sectors and the current trade deal, negotiated more than a decade ago, doesn’t include digital chapters that reflect the modern economy.
With nearly 80% of UK services exports to Korea delivered digitally in 2021, securing modern digital provisions could unlock big opportunities for UK businesses.
The UK’s trade with South Korea has more than doubled in current prices since our existing trade deal was agreed in 2011. An upgraded trade deal is expected to boost our £16 billion annual trading relationship with South Korea, supporting jobs and livelihoods up and down the UK.
Speaking ahead of the launch, Business and Trade Secretary Kemi Badenoch said:
"The government is upgrading our trade deal with South Korea to ensure that our trading relationship plays to the UK’s strengths as an advanced, high-tech economy. This refreshed, modernised deal will boost our world-leading services sector, while also creating new opportunities for UK exports such as in our world leading food and luxury goods sectors.”
The Business and Trade Secretary will launch negotiations alongside Korean Minister for Trade, Industry and Energy Bang Moon Kyu at the UK-Korea Business Forum at Mansion House as part of the state visit by Korean president Yoon Suk Yeol.
At the event, the UK and Korea will also announce a record £21 billion of investments in green energy and infrastructure projects across the UK. With foreign direct investment from Korea standing at £1.9 billion in 2021, this new investment package showcases the strength of the UK-South Korea trading relationship and will create more than 1500 skilled jobs and drive innovation across the country.
£9.7 billion investment by the Republic of Korea Sovereign Wealth Fund into UK assets over the next 10 years to fund UK renewables, green infrastructure and waste management projects;
£2 billion by Shinhan Financial Group to drive investment into renewable energy and infrastructure projects across the UK;
£650 million by wind turbine manufacturer SeAH Wind into a state-of-the-art monopile manufacturing facility at the Teesside Freeport site, creating 750 high-skilled jobs by 2030;
£150 million by food and drink company SPC to establish 200 cafés across the UK, creating 400 UK jobs and employing 200 local businesses in the wider supply chain;
£90 million by Hanwha Phasor in its new European Space Research and Development Hub in Cambridge, creating 100 highly skilled jobs.