SEOUL, Dec. 16 (Yonhap) — South Korea and Britain have signed an upgraded free trade agreement (FTA) aimed at easing rules of origin for Korean automobiles and consumer goods, as well as opening up the latter’s high-speed rail and online game markets, Seoul’s trade ministry said Tuesday.
The deal was jointly signed by Korean Trade Minister Yeo Han-koo and his British counterpart, Chris Bryant, during their bilateral meeting in London, following two-year negotiations between the two countries.
The original FTA between Seoul and London was signed in 2019 and implemented in 2021.
South Korean Trade Minister Yeo Han-koo (R) shakes hands with his British counterpart, Chris Bryant, after they signed an upgraded free trade agreement aimed at easing rules of origin for Korean automobiles and consumer goods in London on Dec. 15, 2025 (local time). (Yonhap)
Under the renewed deal, Britain decided to ease rules of origin for automobiles, beauty and food products exported by Korea, according to the Ministry of Trade, Industry and Resources.
Currently, Korean carmakers are eligible for tariff-free treatment only if they prove that at least 55 percent of a vehicle’s value, including parts and materials, was generated within Korea.
But the revised agreement will lower the requirement for tariff exemption to 25 percent, making it easier for automakers to qualify for preferential treatment.
Automobiles are one of Korea’s key export items to Britain, accounting for 36 percent of Korea’s total exports to the European nation last year, according to the ministry.
Korean beauty products, which are subject to 8 percent duties, will be able to get tariff exemptions if manufacturing procedures, such as chemical reactions, purification, mixing and blending, are carried out in the exporting country.
Processed food products exported from Korea, including dumplings, “tteokbokki,” “gimbap” and kimchi, will receive the preferential treatment even in cases where products were made domestically using major ingredients sourced from third countries. Currently, they can only face zero tariffs when key ingredients originate from Korea.
Cars await shipment abroad at a port in Pyeongtaek, about 60 kilometers south of Seoul, in this Dec. 1, 2025, file photo. (Yonhap)
In the government procurement sector, Britain has agreed to open up its high-speed rail market. Until now, Korea had been the only side to grant access to this market.
In the service sector, the European nation pledged to additionally open up its online game market, an area in which Korean companies show global competitiveness, and markets related to emerging technologies, such as artificial intelligence (AI).
The ministry said the two sides also streamlined their visa system under the upgraded FTA to facilitate the entry of Korean engineers and special workforces responsible for building manufacturing plants in Britain.
The move is aimed at preventing disruptions similar to an incident in the U.S. state of Georgia, where hundreds of Korean nationals were arrested in an immigration raid at a car battery plant in early September and later released.
Meanwhile, the two countries also agreed to adopt regulations for digital trade, including those related to liberalization of cross-border data transfers and online consumer protection, while introducing advanced regulations on investor protection and investment promotion that will replace the existing bilateral investment treaty signed in 1976.
They also agreed to deepen bilateral cooperation in AI and advanced technologies by setting up the so-called innovation committee, and bolster supply chain collaboration, the ministry said.
Following the deal signing ceremony, Yeo told reporters in London the upgraded FTA between Korea and Britain includes “new types of trade norms,” such as supply chain cooperation, digital innovation and modern investment rules, distinct from past trade agreements.
“Like-minded countries should join forces to uphold multilateral systems and free trade to maintain the rules-based international order at the times of rapid shifts in global order,” he said.
nyway@yna.co.kr