South Korea and Britain have signed an upgraded free trade agreement in London, easing rules of origin for Korean automobiles and consumer goods while opening markets in high-speed rail and online gaming. The deal, following two years of negotiations, was jointly signed by Korean Trade Minister Yeo Han-koo and his British counterpart, Chris Bryant. The original FTA was signed in 2019 and implemented in 2021.
South Korea and Britain signed an upgraded free trade agreement on December 16, 2025, in London. The deal eases rules of origin for Korean automobiles, beauty, and food products, while opening Britain's high-speed rail and online game markets. According to the Ministry of Trade, Industry and Resources, automakers now qualify for tariff-free treatment with just 25 percent of a vehicle's value generated in Korea, down from 55 percent. Automobiles accounted for 36 percent of Korea's exports to Britain last year. Beauty products, currently facing 8 percent duties, gain exemptions if manufacturing processes like chemical reactions, purification, mixing, and blending occur in the exporting country. Processed foods such as dumplings, tteokbokki, gimbap, and kimchi receive preferential treatment even when using major ingredients from third countries, unlike the current requirement for Korean origins. Britain agreed to open its high-speed rail procurement market, previously accessible only from Korea's side. In services, it pledged access to the online game sector—where Korean firms excel globally—and emerging technology markets like artificial intelligence (AI). The agreement streamlines visas for Korean engineers and specialized workers building manufacturing plants in Britain, aiming to avoid disruptions like the early September immigration raid at a car battery plant in Georgia, U.S., where hundreds of Korean nationals were arrested and later released. It introduces digital trade regulations on cross-border data flows and online consumer protection, plus advanced investor protection rules replacing the 1976 bilateral investment treaty. The two sides will establish an innovation committee for AI and advanced technologies and enhance supply chain collaboration. Following the signing, Minister Yeo Han-koo told reporters the upgraded FTA includes "new types of trade norms," such as supply chain cooperation, digital innovation, and modern investment rules, distinct from past 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. The pact is expected to reinforce free market principles amid rising protectionism.
