Key Takeaways
- The UK and South Korea have finalized a trade deal that will create thousands of jobs and bring billions into the British economy.
- The deal will maintain tariff-free trade on most goods and services, with 98% of trade continuing to be tariff-free.
- British industries such as pharmaceuticals, car manufacturing, alcohol, and financial services are expected to benefit from the deal.
- The agreement will protect £2bn of UK exports from an increase in tariffs and provide "cast-iron protections" to key industries.
- The deal is the fourth trade agreement struck by the Labour government, following deals with the EU, US, and India.
Introduction to the UK-South Korea Trade Deal
The UK and South Korea have finalized a trade deal that is expected to have a significant impact on the British economy. The deal, which was announced by Trade Minister Chris Bryant and his Korean counterpart Yeo Han-koo, will maintain tariff-free trade on most goods and services, with 98% of trade continuing to be tariff-free. This is the same terms that the EU has with South Korea, and which the UK maintained temporarily after Brexit. The agreement will protect £2bn of UK exports from an increase in tariffs and provide "cast-iron protections" to key industries.
Benefits of the Trade Deal
The deal is expected to benefit British industries such as pharmaceuticals, car manufacturing, alcohol, and financial services. These industries are expected to see an increase in trade and investment, which will create thousands of jobs and bring billions into the British economy. The agreement will also provide new digital and investment protections, making it easier for businesses to operate in both countries. Prime Minister Keir Starmer has said that the deal is "a huge win for British business" and will help boost the economy, supporting jobs and growth across the country.
Reaction from Business Leaders
Business leaders in the UK have welcomed the news of the trade deal. Companies such as Bentley Motors, Jaguar Land Rover, and Guinness owner Diageo have praised the agreement, saying it will help them to expand their operations in South Korea. Frank-Steffen Walliser, chairman and chief executive of Bentley Motors, said that the deal is "great news" and will help to secure ongoing access to the South Korean market. Diageo’s interim chief executive Nik Jhangiani said that the deal will help to satisfy the growing demand from South Korean consumers for Guinness.
Impact on the UK Economy
The trade deal with South Korea is the latest in a series of post-Brexit trade agreements. However, the independent budget forecaster, the OBR, has said that these deals are 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. However, its own assessment has shown that the deal with India will only increase GDP by between 0.11% and 0.14%. Despite this, the government remains optimistic about the impact of the trade deal with South Korea, saying it will help to boost the economy and support jobs and growth across the country.
South Korea’s role in UK Trade
South Korea is the UK’s 25th largest trading partner, accounting for 0.8% of the UK’s total trade. While trade between the two countries has fallen in recent years, with UK exports to South Korea falling 16.4% and South Korean exports to the UK falling 10.8%, the new agreement is expected to help to increase trade and investment. South Korea’s trade minister, Yeo Han-koo, has said that the two economies are "complimentary" and that the new agreement will help to reduce non-tariff barriers and create new digital and investment protections. He has also said that 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.
Conclusion
In conclusion, the trade deal between the UK and South Korea is expected to have a significant impact on the British economy. The agreement will maintain tariff-free trade on most goods and services, protect £2bn of UK exports from an increase in tariffs, and provide "cast-iron protections" to key industries. While the impact of the deal on the UK economy is still uncertain, business leaders have welcomed the news, saying it will help to expand their operations in South Korea and create thousands of jobs. As the UK continues to navigate the post-Brexit trade landscape, the deal with South Korea is an important step towards securing new trade agreements and boosting the economy.
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