8:56 am, October 17, 2023
The UK and South Korea have shaken hands on a two-year extension of low or zero tariffs on mutual trade of products with parts from the EU.
The government hailed the agreement a major boost for the car industry on Monday (Oct 16), which will see firms avoiding high tariffs imposed on products entering South Korea.
British businesses would have been slapped with tariffs on January 1, 2024, when exporting products to the country if they were made with components from the European Union, or were shipped via the EU.
The tariffs would have been high, particularly for electric cars and may have resulted in prices being hiked up.
The government said goods make up the majority of UK exports to South Korea, and were worth £7.3bn last year.
Automotive is the second largest British export to South Korea.
Minister for international trade Nigel Huddleston said: ‘This is fantastic news for UK businesses who can continue selling their brilliant goods with confidence to South Korea, a fast-growing market of the future with a high demand for quality British products.
‘It provides welcome certainty as we prepare to kickstart negotiations on an exciting new trade deal set to turbocharge our already thriving £18bn trading relationship and boost British exports.’
Society of Motor Manufacturers and Traders chief Mike Hawes said: ‘We welcome this announcement as it avoids the re-imposition of duties from January 2024.
‘In the first half of the year, South Korea was our seventh biggest car export market and the third biggest supplier of new passenger cars for UK buyers – so duty liabilities would have been bad for both sides.
‘We look forward to the start of negotiations and swift conclusion of a modernised trade deal that delivers more benefits to our respective automotive sectors, in particular boosting trade in EVs and related technologies.’
