Unlocking Opportunities: Exploring the Benefits of an ENHANCED UK-South Korea FTA
- Arne Mielken
- Nov 25, 2023
- 6 min read
The UK's adoption of a strategic approach to enhance the UK-South Korea Free Trade Agreement is a testament to its unwavering commitment to fostering mutually beneficial relationships with its partners. But what does it say?
Why does bilateral trade between the UK and South Korea matter?
UK and RoK (Republic of South Korea) are discussing to update their FTA. The UK's trade with the RoK increased from £7.4 billion in 2011 to £18.3 billion in 2022 under the 2021 agreement. The UK-RoK FTA, one of the RoK's deepest accords, gives UK enterprises a solid base to enter the RoK market. The deal liberalises over 99% of goods export tariff lines, supporting innovation and IP.
Business advantages
Business advantages from clearer rules of origin, assistance for SMEs, and digitization of customs processes are the goal of UK-RoK trade discussions.
The UK wants to participate more in the Indo-Pacific, and the RoK is key.
The UK-RoK FTA will strengthen and sustain the partnership. Optimising the agreement to support important features would boost the UK-RoK collaboration and establish the UK's Indo-Pacific position.
The negotiation will help more UK firms capitalise on RoK market prospects, leverage contemporary trade instruments, and safeguard enterprises and consumers from global pressures.
What was the result of the Call for Input?
Following a Call for Input (CfI) with over 100 answers from UK citizens, industry, and civil society, the UK government has produced a detailed trade negotiating strategy with the Republic of Korea (ROK). Stakeholders submitted separate responses to the eight-week CfI.
What are the negotiating goals under the UK-South Korean FTA?
The DBT has set negotiating goals to upgrade the UK-ROK FTA, preserve extensive access to goods and services markets, investor access, and labour, environment, and competition regulation.
The government will also defend the NHS and continue to consult with companies, civil society, Parliament, and other stakeholders to form the deal. Existing and new supply chains will get preferential access and assurance from the UK government and Korean partners.
What is in the Agreement in a nutshell?
The UK-RoK agreement promotes customs, technical trade obstacles, sanitary and phytosanitary problems, service trade, financial services, and investment cooperation.
Trade in services, establishment, and e-commerce is covered in the agreement, avoiding quantitative limits and unfair treatment of UK providers.
The agreement also covers regulatory openness, professional qualification recognition, temporary business entrance, and sector-specific measures.
Stakeholders want Technical Barriers to Trade chapter continuity, transparency, and regulatory collaboration.
The agreement allows fair and equal access to each other's financial services markets in certain industries.
A provision on "Establishment" allows wide market access for services and non-services investments in the agreement.
To ensure stability and defend the NHS, the UK and RoK will retain a clear and transparent investment structure.
The UK-RoK FTA has a minor section on e-commerce and a contractual promise to avoid customs duties on electronic delivery.
What about Origin Rules?
The UK-RoK trade agreement has a Rules of Origin (RoO) clause that allows for restricted use of EU components in commerce.
CfI respondents suggested updating the RoO chapter to simplify administrative procedures and modernise it. Respondents advocated for UK merchants to maintain flexible input sourcing and use their current supply networks.
Both UK and RoK firms want preferred access and predictability for supply chains, which the UK government acknowledges.
The UK wants to maintain privileged access and certainty for current and future supply chains with our Korean partners. Additionally, we want to lower administrative expenses for firms by establishing predictable, low-cost agreements, simplifying and lowering trade costs with the RoK.
What about Trade Facilitation and Customs?
The UK-RoK agreement fosters collaboration towards transparent and streamlined customs processes, facilitating trade and reducing financial, administrative, and operational burdens for merchants.
In the CfI, stakeholders indicated interest in digitising customs operations and paperwork. We were asked by stakeholders to simplify or accelerate the discharge of goods from customs.
We will revamp customs processes to improve predictability and efficiency, and encourage digitization and automation.
What about digital trade?
The UK exports the third-most digital goods and South Korea the 14th-most. Digital commerce stakeholders worry about streamlining customs processes, working on new technologies, and broadening data provisions.
The UK and RoK will agree on digital trade obligations to ensure open and trustworthy cross-border data flows and accelerate international commerce using digital technology. The deal covers government procurement and IP rights.
More about the agreement
The UK may use trade remedies, dispute resolution, and trade and sustainable development provisions under the UK-RoK agreement. The agreement covers market distortion, competition policy, and state-owned companies. It lacks ambitious innovation and gender equality requirements. The Global Innovation Index ranks the UK 4th and the RoK 6th in innovation. The agreement will work with the RoK to assist SMEs fully benefit from the FTA and handle export procedures. The pact also lacks trade and gender equality clauses. The deal will be transparent and simple to use, and the UK will prevent corruption. The agreement safeguards the power to control public services like the NHS and broadcasters. The agreement covers all four UK countries.
The UK-ROK Free Trade Agreement (FTA) now gives UK exporters preferential Korean market access. Tariff and descriptive analysis are used in the Scoping Analysis to identify remaining trade obstacles and analyse the economic effect of upgrading the FTA. The UK-RoK trade partnership has more than quadrupled since 2011, reaching £18.3 billion in 2022. The RoK supplied 25% of UK goods imports, mostly vehicles. UK goods imports from Korea are duty-free on 99.6% of tariff lines under the agreement. Cars, clothes, and non-ferrous metals are UK top exports to the RoK.
Download the Strategic Approach
4-In-1 Support Services: How to get more support
1. Customs & Global Trade Updates (Fee Subscription): www.customsmanager.info
2. Customs & Global Trade Consultancy & Advice (Free First Call): https://www.customsmanager.org/consultancy
3. Customs & Global Trade Training & Education: https://www.customsmanager.org/education-training
4. Compliant & efficient UK Customs Clearance: https://www.customsmanager.org/customs-agent
Connect with us on socials
X: @customsmanager
Get in Touch
· Website: www.customsmanager.org
· E-Mail: info@customsmanager.org
About Customs Manager’s Customs & Global Trade Intelligence Services
The Premium Professional Legislative Monitoring Service (PLM) is a research and curation service which checks for legislative updates from official government websites based on the selected jurisdictions and topics. Paid Plan subscribers can access regular law change notifications to ensure they never miss a significant legal change on www.customsmanager.info – a website dedicated to customs & trade intelligence. At the same time, they save valuable time by engaging our dedicated trade specialists to carry the monitoring out for them. Premium subscribers also unlock all content on the Customs Manager’s Ltd. website, including our Customs & Trade Blog on www.customsmanager.info , providing vital thought leadership development services to empower them to trade effectively, efficiently and, of course, compliantly, across borders. Premium Subscribers can add jurisdictions and topics for an additional charge.
About Customs Manager Ltd.
We aim to empower people with import, export and transport responsibilities with helpful advice, insightful training and relevant trade intelligence services. We devote all our passion and energy to helping businesses grow faster cross-border. Working with us means having your own multilingual Customs Manager on standby to help you trade effectively, efficiently and, of course, compliantly wherever you want to go. Includes Brexit support and the ability to lodge customs declarations and making sense of rules of origin, customs classification and customs valuation to make but a few.
Important Notice
Customs Manager Ltd. owns the copyright in this document, except for external documents and links we refer to or make available.
You are not allowed to use this information in any way that infringes its intellectual property rights. You may have to hold a valid licence to use this information. A licence can be obtained by becoming a Paid Plan subscriber to the Customs Managers’ Customs & Trade Intelligence service, also known as Professional Legislative Monitoring (PLM). As a Paid Plan subscriber, you may download and print this information which you may then use, copy or reproduce for your internal non-profit-making purposes. However, you are not permitted to use, copy or reproduce this information to profit or gain. In addition, you must not sell or distribute this information to third parties, not members of your organisation, whether for monetary payment or otherwise. This information is intended to serve as general guidance and not constitute legal advice. The application and impact of laws can vary widely based on the specific facts involved. This information should not be used as a substitute for consultation with professional legal or other competent advisers. Before making any decision or taking action, consult a Customs Manager Ltd. professional.
In no circumstances will Customs Manager Ltd be liable for any decision made or action taken in reliance on the information contained within this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.
Comments