According to Yonhap news agency of Korea, the British government said that South Korea and the United Kingdom have decided to extend the temporary clause in the Korea-UK Free Trade Agreement (FTA) on the identification of EU raw materials as British raw materials by two years to 2025. After Brexit, the Korea-UK FTA came into effect at the beginning of 2021, and the two sides agreed to apply zero tariffs to British products made with EU raw materials within three years. If the provisions are not extended this time, high tariffs will be imposed on British products such as cars, food and drinks made from EU raw materials and exported from Britain to Korea in January next year.
Trade between Korea and the UK is worth 18 billion pounds a year, and Korea is the seventh largest export market for British-made cars, while Korean cars are the third largest import market for British cars. In addition, the two countries will begin negotiations on the revision of the bilateral FTA at the end of this year.