Korea and the UK (UK) have lastly concluded Korea-UK Free Commerce Settlement (FTA) enchancment negotiations after greater than two years of talks. The scope of tariff-free advantages for vehicles, which account for roughly one-third of Korea’s exports to the UK, might be expanded, and the UK’s high-speed railway market might be opened, elevating expectations for elevated export results.
The Ministry of Commerce, Trade and Sources introduced on Dec. 16 that Chief Commerce Negotiator Yeo Han-gu and UK Minister of State for Commerce Chris Bryant concluded the Korea-UK FTA Enchancment Negotiations and signed a joint declaration in London, UK, on Dec. 15 (native time).
Following the UK’s Brexit declaration, each nations applied the Korea-UK FTA in 2021 with equivalent content material to the Korea-European Union (EU) FTA that took impact in 2011 to make sure continuity in commerce and funding. The 2 nations agreed to pursue follow-up negotiations inside two years after the FTA took impact, and after narrowing variations by way of six rounds of enchancment negotiations and 5 commerce ministerial conferences since early final yr, they lastly concluded the negotiations.
The Ministry of Commerce, Trade and Sources said, “Since most commodity markets have been already opened beneath the Korea-UK FTA settlement, extra opening was not mentioned this time,” including, “We secured outcomes by enjoyable strict origin requirements that utilized to our main export merchandise and in areas akin to authorities procurement and providers.”
For vehicles with a primary tariff of 10 p.c, beforehand corporations needed to show that 55 p.c or extra of value-added occurred within the contracting nation to obtain tariff-free advantages. Nevertheless, by way of this enchancment negotiation, this normal has been lowered to 25 p.c. The ministry evaluated that “vehicles accounted for 36 p.c of exports to the UK final yr,” and “notably for electrical autos, the value-added calculated varies considerably relying on the costs of imported uncooked supplies akin to lithium and graphite utilized in battery manufacturing processes, so this rest of value-added requirements will present a possibility for our corporations to stably get pleasure from FTA tariff advantages.”
Origin requirements for promising export gadgets akin to Ok-beauty and Ok-food have been additionally relaxed. Going ahead, chemical merchandise together with cosmetics (tariffs as much as 8 p.c) will obtain tariff-free advantages when processes akin to chemical reactions, refining, mixing, and mixing are carried out within the contracting nation. Processed meals akin to dumplings, tteokbokki, gimbap, and kimchi (tariffs as much as 30 p.c) presently require uncooked supplies like flour and greens to be produced inside the area for tariff-free remedy, however with this requirement eliminated, circumstances the place main elements are imported from third nations and produced domestically also can obtain tariff-free advantages.
Within the authorities procurement market, the UK will moreover open its high-speed railway market. Beforehand, solely Korea had unilaterally opened this market, however this imbalance has now been corrected.
Within the providers market, it was agreed to moreover open the web gaming sector the place Korean corporations have competitiveness. That is anticipated to offer a basis for increasing the European market entry of home video games. In new service sectors, a basis for Korean corporations’ entry into the UK was additionally established in service sectors newly rising based mostly on new applied sciences akin to synthetic intelligence (AI).
The visa system was additionally reorganized. It permits clean entry into the UK for Korean engineers and equipment and tools upkeep specialists in the course of the preliminary institution of producing crops within the UK, stopping incidents just like the one within the U.S. state of Georgia from occurring. Specifically, it permits using visa varieties that don’t require English proficiency, which was a serious barrier for technical personnel acquiring UK visas, and permits not solely Korean headquarters personnel but additionally associate firm personnel to be invited to the UK by way of service contracts. It was additionally agreed to simplify necessities and procedures vital for skilled personnel in biotechnology and data expertise (IT) sectors to enter and keep within the UK.
Within the cultural sector, it was agreed to use audiovisual providers to service and digital chapters, and to conclude a modernized audiovisual co-production settlement that features enhanced monetary help by revising the prevailing cultural cooperation protocol.
New norms have been additionally launched within the investor safety sector, establishing mechanisms to stop abuse of the Investor-State Dispute Settlement (ISDS) system.
In digital norm introduction and AI cooperation sectors, new norms have been considerably mirrored, together with liberalization of cross-border information transfers, prohibition of localization necessities for computing services, prohibition of supply code submission necessities, and on-line client safety norms.
Within the AI sector, detailed cooperation measures have been established with the UK, a technology-leading nation, and it was agreed to advertise strengthened analysis and growth between corporations, enhanced associated funding, and coverage cooperation for AI growth.
Provide chain cooperation will even be systematized. To reply to provide scarcity conditions for main uncooked supplies akin to uncommon earth parts, urea answer, and batteries, a provide chain cooperation chapter might be newly established, and cooperation in analysis and growth and worldwide standardization might be pursued.
When provide chain disruptions happen, each nations will maintain emergency conferences inside 10 days by way of designated hotlines to have interaction in fast export of disrupted gadgets and data sharing on different suppliers.
Moreover, the ‘Korea-UK Innovation Committee’ might be newly established to frequently talk about cooperation in expertise sectors akin to AI, autonomous autos, biotechnology, and superior manufacturing.
Chief Negotiator Yeo said, “This negotiation conclusion will function a possibility to solidify the free market order in a commerce atmosphere the place uncertainty has elevated because of the unfold of protectionism and strengthen financial cooperation relations with the UK, a key associate inside Europe,” including, “We’ll promptly full procedures akin to authorized overview and pursue procedures for settlement ratification together with Nationwide Meeting ratification with out setbacks.”
