UK car makers are celebrating a two-year extension to rules which help British companies to access lower or zero tariffs when selling goods to South Korea.
The extension has been secured under the UK-South Korea free trade agreement and comes as welcome news for businesses who can continue to avoid the high tariffs imposed by South Korea on products entering the country.
South Korea is the 13th largest economy in the world and set to grow rapidly with an import market expected to grow 45% by 2035. The UK’s trade with Korea has more than doubled since the original FTA was negotiated.
Goods make up the majority of UK exports to South Korea, with £7.3 billion worth exported last year. A broad range of British manufacturing sectors are expected to benefit from the extension, including food and drink and automotive, which is the second largest British export to South Korea.
Minister for International Trade Nigel Huddleston said that when the UK negotiated the original trade agreement with South Korea, rolled over from our membership of the EU, time-restricted clauses were agreed to allow for the use of EU content in UK products in meeting the EU-South Korea rules of origin and on shipping goods via the EU. Both clauses were set to expire on 1 January 2024.
“The extensions will apply for a further two years while the UK and South Korea work on new, permanent rules as part of an enhanced free trade agreement. Today’s agreement allows for both parties to extend this period further, if needed, “ he said.
Society of Motor Manufacturers and Traders chief executive 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.”
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- Source: https://www.am-online.com/news/manufacturer/2023/10/16/uk-manufacturers-salute-south-korea-tariff-deal
