The government says the “upgraded” tie-up will boost the existing £ 16 billion–a–year trade between Britain and the South-East Asian powerhouse.
It comes after Rishi Sunak and his Korean counterpart agreed a new accord that will see £21 billion of business investment into the UK.
The investment in renewable energy and infrastructure projects will support more than 1500 highly skilled jobs across the UK.
News that trade talks are set to get underway caps a blockbuster November for Ms Badenoch who has already signed a massive trade deal with Florida – which has a GDP of £1.1 trillion.
A mega free trade agreement with India is also on the horizon, while Britain earlier this year joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) Indo-Pacific trade bloc in the biggest post-Brexit deal to date.
South Korea is the 13th largest economy in the world and its import demand is set to grow rapidly.
Trade talks with Turkey will also begin shortly.
With around 45 million middle-class consumers and an import market expected to grow by 45 per cent by 2035, the market presents massive opportunities for UK companies.
The UK and South Korea are both major modern economies with big digital sectors and the current trade deal, negotiated more than a decade ago, doesn’t include digital chapters that reflect the modern economy.
With nearly 80 per cent of UK services exports to Korea delivered digitally in 2021, securing modern digital provisions could unlock big opportunities for UK businesses.
The UK’s trade with South Korea has more than doubled in current prices since our existing trade deal was agreed in 2011.
An upgraded trade deal is expected to boost our £16 billion annual trading relationship with South Korea, supporting jobs and livelihoods up and down the UK.
Speaking ahead of the launch, Business and Trade Secretary Ms Badenoch said: “The government is upgrading our trade deal with South Korea to ensure that our trading relationship plays to the UK’s strengths as an advanced, high-tech economy.
“This refreshed, modernised deal will boost our world-leading services sector, while also creating new opportunities for UK exports such as in our world-leading food and luxury goods sectors.”
Foreign direct investment from Korea stood at just £1.9 billion in 2021.
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The new investment includes £9.7 billion to fund UK renewables, green infrastructure and waste management projects.
Another £2 billion by Shinhan Financial Group will drive investment into renewable energy and infrastructure projects across the UK.
Food and drink company SPC will invest £150 million in food and drink to establish 200 cafés across the UK, creating 400 jobs.
The new business investment tie-up was announced as South Korean President President Yoon Suk Yeol arrives in the UK for a state visit today.
The Downing Street Accord follows the signing of similar partnerships with Singapore and Japan earlier this year.
Prime Minister Rishi Sunak said: “Long-term, global partnerships are vital to our prosperity and security, both today and in the future.
“As two nations focussed on innovation, harnessing new technologies and defending the international rules-based order, the UK and the Republic of Korea are natural partners.
“Through our new Downing Street Accord, we will drive investment, boost trade and build a friendship that not only supports global stability, but protects our interests and lasts the test of time.
“These close ties have already propelled £21 billion of investment between our countries, and I know a Free Trade Agreement fit for the future will only drive further investment, delivering on my promise to grow the economy and support highly skilled jobs.”
The future-focussed Accord also includes agreements to work closer together to harness the potential of critical technologies like AI, quantum and semiconductors to create jobs and unlock economic growth.
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