UK automotive makers are celebrating a two-year extension to guidelines which assist British firms to entry decrease or zero tariffs when promoting items to South Korea.
The extension has been secured below the UK-South Korea free commerce settlement and comes as welcome information for companies who can proceed to keep away from the excessive tariffs imposed by South Korea on merchandise coming into the nation.
South Korea is the thirteenth largest economic system on the earth and set to develop quickly with an import market anticipated to develop 45% by 2035. The UK’s commerce with Korea has greater than doubled for the reason that unique FTA was negotiated.
Items make up the vast majority of UK exports to South Korea, with £7.3 billion value exported final yr. A broad vary of British manufacturing sectors are anticipated to profit from the extension, together with foods and drinks and automotive, which is the second largest British export to South Korea.
Minister for Worldwide Commerce Nigel Huddleston stated that when the UK negotiated the unique commerce settlement with South Korea, rolled over from our membership of the EU, time-restricted clauses had been agreed to permit for using EU content material in UK merchandise in assembly the EU-South Korea guidelines of origin and on transport items by way of the EU. Each clauses had been set to run out on 1 January 2024.
“The extensions will apply for an additional two years whereas the UK and South Korea work on new, everlasting guidelines as a part of an enhanced free commerce settlement. At this time’s settlement permits for each events to increase this era additional, if wanted, “ he stated.
Society of Motor Producers and Merchants chief government Mike Hawes stated: “We welcome this announcement because it avoids the re-imposition of duties from January 2024. Within the first half of the yr, South Korea was our seventh greatest automotive export market and the third greatest provider of recent passenger vehicles for UK patrons – so responsibility liabilities would have been dangerous for either side.
“We stay up for the beginning of negotiations and swift conclusion of a modernised commerce deal that delivers extra advantages to our respective automotive sectors, particularly boosting commerce in EVs and associated applied sciences.”