According to Pulse by Maeil Business News Korea,

Commemorating 140 years of bilateral diplomatic relations, South Korea and the United Kingdom have agreed to the Downing Street Accord (DSA) that further expands bilateral economic cooperation, especially in the field of high-tech industries.

Following the agreement, the two countries will seek to expand bilateral trade, broadening the scope of cooperation to areas such as science and technology, supply chain security, and energy solidarity, beyond security and defense.

Under the accord, both countries have also agreed to begin negotiations to upgrade the existing Korea-U.K. free trade agreement (FTA) to tap the significant potential in bilateral trade between the two nations. “Through the negotiations to revise the existing FTA, agreed upon during this visit, environments that promote free trade and investment can be fostered, leading to new business opportunities for businesses in both countries,” the presidential office said.

The Korea-U.K. FTA came into effect in 2021, after being concluded in August 2019 following the United Kingdom’s decision to exit the European Union. During the negotiations, Korea aims to focus on improving market access, establishing digital trade norms, and enhancing supply chain cooperation. The discussions will also cover easing the country-of-origin criteria to reflect actual industrial conditions and facilitate exports, particularly for electric vehicles, and entering government procurement markets such as high-speed rail, according to the presidential office.

Of note are the measures to boost digital trade, widening digital trade areas to include small and medium-sized enterprises, as well as fintech and artificial intelligence (AI) companies, while pushing for agendas including paperless trade. The existing agreement only includes two provisions related to e-commerce norms, and a new section on ‘Korea-U.K. FTA investment’ is also anticipated to be covered at the negotiations.

The two governments also plan to sign six memoranda of understanding (MOUs) covering different sectors during a business forum scheduled for Wednesday. With an MOU for semiconductor cooperation, the two countries expect to build a robust semiconductor supply chain for the future and create a mutually beneficial relationship, especially given that the United Kingdom is home to chip design company Arm Ltd. and Korea to chipmakers, including Samsung Electronics Co. and SK hynix Inc.

Other areas of MOUs between the two governments will include the joint declaration to launch negotiations to upgrade the FTA, defense cooperation that will be signed between Korea’s Defense Acquisition Program Administration and the U.K. Department of Trade and Industry, and nuclear power plant cooperation. For nuclear power, eight more MOUs will be signed between businesses and institutions that span the entire nuclear ecosystem, alongside one between the two governments.

An additional 31 MOUs are anticipated to be signed among Korean and U.K. businesses and entities in advanced industries, including energy, AI, defense, biotechnology, and finance. Korean companies, including Hanwha Aerospace Co., Hyosung Heavy Industries Corp., and Kyung Dong Navien Co., secured exports totaling 270 billion won ($209 million) with U.K. companies. “Korean companies have committed more than 21 billion pounds ($26.3 billion) in new investments and an additional 3 billion pounds in trade,” according to the U.K. Prime Minister’s Office.

Cooperation in the defense and security sectors is also set to be significantly strengthened. Both countries agreed to expand joint exercises and enhance cooperation in defense and security, including joint maritime patrols, to enforce United Nations Security Council sanctions on North Korea.

By Park Yun-gyun, Lee Sae-ha, Kim Sung-hoon, and Chang Iou-chung

Copyrights Pulse by Maeil Business News Korea. All Rights Reserved.

Source: Pulse by Maeil Business News Korea (November 22, 2023)