Nov 20, 2023
South Korea’s Yoon to Talk AI in UK as Trade Negotiations Begin
Bloomberg News
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(Bloomberg) -- South Korean President Yoon Suk Yeol will arrive in the UK Tuesday to launch negotiations on a new Free Trade Agreement, as both he and British Prime Minister Rishi Sunak try to burnish their international credentials ahead of respective general elections.
Yoon will ride with his wife in a carriage to Buckingham Palace to meet King Charles III before delivering an address to the Houses of Parliament on the opening day of his three-day visit. He will meet with UK and South Korea business leaders and then Sunak on Wednesday.
During his trip, Yoon will launch negotiations on an updated Free Trade Agreement with the UK, as Sunak attempts to clinch closer relationships with overseas partners following Britain’s decision to part ways with the European Union.
It will be the latest in a string of similar talks between the UK and other nations — a much-heralded deal between the UK and India, which was one of the great promises of Brexit, is in its final stages but has yet to be agreed.
For Sunak, progressing trade negotiations with South Korea would be another way in which the embattled prime minister can claim he is forging ahead with plans to grow the UK economy, ahead of a general election expected in 2024. Currently Sunak’s Conservative Party is lagging the Labour opposition by about 20 percentage points in opinion polls.
Yoon, whose People Power Party is trying to retake control of parliament in an April election, has made foreign policy a key plank of his presidency, most notably with efforts to deepen South Korea’s relationship with the US and a mending of ties with Japan. The visit gives Yoon another chance to showcase his statesman-like credentials for an audience back home, but the tangible deliverables are likely to be limited compared with his visits to Washington and Tokyo.
Yoon’s party needs to win a majority to give him more scope for pushing through his policy agenda and avoid becoming a lame duck leader.
The South Korean and UK premiers will sign an accord designed to encourage investment between the two nations, and closer cooperation on the development of critical technologies such as artificial intelligence, quantum and semiconductors. This will include up to £4.5 million ($5.6 million) in joint research finding led by the Royal Society.
“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,” Sunak said in a statement. He is due to host prominent Korean investors at Downing Street Tuesday evening.
The current FTA between the UK and South Korea is a legacy of the deal signed between the EU and the Asian country in 2011. It is thought to be one of the most utilized trade deals which the UK has signed.
But as the provisions of the agreement come up for renegotiation, officials are understood to want to “future-proof” the arrangement by including provisions for digital services. Almost 80% of the UK’s services exports, in areas from legal advice to management consultancy, were delivered digitally in 2021.
South Korea is the seventh-biggest export market for British-made cars and the third-largest supplier of new cars to Britain, and UK negotiators want to use an updated FTA to help secure supply chains for electric vehicle production. The first formal round of talks is slated to take place in Korea in January, with future rounds alternating between the two countries.
Amid a time of heightened geopolitical tensions, defense is also due to be high on the agenda during Yoon’s visit. Both countries’ militaries are expected to step up joint training and operations to create “the most comprehensive exercise regime between the UK and any partner other than the US,” according to a statement from Number 10.
Fraught Week
Yoon’s visit comes during a fraught week in the UK, as Sunak tries to shore up his leadership following the sacking of Home Secretary Suella Braverman and the unexpected return of former Prime Minister David Cameron to the cabinet. Chancellor of the Exchequer Jeremy Hunt delivers his autumn economic and fiscal statement on Thursday as the party desperately tries to win over the electorate.
Still, for British premier, the visit may give him another chance to highlight the recent Bletchley Declaration aimed at bringing 28 countries together to address the challenges of AI. South Korea has already agreed to host a mini virtual summit on AI in the coming months in a followup to Sunak’s initiative.
Last month the UK sealed a two-year extension to trade rules between the countries enabling it to keep supplying goods that have a certain degree of EU content while still enjoying zero or lower tariffs. UK officials are understood to want to define so-called country of origin rules so they are still advantageous for Britain, even though materials for items like electric vehicle components may have come from abroad.
Foreign direct investment also remains stable between the two countries, even though the total amount remains well below a pre-pandemic high.
“When the UK exited the EU with Brexit, we had to sign an FTA, so at that time, it was hastily signed, so there are things to be supplemented,” Choi Sang-mok, Yoon’s adviser for economic affairs, said in a briefing ahead of the UK trip.
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