South Korea and the U.K. launched the second round of negotiations to improve their bilateral free trade agreement (FTA) in London from March 19 to 22. The talks, involving about 50 representatives from both sides, aim to strengthen cooperation in services, digital, SMEs and good regulatory practices while discussing the introduction of new trade norms. The upgraded FTA is expected to boost South Korean exports and investments, promote collaboration in areas like gender and clean energy and enhance supply chain stability.

Concurrently, South Korea’s deputy trade minister Yang Byeong-nae and Lithuania’s vice foreign minister Egidijus Meilunas met in Seoul on March 19 to explore expanding bilateral trade, investment and economic cooperation. They agreed to focus on advanced industries, particularly R&D collaboration in the laser and biohealth sectors, and signed a memorandum of understanding (MOU) on industrial technology cooperation between their respective agencies.

Why It Matters

South Korea’s meetings with the U.K. and Lithuania highlight its efforts to diversify its trade partnerships amid intensifying competition between the U.S. and China. Having left the EU, the U.K. seeks to redefine its trade relationships, while South Korea aims to maintain its export competitiveness in Europe. However, negotiations will likely be challenging as both nations must navigate domestic political pressures and potential conflicts with existing trade agreements.

Expanding bilateral trade and economic cooperation between Seoul and Vilnius could be beneficial, given Lithuania’s expertise in niche sectors, which may help South Korea counter China’s growing regional assertiveness and supply chain dominance. However, Beijing may view this relationship with unease. Lithuania, driven by its “values-led” foreign policy, allowed Taiwan to open a de facto embassy in Vilnius in 2021, which drew a fierce response from China. Given President Yoon Suk-yeol’s previous remarks about his administration’s values-based foreign policy, Beijing could interpret South Korea’s economic cooperation with Lithuania as a further sign of the ROK’s alignment with Washington.

Further, it is unclear if such narrow bilateral relationships with Lithuania will significantly boost South Korea’s economic resilience, given the Baltic nation’s limited influence on global trade.