The British government announced on Monday an agreement has been reached with South Korea to extend a period of low or no tariffs on bilateral trade by two years until 2025.

According to Reuters, the expiration of the period would introduce high tariffs on British exports to South Korea, such as automobiles, food and drink products from January 1.

Britain's minister for international trade, Nigel Huddleston, reportedly said that extending the tariff-free period would provide welcome certainty for businesses, calling it "fantastic news" for British companies who can continue to confidently sell their goods to South Korea.

Annual trade between the two nations is about 18 billion pounds or 29-point-six trillion won, and the two sides will begin talks later this year on a new trade deal, with South Korea Britain’s seventh-biggest export market.

With trade the other way rendering the Asian country the third-largest supplier of foreign cars in the European nation, head of the British car industry trade body Mike Hawes said that new tariffs would have been bad for both sides.

He expressed hope to see the start of negotiations and the swift conclusion of a new trade deal that delivers more benefits to the respective automotive sectors of the two nations, particularly in electric vehicles and related technologies.