The UK has signed a new trade deal with South Korea designed to increase exports of cars, Scottish salmon and Guinness canned in Britain.

Keir Starmer described the deal, which replaces an existing agreement, as “a huge win for British business and working people”. It follows UK deals with India and the US, and the free trade agreement with the EU clinched this year.

Existing trade between the UK and South Korea is worth more than £15bn a year under a 2019 post-Brexit arrangement. The new deal covers the exports of services, automotive, pharmaceutical and food and drink, and would bring an extra £400m a year to the British economy, the UK government said.

Significantly, the deal also lowers the threshold on the quantity of parts in a car that must be British or from the EU to qualify for zero tariffs from January.

Under the current rules, 55% of a car must be made in the UK or the EU to qualify for duty-free sales. This has been dropped to 25% under the new deal, enabling carmakers to buy batteries or battery components from China and still qualify for zero-tariff exports to South Korea.

The trade minister Chris Bryant tries a racing simulation at Samsung in London to mark the end of negotiations on the UK-South Korea deal. Photograph: Lisa O’Carroll/The Guardian

Richard Molyneux, the chief finance officer at Jaguar Land Rover, welcomed the deal, while Frank-Steffen Walliser, the chief executive of Bentley Motors, described continued access to a key market for the luxury brand as “great news”.

Nik Jhangiani, the interim chief executive of Diageo, said the new trade arrangement would “support export growth for Guinness”, which although made in Dublin, is canned in Runcorn and Belfast.

Announced by the UK trade minister, Chris Bryant, and his South Korean counterpart, Yeo Han-koo, at the Samsung superstore in King’s Cross, London, the deal also offers British companies the opportunity to tender for public procurement contracts in Seoul, to offer legal services and the chance to do business via e-contracts for the first time.

“Today’s agreement secures the UK as a global leader in digital trade and innovation while boosting our world-class services sector, supporting iconic brands, and giving cast-iron protections to our key industries to speed up economic growth as part of our plan for change,” Bryant said.

Yeo said the deal would “strengthen the free-market system” at a time of “heightened uncertainty” and allowed allies to continue operating in the rule-based trading environment that Donald Trump disrupted with his US tariff push this year.

The deal also gives British exporters tariff-free trade on 98% of goods, aligning it with the EU’s trade deal with Seoul.