Collabs key to cracking Fortress Europe's growing arms market
Published: 03 Jun. 2025, 20:28
Updated: 03 Jun. 2025, 20:32
Audio report: written by reporters, read by AI
![Britain's Prime Minister Keir Starmer delivers his speech during a visit to the BAE Systems' Govan facility, in Glasgow, Scotland, on June 2. [AP/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/06/03/f6f62411-4354-4c53-9b19-e9b875ba8806.jpg)
Britain's Prime Minister Keir Starmer delivers his speech during a visit to the BAE Systems' Govan facility, in Glasgow, Scotland, on June 2. [AP/YONHAP]
Korea’s defense industry is setting its sights on Europe’s rapidly expanding arms market, forecast to approach $1 trillion in the coming years. But to break through NATO’s tight-knit procurement networks and the European Union’s (EU) protectionist policies, Korean companies are being told: go local or go home.
British Prime Minister Keir Starmer announced Monday that Britain would allocate 15 billion pounds ($20 billion) to build 12 new submarines at BAE Systems’ shipyard in Glasgow. The move is part of London’s broader plan to raise defense spending from 2.3 percent of GDP to 3 percent by 2029.
"The threat we now face is more serious, more immediate and more unpredictable than at any time since the Cold War,” Starmer said.
He added that different branches of Britain's armed services — from drones, destroyers, AI to aircraft — should be fully integrated to "create an army which is 10 times more lethal by 2035."
![High Representative for Foreign Affairs and Security Policy and Vice-President of the European Commission Kaja Kallas speaks as she presents the white paper on the future of European defence in Brussels, Belgium, on March 19. [REUTERS/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/06/03/fec68f62-9ade-41d0-9cdf-0bcf0a090132.jpg)
High Representative for Foreign Affairs and Security Policy and Vice-President of the European Commission Kaja Kallas speaks as she presents the white paper on the future of European defence in Brussels, Belgium, on March 19. [REUTERS/YONHAP]
Across the continent, similar moves are taking shape. NATO Secretary-General Mark Rutte announced in late May that all 32 member states are expected to adopt a 5 percent defense spending target at a June summit in The Hague — a staggering jump that could boost NATO Europe's budget from $457 billion to $800 billion.
This surge spells opportunity for Korean defense firms. Between 2020 and 2024, Korea accounted for 2.2 percent of global arms exports. If that share holds, Korean companies could tap into more than 10 trillion won ($7.3 billion) in annual orders from Europe alone.
But there’s a catch.
The EU’s new 800 billion euro ($911 billion) rearmament initiative mandates that at least 65 percent of weapons systems be manufactured within the bloc — effectively sidelining outside bidders. NATO, too, prioritizes interoperability, often favoring intra-alliance deals over open competition.
![European leaders and NATO Secretary General Mark Rutte attend the European leaders' summit to discuss European security and Ukraine at Lancaster House in London, Britain, on March 2, in this photo provided by NTB. [REUTERS/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/06/03/3d92d010-de2c-4d7e-9c79-778210d53f59.jpg)
European leaders and NATO Secretary General Mark Rutte attend the European leaders' summit to discuss European security and Ukraine at Lancaster House in London, Britain, on March 2, in this photo provided by NTB. [REUTERS/YONHAP]
To break into the market, Korean companies may need to adopt a different strategy — collaboration.
In December, Japan Aircraft Development Corporation formed a joint venture with Britain’s BAE Systems and Italy’s Leonardo to co-develop a next-generation fighter jet by 2035. The European Commission on Monday approved the establishment of the joint venture headquartered in Britain, stating that it would not hinder competition within the bloc.
![Attendees view the Global Combat Air Programme concept model fighter plane at the BAE Systems pavilion at the Farnborough International Airshow, in Farnborough, Britain, on July 22, 2024. [REUTERS/YONHAP]](https://koreajoongangdaily.joins.com/data/photo/2025/06/03/071ba5bb-01f7-40d0-b1b3-803ffc76c51c.jpg)
Attendees view the Global Combat Air Programme concept model fighter plane at the BAE Systems pavilion at the Farnborough International Airshow, in Farnborough, Britain, on July 22, 2024. [REUTERS/YONHAP]
Korean firms have started following suit. Hanwha Aerospace in April launched a joint venture with Poland’s WB Group to locally produce the Chunmoo multiple rocket launcher. Of the 2.9 trillion won the company raised in a recent rights offering, about 918.8 billion won will go toward joint ventures with defense firms in Europe and the Middle East.
LIG Nex1 is jointly developing and manufacturing air defense missiles with Romania’s state-run Romarm.
Hyundai Rotem, preparing for a second export deal involving K2 tanks to Poland, is discussing local production of some units.
“Western Europe’s high-level defense technologies make it tough to export finished products directly,” said Jang Won-jun, a professor of defense industry convergence at Jeonbuk National University.
“Korean firms should focus on joint ventures and co-development strategies with local players to gain traction.”
Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY OH SAM-GWON [[email protected]]
with the Korea JoongAng Daily
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