Britain agrees historic post-brexit free trade deal with Japan
THE UK has struck an historic trade deal with Japan – Britain’s first major agreement as an independent country for 47 years.
Liz Truss, the International Trade Secretary, held a video call with Toshimitsu Motegi, the Japanese foreign minister, yesterday to seal the deal in principle, which is expected to be signed and published next month, and come into force in January.
The free trade agreement is seen as a step towards Britain joining the Comprehensive and Progressive Agreement for Trans-pacific Partnership (CPTPP), which also includes Australia, Canada, Mexico and New Zealand.
It is expected to increase trade between the world’s third and sixth-largest economies by £15.2 billion and grow the UK economy by 0.07 per cent in the “long term”, the Department for International Trade (DIT) estimates.
David Henig, director of the European Centre for International Political Economy and a former UK trade negotiator, said that this was compared to a no-deal scenario rather than in comparison with the Eu-japan trading terms that currently apply to Britain.
DIT said it had not modelled the latter.
Ms Truss said: “This is a historic moment for the UK and Japan as our first major post-brexit trade deal. The agreement we have negotiated – in record time and in challenging circumstances – goes far beyond the existing EU deal, as it secures new wins for British businesses in our great manufacturing, food and drink, and tech industries.”
The resignation of Shinzo Abe, Japan’s prime minister, last month and disagreements over Stilton cheese – which represents 0.007pc of total UK exports – had previously stalled trade talks. Officials said they had yet to “dot the i’s and cross the t’s” of the deal, but a compromise on agriculture would be that the UK would be allocated the unused remains of EU producers’ tarifffree quota. In future, UK negotiators hope to win their own quota via the CPTPP. The deal will liberalise rules of origin, which allow governments to determine where goods have originated, making it easier for some products, such as biscuits and clothes, to qualify for preferential tariffs. British goods with Japanese parts going to the EU will be covered separately if there is a Brexit trade deal.
The agreement will open a dialogue between British and Japanese regulators on financial services and ease visa requirements for business people, so British workers transferring from a UK HQ to a Tokyo office will be able to stay for up to five years. Britain will also keep seven geographical indications it had under the Eu-japan deal and can add up to 70, such as for Scotch whisky, Cornish pasties and Jersey royal potatoes.
Carolyn Fairbairn, director general of the CBI, described the deal as a “breakthrough moment”.
Michito Tsuruoka, associate professor at Keio University, Tokyo, said: “It should not be seen as a message that Japan supports the way in which the UK government deals with the negotiations with the EU and the implementation of the Withdrawal Agreement. Japanese companies operating in the UK are increasingly concerned about the ‘no deal’ scenario.”
‘The agreement we have negotiated goes far beyond the existing EU deal’