Published: Tue, September 15, 2020
Economy | By

United Kingdom strikes first major post-Brexit free trade deal with Japan

United Kingdom strikes first major post-Brexit free trade deal with Japan

From tech and digital firms to fashion and luxury jewellery designers, London businesses could benefit significantly from the new UK-Japan trade deal.

The Department for International Trade (DIT) news release says the deal will help to create jobs and drive economic growth throughout the whole of the UK.

Carolyn Fairbairn, director general of the Confederation of British Industry, the main business lobby, said in a statement that the deal will be "welcomed by businesses across the country".

The bumps may not bode well for other, more complex negotiations.

That agreement came into force in February 2019, and, among other things, reduced tariffs on agricultural goods and helped European Union companies access procurement markets in Japan.

Motegi told reporters following the talks, "The deal will allow for the continuation of advantages that Japan has gained from the Japan-EU free trade deal and will secure continuity for Japanese companies' businesses".

Britain had demanded a low-tariff import quota for some of its agricultural exports, including blue cheese, to Japan, but Tokyo remained reluctant about introducing such a preferential quota for London.

Prime Minister Boris Johnson said on Twitter that the deal showed "we have taken back control of our trade policy & will continue to thrive as a trading nation outside the European Union".

The deal, meant to boost trade with Japan by some £15.2 billion ($19.5 billion), can also help United Kingdom businesses gain a foothold in the Asia-Pacific region as it became an "important step" towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Bilateral trade is now conducted under the EU-Japan deal that came into effect a year ago, but that agreement will no longer apply to Britain from December 31.

"For the automotive industry alone - which has the largest share of the trade volume between Germany and Great Britain - there is a risk of tariffs of at least two billion euros in less than four months without an agreement", Wansleben said.

Skeptics say the deal with Japan is little different from the one already in place via the U.K.'s former membership in the EU. They have supported us to attend medical trade fairs, understand each country's requirements and find new distributors overseas, especially in Japan.

It marks the first such post-Brexit agreement.

The 23 industry giants, including the Society of Motor Manufacturers and Traders (SMMT), the European Automobile Manufacturers Association (ACEA) and the German Association of the Automotive Industry (VDA), want negotiators to secure a deal that delivers zero tariffs, modern rules of origin and avoids different regulations across the channel.

Around 99 per cent of exports between the two nations will be tariff-free under the deal, with a particular focus on the food and drink, finance and technology sectors.

CPTPP is a landmark 11-country trade deal that includes Australia, New Zealand, Canada, Japan, Mexico, Singapore, Vietnam, Brunei, Chile, Malaysia, and Peru.

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