Daily Management Review

‘Historic’ Trade Deal Struck Between UK And Japan


A free trade agreement with Japan was struck by the United Kingdom on Friday in what is the first big post-Brexit trade deal for Britain. Both the countries hailed the trade agreement as “historic” even as the UK is having troubles with clinching a favourable trade deal with its closest and biggest trading partner the European Union.
The focus of Britain since its formal departure from the single market of the EU was to negotiate and secure new trade deals with countries around the world. But according to analysts, the possible trade loss for the UK if a post Berxit trade agreement is not arrived at with the EU will not be fulfilled by trade agreements with other countries.
“This is a historic moment for the UK and Japan as our first major post-Brexit trade deal,” British trade minister Liz Truss said referring to the trade agreement with Japan. “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.”
According to some analysts, the trade agreement with Japan was one of the easiest for the UK since it was largely based on the pre existing EU-Japan agreement which covers Britain which is applicable till December this year when the Brexit transition period with the EU comes to an end.
The progress has been slow for other trade agreement including the one with the United States.
The talks had been difficult “but we managed to reach an agreement in principle with extraordinary speed, in just three months”, said Japanese Foreign Minister Toshimitsu Motegi.
The aim of Japan is to make the deal come into force from January 1 next year, he said and add that the agreement will help Japanese manufacturers of train equipment and car components.
Britain has been used by Japan as a pro-business gateway to enter into the rest of eh EU. But concerns that a so-called no-deal Brexit might affect this have been raised by some Japanese politicians.
Under the deal about 99 per cent of all exports from eh UK to Japan would not attract any tariffs and the new deal could boost trade by 15.2 billion pounds in the long run based on 2018 numbers, Britain said.
As of 2018, the total bilateral trade between the UK and Japan was at 29.5 billion pounds compared to the huge 700 billion pounds of exports and imports that happened between the UK and the EU.
British fintech firms operating in Japan would be helped by the digital and data provisions in the agreement, Britain said. It said that the deal will also benefit companies from the financial services firms, coat-makers and food producing industry and the deal also represented an “important step” in Britain joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in the Asia-Pacific region.