International Trade Secretary Liz Truss said it was a “historic moment”, for it would bring “new wins” for British businesses in manufacturing, food and drink, and tech industries.Critics has said that while the deal may be of symbolic importance it would boost UK GDP by only 0.07%, a fraction of the trade that could be lost with the EU.
Friday’s deal still needs approval by Japan’s parliament, which the country’s Foreign Minister ToshimitsuMotegi forecast would be passed by January.
Ms Truss said that the UK-Japan Comprehensive Economic Partnership Agreement means 99% of exports to Japan will be tariff-free.
“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.”
“From our automotive workers in Wales to our shoemakers in the North of England, this deal will help build back better as we create new opportunities for people throughout the whole of the UK and help level up our country.”
She further added that, strategically, the deal was an important step towards joining the Trans-Pacific Partnership and placing Britain at the centre of a network of free trade agreements.the UK’s trade department statement has saidthat major Japanese investors in the UK such as Nissan and Hitachi would benefit from reduced tariffs coming from Japan and streamlined regulatory procedures.
Prime Minister Boris Johnson also said that Brexit has given Britain the freedom to strike trade deals with other countries around the world.
Business leaders has welcomed the agreement along with stressing concerns that securing a deal with the EU remained the most important goal.The director general of the British Chambers of Commerce, Adam Marshall, called the announcement a milestone, but added: “Whilst this agreement is undoubtedly cause for celebration, securing a Free Trade Agreement with the EU remains critical to the future of businesses in the UK.
“We urge ministers to redouble their efforts to reach a comprehensive partnership with our largest trading partner at a crucial time in the negotiations.”
The CBI also hailed the agreement, with director general Carolyn Fairbairn saying this “breakthrough moment” can be the first of many.
She further said,”It’s a huge opportunity to secure new Japanese investment across a wider range of sectors and UK regions”.You can almost hear the sighs of relief echoing around Westminster and within the business community.
After weeks of wrangling, the first deal of the Brexit era has been struck, which ensures that 99% of British goods can enter Japan without tariffs, or extra charges.
But ultimately, this deal largely mirrors the agreement which already exists between the EU and Japan. And with trade with Japan accounting for just 2% of the UK’s total, the expected boost to GDP of 0.07% over the long term is a tiny fraction of what might be lost from leaving the EU.
And there is good reason for Japan cooperating to ensure this deal was secured in record time. It stands to get the lions share, 80%, of the total estimated £15bn boost to trade for both countries.
Even then, the talks haven’t been as speedy or straightforward as initially hoped – which may not bode well for negotiations elsewhere.
About 99% of exports between the two nations will be tariff-free under the deal, with a particular focus on the food and drink, finance and tech sectors.Manufacturing parts coming from Japan will benefit from reduced tariffs, as will British pork, beef and salmon travelling in the opposite direction.
Japan’s Foreign Minister ToshimitsuMotegi said: “It was a very tough negotiation, but we reached the agreement in principle in about three months, at an unusually fast pace.
“While maintaining the high levels of access to the British market under the Japan-EU EPA, we improved our access to the British market on train cars and some auto parts.”
