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As negotiations on the complete separation from the European Union stall, the British government has already reached an agreement with its trading partner Japan. Both countries have signed a bilateral free trade agreement that will apply after the transition phase. Japan’s Foreign Minister Toshimitsu Motegi and British International Trade Minister Liz Truss signed an agreement in Tokyo. In doing so, they paved the way for the agreement to go into effect on January 1.
With the agreement, both states want to ensure the continuity of trade and investment. The agreement, which largely corresponds to the existing free trade agreement between Japan and the EU, must first be ratified by the parliaments of both countries.
Japanese car tariffs to be removed by 2026
Japan, the world’s third-largest economy before Germany, had negotiated such an agreement with Britain, as the Japan-EU free trade agreement did not cover the UK after the end of the Brexit transition phase on the 31 from December.
The bilateral agreement states that tariffs on Japanese cars will gradually be reduced to zero by 2026; this is also what the existing trade agreement between Japan and the EU establishes. Japanese tariffs on British agricultural products are also kept at the same level as set out in the Japan-EU trade agreement.
Appeals from Japan’s Foreign Minister: Preserving Supply Chains in Europe
Japanese companies welcome the deal, but are concerned that London will actually reach an agreement with the EU after the transition period is over. London had decided to continue Brexit talks this week. From the EU perspective, there are only a good two weeks left because then a treaty would have to be ratified.
Japan’s Foreign Minister Motegi also said Japan had high hopes that an agreement could still be reached in negotiations between London and Brussels on a Brexit trade deal. “It is of the utmost importance that the supply chains between the UK and the European Union remain in place after the UK leaves the European Union.”
The deal with Japan is the first deal London has concluded with a major economy after the end of the Brexit transition period. London has more trade talks with the United States, Australia and New Zealand. The trade agreement between Japan and the EU entered into force in 2019.
British voters had voted in 2016 with a narrow majority to leave the EU. Britain left the EU at the end of January 2020, but remains a member of the EU internal market and the customs union during a transition period until the end of the year. With a Brexit trade deal, a break with tariffs and trade barriers should be avoided.
