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UK Commerce Secretary Liz Truss called the deal “historic”
The UK has reached its first major post-Brexit trade deal after signing an agreement in principle with Japan that aims to boost trade by around £ 15bn.
International Trade Secretary Liz Truss said it was a “historic moment.”
She said it will bring “new triumphs” for British companies in the manufacturing, food and beverage and technology industries.
Critics said that while the deal may be of symbolic importance, it would increase the UK’s GDP by just 0.07%, a fraction of the trade that could be lost with the EU.
Friday’s deal still needs approval from the Japanese parliament. Trade representatives anticipated that the agreement should be approved in January.
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Truss said that the Comprehensive Economic Partnership Agreement between the UK and Japan means that 99% of exports to Japan will be duty free.
“The agreement that we have negotiated, in record time and in challenging circumstances, goes far beyond the existing agreement with the EU, as it secures new profits for British companies in our large manufacturing, food and beverage and technology industries,” said.
“From our auto 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 across the UK and help level our country.”
He added that, strategically, the deal was an important step in joining the Trans-Pacific Partnership and placing Britain at the center of a network of free trade agreements.
Major Japanese investors in the UK, such as Nissan and Hitachi, would benefit from reduced tariffs on parts from Japan and simplified regulatory procedures, the UK Commerce Department statement said.
Prime Minister Boris Johnson has said that Brexit gives Britain the freedom to make trade deals with other countries around the world.
Business leaders welcomed the agreement, but stressed that reaching an agreement with the EU remained the most important goal.
British Chambers of Commerce Director General Adam Marshall called the announcement a milestone, but added: “While this deal is certainly cause for celebration, achieving a Free Trade Agreement with the EU remains critical for the future. of companies in the UK.
“We urge ministers to redouble their efforts to achieve a comprehensive partnership with our largest trading partner at a crucial time in the negotiations.”
The CBI also praised the deal, with CEO Carolyn Fairbairn saying this “watershed moment” may be the first of many.
“This is a great opportunity to secure new Japanese investment in a broader range of UK sectors and regions,” he said.
One small step
You can almost hear the sighs of relief echoing through Westminster and within the business community.
After many discussions, the first Brexit-era deal has been reached, ensuring that 99% of British goods can enter Japan without additional duties or charges.
But ultimately, this agreement largely reflects the agreement that already exists between the EU and Japan. And since trade with Japan accounts for only 2% of the UK total, the expected increase in GDP (0.07% or £ 1.5bn in the long run) is a small fraction of what the UK can lose by giving up your existing relationship with the UE.
And although this agreement has been reached in record time, it has not been as quick as the parties hoped.
The UK was eager to show that it can make additional benefits by doing it alone, while Tokyo was intent on showing that it was not going to award a more favorable deal to a single country than to a large trading bloc like the EU.
Potholes may not bode well for other, more complex negotiations.
About 99% of exports between the two nations will be duty-free under the agreement, with a particular focus on the food and beverage, finance and technology sectors.
Manufacturing parts from Japan will benefit from reduced tariffs, as will British pork, beef and salmon traveling in the opposite direction.
Japan’s Foreign Minister Toshimitsu Motegi 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 UK market under the Japan-EU EPA, we improved our access to the UK market in rail cars and some auto parts.”
