UK inks Japan trade deal in principle just as EU talks sour

Andrew Cummings
September 13, 2020

The UK-Japan comprehensive economic partnership agreement was agreed in principle on a video call between Britain's worldwide trade secretary Liz Truss and Japan's foreign minister Motegi Toshimitsu.

Japan wanted to reach broad consensus with the United Kingdom on trade this week before a change in government in Tokyo which could have caused the negotiations to drift.

Sceptics say the deal with Japan is little different to the one already in place via the UK's former membership of the EU.

But rules on e-commerce and financial services have become more ambitious than the Japan-EU pact, including the prohibition of restrictions on cross-border transfers of data, or on the location of computing facilities, the ministry said.

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".

The British government announced on Friday that the UK-Japan Comprehensive Economic Partnership Agreement was agreed in principle during a video call between the UK's International Trade Secretary Liz Truss and Japan's Foreign Minister Motegi Toshimitsu.

The sides now have until 15 October to reach an agreement as this is the date Prime Minister Boris Johnson has said he will simply walk away from the negotiating table.

Sterling's value is being driven, for the most part, by political rhetoric - more specifically, the state of play between Britain and European Union, as we enter the Brexit endgame. Had no Japan-U.K. deal been reached, tariffs on traded goods would have increased, a scenario that has likely been avoided now.

One Hitchin-based business is set to benefit from the UK's new provisional trade deal with Japan, after an economic partnership agreement was made by the two countries earlier today.

"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". 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.

Because the two sides had to come to an agreement in a matter of months - an extremely short period of time for a trade negotiation - it was apparently impossible for the two sides to persuade each other to take more ambitious steps to open their market in sensitive areas such as the auto and agriculture sectors. Congress has to ratify all USA trade deals.

She 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.

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