UK secures major trade agreement with Japan

The UK has secured a free trade agreement with Japan, in its first major trade deal as an independent trading nation and increasing its trade with the country by around £15.2bn. UK businesses will benefit from tariff-free trade on 99% of exports to Japan in a deal which could deliver a £1.5bn boost to the UK economy, with manufacturers, food and drink producers and the tech sector key beneficiaries.

The UK-Japan Comprehensive Economic Partnership Agreement was agreed in principle by International trade secretary, Liz Truss and Japan’s foreign minister, Motegi Toshimitsu by video call today.

She said: "This is a historic moment for the UK and Japan as our first major post-Brexit trade deal. 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."

Deal the first of many

Business groups welcomed the historic deal, with the CBI's Carolyn Fairbain suggesting it could be a template for other, similar agreements.

"The signing of the UK-Japan trade deal is a breakthrough moment. It will be welcomed by businesses across the country. The Government and business now need to work together to make the most from the deal. It’s a huge opportunity to secure new Japanese investment across a wider range of sectors and UK regions," she said. "Business will help support the Government in its efforts to secure more trade deals around the world and promote their benefits to communities. The Japan deal can be the first of many."

Chair of the Federation of Small Businesses, Mike Cherry, welcomed the inclusion of a chapter for SMEs, something the group has long championed.

"As we look to the UK’s global trading future, trade deals we sign should be about businesses of all sizes, which is why we are delighted to see a UK-Japan trade deal today that includes a comprehensive chapter for SMEs. FSB has long campaigned for these chapters to be included in trade deals, to give UK small businesses the support and tools they need to reach new markets.

"The UK-Japan trade deal therefore marks a major moment. It provides access to a major global market for the UK’s small business exporters, with one in ten viewing Japan as a crucial market to tap into. With over 130,000 small businesses already exporting to Japan, this should provide small businesses looking to grow, maintain or start exporting to Japan with the certainty they need for the future."

The deal also serves a gateway to further trade deals in the Asia-Pacific region through the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which will help increase global supply chain resilience and diversity, a pressing need as the UK recovers from the coronavirus crisis.

See the next issue of CIR Magazine for the details of this deal -- part of our wider examination of Brexit developments in business and Government.

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