The UK-Japan trade deal is the first major agreement after Brexit

The UK Department for International Trade said in a statement that the agreement with its 11th largest trading partner was agreed in principle on Friday and would increase trade between the two countries by around $ 15.2 billion ($ 19.5 billion) . Japan will not face a 99% export tariff in UK business, including products such as knitwear, biscuits and coats.

“This is a historic moment for our first major post-Brexit trade deal for Britain and Japan,” said International Trade Secretary Liz Truss, which leveraged gains for the manufacturing, food and beverage, and tech industries.

Britain will no longer be covered by the EU-Japan Free Trade Agreement when the Brexit transition period ends later this year. That deal reduced barriers on European exports to things, such as cheese and wine, and Japanese car imports from 2019.

Britain’s government is now The bloc is trying to replicate dozens of similar EU trade deals with third countries before its transitional agreement with the agreement. If the deals do not take place, British companies may face barriers to trade in most overseas markets starting in January.

According to Professor L Alan Winters, director of the UK Trade Policy Observatory, the agreement with Japan means that the United Kingdom has reduced new agreements worth 10% of its total trade in 2019 to around 8% in January. At the University of Sussex.

“The deal is an advantage, but it’s not a big jump,” Winters said. “It’s no compensation for what you’re offering in Europe,” he told CNN Business.

Marginal benefit

According to the Department of Trade, a bilateral trade agreement with Japan could in the long run increase UK GDP by only 1.5 billion ($ 1.9 billion) or about 0.07%, while resulting in an estimated 5.6% decrease in economic growth. No-deal Brexit, which is likely to increase. According to Winters, if the UK-EU trade agreement was agreed, growth would still be expected to decline by around 4.4%, which remained part of this UK block.
The UK government has also imposed lower tariffs on European agricultural products than the EU, including pork, beef and salmon, but not on stilton cheese, which would be subject to similar tariffs under the EU-Japan deal. Trade barriers will also be reduced in areas such as financial services, Britain’s largest export to Japan and the digital sector, mainly through increased coordination between regulators.
Japanese car manufacturers including Nissan (NSANF) According to the statement, parts coming to the United Kingdom can enjoy lower tariffs and streamlined regulatory procedures.

Other elements of the agreement will make it easier for businesses to transfer workers between the two countries. For example, an employee who is being transferred A british company The headquarters of the Tokyo office will be able to bring its spouse and dependents and stay for five years.

The total value of trade between the United Kingdom and Japan was just over £ 29 billion ($ 37.2 billion) in 2018, the UK’s 11th largest trading partner that year. The United States, China and Switzerland are the only non-EU countries in the top 10, trade department figures show.

Carolyn Fairbairn, director general of the Confederation of British Industry, the main business lobby, said in a statement that the deal would be “welcomed by businesses across the country.” “This is a huge opportunity to secure new Japanese investment in new regions and areas of the UK,” he said.