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LONDON – The UK and Japan on Friday agreed in principle to a trade deal, in a move that marks the UK’s first major agreement post-Brexit strike.
The declaration, which Britain accepted as a “historic moment”, Britain struggles to secure an agreement with its close trading partners in the European Union.
The UK Trade Department said that UK businesses would benefit from tariff-free trade at 99% of exports to Japan. It also suggested that the deal would increase the country to £ 15.2 billion ($ 19.5 billion) trade with Japan.
The deal would include digital and data provisions that would “go far beyond the EU-Japan deal”, Britain claimed, “enabling the free flow of data while maintaining high standards of security for personal data.”
The temporary agreement, which will require the approval of both the UK and Japanese parliaments, is set to come into force at the end of the year.
“This is a historic moment for our first major post-Brexit trade deal for the UK and Japan,” UK International Trade Secretary Liz Truss said in a statement.
“The deal is strategically an important step towards joining the Trans-Pacific Partnership and putting Britain at the center of a network of modern free trade agreements with like-minded friends and colleagues,” Truss said.
Sterling traded at $ 1.2770 during morning deals, down 0.25% for the session.
Britain’s Prime Minister Boris Johnson said earlier this year that Britain could become the superman of global trade, making lucrative agreements on its terms after the country exited the EU in January.
The proposed deal with Japan is the first major deal for Brexit, the world’s fifth-largest economy.
Caroline Fairbairn, director general of the Confederation of British Industry, described the agreement as a “moment of success” that would be “welcomed by businesses across the country.”
“The 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 may be the first of many,” Fairbairn said.
However, critics of Johnson’s “global Britain” agenda suggest that free trade agreements with countries around the world are unlikely to offset lost exports to the EU if it cannot reach an agreement with Brussels .
Britain and the European Union are currently in loggerheads on Britain’s so-called Internal Market Bill. The bill, proposed earlier this week, seeks to amend part of the country’s Brexit deal with the European Union. If it is approved, it will allow ministers to withdraw parts of Northern Ireland’s protocol, with negotiations held last year.
Northern Ireland Secretary Brandon Lewis, ever since an interior minister, called the Internal Markets Bill “breaking international law.”
In response, Britain’s opposition Labor Party condemned the proposal, while European Commission President Ursula von der Leyen said on Wednesday that she was “very concerned about the British government’s announcement.”
Stateside, Speaker of the House and an outspoken Democrat legislator, Nancy Pelosi said on Wednesday that if the UK violates its international agreements, “there will be absolutely no chance of a US-UK trade agreement that Congress has passed.”
The UK and the European Union are currently trying to reach a trade agreement before the end of the transition period on 31 December, if no agreement is reached, the UK is set to go to World Trade Organization rules.