15 May 2020
Based on the existing EU-Japan Free Trade Agreement (FTA), the UK is seeking to conclude a similar trade deal with Japan and has published its negotiating objectives ahead of the planned beginning of talks.
Manufacturers of textiles and clothing, and professional and financial services providers are among the UK industries expected to be the biggest winners of lowering trade barriers with Japan, according to International Trade Secretary, Liz Truss.
“We’re optimistic that an agreement with Japan can give us security at home and opportunities abroad,” she said. “It would help improve the resilience of our supply chains through diversity and opening new markets for business, bringing investment, better jobs, higher wages and lower prices, at a time when we need them most.”
The most recent Government analysis shows that the UK economy could benefit from a £1.5 billion boost with a UK-Japan trade deal potentially increasing trade flows between both countries by £15.2 billion.
UK exporters would benefit from zero or lower tariffs, according to the Department for International Trade (DIT).
This could create potential savings worth around £33 million per year while UK workers’ wages are expected to increase by £800 million in the long run as a result of the deal.
While an FTA would benefit the whole of the UK, Scotland, the East Midlands and London expected to benefit the most.
The Japan trade talks are seen as the first logical step towards the UK joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), helping diversify its trade and providing opportunities in the world’s fastest growing economies.
A potential UK-Japan FTA
The UK’s negotiating objectives.
Build on the EU-Japan Economic Partnership Agreement and secure additional benefits for UK businesses.
Increase UK GDP and provide new opportunities for UK businesses (including SMEs).
Increase the resilience of the UK’s supply chains.
Ensure high standards and protections for consumers and workers by not compromising on the UK’s high environmental protection, animal welfare and food standards, and by ensuring both parties meet their commitments on climate change.
Protect the integrity of the NHS (which "is not, and never will be, for sale to the private sector, whether overseas or domestic").
Secure an agreement that works for the whole of the UK and takes appropriate consideration of the UK’s constitutional arrangements and obligations.