Last reviewed 14 September 2020
Set to increase trade with Japan by an estimated £15.2 billion, the UK has secured its first major trade deal as an “independent trading nation”.
Previously it has traded with Japan under the terms of a free trade agreement (FTA) concluded by the European Union. The UK-Japan Comprehensive Economic Partnership Agreement replicates most of the FTA and adds other benefits, giving UK companies exporting to Japan a competitive advantage in a number of areas.
For example, digital and data provisions are said by the Government to go far beyond the EU-Japan deal, enabling the free flow of data whilst maintaining high standards of protection for personal data.
There will also be new protection for more UK goods with protection for geographical indications (GIs) rising from just seven, under the terms of the EU-Japan deal, to potentially over 70 under the new agreement, covering goods including English sparkling wine, Yorkshire Wensleydale cheese and Welsh lamb.
Furthermore, the new deal will see improved market access for UK financial services — including greater transparency and streamlined application processes for UK firms seeking licences to operate in Japan.
CBI Director General Carolyn Fairbairn said: “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.”
UK businesses will benefit from tariff-free trade on 99% of exports to Japan.
According to International Trade Secretary Liz Truss, the deal is also an important step towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on which we reported recently.
However, some analysts have been quick to point out that, while the deal may be of symbolic importance, it would boost UK GDP by only 0.07%, a fraction of the trade that could be lost with the EU if no trade deal is agreed before the transition period ends on 31 December.