United Kingdom and Japan finalise first trade deal, CPTPP membership ahead

Cornelia Mascio
Ottobre 25, 2020

"It used to be said that an independent United Kingdom would not be able to strike major trade deals, or they would take years to conclude", Ms Truss told reporters after the signing.

Last week's EU summit had always been billed as the deadline to finalise an agreement but officials now give mid-November as the latest deadline for agreeing a deal and allowing enough time for it to be ratified by the 27 EU member states and the European Parliament.

U.K. Secretary of State for International Trade Liz Truss, who signed the pact with Japanese Foreign Minister Toshimitsu Motegi in Tokyo, called it a "ground-breaking" deal.

The UK-Japan Comprehensive Economic Partnership Agreement (CEPA) covers a range of sectors, from food and vehicle parts to textiles and technology.

The CEPA, broadly agreed to last month, comes into force on January 1.

It would also see Britain remove tariffs on Japanese cars in stages to zero in 2026, replicating the Japan-EU trade agreement. At the same time, it imports items worth almost 1 trillion yen from Britain, mainly pharmaceuticals, medical products and cars, according to the Japanese Foreign Ministry.

"It provides British businesses with the gateway to the Asia-Pacific.and it paves the way for the accession to the Trans-Pacific Partnership", Truss said in a joint press announcement with Motegi, referring to the framework including Japan, Australia and Mexico and accounting for about 13 percent of the global economy. The U.K. Department for International Trade said it provides bespoke benefits that go beyond the European Union deal, including in areas such as digital and data, financial services, food and drink, and creative industries.

Financial services make up Britain's biggest export to Japan, now standing at 28 percent.

The UK-Japan Comprehensive Economic Partnership Agreement was approved in principle on September 11 but was signed on Friday in the Japanese capital. During the transition period, Britain is still trading with Europe, and internationally, as if it were an European Union member.

Time is short to reach an agreement before the end of the transition period on 31 December.

Motegi on Friday raised concerns about the impact of the United Kingdom withdrawal on Japanese businesses, saying a smooth transition was important for companies that see the United Kingdom as a "gateway to continental Europe". The British government said it expects a $19.9 billion economic boost from the agreement over the next 15 years.

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