Britain signs first major post-Brexit trade deal with Japan
The Government has signed its first major post-Brexit trade deal with Japan as the clock ticks down to the end of the transition period on Dec 31.
The deal's framework is largely based on the pact Japan struck with the EU last year, but with some divergence on digital trade and agricultural exports.
The Department for International Trade said it provided advantages not afforded by the EU deal, including in areas such as financial services, fintech, business travel, food and drink, and creative industries.
The deal will also improve access to the UK market for Japanese train carriages and remove tariffs on cars in stages to zero in 2026.
The two sides reached a broad agreement in September after three months of negotiations, during which talks became stuck over Stilton cheese.
The agreement lacks the same quotas for agricultural exports such as cheese that the Brussels deal achieved. Instead, it allows the UK to use any agricultural quotas left over by the EU.
Japan is the UK's 18th-largest trading partner and the deal is expected to boost UK GDP by 0.07pc compared to 2018 levels in the long run. The deal will take effect from Jan 1.
At the official signing ceremony in Tokyo on Friday, International Trade Secretary Liz Truss struck a defiant note, saying that the Brexit "naysayers" had been proved wrong.
She said: "It used to be said that an independent UK would not be able to strike major trade deals, or they would take years to conclude.
"But today, we proved the naysayers wrong with this groundbreaking, British-shaped deal that was agreed in record time.”
The agreement will also help to pave the way for the UK to join the Comprehensive Trans-Pacific Partnership, Ms Truss said.
Japan is already a member of the CPTPP, which links it with Canada, Australia, Brunei, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Japanese foreign minister Toshimitsu Motegi said: "To this day, many Japanese companies have expanded their business to the UK as the gateway to continental Europe. It is of paramount importance that the supply chain between the UK and the EU is maintained even after the UK’s withdrawal."
The signing comes after the UK and the EU resumed trade talks on Thursday after a week of hostilities between the two sides.
A deal could be agreed within a fortnight after a conciliatory speech from EU chief negotiator Michel Barnier and a "significant" shift in approach that allowed the two sides to return to the negotiating table.
Both sides have agreed a schedule of daily, intensive talks up to the EU’s deadline at the end of this month.
The major obstacles in achieving a deal include fishing rights and “level-playing field” guarantees for companies – including in the area of state aid.
