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Japan trade accord becomes UK post-Brexit priority


The UK is to make a trade deal with Japan one of its top priorities after Brexit, putting it on a par with the need to achieve similar pacts with the EU and US.

Until now, the UK’s principal post-Brexit trade goal in talks with the Japanese government has been to “roll over” the existing trade relationship which Britain enjoys with Japan as a member of the EU.

However, Japan has long resisted this “copy-and-paste” approach, believing it can secure far better trade terms from the UK than it did in negotiations with the much larger EU when it secured a bilateral Japan-EU trade treaty.

As a result, Liz Truss, the international trade secretary, is drawing what some experts believe is the inevitable consequence, declaring in Tokyo that Britain wants to sign a new FTA with Japan as soon as possible.

“Businesses should be reassured that there is huge political will on both sides to begin negotiating a new free trade agreement with Japan as soon as possible,” Ms Truss will say.

Sam Lowe, a trade expert at the Centre for European Reform, a think-tank, said the UK’s new commitment to try and get a fully-fledged FTA with Japan made sense. “Until now the UK has been talking up the need to secure FTAs with Australia and New Zealand but Japan is a much bigger economy and matters a lot more,” he said.

“Politically, it’s also important for the UK to show Japan that it’s a top priority in trade relations. The Japanese are furious over Brexit and see it as a betrayal of trust after decades of Japanese investment in the UK economy.”

However, Mr Lowe said it will be difficult for the UK and Japan to make quick progress on a trade deal. “Japan is quite protectionist and it will want to reduce the amount of access the UK has to the Japanese economy, especially in agriculture,” he said.

David Henig, a former Department of International Trade official, said one of the problems raised by the announcement is that the UK authorities will find it hard to negotiate FTAs with the world’s major economies simultaneously.

The UK prime minister Boris Johnson has played down the prospect of a quick trade deal with the US — despite positive noises from the US president Donald Trump.

“The US and EU were always going to be top priorities for an FTA but they will take up pretty much all the negotiating bandwidth that the UK has,” said Mr Henig. “Now they are putting Japan in the top three. I’m not sure it’s altogether realistic.”

Japan is the world’s third-largest economy and last year trade between the UK and Japan was worth £29.5bn, up by over 8 per cent compared to 2017. It is estimated that there are nearly 1,000 Japanese firms based in the UK, employing over 150,000 people.

To pave the way for such an FTA, on Friday DIT will launch an online “call for input”, asking UK companies to tell the government what their priorities are for the UK’s future trade relationship with Japan.

Today’s move on UK-Japan relations will come a day after Britain and Lebanon signed a UK-Lebanon association agreement. This ensures that British businesses and consumers will continue to benefit from preferential trading terms with Lebanon after Brexit.



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