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PROSPER MAGAZINE: DIGITAL EDITION

BLACK COUNTRY INTERNATIONAL

UK AND JAPAN AGREE HISTORIC FREE TRADE AGREEMENT

The UK has secured a free trade agreement with Japan, which is the UK’s first major trade deal as an independent trading nation.

Earlier this month the UK secured a free trade agreement with Japan, the UK’s first major trade deal as an independent trading nation will increase trade with Japan by an estimated £15.2 billion.

The deal was tailored to the UK economy and secures additional benefits beyond the EU-Japan trade deal, giving UK companies exporting to Japan a competitive advantage in a number of areas. It will help to create jobs and drive economic growth throughout the whole of the UK.

It is also an important step towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which will give UK businesses a gateway to the Asia-Pacific region and help to increase the resilience and diversity of our supply chains.

UK businesses will benefit from tariff-free trade on 99% of exports to Japan. Government analysis shows that a deal with Japan will deliver a £1.5 billion boost to the UK economy and increase UK workers’ wages by £800 million in the long run.

UK manufacturers, food and drink producers and the tech sector are all set to benefit from the measures in the UK-Japan deal, which include:

  • Cutting-edge digital & data provisions that go far beyond the EU-Japan deal. These will enable free flow of data whilst maintaining high standards of protection for personal data. We have also committed to uphold the principles of net neutrality, as well as introducing a ban on data localisation, which will prevent British businesses from having the extra cost of setting up servers in Japan. This will help UK fintech firms operating in Japan - like Revolut and Transferwise - to innovate and grow.

 

  • Improved market access for UK financial services – including greater transparency and streamlined application processes for UK firms seeking licences to operate in Japan. The deal creates an annual dialogue between Her Majesty’s Treasury, UK financial regulators, and the Japanese FSA that will explore ways to further reduce regulatory friction - something that would be impossible were the UK still in the EU. Financial services are our biggest export to Japan, accounting for 28% of all UK exports.

 

  • Tariff free access for more UK goods – new and more liberal Rules of Origin will allow producers of coats, knitwear and biscuits to source inputs from around the world for their exports to Japan – making it easier and cheaper for them to sell to the Japanese market.

 

  • New protection for more iconic UK goods – increasing geographical indications (GIs) from just seven under the terms of the EU-Japan deal to potentially over 70 under our new agreement, covering goods including English sparkling wine, Yorkshire Wensleydale and Welsh lamb. This would lead to improved recognition of key UK brands in the Japanese market.

 

  • New protections for UK creative industries – British businesses can now be confident that their brands and innovations will be protected. We have gone beyond the EU on provisions that tackle online infringement of IP rights, such as film and music piracy.

 

  • Improved mobility for businesspeople – securing more flexibility for Japanese and British companies to move talent into each country, covering a range of UK skilled workers to enter Japan, from computer services to construction. This includes commitments that go beyond the EU-Japan deal, for investors, spouses and dependents, and a wider range of intra-company transfers. Requirements for visas will be clear, transparent, and with an aim that they be processed in 90 days. A worker transferring from their UK HQ to the Tokyo office will be able to bring their spouse and dependents and stay for up to five years.

 

  • Supporting UK car and rail manufacturing – supporting major investors in the UK like Nissan and Hitachi through reduced tariffs on parts coming from Japan, streamlined regulatory procedures and greater legal certainty for their operations.

 

  • More generous market access for malt producers – Japan has guaranteed market access for UK malt exports under an existing quota which is more generous and easier to access than the EU quota. The UK is the second biggest exporter of malt to Japan, with UK producers exporting £37m there each year.

 

  • Strong tariff reductions for UK pork and beef exports – We have negotiated a deal that sees tariffs fall on pork, beef, salmon and a range of other agricultural exports. We will continue to benefit from access to the low tariffs for key food and drink products covered by quotas, such as Stilton cheese, tea extracts and bread mixes. This forms a pathway to further market access under CPTPP, which has been committed to by Japan as part of our agreement.

The UK and Japan have a long-shared history as free trading nations and this deal marks a historic moment that will deepen the partnership between two democratic island nations.

International Trade Secretary Liz Truss said, “This is a historic moment for the UK and Japan as our first major post-Brexit trade deal. The agreement we have negotiated – in record time and in challenging circumstances – goes far beyond the existing EU deal, as it secures new wins for British businesses in our great manufacturing, food and drink, and tech industries.

“From our automotive workers in Wales to our shoemakers in the North of England, this deal will help build back better as we create new opportunities for people throughout the whole of the UK and help level up our country.

“Strategically, the deal is an important step towards joining the Trans-Pacific Partnership and placing Britain at the centre of a network of modern free trade agreements with like-minded friends and allies.”

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