SEOUL, South Korea, September 25, 2020 (Newswire.com) - After months of intense negotiations, Britain has signed its first post-Brexit free trade agreement (FTA) with Japan. The deal was agreed upon in principle via video conference by the UK’s international trade secretary, Liz Truss and Japanese foreign minister Motegi Toshimitsu on September 11.
Analysts at GM Warburg Commercial say that this is Britain’s first major trade deal concluded as an independent trading nation. Japan and Britain share a long history as free trading nations and the newly signed trade deal is expected to increase the UK’s trade with Japan by as much as £15 billion per annum.
Although the UK previously enjoyed a good trading relationship with Japan under the EU-Japan trade agreement, the new deal is said to go far beyond the existing EU deal. It is tailored to the needs of the UK economy and will give UK businesses exporting to Japan a significant advantage in several areas.
UK businesses will benefit from tariff-free trade with Japan on 99% of all exports and will provide a valuable entry point to the Asia-Pacific region.
The deal comes as talks between the EU and the UK have soured once again as the two parties try to thrash out the terms of trade, post-Brexit. Although talks have not yet collapsed, GM Warburg Commercial analysts say concerns over the progress of the negotiations has grown in the last few days as both sides struggle to agree on fundamental issues like business regulations, the degree of support the UK can offer to certain industries and EU access to UK waters.
Although the UK officially left the EU on the 31st of January this year, it is currently in a transition period that allows it to maintain the benefits of tariff-free trade with its EU partners until the end of this year.
One of the main arguments supporting Brexit was that the UK would be entitled to negotiate its own trade deals independent of the EU. The agreement with Japan is the first in what the UK hopes will be a series of free trade agreements. It is also in the process of negotiating rollover deals with Canada and South Korea.
Source: GM Warburg Commercial