Sunday, September 20, 2020

Tariff reductions & increased protections: UK signs ‘historic’ free trade agreement with Japan

Tariff free access for British biscuits, increased geographical indications on food and drink, and tariff reductions for pork and beef exports are among the benefits of a “historic” free trade agreement with Japan.

Marking the UK’s first major trade deal post-Brexit, the agreement will increase trade between the UK and Japan by an estimated £15.2 billion.

The UK-Japan Comprehensive Economic Partnership Agreement was agreed in principle by International Trade Secretary Liz Truss and Japan’s Foreign Minister Motegi Toshimitsu on a video call last week.

The deal is 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 is is also an important step towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This 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.

As well as providing benefits for manufacturers and the tech sector, the deal brings myriad advantages for food and drink producers. This includes tariff free access for more UK goods with new and more liberal Rules of Origin allowing biscuit producers 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.

It also increases geographical indications (GIs) from just seven under the terms of the EU-Japan deal to potentially over 70 under our new agreement, covering English sparkling wine, Yorkshire Wensleydale and Welsh lamb.

Moreover, 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 £37 million there each year.

Crucially, the deal lowers tariffs on pork, beef, salmon and a range of other agricultural exports. Exporters will also 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 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,” said International Trade Secretary Liz Truss.

“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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