“Substantial agreement” on most of the elements of a post-Brexit trade deal was reached between Britain and Japan earlier this week after two days of talks.
It has been reported that during the talks, moves to restrict British farm exports was resisted by UK trade secretary Liz Truss.
The elements of the trade deal between Japan and the European Union were largely followed in the proposed deal between the UK and Japan. Both the countries want to come to an agreement on a free trade agreement by the end of the month.
There would be serious disruption of trade between the UK and Japan after the end of the transition period of UK leaving the EU on December 31 this year if there is no deal between the two parties on trade.
Improved regulatory co-operation between London and Tokyo would help to open up extra trade in financial services, digital and e-commerce after the planned trade deal, Truss insisted. The deal would go “significantly beyond the EU-Japan agreement” in these areas, she said.
But according to estimates of the UK government, a trade agreement between the UK and Japan would add only about 0.07 per cent to the gross domestic product of Britain in the long term through an increase of trade between the two countries worth £15bn. In comparison, the UK government predicted a drop of 5 per cent in GDP growth of the country after the UK leaves the EU single market and customs union.
If the proposed trade agreement with Japan is finalized, it could lead to a rise of 21 per cent in British exports of goods and services to Japan, according to estimates of UK trade department. However at the same time there would be an estimated growth of 79 per cent in imports from Japan to the UK.
Throughout the process of the trade negotiation with the UK, which has a population of 66 million, Japan has insisted that the new deal may not be as good as the one that it has with the EU since the combined population of the EU minus the UK was at almost 450 million.
Tokyo’s attempt to reduce access for British farmers to Japanese markets was the greatest sticking point in the trade negotiations between Truss and Japan’s foreign minister Toshimitsu Motegi in London.
“Liz stood firm on UK interests and it was clear that we wouldn’t accept a rollback on the EU-Japan deal,” according to reports quoting one ally of Ms Truss. Britain hopes that British food producers would be able to have the same amount of access to the Japanese market as those available for the EU farmers.
“In most areas, we have reached a substantial agreement,” Motegi told reporters after the talks in London. Ms Truss said:
“Negotiations have been positive and productive and we have reached consensus on the major elements of a deal,” Truss said.
(Adapted from FT.com)