UK has a major free trade agreement with Japan.
Ian Simmonds • September 11, 2020
The UK has signed its first major post-Brexit Free Trade Agreement with Japan.
UK–Japan Trade Deal
The UK has signed its first major post-Brexit Free Trade Agreement with Japan.
Preferential Trade Deals and Brexit
The EU has approximately 40 free trade deals with more than 70 countries outside the EU. As a member of the EU, the UK has been trading with these countries under EU preferential trade agreements, without having to pay duties on most goods. The UK Government is negotiating trade deals with countries outside the EU to replicate these current EU trade deals. The new trade deals will ensure that UK businesses will still have the same tariff-free access to these countries. Otherwise, WTO (World Trade Organization) terms will apply and UK businesses will be paying extra duties on imports and exports with these countries.
What is a Free Trade Agreement (FTA)?
To obtain access to foreign markets and promote international trade, preferential trade agreements are set up between partner countries. A large and growing number of countries participate in preferential trade agreements, resulting in businesses paying lower or zero preference rates of import customs duty on their goods. However, to be eligible for preference rates the goods must comply with relevant rules of origin.
Preferential rules of origin can be complicated, and importers and/or exporters need to understand how the rules apply to their products.
The UK – Japan Trade Deal
The UK Government have stated the following:
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 and will increase trade with 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 this morning (Friday 11 September).
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 will help to create jobs and drive economic growth throughout the whole of the UK.
The deal 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.
If you would like more details, please call +44 (0) 118 932 8447 or email info@icsglobalservices.co.uk
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