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UK and Japan close in on agreeing trade deal

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UK and Japan close in on agreeing trade deal

Britain’s Secretary of State of International Trade and Minister for Women and Equalities Liz Truss attends a joint videoconference with Japan‘s Minister for Foreign Affairs Toshimitsu Motegi at the Department for International Trade, in London, Britain, June 9, 2020. [Photo/Agencies] Japan‘s Foreign Minister Toshimitsu Motegi was in London on Thursday as his country and the United Kingdom moved closer to agreeing the UK‘s first post-Brexit trade deal.

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He met Trade Secretary Liz Truss as the two sides try to secure an agreement which would in normal circumstances have taken much longer, but has been rushed through in just a couple of months as the UK looks to get something definite confirmed.

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Talks between the UK and the European Union to agree a new trade deal before the end of the post-Brexit transition period at the end of the year show little sign of progress, and London has abandoned hope of a frequently-mentioned trade deal with the United States before its November elections

The Financial Times reports that such is the urgency to secure a deal that it is likely to end up being weighted in Japan‘s favor. The Department of Trade estimates the deal with Japan could result in a 0.07 percent increase to the UK‘s GDP, which pales in comparison to the Treasury’s figures that leaving the EU’s single market and customs union could result in a 5 percent loss of GDP over the next 15 years

The trade department also says that while the deal could see UK exports to Japan rise by 21 percent, imports to the UK from Japan could go up 79 percent

It is expected to be largely based on the deal the EU and Japan secured in February 2019, although the reduced size of the market it deals with one country as opposed to 28 means it is on reduced terms

David Henig, director of the UK Trade Policy Project, said the potential deal would have “a few tweaks” from the EU model and described it as “not phenomenal, but at least both sides want to do it”

Critics of Truss, who supported Remain in the 2016 Brexit referendum, have been quick to remind her of her comment in a BBC debate at the time that “Leave cannot name one country we would get a better trade deal with if we left the EU.”

Motegi’s visit to London is the first overseas trip by a Japanese government minister since the novel coronavirus outbreak began. The UK is still on Japan‘s list of countries whose nationals cannot enter the country, so the Japanese negotiating team will only leave their accommodation for discussions

The Financial Times reports that Tokyo is pessimistic about the likelihood of a deal being agreed between the EU and the UK, hence the uncharacteristic speed of the talks and Japan‘s desire to agree terms with the UK. Otherwise, Japanese companies based in the UK, especially its car industry, would have to pay tariffs on components imported from Europe

The UK‘s largest car production site is owned by Japanese company Nissan, at Sunderland in the North East of England, an area that voted strongly in favor of Brexit

There has been a question mark over its future since then, and recently the company announced it would not be building the new Ariya electric vehicle there, despite Sunderland having been one of the prime candidates to land the job