The UK government has secured a historic free trade agreement with Japan, estimated to increase trade with the country by £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.

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, the government says.

UK manufacturers are set to benefit from the measures in the UK-Japan deal, including the automotive and rail manufacturing industries. Major UK investors like Nissan and Hitachi will be supported through reduced tariffs on parts coming from Japan, streamlined regulatory procedures and greater legal certainty for their operations.

The Department for International Trade (DIT) news release says the deal 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 increase the resilience and diversity in UK 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.

Commenting on the free trade agreement, Stephen Phipson, CEO of Make UK said: “Ensuring preferential trade arrangements with Japan is welcome to ensure that British manufacturing benefits from positive flows of goods and services into the lucrative Japanese market.

“Ongoing tariff free access will be beneficial as businesses work to come out of the current COVID crisis, and we particularly welcome the emphasis on benefits for small business included within the deal which will help to embed British brands within this important global market.

“The UK-Japan trade deal is also a first step towards the UK seeking to join the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) which is the gateway into Asia-Pacific.”

DIT
www.gov.uk/dit

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