News Article

Japan and Britain start trade talks with an eye on agreement this year

On Tuesday, Japan and the United Kingdom formally started discussions on a free trade agreement, with the aim to finalise a deal by the end of the year when the transitional period for the U.K.’s departure from the European Union officially ends.

The countries will draw on an existing agreement between Japan and the European Union, with Tokyo aiming to abolish auto tariffs while London has said it needs incentives for its financial services and textile industries.

Foreign Minister Toshimitsu Motegi kicked off the talks with the British trade secretary, Liz Truss, via a videoconference.

In January, Britain exited from the European Union and is negotiating trade agreements with dozens of countries. It is ready to make deals before the end of the year, after which it will no longer be included in the bloc’s arrangements.

The Japan-European Union free trade agreement came into force in February last year, removing or lowering tariffs on agricultural products such as wine and cheese from Europe while scrapping the 10% tariff on Japanese vehicles in its eighth year and immediately removing those on automotive components.

Trade minister Hiroshi Kajiyama said Tuesday that Japan wants to see the UK abolish auto tariffs “as soon as possible.” The countries should set high-level standards on digital commerce and aim to encourage trade and investment, he said at a news conference.

Truss said in a statement on Monday, the deal would “provide more opportunities for companies and individuals across every UK region and nation and help improve our economies following the unparalleled economic challenges posed by coronavirus threat.”

In 2019, international trade between the countries was worth around $38 billion, with Britain Japan’s 12th biggest export market and Japan the 11th largest export market for Britain.

Uncertainty over Britain’s decision to venture out on its own has proven to be a challenge for Japanese companies, with Nissan Motor Co. ditching last year a bid to manufacture new SUV models for the European market at its Sunderland plant.

Major Japanese corporations from Sony Corp. and Panasonic Corp. to Mitsubishi UFJ Financial Group Inc. and Nomura Holdings Inc. have moved some of their European activities to other countries such as the Netherlands and Germany.

Britain is now seeking to enter a free trade pact consisting of 11 Pacific countries including Australia, Canada and Mexico which accounted for around 13% of the global economy at the time it was signed.

“A trade agreement with Japan will also facilitate the U.K.’s entry to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which will expand market access for U.K. businesses throughout the Asia-Pacific region,” Truss said in the statement.

 

CIMB Bank - Best exchange rate SG > MY

Login to your account below

Fill the forms bellow to register

Retrieve your password

Please enter your username or email address to reset your password.