Finally, the UK has signed its first major trade agreement since leaving the EU. The deal has been made between the UK and Japan and aims to increase trade between the two nations by some £15bn, nearly doubling the value of current trade agreements.
The new deal should make it easier for UK to businesses to operate in Japan, removing barriers to entry for manufacturers, tech companies, and leisure providers alike. Tariffs on Japanese cars, one of its biggest exports to the UK, will be phased out in stages before being removed entirely in 2026.
Importantly, the deal will give the UK a gateway to the Asia-Pacific region, acting as a steppingstone towards joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This is a trade partnership between 11 Pacific nations and could prove a valuable source of future trade for the UK. This is especially pertinent given that the Pacific region is likely to a main source of world economic growth in the coming years and decades.
Though it is unclear whether or not the claims of the deal will be brought to fruition, Labour has been quick to criticise the new agreement, raising concerns over how much of the “£15bn” increase in bilateral trade would be seen by UK businesses. According to the government’s own impact assessment, around 83% of this would go to Japanese businesses.
Liz Truss, author of the deal, has rebuked these claims, citing the government’s antiquated economic modelling processes. The University of Oxford is already reworking these models to better reflect the UK’s offering in tech, data, and services.
What new opportunities will this trade agreement bring the UK? We’ll have to wait and see. It is certainly comforting to see the UK making headway on forging its new deals as an independent nation; some positive progress is always welcome news in these uncertain times.
Today is a landmark moment for Britain. It shows what we can do as an independent trading nation, as we secure modern and bespoke provisions in areas like tech and services that are critical to the future of our country and the reshaping of our economy.