The United Kingdom has struck its first free trade agreement as an independent state, signing a deal with Japan after more than 40 years of being locked in the European Union’s trade regime.
International Trade Secretary made the announcement that she had agreed on the deal in principle with Japan’s foreign minister, Toshimitsu Motegi, on Friday morning.
The agreement goes “beyond the EU-Japan trade deal”, which was used as a template to fast track the bilateral trade deal between the two island nations, and will be worth an estimated £15.2 billion to the economy.
The UK-Japan Comprehensive Economic Partnership Agreement means that tariffs will be lifted on 99 per cent of exports to the far-east country.
It will create British jobs and increase economic growth, according to the Department for International Trade, and will give British companies a “competitive edge” in selling goods to Japan. In the long-term, it will add £800 million to British workers’ wages.
The deal will open up access for British financial services, support for British car and rail manufacturing, and tariff reductions on farming exports like British beef and pork.
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The UK-Japan trade deal is also an important step towards the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which spans from Australia to Chile and is the gateway for British businesses to the Asia-Pacific region.
The Nikkei reported on Thursday that the UK had commenced talks with the 11 members of the bloc about joining the partnership. CPTPP accounts for 13 per cent of global GDP, making it the world’s third-largest free-trading bloc.
Speaking to Breitbart London after the announcement, Ben Harris-Quinney, the chairman of the UK’s oldest conservative think tank, the Bow Group, said: “The deal that has been announced puts paid to the naysayers that Britain would struggle to do deals with the world’s major economies, as they were all too wedded to trading with the EU and wouldn’t take Britain seriously.
“It also puts paid to the notion that we wouldn’t be able to get a better deal than the one we had with Japan under the EU umbrella. It underlines the point Brexiteers have always made: outside the EU the possibilities for deals with other countries are almost endless and immensely exciting.”
Mr Harris-Quinney told this publication that he had met with the Japanese ambassador to the UK “several times over the last four years” to discuss a trade deal, remarking that “their hopes are for a long and enduring partnership that goes beyond even the very comprehensive deal that has been announced today. Without the shackles of the EU, I believe that Britain’s relationship with Japan will over the years become apparent as one of the most important of all.”
“Japan’s economy is substantially larger than Britain’s, ranking third in the world behind only the U.S. and China. They are also a world leader in technology and the digital economy and the third industrial revolution we are in the midst of has a lot to do with Japanese innovation.
“Many people in the UK and Japan will make their fortunes out of this deal alone,” Mr Harris-Quinney said.
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The chairman of the Bow Group added that it was important to develop the relationship with Japan not just for economic reasons, but to enhance global security.
Referencing Japan’s proximity to China, Mr Harris-Quinney remarked that “Japan was the first nation to raise concerns about an expansionist and hegemonic China. They want a more comprehensive defence agreement with the West as they see their defence interests converging with ours should China become a more belligerent power militarily.
“It may well be that the UK has a choice to make in the near future between Japan and China, as it will be difficult to have a deep and enduring relationship with both nations.”
“Japan has proven to be a country Britain can trust, and we must endeavour to reward that trust by committing to and celebrating our new special relationship,” he concluded.
The news of the deal comes as Prime Minister Boris Johnson draws a red line in trade talks with the European Union, which insists that the UK continues to surrender aspects of sovereignty in exchange for a deal.
Mr Johnson said this week that if a deal is not agreed on by October 15th, he will prepare to take the UK out of the bloc’s institutions on December 31st and deal with the EU-27 on World Trade Organization (WTO) terms.