Japan and Britain are scheduled to sign a bilateral free trade agreement on Friday, Britain’s first major trade deal as an independent trading nation.
The UK-Japan Comprehensive Economic Partnership Agreement is expected to increase trade between the two countries by about Є16.8 billion ($ 19.9 billion), according to the UK’s Department of International Trade. The new deal comes into effect when Britain officially leaves the European Union (EU) in early 2021 and will guide the two countries’ post-Brexit trade relations.
After negotiating in June, the agreement was approved in principle by International Trade Minister Liz Truss and Japanese Foreign Minister Motegi Toshimitsu via video call on September 11. Negotiation topics include the import of Japanese cars – with Britain agreeing to gradually raise tariffs to zero by 2006 – and Britain’s exports of groceries to Japan.
Noriko Hama, a professor of economics at Kyoto’s Doshisha University, said both London and Tokyo were trying hard to “avoid tough problems” and quickly reach an agreement on bilateral trade – something that has benefited the leaders of the two countries politically.
“The agreement was made very carefully and did not include agricultural produce, for example, so that there were not too many bumps on the road before both parties could ratify the agreement,” he said.
“And that’s good for Tokyo and London because it emphasizes the ‘special relationship’ again and serves as a propaganda exercise as well, showing the UK that Brexit is a positive thing,” he added.
‘Custom made agreement’
Martin Schulz, chief policy economist for Fujitsu Ltd’s Global Market Intelligence Unit, said discussions on trade were going “smoothly” as the two governments backed off from original plans for a broader deal to meet time limits.
“It would be very easy for them to effectively cancel the EU-Japan free trade agreement, but initially both Japan and Britain said they wanted a much more attractive and forward-looking agreement,” he said. “That’s the reason Britain cited for leaving the EU, it wants a tailor-made trade agreement that goes beyond the EU deal.”
And while the final version of the Japan-UK deal may not be groundbreaking, he said, there are now likely more opportunities once the fundamentals are in place and opportunities for more innovative approaches to trade once the deadlines have been met. .
For Japan and Britain, the agreement signifies more than just bilateral trade.
London sees the deal as a potential showcase for future free trade agreements with the US, Australia, India and other potential trading partners as soon as it leaves the EU.
After the economic alliance was formed, Japan also hoped to deepen its security alliance with Britain and its partners. He hopes London will play a bigger role in security in the Far East and ultimately deploy military units to the Indo-Pacific region, a strategy aimed at curbing China’s expansionist policies in the region.
“Of course, the main reason for his visit was to discuss Brexit and a new free trade agreement between London and Tokyo, but China is clearly on a hidden agenda and Japan is eager to strengthen security ties with Britain and the US to counter China’s rise,” Go Ito said, a professor of international relations at Tokyo’s Meiji University.
Japan also hopes more countries will take part in efforts to stop North Korean imports banned or restricted under UN sanctions including fuel, high-tech technology and luxury goods.
Potential ‘Five Eyes’
Japan’s foreign minister hinted that the two countries also touched on the Five Eyes intelligence-sharing agreement, which has expressed Tokyo’s interest in joining.
Existing members of the organization include Australia, Canada, New Zealand, United Kingdom and the United States. Japan’s membership will give the group a strategic geopolitical position in northeast Asia.
Britain has sent a number of warships to the Far East in recent years, including the HMS Albion, which conducted joint amphibious assault drills with Japanese units in 2018.
HMS Sutherland, a Type-23 frigate, took part in a shutdown operation at sea that same year and in September 2018, British ground forces took part in drills at Japan’s Fuji Ground Self Defense Forces Camp, west of Tokyo.
London is also lobbying Japan to work with a British aerospace firm on the design and construction of a next-generation fighter jet for the Japanese Air Self-Defense Force.
To further strengthen Anglo-Japanese relations, Prime Minister Yoshihide Suga’s government will support London’s efforts to join the Trans-Pacific Partnership (TPP) free trade agreement, which brings together 11 countries including Australia, Canada, Singapore, Vietnam, Malaysia and Chile.