The first big post-Brexit trade deal for the UK was signed after it formally inked a trade agreement with Japan.
Under the deal, which was announced last month, no tariffs would be imposed on nearly all its exports to Japan while tariffs on Japanese cars would be removed by the UK by 20206.
The deal was described as a “ground-breaking, British-shaped deal” by UK International Trade Secretary Liz Truss.
However, critics have claimed that a CGP growth of just 0.07 per cent will result from the deal which would amount just a miniscule fraction of the trade that will be lost with the European Union if there is no Brexit deal with the EU.
In September, a broad agreement on the trade deal was reached by the two countries and trade between the UK and Japan is expected to be boosted by about £15bn. The dela is set ot be come into force from 1 January 2021.
However, according to some experts, this trade agreement is actually a missed opportunity for greater trade relations between the UK and its 11th largest trading partner.
“Given that Japanese FDI (Foreign Direct Investment) has been playing an important role in the UK economy and retaining its existing investment in post-Brexit is crucial, the UK government should have shown a strong commitment to Japanese investment by including a comprehensive investment chapter encompassing investment protection and dispute settlement,” said Dr Minako Morita-Jaeger, international trade policy consultant and fellow of the UK Trade Policy Observatory at the University of Sussex.
Accounting for 14 per cent of the world total in foreign investments in 2018, Japan was the largest investor abroad in the world, she added.
Except for an extra chapter on digital trade, the new trade agreement between Japan and the UK is very similar to the existing between the EU and Japan.
“It used to be said that an independent UK would not be able to strike major trade deals or they would take years to conclude,” said Ms Truss at a joint press announcement with Japan’s Foreign Minister, Toshimitsu Motegi.
For Japanese business, deal between the UK and the EU was still critical particularly because Japanese car makers such as Nissan and Toyota make use of car parts from all over Europe in the cars that they assemble in the UK for the country as well as for exports, Motegi said.
“It is of paramount importance that the supply chain between the UK and the EU is maintained even after the UK’s withdrawal,” he said
(Adapted from BBC.com)