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U.K. close to first major post-Brexit trade deal after fresh negotiations with Japan

July 30, 2020

post-Brexit trade

Britain draws closer to signing its first major trade deal since leaving the European Union in January, according to media reports on Wednesday. The U.K. has made a breakthrough in talks with Japan, with the two countries planning to sign a free-trade agreement soon.

The U.K. published an outline of its objectives for a trade deal with Japan in May and talks began in June. Back in June, Trade Secretary Liz Truss said: “We both share a desire to have this agreement in force by the end of the Transition Period, if at all possible. So after commencing today our teams will move quickly to complete negotiations.”

Both sides now expect to sign the deal by September, though this is barring any last-minute hitches that could derail the agreement. A free trade deal with Japan could mark a milestone in the U.K.’s departure process from the E.U. and could be an encouraging sign as talks continue with the United States, Australia, New Zealand, and others.

In May, the U.K.’s department for international trade (DIT) said a free trade deal with Japan, the U.K.’s fourth-largest non-European Union trading partner, could boost the size of the economy by 0.07%. It also said imports from Japan could increase by 80% while exports to Japan would increase by 21.3%.

The deal could encourage several domestic car makers, such as Aston Martin, as cars are one of the U.K.’s top exports to Japan. This industry worth around £1.1 billion annually, according to DIT figures.

“Both sides are committed to an ambitious timeline to secure a deal that will enter into force by the end of 2020 if at all possible,” a DIT spokesperson said on Wednesday. “Our priority is to maintain and enhance the trading relationship between our two countries.”