UK to benefit from £31bn EU-Japan trade deal for just 57 days

A deal expected to boost trade between Europe and Japan by almost 36 billion euros (£31bn) a year and save EU companies up to one billion euros (£900m) a year in duties comes into effect on Friday.
Speaking: British Secretary of State for International Trade Liam Fox. Picture: AP Photo/Mark SchiefelbeinSpeaking: British Secretary of State for International Trade Liam Fox. Picture: AP Photo/Mark Schiefelbein
Speaking: British Secretary of State for International Trade Liam Fox. Picture: AP Photo/Mark Schiefelbein

The UK will participate in the EU-Japan Economic Partnership Agreement (EPA) for just 57 days before its scheduled departure from the European Union on March 29.

Campaigners for a second Brexit referendum said the EPA highlighted the advantages to the UK of remaining in the EU and the need for the public to be asked again whether they want to leave.

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International Trade Secretary Liam Fox predicted in 2017 the UK would be able to replicate up to 40 EU free trade deals for “a second after midnight” on Brexit day.

So far none are believed to have been formally signed.

Former business secretary Sir Vince Cable, a leading supporter of the People’s Vote campaign, said: “The EU’s trade deal with Japan took years to negotiate and runs to thousands of pages but British business will worry that they might only enjoy the benefits for a few weeks if we crash out of the European Union in March.”

The Liberal Democrat leader added: “We were told it would be the easiest thing ever to leave the European Union but this deal shows that there is no form of Brexit that fulfils the promises made for Brexit.

“Losing access to this trade deal will leave the UK with a worse deal than we already have inside the EU.

“For Britain to sign its own trade deal with Japan will take Liam Fox years, and meanwhile the uncertainty will go on and on for British business, costing this country jobs, skills and investment.”

Labour MP Jo Stevens, a supporter of the Best for Britain campaign for a second referendum, said: “The EU and Japan between them make up one-third of the world’s GDP.

“We’re about to lose access to all this. We are sleepwalking towards a disaster and the Prime Minister needs to wake up and step up.

“The advantages of remaining in the EU are growing, not diminishing. It’s time to end the nightmare that is Brexit.”

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After years of negotiations, the EPA was finalised in 2017 and signed last July, creating the world’s largest bilateral free trade zone, covering 635 million people.

It removes the majority of the one billion euros (£900 million) of duties paid annually by EU companies exporting to Japan and eliminates a number of non-tariff barriers to trade.

Japanese duties of 29.8% on European cheeses, such as Cheddar, will be scrapped and the EU will be able to increase beef exports to Japan “substantially” and sell processed pork products duty-free, the European Commission said.

The agreement also opens services markets in the areas of finance, e-commerce, telecommunications and transport and facilitates EU companies’ access to procurement markets in 54 large Japanese cities.

In addition, the protection of geographical indication status will be extended to hundreds of speciality EU agricultural products for sale on the Japanese market.

European Commission president Jean-Claude Juncker said the deal would “turbo-boost” trade and give customers in both markets greater choice and cheaper prices, while providing “gold standard” protections for workers and the environment.

“Europe and Japan are sending a message to the world about the future of open and fair trade,” said Mr Juncker.

“We are opening a new marketplace, home to 635 million people and almost a third of the world’s Gross Domestic Product, bringing the people of Europe and Japan closer together than ever before.”

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Japan’s Prime Minister Shinzo Abe visited Downing Street on January 10 for talks in which Theresa May said both sides had expressed their hopes for an “ambitious bilateral arrangement, building on the deal already agreed between Japan and the EU”.

Shuichi Akamatsu, minister for economic affairs at the Japanese Embassy in the UK, said: “We intend to steadily implement the EPA and further deepen the collaborative relationship between Japan and the EU.

“With regard to Brexit, the Japanese government continues to urge both the UK and the EU to secure predictability and legal stability in the process of Brexit, and is watching with great interest in order that the impact on Japanese businesses, as well as the world economy, should be minimised.

“When Prime Minister Abe visited the UK last month, he himself earnestly told Prime Minister May that Japan would like a no-deal Brexit to be avoided.

“As reconfirmed during the bilateral meeting between the leaders of Japan and the UK, after the UK’s departure from the EU, Japan intends to build swiftly on a new economic partnership with the UK using the Japan-EU EPA as a basis.”

A Downing Street spokeswoman said “good progress” was being made on a number of trading arrangements to replace the free trade deals that will be lost when the UK leaves the EU.

The spokeswoman said there were “strong elements (of the EPA) which we think could be replicated in our own deal with Japan.”

Japanese companies employ around 150,000 people in the UK and trade between the two countries totalled £28 billion in the past year.

Major employers such as Nissan and Honda, which invested in the UK as a gateway to the European market, have voiced concern about the potential impact of Brexit.