Britain and Japan have signed a post-Brexit trade deal that aims to increase trade between nations by 15 billion pounds ($20 billion). Japan notoriously belatedly engaged in the “bilateral train.” Until the late 1990s, the government secured most of its bets on multilateral negotiations in order to open foreign markets to the interests of Japanese companies. However, Japan is increasingly suffering from the loss of market share that generates free trade agreements between other countries. As a result of NAFTA, for example, Japan felt an acute need to enter into an agreement with Mexico so that its products would benefit from the same rates of duty in the Mexican market as those of the United States. The possibility of concluding a free trade agreement with Hong Kong should not be ruled out as part of the current process of strengthening the economic interdependence relationship between Japan and China. This is a historic moment for Britain and Japan, our first major trade deal after Brexit. The agreement we have negotiated – in record time and under difficult circumstances – goes far beyond the existing EU agreement, as it ensures new benefits for British companies in our major industries in the manufacturing, food, beverage and technology sectors. (1) Three points of conformity with the WTO Agreements should be examined. First, tariffs and other trade regimes should not be higher or more restrictive than tariffs and other corresponding trade arrangements prior to the conclusion of the free trade agreement. Second, they must eliminate tariffs and other trade-restrictive rules on most of all trade. Thirdly, they must ensure that the RTAs are completed within ten years, at least in principle. The reference to “essentially all trade” implies that countries must achieve a level of liberalization favorable to international standards in terms of trade volume (based on the figures provided, the NAFTA average is 99%, while the average of the Free Trade Agreement between Mexico and the EU is 97%).
The most modern digital and data rules go far beyond the EU-Japan agreement. These allow the free flow of this data while maintaining high standards of protection of personal data. We have also committed to net neutrality principles and introduce a ban on data localization that will prevent UK companies from having the additional costs of setting up servers in Japan. This will help UK fintech companies operating in Japan – like Revolut and Transferwise – innovate and grow.