After meeting with senior British government officials such as Liz truss, British Minister of international trade, on June 6 and 7, Japan and Britain jointly said that the two countries are moving forward towards a comprehensive free trade agreement and are committed to reaching an agreement by the end of this year. This will be the first time in more than 40 years that the UK has developed a new trade policy independent of the EU.
It is worth noting that Japan and the UK started this negotiation only six weeks ago, when both sides said that the existing Japan Europe trade and economic partnership could not meet the needs of both sides, and they tried to reach an as fast agreement on this basis.
Agricultural tax is a tough nut to crack
At an online press conference held during maumus stay in London, he said the two sides would speed up negotiations to work out a framework agreement by the end of the month. We all hope that this agreement will come into force at the end of the transition period, that is, before January 1, 2021. Therefore, our team will act quickly to complete the negotiations and hope to sign the agreement in September.
After the meeting of the highest level representatives in the field of trade between the two sides, Japan and Britain have reached substantial agreements on Tariffs covering almost all industries. Among them, among the automobile tariffs that have attracted much attention, both sides agreed to reduce the tariffs in stages until 2026. Previously, Japan hoped to eliminate tariffs on cars and auto parts with the UK by 2026 (or even earlier). Because, according to the Japan Europe economic partnership agreement, the European Union will gradually eliminate the import tariff on Japanese cars by 2026.
Although Japans attempt to abolish the automobile tax ahead of schedule failed, it is good to reach a consensus. At present, the only hard bone in the Japan UK FTA is in the field of agricultural products. The UK hopes to reduce tariffs on agricultural products, especially on beef and cheese exports, and market access for UK services. However, since both sides hope to reach an agreement as soon as possible, the time left for the two sides to conduct article by article negotiations on agricultural tariffs is very limited, which is also one of the most difficult areas in the previous Japan Europe negotiations.
In order to reflect the advanced nature of the FTA, the two sides will also reach new rules on data circulation in the field of digital trade, and plan to write clearly the source code and password of the software that prohibits the enterprises to disclose their holdings.
Become the springboard for Britain to join cptpp
British media believe that the agreement will benefit the British job market and benefit more than 8000 small and medium-sized enterprises in the UK. For these small and medium-sized enterprises, more commodities will be able to enter the Japanese market. In the long run, the annual total tariff reduction on Japanese exports is about 33 million pounds per year.
In addition, British media believe that this FTA will also become a springboard for Britain to join the comprehensive and progressive trans Pacific Partnership Agreement (cptpp) led by Japan. The cptpp accounts for about 13% of global GDP in 2019; if the UK joins, the share will rise to more than 16%. Britain has always been one of the targets of cptpp expansion.
At the same time, the Japan UK FTA can also benefit Britain from long-term trade and investment opportunities in the Asia Pacific region in the post epidemic era. For a long time, the UK has been paying close attention to the development opportunities in the Asia Pacific region. In view of Japans rich experience in the fields of artificial intelligence, information technology and aging society, British media believe that the signing of a free trade agreement with Japan will promote the UK to take the lead in these fields and give full play to Britains advantages in the Asia Pacific region. (Intern Xiao Xia also contributed to this paper.)
Source: editor in charge of Finance and Economics: Zhong Qiming_ NF5619