UK and Japan Agree Historic Free Trade Agreement

This is an historic moment for the UK and Japan as our first major post-Brexit trade deal, underscoring the opportunities that exist for our country as we strike out in the world and delivering on our manifesto commitment.  

The agreement we have negotiated – in record time and in challenging circumstances – goes far beyond the existing EU deal, as it secures new wins for British businesses in our great manufacturing, food and drink, and tech industries. 

From our automotive workers in Wales to our shoemakers in the North of England, this deal will help build back better as we create new opportunities for people throughout the whole of the UK and help level up our country. 
 
Our new trade deal with Japan: 

  • Boosting trade by £15.2 billion between our two countries, helping to create jobs and drive economic growth throughout the whole of the UK. Our new trade deal is tailored to the UK economy and secures additional benefits beyond the current EU Japan trade deal, giving UK companies exporting to Japan a competitive advantage in a number of areas.  
  • Delivering new opportunities for every part of our economy, helping us to bounce back as we recover from coronavirus. UK Businesses will benefit from tariff-free trade on 99 per cent of exports to Japan. Our analysis also shows that a deal with Japan will deliver a £1.5 billion boost to the UK economy, and increase UK workers’ wages by £800 million in the long run. 
  • Marking an important step towards our accession to the Trans-Pacific Partnership, expanding global opportunities for UK businesses. We have secured a strong commitment from Japan to support our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This will give UK businesses a gateway to the Asia-Pacific region and help to increase the resilience and diversity of our supply chains. 

 
The ten key benefits of our new trade deal with Japan: 
 
1. Creating cutting-edge digital and data provisions, helping UK businesses to innovate and grow globally. These changes will enable the free flow of data whilst maintaining high standards of protection for personal data. We will prevent British businesses from having the extra cost of setting up servers in Japan, helping UK fintech firms operating in Japan - like Revolut and Transferwise - to innovate and grow. The EU takes a more protectionist stance on data, so does not have these provisions in its agreement with Japan. 
 
2. Improving market access for UK financial services, helping to boost our biggest export globally. Financial services are our biggest export to Japan, accounting for 28 per cent of all UK exports. Our new trade deal will allow for greater transparency and streamlined application processes for UK firms seeking licences to operate in Japan, and creates an annual dialogue between the Treasury, UK financial regulators, and the Japanese Financial Services Agency, that will explore ways to further reduce regulatory friction. 
 
3. Delivering tariff-free access for more UK goods, making it easier and cheaper for businesses to sell to the Japanese market. New and more liberal Rules of Origin will allow producers of coats, knitwear and biscuits to source inputs from around the world for their exports to Japan, helping UK businesses sell in the Japanese marketplace.  
 
4. Creating new protections for iconic UK goods like Welsh Lamb, safeguarding the interests of British industries. These measures include increasing geographical indications (GIs) from just seven under the terms of the EU-Japan deal, to potentially over 70 under our new agreement, covering goods including English sparkling 
wine, Yorkshire Wensleydale and Welsh lamb. This would lead to improved recognition of key UK brands in the Japanese market. 
 
5. Protecting UK creative industries, ensuring they can continue to thrive in the future. British businesses can now be confident that their brands and innovations will be protected. We have gone beyond the EU on provisions that tackle online infringement of IP rights, such as film and music piracy. 
 
6. Improving mobility for business workers, helping us to attract the best and the brightest to the UK. Our new deal will give more flexibility for Japanese and British companies to move talent into each country, covering a range of UK skilled workers to enter Japan, from computer services to construction. This includes commitments that go beyond the EU-Japan deal, for investors, spouses and dependents, and a wider range of intra-company transfers. 
 
7. Paving the way for our accession to the Trans-Pacific Partnership, opening up new markets for UK businesses globally. We have secured a strong commitment from Japan to support UK membership of CPTPP, which will open up 11 key pacific markets for exporters, reducing tariffs for UK business. 
 
8. Supporting UK car and rail manufacturing, helping to level up and boost every corner of our United Kingdom. We are supporting jobs at major investors in the UK like Nissan and Hitachi through reduced tariffs on parts coming from Japan, streamlined regulatory procedures and greater legal certainty for their operations. 
 
9. Delivering more generous market access for malt producers, helping a key British industry expand globally.  Japan has guaranteed market access for UK malt exports under an existing quota which is more generous and easier to access than the EU quota. The UK is the second biggest exporter of malt to Japan, with UK producers exporting £37 million there each year. 
 
10. Reducing tariffs on key UK exports such as pork and beef, ensuring our agricultural sector can continue to thrive. We have negotiated a deal that sees tariffs fall on pork, beef, salmon and a range of other agricultural exports. We will continue to benefit from access to the low tariffs for key food and drink products covered by quotas, such as Stilton cheese, tea extracts and bread mixes. This forms a pathway to further market access under CPTPP, which has been committed to by Japan as part of our agreement.