Britain has reached a free trade agreement with Japan, its first with a major economy since leaving the European Union earlier this year.
The UK Department for International Trade said in a statement that the deal with its 11th biggest trading partner was agreed to in principle on Friday and will increase trade between the two countries by about £15.2 billion ($19.5 billion). UK businesses won’t face tariffs on 99% of exports to Japan, including on products such as knitwear, biscuits and coats.
“This is a historic moment for the UK and Japan as our first major post-Brexit trade deal,” said international trade secretary Liz Truss, who touted benefits for the manufacturing, food and drink, and tech industries.
Britain will no longer be covered by a EU-Japan free trade deal when the post-Brexit transition period expires at the end of this year. That deal removed tariffs on European exports, such as cheese and wine, and reduced barriers to Japanese car imports from 2019.
The UK government is now trying to replicate dozens of similar EU trade deals with third countries before its transitional agreement with the bloc expires. If the deals don’t materialize, British companies could face barriers to doing business in most of the foreign markets they serve, starting in January.
The deal with Japan means the United Kingdom has nailed down new agreements worth just 10% of its total trade in 2019, up from about 8% in January, according to Professor L Alan Winters, director of the UK Trade Policy Observatory at the University of Sussex.
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