The United Kingdom struck its first trade deal after Brexit after a deal with Japan.
The government has claimed that the agreement will boost trade with Japan by 15.2 billion pounds and that British companies will enjoy duty-free trade on 99% of exports to the country.
International Trade Minister Lise Truss agreed to the agreement, in principle, with Japanese Foreign Minister Toshimitsu Motegi via a video call Friday morning.
Ms Truss said the deal “far exceeds” the trade agreement between the European Union and Japan that will leave the UK at the end of this year, when the Brexit transition period ends.
She also hailed the agreement as a “significant step” toward the UK’s accession to a broader trade agreement of 11 nations, known as the Comprehensive and Advanced Partnership Agreement for the Trans-Pacific Partnership.
A government analysis found that the deal with Japan would provide a £ 1.5 billion boost to the British economy and increase workers’ wages in the UK by £ 800 million in the long term.
On Friday, Ms. Truss said: “This is a historic moment for the United Kingdom and Japan as the first major trade agreement after Brexit.
“The agreement that we negotiated – in record time and in difficult circumstances – goes far beyond the current EU agreement, because it guarantees new gains for British companies in our manufacturing, food and drink industries, and great technology.
“From our auto workers in Wales to shoemakers in the north of England, this deal will help build back better as we create new opportunities for people across the UK and help elevate our country.
“Strategically, the deal is an important step toward joining the Trans-Pacific Partnership and placing Britain at the center of a network of modern free trade agreements with like-minded friends and allies.”
The news of a breakthrough agreement after proposals last month was stalled in negotiations on access to food and agricultural products.
The UK was reported to have sought better terms for blue cheese but Japan wanted to adhere to the current EU tariffs.
Asked whether the United Kingdom will now be able to export more agricultural products to Japan than it can while being a member of the European Union, Trade Minister Greg Hands told Sky News: “I think we will.”
He added, “We’ve got geo indices for 70 products instead of just seven, including Cornish pies, including Milton Mowbray’s pork pies – a lot of popular UK products.”
“As far as the actual tariff rate quotas are concerned, we have really good access to pork and beef.
“There is £ 430 million worth of food and drinks to Japan every year from the UK.
“We have the main continuity and influence in most of these products, so I think it’s good news for agricultural exports to Japan.”
The agreement comes as the UK’s post-Brexit trade deal negotiations with the European Union continue to falter, with the two sides acknowledging on Thursday that “significant” differences remain in key areas despite the completion of eight rounds of talks.
Commerce Department figures reveal that in 2018, the UK’s trade with the European Union was valued at 659.5 billion pounds, while the value of trade with Japan was 29.1 billion.
It has been challenged whether the estimated £ 1.5 billion economic rise to the UK economy from a Japanese deal was significant – given that it represents a small fraction of NHS spending – Hands responded: “This is the first of what we hope will be a series of deals.
“Our commitment to the conservative statement is that 80% of UK trade is covered by such deals within the next three years.”