UK-Japan deal seals trade route for Scottish firms
Liz Truss: ‘landmark moment’
Scottish businesses are expecting a new trade deal between Britain and Japan to help them build on an export market already worth £500 million a year.
The UK-Japan Comprehensive Economic Partnership Agreement (CEPA), which was agreed in principle last month, will be formally signed in Tokyo on Friday (23rd) by the International Trade Secretary Liz Truss and Japan’s Foreign Minister Motegi Toshimitsu.
The deal secures major wins that the governments says would be “impossible” as part of the EU.
It is the first agreement the UK has secured that goes beyond the existing EU deal, with enhancements in areas such as digital and data, financial services, food and drink, and creative industries.
UK exports to Japan have been growing by an average of 8.2% year-on-year over the previous five years. The agreement could increase UK trade with Japan by £15.7 billion, giving a £1.5bn boost to the economy and increasing UK workers’ wages by £800m in the long run.
It also makes it easier for British and Japanese professionals to work in each other’s countries, with Japan making it easier to obtain travel visas and work permits.
It includes a commitment from Japan to support the UK joining the Trans-Pacific Partnership (TPP), one of the world’s biggest free trade areas, covering 13% of the global economy in 2018 and more than £110 billion in trade in 2019.
The deal is expected to benefit more than 500 businesses in Scotland that exported £503.4 million in goods to Japan last year, and almost 68% of the UK’s total goods exports to Japan in beverages.
Salmon producers have a big market in Japan
Scottish products, including Scotch beef, native Shetland wool and Stornaway black pudding are to be protected in Japan for the first time under a new agreement on Geographical Indicators (GIs). While Scotch Whisky distillers will continue to benefit from tariff-free trade.
The food and drink industry, which employed 46,000 people in Scotland in 2018, will also benefit from a reduction in tariffs on beef, pork and salmon.
The Scottish Salmon Company communications and new business development director, Su Cox, said: “We have ambitious plans to grow export sales to Japan and good trading relations are critical in supporting this.”
Johnstons of Elgin chief executive, Simon Cotton, said: “Japan is a key growth market for us. This deal is very welcome and will help to support our continued growth in this market.”
Ms Truss said: “Today is a landmark moment for the UK. It shows what we can do as an independent trading nation, as we secure modern and bespoke provisions in areas like tech and services that are critical to the future of our country and the reshaping of our economy.
“The agreement also has a much wider strategic significance. It opens a clear pathway to membership of the Trans-Pacific Partnership – which will open new opportunities for UK business and boost our economic security – and strengthens ties with a like-minded democracy, key ally and major investor in the UK.”
UK Government Minister for Scotland, David Duguid said: “Today’s signing of the UK’s new trade deal with Japan is much-anticipated and very welcome news, offering a real boost to Scottish businesses.
“This deal is further evidence of how we can unlock our full potential outside the EU, which could benefit all parts of the United Kingdom.”