LONDON/TOKYO (REUTERS, AFP) - Britain struck its first post-Brexit trade deal with Japan on Friday (Sept 11), hailing the agreement as a "historic moment", just as it is struggling to clinch a deal with its closest trading partners in the European Union.
Britain said the deal, which had been agreed in principle, meant 99 per cent of its exports to Japan would be tariff-free. And it would increase trade with Japan by an estimated 15.2 billion pounds (S$26.9 billion) in the long run, Britain's trade department said.
Digital and data provisions in the agreement went "far beyond" those in the EU's trade deal with Japan, helping British fintech firms operating in the Asian country, it said.
Financial services firms, food producers, coat-makers and biscuit bakers - as well as cheese producers - would benefit from the agreement.
The UK-Japan Comprehensive Economic Partnership Agreement was agreed in principle by International Trade Secretary Liz Truss and Japan Foreign Minister Motegi Toshimitsu during a video call on Friday.
It builds on the broad EU-Japan deal that came into effect last year, but which will no longer apply to Britain from Dec 31.
"This is a historic moment for the UK and Japan as our first major post-Brexit trade deal," said Truss.
"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."
The deal was an "important step" towards Britain joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in the Asia-Pacific region, she said.
Major Japanese investors in Britain such as Nissan and Hitachi would benefit from reduced tariffs on parts coming from Japan and streamlined regulatory procedures, the British trade department said.
Prime Minister Boris Johnson has said Brexit gives Britain the freedom to strike trade deals with other countries around the world.
Critics say such agreements are unlikely to replace exports lost to the EU if a deal cannot be struck with Brussels.
The EU has ordered Britain to scrap a plan to break their divorce treaty, but Johnson's government has refused, potentially sinking four years of Brexit talks.
Japan wanted to reach broad consensus with Britain on trade this week before a change in government in Tokyo which could have caused the negotiations to drift.
Japan's ruling party will choose a new leader next Monday (Sept 14) to succeed Prime Minister Shinzo Abe, who is stepping down for health reasons.
His successor will become the next premier and form a new cabinet.
The political changes could include replacing Foreign Minister Motegi, who said on Friday the aim was to have the trade deal with Britain come into force in January.
Japan will submit the agreement to its parliament, which is expected to be convened later this year.
