Financial services central to Japan trade talks

The UK government published its negotiation objectives on Wednesday for upcoming talks with Japan over a post-Brexit trade deal.

David Sapsted

13 May 2020

With trade talks already underway with the EU and US, and with London expected to open discussions with Australia and New Zealand shortly, the publication of plans for a deal with Japan are being seen as further evidence of the UK's determination to strike as many trade agreements with as many nations as soon as possible, the coronavirus pandemic notwithstanding.Talks with Tokyo are expected to be based on Japan's existing trade deal with the EU, but with more extensive arrangements for financial services and tech.According to a City A.M. report on Wednesday, a UK-Japan free trade deal could provide a £383 million-a-year boost to London’s economy alone, with the capital's financial and professional services industries being the big winners.International Trade Secretary Liz Truss said: “Our new trade deal with Japan will be specifically tailored to the UK economy and will aim to create new opportunities for businesses in every part of the country.“London is among the regions set to benefit the most from the new deal. Its world-renowned financial and professional services providers will benefit from cutting edge provisions on digital trade and intellectual property, bringing a boost for tech firms across the UK."Japan is one of our largest trading partners and a new trade deal will help to increase trade, boost investment and create more jobs following the economic challenges caused by coronavirus."Both sides are committed to an ambitious timeline to secure a deal that goes even further than the existing agreement especially in digital and data."Negotiations with Japan are an important step in CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) accession, a key UK priority, which will help us diversify our trade and grow the economy."The CPTPP is a trade deal signed by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.The Department of International Trade (DIT) in London said that priorities in the talks with Tokyo would be to “diversify supply chains beyond the EU and China” and to “reduce barriers to cross-border trade and investment, support co-operation on financial regulation and make it easier for professionals to operate in Japan”.The department said the deal would “aim to secure cutting edge provisions on digital trade”, which would in turn “benefit innovative sectors such as e-commerce and the creative industries”.Japan is the UK's 11th largest trade partner, with exports to Japan in 2018 worth £13.8 billion and imports from Japan valued at £15.4 billion.DIT said the government's aim was to have 80 per cent of total UK external trade covered by free trade agreements by 2022."So in addition to wanting to complete trade agreements with two of the three largest global trade powers [the US and EU] in the next year or so, we're also going to start talks with the fourth largest," David Henig, the UK director of the European Centre For International Political Economy, told Al Jazeera."You can't fault the ambition, but such a programme before we've taken time to consider what we want looks reckless. The risk is that by the time we know what we really want from trade agreements, we'll have given away the access to our own market which we could have traded."