31 July 2020
As strategic partners sharing common values such as freedom, democracy and the rule of law, Japan and the UK have developed a strong economic tie. The total value of trade (goods/services) between the two countries exceeded 29 billion GBP (approximately 4 trillion yen) in 2018. The UK as a gateway to the EU market attracted more than 1000 Japanese companies’ operations which contributed to the socio-economic enhancement of the country through expanding employment opportunities and exports.
Following the UK’s withdrawal from the European Union, negotiation on the Japan-UK EPA was officially launched in June 2020 and now is in its final stage. It must be concluded within the Transition Period and entered into force by no later than 1 January 2021, so as not to retrograde the trade/investment environment which both countries enjoy through the Japan-EU Economic Partnership Agreement (EPA) which eliminated/reduced tariffs for substantial trade in goods and also liberalized market access in services and investment sectors. This also highlights the clear need for the UK and EU to strike an ambitious deal.
The business communities of Japan and the UK hope that the future Japan-UK EPA not only maintains the level of ambition achieved by the Japan-EU EPA, but also improves rules towards achieving further free-open trade/investment. The Japan-UK arrangement is also expected to complement the multilateral trading regime by building upon a resilient framework, which is of significance especially when rule-making under the WTO is currently stagnant and many countries have turned inward during the COVID-19 pandemic.
Equally important, again, is the conclusion of the UK-EU Agreement within the above timeframe because both Japanese and the UK companies operate across the Channel.