From tech and digital firms to fashion and luxury jewellery designers, London businesses could benefit significantly from the new UK-Japan trade deal.
The UK-Japan Comprehensive Economic Partnership Agreement was agreed in principle by International Trade Secretary Liz Truss and Japan Foreign Minister on a video call on Friday morning.
It is the UK’s first major trade deal outside the EU.
A deal with Japan could increase trade by £15.2bn, giving a £1.5bn boost to economy and increasing UK workers’ wages by £800m in the long run. This will benefit the 1,993 businesses in Greater London that exported to Japan last year and help even more local businesses to sell their goods to Japan for the first time.
Cutting-edge digital & data provisions that go far beyond the EU-Japan deal, including enabling free flow of data, a commitment to uphold the principles of net neutrality and a ban on data localisation that will prevent British businesses from having the extra cost of setting up servers in Japan.
This will help UK fintech firms operating in Japan to innovate and grow, attract greater investment into the UK from Japan’s leading digital industry, and make it easier for UK tech and digitally-savvy firms to export to Japan.
CEO of TechUK, Julian David said, “TechUK welcomes the conclusion of the UK-Japan Economic Partnership Agreement with its comprehensive digital trade chapter. Today’s agreement improves an already flourishing relationship between the UK and Japan tech sectors and creates significant opportunities for trade and investment for both our countries.
“Since 2018, in partnership with JEITA, we have run a successful UK-Japan Tech Forum to enable our members to develop a closer relationship with Japan and we look forward to working with the Government and our partners in Japan to assist the tech sector in taking full opportunity of this agreement.”
The removal of several trade barriers aims to assist the UK’s 8,000 SMEs already exporting goods to Japan, by offering tariff-free trade on 99% of products exported to Japan.
International Trade Secretary Liz Truss said, “This is a historic moment for the UK and Japan. This is our first major post-Brexit trade deal and it goes far beyond the existing EU deal by securing new wins for British businesses including in our great manufacturing, food and drink, and tech industries.
“From our tech and digital firms to our fashion industry, this deal will create new opportunities for people throughout the whole of the UK and help level up our country.
“Strategically, the deal is an important step towards joining the Trans-Pacific Partnership and placing Britain at the centre of a network of modern free trade agreements with like-minded friends and allies.”
One business already experiencing success in the Japanese market is London-based precision jewellery brand Alice Made This. The company combines the precision of engineering with the beauty of handwork to create unique accessories and jewellery for both men and women.
Supported by the Department for International Trade (DIT), Alice Made This has been exporting to Japan since 2014 and has become the company’s largest export market for wholesale. Alice Made This already exports 12.5% of its business to Japan and that figure is set to rise as a result of this trade deal.
Alice Walsh, Founder and Director at Alice Made This said, “After meeting my husband, I spotted a gap in the market for male accessories and so in 2012 I decided to turn what was once an extra-curricular activity into a precision jewellery and accessories brand.
“It was really important to me that the brand stayed local, highlighting the breadth of honed craft and innovation that exists in the UK. All the jewellery is designed and manufactured in the UK by engineering experts and skilled artisans.
“I believe that it is our British heritage, passion for craftsmanship and pared back aesthetic that strikes a chord with our Japanese clients. They are always looking for beautifully made British products that have a story to tell.
“Japan’s business etiquette is all about relationship building and by removing barriers to market-entry this trade deal will naturally further this. It will encourage our clients to buy more and to experiment with new products more freely.”
Other key benefits of the UK-Japan Comprehensive Economic Partnership Agreement include:
- Improved market access for UK financial services – including greater transparency and streamlined application processes for UK firms seeking licences to operate in Japan.
- Improved mobility for business people – securing more flexibility for Japanese and British companies to move talent into each country, covering a range of UK skilled workers to enter Japan, from computer services to construction.
- New protections for UK creative industries – British businesses can now be confident that their brands and innovations will be protected. We have gone beyond the EU on provisions that tackle online infringement of IP rights, such as film and music piracy.
- New protection for more iconic UK goods – increasing geographical indications (GIs) from just seven under the terms of the EU-Japan deal to potentially over 70 under our new agreement. These will cover a range of goods from across the UK – including Scotch beef, English Sparkling Wine, Yorkshire Wensleydale and Welsh lamb.
This is the first step towards the UK’s aim to become a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which will open up 11 key pacific markets for exporters, reducing tariffs for UK business (95% of goods traded between members are tariff-free).