“How fitting it is to be in the Land of the Rising Sun to welcome in the dawn of a new era of free trade,” British International Trade Secretary Liz Truss told reporters at a signing ceremony in Tokyo.
Appearing with Japanese Foreign Minister Toshimitsu Motegi, Truss called the agreement a “landmark” as the first major trade deal for Britain as it becomes once again an independent trading nation.
The deal, expected to boost British trade with Japan by 15 billion pounds ($19.5 billion) annually, also will make it easier for British companies to operate in Japan.
Financial services are Britain’s biggest export to Japan, now at 28%. English sparkling wine, made-in-Britain coats and shoes, Stilton cheese, pork, lamb and biscuits will become cheaper in Japan.
Motegi said the bilateral deal ensures continuity with the earlier European agreement and adds new areas for cooperation such as e-commerce and financial services.
Japan's existing free trade agreement with the European Union includes Britain only until the end of this year, as it exits the EU.
Parliamentary approval is needed in both nations before the agreement takes effect from the beginning of next year. It’s expected in Japan next week, as the ruling party controls both houses of parliament.
Japan already exports about 1.5 trillion yen ($14 billion) of goods to Britain each year, mostly autos, auto parts and other machinery. It imports nearly 1 trillion yen ($9.5 billion) from Britain, including pharmaceuticals, medical products and cars, according to the Japanese Foreign Ministry.
Tariffs on Japanese autos will be removed gradually and won’t become eliminated until 2026. That matches Japan's arrangement with the EU.
Japan has repeatedly expressed concern about the likely impact of Brexit on Japanese businesses in Britain, which include Hitachi, with plants making railway cars for East Coast trains, and Nissan Motor Co., employing several thousand workers at its Sunderland auto plant.
Motegi visited Britain in August, his first overseas trip amid the coronavirus pandemic, and stressed the importance for reaching a trade deal quickly.
Yuri Kageyama is on Twitter https://twitter.com/yurikageyama