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▼ Exclusive: UK-Japan Trade Deal In Doubt For Monday's Deadline
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Doubts are growing in Whitehall that a UK-Japan trade deal will be completed by next week’s deadline, despite Downing Street saying just yesterday the target would be met.
The Prime Minister’s official spokesman told journalists yesterday that Boris Johnson expected the deal to be closed by next Monday’s deadline.
However, City A.M. understands that Department of International Trade officials are less bullish about closing the deal by next week and that the deadline “may slip”.
The deal is a key part of the government’s post-Brexit “global Britain” agenda and talks are being conducted alongside trade negotiations with the EU, US, Australia and New Zealand.
Hiroshi Matsuura, Tokyo’s chief negotiator, said in June that the trade agreement needed to be wrapped up by the end of summer so it could be ratified in the Japanese parliament before the end of 2020.
It is understood that haggling over British agricultural products is holding the deal up, with the Financial Times reporting this month that trade secretary Liz Truss was trying to gain reductions in Stilton cheese tariffs.
A Department for International Trade official said the pressure was on Japan to close the deal by the end of August, and that the UK just needed it completed before the end of the post-Brexit transition period on 31 December.
Another official added: “We aim to reach agreement in principle in the coming weeks.
“We have always been clear that we will take the time needed to agree a deal that works for the UK.”
The UK-Japan trade deal is expected to be similar to the EU-Japan deal agreed last year, but with extra concessions on things like digital services, agriculture and a range of other goods.
One source close to Truss suggested the UK may secure lower tariffs on agricultural exports by agreeing to allow greater access to Japanese digital services companies.
This could see a relaxation on laws around the flow of data and how data is stored.
David Collins, professor of international economic law at City University, said a potential cheese-for-data deal would be a “great trade-off”.
“I would welcome more Japanese digital firms over here and I think British companies would improve if that happened,” he said.
“I’m 95 per cent sure there will be a chapter on [digital services] in the UK-Japan free trade agreement and it will probably be a boiler plate copy of what was in the US-Japan free trade agreement.”
Government forecasts show a Japan trade deal would only add 0.07 per cent to Britain’s GDP in the long-term.
The same data shows a deal could lead to a 21 per cent rise in British exports of goods and services to Japan.
Collins said it was essential that UK negotiators pushed hard to secure Japanese access for City of London firms in the deal, but that he did not expect it would happen.
Traditionally countries get very jealous about their services market – about lawyers or securities traders going over,” he said.
“But at the end of the day, these free trade agreements are only going to be worth it if they include services.”
A spokesperson for the Department of International Trade said the department would not comment on ongoing negotiations.
- August 25, 2020
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