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UK signs trade deal with Japan as Brexit talks heat up
[NEW YORK] The UK signed a trade deal with Japan on Friday, its first with a major economy since Brexit, as the clock runs down on British efforts to reach an agreement with the European Union (EU) by the end of the year.
In a ceremony in Tokyo, UK International Trade Secretary Liz Truss and Japanese Foreign Minister Toshimitsu Motegi put their names to the pact, which was reached in principle in September, about three months after formal negotiations began.
The deal largely preserves the terms under which the UK traded with Tokyo as part of the EU, according to Japan's Ministry of Foreign Affairs. It's expected to boost Britain's gross domestic product by 0.07 per cent compared to 2018 levels over the next 15 years, the UK government has said.
The agreement "has a much wider strategic significance", Ms Truss said in a statement late Thursday in the UK "It opens a clear pathway to membership of the Comprehensive Trans-Pacific Partnership - which will open new opportunities for British business and boost our economic security."
Japan has said it will support a UK bid to join the Trans-Pacific Partnership, which is a trade agreement involving 11 countries across the region, including Australia, Vietnam and Canada.
Friday's pact improves access to the UK market for Japanese train cars and some car parts, and adds rules on digital trade and financial services. The UK Department for International Trade said it provides bespoke benefits that go beyond the EU deal, including in areas such as digital and data, financial services, food and drink, and creative industries.
While the economic impact is modest - the UK is Japan's 18th-largest trade partner - the accord with the world's third-largest economy is a bright spot for Prime Minister Boris Johnson, who promised that Brexit would be an opportunity for Britain to strike better deals as an independent country.
The signing came as Mr Johnson's government restarted negotiations with the EU on Thursday, in a bid to avoid tariffs and quotas being reimposed when the UK departs from the single market and customs union on Dec 31.
Japan publicly opposed Brexit ahead of the 2016 referendum and has lobbied against anything damaging the interests of the 1,000 or so Japanese businesses in the UK, including carmakers such as Nissan Motor and Honda Motor that rely heavily on trade with the EU.
The UK said 99 per cent of exports to Japan will be tariff-free under the deal, which will add £15.2 billion (S$26.96 billion) to annual trade with the Asian nation.
The Japan-UK agreement is set to be approved by Japan's Parliament in a session starting next week, enabling it to come into effect on Jan 1.