British Prime Minister Boris Johnson meets with Japanese Prime Minister Shinzo Abe on day three of the G7 Summit on August 26, 2019 in Biarritz, France.
Andrew Parsons – Pool | Getty Images
LONDON — The U.K. and Japan on Friday agreed in principle to a trade deal, in a move that sees the U.K. strike its first major agreement post-Brexit.
The announcement, which the U.K. hailed as a “historic moment,” comes as Britain struggles to secure an agreement with its closest trading partners in the European Union.
Britain’s trade department said U.K. businesses would benefit from tariff-free trade on 99% of exports to Japan. It also suggested the deal would see the country increase trade with Japan by £15.2 billion ($19.5 billion).
The deal will include digital and data provisions that go “far beyond” the EU-Japan deal, Britain claimed, enabling the “free flow of data whilst maintaining high standards of protection for personal data.”
The tentative agreement, which will require the approval of both the U.K. and Japanese parliaments, is scheduled to come into the force at the end of the year.
“This is a historic moment for the UK and Japan as our first major post-Brexit trade deal,” Liz Truss, U.K. international trade secretary, said in a statement.
“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,” Truss said.
U.K. Prime Minister Boris Johnson said earlier this year that Britain could become the Superman of global trade, striking lucrative agreements on its own terms following the country’s exit from the EU in January.
The proposed deal with Japan marks the first major deal for the world’s fifth-largest economy post-Brexit.
However, critics of Johnson’s “global Britain” agenda suggest free trade agreements with countries around the world are unlikely to offset exports lost to the EU if it cannot reach an agreement with Brussels.
Carolyn Fairbairn, director general of the Confederation of British Industry, described the agreement as a “breakthrough moment” that would be “welcomed by businesses across the country.”
“Business will help support the Government in its efforts to secure more trade deals around the world and promote their benefits to communities. The Japan deal can be the first of many,” Fairbairn said.
Sterling traded at $1.2769 during mid-morning deals, around 0.3% lower for the session.