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UK-Japan trade talks go into extra time

By Julian Shea in London | China Daily Global | Updated: 2020-07-31 04:10

Talks between the United Kingdom and Japan to try and agree the UK's first independent trade deal in more than 40 years are expected to continue past the original deadline date of Friday set by Japan.

With Britain having left the European Union in January and now being in a transition period until the end of the year, the pressure is on for it to establish trade agreements of its own. In the case of Japan, it will mean finding an alternative to the EU's deal with Japan, which created a trading zone of 635 million people, covering one-third of global GDP, of which the UK is no longer a part.

The need for this deal has grown even greater as the prospect of a trade deal with the United States any time soon has died.

For years, Brexit supporters have claimed the UK would secure a free trade deal with the US, but earlier this month the Financial Times reported that it was now widely accepted on the British side that there was no prospect of agreeing a deal before the US elections, which is close to the end of the Brexit transition period.

With there being few signs at the moment of a deal being agreed between the UK and EU, that increases the likelihood of no-deal Brexit, which would mean Britain ending its current relations with the EU with no alternative legislative arrangements in place, which is widely predicted to cause economic and social chaos.

This is why so many hopes are now being pinned on a deal with Japan. The country's foreign minister, Toshimitsu Motegi, is expected to visit London in August, when it is hoped that negotiations will have advanced sufficiently for him to announce a deal, to be signed in the following month. The Financial Times quoted one Japanese negotiator as saying they were "still optimistic" and UK officials were described as "hopeful" a deal could be reached soon.

The existing deal between the EU and Japan is being used as the basis for the proposed deal between the UK and Japan.

Such complex negotiations usually take years, but the current round of talks only started in June, with Tokyo imposing the deadline of the end of July, and there are still some points of disagreement.

"It is our highest priority to achieve an agreement within the timeframe … We need to adjust ambitions to a realistic level," Tokyo's chief negotiator, Hiroshi Matsuura, told the Reuters news agency earlier this month.

He cited digital trade as an area where it may be possible to agree terms that surpassed those of the deal with the EU, but just like in the deal between the EU and Japan, agriculture was seen as a challenging topic, and there is also some divergence over rules of origin, with the UK wanting goods to count as British even if they contain a significant amount of parts made in Europe. Japan is not thought to favor such an approach.

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