No-deal Brexit risks rise as UK-Japan trade talks hit buffers
Japan confident it can secure more advantageous deal with Britain than it has with EU
Japanese prime minister Shinzo Abe and prime minister Theresa May. Japanese negotiators have been instructed to get the best deal possible for Japan
Britain and Japan have made little progress on a new trade deal in the past 18 months, according to officials involved in the talks, with tariffs set to revert to World Trade Organization levels at the end of March unless the UK ratifies a Brexit deal.
Japan has agreed to extend existing trade terms for the duration of Britain’s planned transition period with the EU – but this will not apply if the UK fails to strike a deal with Brussels.
It is now too late for the Japanese Diet to ratify any agreement before Brexit is scheduled to take place on March 29th. There is also a wide gap in expectations about a trade accord, which would apply either in the case of no-deal Brexit or at the end of Britain’s planned transition period, which is due to end in December 2020.
Tokyo is confident that it can secure better terms from the UK than it did in negotiations with the much larger EU, and is not willing to duplicate the existing treaty precisely in either a bilateral deal or in talks for the UK to join the Trans-Pacific Partnership group.
The lack of progress on a future bilateral deal – a goal set out by prime minister Theresa May on a visit to Japan in August 2017 – highlights the UK’s broader struggle to roll over existing EU trade deals, let alone secure anything better.
This week, Britain’s Department for International Trade briefed 30 business groups on its failure to replicate “most” of the EU’s trade deals with other countries around the world. Participants complained that they would be seriously affected by the failure to conclude agreements with partners as significant as Canada, Turkey and Japan.
A UK government spokesperson said this week: “In the event of ‘no deal’ we will seek to bring into force bilateral agreements from 29th of March or as soon as possible thereafter.”
The spokesperson added that the UK was “making good progress on securing deals” and cited agreements with Chile and the Faroe Islands. – Copyright The Financial Times Limited 2019