The UK has secured a Free Trade Agreement with Japan.
This is the UK’s first major trade deal as an independent trading nation and will increase trade with Japan by an estimated £15.2 billion.
The UK-Japan Comprehensive Economic Partnership Agreement was agreed in principle by International Trade Secretary Liz Truss and Japan’s Foreign Minister Motegi Toshimitsu on a video call this morning (September 11).
But how will this new deal affect the agriculture industry?
Here are some key points our economists team have put together:
- UK businesses will benefit from tariff-free trade on 99% of exports to Japan. Government analysis shows that a deal with Japan will deliver a £1.5 billion boost to the UK economy and increase UK workers’ wages by £800 million in the long run.**Any increase in the wider UK economy should translate to benefits in the UK agricultural sector**
- Strong tariff reductions for UK pork and beef exports – the negotiated deal sees tariffs fall on pork, beef, salmon and a range of other agricultural exports. The UK will continue to benefit from access to the low tariffs for key food and drink products covered by quotas, such as Stilton cheese, tea extracts and bread mixes. This forms a pathway to further market access under CPTPP, which has been committed to by Japan as part of the agreement.
- Agricultural land in the UK accounts for 72% of total land use while making up less than 1% UK output. There is limited evidence of an elastic response of land use to increased agricultural output in the UK, therefore land use could remain stable and be used more efficiently instead.
- More generous market access for malt producers – Japan has guaranteed market access for UK malt exports under an existing quota which is more generous and easier to access than the EU quota. The UK is the second biggest exporter of malt to Japan, with UK producers exporting £37m there each year.
- New protection for more iconic UK goods – increasing geographical indications (GIs) from just seven under the terms of the EU-Japan deal to potentially over 70 under the new agreement, covering goods including English sparkling wine, Yorkshire Wensleydale and Welsh lamb. This would lead to improved recognition of key UK brands in the Japanese market.
Read the deal in full here