TOKYO (The Japan News/ANN) — Japan hopes to start negotiations for a new trade agreement with Britain as soon as possible, with the likely focal point of the possible talks to be on the elimination of tariffs on automobiles exported from Japan.
A new bilateral trade agreement needs to be formed as Britain — which left the European Union at the end of January — is to withdraw from the Japan-EU economic partnership agreement that took effect in February last year.
“We will work promptly with the U.K. government to establish a new economic partnership between the two countries,” Foreign Minister Toshimitsu Motegi said at a press conference after a Cabinet meeting Friday.
Japan is particularly interested in automobile exports, which account for about 20% of exports to Britain from Japan.
Under the Japan-EU EPA, the 10% tariff imposed by the European Union on Japanese cars will be abolished eight years after the EPA took effect in 2019. In the negotiations with Britain, the Japanese government aims to agree on the elimination of the 10% tariff immediately or earlier than originally planned.
The Japan-EU EPA rules will be applied between Japan and Britain until the transition period ends on Dec. 31.
Should Tokyo and London complete the transition period without concluding a new bilateral agreement, tariffs between the countries will return to the status prior to the Japan-EU EPA taking effect — something that would likely create more confusion.
For the agreement to take effect before the deadline, Japan will have to submit related bills to the extraordinary Diet session in autumn. Therefore, Japan needs to have success during the short period of the negotiations.
Britain’s ruling Conservative Party, for its part, has indicated that it will give priority to negotiations with the United States, Australia, New Zealand and Japan in conjunction with trade talks with the European Union.
The government will likely urge Britain to give priority to negotiations with Japan. A government official expressed concerns, saying, “I don’t think the British government has enough manpower or time for multiple negotiations.”
Britain has expressed interest in joining the Trans-Pacific Partnership. “We aim to build even stronger trade and investment relationships by supporting the possibility of Britain becoming a member [of TPP],” Motegi said.