The governments of Japan and Britain, which have been negotiating over a post-Brexit free trade agreement, are set to reach a broad accord on a new trade deal shortly.
Early this month, the two sides effectively reached a consensus on the major elements of the new deal and have since been negotiating to finalize it. Both sides aim to have the deal take effect on Jan. 1 next year. Major adverse impacts on bilateral trade that would accompany Britain's exit from the European Union are thus likely to be avoided.
Both sides remained apart until recently over the export of British blue cheese to Japan, a sticking point in the talks. According to informed sources, on Wednesday, Japan proposed to Britain that it would create a new system under which the Japanese government will refund part of the tariffs imposed on blue cheese to Japanese importers of the product.
Several sources close to the talks said that the latest proposal is one "whose content can be accepted by the U.K. side."
Foreign Minister Toshimitsu Motegi and British Trade Secretary Elizabeth Truss will hold a video conference to reach a broad accord shortly and are to sign the deal as early as September, the sources said.
Up to now, the terms of the Japan-EU Economic Partnership Agreement have been applied to bilateral trade between Japan and Britain. With the post-Brexit transition period terminating at the end of this year, however, the application of this accord will be discontinued. Both countries were motivated to reach a new trade accord to avoid reverting to the high tariffs that were imposed before the Japan-EU agreement took effect.
The new Japan-U.K. trade accord will be one whose content generally follows that of the Japan-EU trade agreement. Regarding British tariffs on Japanese products, those on automobiles will be lowered in stages, as under the existing Japan-EU agreement, finally reaching zero in 2026. As for certain industrial products, such as auto parts, railway components and aircraft engines, both sides agreed to immediately eliminate tariffs on more such items than would have been the case under the Japan-EU trade agreement.
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