Japan Free Trade Agreement UK: A Comprehensive Overview
The Japan Free Trade Agreement (FTA) with the United Kingdom (UK) is an essential agreement in the context of trade and commerce, particularly during these uncertain times. Though the agreement was signed on October 23, 2020, it only came into effect on January 1, 2021. This article aims to explore the significance of the Japan Free Trade Agreement UK and what it means for businesses, consumers, and the economy in general.
Background
Historically, Japan and the UK have had close economic and political ties. In 2018, the two countries traded goods and services totaling over £31 billion, with Japan being the UK`s 11th largest export market outside of the European Union (EU). However, with the UK`s exit from the EU, trade relations with Japan became more complicated. Hence, the agreement was signed to establish continuity in economic relations and to strengthen them further.
Benefits of the Agreement
The Japan-UK Free Trade Agreement guarantees tariff-free trade on 99% of UK exports to Japan, making it easier for UK businesses to trade with Japan. The agreement covers a range of products and services from textiles, machinery, and electronics to financial services, which are key sectors for both countries. The tariff-free trade on agricultural and food products is of great significance to the UK because Japan is the UK`s largest export market for whisky and its third-largest market for cheese.
Moreover, the agreement paves the way for further cooperation in areas such as digital trade, intellectual property, and e-commerce. It also includes measures to promote sustainable development and the protection of labor rights and the environment.
Impact on Businesses
The Japan-UK Free Trade Agreement provides businesses with increased certainty and continuity in their trading relationships. Companies that already have trade relations with Japan can now carry out their business with a reduced cost of taxation, while those who were hesitant to explore the Japanese market now have fewer barriers to entry. The agreement also opens up new opportunities for businesses in both countries, thus promoting economic growth and job creation.
In summary, the Japan-UK Free Trade Agreement has far-reaching implications for businesses, consumers, and the economy. It further strengthens the economic ties between Japan and the UK and creates opportunities for growth and development. With the UK`s exit from the EU, this agreement is a crucial step towards building new and strong trading relationships with countries outside of the EU.