Brexit chaos: ‘Difficult’ UK-Japan trade deal talks hit impasse over crucial negotiation
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Toshimitsu Motegi, the Japanese foreign minister, flew into London to finish a Free Trade Agreement with the UK. He is due to meet trade secretary Liz Truss for the rushed talks, who also flew back to London last night. Britain left the European Union on January 1, and is holding a series of free trade talks with allies to boost the post-Brexit economy.
Mr Motegi told reporters that the “difficult” and rapid talks are essential for a post-Brexit trade deal.
He said to reporters: “It is indispensable to swiftly form a framework for trade and investment between Japan and Britain that will replace the Japan-EU EPA to ensure the smooth continuation of bilateral businesses.
“Difficult negotiations such as this, where national interest is at stake, cannot be conducted over the telephone.
“We will negotiate face-to-face. I’m afraid negotiations will last many hours, but I would like to find middle ground and reach an agreement.”
Both Ms Truss and Mr Motegi have shared their hopes that they can strike a deal before the foreign minister leaves on Friday.
Negotiations have been at a breakneck pace since they began two months ago, due to Japan’s “tight timeframe” according to Whitehall officials.
The deal will be based on Japan’s pact with the EU, which created the world’s largest free trade zone when it came into effect last year.
Britain will lose access to the bloc’s agreement with Tokyo after the post-Brexit transition period.
The main points of contention that have held up trade talks are Tokyo’s demands for cuts in car export tariffs.
If Britain and the EU failed to secure a trade deal, it would mean Japanese companies based in the UK face tariffs for imported parts from continental Europe.
The UK is also hoping for better access for Japanese services, including new rules on data regulations and agriculture,
But Japan has downplayed hopes for an ambitious trade deal with the UK, saying that EU is a larger bloc and the UK is a smaller market.
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So far, around 20 chapters of the FTA between the UK and Japan have been agreed over two months.
The UK’s Trade Department claimed earlier this year a “modelled” trade deal between the two countries “could increase UK GDP in the long run by 0.07 per cent”.
It follows a Treasury estimate that Britain could lose about 5 percent of potential GDP over 15 years under Prime Minister Boris Johnson’s plan to take Britain out of the EU single market and customs union.
The UK Trade Department has also estimated that while the deal could lead to a 21 percent rise in UK exports of goods and services to Japan, imports from the country are estimated to increase by 79 percent.
Mr Motegi’s trip to London marks the first overseas journey made by a Japanese minister since coronavirus restrictions were introduced.
While Japan is still on the UK’s list of countries denied entry, an exception has been made due to the importance of the talks.
The Japanese team will spend the three-day visit in a self-imposed bubble as a precaution, allowing themselves only to move between their hotel and the negotiation table, with no other meetings allowed.
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