Japan and the UK sign a trade deal but eyes are on Trans-Pacific Partnership

Japan and the UK sign a trade deal but eyes are on Trans-Pacific Partnership

Kanako Mita and Lee Jay Walker

Modern Tokyo Times

The United Kingdom (UK) and Japan, in principle, have signed an important trade deal for the UK. For Japan, the real focus is on continuity and not having supply related issues – and other important factors.

Of course, for the UK, then this is the first significant trade deal with a major economic power in the post-Brexit period. Despite this, the UK waited for certain issues to be resolved.

In truth, the real “economic apple pie” is the Trans-Pacific Partnership for the UK. Also, Japan will welcome the UK joining because it strengthens the long-term economic ambitions of Japan – and all members of the Trans-Pacific Partnership.

Liz Truss, the International Trade Secretary of the UK, uttered, “The agreement we have negotiated – in record time and in challenging circumstances – goes far beyond the existing EU deal, as it secures new wins for British businesses in our great manufacturing, food and drink, and tech industries.”

More significantly, Truss said, “Strategically, the deal is an important step towards joining the Trans-Pacific Partnership and placing Britain at the center of a network of modern free trade agreements with like-minded friends and allies.”

Toshimitsu Motegi, the Foreign Minister of Japan, said, “The deal will allow for the continuance of advantages Japan has gained from the Japan-EU free trade deal and will secure continuity in Japanese companies’ businesses.”

Of course, the EU is a bigger market than Japan by itself. However, sooner or later, both the EU and the UK will solve many problems even if the road is bumpy. After all, the links of trade and history are long – even if the UK will be disadvantaged within Europe.

Hence, the UK is focused on the Trans-Pacific Partnership. Thus the trade deal with Japan will help.

Reuters reports, “The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement that links Canada and 10 other countries: Australia, Brunei, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.”

Once this trade bloc moves forward then the membership of the UK will be welcomed. If so, and with the UK joining the Trans-Pacific Partnership in the future, this bloc will account for approximately 16% of all global GDP. Therefore, if the final goal of the UK is achieved, this will be a bloc of roughly 575 million consumers.

Overall, while the first major post-Brexit deal with Japan is extremely important – even though it will be downplayed by opponents – the real “economic apple pie” is the Trans-Pacific Partnership. If this comes to fruition then a bloc of 575 million consumers is significant.

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