A potential UK-Japan free trade deal would provide a £383m boost to London’s economy each year, City A.M. can reveal.
Estimates from the Department of International Trade, and seen by City A.M., show a trade deal between the two nations would be a major boon to the capital, particularly its financial and professional services industries.
It comes as the UK set out its negotiating objectives today for its Japan trade talks, with formal negotiations expected to start shortly.
Among the highest priorities is to “diversify [the UK’s] supply chains beyond the EU and China” and to “reduce barriers to cross-border trade and investment, support co-operation on financial regulation and make it easier for professionals to operate in Japan”.
The department said the deal would “aim to secure cutting edge provisions on digital trade”, which would in turn “benefit innovative sectors such as e-commerce and the creative industries”.
It is estimated that the deal would add £1.5bn to the UK’s economy annually.
International trade secretary Liz Truss told City A.M. that the trade deal would be highly geared toward the capital in particular.
“Our new trade deal with Japan will be specifically tailored to the UK economy and will aim to create new opportunities for businesses in every part of the country,” she said.
“London is among the regions set to benefit the most from the new deal.
“Its world-renowned financial and professional services providers will benefit from cutting edge provisions on digital trade and intellectual property, bringing a boost for tech firms across the UK.”
Securing a post-Brexit free trade deal with Japan has been among the highest priorities for the government’s “global Britain” agenda.
Writing for City A.M. in December, European Centre for International Political Economy director Hosuk Lee-Makiyama outlined the importance of a UK-Japan trade deal.
“Japanese capital forms the backbone of the supply chains in the world’s fastest-growing economies including south-east Asia and China,” he said.
“And when it comes to the UK seeking CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) membership, negotiations with Japan are effectively a pre-requisite.
“An upgraded Japan-UK agreement will also act as a “down-payment” for further regulatory cooperation with Japan in future, not least for equivalence decisions in banking.”