The UK has secured a free trade agreement with Japan that is set to increase trade with the country by an estimated £15.2bn.
The UK-Japan Comprehensive Economic Partnership Agreement , which is the first trade deal to be signed since Britain left the EU earlier this year, was agreed in principle this morning.
In a statement the government said the agreement will mean 99 per cent of exports to Japan will be tariff-free.
It added that digital and data provisions in the agreement went “far beyond” those in the EU’s trade deal with Japan.
The trade department also said the pact would improve market access for UK financial services, including greater transparency and easier application processes for UK firms seeking licences to operate in Japan.
The two sides said they aimed to have the deal come into force in January.
The trade department said the deal would deliver a £1.5bn boost to the UK economy — equivalent to roughly 0.07 per cent of GDP.
However, Treasury estimates have showed Britain could lose roughly five per cent of potential GDP over the next 15 years due to Brexit.
“This is a historic moment for the UK and Japan as our first major post-Brexit trade deal,” said trade secretary Liz Truss.
“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.”
“From our automotive workers in Wales to our shoemakers in the North of England, this deal will help build back better as we create new opportunities for people throughout the whole of the UK and help level up our country.”
The deal forms a key part of the government’s so-called Global Britain agenda, with talks taking place alongside negotiations with the EU, US, Australia and New Zealand.
Last month talks stalled amid reports the two sides were haggling over British agricultural products, with Truss attempting to gain reductions in Stilton cheese tariffs.
But the trade department said the deal ensures low tariffs on exports of key food and drink products, including pork, beef and Stilton.
CBI boss Carolyn Fairbairn hailed a “breakthrough moment” for businesses across the country.
“The government and business now need to work together to make the most from the deal. It’s a huge opportunity to secure new Japanese investment across a wider range of sectors and UK regions,” she said.
“Business will help support the government in its efforts to secure more trade deals around the world and promote their benefits to communities. The Japan deal can be the first of many.”
Miles Celic, chief executive of TheCityUK, said the deal “raised the bar for trade agreements in services”.
“By addressing issues such as digital trade and data localisation, it has helped to future-proof the important services trade relationship between our two countries, providing a model for further innovative trade agreements around the world,” he said.
“Furthermore, the establishment of an annual financial regulatory forum will be welcomed by industry in both countries. It will help to reduce unnecessary restrictions on cross-border services trade, which is essential to the UK-Japan trade and investment relationship.”