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Japan-UK FTA to be mutually beneficial: GlobalData
08 Aug '20
3 min read
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With the completion of the final post-Brexit transitional period around the corner, the United Kingdom is scrambling to secure multiple trade deals this year. The Japan-UK free trade agreement (FTA) holds significance in boosting investments and diversified supply chain mechanism for both sides with market growth opportunities, according to data analytics firm GlobalData.
The investor-state dispute settlement (ISDS) provision, which enables the countries to settle disputes with foreign investors, was mutually excluded from the negotiation talks with an aim to reach the desired deal at the earliest, through a digital platform, amid the COVID-19 pandemic.
Japan is focused on defending the interest of its automobile industries, by seeking favorable tariff terms or the rate agreed in the European Union (EU) agreement last year, whereas the United Kingdom is envisaging the dream of becoming Global Britain by seeking high-powered trade deals with the countries covering 80 per cent of the UK market, according to a GlobalData press release.
Prachi Gupta, economic research analyst at GlobalData, states: “The UK has been the business hub of Japan for long and a gateway for the European market. The unfavorable future trade deals between the UK and EU could give rise to uncertainties for the Japanese businesses, regarding the supply chain disruptions towards the manufacturing and exports of automobiles in the region. The FTA will help Japanese industries in curbing the trade disruptions arising, after the end of transition period.”
The FTA is to set forth the steppingstone for Japan in becoming the full member of the ‘Five Eyes plus’ framework to strengthen the intelligence alliance, that shares the information on North Korea and China through its advanced technologies as the sixth eye. Moreover, the UK’s membership to the Comprehensive and Progressive Agreement of Trans-Pacific Partnership (CPTPP) will benefit Japan in counteracting China’s influence over the region and luring the US at the negotiations, GlobalData said.
According to the UK Department for International Trade (DIT), UK-Japan trade is expected to boost by $18.1 billion in the coming years, with the signing of the FTA.
The FTA is expected to benefit the various aspects of Japan and the UK’s economies such as the recognition of professional qualifications by the respective countries, with the lowered tariff rates in the textile, leather, automobiles and agriculture sector.
The trade deal is also expected to pave the way for free flow of data, leading to the development of technologies, artificial intelligence and advanced digital trade, London-based GlobalData added.
The investor-state dispute settlement (ISDS) provision, which enables the countries to settle disputes with foreign investors, was mutually excluded from the negotiation talks with an aim to reach the desired deal at the earliest, through a digital platform, amid the COVID-19 pandemic.
Japan is focused on defending the interest of its automobile industries, by seeking favorable tariff terms or the rate agreed in the European Union (EU) agreement last year, whereas the United Kingdom is envisaging the dream of becoming Global Britain by seeking high-powered trade deals with the countries covering 80 per cent of the UK market, according to a GlobalData press release.
Prachi Gupta, economic research analyst at GlobalData, states: “The UK has been the business hub of Japan for long and a gateway for the European market. The unfavorable future trade deals between the UK and EU could give rise to uncertainties for the Japanese businesses, regarding the supply chain disruptions towards the manufacturing and exports of automobiles in the region. The FTA will help Japanese industries in curbing the trade disruptions arising, after the end of transition period.”
The FTA is to set forth the steppingstone for Japan in becoming the full member of the ‘Five Eyes plus’ framework to strengthen the intelligence alliance, that shares the information on North Korea and China through its advanced technologies as the sixth eye. Moreover, the UK’s membership to the Comprehensive and Progressive Agreement of Trans-Pacific Partnership (CPTPP) will benefit Japan in counteracting China’s influence over the region and luring the US at the negotiations, GlobalData said.
According to the UK Department for International Trade (DIT), UK-Japan trade is expected to boost by $18.1 billion in the coming years, with the signing of the FTA.
The FTA is expected to benefit the various aspects of Japan and the UK’s economies such as the recognition of professional qualifications by the respective countries, with the lowered tariff rates in the textile, leather, automobiles and agriculture sector.
The trade deal is also expected to pave the way for free flow of data, leading to the development of technologies, artificial intelligence and advanced digital trade, London-based GlobalData added.
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