Japan Times | 29 August 2020

Japan and Britain delay agreement on post-Brexit trade pact

by Jiji, Kyodo

The Japanese and British governments stopped short of reaching a broad accord on a new bilateral trade deal on Friday, citing the need for further negotiations on how to handle Japanese tariffs on British blue cheese.

Foreign Minister Toshimitsu Motegi and British International Trade Secretary Liz Truss had considered holding talks on Friday to clinch the deal via videoconference, but the meeting was postponed. Japan and Britain now aim to reach an agreement by the end of September, after holding working-level talks.

There is speculation that the postponement reflected changes in the political scene caused by the announcement of Prime Minister Shinzo Abe’s resignation.

“We are focusing on key points, and we are doing our best to reach an agreement in principle,” Motegi told a news conference on Friday. “Today, I don’t plan to make any major action.”

Japan and Britain have already agreed that British tariffs on Japanese automobiles will be removed in 2026.

Japan has suggested a unique system to ensure cuts in its tariffs on British blue cheese to the level for such products from the European Union, set under the Japan-EU economic partnership agreement for free trade.

Sources say Britain is demanding a low-tariff import quota for some of its agricultural farm exports, including blue cheese, to Japan. But Tokyo remains reluctant about introducing such a preferential quota for London.

The two countries aim to put the new trade deal into effect in January.

Following Britain’s exit from the EU at the end of January, preferential tariff measures between Japan and Britain under the Japan-EU EPA are set to expire at the end of this year. Under that trade pact, which took force in February 2019, Japan implemented an import quota on soft cheeses, including blue cheese, where tariffs will be reduced in stages to zero by the 16th year.

It is feared the business activities of Japanese companies will also be impacted by higher tariffs, barring a deal.

Following his two days of talks with Truss in London on Aug. 7, Motegi said the two countries had reached substantial agreement on most areas and were aiming for a formal agreement in principle by the end of this month.