The deal, which was announced today (11 September), represents the first post-Brexit national trade agreement struck by the UK. The Government has estimated it would increase UK trade with Japan by an estimated £15.2bn.
The deal includes strong tariff reductions for UK pork and beef exports. Tariffs would fall on pork, beef, salmon and a range of other agricultural exports. In addition, the UK would continue to benefit from access to the low tariffs for key food and drink products covered by quotas, such as Stilton cheese, tea extracts and bread mixes. This would form a pathway to further market access under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which has been committed to by Japan as part of the agreement.
There would also be more generous market access for malt producers. Japan has guaranteed market access for UK malt exports under an existing quota which is more generous and easier to access than the EU quota. The UK is the second biggest exporter of malt to Japan, with UK producers exporting £37m there each year.
Biscuits
Tariff free access would apply for more UK goods, according to the Government. New and more liberal Rules of Origin would allow producers of coats, knitwear and biscuits to source inputs from around the world for their exports to Japan, making it easier and cheaper for them to sell to the Japanese market.
There is new protection for UK goods bearing geographical indications (GIs) from just seven under the terms of the EU-Japan deal to potentially more than 70 under the new agreement. This would cover goods including English sparkling wine, Yorkshire Wensleydale and Welsh lamb and would lead to improved recognition of key UK brands in the Japanese market.
Scottish wild salmon, Scotch beef and lamb are among 14 iconic Scottish products that could be protected in Japan for first time as part of the UK-Japan trade deal. Scotch whisky will also continue to benefit.
Scottish food products
According to the Government, Scottish food products that could benefit from the new arrangements included Arbroath smokies, Ayrshire New Potatoes/ Ayrshire Earlies and Bonchester cheese. In addition, the deal would benefit Shetland wool, Orkney beef, Orkney lamb, Orkney Scottish island cheddar, Scotch beef, Scotch lamb, Scottish wild salmon, Shetland lamb, Stornoway black pudding, Teviotdale cheese and traditional Ayrshire Dunlop cheese.
Jim Walker, managing director of Walkers Shortbread said: "We welcome the news that a UK-Japan agreement has been agreed today. Japan remains one of Walkers’ most important markets and sales have grown steadily there since first launching in Japan over 40 years ago.
"This deal will help provide certainty and create more opportunities to continue building sales in the future in a market where our products already enjoy success."
The Scottish Salmon Company's communications and new business development director Su Cox said: "Japan is a key growth market for our business and demand for our salmon has helped drive greater export sales to the region.
"While we expect this to continue as consumers discover the great taste and provenance of quality Scottish products like our ‘Tartan Salmon’, good trading relations are critical in supporting our export ambitions.
"We take great pride in our Scottish heritage and the continuation of the Protected Geographical Indication status is very welcome news. PGI acts as a guarantee of the Scottish provenance that is so in demand in worldwide markets."
Rules of origin
Dominic Goudie, head of international trade at the Food and Drink Federation said: "UK food and drink manufacturers are delighted to hear the UK has concluded a comprehensive new trade deal with Japan. As the world’s largest net importer of food and drink, this deal with Japan improves our existing terms of trade and offers significant new growth opportunities for quality UK manufacturing. We particularly welcome the additional flexibility this deal delivers in terms of rules of origin which are so crucial for our industry.
"The agreement recognises the unique challenge posed by seasonality and provides confidence for UK exporters across a wide range of product categories. This deal can make a vital contribution towards the UK’s economic recovery and our industry is ready to deliver for every community across the UK."
Dr Phil Hadley, AHDB international market development director, said: “We welcome today’s announcement that the UK and Japan have agreed an historic free trade agreement. This is great news for our agri-food sector and will secure trade with this valuable importing country, providing further opportunities for our producers of red meat, dairy and grains.
“The UK gained beef and lamb access in 2019, complementing our existing pork trade, and in the first half of this year we shipped 1,369 tonnes of beef, worth £4.7 million and £1 million worth of pork. Our total dairy export volumes to Japan have grown 15 per cent each year in the five years from 2015 to 2019, with cheese being our main dairy export, worth £2.2 million last year.
Malt
“The UK is already a significant exporter of malt to Japan, the second biggest in the world, bringing a £37 million boost to the sector each year. However, this new deal guarantees market access for UK malt exports under an existing quota which is more generous and easier to access than the EU quota, which is welcome news for the industry.
“With strong tariff reductions for UK pork and beef exports and further opportunities for our grain and dairy exports, this new deal will help us to continue growing our export opportunities to this high-value market.”
The UK-Japan Comprehensive Economic Partnership Agreement was agreed in principle by international trade secretary Liz Truss and Japan’s foreign minister Motegi Toshimitsu on a video call. UK businesses will benefit from tariff-free trade on 99% of exports to Japan.
'Historic moment'
Truss said: "This is a historic moment for the UK and Japan as our first major post-Brexit trade deal. 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 Scotch beef and lamb farmers to our Scottish wild salmon and Orkney Scottish island cheddar, this deal will create new opportunities for people throughout the whole of the UK and help level up our country."
UK Government minister for Scotland David Duguid said: "Scotland’s world-famous products, including Scottish wild salmon, Scotch beef and lamb - and of course, Scotch Whisky - are set to get a significant export boost from this agreement."
