The strategic or super-economic significance of the Japan-UK Economic Partnership Agreement
Original title: Financial Observation: Japan-UK Economic Partnership Agreement has strategic or super-economic significance
Tokyo, October 24, Financial Observation: Japan-UK Economic Partnership Agreement Strategic or super-economic significance
Xinhua News Agency reporter Liu Chunyan
Japan and the United Kingdom formally signed a comprehensive economic partnership agreement in Tokyo on the 23rd. Observers believe that this is the first major trade agreement reached after Britain’s “Brexit”. For Japan and Britain, its strategic significance may exceed economic significance.
The UK officially left the European Union on January 31 this year, and will withdraw from the Japan-Europe EPA at the end of the “Brexit” transition period at the end of this year. Japan and Britain launched trade negotiations in June, hoping to use Japan-Europe EPA as a reference to reach a bilateral trade agreement. In September, the two parties announced that they had reached a basic agreement on the Japan-UK EPA negotiations.
Observers believe that for Japan, the signing of the agreement further advances its long-term international economic strategy, enriches its network of economic and trade partners in the world, especially in Europe, and strengthens its cooperation in economic and trade rules. European countries’ ties; for the United Kingdom, the quick resolution of trade negotiations with Japan demonstrates its ability to conduct independent trade negotiations after leaving the European Union.
The Japanese side stated that the Japanese-UK EPA generally followed the contents of the Japanese-European EPA in terms of tariff reduction, and minimized the impact of the UK’s “Brexit” on Japanese companies. After the agreement comes into force, approximately 94% of Japan’s imports from the UK and approximately 99% of Japan’s exports to the UK will eliminate tariffs.
However, Japan is currently only the 11th largest export market for the UK. Japan’s trade statistics show that in 2019, Japan’s exports to the UK were about 1.5132 trillion yen, and the UK’s exports to Japan were 887.5 billion yen. From the perspective of trade volume, the “weight” of this agreement is not significant, and the economic benefits it brings are expected to be relatively limited.
In the field of digital trade, the scope of the relevant provisions of the Anglo-Japanese Agreement exceeds the scope of the EU-Japan Agreement, and may affect future cooperation between Japan, the United States and Europe in the fields of digital trade and e-commerce.
In addition, the United Kingdom is Japan’s second largest investment destination, and many Japanese companies have established extensive and closely connected supply chains between Japan, the United Kingdom and the European Union. The “Brexit” of the United Kingdom once made relevant Japanese companies worry that the supply chain would be affected. The rapid conclusion of the agreement effectively alleviated Japanese investors’ concerns about the British economic and financial environment and helped restore and strengthen their confidence in the British market.
Ishikawa Tomohisa, a researcher at the Japan Research Institute, believes that the signing of the Japan-UK EPA will help promote the UK’s entry into the Comprehensive and Progressive Trans-Pacific Partnership Agreement as soon as possible. This is what Japan is happy to see. In addition, the UK has a deep relationship with India and Africa, two markets with huge growth potential. Japan may consider using the Japanese and British EPA as a springboard to accelerate the development of the Indian and African markets.
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