Tuesday 23 June 2020

Now Japan set deadlines for a FTA

The FT are reporting this morning that Japan has given us just six weeks to agree a free trade deal if we are to avoid a gap at the end of the year without any formal trading arrangements in place.  They say to give time for the deal to be approved by the Diet - the Japanese parliament - it has to be agreed by the end of July. This is a remarkable reversal, usually it is the UK pushing everybody else. The talks will take place by video conference and instead of 'rounds' of talks, they will be continuous every day.

At one point I read that Japan was waiting to see what we agreed with the EU but we may not be in a position to tell them by the end of July.  Apparently both sides have agreed to base the deal on the existing EU-Japan FTA and although we were looking for a “reduction or elimination” of Japanese tariffs on goods and agriculture and “ambitious commitments on market access” for UK services, it seems they don't agree.  

Hiroshi Matsuura, Tokyo’s chief negotiator said, “The shortage of time means that both sides will have to limit their ambitions.”

It would be surprising if Japan offered the UK the same degree of access to their market to a UK market one seventh of the size of the EU. We are almost bound to accept much more limited access. Listen to this from the FT report:

"...one of the UK’s priorities is likely to be rules of origin that let British exporters continue to include European components in products they sell to Japan. Mr Matsuura declined to comment on the content of a UK-Japan deal." 

We want the UK-Japan FTA to include EU components as if they were made in Britain!  I would be amazed if this happens.  What is the benefit to Japan?  It has lost a gateway into Europe and is now being asked to assume the gate is a one-way only route for EU27 components to find their way into Japan via a third country.

We are now negotiation FTAs with the EU, the USA, Japan, Australia and New Zealand - all at the same time, largely by video conference, under massive time pressure, with an inexperienced Department of Trade and with - as far as I can see - zero consultation with industry and agriculture. And we are absolutely desperate for trade deals. What could possibly go wrong?  Apart from everything?

As trade expert David Henig tweeted:
This is in response to a DTI Official telling the FT:

"... that data and digital services was the UK’s primary focus in the negotiations. Last month, Ms Truss said she hoped for a “comprehensive” UK-Japan agreement that 'goes further than the deal previously agreed with the EU'. "

There is now enormous pressure building on the government. It needs trade deals badly and the other sides know it. They are circling like predators. The idea any of these deals will be good for British exports is delusional.  They will all be working on the assumption that their exports to the UK will increase and I would bet money this is what will happen in the coming years.

None of these "ambitious" deals will have the slightest benefit to the UK.

To increase pressure on Johnson and Gove, Jurgen Maier, former CEO of Siemens UK tweeted:

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