Yahoo Finance UK government admits no Japan trade deal before Brexit
Britain will not be able to maintain current trade terms with Japan if it leaves the EU without a deal on 29 March, the UK government has admitted.
The department for international trade made no mention of the failure to roll over the deal in a press release, but the revelation was contained in an attached report about plans for bilateral no-deal agreements.
The move is likely to be seen as an embarrassing blow for the prime minister Theresa May, who has pushed for closer ties between the UK and Japan.
The Japanese government has previously warned that Britain’s economy would be severely damaged if it left the EU without a deal.
Japan is one of the UK’s biggest investors, and Britain imports around £10.6bn ($13.7bn) in goods a year from Japan.
READ MORE: Britain is forgetting about its powerful investor – Japan
It comes after Nissan announced it had abandoned plans to build its new X-Trail model in Sunderland in the north of England earlier this month, despite the government promising to support the Japanese car manufacturer amid Brexit uncertainty.
The department, run by international trade secretary Liam Fox, admitted today that trade with Japan will take place on World Trade Organization (WTO) plans in a no-deal scenario.
“We will not transition this agreement for exit day,” its report said, adding that engagement was “ongoing.”
The Financial Times reported earlier this week that Japanese officials had accused Fox and foreign secretary Jeremy Hunt of “high-handed” behaviour and failing to bring enough specialists to talks.
Britain will also not have an agreement in place with Turkey by the planned exit date, it was confirmed today.
The government also suggested that a substantial amount of UK trade was still not covered by bilateral deals to replace arrangements signed via the EU.
It said only “more than a quarter” of UK trade covered by such agreements had been rolled over, despite Brexit only being weeks away.
Switzerland, Chile, the Faroe Islands, Eastern and Southern Africa, Israel and the Palestinian Authority are the only agreements signed so far.
Mutual recognition agreements, which are said to prevent additional bureaucracy and allow trade “as freely” as today, have been signed with the USA, Australia and New Zealand.
But the government said it would be signing more trade agreements “in the coming days and weeks.”
Current agreements have still not been replicated with countries including Canada, Egypt, Mexico and Kenya.
