How will businesses benefit from the UK-Japan Free Trade Agreement?

The recent signing of the new trade Free Trade Agreement (FTA) between Japan and the UK was a hugely positive development during what has been a challenging period for UK companies. The FTA is really broad in scope, significantly easing the potential for bilateral Digital Trade as well as deals in Financial and Professional Services and Food & Drink; all strong areas for British exporters.

Marking this exciting new chapter in trading relations between the UK and Japan, DIT is launching a series of events - the “Partnering with Japan – Spring ’21 Free Trade Agreement Series’. This flagship Virtual Trade programme will be run throughout spring and is truly historic in its ambition.

Kicking off on the 2nd March at 09:00 GMT, Minister for Exports, Graham Stuart, will host the launch which will provide expert insight into the Japanese market and how the Free Trade Agreement can benefit businesses. To join the launch event, you can sign up here to hear from the Minister, trade experts and leading figures from UK companies who have seen success in what can be a complex market. Participants will develop their knowledge of how to succeed in Japan and will see how they can progress things with a full range of support and information available from DIT’s Strategic Partner, Export to Japan.

Why is the agreement good for the UK?

The benefits are clear - UK businesses will see tariff-free trade on 99% of exports to Japan. Government figures show that the deal with Japan is estimated to lead to an increase in trade of around £15.2 billion, a welcome boost after a tumultuous economic period. It’s a significant opportunity to grow bilateral trade and establish new partnerships across a range of industries.

How will South West businesses fare?

When it comes to international trade, the South West has clear strengths that are a good match for Japan such as in Smart Manufacturing, Technology, Life Sciences, Renewable Energy and Food & Drink. There will be more recognition of South West brands in the Japanese market, which will have greater brand protection, such as Cornish clotted cream, regional cider brands and West Country beef. Secretary of State for International Trade, Liz Truss, recently visited food producers in the South West and noted that companies are in a prime position to satisfy demand in Japan for high quality products.

South West businesses are also well known for their technological innovation. The new FTA enables the free flow of data between the UK and Japan and includes a ban on data localisation, so UK businesses no longer have to set up servers in Japan. This is really good news for digitally savvy tech companies who are thinking about trading in Japan. For inspiration, check out this case study from Renishaw.

How South West businesses can get ready to trade in Japan

It’s critically important to get your business etiquette right when contacting potential Japanese clients. Ideally, companies will have a recognised intermediary, such as DIT Japan or Export to Japan, to introduce them to buyers or potential partners as this lends significant credibility. Cold calling or emails are rarely successful.

Please see this blog from Nigel Barker, our Digital Trade Adviser, which offers some great tips for companies on how they can localise to trade in the market.

To begin with, DIT Advisers can help South West companies assess whether Japan is the right market for their products or services and if this is confirmed, they will help companies plan and prepare. Japan is not typically a market for new exporters and it can take time and resources to get established, but for those who have the right products, it can be a hugely rewarding experience.

Throughout 2021, we will be running masterclasses, roundtables and briefing sessions to enable companies to improve their understanding of the Japanese market. In the South West, we have four events lined up for companies to understand the opportunity in the Health Tech & Life Sciences sector; eCommerce; Protecting your IP and Advanced Manufacturing technology. We’d love to hear from South West companies interested in taking advantage of this new trade partnership.

The Spring series of UK-Japan events starts here on 2nd March Partnering with Japan - Launch Event.

There is also an event on exporting Healthcare and Life Sciences to Japan running on Tuesday 16th March. Find out more and apply here. 

If you have any questions, just get in touch and our team will be ready to help.