Britain and Japan sign post-Brexit trade deal

The UK signed a trade deal with Japan on Friday (Oct 23), its first with a major economy since Brexit, as the clock runs down on British efforts to reach an agreement with the European Union by the end of the year.

Foreign Minister Toshimitsu Motegi and British International Trade Secretary Liz Truss hailed the "landmark" agreement as promoting free trade and strengthening bilateral ties after inking the deal in Tokyo, with London seeing it as a step to join the Trans-Pacific Partnership grouping 11 Pacific nations.

The Japan-U.K. pact, which largely replicates the existing Japan-EU free trade accord, will enter into force after domestic ratification procedures.

The British government has touted it as a chance to boost trade between the two countries by 15.2 billion pounds ($19.5 billion).

UK-Japanese trade was worth more than 30 billion pounds a year ago, according to the British government, and their agreement has a particular focus on the food and drink, finance and tech sectors.

While the economic impact is modest - the United Kingdom is Japan's 18th-largest trade partner - the accord with the world's third-largest economy is a bright spot for Prime Minister Boris Johnson, who promised that Brexit would be an opportunity for Britain to strike better deals as an independent country.

Financial services make up Britain's biggest export to Japan, now at 28%.

According to the Japanese Foreign Ministry, the nation already exports about 1.5 trillion yen ($14 billion) of goods to Britain, mostly automobiles, auto parts and other machinery, while importing almost one trillion yen ($9.5 billion) worth of British goods, including pharmaceuticals, medical products and cars.

The deal, unveiled last month, means almost all its exports to Japan will be tariff free while removing British tariffs on Japanese cars by 2026.

Time is short to reach an agreement before the end of the transition period on December 31.

As both sides have made clear, it takes two to reach an agreement.

A Number 10 spokesman said: "We welcome the fact that Mr Barnier acknowledged both points this morning, and additionally that movement would be needed from both sides in the talks if agreement was to be reached".

That arrangement also stands in the current Japan-EU trade agreement. During the transition period, Britain is still trading with Europe, and internationally, as if it were an European Union member.