I welcome the announcement made on 11 September by the Secretary of State for International Trade and the Japanese Foreign Minister that an in principle agreement has been reached on the UK-Japan Free Trade Agreement (FTA).
The deal is on course to be ratified and brought into force by the end of the transition period, providing continuity for our businesses already trading with Japan under the terms of the EU-Japan Economic Partnership Agreement (EPA).
Had the UK failed to reach agreement in time for ratification by the 31 December, we would have seen the UK and Japan revert to trading on WTO terms. The resultant imposition of barriers to trade (tariff and non-tariff) compared to our current arrangements would have put at risk the strong trading and investment links that have been developed:
- Trade – in 2019 trade in goods between Wales and Japan was worth £935.1 million. Japan is our 12th largest export market and our 6th largest import market.
- Inward Investment – we now have approximately 65 Japanese-owned businesses based in Wales employing over 8,000 staff.
I am pleased this deal delivers an equivalent agreement to the EPA, with some additional benefits in data and digital chapters. I hope that this will give increased confidence to Welsh companies who export to Japan and will encourage Welsh SMEs to consider Japan as an export market for their goods.
We also require a comprehensive free trade agreement with the EU in order to realise the full benefits of this agreement. Unfortunately, achieving such an agreement before the end of this year when we leave the transition period is far from certain while – unlike this agreement with Japan – it is already clear that any FTA with the EU will make trading with our largest market significantly more difficult. I call on the UK Government to redouble its efforts to reach an ambitious FTA with the EU as quickly as possible.
This statement is being issued during recess in order to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Senedd returns I would be happy to do so.