The U.K. signed a trade deal with Japan on Friday, its first with a major economy since Brexit, as the clock runs down on British efforts to reach an agreement with the EU by the end of the year.
In a ceremony in Tokyo, U.K. International Trade Secretary Liz Truss and Japanese Foreign Minister Toshimitsu Motegi put their names to the pact, which was reached in principle in September, about three months after formal negotiations began.
The deal largely preserves the terms under which the U.K. traded with Tokyo as part of the EU, according to Japan’s Ministry of Foreign Affairs. It’s expected to boost Britain’s GDP by 0.07% compared to 2018 levels over the next 15 years, the U.K. government has said.
“It used to be said that an independent U.K. would not be able to strike major trade deals, or they would take years to conclude,” Truss told reporters after the signing. “But today, we proved the naysayers wrong with this groundbreaking, British-shaped deal that was agreed in record time.”
The agreement will also help open the way for the U.K. to join the Comprehensive Trans-Pacific Partnership, Truss added.
Motegi reiterated that Japan will continue to support a U.K. bid to join the TPP, which is a trade agreement involving 11 countries across the region, including Australia, Vietnam and Canada.
Friday’s pact improves access to the U.K. market for Japanese train cars and some auto parts, and adds rules on digital trade and financial services. The U.K. Department for International Trade said it provides bespoke benefits that go beyond the EU deal, including in areas such as digital and data, financial services, food and drink, and creative industries.
While the economic impact is modest — the U.K. 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.
The signing came as Johnson’s government restarted negotiations with the EU Thursday, in a bid to avoid tariffs and quotas being reimposed when the U.K. departs from the single market and customs union on Dec. 31.
Japan publicly opposed Brexit ahead of the 2016 referendum and has lobbied against anything damaging the interests of the 1,000 or so Japanese businesses in the U.K., including carmakers like Nissan Motor Co. and Honda Motor Co. that rely heavily on trade with the EU.
The U.K. said 99% of exports to Japan will be tariff-free under the deal, which will add 15.2 billion pounds ($20 billion) to annual trade with the Asian nation.
The Japan-U.K. agreement is set to be approved by Japan’s parliament in a session starting next week, enabling it to come into effect Jan. 1.
“This is a manifestation of the determination of Japan and the United Kingdom to carry on vigorously promoting free trade,” Motegi told reporters after the signing, adding it would help ensure a “seamless transition” for Japan-U.K. trade following Brexit.