London – Britain and Japan made progress toward a comprehensive free trade deal and are committed to getting one in place by the end of the year, trade minister Liz Truss said on Thursday.
Japanese foreign minister Motegi Toshimitsu is in London this week meeting senior ministers as the two countries try to reach a deal before Britain leaves the European Union and no longer benefits from an existing EU-Japan deal.
“We’ve made further progress towards a comprehensive deal with a like-minded democracy and long-standing ally, and we share a commitment to getting a deal in place by the end of 2020,” Truss said in a statement.
Speaking after the meeting, Motegi also said he thinks the two sides have come to a better mutual understanding.
Motegi and Truss will meet again on Friday, the final day of their two-day meeting, to have further last-minute negotiations.
On Thursday, Motegi and Truss held intermittent talks at the Foreign and Commonwealth Office in central London between around 10 a.m. and 6 p.m. local time.
“As working-level agreements had been reached for the most part, we negotiated the remaining important issues today,” Motegi said at a news conference after the talks.
When asked about the chances of the two countries reaching a broad agreement on Friday, Motegi said, “You never know what will happen but we’ll do our best.”
According to sources with access to the negotiations, the two nations have already agreed on digital trade rules and a scheme to protect famous products from each country, such as Scotch and Kobe beef.
In the ministerial talks, the Japanese side is seeking early removal of Britain’s automobile and auto parts tariffs, while Britain is calling on Japan to liberalize its farm market further, the sources said.
The world’s third-largest economy has for decades been a large foreign investor in British industry, particularly in consumer electronics and car manufacturing. The total value of bilateral trade in 2019 was £31.6 billion ($41.5 billion), according to British data.
Britain is seeking a deal that uses the 2019 EU-Japan agreement as its template, and seeks to improve on its terms in strategic areas. Japan and Britain kicked off their trade talks on June 9, following Britain’s exit from the European Union.
British analysis estimated that, in the long run, the trade deal could increase annual trade flows between both countries by £15.2 billion and increase the size of the U.K. economy by £1.5 billion.
The two countries hope to put the new bilateral trade deal into effect in time for the year-end expiration of the transition period for the British exit, during which tariffs-related preferential measures under the Japan-EU economic partnership agreement continue to cover Britain.