(Bloomberg) -- The U.K. and Japan start trade talks Tuesday, aiming to replace the free-trade agreement that Britain currently enjoys with the country through the European Union.
The British government, whose trade with the world's third-largest economy was worth more than 31 billion pounds ($39 billion) last year, said it intends to build on the existing EU-Japan deal, signed in 2018, which the U.K. will no longer benefit from when it completes its exit from the bloc at the end of 2020.
U.K. Puts Banking at Heart of Objectives for Japan Trade Deal
Securing trade deals is a high priority for the U.K. as it re-shapes its economic relations with the world post-Brexit. Without a new accord with Japan by Jan. 1, 2021, the two countries will default to trading on World Trade Organization terms, meaning tariffs and new obstacles to commerce. Japan is the U.K.'s fourth-largest non-EU trading partner.
“We aim to strike a comprehensive free trade agreement that goes further than the deal previously agreed with the EU, setting ambitious standards in areas such as digital trade and services,” International Trade Secretary Liz Truss said in a statement. “This deal will provide more opportunities for businesses and individuals across every region and nation of the U.K.”
In addition to Japan, the U.K. is seeking to sign free-trade agreements with countries including the U.S., Australia and New Zealand. Britain is also in negotiations with the EU, though those discussions have stalled in recent weeks, risking a sharp break from its largest trading partner at the end of 2020.
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