What is happening and why Japan?
The EU and Japan currently have a trade deal and since it came into force in February 2019, by merit of EU membership UK farmers have been able to benefit from the trade preferences (reduced tariffs and increased quota allocations) it grants.
The UK government is currently negotiating a new trade agreement with Japan, with the aim that it will be ready to apply from the end of the transition period (ie 1 Jan 2021), as at this point trade deals negotiated by the EU cease to apply to the UK and we will operate our own international trade policy.
A deal is rumoured to be close and both sides were reported to have been aiming for conclusion by the end of August, but the recent resignation of the Japanese Prime Minister might see timelines delayed.
Japan is the largest net importer of agri-food products worldwide as it lacks sufficient agricultural land to feed its population. Japan relies on imports for around 60% of the food it consumes and high per capita spending and consumption levels make their food-and-drink market one of the largest globally. Japan is currently the UK’s 4th largest non-EU export market (11th globally) and in 2018 accounted for just over 2% of the UK’s total exports.
What does the NFU want out of a UK-Japan deal?
The EU-Japan deal is extremely positive for the farming sector as it sees around 85% of EU agri-food products allowed to enter Japan duty-free over time.
Tariffs have been either eliminated or significantly reduced and for the more sensitive products the agreement provides for several quotas (TRQs) for key products of interest such as butter, whey, SMP, sugar and malt.
The Japanese market represents genuine opportunity for UK farmers and growers to export more great British food and drink. We are therefore, very supportive of the government’s aim to secure a comprehensive trade deal with Japan as soon as possible and at the latest by the end of the year.
We believe that in the context of a UK-Japan FTA negotiations, the UK should work to achieve at least the same level of market access as is afforded to EU farmers through the EU deal.
Any TRQs should be adjusted in size to reflect the UK and tariff reductions should be replicated if not beaten. If the UK and EU agreements see tariffs cut over a different timescale or to different levels (ie the EU has earlier or better access then the UK) it would put UK businesses at a competitive disadvantage compared to equivalent EU businesses.
Market share is hard won and if the EU has preferential access over and above the UK, it will mean EU businesses will establish themselves earlier, leaving less room in the market for UK imports.
There are sector specific opportunities for UK exports and NFU members can read more about those here.
What is the NFU doing?
The NFU is working to represent the interests of UK farmers and growers at the highest level in the context of these negotiations. We have met with key negotiators from the government and also with representatives from the Japanese Embassy.
We have submitted evidence to a House of Lords select committee inquiry on UK – Japan trade negotiations (NFU members can read this here) and are due to give oral evidence later this autumn.
When the EU–Japan agreement was concluded several years ago, we worked with other EU farming colleagues through Copa (the EU farmers organisation) to vocalise our support for the deal.
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