Free Trade Agreements With Japan

Duty-free access for more British products – new and more liberal rules of origin will allow manufacturers of coats, knitwear and biscuits to buy inputs from around the world to export to Japan – allowing them to sell more easily and cheaper in the Japanese market. In the past, European companies have faced trade barriers by exporting to Japan, which sometimes made them more difficult to compete with. (1) Compliance with WTO agreements Three points must be considered. First, tariffs and other trade rules should not be higher or more restrictive than tariffs and other corresponding trade rules prior to the establishment of the free trade agreement. Second, they must eliminate tariffs and other trade rules that are restrictive for most of all trade. Third, they must complete the ATR within 10 years, at least in principle. The reference to “the bulk of total trade” implies that countries must achieve a favourable standard of liberalization in terms of trade volume against international standards (based on the figures provided, the NAFTA average is 99%, while the average for the Free Trade Agreement between Mexico and the EU is 97%). (2) Japan`s free trade agreement strategy – the specific points to be considered by Japan`s major trading partners are East Asia, North America and Europe, three regions accounting for 80% of Japan`s trade. Compared to free trade agreements with the countries of North America and Europe, all of which are industrialized countries, free trade agreements with East Asia will bring the greatest additional benefits through further liberalization. As can be seen from the simple averages of tariff rates (United States, 3.6%; European Union, 4.1%; China, 10%; Malaysia, 14.5%; Republic of Korea, 16.1%; Philippines 25.6%; and Indonesia, 37.5%, East Asia, the region where Japanese products accounted for the highest share of trade, has the highest tariffs. Trade liberalization with East Asia will help facilitate the activities of Japanese companies that face competition from ASEAN and China and, in many cases, have relocated their production sites to sites in East Asia.

(1) Free trade agreements with economic benefits have the effect of increasing import and export markets, moving to more efficient industrial structures and improving the competitive environment. In addition, free trade agreements help reduce the likelihood that economic frictions will become political problems and help expand and harmonize existing trade-related rules and systems. Other objectives include other objectives that are slipping into Japan`s bilateral trade agenda: in early 2005, Japan began exploring possible discussions with Switzerland and negotiations began in 2007. In 2006, spurred on by concerns about access to energy resources, Japan pledged to restart discussions for a free trade agreement with Kuwait and other oil and Gas countries of the Gulf Cooperation Council (GCC). Japanese companies are also increasingly concerned about international trade disadvantages, leading to free trade agreements with Brazil, South Africa, New Zealand and even some pious rhetoric about a U.S.-Japan deal. At the end of 2011, Japan expressed interest in negotiating a free trade agreement with Burma. In March 2012, signs of the free trade agreement with Mongolia and Canada were announced. The United Kingdom and Japan have a long shared history as free trade nations and this agreement marks a historic moment that will deepen the partnership between two democratic island states. In the context of the current process of expanding economic interdependence between Japan and China, the possibility of concluding a free trade agreement with Hong Kong should not be ruled out.

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