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News & Press: International Trade News

PM May in talks with Japan - copycat deal on the table?

30 August 2017  
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As part of her visit to Japan, Prime Minister Theresa May is holding talks with Japan’s PM Shinzo Abe with the view to setting up an approach to negotiating trade deals that could apply for the UK with global partners around the world. This model would use existing trade deals between prospective partners and the EU as the basis for UK deals following its exit from the EU.

Although the EU-Japan deal has not yet been completed – something PM May is asking Japan to push ahead with – it is likely that it will be completed not long after the UK leaves the EU. A political agreement was agreed earlier in the summer, though there are still disagreements over aspects of the deal, including the investor-state dispute settlement.

The deal between the EU and Canada – which again could prove to be a model on which UK-Canada trade talks could begin – took almost three years to be formulated following a similar ‘political’ agreement. Indeed, the EU-Canada deal almost collapsed after a veto from a Belgian region during ratification earlier this year; the deal still requires final ratification.

The UK is keen for a deal with Japan

The UK was a passionate advocate for the EU-Japan deal when negotiations began in 2013. PM May intends to kickstart talks between the UK and Japan quickly after the UK has left the EU.

“We can’t sign up to a trade deal with Japan or with any other country outside of the European Union until we’ve left the European Union,” she told ITV in Kyoto.

“What we can do is to be talking about that future relationship. That’s what I’m going to be doing here with Prime Minister Abe. I believe we can look at an EU-Japan deal as the basis for a future trade deal between the United Kingdom and Japan.”

Copycat deals?

The idea of using existing EU deals as a model for new UK deals with partners, following Brexit, has already been branded a ‘copycat’ approach. Prime Minister May is, however, keen to assure Brexiteers that new deals with the UK’s global partners will be bespoke towards the UK’s own agenda.

“Even if we start on the basis of an existing trade deal that a country has with the EU, it will be up to the United Kingdom and that country if we wish to renegotiate and change those terms in the future,” she said.

“The important thing is that outside of the European Union the UK will have the control and we’ll make the decisions about who we have those trade deals with and what the terms of those trade deals are.”

Certainly the idea of having trade deals with global partners that are continuous with existing trade deals between the EU and those partners does make sense, in terms of facilitating an easier-to-understand trading climate. This would be especially true if the UK’s deal with the EU is quickly forthcoming following Brexit, allowing a relatively seamless transition towards the UK’s new trading position.

But, on the other hand, if the UK does indeed have trade deals with non-EU partners that closely resemble the deals those partners have with the EU anyway, many on both sides will be asking what the point of Brexit actually has been.

Should the UK look for completely bespoke trade deals with its global partners - deals that are significantly different from existing deals with the EU - then it could be a very long time before the UK is able agree any such deals, such are the complications of these negotiations.

Source: 'May to press Japan on its EU trade deal in hopes of a model for UK' - the Guardian, 30/08/17

Further reading: 'Japan and EU on course for historic trade deal' - IOE&IT, 06/07/17