Following the announcement of a new free trade deal between the UK and Japan, experts have revealed that Japan is a strong export destination for North West firms, particularly in manufacturing.
On 22 October the government announced that it had signed a new UK-Japan Comprehensive Economic Partnership Agreement (CEPA) - the UK’s first Free Trade Agreement (FTA) that goes beyond its existing EU deal.
International Trade Secretary, Liz Truss, said that the deal would boost trade between the UK and Japan by over £15 billion. The deal includes articles that enable a freer flow of data between the two countries, reduced tariffs for car and rail manufacturing parts coming from Japan and tariff reductions on food and drink exports, among other benefits.
The agreement also contains a chapter specifically for SMEs, to help small businesses get the support and tools they need to export to Japan.
Mike Cherry, National Chair of the Federation of Small Businesses (FSB), said:
“With over 8,000 small businesses already exporting to Japan, the market is already a lucrative and successful route to trading, and this should provide small businesses looking to grow, maintain or start exporting to Japan with the certainty they need for the future.”
According to new research from Deloitte - in partnership with the Greater Manchester Combined Authority and MIDAS, Manchester’s inward investment agency - North West companies have exported more than £5.5 billion of goods to Japan over the last decade.
Key sectors include chemical products, machinery and transport, and manufacturing products. Exports of manufacturing products in particular continues to grow year-on-year and last year reached their highest level since 2014.
Jo Ahmed, Global Employer Services Partner at Deloitte, and also the Honorary Consul of Japan in Manchester, explained:
“Japan represents an enormous growth opportunity for many businesses in the North West, both in terms of direct exports and ongoing collaboration and joint ventures. There has been a huge amount of appetite and investment from Japanese businesses in North West products, which has brought with it significant economic benefits for the local area.
“This, coupled with the UK-wide free trade agreement, highlights the opportunities that Japan presents to the region’s businesses, and we expect to see both export and import figures grow as this relationship develops in the coming years.”