The UK and Japan recently signed a Comprehensive Economic Partnership Agreement (CEPA), which is set to boost trade and investment between the two countries. This new agreement, which will come into effect from 1st January 2021, will eliminate tariffs on a wide range of goods and services, including electronics, food and drink, and automobiles. Here’s everything you need to know about this exciting new development in UK-Japan trade:

What is the CEPA?

The Comprehensive Economic Partnership Agreement (CEPA) is a trade deal between the UK and Japan that aims to increase bilateral trade and investment between the two countries. Under the terms of the agreement, tariffs on 99% of exports from the UK to Japan and 99% of exports from Japan to the UK will be eliminated over the next decade. The agreement covers a wide range of industries, including agriculture, food and drink, manufacturing, digital trade, and financial services.

What are the benefits of the CEPA?

The CEPA is expected to deliver significant benefits for both the UK and Japan. For UK businesses, it will provide new opportunities to export goods and services to Japan, which is the world’s third-largest economy. This is particularly important in the current economic climate, where many UK businesses are struggling due to the COVID-19 pandemic. By opening up new markets, the CEPA will help businesses to diversify their revenue streams and boost growth.

For consumers, the CEPA will mean more choice and lower prices. The elimination of tariffs on goods such as Japanese cars and electronics will make them more affordable for UK consumers, while the elimination of tariffs on UK goods such as whisky and salmon will make them more attractive to Japanese consumers. This is good news for businesses on both sides of the agreement, as it will help to drive demand for their products and services.

What are the challenges of the CEPA?

As with any trade agreement, there are bound to be challenges and obstacles that need to be overcome. One of the main challenges of the CEPA is ensuring that the agreement is implemented smoothly and effectively. This will require close collaboration between the UK and Japanese governments, as well as effective communication and coordination between businesses on both sides of the agreement.

Another challenge is ensuring that the benefits of the CEPA are felt by all businesses, not just the largest and most well-established companies. Small and medium-sized enterprises (SMEs) are a key part of the UK economy, but they may struggle to take advantage of the new opportunities created by the CEPA without the right support. To overcome this, the UK and Japanese governments will need to work together to provide SMEs with the information, resources, and support they need to succeed.

Overall, the CEPA represents an exciting new chapter in the economic relationship between the UK and Japan. By eliminating trade barriers and opening up new opportunities for businesses, it has the potential to boost growth, create jobs, and stimulate innovation on both sides of the agreement. While there are challenges to be overcome, the benefits of the CEPA are likely to be significant and long-lasting.