Japan`s initial refusal to “shake up” the EU-Japan Economic Partnership Agreement (EPA) was encouraged in part by Japan`s desire to further clarify the future trade relationship between the UK and the EU and, on the other hand, by the desire to negotiate something more ambitious by validating the UK`s market access commitments and re-examining certain regulatory issues, which were rejected by the EU during the EPA negotiations between the EU and Japan.  However, over time, Japan has repositioned itself to prioritize “continuity.” The Japanese economy has come under strong pressure to ensure a smooth transition from the EU-Japan EPA framework to the EU-UK Free Trade Agreement from 1 January 2021. The free trade agreement between Japan and Britain will be signed shortly, the first British trade agreement after Brexit. While the agreement has some political significance, its economic impact is expected to be very small. This is because it contains only very limited improvements compared to the Economic Partnership Agreement (EPA) between the EU and Japan. While a thorough review will only be possible when the text is made public, one of the main flaws of the agreement appears to be the treatment of investments. * The pricing tables in the original files are images. They were converted by Twitter user “slroot” @schnoogsl (see tweet) on this page using visual character recognition (OCR) into searchable text The UK Comprehensive Economic Partnership Agreement (CEPA) (Japanese: |英ࡍࡍ括的経済連携協定) is a free trade agreement between the United Kingdom and Japan.   The agreement was concluded in principle by both parties in September 2020 and was signed in Tokyo in October 2020, following the UK`s withdrawal from the European Union in January 2020. A major shortcoming is that the investment part of the EU-Japan EPA, which only covers investment liberalisation, appears to be unassed.
The UK government could, for three reasons, have demonstrated a strong commitment to Japanese investment by including a comprehensive investment chapter, including investment protection and dispute settlement. First, further investment liberalisation in the investment relationship between Japan and the UK is no longer a controversial issue, given that the investment policy framework is already quite liberal in both Japan and the UK. Secondly, the EU-27 and Japan have agreed to negotiate a bilateral investment agreement (BIT) but have not yet reached the agreement. The United Kingdom could have played a pioneering role in this regard. Third, the Japanese economy is interested in investment protection in the UK, as there is no BIT between Japan and the UK, while the UK has 92 BITs in force.  With regard to the agreement, a number of concessions have been agreed with regard to customs duties and rules of origin in order to protect Japanese car and rail investments in the UK. These are a response to the strong demands of the Japanese government. As regards customs duties, the United Kingdom has accepted the immediate reduction of customs duties on certain intermediate consumption for the automotive and rail industry.
. As regards rules of origin, the agreement allows for an increase in the cumulation of EU intermediate consumption in Japanese products and a reduction of the threshold from 55% for automotive components (under the EU-Japan EPA) to 50%. However, diagonal trilateral cumulation with the EU is not resolved, as this would also require an agreement with the EU. It is highly unlikely that the EU will make such a concession that could confer a competitive advantage on the UK. The important point is that these agreements cover only certain target sectors and are far from exhaustive. The page of the text of the law also contains an explanatory memorandum (pdf). . . .