THE UK’s “landmark” post-Brexit trade deal with Japan has led to falling exports, new figures have revealed.
The deal with Japan, signed by former trade secretary Liz Truss in 2020, was touted to lead to £15bn worth of trade between the countries – but the numbers show a fall in total trade of around 5%.
Since the deal came into force in 2021, exports of goods and services have fallen from £12.3bn to £11.9bn, statistics from the Department for International Trade and reported by The Observer revealed.
During the same period, the EU’s direct trade with Japan managed to recover significantly to nearly pre-pandemic levels, European Commission figures show.
The news comes as recent polls found the majority of UK residents believe leaving the EU was the wrong thing to do.
In 2021, Scotland made up around 8% of total UK exports to Japan thanks largely to the success of our whisky and salmon sectors. There are not yet official figures available showing how these industries have been affected by the trade deal, though representatives have been contacted for comment.
UK no longer 'Japan's gateway to Europe'
But SNP trade team spokesperson Angus MacNeil (below), who chairs the International Trade Committee and plays a key role in scrutinising the UK’s post-Brexit deals, argued the only solution is to rejoin the single market and customs union.
“The UK was losing GDP as a result of leaving the European Union,” MacNeil said. “There were going to be minor uplifts from other trade deals, Japan wasn’t one of them, it was going to stay the same. In actual fact for Japan the GDP effect will be negative, like Brexit.
“So now Brexit’s negative and the trade deals are negative. The New Zealand deal looks like it will be negative for the economy too. All this effects people’s cost of living and day-to-day expenses, ultimately down the line.”
The MP argued that Japan’s perception of the UK has completely changed since we left the bloc.
“Japan once saw the UK as the gateway to Europe, it doesn’t see that anymore. It sees a global EU, ironically to steal a phrase, as far more important,” he told The National. “Japan and the EU together make up a quarter of the world’s GDP and the UK’s very marginalised. The UK’s tiny in that context.”
The solution for Scotland is clear, says MacNeil – getting out of the Union.
“The hashtag they promised us was Better Together, they’re delivering Poorer Together,” he said.
In the wake of the Supreme Court finding Scotland needs the UK’s consent to hold indyref2, MacNeil has been arguing against the SNP plan to use the next General Election as a de facto referendum.
He says a Holyrood election should be triggered instead, to ensure Scotland can benefit from having the full franchise able to vote – for example 16 and 17-year-olds, and refugees.
A Scottish Parliament election would also stop the indyref2 narrative being overshadowed by Labour’s performance south of the Border, the MP believes.
“I think the sensible thing the Scottish Government could do if they want to improve the situation for Scotland would be to resign and cause an election in two-and-a-half months,” the MP said.
“Get us on the way to independence so we’re no longer held hostage, if you like, by the crazy decisions of the extreme Tory policies in Westminster. All this ties in, these are the reasons for independence. It’s so this sort of stuff doesn’t happen to us.”
Meanwhile, fellow trade spokesperson at Westminster Drew Hendry (below) said it was only independence that would see Scotland back in the EU.
Labour leader Keir Starmer, who bookies predict will be the next prime minister, has ruled out a closer relationship with the bloc.
“Already Scotland's exporters have been betrayed by trade deals negotiated by Westminster, with even the man who agreed the Australian trade deal, George Eustice, admitting that it was not a good deal for Scotland's farmers and crofters,” Hendry told The National.
"Scotland's exports have nosedived since Brexit by £2.2bn as industries lost access to the European Union, a market seven times the size of the UK. Both Labour and the Tories are part of the problem with neither of them committed to returning to the EU, no matter the economic consequences.”
UK stands by the Japan deal
A spokesperson for the Department for International Trade defended the Japan deal.
“Global trade has been significantly impacted by Covid-19, and while trade flows can fluctuate in the short term due a variety of factors, our analysis shows that the UK-Japan CEPA could increase trade by nearly £16bn and increase UK wages by £800m by 2035 compared to not having a deal,” they said.
It’s not only the Japan trade deal which is struggling along – the total trade and goods deficit was £23.7bn from July to September, figures from the ONS found.
And the Office for Budget Responsibility said this month that it expects UK trading intensity to be 15% lower in the long-term.
