Japan and Britain Plan to Negotiate a New Trade Agreement in August to Regard EU-Made Auto Parts as Domestic
2020-08-03 460

Japanese media said that the governments of Japan and Britain began to coordinate and planned to stipulate in the new trade agreement to be signed that even if the industrial products such as automobiles of both sides use more parts made by EU, you can also enjoy the same preferential treatment.

According to the report of Japan's Yomiuri Shimbun on July 29th, the Japanese and British governments were negotiating and planned to negotiate a new trade agreement in August in order to deal with Britain's departure from Europe. In early August, the foreign minister of Japan, maomu minichiro, will visit Britain to hold the final negotiation with Elizabeth Trass, the British Minister of International Trade.

According to the report, the tariff implemented by Japan and Britain is based on the provisions of the Economic Partnership Agreement between Japan and the European Union. The two governments hope to reduce the tariff on industrial products to the current level in the new trade agreement, and even cancel the tariff. However, according to the rules of origin, cars produced in Britain may be regarded as foreign products if they use a large number of parts produced in EU, and then be levied with high tariffs.

Therefore, both parties intend to set special cases to relax the conditions related to rules of origin. The enterprises of Japan and Britain will regard the products that use the components produced by EU as their own products, so as to avoid imposing high tariffs. Among the automobile and electrical products with large trade volume between Japan and Britain, many of them are produced after purchasing parts from the European Union.

According to the report, about 15% of Japan's imported auto parts are produced in the European Union. Japanese auto giants use European Union parts to produce cars in Japan and then export them to Britain. At the same time, Nissan Motor Company and other three Japanese auto giants all set up vehicle factories in Britain, using components produced by EU.

The report also said that Japan Automobile Industry Association and British automobile manufacturers and dealers association signed the intention document about the new agreement this month, it is required to allow preferential policies to be adopted on the issue of EU components caused by the rules of origin of Japan-UK automobile trade.

Source: Reference News Network