Britain has secured a free trade agreement with Japan, which is the UK’s first major trade deal after it left the European Union on Jan. 31.
The UK-Japan Comprehensive Economic Partnership Agreement was agreed in principle by International Trade Secretary Liz Truss and Japan’s Foreign Minister Toshimitsu Motegi on a video call on Friday.
“This is a historic moment for the UK and Japan as our first major post-Brexit trade deal,” Truss said.
“The agreement we have negotiated—in record time and in challenging circumstances—goes far beyond the existing EU deal, as it secures new wins for British businesses in our great manufacturing, food and drink, and tech industries,” she said.
Motegi said the talks had been difficult “but we managed to reach an agreement in principle with extraordinary speed, in just three months.”
Under the deal, UK businesses will benefit from tariff-free trade on 99 percent of exports to Japan, the government said in a statement. It is estimated to increase trade by 15.2 billion pounds ($19.4 billion).
The UK currently benefits from the EU-Japan free trade agreement, which entered into force in February 2019, creating the world’s largest open economic area covering a third of the world’s economy.
But the EU–Japan deal will stop covering the UK when the Brexit transition period ends on Dec. 31, 2020.
Since formally leaving the EU in January, Britain has focused on negotiating new trade deals with countries around the world.
The UK–Japan deal had been widely seen as one the easiest within reach for London, being based largely on the EU–Japan agreement.
The British government also sees the deal as an important step toward joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which will give UK businesses “a gateway to the Asia-Pacific region,” the government said.
CPTPP is a landmark 11-country trade deal that includes Australia, New Zealand, Canada, Japan, Mexico, Singapore, Vietnam, Brunei, Chile, Malaysia, and Peru.
The UK started exploring membership of CPTPP in 2018 in the hope of stimulating exports after Brexit.
Reuters contributed to this report.