UK – Japan trade deal hints at agenda for proposed UK-Australia FTA

August 12, 2020: The Japanese Foreign Minister, Toshimitsu Motegi, and the UK Trade Secretary, Liz Truss met in person in London last week to finalise the proposed UK-Japan Free Trade Agreement, Media reports said that the major issues were settled and Secretary Truss expected the deal to be finalised by the end of August. The UK also wants FTAs with the EU, Australia, the USA, and New Zealand. The Australian negotiations began in June 2020.

The UK and Japan reportedly agreed on deregulated digital commerce – no local servers for data, no government access to source code -as well as financial services. This appears similar to the terms of the Digital Economic Agreement Australia has just reached with Singapore.

AFTINET opposes the deregulation of digital trade because it further empowers Big Tech companies in their practices of abusing consumer privacy, massively dominating consumer markets, and avoiding their tax liabilities where they make their profits. The ACCC has recommended more, not less regulation of these companies.

Japan reportedly accepted British exclusion of Investor-State Dispute Settlement (ISDS), which allows foreign investors to sue governments if they can argue that changes in laws or policies will harm their investment. AFTINET also opposes ISDS, so it is good news that the British government may be opposing it in the Japan deal.

However the UK also hopes that success with a Japan FTA would help its bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes Japan, Australia, South Korea and eight other countries. But the CPTPP does include ISDS. The relevant clause for other states joining CPTPP says that they can only do so :”subject to such terms and conditions as may be agreed between the Parties and that State”. This will be a test of whether Britain is prepared to swallow ISDS in its eagerness to join the CPTPP.