- Britain's trade department said U.K. businesses would benefit from tariff-free trade on 99% of exports to Japan.
- It also suggested the deal would see the country increase trade with Japan by £15.2 billion ($19.5 billion).
- Sterling traded at $1.2817 during lunchtime deals, around 0.1% higher for the session.
LONDON — The U.K. and Japan on Friday agreed in principle to a trade deal, in a move that sees the U.K. strike its first major agreement post-Brexit.
The announcement, which the U.K. hailed as a "historic moment," comes as Britain struggles to secure an agreement with its closest trading partners in the European Union.
Britain's trade department said U.K. businesses would benefit from tariff-free trade on 99% of exports to Japan. It also suggested the deal would see the country increase trade with Japan by £15.2 billion ($19.5 billion).
The deal will include digital and data provisions that go "far beyond" the EU-Japan deal, Britain claimed, enabling the "free flow of data whilst maintaining high standards of protection for personal data."
The tentative agreement, which will require the approval of both the U.K. and Japanese parliaments, is scheduled to come into the force at the end of the year.
"This is a historic moment for the UK and Japan as our first major post-Brexit trade deal," Liz Truss, U.K. international trade secretary, said in a statement.
"Strategically, the deal is an important step towards joining the Trans-Pacific Partnership and placing Britain at the centre of a network of modern free trade agreements with like-minded friends and allies," Truss said.
Sterling traded at $1.2817 during lunchtime deals, around 0.1% higher for the session.
Negotiations between the U.K. and Japan started on June 9. Since then, Britain said more than 100 negotiators had met via remote means or in-person to negotiate the deal.
Late last month, Japanese Prime Minister Shinzo Abe abruptly announced his intention to step down, citing health reasons. The 65-year-old said he would fulfill his duties as prime minister until the next leader is appointed.
U.K. Prime Minister Boris Johnson said earlier this year that Britain could become the Superman of global trade, striking lucrative agreements on its own terms following the country's exit from the EU in January.
The proposed deal with Japan marks the first major deal for the world's fifth-largest economy post-Brexit.
Carolyn Fairbairn, director-general of the Confederation of British Industry, described the agreement as a "breakthrough moment" that would be "welcomed by businesses across the country."
"Business will help support the Government in its efforts to secure more trade deals around the world and promote their benefits to communities. The Japan deal can be the first of many," Fairbairn said.
However, critics of Johnson's "global Britain" agenda suggest free trade agreements with countries around the world are unlikely to offset exports lost to the EU if it cannot reach an agreement with Brussels.
The U.K. and EU are currently at loggerheads over Britain's so-called Internal Market Bill. The bill, proposed earlier this week, seeks to amend part of the country's Brexit deal with the EU. If approved, it would allow ministers to change parts of the Northern Ireland protocol of the Withdrawal Agreement, negotiated last year.
Northern Ireland Secretary Brandon Lewis, a government minister, has since conceded the Internal Market Bill would "break international law."
In response, the U.K.'s opposition Labour party has condemned the proposal, while European Commission President Ursula von der Leyen said Wednesday she was "very concerned about the announcement from the British government."
Stateside, Nancy Pelosi, the speaker of the House and a vocal Democrat lawmaker, said Wednesday that if the U.K. violates its international agreements, "there will be absolutely no chance of a U.S.-U.K. trade agreement passing the Congress."
The U.K. and the EU are currently trying to reach a trade agreement before the end of the transition period on December 31, with the U.K. set to go onto World Trade Organization rules if no agreement is reached.