The government of the United Kingdom has admitted that Britain will not be able to maintain its current trade terms with Japan if it leaves the European Union without a deal on the 29th of March.
The department for international trade did not discuss the failure to roll over the deal in a press release, however, the revelation was included in an attached report regarding the plans for bilateral no-deal agreements.
The move will possibly be seen as an embarrassing blow for Theresa May, the Prime Minister of the United Kingdom who has pushed for closer ties between Japan and the UK.
Previously, the government of Japan has warned that the economy of Britain would be severely damaged if it left the bloc without a deal.
Japan is considered as one of the biggest investors of the UK and Britain imports approximately £10.6 billion ($13.7 billion) worth of goods per year from Japan.
The revelation comes after the announcement of Nissan earlier this month that it had abandoned its plans to build its new X-Trail model in Sunderland in the north of England, despite the UK government pledging to support the Japanese car manufacturer amid concerns of Brexit uncertainty.
The department is run by Liam Fox, the international trade secretary. Today, he admitted that the trade with Japan will take place on World Trade Organization (WTO) plans in case of a no-deal scenario.
Its report stated: “We will not transition this agreement for exit day.” It added that engagement was “ongoing.”
Earlier this week, the Financial Times reported that some Japanese officials had accused Fox and Jeremy Hunt, the British Foreign Secretary, of “high-handed” behaviour and not bringing enough specialists to the negotiations.
It was also confirmed today that the UK is also not expected have an agreement in place with Turkey by the planned exit date.
The UK government also suggested that a significant amount of UK trade was still not covered by the bilateral deals to replace the arrangements that were signed via the EU.
It said that only “more than a quarter” of UK trade that was covered by such agreements had been rolled over, despite Brexit only being weeks away.
So far, Chile, Switzerland, Eastern and Southern Africa, the Faroe Islands, the Palestinian Authority, and Israel are the only agreements that were signed.
Mutual recognition agreements, which are said to block additional bureaucracy and enable trade “as freely” as today, have been signed with Australia, New Zealand, and the USA.
However, the UK government said that it would be signing more trade agreements “in the coming days and weeks.”
The current agreements have still not been replicated with countries including Egypt, Canada, Kenya, and Mexico.