Fact checker dismisses Liz Truss’ claim UK will be £1.5bn better off from Japan deal
A fact checker has dismissed Liz Truss’ claims surrounding the new free trade agreement between the UK and Japan.
The international trade secretary last week triumphed the deal as the first major trade deal made by the UK since it left the EU.
The department said that the deal will deliver a £1.5 billion boost to the UK economy, pointing to figures the government had analysed.
Full Fact however points out that the analysis was relative to 2018 when the UK was a member of the EU, and neither had a free trade agreement with Japan.
It is not comparable to the current arrangements as the UK benefits from a trade deal between the EU and Japan, which came into force in February 2019, and provides reduced tariffs on agricultural goods and helps companies benefiting from EU membership.
The fact checker says that at present it is “hard to quantify how much more the new deal will benefit the UK economy than the old deal.”
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UK in a Changing Europe fellow Dr Meredith Crowley told the website that it is “what an economist would refer to as a “back of the envelope calculation” or a “ballpark estimate.”
“It basically takes a 2009 study from Copenhagen Economics and apportions part of the EU’s estimated gains from the EU-Japan EPA to the UK in a more-or-less sensible way.
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“However, it doesn’t do a fully general equilibrium (CGE) analysis of the extent to which Japan’s engagement with each member state of the EU will change under the EPA. So, it’s not really comparable to the more recent government study”.
Theh website said that until Truss’ department publishes the full agreement to parliament it is unable to make a fuller impact assessment of the deal.
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