Northumberland-based AVID Technology Limited is one of the many businesses within the automotive industry that could benefit from the new UK-Japan Free Trade Agreement.

The company was founded 15 years ago and specialises in custom-designed electrification product and system solutions primarily for heavy duty, high performance hybrid and electric vehicles.

AVID Technologies exports 60% of its overall turnover working with some of the biggest names in the industry globally. It plays an integral part in North East by employing 110 highly qualified specialised staff that include a team of 60 engineers.

The UK-Japan Comprehensive Economic Partnership Agreement was agreed in principle by International Trade Secretary Liz Truss and Japan Foreign Minister on a video call this morning (Friday 11 September).  It is the UK’s first major trade deal outside the EU. 

This is the first step towards the UK’s aim to become a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which will open up 11 key pacific markets for exporters, reducing tariffs for UK business (95% of goods traded between members are tariff-free).

From car and rail manufacturing to electrical machinery the North East could benefit from streamlined regulatory procedures and greater legal certainty for their operations as part of the new UK-Japan trade deal. 

A deal with Japan could increase trade by £15.2 billion, giving a £1.5 billion boost to economy and increasing UK workers’ wages by £800 million in the long run. 

This will benefit the 214 businesses in the North East that exported £370m worth of goods to Japan last year and help even more local businesses to sell their goods to Japan for the first time.

The North East exported almost one-in-four of the UK’s exports of electrical machinery to Japan.

“At present AVID has very limited activity in Asia and over the next couple of years we want to build a strong presence there.”

Iain Young, Sales Director, AVID Technologies

Iain Young Sales Director at AVID Technologies said: “At AVID our most significant advantage is that no request is too big or too small for us. We produce end-to-end custom solutions, which means that we do all the design, testing, manufacturing and certification in our factory.

“Japan is not currently a market we export to, but it is a market we are very interested in developing. At present AVID has very limited activity in Asia and over the next couple of years we want to build a strong presence there.”

“Based on my 30-year experience of doing business in Japan, without a shadow of doubt UK-based tech solutions, research and development are highly regarded around the world, but particularly in Asia and especially in Japan.

“There is big mutual respect between the UK and Japan, for the type of technology innovation and high-quality manufacturing AVID provides.”

International Trade Secretary Liz Truss said: “This is our first major post-Brexit trade deal and it goes far beyond the existing EU deal by securing new wins for British businesses including in our great manufacturing, food and drink, and tech industries.  

“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 liken-minded friends and allies.”   

The removal of several trade barriers aims to assist the UK’s 8,000 SMEs already exporting goods to Japan, by offering tariff-free trade on 99% of UK exports to Japan.  Other key benefits of the deal include:

  1. Cutting-edge digital & data provisions that go far beyond the EU-Japan deal, including enabling free flow of data, a commitment to uphold the principles of net neutrality and a ban on data localisation that will prevent British businesses from having the extra cost of setting up servers in Japan.
  2. New protections for UK creative industries – British businesses can now be confident that their brands and innovations will be protected. We have gone beyond the EU on provisions that tackle online infringement of IP rights, such as film and music piracy.
  3. Strong tariff reductions for pork and beef exports – we have negotiated a deal that sees tariffs fall on pork, beef, salmon and a range of other agricultural exports. We will continue to benefit from access to the low tariffs for key food and drink products covered by quotas, such as stilton cheese, tea extracts and bread mixes.
  4. Improved mobility for business people – securing more flexibility for Japanese and British companies to move talent into each country, covering a range of UK skilled workers to enter Japan, from computer services to construction.

Negotiations with Japan started on 9 June 2020. Since then more than 100 negotiators have met via remote means or in person to negotiate this agreement.

After the deal is formally signed, the UK and Japanese parliaments will have the opportunity to scrutinise the agreement and approve its content before it enters into force at the end of the year.  

It is the government’s ambition is to secure free trade agreements with countries covering 80% of UK trade by 2022.