The two countries announced an in principle trade deal on Friday.
In it the UK committed to tougher restrictions on state aid than the ones it is currently offering the EU in the Brexit talks
- UK and Tokyo have agreed to replicate the restrictions on subsidies in the EU-Japan deal that went into effect last year.
- That agreement prohibits the governments from indefinitely guaranteeing the debts of struggling companies or providing an open-ended bailout without a clear restructuring plan in place.
- By contrast, the UK has repeatedly told the EU that it must have total freedom over state aid after the end of the Brexit transition period with complete autonomy over future subsidy decisions, subject to WTO rules.
Link to the FT for more (may be gated).
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On the upside this suggests we can finally dispense with the notion the UK is conducting Brexit trade talks in good faith.
GBP/USD last trade circa 1.2780, down a little from late-Friday US levels.
