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London (CNN Business)Britain has reached a free trade agreement with Japan, its first with a major economy since leaving the European Union earlier this year.

The UK Department for International Trade said in a statement that the deal was agreed to in principle on Friday and will increase trade between the two countries by about £15.2 billion ($19.5 billion). UK businesses won’t face tariffs on 99% of exports to Japan, including on products such as knitwear, biscuits and coats.
“This is a historic moment for the UK and Japan as our first major post-Brexit trade deal,” said international trade secretary Liz Truss, who touted benefits for the manufacturing, food and drink, and tech industries.

    Japanese car manufacturers including Nissan (NSANF) will enjoy reduced tariffs on parts coming into the United Kingdom and streamlined regulatory procedures, according to the statement.
    The UK government is racing to replicate dozens of EU trade deals with third countries before its transitional agreement with the bloc expires at the end of the year. If the deals don’t materialize, British companies could face barriers to doing business in most of the foreign markets they serve starting next year.

    The total value of trade between the United Kingdom and Japan was just over £29 billion ($37.2 billion) in 2018, making it Britain’s 11th biggest trading partner that year. The United States, China and Switzerland are the only non-EU countries in the top 10, figures from the trade department show.

      Carolyn Fairbairn, director general of the Confederation of British Industry, the main business lobby, said in a statement that the deal will be “welcomed by businesses across the country.” “It’s a huge opportunity to secure new Japanese investment across a wider range of sectors and UK regions,” she added.
      — This is a developing story and will be updated.
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