It seemed harmless enough.
The UK has just signed a trade deal with Japan and the Department of International Trade’s social media manager has decided to head towards the popular television series “The Great British Bake Off” (known in the US as “The Great British Baking Show”) refer a solemn tweet
That tweet sparked a deluge of responses. First, there is the use of “soy sauce” in place of the commonly spelled soy sauce. But the tweet just isn’t true. Soy sauce tariffs are currently zero thanks to the UK’s current participation in the European Union, which has its own trade agreement with Japan. With the UK leaving the EU at the end of the year, it needed its own trade agreement with Japan.
So the Department of International Trade issued another tweet clarifying that soy sauce, while not getting cheaper, will not be more expensive than it would have been if the UK had not signed a trade deal with Japan.
But that is still not necessarily true. Because the UK imports most of its soy sauce from the EU, not Japan. Kikkoman
for example, makes soy sauce in the Netherlands for distribution in the UK.
Now it is likely that the UK will reach an agreement with the EU that will at least allow goods to remain duty-free even when services are not offered. However, the firestorm shows that one of the consequences of Brexit is walking around a lot to stay in the same place. And it highlights the difficulty of getting the EU to believe Prime Minister Boris Johnson’s declared willingness to leave without a comprehensive agreement.
Market participants’ confidence that the UK will reach a trade deal by the end of the year is what drives the pound
traded around the $ 1.30 level even during bitter negotiations.