Soy sauce imports from Japan will not be cheaper next year

28 October 2020
What was claimed

The new UK-Japan trade deal will mean soy sauce imports from Japan will get cheaper.

Our verdict

Incorrect. Tariffs on Japanese soy sauce will stay at 0%. Tariffs on soy sauce imports from some other countries may increase, but from others may decrease.

“The bakers used a lot of soya sauce in the first challenge on #GBBO so it's a good thing it will be made cheaper thanks to our trade deal with Japan.”

Last night, after the conclusion of “Japanese week” on The Great British Bake Off, the Department for International Trade’s (DIT) official Twitter account claimed soy sauce would get cheaper because of the new trade deal with Japan

The account posted the following:

This led to claims that, actually, soy sauce from Japan will be no cheaper than it is now, because currently the UK trades under European Union (EU) rules, and the EU has no tariffs (taxes) on imports of soy sauce from Japan.

It was also pointed out that some soy sauce currently consumed in the UK comes from the Netherlands. 

The implication of this is that, if the UK does not maintain free trade with the EU as regards soy sauce, prices of some imports would increase.

DIT then tweeted that soy sauce would be cheaper under the UK-Japan trade deal than it would be under World Trade Organization (WTO) terms, which it claimed we would have been using to trade with Japan from 1 January 2021 had the UK-Japan trade deal not been agreed.

From next year, imports of soy sauce from Japan will stay tariff-free, as they currently are

Japan

The UK has recently signed a trade deal with Japan which will apply from next year

The UK currently trades with Japan according to the EU’s existing trade deal, under which there are no tariffs on imports of soy sauce

It’s misleading for DIT to suggest that imports of soy sauce from Japan will be cheaper under the new deal compared to the prices currently paid by British importers.

It’s true, as DIT said, that if the UK had not signed a new trade deal with Japan, prices would increase, as the UK would revert to trading with Japan on WTO terms as EU deals won’t apply to the UK from next year

EU countries

One issue with the claim is that we don’t just import soy sauce from Japan.

For example, Kikkoman, the world’s largest producer of naturally brewed soy sauce, manufactures its product for the EU market in Germany and the Netherlands.  

When the UK was part of the EU, UK importers faced no tariffs when importing soy sauce from the EU. This remains the case during the current transition period.

However, if the UK does not maintain tariff-free trade in this area after the transition period ends, businesses wishing to import soy sauce from the EU will be faced with a new 6% tariff.

Other countries

It is possible that some soy sauce prices may decrease from next year. 

The EU’s standard tariff on soy sauce, for countries it doesn’t have a trade agreement with, is 7.7%. The UK has said its import tariff for countries it does not have an agreement with will be 6% from next year.

A quick survey of Full Fact staff kitchens located soy sauce imports from mainland China, Hong Kong and Malaysia, all of which face a 7.7% tariff when imported into the EU.

This means that, from next year, even if the UK does not strike trade deals with countries like these, the tariffs imposed will fall slightly to 6%.

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