Britain could sign its first post-Brexit trade deal within weeks as ministers target finalising an agreement with Japan by September.
Talks with Tokyo started on June 8 and have been ongoing since then, with a ‘significant breakthrough’ taking place yesterday.
The UK is now hopeful of getting the trade deal in the books before the autumn.
The deal would then kick in from January 1, 2021, after the end of the Brexit transition period.
It came as International Trade Secretary Liz Truss said a deal with New Zealand is now a ‘step closer’ after a first round of talks concluded.
Hopes have faded of the UK doing a deal with the US this year while the ‘working assumption’ within the Government is said to be that talks with the EU will fail.
The UK Japan trade deal is broadly based on an agreement done between Tokyo and the EU but Britain has sought to negotiate further tariff reductions and better access to Japanese markets for British firms.
The deal could mean cheaper Japanese tech goods like Sony Playstations for British consumers.
A Government source told The Sun the Japan deal ‘is happening and it is happening soon’.
The Department for International Trade announced this morning that the first round of virtual talks with New Zealand had now finished.
Ms Truss said: ‘We are a step closer to reaching a comprehensive trade deal with a like-minded friend and ally.
‘The first round of talks were positive and productive, with a shared aim to be particularly ambitious in areas including digital trade and sustainability.
‘A deal with New Zealand will strengthen the global consensus for free and fair trade at a time of increased protectionism, and create more opportunities for UK businesses as we recover from the economic impact of Coronavirus.’
Earlier this month it emerged that hopes are fading of the UK and US being able to strike a trade deal before the presidential election in November.
Both Downing Street and the White House were aiming to get a trade deal finalised before Donald Trump seeks re-election later this year.
But Number 10 recently would not commit to a specific timetable for the talks to conclude, instead saying the aim is to strike a deal ‘as soon as we can’.
Meanwhile, the ‘working assumption’ within the Government is now said to be that Britain and Brussels will not be able to agree the terms of their future relationship before the end of the Brexit transition period.
The Government has said it does not want talks with the EU to drag on into the autumn, leaving just a matter of weeks to get the deal done.
But ‘significant differences’ still remain between the two sides on key issues like fishing rights and to what extent the UK will agree to abide by EU rules.