Exporting to Japan - is it for you?
21st January 2020
Spatial Global’s 'Export Champion' Rachel Morley was asked to speak at an event promoting exports to Japan which was hosted by the East Midlands Chamber of Commerce in conjunction with the Department for International Trade and Derbyshire Economic Partnership.
Looking to do business in Japan'
The event was focused upon raising awareness of the opportunity to increase export sales in Japan. The Chamber and DIT are equipped with the contacts and networks to connect businesses with potential Japanese partners. Rachel’s talk explained the practical aspects of trading with Japan to the 80 businesses represented at the event.
Japan is regarded as a great target market for UK businesses as there are many Japanese companies who speak English and lots are already used to doing business with non-Japanese companies. Rachel’s talk explained:
With £6.2 billion British Goods purchased in 2018 (a 10% growth on 2017) there is an appetite for UK products and brands. The attraction of ‘Made in Britain’ holds strong and the recent Rugby World Cup and the 2020 Olympics are providing increased opportunities.
Terms of the sale
Rachel helped businesses present understand the responsibilities and options when it came to exporting product to Japan – the payment methods and related risks.
The Contract Considerations and Terms of Shipment
Ensuring the correct Incoterms® are used and there is clarity on which terms are used in the light of the 2020 Incoterms®. Which is why it is essential to state the version of Incoterms used, otherwise a dispute could arise as to the correct version and lead to a different outcome to that intended.
Goods that are imported into Japan are subject to both customs duty and consumption tax, which is currently 10%. Depending on the nature of the contract signed between UK companies and their Japanese counterparts, customs duties may be paid by either party on the UK side or the Japan side.
- GENERAL RATE
- TEMPORARY RATE
- WTO RATE
- PREFERENTIAL RATE (GSP)
- EPA RATE (Economic Partnership Agreement)
- Consumption Tax
Japan is a signatory country to the ISPM15 standards.
International Standards For Phytosanitary Measures No. 15 (ISPM 15) is an International Phytosanitary Measure developed by the International Plant Protection Convention (IPPC) that directly addresses the need to treat wood materials of a thickness greater than 6mm, used to ship products between countries. Its main purpose is to prevent the international transport and spread of disease and insects that could negatively affect plants or ecosystems. Which means, you need to be compliant to avoid potential issues at the port. Phytosanitary controls on wood packaging, include hay and straw packing material.
Routings: Ocean Freight
The main Japanese sea ports are: Osaka; Nagoya; Yokohama; Kobe and Tokyo. The transit times are between 29 – 35 days, with direct sailings from Southampton & London Gateway. In relation to other Far East main ports, rates are generally 25% higher.
Routings: Air Freight
The main airport is Narita, Tokyo, which caters for various wide body passenger aircrafts (Boeing 777, 878, Airbus A380). The national airline JAL – with direct daily 12 hour flights and other airlines - via EU & ME transhipment hubs.
EUR1 is the preferential trade agreement between Japan and the EU, for goods of EU origin.
Preferential qualification rules Public Notice No.828 – This of course may change if we leave the EU.
Benefits in exporting to Japan
The Japanese market is very desirable for businesses seeking export opportunities, because it’s a stable place to do business. As the world’s third largest economy in the world - Japan is bigger than the UK and Germany combined. In 2014 it made up 6% of world Gross Domestic Product (GDP). Japan remains the high-tech powerhouse economy of Asia and is a strategic stepping stone for other Asian markets. It has highly educated consumers who are early adopters of new products and services plus a large and rich consumer market based in urban areas. There are strong political, trade and social ties between the UK and Japan making it a great export market for British businesses.
Thinking of exporting to Japan'
Spatial Global can help you with your export documentation to ensure you comply with the relevant tariffs, duties and laws. We can help you find the most effective shipping routes for your products and provide you a complete end-to-end solution for your UK exports to Japan.