EU, Japan Sign World’s Largest Free Trade Agreement ‘Sending Message’ against Protectionism
The leaders of the European Union and Japan have signed a bilateral Economic Partnership Agreement (EPA), described as the world’s largest, and a Strategic Partnership Agreement at a ceremony in Tokyo.
The signing was originally scheduled for July 11 in Brussels but Japanese Prime Minister Shinzo Abe had to cancel the trip because of floods in Southwest Japan which killed over 200 people.
The free trade deal between the EU and Japan covers some 30% of global economic input, and some 630 million people.
While it is to eliminate almost all tariffs between two of the world’s top economies, it is also seen as a major symbolic move in favor of free trade as it comes against the backdrop of US President Donald Trump’s protectionist motions threatening to involve the United States in trade wars with the EU, China, and other economic powers.
On July 6, the Council of the European Union took the decision to sign the long-negotiated Economic Partnership Agreement (EPA) with Japan. On June 26, it had already adopted a decision on the signing and provisional application of a strategic partnership agreement (SPA) between the two countries.
Once it is fully enforced, the EPA is reduce the Japanese tariffs on EU exports by 99%, a sum presently amounting to EUR 1 billion, and will also elimnate 99% of EU tariffs on Japanese imports.
The benefits for the EU will include opportunities for boosting agricultural exports to Japan, opening the services markets and improving access for EU companies to Japanese public procurement tenders, and protecting EU intellectual property rights in the Japanese market. Japan’s automotive industry, among others, is expected to benefit substantially from the EPA.
“The EU and Japan are sending a powerful message to promote free, fair, and rules-based trade, and against protectionism. The Economic Partnership Agreement demonstrates to the world the firm political will of the EU and Japan to keep the flag of free trade waving high… the Agreement will be the model of high standard, free, open, and fair trade, and investment rules in the 21st century,” said the joint statement of the EU and Japan leaders, European Council President Donald Tusk, European Commission President Jean-Claude Juncker, and Japanese Prime Minister Shinzo Abe.
“Relations between the European Union and Japan have never been stronger… Politically and economically we could hardly be any closer. We both firmly believe in openness, cooperation, rules-based international order and free trade. We both share values of liberal democracy, human rights and the rule of law,” European Council President Tusk stated.
“We are putting in place the largest bilateral trade deal ever. This is an act of enormous strategic importance for the rules-based international order, at a time when some are questioning this order. We are sending a clear message that we stand together against protectionism… Beyond trade, we are also agreeing a robust framework for dealing with a wide range of areas like security and defense, energy and climate or people-to-people exchanges,” he added.
“The EU and Japan showed an undeterred determination to lead the world as flag-bearers for free trade,” Japan’s Prime Minister Abe said at a joint news conference with Tusk and Juncker.
The Strategic Partnership Agreement, is the first-ever framework agreement between the EU and Japan.
The European Union and Japan have had a strategic partnership since 2001. The talks for a strategic framework agreement were authorized at the end of 2012, and were concluded in April 2018.
Earlier in 2018, the EU concluded free trade talks with Mexico, while CETA, the EU – Canada free trade agreement entered into force in September 2017.
The EPA and SPA between the EU and Japan still require legislative approval in order to enter into force.
(Banner image: @JunckerEU/Twitter)