The EU and Japan have signed a landmark Economic Partnership Agreement at a summit in Tokyo, which amounts to one of the largest free-trade agreements in the world.
The signing of the EU-Japan free trade agreement has been hailed by stakeholders as a landmark in relations between the two powers, and will also have a significant impact on the global economy. The Economic Partnership Agreement creates an open trade zone which covers nearly one third of global GDP, and a population of more than 600 million people.
The agreement – the biggest ever negotiated by the European Union – will remove almost all of the €1bn in annual duties paid by European companies exporting to Japan, and increase EU exports to Japan in agriculture and other sectors to benefit 127 million Japanese consumers.
In addition to removing the majority of trade tariffs, the EU-Japan free trade agreement will address and remove a number of long-standing regulatory barriers, on cars and other products. What’s more, the agreement contains commitments to sustainable development, consumer protection and the environment, including a specific pledge to comply with the Paris Climate Agreement.
How will an EU-Japan free trade agreement affect global trade?
Many have viewed the agreement as a rebuke to growing protectionism around the world, particularly following the recent introduction of high tariffs on steel and aluminium introduced by the US. According to European Commissioner for Trade Cecilia Malmström, the agreement demonstrates the benefits of free trade.
She said: “We are sending a strong signal to the world that two of its biggest economies still believe in open trade, opposing both unilateralism and protectionism. The economic benefits of this agreement are clear. By removing billions of euros of duties, simplifying customs procedures and tackling behind-the-border barriers to trade, it will offer opportunities for companies on both sides to boost their exports and expand their business.”