The European Union has finalised negotiations for a free trade agreement with Japan in a move that should benefit a number of sectors including leather, clothing and footwear.
Announced by Trade Commissioner Cecilia Malmström and Japanese Foreign Minister Taro Kono, the conclusion of the final discussions on the EU-Japan Economic Partnership Agreement (EPA) is, they say, an important milestone to put in place the biggest bilateral trade agreement ever negotiated by the European Union.
The EPA, the European Commission says, will open huge market opportunities for both sides, strengthen cooperation between Europe and Japan in a range of areas, reaffirm their shared commitment to sustainable development, and include for the first time a specific commitment to the Paris climate agreement.
It builds on a political agreement in principle reached during the EU-Japan Summit on 6 July 2017, with negotiations finalised on 8 December. After the legal verification and translation processes, the European Commission can then submit the agreement for the approval of the European Parliament and EU Member States.
Japan is the EU’s second biggest trading partner in Asia after China. EU firms already export over EUR58bn (US$68.2bn) in goods and EUR28bn in services to Japan every year but face trade barriers when exporting to the country, which make it hard for them to compete.
Now, the new deal will remove the vast majority of the EUR1bn of duties paid annually by EU companies exporting to Japan, as well as a number of long-standing regulatory barriers. It will also open up the Japanese market of 127m consumers to key EU agricultural exports and will increase EU export opportunities in a range of other sectors.
The deal also includes a comprehensive chapter on trade and sustainable development; sets the highest standards of labour, safety, environmental and consumer protection; strengthens EU and Japan’s actions on sustainable development and climate change and fully safeguards public services.
In addition, according to the European Commission, the EPA will help shape its global trade rules in line with its high standards and shared values and send a powerful signal that two of the world’s biggest economies reject protectionism.
In a joint statement, President of the European Commission, Jean-Claude Juncker, and the Prime Minister of Japan, Shinzo Abe, said the finalisation of the negotiations on the EU-Japan EPA demonstrates the powerful political will of Japan and the EU to continue to keep the flag of free trade waving high, and sends a strong message to the world.
“The EU-Japan EPA is one of the largest and most comprehensive economic agreements that either the EU or Japan have concluded so far,” the pair said in a statement. “This EPA will create a huge economic zone with 600m people and approximately 30% of the world GDP, and it will open up tremendous trade and investment opportunities and will contribute to strengthening our economies and societies. It will also strengthen economic cooperation between Japan and the EU and reinforce our competitiveness as mature yet innovative economies.
“We are confident that, once in place, this Agreement will deliver sustainable and inclusive economic growth and spur job creation, while at the same time confirming our commitment to the highest level of labour, safety, environmental and consumer protection standards and fully safeguarding public services.
The EU is also negotiating a Strategic Partnership Agreement with Japan in parallel.