A giant free trade deal between Japan and the European Union will finally be ratified by both sides.
The deal, which the EU has called its biggest ever, will forge an economic zone of 600m people worth 30% of global GDP.
As reported by The Japan Times, Japanese Prime Minister Shinzo Abe hailed the imminent birth of what he called a “gigantic economic zone” as he confirmed that the negotiations had been concluded.
“Japan and the EU will join hands and build an economic zone based on free and fair rules,” Abe told reporters in Tokyo on December 8.
Abe and European Commission chief Jean-Claude Juncker said earlier that the agreement, which was four years in the making, had “strategic importance” beyond its economic value.
“It sends a clear signal to the world that the EU and Japan are committed to keeping the world economy working on the basis of free, open and fair markets with clear and transparent rules fully respecting and enhancing our values, fighting the temptation of protectionism,” the pair said in a statement released in Brussels.
The deal will open up the EU market to Japanese cars and auto parts and the Japanese market to European dairy and agricultural products.
According to The Japan Times, Japan will eliminate tariffs on 94% of all imports from the bloc, including 82% on farm and fishery products. The reduction will likely result in lower prices for European cheese, pork and wine in Japan — although domestic farmers are wary of being flooded by competitive products.
In return, the EU will abolish tariffs on 99% of imports from Japan. The EU will eliminate tariffs on Japanese autos in the eighth year after the pact is implemented and abolish taxes on sake and green tea. Japan’s exports will likely get a boost in a market comprising over 500m people.
In response, the Alliance of Liberals and Democrats for Europe (ALDE) Group in the European Parliament stressed the importance of rules-based free trade to counter protectionism and isolationism.
Marietje Schaake, the ALDE group’s spokesperson on trade, said: “A trade agreement with our second largest trading partner in Asia not only promises economic benefits. In an age of Trump-led protectionism and the cynical mercantilism of China, it is of strategic importance that we continue defending the international trading system. By working together with like-minded partners such as Japan, we can raise global standards.”
Nadja Hirsch, Shadow Rapporteur on this file, added the agreement is good news for the EU since Japan is a powerhouse of the digital economy. “However, also we have to do our homework and adapt our trade deals to the challenges of the Digital Age, including a binding framework for privacy rules, data flows and start-up culture.”
“I warmly welcome the agreement of the FTA between EU and Japan,” said Petr Ježek, Chair of the Japan-delegation of the European Parliament. “This is some good news which the world needs. This FTA will be the most modern to date, with huge benefits for businesses and customers. It is clear that the EU and Japan have become standard setters and world leaders in trade. The Parliament’s delegation for relations with Japan will continue our work with our Japanese counterparts to help ensure a smooth ratification of the deal.”