Thursday, 16 August, 2018

European Union and Japan to sign historic trade deal

Japan, EU signs trade pact that will eliminate nearly all tariffs on traded goods The EU and Japan Just Signed a Monumental Free-Trade Deal
Nellie Chapman | 18 July, 2018, 13:30

"In the current circumstances, China, Japan and Korea should stand even more firmly together, uphold the rules-based multilateral trading system, and proudly oppose protectionism and unilateral actions", Li said. The partnership between the European Union and Japan is also being strengthened in other areas, the AP reports, such as climate change, defense, and anti-protectionism.

For the European Union as well as for Japan, Trump's trade policy - and in particular tariffs on steel and aluminium and threats of tariffs on cars - are a sign of the weakening of the rules-based world order they want to maintain.

Reuters described the trade pact, which creates the world's largest open economic area that accounts for about a third of global GDP, as "ambitious", and a "sign of the shifting global ties as Trump distances the United States from long-time allies like the EU, Nato and Canada".

"The EU and Japan showed an undeterred determination to lead the world as flag-bearers for free trade", Abe said at a joint news conference with European Council President Donald Tusk and European Commission President Jean-Claude Juncker.

European Affairs Minister Helen McEntee said trade between Ireland and Japan is worth more than €3bn a year, and will now expand further.

At the summit the worldwide leaders reaffirmed their resolve to "work together for the rules-based worldwide order and to promote a free and fair global economy".

It will scrap Japanese duties of 30% or more on European Union cheese and 15% on wine, as well as securing access to large public tenders in Japan. Following the signing ceremony, they will seek parliamentary ratification.

The deal will eliminate about 99 percent of the tariffs imposed on Japanese goods exported to the EU, and 94 percent of tariffs on European imports into Japan.

"It will remove the vast majority of the €1 billion of duties paid every year by companies that export to Japan". Japan will no more levy duties on European cheese and wines.

Japanese auto makers will see an immediate elimination of the up to 4% tariffs now in place for 90% of Japanese vehicle parts - and all tariffs on cars will be eliminated within the next seven years.

The regional bloc will immediately eliminate tariffs on Japanese sake, green tea and soy sauce, while wine will also be reciprocally traded without tariffs right after the pact comes into force.

Japan's ambassador for global economic affairs, Yoichi Suzuki, has previously said it was 'a very high priority that [the deal] enter force before the end of March 2019, ' referring to the date when Britain is set to leave the EU.

The signing was initially planned to take place in Brussels earlier this month, but Abe canceled a trip due to the rain disaster mainly in western Japan. Japan's global economic affairs ambassador, Yoichi Suzuki, previously said it was a "very high priority that the deal enter before the end of March 2019".

The agreement was largely reached late previous year.