An agreement in principle on the main elements of an economic partnership agreement was reached today between the European Union and Japan. The agreement will remove the majority of duties paid by EU companies, which total 1 billion euros annually, and open the Japanese market to key EU agricultural exports, according to the European Commission in a press release.
“Through this agreement, the EU and Japan uphold their shared values and commit to the highest standards in areas such as labor, safety, environmental or consumer protection,” said President of the European Commission Jean-Claude Juncker. “Together, we are sending a strong message to the world that we stand for open and fair trade.”
“This agreement has an enormous economic importance, but it is also a way to bring us closer,” said Commissioner for Trade Cecilia Malmström. “We are demonstrating that the EU and Japan, democratic and open global partners, believe in free trade…. With Japan being the fourth-largest economy of the world with a big appetite for European products, this is a deal that has a vast potential for Europe. We expect a major boost of exports in many sectors of the EU economy.”
The value of exports from the EU could increase by as much as 20 billion euros, benefitting sectors such as agriculture and food products, leather, clothing and shoes, and pharmaceuticals.
“The EU-Japan Economic Partnership Agreement is the most significant and far-reaching agreement ever concluded in agriculture,” said Phil Hogan, commissioner in charge of agriculture and rural development for the European Commission. “Today, we are setting a new benchmark in trade in agriculture.”
In regards to agricultural exports, the agreement does away with duties on wine and many cheeses, and will allow the EU to increase its beef exports to Japan substantially, according to the release. The agreement also opens up markets in financial services, e-commerce, telecommunications and transport. It guarantees to EU companies access to the large procurement markets of Japan and protects sensitive economic sectors of the EU, such as the automotive sector, with transition periods before markets are opened.
“After some years of debate and some real acrimony, the Europeans and Japanese have reached a deal that will both delight and dismay business in both countries,” said NACM Economic Chris Kuehl, Ph.D. “There are lots of provisions and sections, but the most important elements include the fact that Japan will get greater access to the European market for its cars. In return, European farmers will gain access to the Japanese agricultural market. Both of these are politically sensitive areas. The leaders have taken some risk by changing the rules at this stage.”
Negotiators on both sides will continue work on remaining technical issues, with a final text expected by the end of the year. It will then be submitted for the approval of the EU member states and the European Parliament.
– Adam Fusco, associate editor