Japan and the European Union have signed a wide-ranging free trade agreement that both sides hope will act as a counterweight to the protectionist forces unleashed by US President Donald Trump.
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”.
Once ratified by parliaments on both sides, the deal will eliminate about 99% of tariffs on Japanese goods, including 10% on Japanese cars. It will scrap Japanese duties of 30% or more on EU cheese and 15% on wine, as well as securing access to large public tenders in Japan.
This will be particularly beneficial to Europe’s food sector, which will be able to capitalise on Japanese demand for high-quality products, with EU officials estimating it could boost the bloc’s overall economy by 0.8% over the long term.
Following the signing ceremony, Japanese Prime Minister Shinzo Abe, said: “There are rising concerns about protectionism, but I want Japan and the EU to lead the world by bearing the flag of free trade”.
This sentiment was echoed by European Council President, Donald Tusk, who told reporters the deal sent a “clear message that we stand against protectionism”.
Appearing as a united front, Abe, Tusk and European Commission President Jean-Claude Juncker “sought to establish themselves as the flag-bearers of the free world, in response to Donald Trump’s show of apparent solidarity with Vladimir Putin in Helsinki on Monday”, reports The Guardian.
It comes as part of a wider EU strategy to secure long-term permanent trade deals with Asian markets in a bid to counter the increasingly protectionist policies of the US.
EU accords with Singapore and with Vietnam are at the ratification stage, while deals with Indonesia, Australia and New Zealand are being negotiated.
The EU and China also issued a communiqué on Monday affirming the commitment of both to the multilateral trading system.
It is not clear, as yet, whether the UK will benefit from these deals as it looks to secure its own post-Brexit trading relationships.
Both Japan and the EU have rushed through negotiations in the hope the deal could come into force before the UK leaves the bloc in March next year.
Japan’s ambassador for international economic affairs, Yoichi Suzuki, said earlier this year that if an EU-Japan deal were in force in the UK during the Brexit transition phase, it would buy Japan more time to establish a separate trade deal with Britain.
However, The Independent says “experts have previously suggested the UK would struggle to better the terms of the EU-Japan deal in any negotiations on its own”.