Published: Wed, July 18, 2018
Business | By Tara Barton

The EU and Japan Just Signed a Monumental Free-Trade Deal

The EU and Japan Just Signed a Monumental Free-Trade Deal

European Council President Donald Tusk said the deal showed that the EU and Japan "stand together against protectionism".

The European Union and Japan will today officially sign the largest free trade deal either of them has ever negotiated.

The move will strengthen global trade cooperation that has been recently shattered by the current U.S. administration.

The deals come as Trump pushes the world's largest economy into a more protectionist direction with various tariffs and trade restrictions.

Following the signing ceremony, Japanese Prime Minister Shinzo Abe, said: "There are rising concerns about protectionism, but I want Japan and the European Union to lead the world by bearing the flag of free trade". "We are sending a clear message that you can count on us".

Both sides also reached an agreement to protect personal data and facilitate its cross-border transport between companies in a move expected to promote marketing activities, according to the leaders.

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. More than 200 people died from flooding and landslides. The new policies won't go into effect immediately, as they require legislative approval.

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European exporters to Japan will see the vast majority of €1bn of duties they pay annually removed. Japanese machinery parts, tea and fish will become cheaper in Europe.

The deal removes the 10% tariff the European Union levies on importing Japanese cars and the 3% tariff on most vehicle parts, Reuters reported. "About 94 percent of the tariffs on European exports to Japan will be lifted, rising to 99 percent in the future". The difference reflects exceptions on such products as rice, which enjoys strong political protection from imports in Japan.

"And by the same token, Japanese products such as Kobe Beef or Yubari Melon will be protected in Europe".

Abe, standing alongside the two European Union officials, said the agreement, "shows the world the unshaken political will of Japan and the European Union to lead the world as the champions of free trade at a time when protectionism has spread".

Current duties of 29.8pc on hard cheeses such as gouda and cheddar (which Ireland is seeking new markets for as a result of Brexit) will be eliminated, and a duty-free quota will be established for fresh cheeses such as mozzarella.

For Irish consumers it could, eventually, bring down the price of Japanese cars but tariffs of 10pc will be phased-out only gradually over eight years, something demanded by European auto makers.

The major step toward liberalizing trade has been discussed since 2013. "The EU and Japan remain open for cooperation", European Council President Donald Tusk, who speaks for the 28 EU national leaders, told reporters. The European bloc is also pursuing deals with Mexico, Australia, and Mercosur, the South American trading bloc that includes Argentina, Brazil, Paraguay and Uruguay.

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