Japan, EU sign EPA trade pact

Marco Green
July 17, 2018

The European Union on Tuesday signed an agreement with Japan that will create the world's largest free trade zone before attacking Donald Trump for triggering possible trade wars with his protectionist "America First" policy.

The ambitious trade pact, which creates the world's largest open economic area, comes amid fears that a trade war between the USA and China will diminish the role of free trade in the global economic order.

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".

Both sides are heralding the deal, which covers a third of the global economy and more than 600 million people.

Tusk hailed the accord, saying, "This is an act of enormous strategic importance for the rules-based worldwide order at a time when some are questioning this order".

The EU will also eliminate about 99 percent of its tariffs on Japanese goods, including crucially removing levies on Japanese cars from the eighth year after the deal is implemented, and scrapping tariffs on vehicle parts immediately.

European Council President Donald Tusk on Sunday rejected Trump's characterization of the EU as an enemy of the US, saying that the two are "best friends".

The European Union's top officials arrive in Japan Tuesday (17 July) to sign the single market's biggest trade deal ever and present a united front as Washington upends the worldwide trade order.

They will also sign an accompanying strategic partnership agreement.

By strengthening ties with the EU, Japan hopes to vitalise mutual direct investment, fight other global trends toward protectionism and enhance the stature of Japanese brands, the foreign ministry said in a statement.

The EU officials and Japan will also look to present a united front against USA tariffs on steel and aluminium, which Tokyo has called "deplorable".

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. About 94 per cent of the tariffs on European exports to Japan will be lifted, rising to 99 per cent in the future.

The joint statement aims to demonstrate their stance of responding in unity to U.S. President Donald Trump, who has expressed his intention not to endorse the communique.

Japan will scrap tariffs on hard cheese such as cheddar and gouda in the 16th year of the treaty, while duties will be scrapped on European chocolate and pasta after 10 years.

The deal signed in Tokyo is the largest ever negotiated by the European Union and creates a massive free trade zone, eliminating tariffs for everything from Japanese cars to French cheese.

Japanese Prime Minister Shinzo Abe also offered a backhanded condemnation of Trump's tariffs.

Shinzo Abe had been scheduled to sign the deal in Brussels last week, but cancelled his trip after devastating floods that killed more than 220 people.

"It's a light in the increasing darkness of worldwide politics", Tusk said.

Apart from its deal with the EU, Japan is working on other trade agreements, including a far-reaching trans-Pacific deal.

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.

Other reports by Click Lancashire

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