In a move that leaders say is “a very powerful signal against protectionism”, the EU and Japan have just given the go ahead for a new free trade deal. At a time when the US is pushing an “America First” agenda, this is considered a positive step for improving international relations.
The US tariffs that were introduced on aluminium and steel have been disputed by countries around the world. Despite these disputes, they were implemented last months and there are fears it could lead to a global trade war, as well as having major financial implications for both the US and its trade partners.
With this, and the ongoing uncertainty over brexit, securing free trade deals is considered a huge priority for the EU. Earlier in the year, negotiations with Australia and New Zealand took place. A deal has also been agreed with Mexico recently, and last year the EU made moves to secure a deal with the Latin American trade bloc.
Japan is the world’s third largest economy. This deal is the largest ever signed by the EU; it will unite around 600 million people and affect a third of all global trade. It will remove 99% of tariffs applied to exports, which currently amount to around €1 billion. The aim is to boost economic growth and create new jobs for both the EU and Japan.
Negotiations for this agreement have been taking place since 2013 and will create new opportunities for both sides. The EU will benefit from the removed tariffs on agricultural exports including products like cheese and wine, and will also protect EU intellectual property rights in Japanese markets and increase companies’ access to Japan’s procurement bids.
In addition to the agreement for free trade, the deal includes a new strategic partnership which aims to boost cooperation in other areas like security, climate change and energy. Both the EU and Japan have agreed on the deal and are expected to sign next week at the bilateral summit in Brussels.
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