Yahoo Finance EU and Japan say new trade deal is signal to the world that protectionism does not work
The EU and Japan have signed up to a “landmark” trade deal in a show of strength against protectionism among global economies.
Japan is the EU’s second biggest trading partner after China and together the EU and Japan account for almost one third of global GDP.
The deal was confirmed at a ceremonial signing in Tokyo on Tuesday, attended by Japan’s Prime Minister, Shinzo Abe, Jean-Claude Juncker, the president of the commission, and European council president Donald Tusk comes into effect in 2019.
The European Commission said the deal was a sign to the rest of the world that two of the largest economies are “resisting protectionism”, and could see European companies save up to €1bn (£890m) in customs duties.
The EU-Japan economic partnership will see the EU increasing its annual exports to Japan by up to 13.2 per cent, or €13.5bn. The EU said the deal creates the potential to “more than triple” exports of dairy products and textiles, while processed foo0ds, chemicals, machinery, cars and business services “are other sectors where we expect major new opportunities”.
“In the current international environment a trade agreement between the EU and Japan would send a powerful signal to the rest of the world that two of the largest economies are resisting protectionism,” the commission said.
“Openness to trade and investment remains one of the best tools to harness globalisation and create more economic growth and jobs. There is no protection in protectionism; on the contrary, every €1bn in exports supports 14,000 jobs across the EU.
“Reaching a trade agreement with Japan will be a clear statement of the EU’s interest in the region.”
Mr Juncker said: “With the signature of the Economic Partnership Agreement with Japan we are making a statement about the future of free and fair trade. The agreement puts fairness and values at its core. There is no protection in protectionism – and there is no unity where there is unilateralism.”
Observers have suggested that the bloc’s deal with Japan is part of a wider strategy to counter the increasingly protectionist policies of Donald Trump’s United States, which has been raising trade barriers since the president took office.
Christian Verschueren, director-general of business group EuroCommerce, said: “This is a good day for free trade. (The deal) sends an important message to those leaders who want to throw away all that a rules-based world trading system has achieved.
“It means the removal of a large number of tariffs affecting trade between us – this is great news for consumers and businesses in both markets.
