EU and Japan sign largest bilateral free trade deal

The EU and Japan signed the EU-Japan Economic Partnership Agreement on 17 July, the largest free trade agreement (FTA) the EU has ever negotiated, Reuters reported.

The FTA, signed after four years of negotiations, will eliminate up to 99% of the tariff barriers between the EU and Japan, including the elimination of tariffs on almost all the goods that the EU exports to Japan, and the 10% tariff on Japanese car exports to the EU, Global Trade Review reported. The FTA will create a free-trade economic zone of a third of global GDP.

Channel News Asia reported the agreement was widely seen as a counter to the new protectionist policies enacted by US President Donald Trump. EU Council President Donald Tusk said that the FTA was “a clear message… against protectionism” and “a light in the increasing darkness of international politics”, while Japanese Prime Minister Shinzo Abe said it showed “the unshaken political will of Japan and the EU to lead the world as the champions of free trade at a time when protectionism has spread”.

Trump’s trade policies have rattled the global economy, while upending traditional alliances, the South China Morning Post reported. Trump called the EU “a foe” of the US which has “taken advantage of [the US] on trade”, and Japan has called the US tariffs on steel and aluminium “deplorable”.

The trade deal will come into force in 2019, after being ratified by both the Japanese and European parliaments, CNN reported.