EU-Japan free trade deal creates world's largest free economic area, with wine tariffs slashed
The EU and Japan have finally formalised a free trade deal that will pave the way towards tariff free trading and preferential access for both countries after more than four years of wrangling.
The deal, which has resulted in the creation of the biggest open economic area in the world accounting for nearly a third (30%) of the world’s GDP, was agreed in principal at the EU Japan Summit last July, but was not formalised until last week when Japanese minister Taro Kono and EU trade commissioner Cecelia Malstrom announced that the final discussions had bee sealed. This will make it the largest bilateral trade agreement negotiated by the EU.
“Japan and the EU will join hands and build a free, fair and rule-based economic zone, which will be a model of an economic order in the international community in the 21st century,” Japanese Prime Minister Shinzo Abe told reporters.
Japan had been one of the signatories to the proposed Trans-Pacific Partnership, a massive 12-nation trade alliance that US president Donald Trump ditched on his first day in office. Abe said a “new era” would now start for the EU and Japan.
“This agreement represents the most significant and far reaching deal ever concluded by the EU in agri-food trade,” added the EU commissioner for agriculture and rural development Phil Hogan. “It will provide huge growth opportunities for our agri-food exports in a very large, mature and sophisticated market.”
The deal will give preferential access to the Japanese market for a wide array of EU exports, including wine and spirits, doing away with import tariffs on goods into the country and putting the EU on a more level playing field with countries such as Chile which has long beneifted from a similar free trade agreement.
The deal, combining the 28-nation bloc and the world’s third largest economy, will remove EU tariffs of 10pc tariffs on Japanese cars and the 3pc rate typically applied to car parts. For the EU, it will scrap Japanese duties of some 30pc on EU cheese and 15pc on wines as well as allowing it to increase its beef and pork exports and gain access to large public tenders in Japan.
“Today, Japan is the 5th export market for EU wines. But we can do much better. Once entered into force, the agreement will improve access for our wines and will level the playing field with our main competitors in this key market,” said Jean-Marie Barillère, president of the Comité Européen des Entreprises Vins (CEEV).
“This agreement will boost our exports to Japan and will enhance our position as export leaders.” The agreement also means that wines and whiskies imported into Japan will be protected under the same EU Geographical indications (GIs) as they are in Europe, affecting around 200 recognised EU-based GIs.
“Trade agreements are critical components of EU wines’ competitiveness in the international marketplace,” added Dr Ignacio Sánchez Recarte, secretary general of CEEV. “CEEV applauds the EU’s momentum on free trade agreements and hopes to see it continue with an agreement with Mercosur countries at the same level of ambitions in regard to market access, GIs protection and removal of technical barriers to wine trade.”