Photo: AP / Koji Sasahara
The European Union and Japan comprise nearly one-third of GDP worldwide and announced on Tuesday that the two had signed a trade deal to establish an open-trade zone for more than 600 million people, according to National Public Radio.
The deal had been in the works for more than five years but the two parties reached an agreement in principle a year ago after United States President Donald Trump pulled the U.S. out of the Trans-Pacific Partnership deal that linked Japan and 10 other countries.
The envoys were both clear the agreement was made as an action against the growing trend of protectionism during the EU-Japan summit in Tokyo.
"The document we signed today is much more than a trade agreement," said European Commission President Jean-Claude Juncker. "What we're saying is that we believe in open, fair and rules-based trade. What we are saying is that a trade agreement is not a zero-sum game, but a win-win for the involved parties."
Juncker tweeted the agreement "puts fairness and values at its core. There is no protection in protectionism - and there is no unity where there is unilateralism."
He also called it a "win-win" solution.
"We are showing that we are stronger and better off when we work together. And we are leading by example, showing that trade is about more than tariffs and barriers. It is about values, principles and finding win-win solutions for all those concerned."
Japanese Prime Minister Shinzo Abe also emphasized how current "concerns are rising over protectionism all around the world.. We are sending out a message emphasizing the importance of a trade system based on free and fair rules."
The trade agreement will eliminate a large majority of the $1.1 billion in duties that EU companies currently pay to Japan, according to the European Commission.
The deal removes "about 99 percent of the tariffs on Japanese goods sold to the EU," according to The Associated Press. "About 94 percent of the tariffs on European exports to Japan will be lifted, rising to 99 percent in the future."
The deal would also remove EU tariffs of 10 percent on Japanese cars and 3 percent on most vehicle components, while also removing Japanese duties of 30 percent or more on cheese from the EU and 15 percent on wines while also securing wider distribution in Japan.
The Japan Times also emphasized how the trade deal had some Japanese farmers concerned since the EU agricultural sector seemed to win.
The trade agreement stands against the growing trade tensions in the U.S. after the Trump administration has pushed for a number of tariffs on several countries, including integral allies.
The U.S. recently announced it would be imposing $200 billion in new tariffs on Chinese imports, which prompted Beijing to file a case with the World Trade Organization.
"We are sending a strong signal to the world that two of its biggest economies still believe in open trade, opposing both unilateralism and protectionism," said EU Commissioner for Trade Cecilia Malmström.
The agreement still needs to be approved by the EU and Japanese parliaments, but it will hopefully come into force in 2019.
It was originally scheduled to be signed in early July but Abe had to delay the signing due to deadly floods in western Japan which killed more than 200.
Japan's Minister for Economic Revitalisation, Toshimitsu Motegi, said, "At a time when protectionist measures are gaining steam globally, the signing of the Japan-EU deal today will show the world once again our unwavering political will to promote free trade."
-WN.com, Maureen Foody
