Japan, EU sign trade agreement
21:28
After years of negotiations, Japan and the European Union agreed on a free trade pact on Thursday to create the world's biggest open economic area. The “political agreement” which was signed in Brussels, covers over 90 percent of the issues, with some areas such as investment protection and data flows still need to be ironed out.
“Ahead of the G20 summit, I believe Japan and the EU are demonstrating our strong political will to fly the flag for free trade against a shift toward protectionism,” Japanese Prime Minister Shinzo Abe said. He called the deal a “win-win” and a “strong message to the world.”
“Although some are saying that the time of isolationism and disintegration is coming again, we are demonstrating that this is not the case,” European Council President Donald Tusk said.
Both sides hope that the treaty will go into effect in 2019.
Tariffs on much of their bilateral trade, which Abe noted accounts for some 40 percent of total international commerce, will be phased out over some years, and other economic areas, such as Japan's public tender system, will be opened up.
Both the EU and Japan, which are also forging a parallel cooperation pact on broader political issues such as security, crisis aid, and climate change, forecast that the trade deal will boost economic growth and employment in Japan and in Europe.
Under the trade deal over 200 EU geographic protections on product names, including Polish vodka, will be respected in Japan. Interestingly, Scotch whisky might not enjoy the same protection, after the UK leaves the EU.
A trade accord with the world's third-largest economy would be the European Union's biggest trade deal to date. The EU has forecast trade between the two could increase by a third, boosting the EU economy by 0.8 percent and Japan's by 0.3 percent over the long term. Japan is the EU’s sixth-biggest trading partner, and the two parties posted total trade of about €125 billion last year. Between them, the EU and Japan represent nearly 30 percent of the global gross domestic product.
