EU and Japan agree ‘in principle’ trade deal
BRUSSELS: Japanese Prime Minister Shinzo Abe and top EU officials agreed on Thursday the broad outline of a landmark trade deal, presented as a direct challenge to protectionism championed by US President Donald Trump.
“Today we agreed in principle on an Economic Partnership Agreement (with Japan), the impact of which goes far beyond our shores,” European Commission chief Jean-Claude Juncker announced at a joint press conference with Abe and EU President Donald Tusk in Brussels.
“We’ve reached political agreement at ministerial level on an EU-Japan trade deal,” European Union Trade Commissioner Cecilia Malmstroem said on Wednesday in a tweet after talks in Brussels with Japanese Foreign Minister Fumio Kishida which capped four years of tough negotiations.
The two sides “ironed out the few remaining differences” and will now “recommend to leaders to confirm this at summit”, Malmstroem added.
The deal comes days before a G20 meeting in Germany at which Trump is expected to defend his protectionist stance on trade.
The EU and Japanese economies combined account for a colossal 28 per cent of global output making the deal one of the biggest trade pacts ever attempted.
The “political agreement” on the trade deal covers some of the accord’s toughest aspects but leaves aside details that could still prove difficult.
At the heart of the deal is an agreement for the EU to open its market to the world-leading Japanese auto industry, with Tokyo in return scrapping barriers to EU farming products, especially dairy. Left untouched for now are the controversial investment courts that have stoked opposition to trade deals in the EU nations, including Germany and France.
The deal could be seen as a provocation to Trump who pulled the United States out of the 12-nation Trans-Pacific Partnership this year, in favour of striking country-to-country bilateral deals, including with Japan.
The EU’s Malmstroem and Agriculture Commissioner Phil Hogan visited Tokyo last week to unblock the talks, with tariffs on European cheese a key sticking point. Brussels wants Japan to eliminate its 30 per cent tariffs on some EU-made cheese, while Tokyo wants duties cut on cars which it exports to the 28-member bloc.
Officials said that EU automakers would win a long transition period — probably seven years — to adapt to the arrival of tariff-free autos on the European market.
European automakers had meanwhile sought assurances that the deal would truly give them access to Japan, which is known for finding ways to block imports in sensitive sectors.
Launched in 2013, the talks had effectively been put on hold while Japan concluded the mammoth TPP deal, that was torpedoed by Trump in January.