The EU and its member states have been actively negotiating free trade agreements (FTAs) with countries around the world. The latest addition to the list is the EU-Mercosur FTA, which has been under negotiation for two decades and was finally signed in June 2019. However, there is also another FTA on the horizon that is gaining attention in recent times: the EU-Japan Economic Partnership Agreement (EPA), popularly known as the EUR 1 Free Trade Agreement.
The EUR 1 Free Trade Agreement between the EU and Japan is the largest free trade agreement that the EU has ever negotiated. The deal came into effect on February 1, 2019, and has been hailed as the most significant ever signed between the two economies. Japan is the world`s third-largest economy and is the EU`s second-biggest trading partner in Asia after China.
The agreement eliminates tariffs on 99% of EU exports to Japan, with a total savings of around EUR 1 billion annually. Import taxes on European wines, cheeses, and meat will be abolished, while tariffs on Japanese vehicles and electronics will be phased out over time. The agreement also covers services, investment, and public procurement.
Apart from reducing tariffs, the agreement also aims to boost regulatory cooperation between the EU and Japan, making it easier for companies to do business in both regions. This includes harmonizing standards for everything from safety to labeling, allowing for a smoother exchange of goods and services. The deal is also expected to increase market access for small and medium-sized enterprises (SMEs) by simplifying customs procedures and reducing regulatory burdens.
The EU-Japan EPA is seen as a significant step towards promoting free trade in a rapidly changing global economic landscape. Against the backdrop of rising protectionism and trade tensions between the US and China, the agreement sends a strong message of support for multilateralism and open markets. It also strengthens the EU`s strategic partnership with Japan, which shares many of the same values and interests.
In conclusion, the EUR 1 Free Trade Agreement between the EU and Japan is a significant achievement that is expected to benefit both economies. By eliminating tariffs and boosting regulatory cooperation, the agreement will create new opportunities for businesses, increase market access, and promote free trade. At a time when protectionism is on the rise globally, the EU-Japan EPA sends a strong message in support of open markets and multilateralism.