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EU & Japan strike free trade deal

After nearly four years of negotiations, the European Union and Japan have signed a trade agreement, opening up each other’s markets. The deal aims to support global trade in the wake of rising protectionism in the US.

The agreement was concluded by Japan’s Prime Minister Shinzo Abe and European Commission President Jean-Claude Juncker in Brussels on Thursday, a day before G20 leaders meet in Germany.

“We did it. We concluded EU-Japan political and trade talks. EU is more and more engaged globally,” European Council President Donald Tusk tweeted.

The deal will remove tariffs on many goods traded between Japan and the EU.

Japan is the European Union’s second-biggest Asian trading partner after China. Last year it accounted for about $134 billion. Statistics show that together with the EU it accounts for more than a third of global economic output.

For Europe, one of the main motivating factors was the possibility of opening up new opportunities for its farmers.

“We will have full duty-free access for almost all agricultural food exports,” a senior EU official told the Financial Times, adding that would include pasta, confectionery and chocolate. “Some of the transitions are a bit longer than we would have liked, but in the end, it will be full duty-free,” he said.

According to the official, the European Automobile Manufacturers’ Association has been calling on Brussels to negotiate a transition period with Japan for the removal of import duties on cars. The tariffs currently stand at 10 percent.

“Industry has asked for seven years, and I don’t think they will be disappointed,” he said.

In March, German Chancellor Angela Merkel and Japanese Prime Minister Shinzo Abe called for a free trade deal to be reached quickly, saying they were strongly for open and fair markets.

Merkel who will host the G20 meeting said on Wednesday “while we are looking at the possibilities of cooperation to benefit everyone, globalization is seen by the American administration more as a process that is not about a win-win situation but about winners and losers.”

In January US President Donald Trump pulled the country out of the Trans-Pacific Partnership (TPP) which has been the largest global trade agreement in 20 years. Trump called the trade pact a “potential disaster” for the US.

He has also accused Japan of limiting the access of American goods to its domestic market as well as devaluing the yen to boost exports, something Prime Minister Abe has denied.

Source: other

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