Today, the European Parliament endorsed the new EU-Japan trade agreement.
Abolished the tariffs of 38% for the European hard cheese and tariff of 10% for Japanese cars. Abolished more than 90% of tariffs for EU exports and Japan will benefit for many good and services.
The European Parliament voted this Wednesday the ratification of the trade agreement UE-Japan, signed in Tokyo last July, by pm Shinzo Abe and the President of the European Council Donald Tusk and the EU Commission President Jean-Claude Juncker.
This agreement is the most important bilateral trade agreement ever concluded by the EU, covering nearly a third of world gross domestic product (GDP), almost 40 percent of world trade and more than 600 million people.
The Europeans estimate that the agreement would deliver positive impacts in terms of GDP, income, trade and employment for both the EU and Japan, adhering to the objective to create ‘smart, sustainable and inclusive growth’.
However, criticisms comes from both sides, where some “local” products could be threatened by imports of imitations of typical products.
Here a list of the most important agreements.
- Trade in Goods: eliminated tariffs on more than 90% of the EU’s exports to Japan from its entry into force. When fully implemented, Japan will have scrapped customs duties on 97% of goods imported from the EU, with the remaining tariff lines being subject to partial liberalization through tariff rate quotas or tariff reductions. For passenger cars, the EU will phase in an elimination of its 10% tariffs on cars over a period of seven years, while on tractors and buses the EU customs will be eliminated after 12 years. According to some estimates, the agreement will save EU exporters around 1 billion euros in customs duties per year.
- Non-tariff measures (NTMs): The EU-Japan negotiations addressed many non-tariff measures, which have constituted an important concern for EU companies, in particular in the car sector, food additives, food labelling, cosmetics, medical devices and textiles labelling.
- Agriculture and GIs: Tariff reductions are most substantial for the EU agricultural sector, while the agreement safeguards the most sensitive products. Wine, spirits and other alcoholic beverages will enter duty free from day one. High duties on hard cheese will be eliminated and duty-free tariff rate quota for fresh cheese will be established. For beef, tariffs will be progressively reduced (from 38.5% to 9% over 15 years). The EU will enjoy duty-free access for processed pork meat and almost duty-free trade for fresh pork meat. After a transition period, custom duties on processed agricultural goods such as pasta, chocolate and biscuits will be eliminated. The EPA also provides for protection of 205 European Geographical Indications, which is particularly important for small and medium-sized enterprises (SMEs).
- Public Procurement: Japan accepted to commit the procurement of 48 core cities (representing about 15% of Japan’s population) as well as many independent local administrative agencies (universities, hospitals and public energy companies). Japan also committed to remove the so-called ‘operational safety clause’, at the latest one year after the entry into force of the agreement, which so far has in practice prevented the EU rail suppliers to access the Japanese market.
- Trade in Services: The agreement maintains the right of the EU Member States’ authorities to define, provide and regulate public services at national, regional or local level, despite its negative list approach. The EPA does not prevent governments from bringing any privatized service back in to the public sector.
- SMEs: This is the first time that a dedicated chapter for SMEs is included in an EU trade agreement. The chapter foresees a publicly accessible website and SME Contact Points, which will provide information relevant for small companies to access each other’s markets. 78 percent of EU companies exporting to Japan are SMEs.
- Sustainable development: The EU-Japan EPA reaffirms both parties’ commitment to a broad range of multilateral agreements in the area of labour and environment, as well to the United Nations Agenda 2030 for Sustainable Development.
- Regulatory cooperation: The regulatory cooperation chapter is voluntary and respects each parties’ sovereign right to regulate its own levels of protection in pursuit of public policy objectives. The agreement also foresees the establishment of a financial regulatory forum to strengthen cooperation between the EU and Japan to enhance the stability and improve the global financial system.