13/12/2018 – News / Business / Free Trade / Europe / Japan

European Parliament endorses landmark EU-Japan free trade agreement

The European Parliament has given its consent to the EU’s trade agreement with Japan, the largest bilateral trade deal ever negotiated by the EU. The new agreement will remove most duties on EU goods exported to Japan – with wine, spirits, meat, dairy, textile, leather traders, rail procurement SMEs set to be the biggest EU winners.

 

Approved with 474 votes to 152 with 40 abstentions on Wednesday (12th Dec), the Economic Partnership Agreement between the EU and Japan will remove almost all custom duties adding up to €1 billion annually for EU companies.

 

It represents a clear stance in support of rules-based, free and fair trade “at a time of serious protectionist challenges”, reads a statement from the European Parliament.

 

A win for agriculture and SMEs

 

While the most sensitive EU sectors such as rice production are safeguarded, wine, cheese, beef, pork, pasta, chocolate and biscuits will enter duty-free either immediately or after a transition period. 

 

Some 205 products with European geographical indications will be protected in order to help small and medium sized enterprises (SMEs), which make up 78 per cent of exporters to Japan. Parliament urges the Commission to set up contact points for them, so that they can quickly benefit from the agreement.

 

Opening up Japan’s rail and service sectors

 

Japan opens up its rail procurement market and public procurement in its main cities to European competition. E-commerce, international maritime transport and postal services will also be liberalised.

 

Environmental and labour protection 

 

The European Parliament welcomed the high level of environmental and labour protection, and the commitment to the Paris Agreement to combat climate change – and it encourages both parties to combat illegal logging. MEPs nevertheless stressed that Japan must ratify all relevant labour codes set by the International Labour Organisation.

 

Parliament also approved the Strategic Partnership Agreement, which extends co-operation to areas such as energy, education, R&D, development, and the fight against climate change and terrorism.

 

“A key milestone for fair trade” 

 

Pedro Silva Pereira, the rapporteur in charge of the trade agreement, said that approval of the deal by the European Parliament is “a key milestone for fair trade based on rules and values, amid rising protectionism”. He anticipated that the new agreement would “help promote high standards and strengthen sustainable development” in trade policy. “The European Parliament is sending a very progressive message and will continue to do its part, so that the biggest EU bilateral trade agreement truly works for both citizens and businesses,” he added. 

 

Bernd Lange, the chair of the trade committee, remarked that the European Parliament's answers to the challenges of globalisation are “co-operation and global standard setting”. 

 

“We firmly reject inward-looking protectionism and nationalist tendencies – they will not solve the pressing problems we are facing, but only drive us further apart,” Mr Lange opined. “It will be crucial to swiftly implement the accord and involve civil society at every step to ensure that the agreement benefit workers and citizens,” he added.

 

The next steps

 

Japan has already ratified the agreement. After the endorsement of the trade deal by the European Parliament, the European Council is set to give its final go-ahead on 21st December. This will allow the agreement to enter into force on 1st February 2019. For the strategic partnership agreement to enter into force, all member states must first ratify it.

 

The area subject to the Agreement spans a trade zone of 600 million people, covering one-third of global GDP and about 40 per cent of global trade.

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