The European Parliament on December 13 approved the bloc’s largest-ever trade deal with Japan that will come into force on February 1 aimed at removing €1 billion in duties for European exporters and creating an “open trade zone” covering 630 million people, or one-third of the global GDP.
The Japan deal does not need to be ratified by the EU’s national parliaments because it excludes issues related to investor protection and dispute settlements, all of which are being tackled in separate negotiations.
Under the agreement, Japan will scrap tariffs on EU agricultural goods, including wine, meat, and cheese. Europe will reciprocate by removing duties on Japanese cars and car parts. The deal also removes regulatory barriers and opens up public procurement markets.
Brussels’ trade commissioner, Cecilia Malstrom, said the US’ decision to pull out of the Trans-Pacific Partnership helped motivate the two sides to come to an agreement during the negotiations. Bot the EU and Japan have agreed to work towards fundamentally reforming the World Trade Organization.
In addition to trade, the agreement cuts red tape for individuals who move temporarily between the two for work and ensures common standards of information for shareholders of companies.