The EU and Japan have signed the largest trade agreement to date in Tokyo which will lower tariffs barriers on the movement of goods and services between the two economies and act as a massive counterweight to US President Donald J. Trump’s protectionism and his desire to wage trade wars against the United States’ main allies.

Japanese car exports and EU goods are expected to increase by 24%, according to what the European Commission President Jean-Claude Juncker told reporters at a press conference after the agreement was signed. Japan’s Prime Minister Shinzo Abe, and European Council President Donald Tusk, joined Juncker as the three co-signed the accord after nearly five years of negotiations.

The agreement comes in the wake of Trump imposing tariffs on the US’ main trading partners and after he publicly called his NATO allies “foes”, moves that have not escaped the attention of Abe, who also used the signing to discuss the future of the Trans-Pacific Partnership. (TPP) Trump withdrew from the negotiations on the TPP in 2017

Brussels also announced that the EU and China will hold a joint summit to discuss “the global challenges that require collective responses,” and pledged to strengthen their cooperation and develop a new set of guidelines for government-supported export credits within the International Working Group on Export Credits.

Japan is also in talks with China, India, and other Asian countries to create a 16-nation Regional Comprehensive Economic Partnership, which would quickly become the world’s largest trading bloc.

The EU expects exporters in Japan to benefit from the €1 billion of duties that will be paid annually on products that include cheese, wine, beef, and pork. The Japanese economy will benefit from the1% GDP growth and the 290,000 new jobs are expected to be added in Japan, according to the country’s Ministry of Foreign Affairs.

The agreement is expected to take effect by the end of 2019 after being approved by the European Parliament and the bloc’s national governments, along with the Japanese parliament.  

Tusk said the signing of the deal brings the two sides politically and economically closer than at any other time, a sentiment reiterated by Juncker, who added that the agreement brings together 600 million people and builds on the €58 billion of exports and €28 billion in services that are already sent to Japan.

“The EU and Japan took major steps together to strengthen their cooperation, we are making a statement for free trade,” added the EU chief spokesperson Margaritis Schinas from Brussels on Tuesday.

As for the ratification obstacles that have again risen due to Italy’s unwillingness to ratify the EU-Canada CETA free trade agreement, Juncker expressed confidence that the agreement would eventually be ratified, despite tensions with Italy over its refusal to sign off on a new EU-Canada deal, known as the EA free trade agreement, saying the deal with Tokyo is in full compliance with labour market standards.