EU-Japan trade deal clears hurdle on way to 2019 start

BRUSSELS: European Union and Japanese plans to form the world’s largest free trade area cleared a significant hurdle on Monday when EU lawmakers specialising in trade backed a deal that could enter force next year.

The European Parliament’s international trade committee voted 25 in favour to 10 against to clear the deal for a final vote in the parliament’s full chamber set for December 13.

An agreement would bind two economies accounting for about a third of global gross domestic product and also signal their rejection of protectionism.

Both have faced trade tensions with Washington and remain subject to US tariffs imposed by President Donald Trump on imports of steel and aluminium.

Japan had been part of the 12nation Trans-Pacific Partnership that Trump rejected on his first day in office, turning Tokyo’s focus to other potential partners – such as the European Union.

The EU has also sought other partners after freezing TTIP (Transatlantic Trade and Investment Partnership) negotiations with the United States in 2016.

It concluded an updated trade deal with Mexico earlier this year.

Both have since agreed to start trade talks with Washington.

The EU-Japan agreement will remove EU tariffs of 10 per cent on Japanese cars and 3 per cent for most car parts.

It would also scrap Japanese duties of some 30 per cent on EU cheese and 15 per cent on wines and open access to public tenders in Japan.

It will also open up services markets, in particular financial services, telecoms, e-commerce and transport.