EU gives the nod to Tokyo deal

EU and Japanese plans to form the world’s largest free-trade area cleared their final hurdle on Wednesday when EU legislators backed the partnership.

EU and Japanese plans to form the world’s largest free trade area cleared their final hurdle on Wednesday when EU legislators backed a partnership set to come into force early in 2019.

The European Parliament voted 474 to 156 for the agreement that binds two economies accounting for about a third of global GDP and signals their rejection of protectionism.

Both face trade tension with Washington and remain subject to US tariffs imposed by President Donald Trump on imports of steel and aluminium, although the two have agreed to start separate trade talks with the US.

“This will bring clear benefits to our companies, farmers, service providers and others,” said EU trade commissioner Cecilia Malmstrom. “Our economic partnership with Japan — the biggest trade zone ever negotiated — is now very close to becoming a reality.”

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

The EU has also sought other partners after Transatlantic Trade and Investment Partnership negotiations with the US stalled in 2016. It concluded an updated trade deal with Mexico earlier in 2018.

The EU-Japan agreement will remove EU tariffs of 10% on Japanese cars and 3% for most car parts. It will scrap Japanese duties of about 30% on EU cheese and 15% on wines as well as open access to public tenders in Japan.

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

The European Commission, which co-ordinates trade policy for the 28 EU members, said Wednesday’s vote paves the way for the agreement to enter force on February 1.