EU-Ja­pan free trade deal cleared for early 2019 start


STRAS­BOURG, FRANCE The Eu­ro­pean Union and Ja­pan will launch the world’s largest free trade zone early next year af­ter their eco­nomic part­ner­ship cleared a fi­nal hur­dle on Wednes­day.

Some 70 per cent of Eu­ro­pean Par­lia­ment law­mak­ers backed the deal that binds two economies ac­count­ing for about a third of global gross do­mes­tic prod­uct and sig­nals their re­jec­tion of pro­tec­tion­ism.

While they have agreed to start sep­a­rate trade talks with the United States, both face trade ten­sions with Wash­ing­ton and their steel and alu­minum pro­duc­ers re­main sub­ject to U.S. tar­iffs im­posed by Pres­i­dent Don­ald Trump.

EU Trade Com­mis­sioner Ce­cilia Malm­strom said the deal would bring clear ben­e­fits to EU com­pa­nies and farm­ers. Ja­pan’s par­lia­ment ap­proved it on Satur­day.

“If all goes well, it should be able to en­ter force on Feb. 1,” she said. “The agree­ment is not only send­ing a sig­nal to the world. It is also ex­tremely ad­vanced when it comes to open­ing mar­kets.”

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

The EU has also looked else­where af­ter TTIP (Transat­lantic Trade and In­vest­ment Part­ner­ship) ne­go­ti­a­tions with the U.S. stalled in 2016. It con­cluded an up­dated trade deal with Mex­ico ear­lier this year.

“Ev­ery­one knows there is a tar­iff man on the other side of the At­lantic. Our an­swer is clear. We are not tar­iff men, but the peo­ple of fair trade,” said Bernd Lange, who heads the Eu­ro­pean Par­lia­ment’s trade com­mit­tee.

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

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

The flag­ship deal comes af­ter wide­spread anti-glob­al­iza­tion protests threat­ened the ear­lier EU-Canada Com­pre­hen­sive Eco­nomic and Trade Agree­ment (CETA), which a re­gion of Bel­gium ob­jected to in 2016. It fi­nally en­tered force in 2017.

Crit­ics say the EU-Ja­pan agree­ment will give too much power to multi­na­tion­als and could un­der­mine en­vi­ron­men­tal and labour stan­dards.

Both Brus­sels and Tokyo want it in place be­fore Bri­tain leaves the EU at the end of March.

Ja­pan, whose many car­mak­ers serve the EU mar­ket from British bases, had wanted it to then ap­ply to a Brexit tran­si­tion pe­riod un­til the end of 2020, although that pe­riod is un­cer­tain due to po­lit­i­cal tur­moil in Bri­tain.

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