Abe meets EU leaders to sign trade pact

TOKYO: The leaders of Japan and the European Union held a summit yesterday to sign a free trade deal aimed at boosting business between the two regions by eliminating tariffs on most of their products.

Japanese Prime Minister Shinzo Abe, European Commission President Jean-Claude Juncker and European Council President Donald Tusk met at Mr Abe’s office in Tokyo, before the signing ceremony.

The agreement will create one of the world’s largest economic blocs, accounting for roughly 30% of the world’s gross domestic product with about 600 million people in the 29 countries.

The signing ceremony comes amid a spreading protectionism trend, including US President Donald Trump’s “America First” agenda, and an escalating trade war between the United States and China.

Japan and the European Union became the targets of recent US tariffs of 25% on steel and 10% on aluminium products they export.

Having started negotiations on the pact in 2013, the two sides reached an agreement in principle at the previous Japan-EU summit last July and then finalised their consultations in December. Following the signing ceremony, they will seek ratification from each parliament.

Japan and the European Union are aiming to have the pact enter into force by late March next year, when Britain is scheduled to leave the regional bloc.

Under the scheme, Japan will eliminate tariffs on 94% of all imports from the European Union, including 82% of farm and fishery products, resulting in lower prices of European cheese, wine and pork in the Japanese market.

The European Union will erase tariffs on 99% of imports from Japan. It will eliminate tariffs on Japan’s mainstay products of automobiles in the eighth year and TVs in the sixth year following the pact’s implementation.

But both parties have decided not to include a controversial scheme to settle investment disputes and will continue negotiations over the matter.

Japan and the European Union had originally planned to sign the pact on July 11 in Brussels during Mr Abe’s planned overseas trip, but the prime minister cancelled the plan to focus on dealing with the deadly torrential rains that hit western Japan.

During the rescheduled summit in Tokyo both sides are expected to sign a strategic partnership agreement, a framework aimed at strengthening bilateral cooperation on a broad range of bilateral and multilateral issues, such as security, cybercrime and climate change.