Expansion of European-Japanese trade relations
On February 1, 2019 Europe and Japan have joined forces to create the biggest global free trade area. Called the Japan-EU Free Trade Agreement (JEFTA), over the next few years the agreement will gradually eliminate tariffs and trade barriers. In the last phase negotiations for the economic partnership agreement circled mainly around the export of agricultural products from the EU to Japan and the access of Japanese automobile manufacturers to the European market. As per finally agreed compromises Japan will scrap gradually within 15 years duties on many cheeses such as Gouda and Cheddar completely (which were at 29.8%). As result the Japanese market will open for 31,000 tonnes of soft cheese and provide almost unlimited access for hard cheese and whey, which will be needed in the quickly growing market of protein shakes.
In meat trade duties for pork shall be reduced within 10 years from 19% to zero. There will be duty-free trade in processed meat and almost duty-free export for fresh meat. For beef duties shall be removed from 38.5% to 9% within 15 years, which will allow the EU to increase its beef exports to Japan substantially. Also for wine, duties for export to Japan shall drop from then 15% to zero. Furthermore there will be protection in Japan of more than 200 high-quality European agricultural products, so called Geographical Indications. From the agreement the EU expects liberalisation of 85% of agricultural exports to Japan. In return the Japanese car industry accepted that import duties of currently 10% in Europe on Japanese vehicles will be dropped completely only after seven years. The unimpeded access of Japanese automobile manufacturers to the European market is a long-held wish of Japan.
The agreement also opens up services markets, in particular financial services, e-commerce, telecommunications and transport. It guarantees EU companies access to the large procurement markets of Japan in 48 large cities, and removes obstacles to procurement in the economically important railway sector at national level. For the agricultural and automotive sector the consensus reached constituted a substantial change. The German economy welcomes the agreement and foresees in trade with Japan for both sides advantages and on the German side with a current trading volume of 40 bn Euro still a substantial potential for growth.
The achieved outcome sends an important political message to the other trading nations of the world. After termination of the negotiations on the European-American trade and investment agreement TTIP and the failure of the conclusion of the agreement for the transpacific free trade area TPP, also for reasons originating from the participating partner USA, JEFTA delivers decisive impulses not only for an economically but also politically deepened partnership between both trading areas.