TOKYO – A free trade pact between Japan and the European Union came into force on Friday, underlining a new phase in bilateral ties.
The Economic Partnership Agreement, signed by the two sides in Tokyo in July, will create the largest free trade zone in the world with 36.9 percent of global trade and 27.8 percent of the global gross domestic product.
For Japan, which has openly backed free trade, the pact is another step forward, following the 11-nation Trans-Pacific Partnership free trade agreement that came into effect on Dec. 30.
At an official event on Friday, Japanese Agriculture Minister Takamori Yoshikawa said that at a time of protectionist trends across the world, the agreement, based on free and fair rules, will produce benefits for both the EU and Japan.
Yoshikawa along with other senior Japanese officials and ambassadors of EU countries took part in the official event at the European delegation in Tokyo to celebrate the success of the efforts made in the last five years to forge the pact.
Speaking at the same event, economic revitalization minister Toshimitsu Motegi said that Japan and the EU will have to lead the movement to extend free and fair common rules in the 21st century around the world.
Hours earlier, from Brussels, President of the European Commission Jean-Claude Juncker emphasized the practical advantages of the pact for European and Japanese consumers as well as the message it sent to the world.
“More than anything, our agreement shows that trade is about more than quotas and tariffs, or millions and billions. It is about values, principles and fairness,” Juncker said.
According to the agreement, EU will scrap levies on 99 percent of imports from Japan, starting Friday or progressively, while Japan will eliminate tariffs on 94 percent of European products entering Japan.
Last year, trade between Japan and the European Union reached 18.91 trillion yen ($173.63 billion), 11.53 percent of Japan’s total exports and imports, resulting in a deficit of 487.6 billion yen for Japan in its balance of trade with the EU.
China is Japan’s main trading partner, followed by the United States.
Analysts believe that the pact, which will benefit around 635 million people, could boost EU exports to Japan by 34 percent.