With the world’s largest free trade zone to set a signal against the trade policy of the US president, the EU wishes. The agreement with Japan comes into force this Friday. From Brussels Bernd Riegert.
It is also possible without the US and its polarized on isolationism president. This is supposed to be the political message of the EU’s trade agreement with Japan, which will come into force this Friday. Europeans and Japanese, after six years of negotiations, create the largest free trade area in the world , comprising more than 600 million people and about one third of global economic output.
After the end of TTIP: largest free trade zone worldwide
EU Trade Commissioner Cecilia Malmström also sees great opportunities for export in both directions. “We want to shape globalization for the benefit of our citizens and companies, which is a strong message for free trade under global rules,” said Malmström at the presentation of the agreement with a view to the White House.
Even far greater than EPA would have been the transatlantic free trade agreement (TTIP) between the EU and the US. There was criticism of TTIP on both sides, but it was US President Donald Trump who refused to continue the negotiations.
Trump operates instead with punitive tariffs to pursue trade policy. Currently, Europeans are trying to negotiate with the US government at least on certain sectors, for example, to prevent import tariffs on cars.
The EU’s agreements with Japan always stayed a little under the radar screen of the public. The issue was more about the volume-wise much smaller agreement with Canada (CETA).
This may also be because the agreement with Japan, unlike CETA, did not have to be ratified by all 28 EU Member States. Some controversial agreements, for example on investment arbitration tribunals, have been excluded.
What is in the agreement with Japan? Here are the essential points:
Customs duties on European goods in Japan amounting to one billion euros per year are largely eliminated. Industrial products can be sold in the Japanese market without additional certification or testing.
In return, the EU removes import tariffs (10 – 22 percent) for Japanese vehicles, which was particularly important to Tokyo. Japanese automakers such as Nissan and Toyota will be able to ship cars duty-free directly from Japanese factories.
So far, vehicles for the EU market have also been built in the UK to avoid tariffs. This is unlikely to be worthwhile after Brexit, as duties could be due on vehicles from the upcoming third country, the United Kingdom.
In the future, Japan will allow more meat products, milk products and wine into the country. The tariffs on these products, such as the 30 percent levy on Gouda cheese from Europe, are gone. The EU Trade Commissioner expects exports of processed food to increase by 180 per cent, which would translate into additional sales of 10 billion euros.
Critics say it would only benefit large farms in the EU. Small farmers in the EU and in Japan would suffer, according to the anti-globalization lobby organization “Attac” in comments on the trade agreement.
Parts of the service sector are liberalized. In future, EU companies will be able to participate in tenders from public procurers in Japan. Conversely, this also applies to companies from Japan who want to do business in the EU.
However, “public services” are explicitly excluded, where the public sector can continue to decide that water, electricity or gas supplies continue to be provided by the state and not privatized.
Lobby groups had criticized that this general interest was not sufficiently protected in the contract with Japan. The Chairman of the Trade Committee in the European Parliament, Bernd Lange (SPD), has repeatedly rejected this. “The water supply is expressly excluded,” assures Lange.
The EU and Japan are committed to the highest standards of consumer, labor and environmental protection. For the first time, the Paris UN agreement on climate protection is part of a trade agreement.
The globalization critics of “attac” see this agreement as a sham. A rapid response to health or environmental hazards that could emanate from some products is no longer possible, criticized “attac”. The EU Commission rejects this interpretation. The so-called EU precautionary principle, according to which certain products can be withdrawn from the market in the event of imminent danger even without scientific proof, is not touched.
The Federal Association of German Industry (BDI) praised the agreement with Japan. Stefan Mair of the BDI management also called for further steps by the EU in this direction.
“Europe must now keep its course and not allow other trade and investment treaties such as Singapore and Vietnam to fail,” said Mair. “This would make the EU wide open the economic door to the growth region of Southeast Asia and show that it can effectively protect European foreign investment.”
The EU Parliament will vote on the negotiated agreement with Singapore on 13 February.