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EU-Japan trade deal

Agreement announced recently that would lower barriers on virtually all goods traded between them

Adrija Shukla 

export, goods, import, trade

The and announced a broad agreement on Thursday that would lower barriers on virtually all the goods traded between them, a pointed challenge to President on the eve of a summit meeting of world leaders in

Though the deal still needs further negotiation and approval before it can take effect, it represents an act of geopolitical theater.

Prime Minister of said the deal signified the creation of “the world’s largest free, advanced, industrialised

Here is a look at the main aspects of the deal:

The deal

The Europeans are expected to scrap a 10% tariff on passenger cars made in Japan, over a period of seven years. Duties would be reduced for some car components.

The Japanese, in return, are expected to lower duties on like from the Netherlands, while retaining their unusually complex regulations on

is also likely to make it easier for European companies to bid for major government contracts, a move that could benefit train makers like Siemens of and Alstom of
EU-Japan trade deal

What’s been left out?

Negotiators have refused to include whaling and logging in the talks, which has angered has characterised the deal as “a huge transfer of power from people to big business.”

Together, the EU and would constitute a trading bloc of a size to rival that created by the North American Agreement, presently the world’s biggest zone.

Unresolved issues

The biggest issue is how to ensure that investors have a way to resolve disputes arising as a result of the deal. The Europeans want to employ a court system rather than ad hoc The Japanese, say existing institutions are enough.

What happens now?

have been going on for years, but were accelerated after Trump abandoned the

The new deal was a clear sign that other parts of the world will continue to pursue a liberalising trade agenda, even without the United States.
Sources: The New York Times, Treading Economics, Top Exports

First Published: Mon, July 10 2017. 03:22 IST