Source: iStock.com/fotoVoyager

© iStock.com/fotoVoyager

The Economic Partnership Agreement between the EU and Japan enters into force today: the largest bilateral trade agreement ever negotiated by the EU. It will create a common trading zone which is home to 635 million people and generates almost one-third of the world’s gross domestic product.

Peter Altmaier, Federal Minister for Economic Affairs and Energy, said: “The free trade agreement sends an important signal for rules-based trade and a clear message against rising protectionism. I am particularly pleased that Japan and the EU have agreed on very ambitious rules and high standards, particularly for sustainability. The free trade agreement abolishes almost all the tariffs between the EU and Japan. The clear reduction in non-tariff trade barriers will give a further boost to the competitiveness not least of German products. This is particularly the case with the traditional exports from the automotive and mechanical engineering sectors.”

The agreement removes a large proportion of the tariffs and a number of long-standing regulatory impediments. With its 127 million consumers, the Japanese market will be opened up to major agricultural products from the EU (e.g. wine, cheese, beef and pork), and the EU will have better export prospects in many other sectors too. Improved access for European companies to Japan’s public procurement market, including the railway sector, is also important. International maritime transport and postal services are also being liberalised. Further to this, the agreement will strengthen cooperation between Europe and Japan in other areas such as sustainable development. Also, for the first time the agreement contains a commitment to the Paris climate agreement.

Economic relations between Germany and Japan are very close: Japan is Germany’s second most important trading partner in the Asia-Pacific (behind China), whilst Germany is Japan’s most important trading partner in the EU. Since 2009, the volume of trade has grown steadily, reaching approximately €42.4 billion in 2017.