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EU-Japan trade agreement on track to enter into force in February 2019

Japan | Strasbourg, 12 December 2018

The European Commission welcomes today’s approval in the European Parliament of the EU-Japan Economic Partnership Agreement and the EU-Japan Strategic Partnership Agreement. The trade agreement negotiated by the Commission is the first ever to include an explicit reference to the Paris climate agreement. It will create an open trading zone covering 635 million people and almost one third of the world’s total GDP. The Strategic Partnership Agreement is the first ever bilateral framework agreement between the EU and Japan.

President of the European Commission Jean-Claude Juncker said: "Almost five centuries after Europeans established the first trade ties with Japan, the entry into force of the EU-Japan Economic Partnership Agreement will bring our trade, political and strategic relationship to a whole new level. I praise the European Parliament for today's vote that reinforces Europe's unequivocal message: together with close partners and friends like Japan we will continue to defend open, win-win and rules-based trade. And more than words or intentions, this agreement will deliver significant and tangible benefits for companies and citizens in Europe and Japan."

Today’s vote follows a similar decision taken by Japan's National Diet, thus concluding the parliamentary ratification of the agreement by both partners. It paves the way for the agreement to enter into force on 1 February 2019. From that moment, EU companies, farmers, workers and consumers will start reaping the benefits of simpler and faster trade between the EU and Japan.

Cecilia Malmström, Commissioner for Trade, said: "I am extremely pleased with the Parliament's vote today. Our economic partnership with Japan – the biggest trade zone ever negotiated – is now very close to becoming a reality. This will bring clear benefits to our companies, farmers, service providers and others. Those benefits also go hand in hand with a commitment on both sides to uphold the highest standards for our workers, consumers and the environment. That's good news for the EU and all supporters of an open and fair international trading system.”

The EU-Japan Economic Partnership Agreement will remove the vast majority of the €1 billion of duties paid annually by EU companies exporting to Japan, as well as a number of long-standing regulatory barriers, for example on car exports. It will also open up the Japanese market of 127 million consumers to key EU agricultural products and increase EU export opportunities in many other sectors. In addition, the agreement will strengthen cooperation between Europe and Japan in a range of areas, reaffirm their shared commitment to sustainable development, and include for the first time a specific commitment to the Paris climate agreement.

Key parts of the Economic Partnership Agreement

The agreement will, in particular:

  • eliminate duties on many cheeses such as Gouda and Cheddar (which currently are taxed at nearly 30%) as well as on wine exports (currently at 15% on average);
  • allow the EU to substantially increase its beef exports, and open additional opportunities for export of pork products;
  • ensure the protection in Japan of more than 200 Geographical Indications (GIs), high-quality European traditional food specialities, and the protection of a selection of Japanese GIs in the EU;
  • remove tariffs on industrial products in sectors where the EU is very competitive, such as cosmetics, chemicals, textiles and clothing;
  • commit Japan to international car standards, with the result that EU exports of cars to Japan is made significantly easier;
  • open services markets, in particular for financial services, e-commerce, telecommunications and transport;
  • guarantee EU companies access to the large procurement markets of 54 large Japanese cities; remove obstacles to procurement in the economically important railway sector

The agreement includes a comprehensive chapter on trade and sustainable development; sets very high standards of labour, safety, environmental and consumer protection; strengthens EU and Japan's commitments on sustainable development and climate change and fully safeguards public services. It also includes a chapter on small and medium enterprises (SMEs) which is particularly relevant since 78% of current exporters to Japan are smaller businesses.

Concerning data protection, the EU and Japan concluded on 17 July the negotiations on reciprocal adequacy, which will complement the Economic Partnership Agreement. The objective is to recognise each other's data protection systems as 'equivalent', which will allow data to flow safely between the EU and Japan, creating the world's largest area of safe data flows.

A Strategic Partnership Agreement to work even more closely

Japan and the EU share a strong commitment to democracy, the protection of human rights, free and open trade, multilateralism and a rules-based order. Japan is a long-standing Strategic Partner for the EU and an important ally on the international scene.

The Strategic Partnership Agreement will lead to further deepening of EU-Japan relations, strengthened foreign and security policy dialogue, and engagement across a wide range of global, regional and bilateral thematic issues. The Agreement re-affirms the shared values and common principles that form the basis of the EU-Japan partnership, including human rights, democracy, multilateralism and the rule of law.

"Japan is a country with which we already work very closely. Following today's votes, our partnership will become even stronger. Japan is an important partner for the EU in multilateral fora. Our new agreement will help us cooperate even more closely in many areas and increase people-to-people contacts," said High Representative Federica Mogherini.

The Strategic Partnership Agreement will boost dialogue and cooperation between the European Union and Japan on topics of mutual interest such as foreign and security policy, connectivity, climate change, environment, energy, cyber issues, employment and social affairs, as well as people-to-people exchanges.

Timeline of the agreements and next steps

Negotiations for the Strategic Partnership Agreement and the Economic Partnership Agreement started in 2013, and both agreements were signed at the EU-Japan Summit on 17 July 2018.

On 29 November and on 8 December the two houses of Japan's National Diet ratified the Economic Partnership Agreement. The European Parliament's consent expressed today clears the way for the trade agreement's conclusion and entry into force. The remaining formalities are expected to be done in time for the agreement to become effective as soon as 1 February 2019.

The entry into force of the Strategic Partnership Agreement requires also the ratification by EU Member States, but a large part of the Agreement can be applied on a provisional basis already in early 2019.

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