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

As Mandel-Associes law firm is very involved in French-Japanese legal issues, we are pleased to quote some extracts of a press release published by the European Commission on December 12, 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.

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:

  • 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;
  • 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.

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. »