Business

EU parliament approves Japan trade deal, dubbed world's largest

AFP-JIJI

The European Parliament on Wednesday approved an accord with Japan that has been dubbed the world’s biggest trade deal, covering economies that represent a third of global GDP.

The agreement will go into effect in February, and has been celebrated as a victory for Europe as a free trade champion in the face of U.S. President Donald Trump’s protectionism and the U.K.’s decision to leave the EU.

“Our economic partnership with Japan — the biggest trade zone ever negotiated — is now very close to becoming a reality,” said EU Trade Commissioner Cecilia Malmstrom.

Talking to AFP before lawmakers voted by 474 votes to 152 to back the deal, Malmstrom called it “a symbol, a signal” and added: “We’re showing that for our part, we’re in favor of open but regulated trade.”

The deal was confirmed even as U.K. Prime Minister Theresa May defended her faltering attempt to negotiate her nation’s orderly departure from the European Union before a boisterous House of Commons.

But, ironically, some EU leaders see the wide-ranging deal they have agreed with far-off Japan as a possible model for future commercial relations with the United Kingdom, once it formally quits the bloc.

“Everything is uncertain with the United Kingdom for the moment, but one day or another we’ll have to negotiate something,” Malmstrom said, predicting that a U.K. deal would “go even further” than Japan’s.

Covering more than 630 million people and economies that add up to around a third of global output, the EU-Japan Economic Partnership Agreement has been under discussion since 2013.

When it goes into effect it will regulate almost all commerce between the Asian giant and the 27 remaining EU economies and, according to Malmstrom, will benefit in particular European farmers.

The pro-business lobby welcomed the deal.

“Approving the EU-Japan EPA, the European Parliament delivers on what business and citizens need in a time of political and economic uncertainty,” said BusinessEurope Director General Markus Beyrer.

“This agreement is projected to increase exports between the two economies by 34 percent for the EU and 29 percent for Japan, liberalizing up to 99 percent of bilateral trade,” he argued.

“The elimination of tariffs will save consumers and importers €1 billion per year in the EU and will support a substantial increase of jobs, maximizing benefits for both companies and citizens.”

Once the accord is fully implemented, some 85 percent of EU farm products will be eligible for tariff free export to Japan, although in some cases this will come after a period of transition.

Customs duties on beef, for example, will be progressively reduced, and rice — a source of national pride in Japan — will be excluded from the deal.

Tokyo has also agreed to recognize more than 200 “geographic signifiers,” allowing iconic European products like Roquefort cheese, Tirolean speck and Polish “Wodka” to protect their brand value.

For their part, the Japanese will win free access to the European automobile market after a multiyear transition period.

In a nod to the environmental and anti-globalist groups who have lobbied against this and other EU trade agreements, it includes chapters on sustainable development and the Paris climate change accord.

This was not enough to appease at least three NGOs — the Foundation for Man and Nature (FNH), the Veblen Institute and Foodwatch — who denounced a deal they said was “negotiated in the shadows.”

“The European Parliament agreed to a trade agreement that damages European democracy,” Lena Blanken of Foodwatch said.

The deal “restricts the legislative authority of the EU and its member states, jeopardizes the European precautionary principle and establishes committees without sufficient democratic control.”

But Malmstrom was unrepentant.

“With or without a deal, we do trade with far off countries. That’s commerce,” she said.

“In the end, it’s consumers who decide,” she said, adding that, while many might prefer to buy locally, Europe would work with Japan to reduce the environmental impact of long-distance shipments.

With the deal, the EU is seeking access to one of the world’s richest markets, while Japan hopes to jump-start an economy that has struggled to find solid growth for more than a decade.