Automobile and wagyu beef exports to the European Union are increasing thanks to tariff cuts under an economic partnership agreement between Japan and the EU, which took effect on Feb. 1 last year.
The EPA, which created a free trade bloc accounting for 40 percent of global trade, has also contributed to increases in Japan’s imports of European wine, pork and cheese, benefiting Japanese consumers.
Some industries have been facing tougher competition from European rivals. Japan and the EU agreed to mutually remove tariffs for over 90 percent of their trade items.
The EPA also includes rules affecting a range of fields, including e-commerce and the protection of intellectual property rights.
Overall, the government estimates that the pact will increase Japan’s real gross domestic product by ¥5 trillion, or about 1 percent.
Under the EPA, the EU will scrap its tariffs on Japanese passenger cars in the eighth year from effectuation, after lowering it in stages from 10 percent. The EU’s tariffs on Japanese beef and sake were removed upon effectuation.
Japan’s vehicle exports to the EU in February-November last year rose 19 percent from a year before, according to trade statistics released by the Finance Ministry.
Wagyu exports surged 28 percent and sake exports grew 5 percent, both supported by the popularity of Japanese cuisine.
Meanwhile, Japan’s wine imports from EU member states rose 12 percent following Tokyo’s tariff removal. Japanese retail prices for European wine fell by some ¥100 for a 750-milliliter bottle.
Japan is set to start negotiations as early as spring on a proposed trade deal with the U.K., following its exit from the EU on Friday.
The U.K. will remain within the Japan-EU EPA framework during its post-Brexit transition period.
The focal point of the negotiations between Tokyo and London is likely to be when the U.K. will eliminate tariffs on Japanese vehicles.