Free trade: EU and Japan agree on deal


The EU and Japan together represent around one third of global economic output. The trade agreement will be signed in autumn.

The European Union and Japan have negotiated the free trade agreement Jefta for around four years. Now, they have basically agreed on the conclusion of one of the world’s largest trade agreements. The EU Trade Commissioner Cecilia Malmström said after a meeting with the Japanese Foreign Minister Fumio Kishida in Brussels that a political agreement had been reached at ministerial level. The last remaining differences had been ironed out, said Malmström. President Shinzo Abe and EU Council President Donald Tusk and Commissioner Jean-Claude Juncker are now advised to confirm the agreement at their summit on Thursday in Brussels.

Just before the G20 summit in Hamburg, the agreement is seen as a signal against protectionist tendencies such as that of US President Donald Trump. With its “America first” policy, the latter is currently focusing on economic isolationism. He has already withdrawn from TPP, a transpacific free trade agreement, in which Japan is also involved, and intends to renegotiate the NAFTA agreement with Canada and Mexico.

The EU and Japan together represent around one third of global economic output. According to the EU Commission, the agreement will gradually abolish nearly all customs duties between the two sides, which currently amount to one billion euros annually. The Japanese market for agricultural products, which has so far been subject to high duties,  will become more accessible to EU producers. In return, the European tariffs for Japanese cars are to fall. So-called non-tariff barriers to trade such as different standards and regulations are also to be reduced by the agreement.

As is the case with the negotiations on TTIP or the EU trade agreement with Canada (Ceta) environmental associations, protectionists and trade unions complain about the lack of transparency of the talks. Under “Jefta Leaks”, Greenpeace recently published some 200 secret negotiating documents on Jefta. The environmental protection organization claimed that sustainable development, workers’ rights and environmental protection have so far not been adequately covered by the proposed agreement.

Also, the so-called investor protection is criticized as already with TTIP and Ceta. Opponents fear that companies will be able to sue states and governments through democratically unauthorized arbitration and thus could prevent unfavourable laws. The EU Commission, however, stresses that it has rejected the existing controversial system of investor state dispute resolution.

Instead, as in the case of the Ceta agreement, a new international commercial court is to be put in place which will be subject to public control. Brussels takes the view that citizens can therefore rely on fair and objective judgments on investment disputes. According to the Greenpeace publication, the green European politician Sven Giegold complained that the jurisdiction of the planned trade agreement with Japan will fall short of the standards agreed in Ceta. However, the detailed questions on this controversial issue are still open. The agreement is expected to be definitively signed in autumn.


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