On Friday 8 December, the EU and Japan announced the finalisation of the details of their economic partnership agreement, which had been the subject of an agreement in principle on 6 July (see EUROPE 11823).
European Commissioner for Trade Cecilia Malmström and Japan's Foreign Affairs Minister Taro Kono said the final discussions had ended successfully at the end of the last discussion session in Brussels.
European Commission President Jean-Claude Juncker then called on Japan's Prime Minister Shinzo Abe to formalise the agreement. In the long-term, the agreement will cover 99% of the bilateral trade in goods between the two partners. It is the most important bilateral trade agreement ever negotiated by the European Union. Japan is the fourth biggest economy in the world.
The technical discussions that took place in July focused on: - the stabilisation of the commitments from the EU and Japan on tariffs and services; - the final arrangements for the protection of EU and Japanese geographical indications; - the conclusion of chapters on good regulatory practice and regulatory cooperation and transparency; - the strengthening of commitment for the Paris Agreement in the chapter on trade and sustainable development; - the clarification of a number of minor questions on hold in several parts of the agreement.
By contrast, the chapter on investment is still not finished. The standards on this between the two partners are still too different and a solution must also be found on the issue of the investor-state dispute settlement mechanism. "A bit more time is needed to be able to reach an agreement", Malmström stated.
In substance, the agreement provides for 85% of the EU's food exports to Japan to liberalised in the long term. In exchange, the EU offers increased access to automobiles and spare parts from Japan.
For dairy products (a very sensitive sector for Japan, with 29.8% duties), the EU obtained the gradual full liberalisation of the Japanese market for hard cheeses (including parmesan, gouda and cheddar) and the opening of tariff quotas for soft cheeses (including camembert, mozzarella and feta). Japanese customs duties (15%) on wine, sparkling wine and alcoholic drinks will be removed as soon as the agreement is implemented. Trade in processed agricultural products (like biscuits, pasta and chocolate) will be liberalised progressively over ten years. In addition, the agreement will protect over 200 EU geographical indications on Japanese territory.
As regards automobiles, Japan obtained the lifting of EU taxes on private vehicles (sensitive products for Europeans that have nevertheless obtained a period of grace of over seven years).
On regulatory cooperation, the Europeans and Japanese established some common principles on the rules for company governance, competition, subsidies and state-owned enterprises, as well as for intellectual property and support for SMEs. (Original version in French)