EU JAPAN – Economic partnership agreement

Author : Lorenzo Giusepponi

Translated by : Matteo Aristei

January 2018

Japan and Europe will be closer and there will be greater opportunities for the companies of both countries about their respective export markets . On the 7th December, the president of EU Commission Jean -Claude Juncker and the Japanese premier Shinzo Abe have announced the negotiation ‘ s finalisation for a free trade agreement that has begun in 2013, and it will cover the 30 % of the world GDP and a block of 600 million people, underlining the common willingness to send to the entire world a strong message in favour of free trade and against protectionism . Now a complex procedure for the official signature will be opened, it is expected for the next summer and it concerns the debate of the remaining technical questions until the achieving of a final text . Then, the agreement has to be approved by both European Parliament and parliaments of each Member States . Both parts foresee that the agreement will enter into force at the beginning of 2019 .

General framework

The EU companies export already to japan goods for over 58 billions euros and services for 28 billions . Furthermore, Japan is the fourth biggest market for the agricultural exportation of EU, and they are worth 20 times higher than the Japanese exportation in the Union . However, European companies are facing obstacles in trade when they export in Japan .
With the EU JAPAN Economic Partnership Agreement, farming communities and producers of food and drink will access easier to the Japanese market, with higher possibilities to sell their products to 127 millions Japanese consumer .

Food sector

Japanese consumer appreciate high quality european products such as wine, cheese, chocolate, pigmeat and pasta, but Japan requires high customs duties on these products and other european food and drink : 30 – 40 % on cheese, 38,5 % on pigmeat, 15 % on wine, until the 24 % on pasta and 30 % on chocolate . Thanks to this agreement, Japan will remove customs duties more than the 90 % of agricultural exportation of EU from the first day and will acknowledge 205 geographical indications that are chosen by Member States for their real and potential exportation value in the Japanese market . As a result, only products with such status can be sold in Japan . This will make illegal to sell imitation products and will ensure to japanese consumers that they are buying a real european product .

Food security

Japanese rules on food security, as well as the european ones, are between the most demanding in the world . For example, Japan doesn’t allow the use of growth hormone in the production of bovine meat, and the legislation that regulates GMO is very important for japan consumers . Like for other Union ’ s economic agreements, the EU JAPAN agreement won’t certainly prejudice the european level of protection in matter such as food security . All the imports of products of animal origin in the EU from Japan will continue , in addition to they must be accompanied by a veterinary certificate, as is the case today .

Exportation

Japan is the fourth leading economy in the world and is the second biggest trade partner of EU in Asian after China . However for Europe, Japan is only the seventh exportation market. Experts foresee that the facilities of exportation in Japan will lead to benefits for EU companies which produce and trade agri – food products as well as electrical machinery, pharmaceutical products, medical devices, means of transport, textile products and clothing . In fact, european exportation of transformed food in Japan could increase of 180 %, that is equal to an increasing of sales until 10 billions of euro . In addition, since Japan has accepted to adapt rules related to car to the international rules used by EU, for car manufacturers in EU will be easier sell their vehicles in Japan . Furthermore, since that every billion euro of exportation from Eu to japan corresponds to 14.000 job in Europe, the more Europe exports, the more it will be possible create and protect employments .

Contracts

It is estimated that a developed economy like the EU one or the Japan one, the purchase of goods and services from the State represent over the 15 % of the total economy . It is a big market, full of trade opportunities . Thanks to the EU JAPAN agreement, EU will obtain a better access to japanese calls of tender in terms of central,regional and local administration . One of the EU’s priority in negotiations was to ensure a higher access to the japanese market of rail infrastructure . Japan has partly accepted and has decided to open contracts to EU tenderers for hospitals, academic institutions and energy distribution as well as grant to EU suppliers a not discriminatory access to the contracts market of 48 cities of about 300.000 people which represent the 15% of the country’s population . For its part, EU has partially accepted to open its market of rail plants for public transport in the city and has granted to Japan a better access to contracts which are organised by municipality .

Environmental protection

EU undertakes to ensure that its trade policy favours sustainable development .
The EU JAPAN economic partnership agreement is no exception . Moreover, EU and Japan undertake to : protect and handle natural resources in a sustainable way, address biodiversity problems ( also fighting illegal logging ) and practice a sustainable fishing .

Article sources for EU JAPAN :

- ec.europa.eu
- www.ilsole24ore.com
- video