EU, Japan reach ‘political agreement’ on trade deal

BRUSSELS, Belgium – The European Union and Japan reached broad political agreement on a historic free trade deal on Wednesday, July 5, capping 4 years of negotiations, EU Trade Commissioner Cecilia Malmstroem said.

The hard-won deal marks a big win for free trade two days before a G20 summit in Germany in which US President Donald Trump is expected to defend his “America First” protectionist stance.

“We’ve reached political agreement at ministerial level on an EU-Japan trade deal,” Malmstroem said in a tweet, after talks in Brussels with Japanese Foreign Minister Fumio Kishida.

The two sides “ironed out the few remaining differences” and will now “recommend to leaders to confirm this at summit” on Thursday, Malmstroem added.

Japanese Prime Minister Shinzo Abe is set to officially rubberstamp the outline of the trade deal at a meeting on Thursday with EU Council President Donald Tusk and EU Commission chief Jean-Claude Juncker.

The EU and Japanese economies combined account for a colossal 28 percent of global output making the deal one of the biggest trade pacts ever attempted.

The “political agreement” on the trade deal covers some of the accord’s toughest aspects but leaves aside details that could still prove difficult.

At the heart of the accord is an agreement for the EU to open its market to the world-leading Japanese auto industry, with Tokyo in return scrapping barriers to EU farming products, especially dairy.

Left untouched for now are the controversial investment courts that have stoked opposition to trade deals in the EU nations, including Germany and France.

The deal could be seen as a provocation to Trump who pulled the United States out of the 12-nation Trans-Pacific Partnership this year, in favour of striking country-to-country bilateral deals, including with Japan.

The EU’s Malmstroem and Agriculture Commissioner Phil Hogan visited Tokyo last week to unblock the talks, with tariffs on European cheese a key sticking point.

Brussels wants Japan to eliminate its 30% tariffs on some EU-made cheese, while Tokyo wants duties cut on cars which it exports to the 28-member bloc. – Rappler.com