Japan, EU sign trade deal to eliminate almost all tariffs

Trump Juncker

GETTYTrump and Juncker"will focus improving transatlantic trade

"There are rising concerns about protectionism, but I want Japan and the European Union to lead the world by bearing the flag of free trade", Prime Minister Shinzo Abe said at a news conference after the signing ceremony.

The signing was initially planned to take place in Brussels earlier this month, but Abe canceled a trip due to the rain disaster mainly in western Japan.

The entering into force of the agreement will bring into reality a massive free trade zone that accounts for about 30 percent of the world's gross domestic product, with a population of about 600 million.

The Japan-EU statement is meant to confirm their stance of warning against such hardline policies of the Trump administration and mutually cooperating to firmly maintain the free trade regime.

Trump has alienated some allies over his protectionist trade policies, including tariffs on European Union aluminum and steel exports to the U.S.

"We are sending a clear message that we stand together against protectionism", EU Council President Donald Tusk said.

Once in effect, . the deal will eliminate almost all of the tariffs levied on Japanese goods within the European market, . which means South Korean goods will no longer have the same price competitiveness within the market. Japanese machinery parts, tea and fish will become cheaper in Europe.

The U.S.is proposing 10 percent tariffs on a $200 billion list of Chinese goods. The difference reflects exceptions on such products as rice, which enjoys strong political protection from imports in Japan.

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Juncker also highlighted the importance of creating a system based on common values and rules for free and fair trade.

The deal eliminates about 99 percent of the tariffs on Japanese goods to the EU, but remaining at around 94 percent for European imports into Japan for now and rising to 99 percent over the years.

The major step toward liberalizing trade was discussed in talks since 2013 but is striking in the timing of the signing, as China and the USA are embroiled in trade conflicts.

Besides the latest deal with the EU, Japan is working on other trade agreements, including a far-reaching trans-Pacific deal.

Trump says he is taking a hard line on trade to protect US workers and USA companies, but critics say his approach is upending the rules of multilateral global trade. The partnership includes Australia, Mexico, Vietnam and other nations, although the USA has withdrawn.

Abe "has good relations with Trump, but in terms of trade, Japan has sided with the European Union", he told AFP. Japan's growth remains heavily dependent on exports.

The EU said the trade liberalization will lead to the region's export growth in chemicals, clothing, cosmetics and beer to Japan, leading to job security for Europe. Japanese will get cheaper cheeses, such as Parmesan, gouda and cheddar, as well as chocolate and biscuits.

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