The Economic Partnership Agreement that came in effect February 1st removes the vast majority of tarrifs on goods and services traded between Japan and the EU.
Once the agreement is fully implemented, Japan will have scrapped customs duties on 97% of goods imported from the EU. The EU will eliminate tariffs on 99 per cent of imports from Japan.
The agreement removes a number of long-standing non-tariff barriers, for example, by endorsing international standards on cars.
The agreement also secures the opening of services markets, in particular financial services, e-commerce, telecommunications and transport.
The automotive sector, will have transition period of up to 7 years before customs duties are eliminated.
Japan is the EU’s second-largest trade partner in Asia after China.
EU businesses export €58 billion in goods and €28 billion in services to Japan every year.
Japan exports €69 billion in goods and €18 billion in services to the EU annually.
Annual trade between the EU and Japan could increase by nearly €36 billion once the agreement is implemented in full.
President of the European Commission Jean-Claude Juncker said: "Europe and Japan are sending a message to the world about the future of open and fair trade.
“We are opening a new marketplace home to 635 million people and almost a third of the world's Gross Domestic Product, bringing the people of Europe and Japan closer together than ever before.
“The new agreement will give consumers greater choice and cheaper prices; it will protect great European products in Japan and vice-versa.
Cecilia Malmström, Commissioner for Trade, said: "This agreement has it all: it scraps tariffs and contributes to the global rulebook, whilst at the same time demonstrating to the world that we both remain convinced by the benefits of open trade.”
To take stock of the initial months of implementation, the first EU-Japan committee meeting will be convened in April 2019 in Brussels.
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