The EU-Japan Summit on 17 July 2018 saw the signing of the Economic Partnership Agreement (EPA) between the EU and Japan, which is the biggest ever bilateral trade partnership negotiated by the European Union, covering nearly a third of global GDP. According to the European Commission estimates, the trade deal could boost EU exports to Japan up to, for instance, 180% for processed food, 22% for chemicals, and 16% for electrical machinery.
The agreement is now awaiting approval by the European Parliament and ratification by the Japanese Diet, following which it could enter into force in 2019.
The entry into force of the EPA will improve current opportunities for Latvian businesses and open up new ones in the Japanese market of 127 million consumers. Companies will benefit from the sweeping removal of import and export tariffs, as well as from other preferential arrangements.
The EPA is expected to add a positive impetus to Latvian timber and food processing, chemical and pharmaceutical sectors, which are currently among the leading industries in Latvia’s exports to Japan. On the whole, the EU-Japan EPA will boost the competitiveness of Latvian companies in the Japanese market and promote an even closer economic cooperation both through diversifying export in Latvian goods and services and attracting investments from Japan.
Tariffs on 91% of the EU's exports to Japan will be eliminated at entry into force of the economic partnership. Once the agreement is fully implemented, Japan will have scrapped customs duties on 99% of goods imported from the EU, in tariff lines. The largest share of technical (non-tariff) barriers to trade will be removed in Japan, for instance, requirements of double-testing and overlapping formalities. The EPA includes a number of provisions to simplify trade and investment procedures, ensure greater transparency and reduce related costs, simplify technical regulations, compliance requirements and customs procedures. The agreement will ensure access to public procurement tenders in Japan and also improve opportunities in the service sector, especially concerning financial, transport, communications and e-commerce services.
Besides its value in economic terms, the agreement also bears a considerable political weight: it demonstrates joint commitment by the EU and Japan to advance the principles of free and fair trade, and to engage in open trade based on clear and transparent rules. This is of special importance at the time when protectionist ideas are becoming increasingly popular worldwide.
The negotiations for the EU-Japan Economic Partnership Agreement were launched in March 2013. On 6 July 2017, at the EU-Japan Summit, a political agreement was achieved on the main elements of the trade deal, while 8 December 2017 saw the formal conclusion of the talks.
Meanwhile, separate negotiations continue on investment protection standards and investment protection dispute resolution. The commitment on both sides is to move towards an agreement as soon as possible, in light of the shared commitment to a stable and secure investment environment in both Europe and Japan.
See further information on the EU-Japan Economic Partnership Agreement at: http://ec.europa.eu/trade/policy/in-focus/eu-japan-economic-partnership-agreement/