EU and Japan sign new trade deal
The European Union and Japan signed a new free trade agreement earlier this week, the latest in a series of moves to further liberalize world trade. The deal has been characterized as a rebuke to President Donald Trump’s policy trade protectionism, exemplified by a raft of new tariffs on imports.
Trump promised new bilateral deals with a host of countries, but none have been concluded so far. In fact, none are being negotiated. Meanwhile, the rest of the world is proceeding with deals reflecting the pre-Trump global consensus towards liberalizing trade.
The latest deal, dubbed the EU-Japan Economic Partnership Agreement (EPA), will lower most tariffs, including Japanese duties on EU agricultural products and EU tariffs on Japanese cars. The European Commission says the deal will eliminate $1.2 billion worth of tariffs for EU exporters and double that amount for their Japanese counterparts.
The EPA creates a free-trade zone for countries comprising 30 percent of global GDP, and is the latest in a series of trade agreements initiated or concluded by countries around the world. European Council President Donald Tusk suggested the EPA represented a rebuke to Trump’s trade policies.
“We are sending a clear message that we stand together against protectionism,” Tusk said. Japanese Prime Minister Shinzo Abe noted that “while protectionism is spreading in the world, Japan and the European Union will take the lead as flag bearers for free trade.”
In addition to the latest deal with Japan, the EU is nearing ratification of a landmark agreement with Canada and is also pursuing deals with Mexico, Australia, and the South American trading bloc Mercosur.
China has also begun trade talks with the EU. In a joint statement released earlier this week, China and the EU said they are “resisting protectionism and unilateralism” and are devoted to “making globalization more open, balanced, inclusive, and beneficial to all.”
China is also in talks with Japan and South Korea, and officials have expressed interest in a a trilateral free-trade deal.
While many major economies are pursuing a more open trading system, Trump is moving the United States in the opposite direction. He has introduced new tariffs, pulled the US out of the Trans-Pacific Partnership, and has suggested he might scuttle the North American Free Trade Agreement.
Report Shows Counterfeit Trade Increase in 2019