The EU and Japan have signed a new trade agreement;1 once ratified, it is likely to come into force in early 2019.
- Creates an open trade zone covering 600 million people and 30% of global GDP.
- Phases out nearly all duties on EU exports to Japan, notably on agricultural products and chemicals.
- Reduces EU duties on imports of Japanese goods, notably vehicles and components.
- Simplifies customs and removes regulatory barriers.
- Opens up services markets, in particular financial services, e-commerce, telecommunications and transport.
- Guarantees EU companies access to large Japanese procurement markets including the railway sector.
- Sets high standards of labour, safety, environmental and consumer protection.
- Complemented by:
- a Strategic Partnership Agreement to enhance co-operation in areas including technology, environment, energy and security;
- a reciprocal agreement on data protection adequacy, creating the world's largest area of safe data flows;
- negotiations continue towards an agreement on investment protection standards and dispute resolution.
If ratified before 29 March 2019, the Economic Partnership Agreement could apply to the UK during the implementation period. The UK seeks to both replicate the Agreement and negotiate improved terms, particularly on services, but achieving either is not assured. Japan, as a major investor in the UK as a gateway to the EU in the automotive and electronics sectors, will take close account of the UK’s future access to the EU market. Even if the UK did replicate the EU’s deal, UK exports to Japan may not qualify for reduced tariffs if UK manufacturers are not able to pool the value of EU and UK content in their products to meet the rules of origin thresholds defined in the deal.