Business World

Wednesday 21 November 2018

EU-Japan trade deal a step closer after committee ruling

Trade talk: Japan’s Prime Minister Shinzo Abe, European Council President Donald Tusk and European Commission President Jean-Claude Juncker
Trade talk: Japan’s Prime Minister Shinzo Abe, European Council President Donald Tusk and European Commission President Jean-Claude Juncker

Philip Blenkinsop and Donal O'Donovan

PLANS by the European Union and Japan to form the world's largest free trade area cleared a significant hurdle on Monday, when EU lawmakers specialising in trade backed a deal that could enter force next year.

The European Parliament's international trade committee voted 25 to 10 in favour of sending the deal to the parliament's full chamber for a vote in December. An agreement would bind two economies accounting for about a third of global gross domestic product and also signal their rejection of protectionism.

Both have faced trade tensions with Washington DC and remain subject to tariffs imposed by US President Donald Trump on imports of steel and aluminium.

Japan had been part of the 12-nation Trans-Pacific Partnership that Mr Trump rejected on his first day in office, which turned Tokyo's focus to other potential partners - such as the European Union.

The EU has also sought other allies after freezing Transatlantic Trade and Investment Partnership negotiations, also concluding a deal with Mexico earlier this year.

In Ireland, farmers and food processors stand to be among the main winners from an agreement signed between the EU and Japan. The deal would scrap tariffs on much of their bilateral trade and is expected to come into effect next year. For Irish consumers it could, eventually, bring down the price of Japanese cars. However, tariffs of 10pc will be phased-out only gradually over eight years

The digital services sector also looks set to benefit from the European Commission's decision of adequacy in relation to data protection, paving the way for data transfers between the EU and Japan.

Irish Independent

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