The European Union signed a large-scale free trade agreement with Japan today, and both sides hope to serve as a counterbalance to the protectionist forces launched by US President Donald Trump through his trade policies.
The trade pact, which creates the world's largest open economy region, comes amid fears that a trade war between China and the United States could reduce the role of free trade in the global economic system.
Japanese Prime Minister Shinzo Abe said there was growing disapproval of protectionism, but I wanted Japan and the EU to lead the world by carrying the flag of free trade. Donald Tusk, President of the European Council, said that we are sending a clear message of our stand against protectionism, and the EU and Japan remain open to cooperation.
The agreement eliminates EU tariffs of 10% on Japanese cars and 3% on most auto parts. This would cut Japanese fees by about 30% or more on EU cheese. The European food sector is one of the biggest winners in the deal, Japanese car and auto parts manufacturers are expected to increase their sales to Europe.
The EU represents with Japan about a third of the world's gross domestic product, and the deal is expected to boost the EU economy by 0.8% and 0.3% over the long term.
