European Union (EU) and Japan signed on July 17, 2018 a Free Trade Agreement, called the “Economic Partnership Agreement” (EPA), thus concluding a negotiation process that had been conducted since March 2013. This is the biggest agreement ever negotiated by the EU, covering over 600 million people.
The agreement will reinforce cooperation between EU and Japan in several aspects, remove almost all the tariffs paid by EU companies that export to Japan, which currently amount to about €1 billion per year, and remove a number of long-standing regulatory barriers. As a result, exporting goods and services from a member state to Japan will definitively be easier and cheaper, which will lead to an increase of the EU exports in a range of sectors. Likewise, importing from Japan will also be easier and cheaper.
Jean-Claude Juncker, President of the European Commission, said that this trade agreement “will create opportunities for our (European) companies, our workers and our citizens and will boost the European and Japanese economies”.
Furthermore, “it is a statement by two likeminded partners that together represent nearly a third of the world’s GDP and reiterate their commitment to uphold the highest standards in areas such as labour, safety, environmental or consumer protection”.
Portugal and Japan have already a close trading relationship, which is expected to significantly increase with the EPA. According to the information of the European Commission, 898 Portuguese companies of all sizes export to Japan a broad range of goods and services, being 87% small and medium-sized enterprises. Japan is Portugal’s 17th biggest trade partner outside the EU, being the value of Portuguese imports from Japan of €333 million and the value of Portuguese exports to Japan of €146 million.
This agreement will certainly generate significant opportunities in the future for companies through the expansion of their exports and their business.
The EPA is now awaiting ratification and is expected to enter into force in 2019.