EU, Japan conclude world's largest free trade agreement
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[December 08, 2017]
By Philip Blenkinsop
BRUSSELS (Reuters) - The European Union and
Japan concluded negotiations on a free trade deal to create the world's
largest open economic area, signaling their rejection of the more
protectionist stance of U.S. President Donald Trump.
The two parties, who agreed the outlines of a deal in July, said on
Friday negotiators had now finished a legal text that would open up
trade for economies making up about 30 percent of global output.
"Japan and the EU will join hands and build a free, fair and rule-based
economic zone, which will be a model of an economic order in the
international community in the 21st century," Japanese Prime Minister
Shinzo Abe told reporters.
Japan had been one of the signatories to the planned Trans-Pacific
Partnership, a massive 12-nation trade alliance that Trump ditched on
his first day in office. Abe said a "new era" would now start for the EU
and Japan.
The deal, combining the 28-nation bloc and the world's third largest
economy, will remove EU tariffs of 10 percent tariffs on Japanese cars
and the 3 percent rate typically applied to car parts.

For the EU, it will scrap Japanese duties of some 30 percent on EU
cheese and 15 percent on wines as well as allowing it to increase its
beef and pork exports and gain access to large public tenders in Japan.
"This is the biggest trade agreement we have ever negotiated for the
European Union," EU trade chief Cecilia Malmstrom said. "It sends a
powerful message in defense of open trade based on global rules."
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European Trade Commissioner Cecilia Malmstrom addresses a news
conference on the trade package in Brussels, Belgium September 14,
2017. REUTERS/Francois Lenoir

In the past five months, negotiators worked on stabilizing tariffs in services,
regulatory cooperation and the means to protect food and drink categories so
that, for example, only sparkling wines from a specific Italian region can be
called prosecco.
Discussions will continue on the contentious issue of investor protection. Japan
has been reluctant to adopt the investment court system the EU has devised as an
answer to fierce criticism that disputes between foreign companies and states
should not be settled by opaque tribunals.
"This needs further discussion at the beginning of next year but the rest of the
agreement is there," Malmstrom said, adding this element of the deal could be
added on later.
The European Union is also hoping to seal free trade agreements with the Mexico
and the Mercosur bloc of Argentina, Brazil, Paraguay and Uruguay. Talks on the
latter will take place on the sidelines of a World Trade Organization meeting
starting on Sunday.
"The fact that we manage to finalize this today when we and Japan go to Buenos
Aires sends a powerful signal that we can make good trade agreements that are
win-win," she said.
(Reporting by Philip Blenkinsop in Brussels, Kiyoshi Takenaka in Tokyo; Editing
by Matthew Mpoke Bigg)
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