The EU-Japan Economic Partnership Agreement, a free trade deal, comes into effect today after the two sides agreed to terms
The EU-Japan Economic Partnership Agreement, a free trade deal, comes into effect today after the two sides agreed to terms last July and a final hurdle was cleared on December 12.
The agreement creates the world’s largest free trade zone, covering one quarter of the world’s economy and slashing tariffs on trade flows worth more than $200 billion. Both sides will lift major import duties, including a 10% tariff on Japanese automobiles and a 30% tariff on European cheeses.
The deal is being implemented before the UK leaves the EU, which is expected to take place in late March (although this could be extended). It remains unclear whether or not the EU’s nearly 40 free trade agreements will roll over for Britain after Brexit. Particularly in the event of a “no deal” Brexit, these deals will likely expire for the UK, harming Britain and its trading partners.
Japan and the UK may have the opportunity to preserve favourable trade conditions after Brexit. If Britain is not covered by the EU-Japan deal, though, it would lose a great deal of its lustre, since the UK is a major European port of entry for key imports like Japanese automobiles. Ongoing negotiations between the UK, the EU and Japan should thus be watched closely.
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