The EU-Japan Economic Partnership Agreement: What You Need to Know
In July 2018, the European Union and Japan signed one of the world`s largest free trade agreements, the EU-Japan Economic Partnership Agreement, which came into effect in February 2019. This agreement is expected to create a trade zone that accounts for one-third of the world`s GDP, as well as strengthen economic ties between the EU and Japan. Here`s what you need to know about the EU-Japan Economic Partnership Agreement:
What is the EU-Japan Economic Partnership Agreement?
The EU-Japan Economic Partnership Agreement, or EPA, is a free trade agreement between the European Union and Japan. This agreement eliminates most tariffs on goods traded between these two economic blocs. It also includes provisions on services, investment, intellectual property rights, and public procurement.
What are the benefits of the EU-Japan Economic Partnership Agreement?
The EPA creates a free trade zone between the EU and Japan, which means that companies can sell their goods and services without paying import taxes. This will make it easier and cheaper for European and Japanese companies to trade with each other, which should increase trade and investment between the two regions.
The EPA is also expected to spur economic growth and job creation in both the EU and Japan. The European Commission predicts that the EPA will increase EU exports of goods and services to Japan by €36 billion annually. Japan`s Ministry of Foreign Affairs estimates that its GDP will increase by 1.5% and that the EPA will create 290,000 Japanese jobs.
The EPA also includes provisions on sustainable development, which means that both the EU and Japan are committed to promoting environmental protection, labor rights, and social responsibility.
What are the challenges of the EU-Japan Economic Partnership Agreement?
While the EPA is expected to bring significant economic benefits, it`s also facing some challenges. For example, some European companies are concerned that they won`t be able to compete with their Japanese counterparts, especially in sectors such as cars and electronics. Japan has a reputation for being a highly competitive market, and some European companies worry that they won`t be able to break into Japanese markets.
Another challenge is the fact that the EPA doesn`t cover all sectors. For example, the agreement doesn`t include agriculture, which is a significant sector for both the EU and Japan. This means that tariffs on agricultural products will remain in place, which could limit trade in this sector.
The EU-Japan Economic Partnership Agreement is an ambitious free trade agreement that has the potential to bring significant economic benefits to both the EU and Japan. While there are some challenges to overcome, the EPA is a positive step towards closer economic ties between these two regions. By eliminating tariffs and promoting sustainable development, the EPA will create a more open and competitive market for European and Japanese companies.