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Japan-EU trade deal a free trade message to Trump

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European leaders Donald Tust and Jean-Claude Juncker meet with Japanese Prime Minister Shinzo Abe Reuters

Japan and the EU on Tuesday signed a free trade deal and declared they were sending a "clear message" against protectionism. The deal comes as US President Donald Trump's isolationist policies erect barriers and bring the risk of trade war.


The deal signed in Tokyo is the largest ever negotiated by the EU and creates a massive free trade zone, eliminating tariffs for everything from Japanese cars to French cheese.

Japan/EU trade deal warning to Trump 17/07/2018 - by Jan van der Made Listen

It has been in the making for some time but the timing of its signing is no coincidence.

It comes just after Monday's visit by EU leaders Donald Tusk and Jean-Claude Juncker to China.

The signal is clear: the EU is linking up with Japan, and to a certain extent with China, to form a united front against any US attempts to go it alone.

Japan's economy

“The EU has been negotiating a deal with Japan where they will be eliminating most tariffs of, winding up eventually to 99 percent of all goods, exported between the EU and Japan,” says Robert Oulds, of the Bruges Research Group, a London-based thinktank.

“[Japan is] still a significant economy, despite its recent and ongoing economic problems. So it should actually be a big boost to Japan and of course to the European economy."

Oulds thinks the deal will encourage trade and is sending a message that internatioinal trade liberalisation is ”actually still underway”.

“It is something that the EU wants and something that Japan clearly wants, as well. So this is something that is beneficial to all countries concerned and perhaps possibly even Britain as well,” he says.

How far does the trade deal differ from agreements the EU has with Beijing?

“The EU still hasn’t got a free trade agreement with China,” says Oulds.

“Of course, it does allow particular Chinese goods, trusted traders, to export with limited obstruction into the EU. There are trade agreements between the EU and China about easy clearance of customs and getting around most of the checks that normally be put in place.”

Brexit danger

Meanwhile, Britain is still in the EU and as such can be a signatory to the EU-Japan deal. But what happens when the UK leaves the EU?

That depends on when the deal is ratified, according to Oulds. “It would need the formal approval of the institutions of the EU, the European Parliament and, of course, of those other member states. It would have to go through the House of Commons presuming it is all agreed and managed and in place to be ratified before the 29 March 2019, which is much less than a year away now.

“But, if it is in place, the House of Commons, the British Parliament have voted for this agreement before then and it is ratified formally and is therefore law, it would actually, as long as all the parties, Britain and Japan, want it to continue, it would also apply to Britain,” he says.

Free trade message

The question is under which terms the UK will leave Britain and whether it is attractive for the US to make deals with the UK if London somehow manages to remain within the common market.

But one thing is clear: the EU and Japan made a point in telling Washington that isolation is not the way to go and that the major economic powers will continue with their free trade policies, with or without the United States.