In a time of disruption and instability, it is doubly important to highlight efforts to sustain and reinforce the global trade order. Japan and the European Union thus deserve more credit than usual for their determination to conclude and fast-track a free trade agreement. If all goes according to plan, the final deal will be signed at the annual Japan-EU summit scheduled for the summer and will go into effect next year, benefiting citizens in all 29 countries and helping to shore up an international trade order that is under assault.
Negotiations on a bilateral trade agreement began nearly seven years ago, when Japan and the EU agreed in May 2011 to a "scoping exercise" to identify terms of a possible deal. Negotiations began in April 2013 and continued through nearly two dozen rounds, wrapping up last December. This month, the European Commission, the executive component of the EU that negotiates trade deals on behalf of member states, will present its proposals to the 28 member countries.
The agreement would create the world's biggest economic area, with more than 600 million people (about 8.6 percent of the world's population), 28.4 percent of global GDP (of which Japan constitutes 6.5 percent) and 37.2 percent of global trade (Japan contributing 3.9 percent). The deal will remove EU tariffs on 99 percent of imports from Japan, including, significantly, reductions on tariffs on Japanese cars and most car parts. By the eighth year, tariffs on all autos will be eliminated; those on TVs will be gone in six years, along with taxes on Japanese tea and sake.
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