[Joxster]

Japanese automakers set for European sales boost from trade pact, while European food companies are one of the biggest winners from the deal.

The European Union and Japan signed a trade pact that will remove EU tariffs of 10 percent on Japanese cars and 3 percent on most car parts. Japanese automakers could increase their sales to Europe, where they have lagged behind European rivals. The accord is expected to benefit Toyota, Nissan, Honda, Suzuki and Mazda. Toyota's Group's market share in the EU was 4.7 percent in the first half, data from the European industry association ACEA shows. Nissan had a 3.3 percent share while Honda had a 0.9 percent share. The three automakers have factories in Europe. Japanese suppliers Denso, Aisin Seiki, and JTEKT also stand to gain from the fall of a 3 percent tariff on auto parts.

The trade pact creates the world's largest open economic area. It comes amid fears that a trade war between the U.S. and China will diminish the role of free trade in the global economic order. "There are rising concerns about protectionism, but I want Japan and the EU to lead the world by bearing the flag of free trade," Prime Minister Shinzo Abe said at a news conference on Tuesday after the signing ceremony.

The U.S. this month imposed 25 percent tariffs on $34 billion of Chinese goods to lower the U.S. trade deficit, and China quickly retaliated with an increase in tariffs on U.S. goods.
The Japan-EU trade deal is also a sign of shifting global ties as Trump distances the U.S. from long-time allies like the EU, NATO and Canada.
"We are sending a clear message that we stand against protectionism. The EU and Japan remain open for cooperation," European Council President Donald Tusk, who speaks for the 28 EU national leaders, told reporters.

Europe's food sector is one of the biggest winners from the deal, which should allow it to capitalize on Japanese demand for high-quality cheese, chocolates, meats and pasta. EU exports of processed food, including meat and dairy products, are expected to rise by up to 10 billion euros ($11.7 billion) once the deal takes full effect and tariffs are gradually dropped, the European Commission says.

Both Japan and the EU, having seen Trump pull back from free trade relationships, are keen to show they remain committed to removing barriers they say hamper growth, analysts said.
EU accords with Singapore and with Vietnam were at the ratification stage, while deals with Indonesia, Australia and New Zealand were being negotiated, he said.

Trump pulled the U.S. out of the Trans-Pacific Partnership with Japan and 10 other states on his first day in office in January 2017 and has pushed to renegotiate a free trade pact with Canada and Mexico.
Trump says he is taking a hard line on trade to protect U.S. workers and U.S. companies, but critics say his approach is upending the rules of multilateral global trade.

Japan and the EU account for about a third of global GDP and their trade relationship has room to grow, according to EU officials, who expect the deal to boost the EU economy by 0.8 percent and Japan's by 0.3 percent over the long term.
The agreement is now awaiting ratification by the European Parliament and the Japanese Diet following which it could enter into force in 2019, the European Commission said.

Source

Cheers

[SmartCat]

India - EU free trade agreement has been in the works for many years now. EU wants India to remove tariffs on car imports. India wants EU to remove restrictions on generic drug sales and movement of IT professionals

[the_skyliner]

It was just about time for this to happen. With the US moving more and more towards protectionism, EU and Japan had to open doors for each other.

Japan will be extremely benefited by this move considering the range of products that are being exempted and the size of EU market.

Won't be surprised if eventually UK does the same post Brexit (and that will be ironic, actually).

[sgiitk]

Originally Posted by smartcat

India - EU free trade agreement has been in the works for many years now. EU wants India to remove tariffs on car imports. India wants EU to remove restrictions on generic drug sales and movement of IT professionals

I think the main sticking point has been taxation on EU made C2H5OH.