Japan and the European Union (EU) agreed to a free trade pact on July 6, 2017, to create the world's biggest open economic area and signal resistance to what they see as U.S. President Donald Trump's protectionist turn, reports Reuters.
"Ahead of the G20 summit tomorrow, I believe Japan and the EU are demonstrating our strong political will to fly the flag for free trade against a shift toward protectionism," said Japanese Prime Minister Shinzo Abe.
Fears of cheaper import competition for European carmakers and Japanese dairy producers were among the thorniest issues, but officials said the two sides were driven by a shared alarm at Trump's apparent shift away from multilateral open trading systems towards an aggressive "America First" policy.
Tariffs on much of their bilateral trade – which Prime Minister Abe noted accounts for some 40% of total international commerce – will be phased out over some years, and other economic areas, such as Japan's public tender system, will be opened up. Both the EU and Japan, which are also forging a parallel cooperation pact on broader political issues such as security, crisis aid and climate change, forecast that the trade deal will boost economic growth and employment in Japan and Europe.
"Although some are saying that the time of isolationism and disintegration is coming again, we are demonstrating that this is not the case," said European Council President Donald Tusk. (Source: Reuters)
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