EU's New Bilateral Agreement
Last week, the European Union and Japan, signed the world's largest bilateral trade pact called The Economic Partnership Agreement. EU firms already export over €58bn in goods and €28bn in services to Japan every year.
The new bilateral agreement between the European Union (and consequently it's members) and Japan is the result of 5 years of negotiations in the most classical diplomatic tactic and hope to increase trade between the two by reducing tariffs and bureaucracy.
How will it work?
The Japanese will gradually lower their taxes and tariffs on European wine, meat, and cheese, and in return, the European Union will drive down levies on imports of cars and vehicle parts from Japan. Today the tariffs for Wine, Meat, and Cheese in Japan for imported goods are 15%, 40%, and 40% respectively.
Not only tariffs will be reduced, but also bureaucracy.
Japan has highly restricted rules to approve fruits, vegetables, and animal origin goods, making the approval process long and costly. This discourages EU exporters of even trying to get all necessary approvals. With the new agreement, Japan, for example, will automatically recognize 200 European delicacies, nulling any requirement for it to be approved again in Japan.
The news comes in a bad period for the WTO (World Trade Organization) and also for the international trade since the President of the United States Donald Trump has progressively increased America's isolationism, but it's a hope that bilateral agreements will continue to forge stronger economical partners.