EU and Japan Agree “In Principle” on Free Trade Deal

Japan and the European Union (EU) have reached a broad free-trade Economic Partnership Agreement (EPA) following negotiations in Brussels on July 5th , according to the Associated Press.

 The two sides are expected to work out a final version of the EPA in due course. The agreement is certain to have a ripple effect on subsequent trade negotiations across the world.  Once the EPA goes into effect, it is anticipated that tariffs will be removed from more than 90 percent of items that flow between Japan and the EU.   Significant financial benefits are expected for both sides. It has been provisionally calculated that the increased trade will boost the GDP of Japan by at least 1 percent, and that of the EU by about 0.76 percent. It will also set standards for labour, safety and consumer protection

If it is endorsed as expected, it will likely still take several months for both sides to finalize all the terms of the deal. The EU says it is hoped the agreement will come into force in early 2019.