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European Union signs biggest ever free trade deal with Japan amid Brexit turmoil

17 July 2018

The deal removes about 99 percent of the tariffs on Japanese goods to the EU, but only 94 percent for European imports into Japan, rising to 99 percent over the next few years.

The EU has signed its biggest ever free trade deal with Japan - hailing it as a "clear message against protectionism" in a swipe at US President Donald Trump.

At a EU-Japan summit Tuesday in Tokyo, the envoys were clear that the agreement was meant to send a message about the value of trade and cooperation.

Brussels and Tokyo's agreement will eliminate almost all tariffs, attempting to allay fears set off by the US President's protectionist crackdown on global trade.

Japan's ambassador for worldwide economic affairs, Yoichi Suzuki, has previously said it was 'a very high priority that [the deal] enter force before the end of March 2019, ' referring to the date when Britain is set to leave the EU.

It comes as Trump continues to unsettle allies and provoke rivals with his aggressive "America First" trade policy.

European Commission President Jean-Claude Juncker and European Council President Donald Tusk will sign the EU-Japan Economic Partnership Agreement with Japan's Prime Minister Shinzo Abe in Tokyo at the 25th EU-Japan Summit.

The EU - the world's biggest single market with 28 countries and 500 million people - is trying to boost alliances in the face of Trump's protectionist administration.

Under it, Japan will scrap nearly all its tariffs on European Union goods, particularly dairy items like cheese, though the country's rice industry will remain protected.

On Sunday, the U.S. president fuelled rising rancour by labelling the European Union, along with Russian Federation and China, "a foe" of the United States, and repeating his assertion that the European Union has "really taken advantage of us on trade".

"This is an act of enormous strategic importance for the rules-based worldwide order, at a time when some are questioning this order", Tusk said.

Tusk praised the deal as "the largest bilateral trade deal ever".

"It's a light in the increasing darkness of global politics", Tusk said.

He dismissed concerns about the effect on small businesses, suggesting U.S. trade policy was far more problematic.

The dialogue will be chaired by Japan's trade and foreign ministers and the European Commission's vice-president for competitiveness, both sides said in a joint statement.

Junichi Sugawara, a senior research officer at Mizuho Research Institute, said Trump's protectionism had "prompted Japan and the European Union to speed up negotiations on the deal".

The Japan-EU statement is meant to confirm their stance of warning against such hardline policies of the Trump administration and mutually cooperating to firmly maintain the free trade regime.

The EU officials and Japan will also look to present a united front against U.S. tariffs on steel and aluminium, which Tokyo has called "deplorable".

Having started negotiations on the pact in 2013, the two sides reached an agreement in principle at the previous Japan-EU summit last July and then finalized their consultations in December.

Tusk and Juncker arrived in Tokyo from Beijing, where they urged calm instead of "conflict" in worldwide trade.

"It is the common duty of Europe and China, but also America and Russian Federation, not to destroy (the global trade order) but to improve it, not to start trade wars which turned into hot conflicts so often in our history", Tusk said in Beijing.

It was delayed from earlier this month because Japanese Prime Minister Shinzo Abe cancelled going to Brussels over a disaster in southwestern Japan, caused by extremely heavy rainfall.

European Union signs biggest ever free trade deal with Japan amid Brexit turmoil