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Trade Agreement Between Japan And Germany

Posted by Josh On October - 12 - 2021

“The free, open and rules-based international order faces a major challenge,” Kono said at a joint press conference with Meuse. “Closer cooperation between Japan and Germany (countries that share the same values as democracy) and that lead Asia and Europe. `takes on more importance than ever.` In which areas will the EU and Japan benefit most from the entry into force of the agreement in 2019? In the EU`s view, medicines, medical equipment, vehicles and food are among the biggest beneficiaries. For example, the European Commission forecasts 180% growth in the agricultural sector by removing Japanese tariffs on cheese, wine and pork. A second important opening will be for services, for example in the fields of finance, telecommunications, transport and distribution. Japan will probably be the happiest of the benefits for its automotive industry. The import duty, currently set at 10%, will be completely abolished in eight years. Tariffs on automotive components will also be eliminated. Decisive results have been achieved in the field of non-tariff barriers, in particular in the automotive sector, the high degree of recognition of UNECE standards, the inclusion of commercial vehicles). It was also important to put in place mechanisms that would prove effective in preventing or sanctioning the creation of new non-tariff barriers (the “snap back” clause).

European Commissioner for Trade Cecilia Malmstrom said: “This agreement has it all: it has scrapped tariffs and contributes to global regulation, while showing the world that we both remain convinced of the benefits of open trade.” Germany and Japan already have close trade relations. The trade agreement between the EU and Japan will give it a big boost. “This agreement is the perfect example of the best way to build bridges than to lift walls,” said Pierre Gattaz, President of BusinessEurope. “If protectionism intensifies, the EU and Japan are showing the world that they remain open to modern, rules-based trade.” And which sectors of the German economy can rejoice in a better deal in Japan? Germany is strong, among other things, in chemicals and electrical machinery. The agreement creates additional room for manoeuvre for these sectors and, in the medium term, I believe that German dairy and meat products will benefit. German companies should also benefit in the rail sector, for example, as Japan improves access to public tenders. A real potential, often underestimated in trade relations with Japan, is that of business with Japanese partners outside Japan. According to our latest business mood survey, 60 percent of companies surveyed reserve at least one euro of additional revenue for Japanese customers outside the country for every euro of revenue in Japan.

And for a third of respondents, additional sales to Japanese customers outside Japan were at least four times the volume of sales in Japan. The signing earlier this month of the free trade agreement, which covers about a third of the global economy, was seen as a symbol of concerted efforts to counter increasingly protectionist measures taken by US President Donald Trump. There is a good chance that the EPA can develop and deepen trade and economic relations between the two partners.

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