The European Commission and Japan have finalised a bilateral free trade agreement, Trade Commissioner Cecilia Malmström has said.
The deal will allow the bloc to sell food in Japan at reduced tariffs, Malmström said, adding “this is actually the biggest trade deal we have ever negotiated”, granting Japanese carmakers easier access to the European market in exchange.
The deal also “sends a clear signal to the world that the EU and Japan are committed to keeping the world economy working on the basis of free, open and fair markets with clear and transparent rules fully respecting and enhancing our values, fighting the temptation of protectionism,” Commission President Jean-Claude Juncker and Japan’s Prime Minister Shinzō Abe said in a joint statement.
Despite the announcement, the two have not reached an agreement on investment protection, which remains the outstanding obstacle to the deal, and talks will continue into the new year.
Negotiators agreed to split investment protection from the rest of the deal to expedite negotiations.
The EU has insisted on applying the new Investment Court System to deal with grievances, while Japan prefers the previous mechanism known as Investor-State Dispute Settlement.
Together, the EU and Japan count for about 30% of the world’s gross domestic product.
