Japan and European Union sign trade agreement amid worries about Trump’s trade war

EU and Japan sign trade deal covering a third of the world's economy

Japan, EU signs trade pact that will eliminate nearly all tariffs on traded goods

The Economic Partnership Agreement between Europe and Japan remains subject to ratification by the European Parliament and the Japanese Diet following which it could enter into force as early as 2019.

EU products now face an average tariff of 1.6% when they arrive in Japan, while Japanese products face tariffs of 2.9% in the European Union, according to the World Trade Organization. Japan will no more levy duties on European cheese and wines.

Agreed last December, the deal is "the biggest ever negotiated by the European Union", according to Commission spokesman Margaritis Schinas, and will create a free trade zone covering almost a third of the world's GDP.

Japan and the European Union had originally planned to sign the pact on July 11 in Brussels during Abe's planned overseas trip, but the prime minister canceled the plan to focus on dealing with the deadly torrential rain that hit western Japan. He said the partnership is being strengthened in various other areas, including defense, climate change and human exchange, and is "sending a clear message" against protectionism.

The deal removes "about 99 percent of the tariffs on Japanese goods sold to the European Union", according to The Associated Press.

The US was in talks with Japan and other Asian countries 18 months ago about a wide-ranging free-trade agreement, the Trans-Pacific trade agreement, but Donald Trump withdrew from this in one of his first moves after becoming president.

Japan and the European Union became the targets of recent USA import tariffs of 25 percent on steel and 10 percent on aluminum products.

Without mentioning Trump by name, Tusk made sharply clear that the agreement was intended as a counterpoint to Washington's current trade policy.

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Earlier in the day, Trump had blamed the United States on Twitter for the worsening relations with Russian Federation . It featured an American president siding with an enemy of the US over his administration and intelligence officials.

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

The European Union yesterday called on the United States, China and Russian Federation to work together to cool worsening global trade tension, warning that they could spiral into violent "conflict and chaos".

The EU and Japan aim to have the agreement come into force before the United Kingdom leaves the EU next March. "About 94 percent of the tariffs on European exports to Japan will be lifted, rising to 99 percent in the future".

The deal comes amid a trade disputes between the United States and China. The partnership includes Australia, Mexico, Vietnam and other nations, although the U.S. has withdrawn.

Current duties of 29.8pc on hard cheeses such as gouda and cheddar (which Ireland is seeking new markets for as a result of Brexit) will be eliminated, and a duty-free quota will be established for fresh cheeses such as mozzarella.

Abe "has good relations with Trump, but in terms of trade, Japan has sided with the European Union", he told AFP.

Japanese consumers have historically coveted European products, and a drop in prices is likely to boost spending. Japan's growth continues to be heavily dependent on exports.

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