Published Date : Jul 06, 2017
The European Union Trade Commissioner, Cecilia Malmstrom, announced on Wednesday that the EU and Japan have overcome their age old differences and reached a political agreement in order to expand trade, primarily related to car exports and farm. This agreement is an encouraging news for various vendors connected to the value chain of the two partners who form nearly a quarter of the world’s economic output.
European Commission chief Jean-Claude Juncker, along with Donald Tusk, the President of the EU, are expected to endorse the preliminary accord with Japanese Prime Minister Shinzo Abe on Thursday. This trade agreement has worked out since 2013.
U.S. Pull-out Opened Window of Opportunity
Earlier this year, the President Trump pulled the United States out of the Pacific trade pack, highlighting his “America First” approach, which in terms seems to have opened a window of opportunity for the Japanese PM, who aims to establish Japan as one of the global leaders in terms of technology trade. This Japan-EU deal is being seen as a political success for German Chancellor Angela Merkel, who is about to host the G20 summit in Hamburg later this week.
Building Bridges More Important than Building Walls
While President Trump’s foreign policies are blocking the U.S. from several revenue avenues, Europe are showing signs of moving on to building bridges with other prospects rather. Under this new agreement, the EU will phase out its 10 percent import duty on cars coming from Japan, whereas the Japanese authorities will open their markets for Europe’s farm goods.