Today in Tokyo, the European Union and Japan just signed the largest trade deal in either’s history, eliminating nearly all tariffs. Donald Trump, unwittingly, helped spur things along.
Negotiations between the EU and Japan started in 2012, then stalled. But Trump’s election victory and protectionist policies gave the two sides the motivation they needed to overcome their differences. They agreed to the outlines of the deal last summer, and largely finished the negotiations in December. Today’s signing, while mostly ceremonial, was also a rejection of Trump’s protectionism.
According to the European Commission, the Economic Partnership Agreement, as it’s called, will create a trade zone covering 600 million people and nearly a third of global GDP. Last year it estimated the deal would boost EU exports to Japan by 180% for processed foods, 22% for chemicals, and 16% for electrical machinery. It noted the bloc’s exports to Japan, its second-largest export market in Asia, amount to €86 billion ($100.9 billion), with 600,000 jobs tied to them and 74,000 EU companies involved.
Japanese consumers have long coveted European food and beverage products, including cheese, wine, and chocolate. Lower prices will encourage them to spend more freely on such items. US food companies will no doubt be grinding their teeth at the treatment granted to European rivals in Japan, the world’s third-largest economy.
Meanwhile Europeans will enjoy lower prices on tea, seafood, and automobiles from Japan.
Trump’s protectionist policies have also prompted the EU and China to draw closer together. Before arriving in Tokyo, EU leaders were in Beijing, where they signed a joint statement on trade, investment, and intellectual property rules, plus a communique on climate change and clean energy.
“I can only think of Donald Trump as the hidden producer of this communique,” said François Godement, an expert in EU-China relations at the European Council on Foreign Relations.