EU AND JAPAN SEAL FTA

The European Union and Japan  have sealed a broad agreement on free trade in a deal they hailed as a sign of their joint efforts to promote an open economy.

The agreement was achieved after the two sides resolved thorny issues on tariffs on sensitive products such as Japanese automobiles and European wine and cheese. They will seek to reach a final agreement by the end of this year.

The EU-Japan deal is expected to spur trade and investment by removing or lowering tariffs on a broad range of products, including farm and industrial products, while it is also to set common trade rules.

Japanese automobile and electronics manufacturers are expected to regain competitiveness in the European market in competition with rivals from South Korea, which has already signed a free trade pact with the bloc, while European farmers are seeking to tap deeper into the Japanese market for wine, cheese and meat.

Among key areas the two sides settled on, Japan will set up a low-tariff quota on European cheese that will be eliminated over 15 years, a source close to the matter said. The two sides will also scrap their tariffs on wine as soon as the pact comes into force, while duties on European chocolates and pasta will be scrapped in 10 years, the source said.

The bloc will ease regulations on wine such as on sugar content and bottle size and also agreed to immediate cuts on tariffs on Japanese sake and green tea.

In the automobiles sector, the two sides have agreed to phase out tariffs on Japanese automobiles after seven years and on Japanese TVs after five years. The bloc will also immediately get rid of tariffs on Japanese electronics.