Preferential Trade Agreement with Japan: What Does It Mean?

On January 1st, 2019, the European Union and Japan implemented a Preferential Trade Agreement (PTA), effectively reducing trade barriers between the two powers. The agreement, known as the EU-Japan Economic Partnership Agreement (EPA), is the largest bilateral trade agreement in history. But what does this mean for businesses and consumers alike?

The PTA between the EU and Japan is designed to facilitate trade between the two regions by eliminating tariffs and other restrictions. This means that EU companies exporting goods to Japan and Japanese companies exporting goods to the EU will face fewer trade barriers, making it easier for businesses to expand their markets and increase revenue.

For consumers, the agreement will lead to lower prices on products and services, as well as an increase in the variety of goods available. The EPA will also protect European geographical indications for food and drink products, providing greater credibility and recognition for these products in Japan.

The PTA also has a number of implications for specific industries. For example, Japan is one of the world`s largest manufacturers of automobiles and automotive parts. As such, the EPA will reduce tariffs on European car exports to Japan, making it easier for European car manufacturers to penetrate the Japanese market. Similarly, the EPA will allow Japanese car manufacturers to export to the EU more easily.

Another important aspect of the PTA is the inclusion of provisions related to intellectual property (IP) protection. The agreement establishes a high level of protection for IP rights, including patents, trademarks, and copyrights, in both the EU and Japan. This will provide greater certainty and stability for businesses that rely on IP protection and enforcement.

Overall, the EU-Japan Economic Partnership Agreement represents a significant step forward for trade relations between two major economic powers. By reducing trade barriers and increasing market access, the agreement has the potential to benefit both businesses and consumers in the EU and Japan. As such, it is likely to serve as a model for future PTAs between the EU and other trading partners.