According to Reuters, plans of the European Union and Japan to form the world’s largest free trade area cleared a significant hurdle when EU lawmakers specializing in trade backed a deal that could enter force next year. The European Parliament’s international trade committee voted in favor to clear the deal for a final vote set for December 13th. When the agreement comes into play, it would bind the two economies that account for about a third of global gross domestic product. Both economies have faced trade tensions with the USA and remain subject to American tariffs imposed by President Donald Trump on imports of steel and aluminum. For the EU, it is the second agreement after the updated trade deal with Mexico earlier this year.
The agreement between Europe and Japan will remove European tariffs of 10% on Japanese cars and 3% for most car parts. It would also scrap Japanese duties of some 30% on EU cheese and 15% on wines and open access to public tenders in Japan. It also opens up services markets, particularly financial services, telecoms, e-commerce, and transport.
Critics say the EU-Japan agreement will provide too much power to multinationals and could undermine environmental and labor standards. Despite these critics, the EU and Japan aim to get the agreement to enter force in early 2019, before Brexit at the end of March. This way, the trade deal could apply automatically to Britain as well, during the transition period until the end of 2020.