We remember it. Shortly after Donald Trump became US President, he canceled the fully negotiated trans-Pacific Free Trade Agreement (TPP). And he also stopped the negotiations with the Europeans about the free trade agreement TTIP. A good thing for TTIP opponents in Europe, who ironically found in Trump a perfect matchmaker who did exactly what they wanted – an end to free trade talks. Thus the topic was dead in the European public.
Which topics have we dedicated ourselves since then? Terrorism, Brexit, Refugees, Bitcoin, Stock Price Records, and much more! But free trade? No one talks about that anymore, you do not hear about it in the news, and there are no street protests anymore. Even last weekend, there were virtually no main tv news broadcasts reporting that the EU and Japan had finally reached an agreement on a free trade agreement.
90% of all tariffs in trade between the two economic areas will be deleted. Does anyone still care? Where are the protest campaigns from the large organizations? A nice Mr. Abe from Japan just does not serve as well as an enemy like a “bad” Donald Trump. But in terms of content, Japan as an exporting machine may pose a greater threat to European jobs than the US, which is not so far ahead in terms of high-quality industrial production among the broad masses of the economy.
But it’s not just about Japan. When Trump reneged on TTIP, the EU announced it would continue to go on the offensive with regard to free trade, and now conclude free trade agreements with many other nations. Japan is just one of many new partners currently on the mat in Brussels. It’s more about the “big picture” than about Japan. For simple workers with simple jobs, any renegotiated free trade agreement is becoming an ever greater problem. Because when international corporations can move goods duty-free back and forth, it’s always easier to close down locations in the EU, and reopen somewhere in Asia or Africa. Transport costs are nowadays no longer a cost factor.
The simpler the activity, and the lower the qualification required, the easier it is for more and more free trade to completely eliminate these activities and outsource them to countries that can send products to Europe duty-free. That’s a fact. Of course, it goes without saying that high-quality industrial jobs in Germany, France and other Industrial hot spots in part benefit from more export. But the example of Lufthansa´s Repair Unit “Lufthansa Technik” shows that even extremely high-quality jobs are now being transferred to the Philippines without batting an eyelid.
The standard saying of many politicians and business representatives is still echoing in our ears, as TTIP was still the topic number 1 in media. “Free trade brings benefits for all of us”. How wrong this sentence is. For some it brings advantages, and for many disadvantages!
Here the EU Commission´s Statment in wording:
After confirming the conclusion of this process in a phone call with Prime Minister Abe earlier today, President Jean-Claude Juncker said: “This is the EU at its best, delivering both on form and on substance. The EU and Japan send a powerful message in defence of open, fair and rules-based trade. This agreement enshrines common values and principles, and brings tangible benefits to both sides while safeguarding each other’s sensitivities. In line with the commitment made in July, we finalised the discussions before the end of the year. We will now do the necessary to submit the agreement to the European Parliament and EU’s Member States so that our companies and citizens can start exploring its full potential before the end of the mandate of my Commission.”
“Right on time – we are delivering on our promise to finalise this win-win agreement during this year,” said Commissioner for Trade Cecilia Malmström. “The EU and Japan share a common vision for an open and rules-based world economy that guarantees the highest standards. Today, we are sending a message to other countries about the importance of free and fair trade, and of shaping globalisation.. The potential of this deal is enormous and I’m glad that the EU and Japan remain fully on course to sign it next year. That way, EU firms, workers and consumers will be able to enjoy the benefits as soon as possible.”
Commissioner for Agriculture and Rural Development Phil Hogan said: “This agreement represents the most significant and far reaching deal ever concluded by the EU in agri-food trade. It will provide huge growth opportunities for our agri-food exporters in a very large, mature and sophisticated market. We were successful in developing a model free trade agreement that fits our export profile, while still delivering a mutually beneficial agreement with our partner. This shows the EU as a global leader and standard-setter in shaping international trade and its rules – a concrete example of the EU harnessing globalisation to benefit our citizens. EU agri-food exports create high-quality jobs, most of them in rural areas.”
The outstanding technical discussions that have taken place since July have included: stabilising the commitments of the EU and Japan on tariffs and services; settling on the final provisions for protection of EU and Japanese Geographical Indications; concluding the chapters on good regulatory practices and regulatory cooperation, and transparency; strengthening the commitment to the Paris agreement in the trade and sustainable development chapter; as well as clearing up a number of minor remaining issues in several parts of the agreement.
The main elements of the agreement
The Economic Partnership Agreement will remove the vast majority of the €1 billion of duties paid annually by EU companies exporting to Japan, as well as a number of long-standing regulatory barriers. It will also open up the Japanese market of 127 million consumers to key EU agricultural exports and will increase EU export opportunities in a range of other sectors.
With regards to agricultural exports from the EU, the agreement will, in particular:
scrap duties on many cheeses such as Gouda and Cheddar (which currently are at 29.8%) as well as on wine exports (currently at 15% on average);
allow the EU to increase its beef exports to Japan substantially, while on pork there will be duty-free trade in processed meat and almost duty-free trade for fresh meat;
ensure the protection in Japan of more than 200 high-quality European agricultural products, so called Geographical Indications (GIs), and will also ensure the protection of a selection of Japanese GIs in the EU.
The agreement also opens up services markets, in particular financial services, e-commerce, telecommunications and transport. It also…
guarantees EU companies access to the large procurement markets of Japan in 48 large cities, and removes obstacles to procurement in the economically important railway sector at national level;
addresses specific sensitivities in the EU, for instance in the automotive sector, with transition periods before markets are opened.
The deal also includes a comprehensive chapter on trade and sustainable development; sets the highest standards of labour, safety, environmental and consumer protection; strengthens EU and Japan’s actions on sustainable development and climate change and fully safeguards public services.
Concerning data protection, which is being dealt with separately from the Economic Partnership Agreement, a Joint Statement was issued during the July Summit, in which the EU and Japan stress the importance of ensuring a high level of privacy and security of personal data as a fundamental right and as a central factor of consumer trust in the digital economy, which also further facilitate mutual data flows, leading to the development of digital economy. With the recent reforms of their respective privacy legislation, the two sides have further increased the convergence between their systems, which rest notably on an overarching privacy law, a core set of individual rights and enforcement by independent supervisory authorities. This offers new opportunities to facilitate data exchanges, including through a simultaneous finding of an adequate level of protection by both sides. The EU and Japan continue working towards adopting adequacy decisions under the respective data protection rules as soon as possible in 2018.