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- Negotiations and agreementsTrade policy
The EU and Japan have concluded an Economic Partnership Agreement (hereafter ‘EPA’), which entered into force on 1 February 2019. Together with a more general Strategic Partnership Agreement, provisionally applied since the same date, it has become the cornerstone of an enhanced relationship between the EU and Japan.
An in-depth analysis of the EU-Japan EPA, carried out for the European Commission, was published in 2016. Furthermore, based on the outcome of the negotiations, the European Commission produced an economic impact report in July 2018.
- Japan is the EU’s second-biggest trading partner in Asia after China. At the same time, Japan is the seventh largest partner for EU exports and imports of goods.
- Together, the EU and Japan account for about a quarter of the world's GDP.
- Imports from Japan to the EU are dominated by machinery, motor vehicles, chemicals, optical and medical instruments, and plastics.
- EU exports to Japan are dominated by chemicals, motor vehicles, machinery, optical and medical instruments, and food and drink.
The EU and Japan
The traditional trade relationship between the EU and Japan used to be characterised by big trade surpluses in favour of Japan.
From 2009-2019, trade figures became more balanced, as the EU’s trade in goods deficit with Japan decreased from €18 billion in 2009 to reach the surplus of €82 million in 2021.
Both exports to and imports from Japan increased between 2009 and 2021. For the period 2009-2021, EU exports to Japan reached their highest level in 2021 (€62.4 billion) and their lowest in 2009 (€32 billion). EU imports from Japan were highest in 2019 (€63 billion) and lowest in 2013 (€49 billion).
In 2020, the EU had a €15 billion surplus in services trade with Japan, up from €13 billion in 2018.
Overall, there is more trade in goods between Japan and the EU than trade in services. EU-Japan total trade in services amounts to around 35% of EU-Japan total trade in goods. At the same time, EU exports of services to Japan amount to roughly 50% of EU exports of goods to the country.In Japan, doing business or investing can be challenging for European companies due to the features of Japanese society and Japan’s economy.
To support the trade relationships between the EU and Japan, some informal bilateral dialogues and other specific initiatives have been established:
- A Cooperation Framework aimed at promoting two-way investment via concrete actions has existed since 2004.
- The EU-Japan Business Round Table: allows for a dialogue and an exchange of views between EU and Japanese businesses.
- The Executive Training Programme and the EU Gateway Programme: encourages European enterprises to penetrate the Japanese market and gives them assistance .
- The EU-Japan Centre for Industrial Cooperation promotes all forms of industrial, trade and investment cooperation between the EU and Japan by helping EU and Japanese businesses to exchange experience and know-how, with a particular emphasis on SMEs.
Six important agreements have been concluded to date between the EU and Japan.
- The EU-Japan Economic Partnership Agreement (EPA), in force since 1 February 2019, and the Strategic Partnership Agreement, provisionally applied since 1 February 2019.
- The EU-Japan Mutual Recognition Agreement, which entered into force on 1 January 2002, allows for conformity assessments in four product areas: telecommunications terminal equipment and radio equipment, electrical products, laboratory practices for chemicals and manufacturing practices for pharmaceutical products.
- The Agreement on Co-operation on Anti-competitive Activities – concluded in 2003 – aims to facilitate EU-Japan trade and investment by securing a level-playing field between in- and outsiders.
- A Science and Technology Agreement between the EU and Japan was signed on 30 November 2009.
- An Agreement on Co-operation and Mutual Administrative Assistance on Customs Matters (CCMAA) between the EU and Japan entered into force on 1 February 2008.
Committees and Dialogues
The EU and Japan meet regularly to discuss issues and best practices and oversee the proper functioning of the Agreement.
The European Commission will publish the agendas (when available) of the committees set up by the EU-Japan EPA, as well as reports and other documents in order to inform about the different steps of the EPA implementation process. This is part of its commitment to a more transparent and inclusive trade and investment policy.
Trading with Japan
Today, the Joint Committee established under the EU-Japan Economic Partnership Agreement (EPA) took place.
Under the EU-Japan Economic Partnership Agreement (EPA) Facility Instrument, a Progress Report of the 2nd year of implementation of the EU-Japan EPA is now available.
The United States, Japan and the European Union have agreed to renew their Trilateral partnership to address the global challenges posed by non-market policies and practices of third countries.