INSUBCONTINENT EXCLUSIVE:
Image copyrightEPAImage caption
European wines could see revived sales in Japan
Cheaper wine and cheese
for Japan, cheaper cars for the EU - part of what the EU-Japan trade deal, now in force, means.The world's biggest such deal, it covers
nearly a third of global GDP and 635 million people.However there are warnings that the UK could lose its benefits if it leaves the EU
without an agreement.It comes as a trade war rages between the US and China, who have slapped tariffs on each others' products.The EU's
Jean-Claude Juncker said the pact, which took years to agree, was about "values and principles".Here are five things about the deal:1)
Services as well as Sancerre and SuzukisThe deal's headline is about scrapping duties on 97% and 99% of Japanese and European imports
create jobs.Image copyrightAFPImage caption
Japan's deals mean it is now part of a free trade sphere of a billion
people
Going the other way, the EU will reduce the 10% duties on car imports to zero by 2027
Japan's government estimates it could increase GDP by 1%.However, the deal also provides better access for services firms, allowing them
The EU says firms selling business, financial, telecoms, transport and distribution services stand to benefit most
2) Japan's emergence as a free trade championJapan has not historically been that active in free trade talks internationally - but that
has now changed.It led negotiations to salvage a Pacific trade deal - the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership, or CPTPP - after the US pulled out.CPTPP came into force earlier this year and slashes tariffs between 11 states - Australia,
Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam - with 500 million inhabitants.Image
copyrightGetty ImagesImage caption
Japan stands to export more cars to Europe - and elsewhere
That and
its EU deal mean 2019 has already seen Japan enter a free trade sphere of a billion people.Last year Jun Yamazaki, Japan's ambassador to
Singapore, told the TheIndianSubcontinent what was behind Japan's new approach."Our country does not produce natural resources
Our strength is that we have people - a quite well-educated population that is fairly diligent in doing things," he said
"And in order to utilise that asset, we do have to have interaction with the outside world, and that definitely means free trade, and
creating a more liberalised investment climate."3) The UK may only be in it for 59 daysThe prospects for British exporters are much less
If the UK leaves the EU without a deal at the end of March it will fall out of the new free trade area
If it agrees a deal, it is set to remain in the EU-Japan trade deal during the Brexit transition period.Image:"My country is more
dysfunctional than yoursJapan's government has promised to negotiate an ambitious new free trade deal with London - but only once the
future relationship between Britain and the EU is fixed.The UK's Department for International Trade has said the EU-Japan trade deal would
stronger partnership after we leave the EU".4) The climate componentThe deal is the first struck by the EU to include a specific provision
on the Paris climate agreement, which - until the US announced its intention to withdraw - united the world in a single agreement to prevent
global warming by reducing emissions.The EU and Japan have agreed that trade could make a "positive contribution" in the fight against
rising temperatures.Last February EU trade commissioner Cecilia Malmstrom said a reference to the Paris deal would be required in all new
trade deals.However some campaigners have questioned whether the EU would be willing to risk trade by insisting on compliance.In December a
report from the Institute of International and European Affairs said that the US withdrawal had created political cover for others to go
slow on their commitments.5) Where does it leave the US and ChinaAs Japan, Europe and Pacific-bordering nations dismantle tariffs, the
world's two biggest economies are busy putting them up.The US has slapped tariffs on $250bn of imports from China and is threatening to
increase most of them from 10% to 25%, while China has put tariffs on $110bn of imports from the US.But their companies could lose out in
US beef may lose some appeal in Japan now that European beef is cheaper, while US cars may become less competitive in CPTPP nations where
Japanese cars have become cheaper.Image:China's economic slowdown explainedChina meanwhile could see production in some areas such as
garments move to CPTPP countries to benefit from lower duties, the Nikkei Asian Review reported.Japan is about to begin negotiations with
the US towards a bilateral trade deal
Negotiations between the EU and the US have stalled while talks between China, Japan and South Korea over a trade deal have not yet resulted
