In this dark time for the global trade, Tuesday was turned to be a bright day of hope when world second-fourth-largest trading shareholders i.e EU and Japan signed the historic bilateral trade deal. This signing did in Tokyo will eliminate nearly all the tariffs, this the right answer for Donald Trump destructive trouble tariff imposing game that world already has seen last week across Europe.
The agreement covers 600 million people equal almost third of the Global Economy. In the words of Donald Tusk president of EU “largest bilateral trade deal ever”. It seems true too also because last year Japan and EU traded almost around €129 billions of goods as per the EU data.
In the numbers EU products in the current time facing an average trading of 1.6% in the time of when they arrive in Japan and Japanese products faces the tariff of 2.9% in EU as per the world trade organisation this shows the average global tariff records low.
Major credit goes to Japanese Prime Minister Shinzo Abe for the completion of this mega-deal apart from trade deal between the EU and Japan, he played a key role in reviving the Trans-Pacific Partnership from which Donald Trump took America out.
He grabs the opportunity and uses the trade deal in a very smooth manner as a way to domestic reform. To crack down the very protected Japan agriculture sector and to give a boost to the domestic services liberalisation he as employed many agreements in the deal.
But this similar approach quite absent on the side of European Union, where there many omission in the deal with Japan which somewhat reflect towards the many loops-hole in EU trade strategy one of them is the absence of substantive binding reciprocal agreement on the free flow of trade.
Now the deal is done, the Japan and EU should try to strengthen bilateral trade diplomacy and should take their respected economies into the free trade zone. This deal is becoming more important by knowing the fact that we are living in the era of right-wing, anti-globalization and tariff loving warriors like Donald Trump.