Leaders from the European Union and Japan formally signed a new free trade pact on Tuesday, the latest in a series of moves toward trade liberalisation and a direct rebuke to US President Donald Trump's recent trade protectionism.
The deal, known as the EU-Japan Economic Partnership Agreement or EPA, would lower most bilateral tariffs including high Japanese duties on EU agricultural products and EU tariffs on Japanese cars. According the European Commission, the deal is projected to eliminate just under R16 billion worth of tariffs for EU exporters and double the amount for Japanese firms.
In addition to creating a free-trade zone for countries that make up around 30% of the world's GDP, the EPA is also the latest in a series of liberalising agreements that have been initiated or formalised by major economic powers around the world.
The deals come as Trump pushes the world's largest economy into a more protectionist direction with various tariffs and trade restrictions. European Council President Donald Tusk appeared to use the EPA signing to rebuke the US president's recent actions.
"This is an act of enormous strategic importance for the rules-based international order, at a time when some are questioning this order," Tusk said. "We are sending a clear message that we stand together against protectionism."
Japanese Prime Minister Shinzo Abe also offered a backhanded condemnation of Trump's tariffs.
"While protectionism is spreading in the world, Japan and the European Union will take the lead as flag bearers for free trade," Abe said.
Other major economic powers have also lined up similar deals in recent months. While many have long been in the making, the movement gave officials the opportunity to express a commitment to free trade and the elimination of trade barriers.
In addition its deal with Japan, the EU is nearing ratification of a landmark agreement with Canada, though some stumbling blocks remain. The European bloc is also pursuing deals with Mexico, Australia, and Mercosur, the South American trading bloc that includes Argentina, Brazil, Paraguay and Uruguay.
Even China, Trump's most recent tariff target, has gotten in on the action. The country recently lowered tariffs on products including vehicles and launched talks with the EU about building a stronger trade relationship.
In a joint statement on Monday, Chinese and EU leaders reiterated their dedication to "resisting protectionism and unilateralism, and making globalization more open, balanced, inclusive, and beneficial to all."
China has also cozied up to other countries in the region, including Japan and South Korea, in an effort to solidify its economic strength in the region. During a meeting in May, Chinese Premier Li Keqiang expressed a desire for a trilateral free-trade deal between the three powers.
"In the current circumstances, China, Japan and Korea should stand even more firmly together, uphold the rules-based multilateral trading system, and proudly oppose protectionism and unilateral actions," Li said.
The recent actions from nearly every major economy seem to be pointed to a more open trading system with fewer barriers, a stark contrast to Trump's recent actions.
Not only has the president rolled new tariffs on allies including Canada, Mexico, and the EU, but he has also turned away from major free-trade agreements like the Trans-Pacific Partnership and floated the idea of pulling the US out of the North American Free Trade Agreement, or NAFTA.
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