“Cars for cheese”: Get to know the perks of the EU-Japan Agreement

On February 1st, 2019 the Economic Partnership Agreement between the European Union and Japan was concluded. This agreement aims to reduce the barriers faced by European and Japanese companies when exporting, thus making both markets more competitive.

 With respect to EU agricultural exports, Japan is the 4th largest market.

This trade agreement was named “Cars for Cheese” due to the commercial opportunities to both Japanese companies and European agricultural producers. Japan was in 2019 the 4th biggest market regarding European agricultural exports. This may be explained by the fact that Japanese consumers greatly enjoy high-quality European products like wine, cheese, chocolate, pork, and pasta. However, Japan used to impose customs duties of 15% to 40% on these products.

Acordo EU Japão
Source: European Commission “The EU-Japan Economic Partnership Agreement in 60 seconds”

The agreement eliminates most of the duties borne by European and Japanese Companies

Upon entry into force, the agreement liberalized 99% of the EU’s tariff headings and 97% of Japan’s tariff headings. As for those customs duties not yet liberalized, it has been reached an agreement to tariff quotas and tariff reductions.

It is estimated that this agreement with Japan will reduce tariffs by approximately one billion euros per year and increase European exports from 16% to 24% in the next 10 to 15 years.

Acordo EU Japão
Source: European Commission “The EU-Japan Economic Partnership Agreement in 60 seconds”

The European Commission shows in their website the list of perks to the European companies resulting from this trade agreement with Japan:

  • eliminates customs duties and other barriers to trade and facilitates exports and imports by companies from both sides;
  • ensures the openness of services markets, especially financial, telecommunication and transportation services;
  • guarantees a non-discriminatory treatment of EU companies operating in the public procurement market;
  • enhances the protection of intellectual property rights in Japan as well as the protection of European high-quality agricultural products, the so-called geographical indications;
  • prevents companies from both sides from spending a lot of time and money trading goods in the bilateral market;
  • provides for greater support to small-size companies which are disproportionately affected by trade barriers.

Despite the lack of data on the second year of the agreement, the European Union announces that in the first ten months after its implementation, EU exports to Japan increased 6.6% in comparison to the same period in the preceding year. This trend is also noticeable in the land of the rising sun where exports to Europe increased by 6.3%.

Internationalization opportunities to Japan

Barriers to international trade are relevant determinants in the process of companies’ internationalization.

Acordo EU Japão
Source: European Commission “The EU-Japan Economic Partnership Agreement in 60 seconds”

The new agreement is an opportunity for many European companies to compete and grow in the Japanese market. With a network of international consultants, Market Access supports the internationalization of companies and organizations to the Japanese market. Despite the geographical and cultural distance, many European  industries have great acceptance in the market. Contact us to learn more!







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