14 Jun FREE TRADE AGREEMENT EUROPE-JAPAN
In this week’s post we are going to analyze the free trade agreement that the European Union and Japan have reached. Before focusing on the specific case, it is convenient to clarify that they are the so-called Free Trade Agreements (hereinafter “TLC”). These are trade agreements, regional or bilateral, whose main objective is the elimination of certain trade barriers in relation to the export and import of goods and services.
The free trade agreement between the EU and Japan that will be formally signed on July 11 will produce significant changes in the Spanish economy. The entry into force of the same will suppose the suppression of great part of the commercial tariffs existing between both and is predicted for beginnings of next year (2019)
What exactly does the FTA between the two countries enable?
With the signature and entry into force of the aforementioned treaty will take place the elimination of more than 90 percent of tariffs on exports from the European Union to Japan. To get an idea, the calculated savings can reach more than 1,000 million euros per year, paying only for customs duties for EU exporters.
From the European perspective, the great beneficiaries of the FTA are some sectors such as the agri-food sector. Wine exports will no longer be subject to these extra costs (currently around 15%). In turn, service markets are liberalized, particularly electronic commerce, financial services, telecommunications and transport, in turn guaranteeing European companies accessing Japan’s public procurement markets in more than 40 cities.
All this will open many opportunities and facilitate the ability of Spanish companies to access the Japanese market, a demanding but faithful market with which it is worth working, as indicated by the president of CEJE, Jorge Lasheras.
Recall that EU companies export to Japan more than 58,000 million euros in goods and 28,000 million euros in services while Spain has the presence of 243 Japanese companies.
In 2017, Spanish companies made exports to Japan worth more than 2,400 million euros, 1.7% more than the previous year.
The agreement, which has a great positive impact, does not mean, however, that the introduction into the Japanese market of European companies will be easy, since any attempt to access an international market entails a series of additional difficulties with respect to the national market, such as cultural or idiomatic differences.
In Navarro Llima Abogados we have highly qualified lawyers with experience in international trade and we have an important network of collaborators all over the world, including Japan, that allow us to offer cross-cutting and multicultural advice.