But Britain may cease to benefit after the Brexit transition, says a former Ambassador in Tokyoby David Warren / July 19, 2018 / Leave a comment
In an unpredictable world, the EU-Japan free trade agreement signed in Tokyo on 17th July by Japanese Prime Minister Shinzo Abe, and European Council and Commission Presidents Donald Tusk and Jean-Claude Juncker, is a good news story.
The European Union and Japan together account for over a quarter of the world economy: their combined populations total over 600m. After nearly five years of negotiations, they have agreed to remove 99 per cent of remaining tariffs on Japanese goods coming into the EU, and 94 per cent, eventually rising to 99 per cent, of tariffs on EU goods into Japan. These cost European exporters about €1bn a year. Some estimates have the deal adding 0.8 per cent to the EU’s economy and 0.3 per cent to Japan’s—around $1.3bn in all, creating jobs, bringing down prices and opening up trading opportunities.
European and Japanese leaders have not been slow to point out the contrast with what is going on elsewhere in the world, as President Donald Trump sets in train a trade war of potentially gigantic proportions—planning tariffs of another $200bn on trade from China, and threatening more tariffs against European cars.
It is not just the United States President’s rejection of the principles of free trade and undermining of the institutions of the international trading system. It is the realisation that we have a leader in the White House taking aim at the values of the post-war liberal international order, in pursuit of “America First” to the exclusion of all others. International agreements are thus reduced to a series of aggressive, zero-sum transactions. Against this chaos, the painstaking way in which the second and fourth largest trading blocs in the world have negotiated this treaty—one that represents what might be achieved by sharing and compromise—really is a statement of common values. In Tusk’s words it is a “light in the darkness.”