EU and Japan ratify first FTA ever to include Paris Climate Agreement provision

Shinzō Abe, on the right, and Jean-Claude Juncker at EU-Japan Summit in Tokyo last week. (Copyright: European Union, 2018 / Photo: Etienne Ansotte)

Shinzō Abe, on the right, and Jean-Claude Juncker at EU-Japan Summit in Tokyo last week. (Copyright: European Union, 2018 / Photo: Etienne Ansotte)

In the week that US President Donald Trump called the European Union a “foe”, and reaffirmed his will to hit China with more duties on imports, Brussels signed a wide-ranging free trade deal with Japan. At the 25th EU-Japan summit in Tokyo last week, the leaders of the two areas indeed finally sealed two landmark agreements that will boost cooperation between both sides and that will ultimately create the world’s largest free-trade areas.

The deal is also the first one to date to include the Paris Climate Agreement’s provision, and to carry the ambitious goal to commit both parties to upholding the UN climate accord. With the creation of such an ambitious and wide pact, which covers nearly a third of the world’s economic output and affects 600 million people, the two parties hope to counterweight the protectionist forces unleashed by US President Trump, and to launch a new policy for any future trade pact to be.

Background

The first moves towards the creation of an EU-Japan FTA date back to 2013 when, on March 25, EU governments instructed the European Commission to start negotiations with the country of the rising sun. After 18 rounds of talks, on July 6, 2017, the European Union and Japan reached an agreement in principle on the main elements of the EU-Japan Economic Partnership Agreement, negotiating a Strategic Partnership Agreement in parallel. On 8 December last year, the negotiations were finalised. After the legal verification and translation processes, the European Commission could then submit the agreement for the approval of the European Parliament and EU Member States.

At the end of April this year, the Commission presented the outcome of the negotiations for the EPA with Japan, as a first step towards the signature and conclusion of the agreement. The President of the European Commission Jean-Claude Juncker welcomed the move this way: “The step we are taking today paves the way for our companies and citizens to start benefitting from the full potential of the Economic Partnership Agreement with Japan already in the coming year”.

Last week’s accord

At the 25th EU-Japan summit in Tokyo last week, the two parts finalised the deal, signing two landmark agreements to increase their cooperation and to formally create the world’s largest free trade area in the planet, covering 600 million people. The two agreements were: the actual EU-Japan free trade agreement, that will remove 99% of tariffs paid by EU companies exporting to Japan, and the EU-Japan strategic partnership agreement, which is expected to boost cooperation between both sides on a wide range of issues beyond trade including security and defence, people exchange and climate.

“The document we signed today is much more than a trade agreement. It is of course a tool that will create opportunities for our companies, our workers and our citizens […], but it is also a statement, President of the European Commission Jean-Claude Juncker said. “It is a statement by two likeminded partners that together represent nearly a third of the world’s GDP and reiterate their commitment to uphold the highest standards in areas such as labour, safety, environmental or consumer protection”.

“Together with Japan, we are sending a strong signal to the world that two of its biggest economies still believe in open trade, opposing both unilateralism and protectionism”, said Cecilia Malmström, Commissioner for Trade, on July 17.

Paris climate clause

Regarding climate, the deal includes a very ambitious goal. For the first time in history, a Free-Trade Agreement between economic superpowers will indeed include provisions regarding the fulfilment of UN Paris Climate Agreement. Last February, the European Commission stated that future EU trade deals will be contingent on Paris Agreement membership and that will have to carry a formal commitment from all parties involved to uphold the 2015 Paris Agreement on climate change mitigation.

“We reaffirm our strong commitment to implement the Paris Agreement, through ambitious climate action, in particular through reducing emissions while promoting innovation, climate finance, development of sustainable energy technologies, and improvement of energy efficiency so as to reach a global carbon-neutral economy over the course of the second half of the century”, said an official joint statement by Donald Tusk, President of the European Council, Jean-Claude Juncker, President of the European Commission, and Shinzo Abe, Prime Minister of Japan.

Ambitious deal

The EU-Japan FTW is the first deal in history to indicate an effort to integrate trade and climate policy. Many EU agri-food chain organisations recognised its value and ambitiousness of the message it carries. In a joint statement, Copa and Cogeca, CELCAA and FoodDrinkEurope said: “The EU-Japan EPA comes with high expectations, both in terms of tariff reductions and removal of non-tariff barriers to trade, which are expected to create significant opportunities for European exports of agricultural products, food and drinks.

EuroCommerce has welcomed too the historic trade agreement signed between Japan and the European Union during the 25th EU-Japan Summit earlier this week. “The formal signing […] of the EU-Japan Economic Partnership Agreement sends an important message to those leaders who want to throw away all that a rules-based world trading system has achieved,” EuroCommerce director general Christian Verschueren.

“No Paris-No agreements” policy

Both Japanese and EU leaders were aware of the symbolic meaning behind the trade deal, as the ambitious accord is a clear message to US President Donald Trump’s protectionist policy and open opposition to Paris Agreement. On June 1, 2017, United States President Donald Trump announced that the US would cease all participation in the 2015 Paris Agreement. Back then, President Trump stated that “the Paris accord will undermine (the US) economy”, and “puts (the US) at a permanent disadvantage”, clearly distancing himself from the other Western leaders.

Many European leaders in the past months have made clear that there was a precise will from Brussels to make any further trade agreement with foreign economies contingent on membership of the Paris climate agreement, automatically excluding the US. Earlier this year, in February, French foreign affairs minister Jean-Baptiste Lemoyne told his own parliament that France will oppose to reviving any EU-US trade accord if the US was carrying through their promise to leave the Paris deal. “One of our main demands is that any country who signs a trade agreement with EU should implement the Paris Agreement on the ground”, Mr. Lemoyne said. He then called on the EU to make a new trade policy: “No Paris Agreement, no trade agreement”.

Size of the game

The Japan agreement is the biggest bilateral trade partnership ever negotiated by the European Union. Once ratified, it would create the world’s largest economic area, covering roughly the 30 per cent of global GDP. Firms in Europe currently export more than €85 billion in goods and services to Japan every year, and the deal aims at removing the vast majority of customs duties that cost EU companies exporting to Japan roughly €1 billion a year. The agreement would remove EU tariffs of 10 percent on Japanese cars and the 3 percent rate for most car parts. It would also scrap Japanese duties of some 30 percent on EU cheese and 15 percent on wines, and secure access to large public tenders in Japan.

The agreement is now awaiting ratification by the European Parliament and the Japanese Diet following which it could enter into force in 2019.

Advertising

Advertising

Advertising

Advertising

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

To all far-right partisans who exploit Charlie Hebdo atrocity: a peaceful reply given by a peaceful student

EU Youth Goals – we are shapers not listeners

Christine Lagarde: This is what we can still learn from the Great War

Hungary has made progress on greening its economy and now needs to raise its ambitions

Here’s how we get businesses to harmonize on climate change

Turkey: MEPs cut support by €70m due to no improvement in respect for EU values

Greece lost a month that cannot be found neither in “mini Summits” nor in Berlin

Will the end of QE come along with ECB’s inflation target?

Telecommunications and Internet: A Jungle with no principles?

European Youth Vlog

WEF Davos 2016 LIVE: Cameron corroborates that Britain should remain in the EU

Worldwide UN family celebrates enduring universal values of human rights

Why EU’s working and unemployed millions remain uncertain or even desperate about their future

War of words in Davos over Eurozone’s inflation/deflation

A Year in China

Skeptic France about Trump-Juncker trade deal favoring German cars; EU’s unity in peril

Commission hardens its stance against carmakers ensuring emissions reductions targets

Back to the future: flying cars are becoming a reality

The Commission calls for a climate neutral Europe by 2050*

Can the EU afford to block China’s business openings to Europe by denying her the ‘market economy status’?

EU crisis aggravates structural differences, threatens cohesion

Has the treacherous theory about the ‘French patient’ finally prevailed?

Trust and support of Iraqis essential for success of UN’s Da’esh terror investigation

Politics still matter in the US but not in Europe

Nagasaki is ‘a global inspiration’ for peace, UN chief says marking 73rd anniversary of atomic bombing

G20 GDP growth nudges up to 1.0% in the second quarter of 2018

Human rights chief calls for international probe on Venezuela, following ‘shocking accounts of extrajudicial killings’

ECB’s Draghi favours a cheaper euro to serve all Eurozone countries

Blockchain could boost global trade by $1 trillion

IMF’s Lagarde: Ukraine must fight corruption

How we can work together in the fight against NCDs

COP21 Breaking News_05 December: Carbon Price Needed for Climate Change Success

Latest leaked TTIP document confirms EU sovereignty may be under threat

Access to ‘affordable’ medicines in India: challenges & solutions

Horse meat runs faster than authorities…

Liaison Officer – 2020

ECB tied in the anti-monetary German ideology

Healthcare for refugees: a necessary symbiosis of medicine and politics

The EU will always have a stable partner in Montenegro, says President Đukanović

A Europe that Protects: Commission calls for decisive action on security priorities

EU to spend €6 billion on youth employment and training futile schemes

EU readies for eventual annulment of the Turkish agreement on immigrants-refugees

Is the ECB ready to flood Eurozone with freshly printed money?

Taliban-led violence during recent Afghan polls leaves record high numbers of civilians dead – UN

Draghi left alone with no hope of boosting EU growth as Merkel just focuses on next elections

Draghi to lay his print on long term ECB policies prior to exiting next year

Sanctions on Russia to be the biggest unity test at this European Council

From drones to health data, how Japan can power ahead

Eurozone examines the prospect of issuing debt paper jointly

4 things President Trump could learn from Jimmy Carter

How will Brexit affect higher education in the EU?

The EU threatens to occupy Libya militarily; is another colonial war brewing?

Challenges remain in DPRK despite ‘slight’ improvements in health, wellbeing: UNICEF

Trump systematically upsets global order and trade: Where does this end?

The key takeaways of G7 Summit in Canada

No improvement in respect for EU values: MEPs cut support for Turkey by €70m

Sustainability is now mission critical for businesses. Here’s why

Raw materials use to double by 2060 with severe environmental consequences

Is Europe misjudging its abilities to endure more austerity and unemployment?

More Stings?

Trackbacks

  1. […] bilateral, EU and Japan took climate action a step further by including Paris agreement in their free trade agreement. Inclusion of climate targets in bilateral free trade deal is a first for the […]

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s