What does JEFTA mean?
The JEFTA “Japan-EU Free Trade Agreement”, considered to be the world’smost important trade agreement comes into force on Friday, February 1, 2019.
This agreement, negotiated since 2013, creates the world’s largest free trade zone. It covers nearly 635 million consumers and more than a third of the world’s GDP.
Japan is the EU’s 6th largest economic partner, and conversely, the EU is Japan’s 3rd largest economic partner. Trade between the two parties accounts for 36.9% of international trade.
What are the advantages of JEFTA for Europeans and Japanese?
The European Union estimates that theelimination of tariff and non-tariff barriers will increase total exports to Japan by a quarter, and the removal of customs duties will save the EU €1 billion. Thanks to this agreement, European companies will benefit from enhanced international standards, and the designations of origin of certain European products will be protected. Tokyo is committed to recognizing 205 geographical indications such as Roquefort or Jambon d’Ardenne.
The “made in France” brand enjoys an excellent reputation in Japan, which is a real opportunity for French SMEs wishing to conquer the Japanese market with high-quality products that meet consumer expectations.
Tariffs on many products will fall as a result, with tariffs on some products as low as -35%.
Japan expects a 1% rise in GDP thanks to the disappearance of European tariffs. The country is hoping for economic benefits for its automotive industry. The gradual elimination of customs duties on automobile imports and the immediate abolition of tariffs on spare parts will facilitate industrial cooperation in this sector.
The agreement also provides greater reciprocity in access to public procurement contracts, which will open up new prospects for many European companies, particularly in the rail sector.
It also includes commitments to respect multilateral agreements and ratify International Labour Organization conventions.
What impact will this have on expatriates in Japan and those wishing to live in Japan?
If you’re thinking of developing your business in Japan, this agreement is a real opportunity for you, as it implies an increase in trade between the 2 continents, and therefore the need for European cultural skills in Japan and Japanese skills in Europe. When planning your expatriation to Japan, make sure you think about your visas for Japan, of course, and compare the international health insurance that’s essential when you’re abroad.
