EU-Japan Economic Partnership Agreement (EPA), which entered into force on 1 February 2019, is an important step taken by two of largest economic actors of the world, the EU and Japan, for rules-based free trade. The agreement’s importance is rising considering the fact that it entered into force in an atmosphere of rising protectionist tendencies and threatening free trade with additional tariffs and protectionist measures against the WTO rules.

IKV Chairman Ayhan Zeytinoğlu made a statement regarding the subject. Chairman Zeytinoğlu emphasised that EU-Japan EPA whihc brings two significant commercial actors together is extremely  important for Turkey. IKV Chairman Ayhan Zeytinoğlu reminded that negotiations for an FTA between Turkey and Japan are continuing and stated that urgent completion of these negotiations should be a strategic after EU-Japan EPA entered into force. Chairman Zeytinoğlu continued his words as follows:

‘The agreement, which entered into force on 1 February 2019, has ensured the reciprocal opening of the markets of EU and Japan where 635 million people live and one third of the global output is produced. After the agreement enters into force completly, the trade between the EU and Japan is expected to increase by 36 million euros. This agreement concerns Turkey directly, too. Turkey and the EU has the Customs Union which covers industrial goods. In accordance with the requirement of the Customs Union, Turkey has to comply with the EU's trade agreements. Negotiating with the corresponding third countries in concurrence with the EU’s trade negotiations is important for the means of increasing trade opportunities and achieving the goals of foreign trade. Otherwise, while countries that have concluded FTAs with the EU can sell their products to Turkish without any tariffs, Turkey can not sell its goods to the corresponding third countries’ market tax-free as long as it concludes a separate agreement with these countries. Turkey’s negotiations with Japan have been still continuing. The last round of negotiations took place in Ankara in December. Accelerating this  process and conclusion of an agreement that enhances opportunities for exports and mutual business is extremely important. In the first six months of 2018, Turkey’s exports to Japan were 253 million dollars which is desperately insufficient. Besides, EU’s imports from Turkey might decrease due to applying zero tariffs on automotive products coming from Japan after the transition period of seven years.’’

Chairman Zeytinoğlu also drew attention to the modernisation of Turkey-EU Customs and indicated that it would be beneficial for both Turkey and the EU to modernise the Customs Union even if the negotiations do not start due to political obstacles:

“EU-Japan EPA is a new generation agreement. In other words, it covers comprehensive issues such as agriculture, services, e-commerce, public procurement and data security in addition to industrial goods. It is highly significant to examine the agreements that can be taken as a model and to understand the new horizons of trade while Turkey is preparing for the modernisation of the Custom Union with the EU. Even though the negotiations has not started yet due to political obstacles in this process, the modernisation of Turkey-EU Customs Union in a close future is an inevitable obligation for not only Turkey but also the EU. The modernisation and update of the Customs Union will cover highly technical and strategic areas such as services, public procurement, data security and agriculture just like the EU-Japan EPA. In order for Turkey to have maximum benefit from this process, Ministry of Trade and other relevant ministries have to work closely with the institutions representing the business world.”

Chairman Zeytinoğlu pointed out to the fact that EU companies has been taking advantage of zero tariffs and simplified customs procedures in their trade with Japan since 1 February and this is one of the most important steps taken by the EU trade policy so far. IKV Chairman Ayhan Zeytinoğlu stated that the EU-Japan EPA is a new generation trade agreement and added that in addition to covering safe data flow, it is also the EU's first trade agreement in which the EU has committed to comply with the objectives of the Paris Agreement.

Brief Information on EU-Japan Economic Partnership Agreement:       

The agreement, which entered into force on 1 February 2019, will open the markets of the EU and Japan where 635 million people live and one third of the global output is produced. Once the agreement is fully implemented, Japan will remove 97 percent of the tariffs imposed of imports from the EU. The agreement will also bring the elimination of non-tariff barriers such as international standards on vehicles. Therefore, trade between the EU and Japan is expected to increase by 36 billion euros. Approximately 1 billion euros paid by European companies while exporting to Japan annually will come to an end.

The most striking features of the EU-Japan EPA can be listed as follows: Japanese duties on cheeses coming from the EU including Gouda and Cheddar (which are currently 29.8 percent) along with tariffs on wine exports (currently 15 percent on average) will be removed. EU’s beef exports to Japan will increase significantly thanks to the fact that on pork there will be free of tax trade in processed meat and almost free of tax trade for fresh meat. In Japan, the protection of more than 200 high-quality European agricultural products, so called Geographical Indications (GIs), and the protection of a variety of Japanese GIs in the EU will be ensured.

EU-Japan EPA will also finalise tariffs and non-tariff barriers in financial services, e-commerce, telecommunications and transport. With regard to another important area, public procurement, European companies will hereupon be able to participate in procurement markets in 54 large cities of Japan and the barriers to have and access to public procurement in nationally important railway sector will come to an end. Within the scope of EU-Japan EPA which addresses sensitivities in specific sectors, especially elimination of tarffs in EU’s automotive sector will be accomplished in the wake of seven-year transition period.

Another important feature of EU-Japan EPA is that it will put the world's largest area of safe data flows into practice. By recognising each other's data protection systems as equivalent, personal data will flow freely and safely between the EU Member States and Japan.