The European Union and Japan are signing a widespread trade deal Tuesday that will eliminate almost all tariffs, seemingly defying the worries about trade tensions set off by President Donald Trump's policies.
The signing in Tokyo for the deal, largely reached late previous year, is ceremonial.
Japan's Prime Minister Shinzo Abe (C) walks with European Council President Donald Tusk (R) and EU Commission President Jean-Claude Juncker in Brussels, Belgium, this month. It covers a third of the global economy and markets of more than 600 million people. Contributions of 200 words or more will be considered for publication. And with a digital subscription, you'll never miss a local story.
Tusk, taking a swipe at Trump, stipulated, "Let me say that today is a good day not only for all the Japanese and Europeans but for all reasonable people of this world who believe in mutual respect and cooperation ..." Japanese machinery parts, tea, and fish will become cheaper in Europe.
When Commission President Jean-Claude Juncker meets with Trump on July 25, he'll bring two main negotiating proposals in an effort to tamp down the escalating trade tensions: an offer to discuss the reduction of levies on cars and vehicle parts among all major auto-exporting countries in a so-called plurilateral deal; and the possibility of broaching a limited free-trade agreement, according to a separate official familiar with the EU's thinking.
The difference is due to exceptions such as rice, a product which is culturally and politically sensitive and has been protected for decades in Japan. "Together we are a making, by signing this agreement, a statement about the future of free and fair trade".
The agreement stands in sharp contrast to trade developments in the USA, where the Trump administration has pushed forward with an array of tariffs on several nations.
"We are preparing a list of rebalancing measures", Malmstrom said, as Washington studies imposing duties on cars following its tariffs on aluminium and steel.
Besides the latest deal with the EU, Japan is working on other trade agreements, including a far-reaching trans-Pacific deal.
The American Automotive Policy Council, which represents GM, Ford Motor Co. and Fiat Chrysler Automobiles, said there is "no evidence" that automobile imports pose a threat to USA national security.
The EU said the trade liberalisation will lead to the region's export growth in chemicals, clothing, cosmetics and beer to Japan, leading to job security for Europe.
A key part of the agreement will see the removal of a vast majority of tariffs, expecting to save European Union companies that export their products to Japan as much as €1bn a year in customs duties. Japan's growth remains heavily dependent on exports. Negotiations on reciprocal adequacy have also been concluded, meaning that the European Union and Japan will recognize each other's data protection systems as "equivalent", thus allowing data to flow safely between the two. Japan will get cheaper cheese, such as Parmesan, gouda and cheddar, as well as chocolate and biscuits.
Many European automakers already have production plants in the USA.