AGREEMENT ON FREE TRADE AND ECONOMIC PARTNERSHIP BETWEEN MALTA AND JAPAN
On 1st February 2019, after more than 5 years of negotiations,the EU-Japan Economic Partnership Agreement (EPA) came into force and the partial implementation of the EU-Japan Strategic Partnership Agreement (SPA). This is the world’s largest and most ambitious bilateral trade Agreement covering 630 million people.
The EPA should not be confused with a Free Trade Agreement (FTA), as it goes well beyond trade and tariffs, and includes clauses pertaining to labour rights, environmental protection and climate change, state-owned enterprises, public procurement, market access, intellectual property, and data protection.
Over the next 15 years, the EPA will remove 97% of Japanese tariffs on imported EU goods, which will save around €1bn in paid duties. By then, 99% of European tariffs on imported Japanese goods will also be eliminated, equivalent to around €2bn in paid duties. It is estimated that thanks to these reductions, annual EU-Japan trade could increase by almost €36bn, once the EPA is fully implemented.
Japan is already Malta’s sixth largest trading partner outside the EU. According to the EU Commission, 1,262 jobs in Malta are supported by trade with Japan and that there are presently44 companies in Malta that export to Japan – 83% of which are SMEs. Aside from low barriers to trade, the EU includes special provisions to help smaller companies access the Japanese market – like Small Business Points and online information.
The EPA comes as good news to the European and Maltese agriculture sector, as Japan will remove duties on many cheeses (tariffs were as high as 29.8%) and wines (the average tariff stood at 15%), allow more imports of beef and pork, and ensure the protection of more than 200 European Geographical Indications (GI) such as: Roquefort, Parmigiano Reggiano, Feta cheese, Scottish Farmed Salmon etc. Japan, on the other hand, will reap most rewards in the automotive industry. While EU customs duties on Japanese automobiles used to be 10%, they will be fully eliminated in eight years. This means more affordable Japanese cars, parts and machinery will be available for Maltese customers.
The Malta – Japan Chamber of Commerce is also committed to assist and equip its members with the latest information and guidance to make best use of this ambitious trade agreement with Japan. Non-Members that are interested in doing business with Japan, are also free to contact us to see how we can be of service.