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The EU and Japan signed on 17 July 2018 an Economic Partnership Agreement (EPA) that will boost growth and create a free trade area with a combined market of around 640 million consumers. This is the first EPA signed by the EU which includes specific commitments related to the fight against climate change, and the EESC and its Japanese counterparts will be responsible to monitor its social and environmental impact.
The EU-Japan EPA is the biggest bilateral trade partnership ever negotiated by the EU and it is expected to have a very positive impact for both parts. In the mid-term, 97% of the tariffs on EU exports will be eliminated, which will allow European companies to save €1 billion annually. EU exports to Japan could consequently rise by up to 34% and the EU Gross Domestic Product (GDP) would increase up to 0.75%.
This agreement will also have social and environmental effects that will be monitored by representatives of the civil society from both sides: the European Economic and Social Committee for the EU and socio-economic stakeholders for Japan. The future role of civil society representatives was discussed in a High Level Conference that took place in Tokyo on 13 and 14 November with the participation of an EESC delegation chaired by Eve Päärendson, President of the EU-Japan Follow-up Committee of the EESC, and members of Japanese public administration and institutions. This conference was followed on 15 November by a seminar in Kobe on technological change and its impact on the labour market.
This is the first time an EPA negotiated by the European Union includes a chapter on trade and sustainable development (TSD), a request made by the EESC to ensure a key monitoring role for civil society. According to the provisions set out in this chapter a domestic advisory group (DAG) will be created by each part to follow up the implementation of the agreement and make sure that it respects not only its internal terms, but also the United Nations Framework Convention on Climate Change and the Paris agreement. The EPA also encourages promoting corporate social responsibility, green technologies, eco-labelling schemes and exchanges of good practices.
Small and medium enterprises (SMEs) will also benefit directly from this agreement. Currently 88% of EU firms exporting to Japan are SMEs, with a very high share in agriculture, beverages, textiles and leather, but also in construction, real estate activities and wholesale and retail trade. For many of these companies bureaucracy and language issues make it difficult to have access to the Japanese market, so the agreement foresees specifically designated SME contact points, increased transparency and information available in English. Both parts have also made an important commitment to publish notices of public procurement on a single portal on the internet, which would make this information accessible to EU companies.
The EU-Japan EPA can also be seen as a strategic step made by the EU that goes beyond economy. It shows the commitment of the parties to promoting a free and fair trading system based on rules and to reject trade protectionism. From the EU side, it is also a way to encourage some reforms in Japan, as the ratification of the ILO Convention on non-discrimination that could lead to reducing the gender wage gap and promoting women's active participation in the Japanese economy.