Japan deal is hailed as boost for EU agri-food sector

By Jane Byrne contact

- Last updated on GMT

© GettyImages
© GettyImages
Farming lobby, Copa and Cogeca, has welcomed the signing yesterday [July 17] of the EU-Japan free trade deal.

Japan is the EU’s fifth largest agri-food export market, valued​ at €6.4bn in 2017.  

The EU farming sector representatives, along with other EU agri-food chain trade groups, said the deal is an important step towards reinforcing relations with one of the EU’s key trade partners.

“The trade agreement is of strategic importance as it will strengthen the [agri-food] sector’s competitive position in the dynamic and growing Asia-Pacific region,” ​noted Copa and Cogega, the European Liaison Committee for Agricultural and Agri-Food Trade (CELCAA) and food manufacturer representatives, FoodDrinkEurope.  

The agreement will "complete the picture"​ of successfully negotiated trade deals in the region such as EU-South Korea and the pending deals with Singapore and Vietnam, they added.

The industry bodies called for swift ratification of the deal by the European Parliament.

Tariff reductions 

The EU-Japan EPA comes with high expectations, both in terms of tariff reductions and removal of non-tariff barriers to trade, which are expected to create significant opportunities for European exports of agricultural products.

EU Commission head, Jean-Claude Juncker, said the agreement shows the "win-win"​ outcomes offered by free trade.

The EU-Japan FTA will create a trade zone covering 600 million people and nearly a third of global GDP. 

Cecilia Malmström, EU Commissioner for Trade, added:

"Together with Japan, we are sending a strong signal to the world that two of its biggest economies still believe in open trade, opposing both unilateralism and protectionism. The economic benefits of this agreement are clear. By removing billions of euros of duties, simplifying customs procedures and tackling behind-the-border barriers to trade, it will offer opportunities for companies on both sides to boost their exports and expand their business.”

With regards to agricultural exports from the EU, the Commission said the deal will, in particular, scrap Japanese duties on many cheeses and will allow the EU to increase its beef exports to Japan substantially; it said, in terms of pork, there will be duty free trade in processed meat and almost duty-free trade for fresh meat.

The deal will also ensure the protection in Japan of more than 200 high-quality European agricultural products, so called Geographical Indications (GIs), and the protection of a selection of Japanese GIs in the EU.

Benefits for EU pork producers

A trade agreement in principal was, in fact, reached in July 2017, between the EU and Japan.

Justin Sherrard, global strategist, animal protein at Rabobank, told this publication at that time​ then the trade deal with Japan could offer the EU pork sector up to 10% price advantage compared to pig meat exports from US and Canada.

“Japan is Europe’s second biggest trade partner for pig products after China and Hong Kong. So the deal is not going to open up the Japanese market in a radical new way, but it will expand the trade; the tariff reductions under the deal will be the big opportunity, allowing Europe to out compete other exporters.”

Japan has a growing dependency on pork imports given that its domestic pig production is in decline.

“There has been slow and steady growth in terms of EU pig meat exports to Japan. The pace is sustainable, and it is a more consistent and reliable trade partner for the EU swine sector than other countries,” ​added Sherrard, when speaking to us last summer.

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