2017 has witnessed a number of political changes in various countries of the world. These changes are political in nature but they affect other sectors of the country as well. Be it trade relations between two countries or boundary issues, a change in the governance will also affect the policies of the same. Two events have been affecting trade-related transactions of a number of countries. The first is the selection of Donald Trump as the President of the U.S. As soon as he got into power, he started meddling with the trade policies and made numerous changes in them. The second incident is Brexit in the U.K. As U.K. became independent from the European Union, the open trade practices also came to a standstill. The EU Japan trade deal has solutions to deal with these transformations in the market relations of two countries.
With U.K. becoming independent from the European Union and Trump threatening to make trade relations difficult between two countries, it was time the EU did something to find a solution to such obstacles. This is when the EU Japan trade deal materialized. Japan and the European Union were in talks about this free-trade deal for a while but it was officially announced on Thursday. According to this deal, both the parties involved will make the trade of almost all goods much smoother between them. As a result of the Brexit, U.K. does not come under this free-trade deal.
EU Japan trade deal still undergoing negotiation
U.S. President Donald Trump recently challenged international trade relations at a summit of world leaders held in Germany. This challenge initiated the thought of a free-trade deal which would lower the barriers before any other changes take place in the international trade policies. This broad agreement is out in the open but it will still undergo negotiations and approval before it is put into effect.
The main focus of the EU Japan trade deal is to increase the flow of European food to Japan and the Japanese cars to Europe. It also aims to make this flow as hassle free as possible. Europe will reduce the tariff on Japanese cars by ten percent within the next seven years. This will promote the use of Japanese cars and will bring in more business for these automakers. On the other hand, Japan will lower the tariff on expensive European cheeses. It isn't wrong to say that the free-trade deal is still in its superficial stage. It might impose a threat on other trade policies in the world.