JEEPA is good news for EU farmers but it takes six years
Agreement in principle on the main elements of the Japan-EU Economic Partnership Agreement (JEEPA) promises easier access for the EU to its fourth biggest market for agricultural exports.
EU agricultural exports to Japan are worth more than 20 times those of Japan to the EU, despite European firms facing trade barriers when exporting to Japan.
Japan taxes imports of European food and drink products at 30-40% on cheese, 38.5% on beef, 15% on wine, up to 24% on pasta, and up to 30% on chocolate.
JEEPA will eliminate duties on more than 90% of EU agricultural exports, making European products more affordable and more attractive to Japan’s 127 million consumers.
JEEPA will completely scrap import duties on many cheeses and wines.
The Agreement will gradually reduce tariffs for beef, allowing the EU increase its beef exports to Japan substantially.
There will be duty-free trade in processed pork and almost duty-free trade for fresh pork (pork is the EU’s most important agricultural export to Japan by value).
Distinctive EU regional food and drink products, including Irish whiskey, will be protected premium products in Japan, making it illegal to sell imitation products.
There will be increased Japanese quotas for malt, potato starch, skimmed milk powder, butter and whey from the EU. JEEPA will also increase trade in the EU’s processed foods such as pasta, chocolates, confectionery and biscuits.
The agreement will not seriously threaten Japan’s own food production, which is based on the same family farming model as in the EU.
However, Japan-EU negotiations have taken a long time, and are not quite over yet.
Talks started in 2013, and although Japan and the EU have signed the JEEPA deal, negotiations will continue to mid-2018, with the aim of enforcement of the agreement in early 2019.
Bearing in mind that it is the most important bilateral trade agreement ever concluded by the EU, there is much to celebrate, after six years of negotiations.
But that long run-in illustrates how difficult trade agreements can be.
Farmers can therefore have little hope that “overnight” trade agreements will provide suitable new arrangements after Brexit.
The EU and Japan have reached a political agreement; and the emphasis is on “political”, with negotiators on both sides apparently anxious to make their announcements ahead of the recent G20 world leaders’ meeting in Hamburg, to show how they are supposedly filling the vacuum left by America’s withdrawal from its role as world trade leader — which looks like a somewhat contrived bit of point-scoring, seeing as EU-Japan talks started so long before the Trump era in the US.
But then again, it’s all about politics, and Irish farmers and food industry workers just have to hope the whims of world leaders do not leave them in the lurch. Politics could still delay JEEPA even further, when it is submitted for the approval of EU member states and the European Parliament, after legal verification and translation of the agreement into all EU official languages.
When it finally comes into force, EU farmers will join in toasting it with champagne, because tariffs on EU wine exports to Japan will instantly disappear, which means a saving of €134 million a year for the EU wine industry.
EU farmers believe that opening the Japanese market will benefit the European meat and dairy sectors in particular.
The value of exports from the EU could increase as much as €20 billion, bringing more possibilities and jobs in many EU sectors such as agriculture and food products, leather, clothing and shoes, pharmaceuticals, and medical devices. There could be 400,000 new jobs, according to the European Commission.
A deal with Japan will give Irish businesses, and agriculture in particular, major new opportunities. Ireland’s exports to Japan in 2015 were worth €7 billion.
