EU sends message to UK and Trump with biggest ever trade deal

Luke James
Brussels correspondent
EU Council president Donald Tusk and EU Commission president Jean-Claude Juncker with Japanese prime minister Shinzo Abe (Reuters)

The EU sent a message to both London and Washington today by signing its biggest ever trade agreement with Japan.

Brussels used the deal to signed in Tokyo to push back against the protectionist policies of US president Donald Trump, saying it shows that free trade can be “win-win.”

The bloc also sold the benefits of the deal to Britain, which is likely to lead to fresh calls for the UK to remain in the EU’s customs union after Brexit.

The deal opens up the Japanese market of 127 million people to European business who will avoid €1bn worth of duties paid annually on exports.

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Car manufacturers are among the major beneficiaries on the Japanese side. They will see the 10% tariff on imported cars and the 3% on imported car parts eliminated entirely.

EU tariffs on US cars has been a major complaint of Trump in an escalating trade war.

The EU hope the deal will persuade the US president that the best way to solve the issue is through a deal rather than unilateral tariffs.

European Commission president Jean-Claude Juncker, who will visit the White House to talk trade on July 25, said pointedly: “The impact of today’s agreement goes far beyond our shores.

Jean-Claude Juncker used a press conference on the deal to send a strong message to Donald Trump (Reuters)

“Together, we are making, by signing this Agreement, a statement about the future of free and fair trade. We are showing that we are stronger and better off when we work together.”

The EU also pushed the benefits of the deal to the UK, saying it will provide a “huge boost for jobs and exports in the United Kingdom.”

“Businesses of all sizes in towns and cities across the United Kingdom already export a wide range of goods and services to Japan,” says an EU factsheet on the deal.

“The EU-Japan trade agreement will make it easier and cheaper for them to do so.”

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The UK will be part of this and some 750 more EU trade deals until it leaves the customs unions as planned by the prime minister.

But today’s deal will provide ammunition for MPs who are fighting for the UK to remain in it after Brexit.

An amendment to the trade bill which could keep the UK in the customs union if no other way of maintaining frictionless trade with the EU is found will be voted on in the Commons today.

The government could face defeat if enough Conservative rebels are joined by opposition MPs in supporting it.

Labour MP Ben Bradshaw claimed the EU-Japan deal showed Brexit is “looking increasingly like a threat to our international trade.”

“Not only are we going to be putting up barriers between ourselves and our largest trading partner, the EU, we also risk losing the deals we have helped negotiate collectively as a member of the EU,” he said.