Czech Business Today

On the 6th of July, the EU and Japan reached a political agreement in principle on the Economic Partnership Agreement.

The free trade agreement (FTA) will remove the majority of existing tariffs that sum up to a total of approximately 1 billion EUR that European companies have to pay when doing business with Japan. Furthermore, both partners agreed to respect strict standards concerning labor, safety, environmental protection, consumers and also protection of personal data. Apart from that, the agreement includes chapters on sustainable development.

The European Commission expects that the value of EU exports could increase by up to 20 bn. EUR. The agreement is also important from another perspective. In the situation when global protectionist tendencies are rising, the FTA shows that international cooperation and opening of markets is the way forward. European business community welcomed the political agreement and called on the negotiating sides to finalize the pending issues as soon as possible and with a high level of ambition. The main areas of concern are the non-tariff barriers (NTBs) that European companies often referred to as a barrier to trade. This is the case especially for the European car manufactures that underline the need to resolve the remaining NTBs and set up a mechanism that would prevent future NTBs from arising.

Given the strategic importance of car industry for the Czech Republic, Czech business and employers’ organizations stress that NTBs in the car sector as well as the rules of origin need to be fully resolved before the negotiations are finalized so that the FTA bring as much benefits for both sides as possible.