Leaders of the European Union and Japan signed a deal in principle on July 6 for a free trade agreement (FTA) that would create the world's largest economic zone, representing about 30 percent of the world's GDP and 40 percent of world trade.
The European federation of the sporting goods industry, Fesi, welcomed the agreement, noting in particular that it should facilitate exports of ski boots to Japan.
The European Commission had been discussing an FTA with Japan since April 2013. The discussions took a more positive turn after the newly elected U.S. president, Donald Trump, reneged last January on the project for a Trans-Pacific Partnership (TPP), which would have involved Japan as well.
The FTA would be part of a broader Economic Partnership Agreement that would include specific commitments to the Paris climate agreement and to high standards for labor, safety and the protection of personal data. It would be the biggest bilateral trade deal ever concluded by the EU.
Some technical points have yet to be finalized before the final EU-Japan FTA is approved by both sides, probably by the end of this year. It will be subsequently proposed to the member states of the EU and the European Parliament for their endorsement.
In general, it is expected to lead to the abolition of tariff and non-tariff barriers that could lead European exports to Japan to increase by up to €20 billion a year, including €1 billion for textiles and clothing. European exporters of footwear, handbags and other leather products, pharmaceuticals, agricultural and food products would also be among the biggest beneficiaries.
In return, European duties on Japanese cars would be scrapped after seven years, making the Japanese automotive industry competitive with that of South Korea, which recently concluded an FTA with the EU.
According to the European Commission, Japan's current quotas on textiles, clothing, leather and shoes would be fully abolished as soon as the FTA goes into force. Import tariffs on footwear would be reduced from 30 percent to 21 percent at the start, and completely eliminated after ten years.
Fesi, which has been calling for an FTA with Japan since 1998, says it hopes that the final text will include “ambitious” duty cuts for ski boots. At present, imports of ski boots are taxed at 27 percent in Japan and 17 percent in Europe. With the ski boots cluster in Montebelluna representing 60 percent of the global ski boot market, European companies pay almost €20 million worth of import duties in Japan every year.
According to Fesi, the abolition of import restrictions on ski boots in Japan could jelp attract a larger number of Japanese people to the ski slopes. The number of participants has been declining strongly in the last couple of decades, and it seems to have stabilized at around 12 million skiers.
The trade pact with Japan is scheduled to go into force at the beginning of 2019. It would exclude the U.K. unless the pact is ratified before the U.K. exits the EU. The U.K. would then have to negotiate a separate FTA with Japan.
The EU has already submitted its proposal for a Comprehensive Economic and Trade Agreement (CETA) with Canada to the national parliaments of the member states this past May.
