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Free Trade: The EU and Japan challenge an agreement with US President Trump
LINZ / TOKYO. With the JEFTA, the number of 90% of all items exported to Austria is gradually phased out
The main products of Japan's exports are automobiles. Image: Toyota
More than four years have been negotiated. Yesterday, Tuesday, the EU and Japan signed their largest free trade agreement. The JEFTA pact must dismantle Zlle and other trade barriers and enter into force next year.
The unification between the two economies is not the slightest sign for US President Donald Trump, known for his foreclosure policy. "In these moments, the agreement is a very important sign," says Ingomar Lochschmidt, Trade Commissioner in Tokyo. He supports the Free Trade Agreement: "About 90% of Austria's exports to Japan will be duty-free in a few years, which will greatly help Austrian companies."
But Critical voices were also voiced yesterday. "With the signing of the agreement between the EU and Japan, another chance has been given to make globalization more equitable thanks to the trade agreements", regretted the President of the House Renate Anderl in a statement press release
. Like wine, customs duties (currently 10%) are incurred immediately after the entry into force of the contract. For other goods, such as the timber sector, tariffs will be gradually reduced over the next few years. At the same time, Lochschmidt admits that Japan is not a market on which customs are crucial for success.
Austria has a very wide export spectrum in Japan – from consumer goods to industrial goods. The most important export items are the cars that are manufactured in Graz. In total, 1.6 billion euros worth of goods are exported each year, 80% of which comes directly from Austria.
In the opposite direction – from Japan to Austria – cars are also the most important export product. The best-selling Japanese car brands in Austria are Mazda, Toyota, Suzuki and Nissan. It is not certain that it will become cheaper because of the abolition of customs in Austria. "80% of the cars we sell in Austria are produced in Europe," says Markus Mitterbauer, director of the car dealer of the same name in Pasching, specializing in Toyota. Nothing will change in these cars. The price policy for the remaining 20% is controlled directly by the manufacturer in Japan. "Mitterbauer has no influence on that."
One million fewer inhabitants
The years of stagnation in the Japanese economy seem to be over. In the previous year, gross domestic product increased 1.6%. The economy grew eight consecutive quarters, the last time in Japan in the 1980s. Nevertheless, the market of 125 million inhabitants poses a big problem: every three years, the population decreases from one million. "Achieving economic growth with this demographic development is a success," says Lochschmidt. (sd)
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