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The last weeks of 2018 have been dramatic for international trade.
Stock markets have become unstable, especially in the face of a sense of rejection of free trade that continues to emanate from the United States under Donald Trump.
On the other hand, two major trade agreements between European and Asian countries will enter into force in this new year.
And these treaties exclude the world's two largest economies, the United States and China, which are at the heart of a trade war.
First, what are free trade agreements?
These are agreements designed to reduce commercial rates between the signatory countries. The reductions may include import duties and customs fees, for example.
Originally, these rates were derived from the objective of protecting local production from the entry of certain products, thus preventing an importation from harming, for example, a domestic industry or a domestic industry. to rural producers in the country.
The most comprehensive version of a free trade agreement includes the removal of all border duties and tariffs as well as the importation of goods and services. It also means the elimination of quotas, which are restrictions on the quantity of imported products.
Free trade agreements can help reduce a country's exports and facilitate their entry into other markets. Each agreement may have different clauses and rules, but in summary, the goal is to open markets and facilitate the movement of goods to ensure competitiveness.
One of two types of agreements whose entry into force is scheduled for 2019 is the global and progressive agreement for the Trans-Pacific Partnership (CPPP).
This agreement was concluded in response to the US decision to leave the Trans-Pacific Partnership (TPP). The agreement that Trump was trying to dissolve ended up being saved by the remaining 11 members of the group: Australia, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam, who reissued it under a new name.
The PSTN now covers a market of nearly 500 million people and the economies that make up the agreement represent 13% of global GDP.
Text removes tariffs on about 95% of goods traded between member countries. The agreement entered into force on December 30 for countries that have completed the ratification stages (approval by local parliaments): Australia, Canada, Japan, Mexico, New Zealand and Singapore.
For Vietnam, the big day is January 14 and for the others, the agreement expires 60 days after the internal ratifications.
The other major free trade agreement was signed between the European Union and Japan and will come into effect on February 1.
The Economic Partnership Agreement between the European Union and Japan creates a free trade area covering a market of over 600 million people and accounting for one third of the world's GDP.
It began trading in 2013 and is the first agreement to include an explicit reference to the Paris Agreement on Climate Change.
The document reinforces the commitments of the European Union and Japan to reduce the pace of climate change and to ensure sustainable development.
The above-mentioned two free trade agreements contrast with the gradual adoption of protectionist measures by the United States.
These partnerships are considered essential for the future of free trade and economic globalization.
And it is relevant to point out that the third largest economy – Japan – is one of two successes.
In the past, Japan has been very active in negotiations on market openings, but has changed its position with respect to the PCPTP and the partnership with the European Union.
And after the United States left the Trans-Pacific Partnership, Japan led efforts to ensure that other countries kept the agreement alive.
"The evolution of Japan is really impressive," says Frank Lavin, former US Under Secretary of International Trade and current executive director of Export Now, who advises companies interested in exporting to China.
"(Japan) has always been less enthusiastic about liberalization than major economies, and is now opening the market for the Pacific and the European Union." We must open our economy, we must globalize and liberalize. "
Japan's ambbadador to Singapore, Jun Yamazaki, attributes this change to Prime Minister Shinzo Abe.
"He proactively engaged in this effort and I think he considered it as d & # 39; vitally important for Japan, "he said.
Japan's move to free trade is the result of a gradual evolution.
"I think we have learned a lot over the years and realize that free trade is of interest to Japan," Yamazaki said.
"Our country has no natural resources: our strength is the people, a school population diligent in its tasks, and to use this badet, we must interact with the outside world, which is definitely synonymous with free trade and creation, an open investment climate ".
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