Historic Agreement Reached
On July 6, 2017, negotiators for the Japan-European Union Economic Partnership Agreement (JEEPA) announced a landmark “political agreement in principle” at the EU-Japan Summit. While negotiations continue, this represents a major step toward implementing what could become the EU’s largest free trade agreement to date.
Key Details:
· Negotiations began: March 2013
· Total negotiation rounds: 18
· Combined GDP of EU & Japan: Over ⅓ of global GDP
· Projected timeline:
° Final negotiations by mid-2018
° Entry into force by early 2019
Key Provisions of JEEPA
Tariff Reductions
| Party | Immediate Cuts | After 15 Years |
| Japan | 91% duties eliminated (86% of tariff lines) | 99% duties eliminated (97% of tariff lines) |
| EU | 75% duties eliminated (96% of tariff lines) | Nearly 100% duties eliminated (99% of tariff lines) |
Sensitive sectors:
· Agriculture: EU gains significantly in beef & cheese exports (currently facing ~40% Japanese tariffs)
· Automobiles: Japan benefits from phased EU vehicle tariff elimination (7-year staging)
Rules of Origin
JEEPA introduces product-specific origin rules with thresholds for non-originating materials (NOM):
| Industry | NOM Allowance |
| Automobiles | 55% (Y1-3), 50% (Y4-6), 45% (Y7+) |
| Auto Parts | 60% (Y1-3), 50% (Y4+) |
| Footwear | Up to 50% |
| Textiles | Double substantial transformation required |
Diagonal cumulation: Potential to exclude content from mutual FTA partners (e.g., Canada) from NOM calculations.
Other Critical Elements
· 16-chapter agreement covering intellectual property, regulatory cooperation, and data flows
· Safeguard clauses to protect domestic industries from import surges
· Pharmaceuticals: Expanded mutual recognition of manufacturing standards
Challenges Ahead
· Ratification process: Likely a “mixed agreement,” requiring approval by all EU national/regional parliaments
· Pending issues: Investment arbitration, data flow regulations
· Brexit uncertainty: UK’s future status in JEEPA remains unclear post-EU exit
Global Trade Implications
As the EU advances its trade agenda with deals like JEEPA and CETA, businesses must stay agile to capitalize on new opportunities. This agreement will reshape supply chains and competitive dynamics across industries.
Stay informed as negotiations progress toward finalization in 2018.
For ongoing updates on JEEPA and other trade agreements, subscribe to our strategic analysis reports.
Optimization Notes:
· Added structured headings for better readability
· Incorporated tables to present tariff/ROO data clearly
· Highlighted key figures in bold
· Improved scannability with bullet points
· Maintained all original technical details while enhancing presentation
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