Trade Sustainability Impact Assessment of the Free Trade Agreement between the European Union and Japan

April 2016

TSIA of the Free Trade Agreement between the European Union and Japan

The EU-Japan Free Trade Agreement (FTA) is designed to strengthen Europe’s weakening economic relationship with Japan, the world’s third largest national consumer market. Since the Trans-Pacific Partnership (involving Japan and the United States) was concluded in October 2015, the EU-Japan FTA is a necessity if Europe is to maintain market shares in Japan.

The economic gains from this agreement are of the same magnitude as a free trade agreement with the United States, and could lead to major increases in exports (notably in the food and feed, processed food sectors). There are also considerable benefits for consumers, business and employment from an effective liberalisation of both markets that encompasses tariffs and regulatory issues.

These gains are more symmetrically distributed than earlier FTAs, and benefit groups that do not always stand to gain from trade liberalisation. At the same time the environmental and social risks are negligible, or offset by new technologies and opportunities provided by the agreement. Even in sensitive sectors, such as the motor vehicle industry, no tangible employment losses are foreseen compared to a scenario in which there is no EU-Japan FTA.

Client: European Commission – DG for Trade

Authors: Elitsa Garnizova, Philipp Lamprecht, Hosuk Lee-Makiyama, Stephen Woolcock, Patrick Messerlin, Duncan Brack, Stefania Lovo, Ken Heydon & Michal Krol

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