LATEST: Japan and the EU have announced a massive free trade deal


BRUSSELS — Japanese Prime Minister Shinzo Abe and the European Union’s top two officials reached a political agreement over a wide-ranging free trade deal between Japan and the EU on Thursday.

The announcement in Brussels is meant to signal strengthened cooperation between the EU and Japan on international trade as world leaders are set to gather for a Group of 20 meeting in Germany on Friday.

“We planned this some time ago when we promised to do everything in our power to conclude political and trade talks between Japan and the European Union on the eve of the G20 summit,” European Council President Donald Tusk said. “And we did it.”

The agreement, which will lead to the establishment of the EU’s largest bilateral trade deal to date, will cover a market of 638 million people, about 28 percent of the global economy.

“This is the birth of the world’s largest free, advanced, industrialized economic zone,” Abe said.

The “agreement in principle” confirmed by Abe, Tusk and European Commission President Jean-Claude Juncker signals that the two sides have agreed on several major elements of the deal, which has been four years in the making.

The legal text of the agreement has yet to be finalized.

Previous sticking points, including tariffs on cars, and farm and dairy products such as cheese, have been ironed out, Juncker said.

One of the issues still open is investment protection, he noted, as the two sides remain divided on how to handle disputes involving investors.

The symbolic move timed for the eve of the G-20 summit is seen as a rebuke to U.S. President Donald Trump’s protectionist trade policies.

“Closing ourselves off to the world is neither good for business, nor for the global economy, nor for workers,” Juncker said. “As far as we are concerned, there is no protection in protectionism.”

The trade deal was concluded in tandem with an agreement on strategic partnership, which will strengthen cooperation between the EU and Japan on climate action, diplomacy and peace and security.