Ironically, the threat of a global trade war is inspiring trade deals across the globe. Sadly, however, the traditional U.S. leadership in such agreements is missing.
Japan and the European Union signed a trade agreement on Tuesday in Tokyo that lowers barriers on the movement of goods and services between the two economies and provides a counterweight to U.S. protectionism.
The Economic Partnership Agreement will remove a wide range of duties and regulatory obstacles between the EU and Japan, helping Japanese car exports and making it easier for European farmers to sell their produce in the Asian nation. Japanese Prime
Europe and Japan are rallying to bolster multilateral agreements as U.S. President Donald Trump shuns such pacts and imposes tariffs on trading partners. Japan took a leadership role in preserving an 11-member Trans-Pacific deal after Trump pulled the U.S. out immediately after taking office.
This last one’s huge!
Separately in Beijing on Monday, the EU agreed with China on a joint summit statement for the first time in three years as they sought to set aside differences and show support for a multilateral approach to solving world problems. Meanwhile, Japan is also in talks with China, India and other Asian countries to create the 16-nation Regional Comprehensive Economic Partnership, which could become the world’s largest trading bloc.
And make no mistake, such agreements will absolutely result in trade deficits/investment surpluses all over the place, in accordance with the unique producer, consumer, assets and resources characteristics of each nation relative to its trading partner(s). While all of the participating economies will grow richer in the process.