Is the world bypassing the US when it comes to global trade?

Discussion in 'Economics' started by zdreg, Feb 1, 2019.

  1. zdreg


    what effect will this agreement have on US trade policy?
    A free trade agreement between Japan and the EU entered into force on February 1, covering 635 million people and almost one-third of the world's economy.

    Dubbed the world's largest free trade agreement, the EU-Japan Economic Partnership Agreementremoves duties on almost all agricultural and industrial products and opens up the service sector and procurement. It also moves to eliminate non-tariff barriers to trade.

    The highlights of the deal

    • Japan will have scrappped duties on 97 percent of goods imported from the EU once the agreement is fully implemented.
    • Open access to the Japanese market will save EU companies from paying €1 billion ($1.14 billion) of duties annually.
    • The EU will eliminate tariffs on 99 percent of imports from Japan.
    • In the automotive sector, the EU will eliminate duties over a seven-year transition period.
    • Both sides will eliminate duties on nearly all food and agricultural products.
    • The service market will be opened, including financial services, e-commerce, telecommunications and transport.
    • For the first time, the trade agreement includes countries' Paris climate deal commitments.
    • The text also addresses sustainable development and sets standards for labor, safety, environmental and consumer protection.
    'Protecting brand names'

    EU Trade Commissioner Cecilia Malmstrom said: "This agreement has it all: it scraps tariffs and contributes to the global rulebook, whilst at the same time demonstrating to the world that we both remain convinced by the benefits of open trade."

    The president of the European Commission, Jean-Claude Juncker, said: "The new agreement will give consumers greater choice and cheaper prices; it will protect great European products in Japan and vice-versa, such as the Austrian Tiroler Speck or Kobe Beef; it will give small businesses on both sides the chance to branch out to a completely new market; it will save European companies 1 billion euro in duties every year and turbo-boost the trade we already do together."

    Trade groups also welcomed the move.

    "This agreement is the perfect example that building bridges is better than raising walls," said Pierre Gattaz, president of BusinessEurope. "When protectionism is on the rise, the EU and Japan show to the world they remain open to modern and rules-based trade."

    Hiroaki Nakanishi, chairman of the Japan Business Federation, said the agreement "will stimulate additional growth and create jobs for both sides."

    Read more: Japan wants to attract more European travelers

    The deal protects 'Geographical Indications' such as Cheddar, Kobe beef and Scotch whiskey

    What is the status of EU-Japan trade?

    Japan is the EU’s second-largest trade partner in Asia after China. EU businesses export €58 billion in goods and €28 billion in services to Japan every year. The EU estimates exports to Japan will increase 13 percent, or €13 billion, as a result of the free trade zone. Japan exports €69 billion in goods and €18 billion in services to the EU annually.

    How did we get here and what’s next?

    The EU and Japan began negotiations for a free trade agreement in 2013. The European Parliamentand Japan’s parliament approved the deal last year after both sides finalized negotiations in December 2017.

    EU and Japan are continuing investment protection negotiations and hope to reach an understanding as soon as possible.

    what effect will this agreement have on US trade policy?

  2. Economies are moving to near shoring and deglobilization... Obviously international trade will always be existent, but with strides made in automation and 3D Printing, I do not see how globalization is gonna be working much longer in a capitalist environment given the technological advancement... Surprised Amazon isn't making there own products yet with giant 3D factories
  3. Overnight


    The USA is screwed if Trump doesn't see what this means for the shift in the balance of power of global trade.

    And he won't. He's too busy stuffing himself full of America.

  4. ironchef


    This is exactly what the US asked for from EU, Japan and China yet they refused.

    Perhaps there is hope EU, Japan and China will sign an exact same deal with the US.
  5. bbpp


    Don't drink too much, it hurts your mind.
  6. srinir


    Not really. Deal also says to comply with Paris accord. US already backed out and won't agree for it
  7. So the USD is likely on the chopping'll take 20 years or so to unwind related trade but I'm not sure which currency will take its place.
  8. zdreg


    basket of crypto currency, russian rouble, norwegian krona

    ps tomorrow is promised to no one, never mind twenty years,
  9. The USD got its prominence by being everywhere, ruble/krona are nowhere. No one will give up sovereignty to crypto, so the most likely candidates are EUR and/or JPY.
    piezoe likes this.
  10. zdreg


    re: tomorrow is promised to no one, never mind twenty years,
    In 20 years my scenario is just as likely. the Euro may not even exist and the Yen may be submerged into a pacific currency. I accidentally left out the chinese yuan.
    #10     Feb 2, 2019
    nooby_mcnoob likes this.