By BLOOMBERG

TOKYO • Japan and the European Union (EU) signed a trade agreement yesterday in Tokyo that lowers barriers on the movement of goods and services between the two economies and provides a counterweight to US 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 Minister Shinzo Abe, European Commission President Jean-Claude Juncker and European Council President Donald Tusk signed the pact.

The deal, which had been under negotiation since 2013, was to have been signed in Europe earlier this month, but Abe was forced to cancel his trip after serve flooding and landslides in Japan claimed the lives of more than 200 people.

Europe and Japan are rallying to bolster multilateral agreements as US 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 US out immediately after taking office. The EU is joining with Asia’s biggest economies to defend the global trading system from attacks by Trump, who over the weekend suggested the 28-member bloc was the US’ biggest foe globally.

“We underline the crucial role of the rules-based multilateral trading system with the World Trade Organisation (WTO) at its core and continue to fight protectionism,” Japan and the EU said in a joint statement issued in Tokyo yesterday.

“In giving full effect to this agreement, Japan and the EU are sending a powerful message to promote free, fair and rules-based trade, and against protectionism.”

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.

The Japan-EU trade agreement is expected to boost Japan’s economy by about 1%, or ¥5 trillion (RM177.89 billion), and add roughly 290,000 jobs in the nation, according to Japan’s Ministry of Foreign Affairs.

A 10% import duty on cars from Japan will be phased out over the course of eight years after the deal takes effect, the ministry said. That contrasts with the possibility that the US president invokes national security risks to impose 25% tariffs on Japanese car imports.

European exporters to Japan will see the vast majority of €1 billion (RM4.85 billion) of duties they pay annually removed, benefitting producers of cheese, wine, beef and pork, according to the European Commission.

The aim is for the deal, which will be the EU’s biggest-ever commercial agreement, to take effect by late 2019. It is awaiting approval by EU governments and by the European Parliament, which is likely later this year. Japan’s Parliament also needs to approve it.

Japan and the EU also signed a strategic partnership agreement yesterday that will reinforce cooperation in fields including security, cyber crime and climate change.