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Source: www.asiaecon.org |

JAPAN SWITZERLAND SIGN AN ECONOMIC PARTNERSHIP AGREEMENT


Japan and Switzerland have signed an Economic Partnership Agreement (EPA) aimed at providing free trade between the two countries during the next 10 years. The EPA will not only bolster economic ties between the two countries, but may also stimulate Japan's sagging export sector amidst the economic slowdown. Moreover, the recently signed deal represents Japan's efforts to counter growing protectionism tendencies around the world during the global economic crisis.




Japan and Switzerland have signed an Economic Partnership Agreement (EPA) aimed at providing free trade between the two countries during the next 10 years. The EPA will not only bolster economic ties between the two countries, but may also stimulate Japan’s sagging export sector amidst the economic slowdown. Moreover, the recently signed deal represents Japan’s efforts to counter growing protectionism tendencies around the world during the global economic crisis.
   
Japan and Switzerland have increasingly placed efforts to expand bilateral economic cooperation throughout the last few years. Both countries have enjoyed strong economic relations mainly due to converging trade ideologies on several issues, such as agricultural protectionism. Switzerland is one of the top ten foreign investors in Japan, while Japan is one of Switzerland primary business partners in the Asian continent. The two countries also share mutual interest in expanding trade in areas of investment, intellectual property rights and collaboration in tourism and technology sectors.

Moreover, while Switzerland expects strengthened relations with Japan to expand its market access in the region, Japan expects improved relations with the European country to enhance its trading position in East Asia.

In 2006 Japan imported over $6.38 billion of Swiss products, while Switzerland imported around  $3.08 billion worth of Japanese products.  In 2007, Japanese exports to Switzerland totaled $3.81 billion , while Swiss exports to Japan amounted to $6.58 billion.

As of now, Switzerland already enjoys substantial cuts in tariffs with 77% of its exports to Japan being duty-free. However, 76% of Japanese exports to Switzerland are subject to Swiss tariffs.

Japan and Switzerland began FTA negotiations in 2007, and they expect the agreement to go into force by the end of 2009. Under the agreement, 99% of bilateral trade between the two regions will be tariff-free within the next 10 years. The deal seeks to remove tariffs in several goods, such as agricultural and industrial products, with the only exception coming from Swiss specialty goods, such as chocolate and natural cheese.

Moreover, the agreement will also include issues such as services, cooperation and investments, electronic commerce, competition, business travel links and intellectual property rights. Both countries will increase collaboration in areas such as anti-counterfeiting and anti-piracy, as well as seeking to improve the business environment by relaxing residential and nationality requirements for foreign business workers.

The Japan-Switzerland EPA agreement is expected to significantly boost Japan’s exports revenue, as it will provide immense opportunities for increased trade between the two countries. As a country that is heavily dependent on exports, Japan has been suffering from plunging demand from its biggest markets, such as the US and Europe. In December, Japan’s total exports fell by 35% and plummeted by 46% from a year earlier during the first 20 days of January.
 
The reduction in tariffs will allow Japan to expand its automobile and electrical appliances exports to Switzerland, while simultaneously expanding Switzerland’s market access for products such as coffee and other specialty goods.

As the global economic downturn increasingly hinders global trade,  the conclusion of this EPA  represents Japan’s efforts to counter protectionism and encourage international trade expansion. Japan has stated the significance of international trade agreements as it provides a crucial means for countries to achieve sustainable economic growth and recover from the impacts of the global economic downturn. In fact, Japan has been one of the largest beneficiaries of open multilateral trade. As such, Japan has vehemently opposed the trend towards protectionism and has placed significant efforts in  encouraging further international trade agreements.

Japan has already signed 11 free trade agreements with countries such as Mexico, Chile,  Malaysia, Thailand, Singapore, and the Association of Southeast Asian Nations (ASEAN).  Furthermore, Japan has already started similar negotiations with Australia, India and South Korea.

Source: www.AsiaEcon.org
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Source: www.asiaecon.org |


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