Fact Sheet

Japan-EU free trade agreement: What it means for Swiss exporters

The European Union and Japan reached a free trade agreement in July 2017; it is expected to enter into force in 2019. What will this new FTA mean for Swiss exporters? A comparison by Professor Patrick Ziltener on behalf of Switzerland Global Enterprise (S-GE) shows that, although competitors in the EU will pay lower tariffs in certain sectors and receive better access to public procurement, Swiss companies will benefit from economic reforms in Japan.

Factsheet FTA

There are two main areas in which Japan has negotiated lower tariffs with the European Union compared to those with Switzerland (in force since 2009).

The first is agriculture: While Switzerland and Japan only agreed on mutual tariff concessions for selected agricultural products, 85% of tariffs are set to disappear from exports of agricultural products from the EU to Japan in the next few years. Some of the product areas in which producers from the European Union will gain easier access to the Japanese market include: pork, beef (except dried meat such as Bündnerfleisch), milk, (processed) cheese, butter, yoghurt, ketchup or bakery products and baked goods.

The second is industrial goods: In their agreements with Japan, both the European Union and Switzerland abolished tariffs on the vast majority of products in this area. Exporters from EU countries only receive better conditions for a few goods that are insignificant for the Swiss export industry: salt, a few organic chemicals, certain leather products, ski and sports shoes and slippers.

EU-based companies given more consideration for public procurement 

Switzerland and Japan both signed the WTO Agreement on Government Procurement (GPA), which ensures mutual access to public procurements. Patrick Ziltener's comparison shows, however, that the EU receives an additional concession under the Economic Partnership Agreement with Japan: companies from the EU can, for instance, also submit offers for city projects, hospitals or academic institutions as well as goods and services related to (rail) transport. Likewise, Japanese companies are also allowed to participate in procurement in the EU.

Reforms in Japan favor Swiss companies

Although the agreement grants lower tariffs to companies from EU countries and allows them to participate in the procurement process, Japan’s negotiation of free trade agreements has removed various non-tariff trade barriers, and this also benefit Swiss companies. Examples include a reduction in the cost of certifying medical devices and the adoption of the international textile labeling system. In addition, Japan has given priority to the admission test for innovative pharmaceutical products and medical devices. The reporting system, which could hinder the marketing of many drugs, medical devices and cosmetics, has also been abolished.

Detailed information on the impact of the Japan-EU Economic Partnership Agreement on Swiss companies can be found in the Factsheet in the download-sector.

About Patrick Ziltener

Prof. Dr. Ziltener is a lecturer at the University of Zurich. His teaching and research focuses on areas such as free trade agreements, as well as other topics relating to globalization/transnationalization. From 2006 to 2009, Patrick Ziltener was a research assistant at the State Secretariat for Economic Affairs (SECO) and was Secretary of the free trade negotiations between Switzerland and Japan.

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