This week the European Parliament in Strasbourg approved the agreement with Japan to form the world’s largest free trade area. This overcomes the final obstacle to the deal, which should enter into force next year.

The EU-Japan Economic Partnership Agreement, adopted by 474 votes to 125 and 40 abstentions, will result in the abolition of almost all customs duties amounting to more than €1 billion a year for EU businesses. This is a clear signal of the support for free and fair trade based on rules and values, “at times of serious protectionist challenges.”

While the most sensitive sectors for the EU such as rice production remain protected, other like wines, cheese, beef, pork, pasta, chocolate and biscuits will be imported duty-free either immediately or after a transitional period. A total of 205 goods with European geographical indicators will be protected to help the small and medium-sized enterprises (SMEs), which account for 78% of exporters to Japan.

Japan has already ratified the agreement. Following the endorsement of the trade agreement by the European Parliament, the EU Council is expected to give its final approval on 21 December, which will allow it to enter into force on 1 February 2019. To achieve this this, it must be ratified by all countries Member States.

Negotiations on a separate agreement with Japan on investment protection are currently in progress.

The EU-Japan Economic Partnership Agreement is of strategic importance. This is the most important bilateral trade agreement ever concluded by the EU, and it covers almost one third of the world’s gross domestic product (GDP), almost 40% of world trade and more than 600 million people.

Japan is the third largest market in the world, but only the EU’s sixth largest trading partner. This agreement will strengthen existing bilateral trade and political relations.

Critics believe that the agreement will give too much power to multinational companies and could undermine environmental and labor standards. Both Brussels and Tokyo want it to happen before the UK leaves the EU in late March.

Japan, whose many automobile producers serve the EU market from its British bases, wanted the agreement to be applied to the transitional period of Brexit by the end of 2020, although this period is uncertain due to the political turmoil in the UK.