EU-Japan trade relations are characterised by a strong economic partnership, reinforced by the Economic Partnership Agreement (EPA). Japan is one of the EU’s largest trading partners, with large exchanges of automotive, machinery and chemical products. Both sides continue to work together on global challenges such as digitalisation and climate change, which further strengthens bilateral economic ties.

Japan is the EU’s 7th largest trading partner, while the EU is Japan’s third largest overall trading partner after China and the US. Industrial goods dominate bilateral trade. EU exports include machinery and transport equipment, chemicals, other industrial products and basic products such as agriculture, raw materials and energy. The Union market imports mainly machinery and transport equipment and chemical products from Japan. The EU notes a surplus in trade in services with Japan. It results from trade in telecommunications/computer/information services, financial flows related to intellectual property, other business services and financial services.

The Economic Agreement (EPA) with Japan is one of the EU’s most important bilateral trade agreements. It opens the Japanese market to European agri-food products, products from other economic sectors, and opens up the market for services, in particular financial services, e-commerce, telecommunications and transport. It guarantees access for EU companies to the public procurement market in Japan and sets the highest standards in the areas of labour market, food security and environmental protection. It also removes a number of non-tariff barriers to bilateral trade.

The EPA facilitates investment flows between the EU and Japan. EU and Japanese companies are free to establish branches or subsidiaries in order to develop their business activities. For Japan, foreign direct investment (FDI) plays a key role in boosting economic growth.

In 2019, the EU and Japan signed a partnership agreement on sustainable connectivity and infrastructure quality. This is the EU’s first-ever partnership with a third country.

The EU-Japan Centre for Industrial Cooperation is a joint initiative to foster industrial, trade and investment cooperation between the EU and Japan. It has been in place since 1987 and is jointly funded and managed by both sides, it has its headquarters in Tokyo and an office in Brussels. The Centre offers business support, training programmes, economic analysis, seminars, workshops and business missions.

The EU-Japan Business Round Table is a forum that brings together business leaders from the EU and Japan. It is composed of representatives of leading EU and Japanese companies who meet once a year to discuss all aspects of business cooperation and formulate policy recommendations for improving the business environment. It covers different sectors, providing a comprehensive approach to bilateral economic cooperation.

The European Business Council (ECB) is an association of 15 European national chambers of commerce and business associations in Japan. It represents more than 2500 local European companies and individuals and works closely with the EU Delegation, European embassies and business organisations to coordinate policy proposals. Together with 22 industry committees, the ECB publishes an annual report on Japan’s business environment.

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