Prime Minister Shinzo Abe of Japan (center) is welcomed in Brussels by Donald Tusk, president of the European Council, and Jean-Claude Juncker, right, president of the European Commission. Image Credit: New York Times

Media outlets in the region cannot get any more eccentric in their ways.

They pay much attention to political issues and differences from a sectarian, chauvinistic and ethnic perspective — while ignoring matters of economic importance.

These, too, must be addressed given they are related to the future of the region and its economic positioning in the new division of labour.

A process that is developing at a tremendous speed amid bitter conflicts and breakthroughs in technology and artificial intelligence.

EU-Japan FTA

Among these developments is the free trade agreement between the EU and Japan that went into effect early this month. This is seen as a milestone development and result in great shifts in global trade, including for those in the Gulf and wider Middle East.

The agreement is indeed fruitful given it was signed between two major trade partners, which together represent a third of the global economy and covers about 643 million people. Their markets are among the world’s largest.

Prime Minister Shinzo Abe of Japan (center) is welcomed in Brussels by Donald Tusk, president of the European Council, and Jean-Claude Juncker, right, president of the European Commission. Image Credit: New York Times

This free trade zone will abolish tariffs and duties on exchanges between the EU and Japan.

It will also increase both sides’ competitiveness in the European and Japanese markets compared to goods and services imported from other countries, and provide customers with more options at competitive prices.

“The agreement will bring the peoples of Europe and Japan closer than ever,” said the President of the European Commission, Jean-Claude Juncker. Interestingly, the agreement includes other aspects such as labour rights, consumer protection and job creation through the development of trade exchange between the two sides.

Interestingly, the agreement includes other aspects such as labour rights, consumer protection and job creation through the development of trade exchange between the two sides.

The EU-Japan agreement could have direct effect on the course of these trade war, in which major powers are fighting over zones of influence through protectionist trade policies.

- Dr Mohammad Al Asoomi

“The agreement will bring the peoples of Europe and Japan closer than ever,” said the President of the European Commission, Jean-Claude Juncker.

Interestingly, the agreement includes other aspects such as labour rights, consumer protection and job creation through the development of trade exchange between the two sides.

Japanese cars and electronics, on which European markets impose 10 per cent duties on the first and 14 per cent on the second, will have better marketing opportunities compared with similar goods from elsewhere.

Competition

European dairy products, on which Japan used to impose duties by 40 per cent, will also have competitive marketing opportunities after the removal of custom duties.

On the other hand, this represents a challenge to the protectionist policies of the US administration, which have only helped set off trade wars.

The EU-Japan agreement could have direct effect on the course of these trade war, in which major powers are fighting over zones of influence through protectionist trade policies.

The international trade environment is now moving in two contradictory directions.

The first aims to achieve more trade liberalisation, as embodied in the EU-Japan agreement, while the other aims to take more protectionist measures as clearly evident from the US measures and the trade conflict between the US and China, which has had adverse effects on international trade.

The international trade environment is now moving in two contradictory directions. The first aims to achieve more trade liberalisation, as embodied in the EU-Japan agreement, while the other aims to take more protectionist measures as clearly evident from the US measures and the trade conflict between the US and China, which has had adverse effects on international trade.

- Dr Mohammad Al Asoomi

Where do the rest of countries stand and how much damage or benefit, if any, will result from these developments and trade conflicts?

Needless to say, there is going to be a significant impact on overall trade flows for countries of this region and in the way they need to recalibrate their economic and trade relations with other countries.

A question that needs to be raised is to which extent the region’s exports are going to be affected. Are there alternatives to accommodate these changes? What is the impact on the overall business sector?

They need answers so that countries in the region can maintain their economic interests, either by avoiding negative fallouts or by initiating steps to enter agreements that will grant them greater freedom in international trade.

Dr Mohammad Al Asoomi is a UAE economic expert and specialist in economic and social development in the UAE and the GCC countries.