The European Union and Japan have signed a trade deal eliminating 99% of tariffs that cost businesses in the EU and Japan nearly $1.17 billion every year.

According to the European Commission, the EU-Japan Economic Partnership Agreement (EPA) is the largest trade deal ever negotiated by the EU: it will create a trade zone covering 600 million people and nearly a third of global GDP.

Japanese Prime Minister Shinzo Abe met European Commission President Jean-Claude Juncker and European Council President Donald Tusk in Tokyo and signed the EPA at the 25th EU-Japan Summit.

The EPA, which was finalised in late 2017 after four years of negotiation, is expected to come into force by the end of the ‘current mandate’ of the European Commission in autumn 2019.

The total trade in goods and services between the EU and Japan is worth $100 billion.

Among other things, the agreement is expected to increase chemical exports from the EU to Japan by 22% and mechanical-engineering shipments by 16%.

The Japanese computer, electric and automobile industries are all expected to benefit from the deal. For example, EU import tariffs on Japanese cars, currently at 10%, will gradually be reduced to zero.