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EU, Japan finalize landmark free trade pact

The EU and Japan have finalized a landmark trade pact that will remove tariff barriers between two of the world's biggest economies at a time when populist backlash against free trade is on the rise.

"It sends a clear signal to the world that the EU and Japan are committed to keeping the world economy working on the basis of free, open and fair markets with clear and transparent rules fully respecting and enhancing our values, fighting the temptation of protectionism," European Commission President Jean-Claude Juncker and Japanese Prime Minister Shinzo Abe said in a joint statement after the agreement was finalized.

Nearly 600 million people and about 30% of the world GDP will become part of the economic zone that will be created under what is one of the most important trade agreements ever concluded by the EU and Japan, the joint statement said.

The European Commission has said it expects the value of its exports to Japan to rise by as much as €20 billion under the agreement. The pact would remove the majority of duties paid by EU companies to Japan, which currently amount to €1 billion annually, and allow around 85% of EU agri-food products to enter Japan entirely duty-free over time. Japanese automakers are also set to benefit from the eventual removal of tariffs that currently range from 10% to 22%.

An initial version of the Economic Partnership Agreement was signed July 6 during the EU-Japan Summit by Abe, Juncker and European Council President Donald Tusk. With negotiations finalized, the two sides will move toward implementation.