On July 6, 2017, the European Union (EU) and Japan announced they had reached an agreement in principle on what would be a milestone free trade deal – one of the most important bilateral trade agreements ever concluded by the EU – and a separate Strategic Partnership to tackle issues such as climate change and cybersecurity. For Japan this was, both literally and metaphorically, a big deal. It followed hot on the heels of the collapse of the long-awaited Trans-Pacific Partnership (TPP) trade agreement between Japan, the U.S. and other Pacific Rim countries, with some commentators believing it could herald a much-needed return to growth for the Japanese economy.
Once a model of economic prosperity, the world’s third-largest economy had been hit hard after the Tokyo stock market crash of the early 1990s, experiencing deflation and stagnation. It has also been grappling with an aging population that has presented government and business with multiple challenges.