The Jefta Free Trade Agreement between the European Union and Japan officially came into force on 1 February 2019. Jefta accounts for 30 percent of world trade and is the largest free trade agreement in the world. According to its 300 pages, the devil is in the detail. In this article you can find out how to support the customs and foreign trade experts at Kloepfel 4PL Solutions in order to benefit from Jefta.
The aim of Jefta (Japan-EU Free Trade Agreement) is to remove barriers in trade between EU and Japanese economies as far as possible. Due to the size of the Japanese market with its 127 million inhabitants, the EU Commission expects a strong increase in European exports.
Jefta is also a partnership agreement with a “clear signal against protectionism” in times of Brexit and current trade disputes with the US, said trade commissioner Malmström at the signing ceremony.
The agreement benefits all German small and medium-sized enterprises which trade with Japan. On the one hand, it is about tariff reductions in order to lower or completely abolish trade barriers for exports and imports. On the other hand, standardization in technical matters or in the case of foodstuffs will be simplified in order to ease access to the Japanese or European market or to make it even possible in the first place.
With the exception of a few industrial sectors, the following sectors benefit: chemicals, reprocessing, mechanical engineering, automotive, special vehicle construction, food, consumer goods non-food, service providers, pharmaceuticals, healthcare, furniture and others.
In the food sector, for example, Jefta makes it possible for many companies to do business with Japan for the first time. Here the rules of the Japanese food industry have been adapted in such a way that food produced in Germany or Europe now has the opportunity to be approved in Japan. Brussels was particularly concerned that the protected designations of origin (Thuringian Rostbratwurst, Prosecco etc.) should also be respected within the framework of the Japan Agreement. Conversely, of course, the same applies to Kobe meat, for example.
In order to benefit from the advantages, companies have to take certain steps. In the first step, the basic requirement for participation must be met by registering with customs as a Registered Exporter (REX). Pure registration is simple. You have to fill out a form, send it to the customs authority and get a number with which you are registered. This is just a registration form, which does not require a permit and for which you do not have to meet any requirements. Everything that follows becomes more complicated according to the 300 pages that the agreement contains.
As with many of these agreements, it must in principle be possible to prove that the goods concerned qualify for preferential treatment within the meaning of the agreement.
The Jefta Agreement, for example, only favors goods of EU origin. The goods for (duty-free) import into the EU, on the other hand, must have been manufactured in Japan. For this purpose, Japanese and European companies must comply with various so-called rules of origin. For example, the goods may have to be entirely obtained or manufactured in the territory of the EU or Japan. Or it is a preferential originating product if the products have undergone sufficient treatment or processing in Europe or on Japanese ground. In this context, Jefta provides that the production of goods from raw materials may not exceed certain percentages. For this purpose, certain texts for import and export must be attached to the invoices, specified formalities must be adhered to and various proofs must be provided.
Only when all the necessary information and supporting documents for the customs declaration have been correctly submitted a customs privilege or clearance is granted for the corresponding imports. Otherwise the customs duty would be due, which would be the norm if there was no agreement.
The customs and foreign trade experts at Kloepfel 4PL Solutions help companies to set up processes and documents specifically for their situation and markets with which they can participate in Jefta in accordance with the rules.
We will work out an appropriate result document together with you, with which you can work in day-to-day business with the customs authorities. We implement such a project within a few weeks.
If required, Kloepfel 4PL Solutions also offers coaching to logistics departments. Here we teach you how to correctly declare the relevant documents and formal requirements for Japanese imports to customs.
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Christian Fischer
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P: +49 211 / 882 594 0 | M: +49 152 / 227 227 50 | c.fischer@kloepfel-supply.com
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