Mubasher: Japan and the European Union (EU) have signed a massive free trade agreement on Tuesday, which includes cancelling as much as 99% of tariffs on exports.

The deal comes amid growing trade tensions between the US and China, as the two world powers have been retaliating against one another with export tariffs.

The EU’s main exports to Japan include dairy goods, whereas the Asian country’s exports to the EU mainly involve cars.

“[The] impact of today's agreement goes far beyond our shores. Together we are a making, by signing this agreement, a statement about the future of free and fair trade,” commented EU Commission head Jean-Claude Juncker.

The move also comes in contrast with the actions taken by US President Donald Trump, whose successive announcements have involved tariffs on exports from various countries particularly China.

"We are showing that we are stronger and better off when we work together. And we are leading by example, showing that trade is about more than tariffs and barriers. It is about values, principles and finding win-win solutions for all those concerned," Juncker added.

He further described the deal as “win-win” for the EU and Japan.

The deal covers nearly a third of the world’s gross domestic product (GDP) and around 600 million people.

Eighteen months ago, the US was in talks with Japan and other Asian nations over a wide-ranging free-trade agreement, the Trans-Pacific trade agreement. However, Trump withdrew from the deal soon after becoming president.

Trump’s “America First” policy has entailed the introduction of tariffs on a wide product range, hitting the steel and aluminum segment hard as these materials are imported by the US from Japan and the EU.