Thursday, July 19, 2018

Europe and Japan announce a trade deal that will eliminate motorcycle tariffs

It was almost lost in the fuss over Harley-Davidson shifting production overseas, but Trump's obsessive 'trade wars' will produce a benefit -- albeit indirect -- for European motorcyclists.
Japan and the European Union prove that Donald Trump was right: Trade wars are easy to win. All you have to do is stay out of them

The U.S. seems bent on reneging on long established multilateral agreements, but in response other nations are quietly bypassing the U.S. to fast-track their own bilateral deals. The biggest of these has seen a sweeping free-trade agreement between Japan and the European Union, that will eliminate 99% of the tariffs the EU previously imposed on imports from Japan.

Any U.S. motorcyclists who've traveled much in Europe, and were paying attention, already know that Japanese motorcycles are much more expensive in Europe than the same models are here. 

Part of that is, I suppose, because EU regulations now force all motorcycle manufacturers to include ABS as a standard feature on all models over 125cc. But historically that price difference has largely been the result of tariffs imposed on Japanese imports. Obviously, those tariffs protected European manufacturers like KTM, BMW, Ducati, the Piaggio Group, and Triumph.

'JEFTA' (Japan-Europe Free Trade Agreement) will be implemented over the next five years. One of it's impacts will be the elimination of a 6% tariff on Japanese motorcycles. While I suppose the impact on retail prices will be masked by inflation, it will have the effect of lowering Japanese bike costs in Europe, and will obviously put price pressure on the European brands. No matter what bike you want to buy, in Europe, it's gonna' get cheaper soon. Unless you want to buy a Harley.

In exchange, I presume the Euros will get better access to the Japanese market. It is hard to believe Ducati or Piaggio will sell as many motorcycles and scooters in Japan as Honda sells in Italy, but the really big implication is that European-certified vehicles (cars as well as bikes) will now be eligible to enter the Japanese market without going through Japan's very costly and time-consuming homologation procedures.

Sadly, by the time the deal is really in effect, Britain will no longer be part of the EU.

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