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Japan and EU Reach 'Political Agreement' on Trade Deal

A customer looks at various types of imported cheese sold at a department store in Tokyo, Japan, July 1, 2017.

The European Union and Japan have reached an agreement on an enormous free trade deal, just two days before a G-20 meeting in Germany.

The deal will affect a majority of the commerce between the two economic giants.

Capping four years of negotiation, the deal will be officially endorsed on Thursday when Japanese Prime Minister and EU Council President Donald Tusk meet on the eve of the G-20 meeting to shake hands on the historic deal.

The economies of the European Union and Japan combined make up for an immense 28 percent of global output, creating one of the largest trade pacts ever proposed.

EU Trade Commissioner Cecilia Malmstrom said in a tweet, "We've reached political agreement at ministerial level on an EU-Japan trade deal we now recommend to leaders to confirm this at summit."

Malmstrom also tweeted the two sides "ironed out the few remaining differences," but setbacks such as translations and legal scrubbing are expected to take several months.

One senior EU official said European food and drink exporters would eventually get access to all Japanese markets tariff-free, while European carmakers would see an end to tariffs on Japanese vehicle imports. Both sides had their key demands met.

The two day G20 summit that begins Friday will also be highlighted by U.S. President Donald Trump's "America first" agenda, which he is expected to defend.

The trade deal between the European Union and Japan could be seen as a provocation to Trump, who recently pulled the United States out of participation in the 12-nation Trans-Pacific Partnership.

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