From Policy to Practice The Role of the Economic Partnership Agreement in Overcoming Trade Barriers for Swedish Firms in Japan

Abstract

The EU-Japan Economic Partnership Agreement (EPA) entered into force in 2019, aiming to eliminate formal trade barriers and create a more open trade environment. However, the agreement's impact remains unclear, and foreign companies in Japan continue to face significant trade barriers. This study focuses on Swedish companies in Japan and examines how the EPA has influenced both formal and informal trade barriers and explores what additional institutional support that could complement the agreement. The study addresses two gaps in existing research. First, it offers a firm-level perspective on how Swedish companies experience trade barriers, whereas earlier research has focused on the EPA’s macroeconomic effects. Second, it highlights the significance of informal trade barriers, which have received limited attention despite their practical relevance. Findings from 21 interviews with Swedish firms and institutional actors on-site in Tokyo show that awareness of the EPA is limited, which has led to underutilization of the agreement. Although formal barriers have been reduced, informal barriers remain a major challenge which reflects a closedness of the Japanese market that disadvantages foreign firms. To complement the EPA, institutional support should focus on increasing awareness of the agreement, lobbying for harmonization, and helping firms navigate the Japanese business environment.