BRATISLAVA, July 18 (Xinhua) -- Japan-EU trade deal is good news for Slovak economy. Especially, car companies in Slovakia could profit from the JEFTA economic partnership agreement, which will boost shared trade and decrease the prices of products for consumers. Postova Bank analyst Jana Glasova said on Wednesday.
"We consider the signing of an agreement on free trade between the EU and Japan to be a positive factor, especially in today's era of growing protectionism and with a trade war between the U.S., EU and China looming over us. The deal should boost shared international trade and investments circulating between the two parties," said Glasova.
Certain goods could see a drop in prices.
"The agreement will reduce the prices of goods for consumers. For example, Japanese cars for Europeans, and wines from Europe for the Japanese. At the same time, the agreement will increase sellers' gross margins. Lowering tariffs has essentially the same effect as lowering taxes," said Tatra Bank analyst Tibor Lorincz.
According to Glasova, JEFTA will prove useful to the EU's automobile industry, as it will get rid of tariffs and multiple kinds of regulations concerning car production.
"That's good news for many European countries, including Slovakia, because car factories are one of Slovakia's main contributors to its economy's growth," stressed Glasova.
Analysts see minor risks in the agreement, mainly for domestic businesses.
"In the long run, the JEFTA deal could slightly harm domestic producers, whether it be in the EU or Japan, but we don't predict any major changes," expects Lorincz.
