The deal signed in Tokyo by the EU's top officials and Japan's Prime Minister Shinzo Abe creates a free trade zone covering almost a third of the world's GDP. According the European Commission, the deal is projected to eliminate just under $1.2 billion worth of tariffs for EU exporters and double the amount for Japanese firms.
"It is expected that this agreement will promote the liberalization and facilitation of trade and investment between Japan and the European Union and will further vitalize both economies by strengthening reciprocal economic ties", the Ministry of Foreign Affairs of Japan said in a statement said.
EU Council President Donald Tusk and Commission head Jean-Claude Juncker landed in Japan late Monday after talks in Beijing, where they urged global trade cooperation and warned against trade wars.
The trade pact creates the world's largest open economic area.More news: Paul Manafort's request to move trial to Roanoke denied
"We are sending a clear message that you can count on us, both Japan and the EU".
The Japan-EU statement is meant to confirm their stance of warning against such hardline policies of the Trump administration and mutually cooperating to firmly maintain the free trade regime.
The EU - the world's biggest single market with 28 countries and 500 million people - is trying to boost alliances in the face of Trump's protectionist administration.
"There is still time to prevent conflict and chaos". The deal will bring down the prices for European wine, pork and cheeses for Japanese consumers, while made-in-Japan machinery parts, tea and fish will become cheaper for Europeans.
Japan's Prime Minister Shinzo Abe had been scheduled to sign the deal in Brussels last week, but cancelled his trip after devastating floods that killed more than 220 people.More news: Trump reveals details of planned Air Force One makeover
The difference is due to exceptions such as rice, a product which is culturally and politically sensitive and has been protected for decades in Japan.
One of the biggest European Union exports to Japan is dairy goods, while cars are one of Japan's biggest exports.
"We are showing that we are stronger and better off when we work together".
That follows an earlier move by Washington to impose 25% tariffs on 34 billion dollars (£25 billion) of Chinese goods.
Mr Trump pulled the United States out of the Trans-Pacific Partnership with Japan and 10 other states on his first day in office in January 2017 and has pushed to renegotiate a free trade pact with Canada and Mexico. Japan will get cheaper cheese, such as Parmesan, gouda and cheddar, as well as chocolate and biscuits. Japan's growth remains heavily dependent on exports.More news: Alabama college student's 32 km walk to work attracts praise, new car
No wonder then that the International Monetary Fund on Monday estimated that annual global economic output could be half a percentage point lower than projected by 2020 if current trade policy threats - and retaliatory actions from USA trading partners - come to pass. Europeans should benefit, too, from lower vehicle prices.
- Watch Rami Malek Transform Into Freddie Mercury in New 'Bohemian Rhapsody' Trailer
- Obama gives Trump sharp rebuke in Mandela address on values
- European Union to sign its biggest free trade deal with Japan
- The official photos from Prince Louis' christening have been revealed
- Trump strikes back at critics of Helsinki summit with Putin
- Oxygen Masks Dropped as Ryanair Flight Plummets 27,000 Feet, Hospitalizing 33
- Galaxy Note 9 official press render leaked
- As sanctions start to bite, Iran crude exports set to wilt
- Wild video shows Las Vegas police pursuit, shootout with suspects
- People now want French and Croatian presidents to fall in love