European Commissioner for Trade Cecilia Malmstrom (left) shakes hands with Japanese Foreign Minister Fumio Kishida (right) | EPA/Franck Robichon | Pool photo by Franck Robichon/EPA EU and Japan hit back at protectionism with trade deal Deal is seen as counterblast to US President Trump’s ‘America First’ strategy.

Japan and the European Union delivered a significant riposte to the protectionist agenda of U.S. President Donald Trump on Wednesday by striking the world's biggest trade agreement.

Japan's Prime Minister Shinzō Abe is traveling to Brussels for a summit with the EU on Thursday, where he is now expected to sign the political agreement for a free-trade deal that will cover more than a quarter of global economic output.

Tough negotiations have dragged on for more than four years and have centered primarily on EU farmers seeking greater access to Japan's food market and Japanese carmakers seeking an end to the EU's 10 percent tariff barrier on motor vehicles.

European Commissioner for Trade Cecilia Malmström said she had "ironed out the few remaining differences" in discussions with Japanese Foreign Minister Fumio Kishida on Wednesday.

To celebrate, Malmström posed for photographs with Kishida, drawing eyes onto traditional Japanese daruma dolls. These are symbolic figurines that are purchased with blank eye sockets. When setting out toward a big goal, one eye is drawn in. The second is only added when the goal is achieved.

Painting eyes on symbolic daruma dolls to mark agmnt at Ministers' level on #EUJapan trade deal, in prep for summit https://t.co/0RHRXBZlfv pic.twitter.com/L7tQe8hdNA — Cecilia Malmström (@MalmstromEU) July 5, 2017

A political deal covers more than 90 percent of the issues under discussion, and a senior EU official said the whole accord could be wrapped up by the end of the year, with 99 percent of goods on course to be traded tariff-free.

The official acknowledged that growing global resistance to Trump had helped push the deal over the line and said the accord “was probably helped by what we both see as a deterioration of the international climate” on trade and investment.

The timing of Thursday's EU summit is highly significant as it will come on the eve of a summit of the G20 group of the world's leading economies in Hamburg, with Trump in attendance.

In terms of the timings of tariff cuts agreed in the final compromise, one European diplomat said the deal would greatly reduce Japanese tariffs on imports of European cheese over 15 years and scrap EU tariffs on Japanese cars over seven years. On some car components, duties will be reduced well before seven years.

Hungry Japanese market

Japan is also expected to open its public procurement market to foreign competition as part of the deal, most importantly by dropping a clause that largely shuts European trainmakers out of the Asian country's railway business. This has been a long-standing bugbear for companies such as France's Alstom and Germany's Siemens.

In another boon to Europe's farmers, the agreement will also protect 205 European geographical indications for iconic food names of gourmet products. Malmström was very bullish on the effect the deal will have on the European food sector.

“We hope that we could triple our agriculture exports,” she said. “EU exports to Japan overall could, according to our calculations, be boosted by one-third.”

Overall, the Commission predicts that EU exports of processed food could rise by up to 180 percent and export of chemicals could surge by more than 20 percent.

"There are some technical and legal issues that remain to be resolved" — Pedro Silva Pereira, European Parliament rapporteur on the Japan deal

Investment protection is excluded from the agreement, as well as some questions on regulatory cooperation that both sides want to iron out in coming months.

Pedro Silva Pereira, the European Parliament’s rapporteur on the deal with Japan, said there was still a “huge gap” on investment protection.

“A political agreement means we have a deal on market access, which is important, but we still don’t have a final text. There are some technical and legal issues that remain to be resolved. And we haven’t come closer on agreeing on an investment protection mechanism,” he said.

An 11th-hour spat has focused on the draft joint statement for Thursday’s summit, on which the EU side insisted.

The EU on Tuesday circulated a text that included broad political declarations to jointly defend a rules-based world order and the Paris climate agreement, in another clear rebuke to Trump.

Tokyo signaled it preferred a statement solely on the trade deal. Japanese officials also weren’t best pleased about the fact that Brussels linked the trade deal to assurances on democracy or human rights — as if the Japanese government had deficits in these areas.

A possible compromise could be to draft a downscaled text confined to endorsing the political agreement of the trade deal and a collaboration against terrorism, one diplomat suggested.

The EU-Japan trade deal will not include the thorny issue of data flows. European Commission President Jean-Claude Juncker and Prime Minister Abe came to an agreement to leave language on data flows out, but the deal will add a “review clause” to discuss the topic at a later stage.