Trade barriers are to be reduced or removed between the two regions
The European Union and Japan have signed an Economic Partnership Agreement.
EU firms export over €58bn in goods and €28bn in services to Japan every year.
Under the trade agreement, Japan will remove trade barriers and shape global trade rules in line with EU standards and values.
The agreement will remove the vast majority of the €1bn of duties paid annually by EU companies exporting to Japan - as well as a number of long-standing regulatory barriers.
It will also open up the Japanese market of 127 million consumers to EU agricultural exports, and will increase EU export opportunities in a range of other sectors.
The deal also includes a comprehensive chapter on trade and sustainable development, sets standards of labour, safety, environmental and consumer protection - and strengthens the EU and Japan's actions on sustainable development and climate change.
The agreement will eliminate or sharply reduce duties on agricultural products in which the EU has a major export interest - such as pork, the EU's main agricultural export to Japan.
Tariffs on beef will be cut from 38.5% to 9% over 15 years for a significant volume of beef products.
EU wine exports to Japan are already worth around €1bn and represent the EU's second biggest agricultural export to Japan by value.
The tariffs on wine will be scrapped from day one, as will tariffs for other alcoholic drinks.
As regards cheese exports, where the EU is already the main player on the Japanese market, high duties on many hard cheeses such as Gouda and Cheddar will be eliminated, and a duty-free quota will be established for fresh cheeses such as Mozzarella.
The agreement ensures that both Japan and the EU will fully align themselves to the same international standards on product safety and the protection of the environment - meaning European cars will be subject to the same requirements in the EU and Japan, and will not need to be tested and certified again when exported to Japan.
With Japan committing itself to international car standards, EU exports of cars to Japan will be significantly simplified.
EU Commission President Jean-Claude Juncker has welcomed the signing of the deal.
He tweeted: "With the signature of the Economic Partnership Agreement with Japan we are making a statement about the future of free and fair trade.
"The agreement puts fairness and values at its core. There is no protection in protectionism – and there is no unity where there is unilateralism."
With the signature of the Economic Partnership Agreement with Japan we are making a statement about the future of free and fair trade. The agreement puts fairness and values at its core. There is no protection in protectionism – and there is no unity where there is unilateralism. pic.twitter.com/4vMs7FcfWM— Jean-Claude Juncker (@JunckerEU) July 17, 2018
There are currently 503 Irish companies exporting to Japan from Ireland, according to the European Commission.
Some 7,651 jobs in Ireland are supported by EU exports to Japan.
The main products Ireland exports there are horse feed, dental products, scaffolding, pharmaceuticals, dairy products and chemicals.
Japan is Ireland's fourth biggest trade partner outside the EU.
The EU and Japan reached agreement in principle on the main elements of the agreement last July, and negotiations were finalised on December 8th 2017.
The European Commission then submitted the agreement for approval of the European Parliament and EU member states.
Separately the EU and Japan have agreed to recognise each other's data protection systems - known as reciprocal adequacy.
It will allow data to flow safely between the EU and Japan.
Each side will now launch its relevant internal procedures for the adoption of its adequacy finding.
This mutual adequacy arrangement will create the world's largest area of safe transfers of data, based on a high level of protection for personal data.
The European Commission says Europeans will benefit from strong protection of their personal data in line with EU privacy standards when their data is transferred to Japan.
Věra Jourová, EU Commissioner for Justice, Consumers and Gender Equality, said: "Japan and EU are already strategic partners.
"Data is the fuel of global economy and this agreement will allow for data to travel safely between us to the benefit of both our citizens and our economies.
"At the same time we reaffirm our commitment to shared values concerning the protection of personal data.
"This is why I am fully confident that by working together, we can shape the global standards for data protection and show common leadership in this important area."