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The European Union and Japan set aside their differences and reached a preliminary political agreement, paving the way for a free-trade agreement that’s been in the works for years.

The said differences were focused on car and farm goods exports, with the agreement having EU to drop its 10 percent import duty on Japanese cars while Japan is expanding its access to European farm goods, as reported by Bloomberg.

"We've reached political agreement" on an EU-Japan trade deal at the ministerial level, EU Trade Commissioner Cecilia Malmstrom said on Twitter. "We now recommend to leaders to confirm this at summit."

The new deal will become EU’s largest free-trade agreement, as the bloc is seeking to boost its open-market credentials in the face of Donald Trump’s moves to challenge the global trade order. Analysts say that this new free trade agreement is a direct answer to Trump pulling out of a Trans-Pacific commerce agreement in January.

The new deal will eliminate 99 percent of today’s tariffs when fully engaged according to an official who asked to remain unnamed because the proceedings are private. Japanese car makers have repeatedly expressed their complaints to their government for not having a trade deal with EU, saying that they are losing out to South Korean companies who already enjoy a trade deal with Europe.

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