The EU and Japan have reached an agreement in principle on a major new free trade agreement (FTA) that could deliver considerable economic benefits for both regions.

An agreement in principle has been reached on the main elements of an Economic Partnership Agreement that has been described as the most important bilateral trade agreement ever concluded by the EU.

Among other objectives, it will eliminate the vast majority of duties paid by EU companies - amounting to €1 billion annually - while opening the Japanese market to key EU agricultural exports and establishing new shared standards of labor, safety, environmental and consumer protection.

It also contains a number of data protection regulations and will - for the first time ever - include a specific commitment to the Paris climate agreement.

The FTA is expected to increase the value of exports from the EU to Japan by as much as €20 billion, with the European agriculture sector set to be experience particularly pronounced benefits, as this was a key area of focus in the negotiations.

Now that the basic principles have been agreed, negotiators will work to eliminate the remaining technical details, with the aim being to conclude a final text of the agreement by the end of the year.

The EU's commissioner for trade Cecilia Malmstrom said: "We are demonstrating that the EU and Japan, democratic and open global partners, believe in free trade; that we believe in building bridges, not walls.

"With Japan being the fourth-largest economy of the world, with a big appetite for European products, this is a deal that has a vast potential for Europe. We expect a major boost of exports in many sectors of the EU economy."