Brussels - The EU and Japan have finalised terms for a giant free trade deal which has been presented as a challenge to the protectionism championed by US President Donald Trump.

The trade deal, which the European Union says is its biggest ever, must still be signed and ratified by both sides who first agreed to its broad outlines in July.

"We welcome the finalisation of the negotiations of the Economic Partnership Agreement between the European Union and Japan," European Commission chief Jean Claude Juncker and Japanese Prime Minister Shinzo Abe said Friday in a joint statement released in Brussels.

With the deal, the EU is seeking access to one of the world's richest markets, while Japan hopes to jump-start an economy that has struggled to find solid growth for more than a decade.

Japan is also hoping to seize an opportunity after the failure of the 12-nation Trans-Pacific Partnership (TPP), which was torpedoed by Trump in January.

- "strategic importance" -

Juncker and Abe said in the statement that the agreement has "strategic importance" beyond its economic value.

"It sends a clear signal to the world that the EU and Japan are committed to keeping the world economy working on the basis of free, open and fair markets with clear and transparent rules fully respecting and enhancing our values, fighting the temptation of protectionism," they said.

Hailing the opening of markets, EU Trade Commissioner Cecilia Malmstroem said: "This is actually the biggest trade deal we have ever negotiated from the European Union."

Last year, the EU and Canada struck a major trade deal as EU-US trade talks stumbled.

The EU-Japan statement said the finalisation of the talks now paves the way for the signature, ratification and full implementation of the agreement.