EU to open Japan trade talks

EU to open Japan trade talks

BRUSSELS- Agence France-Presse
EU to open Japan trade talks

A customer checks out LCD television sets made by Japanese electronics giant Sony at a Tokyo electronics shop. The European markets may whet the the appetite for Japanese retailers. AFP photo

European Union trade ministers yesterday agreed to launch negotiations on a potentially giant free trade agreement (FTA) with Japan despite concerns from European car-makers, EU diplomats said.

A decision to give the EU executive, the European Commission, a mandate to launch the talks, which could take several years, was “just agreed” by the bloc’s 27 trade ministers, said one EU diplomat.
The EU, which together with Japan accounts for more than a third of the globe’s output, is looking to accelerate trade deals worldwide to give its struggling economies a shot in the arm.

The EU’s Trade Commissioner Karel De Gucht has said a free trade deal, or FTA, could increase EU gross domestic product by almost one percentage point, boost EU exports to Japan by one third, and add 400,000 extra jobs across the 27-nation bloc.

“Let’s be clear. We need these jobs, and we need this growth in the current economic climate,” he said in the summer.

But Europe’s struggling car and car part manufacturers are fearful the removal of tariffs would lead to a rise in Japanese car imports, pointing to a previous trade deal with South Korea that bumped up sales of their vehicles in Europe.

Other European manufacturers complain of failing to find a footing in Japan, which has a reputation for being a closed market.

But EU sources has said Japan is ready to open up its market, recently having finally agreed to grant liquor licenses for EU firms.

As for the car industry, its troubles, they say, are due to the economic crisis and to over-capacity, not to competition from elsewhere.

De Gucht said in July that a number of European industries supported a deal tying the globe’s largest market to the world’s third biggest economy.

‘Prize for Europe’

Among the sectors he cited were agri-food, drinks, chemicals, ICT, services ad pharmaceuticals.
Britain is supportive, having welcomed a deal as “a significant economic prize for Europe,” worth up to 33 billion euros $43 billion) a year in GDP and an extra 43 billion euros a year in additional export opportunities.” De Gucht has pledged to ensure Japan dismantles non-tariff barriers as set out in a roadmap agreed by both sides this year.

“If the implementation has not been satisfactory, I will stop the negotiations,” he said.
He said he had also made it clear that Europe would not reduce tariffs before Japan delivers on regulatory barriers. Struggling to boost growth and create jobs, the EU is looking at concluding a series of trade deals worldwide, in particular with emerging economies. Should the EU conclude all the FTAs currently being negotiated, it would boost EU GDP by more than two percent, or 250 billion euros, officials estimate.

Japan is also close to launch free trade talks with China and South Korea.