Brussels, 30/05/2011 (Agence Europe) - In agreement over the principle, the EU and Japan are soon to negotiate a trade pact. However, Tokyo will have to agree to give some ground over the dossiers of concern to the Europeans, non-tariff barriers and access to public procurement contracts.
As anticipated, the European and Japanese leaders, meeting in Brussels on 28 May, gave their agreement in principle on the future launch of discussions for a bilateral free-trade agreement, in order to boost economic relations between the Twenty-Seven and the Japanese archipelago, in a context favouring Japan, crippled by its recent double natural disaster and large-scale nuclear incident.
“We still have a long way to go, but the objective is clear at the moment. By expressing our intention of working together towards a free-trade agreement, [we have] taken a large step forwards”, said the President of the European Council, Herman Van Rompuy, after the summit. The EU and Japan agreed to start the process for negotiations in parallel, with the joint aim of an in-depth and complete bilateral free-trade agreement which responds to the issues of mutual interest and including tariff and non-tariff measures, services, investment, intellectual property rights, competition and public procurement, and also a binding agreement covering bilateral and global cooperation (see other article), the joint declaration, which was also co-signed by the President of the Commission, José Manuel Barroso, and the Japanese Prime Minister, Naoto Kan, confirms.
Over the next six months, therefore, the Europeans and the Japanese will be carrying out an exercise of delineating the scope of the future agreement (scoping), before negotiations start. However, the European executive particularly expects the Japanese authorities to attack their non-tariff barriers and the restrictions to access to public procurement they have imposed, which have been criticised by European businesses. On Saturday, Mr Barroso stressed his wish of seeing these dossiers included in the scope of negotiations, which must first of all be defined at expert level. “The agreement must attack all obstacles to free trade”, warned the head of the executive, who nonetheless said that he was “firmly convinced that Japan is safe and open for business”.
A free-trade agreement would help to breathe new life into bilateral trade in decline for more than a decade, even if the EU is still the third-largest trade partner of Japan, itself the sixth-largest partner of the Twenty-Seven. The commercial deficit registered by the EU up to 2000 has since fallen, because although its exports of goods to Japan remained stable between 2000 and 2010, dropping just one billion in value, from 45 to 44 billion euros, its imports from Japan fell by 30%, from 92 to 65 billion euros over the same period, which had the effect of bringing its deficit down from 47 to 21 billion. Additionally, in terms of investments, the FDI of the EU in Japan have fallen from 5.6 billion euros in 2007 to 1.8 billion in 2008, then 0.2 billion in 2009, before disinvestment of 4.1 billion in 2010. Japanese FDI in the EU have also fallen, from 19.2 billion euros in 2007 to 1.5 billion in 2010.
In recession once again since the double natural disaster of 11 March, Japan, which has high hopes from the lifting of European customs duty on automotives, electronics and spare parts, was even planning to launch the process of negotiations for a free-trade agreement now. But the EU, which wants to secure the removal of all non-tariff barriers put in place by Tokyo, such as the duration and cost of authorisation procedures, but also the reduction of Japanese tariff peaks on its exports of raw and processed agricultural products, leather and sports shoes - a clear demand made by the European business organisation BusinessEurope, is hoping for clear commitments from its Asian partner on all obstacles to competition. (E.H./transl.fl)