Brussels, 26/03/2013 (Agence Europe) - The free trade negotiations, officially started on 25 March, will be difficult - especially as regards cars, with European manufacturers facing weak domestic demand and being more and more concerned by an influx of Japanese exports.
In the discussions with Japan, the EU will focus on lifting non-trade barriers. The EU27 have already said that they will lower their customs duties on the import of Japanese vehicles only in proportion to the reduction of technical and regulatory barriers in Japan.
All eyes are on the automobile sector. The EU currently imposes customs duties of 10% on Japanese cars, whilst Japan has a zero rate on foreign cars. Japan wants the EU to reduce its tax on cars, as cars represent nearly 20% of Japan's total exports to the European market. However, the EU will only accept to do this if Japan relaxes its automobile safety standards and reduces its preferential treatment of mini cars. In addition, the EU will request the inclusion of safeguard clauses allowing it to impose temporary restrictions on Japanese automobiles should there be a rise in imports. The free trade agreement with South Korea, which came into force on 1 July 2011, has made Europe all the more apprehensive of the idea of a rise in imports of Japanese vehicles.
European car manufacturers are also on their guard. They are “global players with factories in all regions of the world. As such, they support multilateral efforts to liberalise trade in automobiles”, a press release from the European Automobile Manufacturers' Association (ACEA) states. “We are strongly in favour of FTAs that are balanced and that provide real opportunities for export”, says ACEA Secretary General, Ivan Hodac. “However, we still have some reservations about an FTA with Japan. We question its potential to create sufficient opportunities for European exporters to counterbalance the greater access to the EU which Japanese manufacturers will gain as a result of tariff reductions”, he adds.
Japan retains its unique national requirements which add to the cost of imports to Japan without bringing benefits to the consumer. Tokyo must, therefore, accelerate harmonisation of its vehicle standards with UNECE regulations, ACEA states. “Our industry requests that an EU type-approved vehicle can be sold in Japan without the need for further certification or costly modification. This is not the case today. European cars are amongst the safest and cleanest in the world, so there is no reason why a car that is suitable for EU consumers should not be suitable for Japanese consumers”, Hodac states. ACEA also wants Japan to revise its system of tax advantages enjoyed by Japanese mini cars (kei-cars) so that European sub-compact cars can compete on an equal footing. (EH/transl.fl)