Following the 18th round of negotiations for an EU-Japan free trade agreement that took place in Tokyo in early April following the reaffirmed commitment by the leaders of the two sides on 21 March to conclude these talks swiftly by the end of 2017, European Commissioner for Trade Cecilia Malmström blogged on Tuesday 11 April about the opportunities of such an agreement.
The negotiations for free trade agreements between the EU and US (TTIP) and the EU and Canada (CETA) have somewhat eclipsed the similar negotiations underway with Japan since 2013. Japan is the fourth most powerful economy in the world and has a market of 130 million people, to which the EU exports over €80 billion in goods and services annually, Malmström states. Over 600,000 jobs in the EU are linked to exports to Japan, and Japanese companies employ over half a million people in the EU, she adds.
The free trade agreement with Japan is aimed at lifting the “wide range” of barriers that EU businesses face on the Japanese market, Malmström continues. One is related to tariffs, with “quite high” duties on “many” European food products such as pasta, chocolate, wine and other consumer goods such as shoes and leather goods, she says, underlining that an agreement “would improve” this access “considerably” and would enable European exporters to save €1 billion in customs duties annually.
Another obstacle involves Japanese technical requirements that “often” make exports of safe European goods to Japan more difficult, Malmström adds, promising more transparent and fairer rules for EU exporters under a trade agreement. “The best way to secure such a level playing field is by ensuring that requirements are in line with international standards. Already, our negotiations have born valuable fruit, as the EU and Japan have intensified their cooperation in several international standard-setting fora, for instance on motor vehicles”, she continues, adding that the agreement will also include a specific chapter on SMEs.
The EU wants to obtain “new opportunities” for service businesses and EU investors in maritime and financial service sectors or digital trade and “bigger opportunities” on Japanese public procurement, Malmström adds.
Furthermore, the agreement will contain all the guarantees in CETA – the protection of the right of states to regulate, solid rules on labour rights and the environment, and the guarantee that public services will be able to stay public. The EU has also proposed to Japan that the country follows the EU’s “new transparent model” of resolving investment disputes (the investment court system - ICS), Malmström adds.
Underlining great transparency in the negotiating process, Malmström says that as well as its economic gains, a free trade agreement between the EU and “its closest Asian ally is needed more than ever to build bridges in the face of growing protectionism in the world”. “This agreement would send a powerful signal”, she says.
The 18th round of EU-Japan free trade talks, in Tokyo on 3-5 April (see EUROPE 11766), has enabled “work to reduce the gaps” between the two sides, Malmström states, with the objective of concluding an agreement as soon as possible in 2017. “No date has yet been defined for the next round, but the process should be stepped up more”, a source close to the issue told EUROPE on Wednesday 12 April. European and Japanese leaders are expected to maintain political momentum at the G7 summit in Taormina, Italy, on 26-27 May. (Original version in French by Emmanuel Hagry)