Commission pushes for Japan trade deal
By Andrew Gardner
12 July 2012
Car industry causes concerns.
The European Commission will next Wednesday (18 July) ask member states for a mandate to start talks with Japan on a bilateral free-trade deal.
Advocates of a free-trade deal between the world’s fourth and fifth-largest economies are urging speed, highlighting the potential to help the European Union’s economic recovery. However, a third of the EU’s member states have reservations about Japan’s readiness for a deal and about the mandate that the Commission is seeking.
At a meeting of trade ministers on 30 May, some countries argued that the 12-month scoping exercise conducted to test the potential for an agreement should have probed more deeply about Japan’s commitment to reaching a deal. The Commission refused to re-open the scoping exercise and insists that it has “clear commitments written in stone” from Japan that would not normally be made at this stage.
According to diplomats and EU officials, those countries that will push for a tougher negotiating mandate include four of the EU’s largest economies: Germany, France, Italy, and Spain. The others are Austria, Bulgaria, Greece, Romania, Slovakia and the Czech Republic.
The car industry is an area of particular concern. Manufacturers believe that Japan’s standards and regulations – non-tariff barriers – contribute to making it 30% more costly to own a European car than a Japanese care.
There are also doubts about non-tariff barriers in the health sector, and about rules for public tenders. The prospects of agreement on public procurement have, however, improved, as the EU, Japan and the US agreed in December to open up their markets for public contracts.
Arguments for a quick agreement between the Commission and member states, an EU official said, include the EU’s need for growth and the political situation in Japan, where the government is pushing through reforms against a backdrop of waning public support and divisions within the ruling party.
According to a Japanese official, the date of this year’s EU-Japan summit will be set only once the EU has agreed on a mandate for free-trade talks. His EU contacts suggest that the aim is to agree a mandate at the European Council in October. That would open up the possibility of a summit in November, probably in Tokyo.
The trade mandate will also affect progress on signing a framework agreement between Japan and the EU. That agreement will be debated by European commissioners at their 18 July meeting.