The European Union’s member states today (25 June) decided to allow EU negotiators to continue talks on a free-trade deal with Japan, after concluding that Japan has demonstrated its willingness to open its markets.
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Member states had taken the unprecedented step of insisting on a one-year review clause when they gave the European Commission the green light last year to start negotiations with Japan, which was the EU’s seventh-largest trading partner in 2013. France and Italy, which are home to some of Europe’s largest carmakers, had been particularly insistent on the safeguard clause.
The member states’ trade policy committee today backed the Commission’s assessment that Japan has been acting on a set of commitments intended to build up confidence in the possibility of an ambitious agreement.
Tariffs between the EU and Japan are already low. The focus of the trade talks is, as a result, on lowering non-tariff barriers – such as regulations – that obstruct or prevent companies operating on the Japanese or European markets.
Gaining access to public contracts in the railway sector is of particular interest to EU negotiators. Four EU states – France, Germany, Italy and Spain – remain unconvinced that Japan has provided enough guarantees and commitments that a final deal would ease procurement rules on public transport.
Some of the most sensitive topics – including agriculture, an area of particular concern for Japan – are likely to be negotiated in depth only in the latter stages of the talks. Trade negotiations typically last at least two years. The EU and Japan held their first round of talks in April 2013.
The greatest progress so far has been on the liberalisation of the trade in goods. Offers were exchanged in the fifth round, in May. The Commission says that Japan has agreed to eliminate tariffs on 83% of its tariff lines, compared with the EU’s offer to eliminate tariffs on 87% of tariff lines.
The European Commission said the sixth round of talks will be held in Tokyo, starting 7 July.
The EU-Japan trade talks are part of a global trend towards large bilateral or regional trade deals. Both the EU and Japan are currently negotiating separate agreements with the United States. The Japan-US talks are part of an emerging 12-country deal, the Trans-Pacific Partnership.