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European Union: Commission Asks the Council for Mandate to Open Free Trade Negotiations with Japan

(July 25, 2012) On July 18, 2012, the European Commission requested that the Council of the European Union give the required mandate to open negotiations with Japan for a free trade agreement. (Press Release, IP/12/810, Commission Proposes to Open Negotiations for a Free Trade Deal with Japan (July 18, 2012), EUROPA.)

The Commission's current action is in response to a summit held in May 2011 between the EU and Japan. At that time, both parties decided to begin negotiations for free trade and political framework agreements. In May 2012, following extensive negotiations, the EU and Japan agreed on a general, dynamic plan for trade negotiations and on specific “roadmaps” to remove non-tariff barriers and to open public procurement in the Japanese railroad and urban transport market. (Id.)

The Commission's keen interest in opening trade negotiations with Japan is due to the fact that Japan is the EU's second largest trading partner in Asia, after China. The EU and Japan account for more than a third of the world's gross domestic product. In addition, Japan is the sixth largest country exporting to the EU, lagging just behind China, the United States, Russia, Switzerland, and Norway. In 2011, EU imports from Japan rose to €67.5 billion (about US$82.9 billion), primarily in the fields of machinery, transport equipment, and chemical products. In 2010, EU imports and exports of commercial services from and to Japan amounted to €12.7 and €17.3 billion, respectively. (Id.)

EU Trade Commissioner Karel De Gucht commented, “if growth in the next twenty years is likely to come from Asia, then overlooking Japan would be a serious mistake in our trade strategy.” (Id.) He also stated that the priority during the negotiations would be the issue of non-tariff barriers in the automobile sector in the Japanese market and the need to permit European business to access Japan's public procurement market. He added that if Japan does not remove the non-tariff barriers within one year of the negotiations, then the Commission will discontinue the discussions. (Id.)