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Press release

Start free trade talks with Japan, say trade MEPs but look out for EU car sector

External/international trade - 11-10-2012 - 12:52
Committee : International Trade
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The international trade committee gave its green light for free-trade talks with Japan on Thursday, pointing to the huge gains for jobs and growth offered by deeper ties with Japan, a strategic partner of the EU. But negotiations should be suspended if Japan fails to remove barriers in key sectors including cars, say MEPs.

The non-binding resolution, which also points out that Parliament can block trade deals, was passed by 23 votes to 2, with 3 abstentions.

"The EU's trade policy needs a game-changer: a free trade agreement with Japan. The huge untapped trade potential could boost the EU's GDP, create jobs and increase exports. That is why I recommend launching negotiations. We know it won't be easy - the key lies in removing non-tariff barriers, particularly in crucial sectors such as cars and medical devices. If Japan fails to deliver, the negotiations should be suspended", said the rapporteur, Metin Kazak (ALDE, BG).

Concerns for cars, postal services, public procurement

The committee stresses that non-tariff barriers (NTBs), which often take the form of regulatory or traditional advantages for local business and are harder to eliminate than customs duties, have prevented EU businesses from benefiting fully from commercial ties with Japan.

It points out that trade in goods between the EU and Japan was worth only €116.4 billion in 2011, against €444.7 billion for EU-US trade or €428.3 billion for EU-China trade. It quotes estimates of a potential 71% boost for EU exports to Japan if tariffs and non-tariff barriers are reduced to their fullest possible extent.

MEPs insist that the mandate for the talks should include "clear and measurable targets" for the removal of NTBs and point specifically to  barriers in the car sector, such as "zoning regulations", restrictions on electric and hybrid vehicles and preferential treatment for "kei cars" (very light class cars) in Japan.

Restrictions to market access in electronics, postal services and railway public procurement must also be lifted, says the committee. It wants a 'safety clause' to ensure that sensitive EU tariffs are not reduced without a corresponding elimination of Japanese non-tariff barriers and obstacles to public procurement. If Japan does not show "sufficient ambition in meeting the EU's priority demands", the negotiations should be suspended, say MEPs.

What next?

The resolution will be debated and voted by the full House in October (tbc). Parliament asked the Council in June to wait for its opinion before deciding whether to launch free trade talks with Japan as proposed by Commission in July this year.

REF.: 20121008IPR53129