Brussels Trade Commissioner, Karel de Gucht, says he has made it clear to Japan there will be no Free Trade Agreement (FTA) unless the contentious issue of its tariff barriers is addressed.
The issue of Free Trade Agreements is a hot topic at the moment among passenger vehicle companies and was a key theme at this year’s European association of automotive suppliers’ (CLEPA) Annual Reception in Brussels.
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Addressing the Reception in the Belgian capital this week, Trade Commissioner, De Gucht, acknowledged there were concerns.
“[In] the next few months we will launch Free Trade Agreement negotiations with Japan,” he said. “I know many people will question whether we can tackle Japan’s tariff barriers.
“I have made it clear to Japan there will be no deal unless there are commitments in this area.”
De Gucht added there had also been a “breakthrough” in talks with the US, with “huge potential” for automotive companies. “The US is our most important trading partner,” he said, although added the caveat, “it will be a long haul.”
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By GlobalDataThe Commission is due to start talks with China this year and says it is working on emerging markets in Latin America, while “pushing hard” on Russia, Argentina and Brazil, which have “very questionable” trade barriers.
“We have an unprecedented agenda of FTAs that will help the automotive industry in particular,” said De Gucht. “In all of these efforts, we need industry support. I know not all agreements will please everybody – that is a reality of which I am all too familiar.
“We need to think broadly and strategically. If we look only inwards, we will fail.”
Despite European economic challenges, the Commissioner insisted the Continent’s car industry remained “pivotal” although the sector had to recognise change was needed.
“[Of] global distribution of vehicle sales in 2011, almost 37% [was] in BRIC countries,” he said. “Meanwhile, sales have continued to fall in Europe.
“Sales of passenger cars hit their lowest levels since 1995 last year. Of course, much of this is due to the difficult economic conditions we are facing. It seems likely the smaller European market is likely to continue.
“Automotive suppliers and vehicle producers need to support and invest abroad to bring work. When change happens on this scale, only companies capable of adapting will survive.”
De Gucht added the EC would support automotive companies to innovate and “adapt capacity” – a position that several large automakers are having to adopt as demand falls.
