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EU-Japan FTA on 'last mile' - European Commission

By Simon Warburton | 8 November 2016

Japan is the European Unions (EU) second largest trading partner in Asia after China, while together both blocks account for more than a third of the worlds GDP

Japan is the European Union's (EU) second largest trading partner in Asia after China, while together both blocks account for more than a third of the world's GDP

European Commission (EC) officials have added their voices to growing optimism a Free Trade Agreement (FTA) can be concluded with Japan by the end of this year with the automotive sector forming a key plank of Brussels' thinking.

Intense horse-trading has seen an eye-watering 17 rounds of negotiations between Tokyo and Brussels concerning the deal, which addressed issues such as trade in goods, services and business barriers, but also investment and public procurement.

Japan is the European Union's (EU) second largest trading partner in Asia after China, while together both blocks account for more than a third of the world's GDP.

"We have high hopes for the FTA with Japan – it is not only content [and] not only speed – it is a question to make our European and Japanese market [s] much better fitted to each other," said European Commission deputy director general for growth, Antti Peltomaki at the recent JAMA (Japan Automobile Manufacturers Association) – CLEPA (European suppliers body) Business Summit in Venice.

"We are rather advanced and we really see European and Japanese sides have made great efforts, but of course there is the last mile to go. We are pretty confident there is a political will to conclude these negotiations by the end of the year. We fully recognise the importance of the Japanese car industry to the EU – JAMA members contribute significantly to the European economy – 158,000 direct and indirect jobs – 14 production plants and 16 R&D centres. I guess we can be quite proud.

"Together the while of the industry is facing revolution in the market place. We are witnessing challenges taking place in terms of demographics – our citizens are ageing and we are seeing a strong trend to urbanisation. We are seeing attitudes to car ownership [which] require us as regulators to adapt to how we plan policies. It is how you address this revolution in terms of new technologies, alternative fuels, electromobility and automation of vehicles.

"We are pleased to see JAMA is playing its role. It is a question of seeing what we can do to find solutions for CO2 reductions or zero accidents – of course this is not only Europe [and] Japan this is the global challenge we are facing."

As well as a bilateral deal with Japan, the Commission is also working with the United Nations to attract other global economies such as China, Brazil and India into broader global agreements, although at the time of writing such huge discussions may include an element of doubt depending on the outcome of the US Presidential election taking place today (8 November).

Part of those global talks involve harmonisation – a crucial facet for the automotive sector – and the EC deputy director noted the multi-lateral negotiations included it as part of discussions.

"We have made a proposal for the European Parliament and Council to revise our approval framework," added Peltomaki. "First we want to introduce a market surveillance system. The EC should be able to oversee these compliance checks.

"We must ensure type approval works, that products are completely independent from manufacturers. These are the three ways to make our system robust and solid to prevent the scandals we have witnessed."