EU, Japan Leaders Call for Trade Talks to Conclude in 2016
The European Union and Japan should aim to conclude their negotiations for a sweeping free trade deal this year, leaders from both sides said on Tuesday, following high-level meetings in Brussels.
The 3 May leaders’ meeting, which brought together Japanese Prime Minister Shinzo Abe, European Council President Donald Tusk, and European Commission President Jean-Claude Juncker, comes three years into the bilateral talks. (See Bridges Weekly, 27 May 2013)
The gathering also came just weeks before Japan is slated to host the next meeting of G-7 leaders, scheduled for 26-27 May in Ise-Shima, with the state of the global economy one of the key items on the docket. Both Juncker and Tusk will be there on the EU’s behalf.
Highlighting the state of the global economy, Juncker stressed that inking a deal with the Asian trading giant would be a boon to ongoing recovery efforts.
“We face a number of risks – including slower growth in emerging economies – and therefore we need to combine our forces to promote growth and investment,” said the Commission chief. “This is why our Free Trade Agreement with Japan is so important.”
Expressing “confidence” that this can be reached by year’s end, Juncker indicated that the deal could help generate growth and jobs, along with giving a “positive signal” globally.
Indeed, the state of the global economy has continued to worry officials and analysts alike, dominating major gatherings including the Spring Meetings of the International Monetary Fund (IMF) and the World Bank. (See Bridges Weekly, 21 April 2016)
“Our negotiations have progressed but now we must finish the job,” said Juncker on Tuesday, with Abe and Tusk expressing similar hopes for bringing the talks to a rapid close.
Tusk: “Political will” key
Prior to the meet, Tusk had indicated that the leaders’ discussions in Brussels would aim to give trade negotiators “clear political steer” in moving forward, stressing also that these talks are occurring in parallel with efforts to forge a “strategic partnership agreement” with Tokyo.
“For this to happen both sides need to demonstrate political will,” he said.
The EU and Japan combined make up one-third of global GDP, and are major trade partners for one another. While the talks date back to 2013, preparations for such a trade deal began well beforehand, with the two sides agreeing in 2011 to begin exploring the possibility.
Indeed, for EU ministers to even agree to the launch, Japan first needed to remove a series of non-tariff barriers before the negotiations began, and the Commission was required to assess progress in the removal of non-tariff barriers, railways, and urban roadmaps one year into the talks to determine whether these should continue. (See Bridges Weekly, 5 December 2012)
The two sides have already missed earlier targets for clinching a deal, having aimed to conclude the negotiations by the end of 2015. (See Bridges Weekly, 4 June 2015)
At the time, Abe said that he hoped to have a deal that year, while EU officials cautioned that the talks could go into 2016 if necessary. Among the areas which the two sides highlighted as key for the deal were goods, services, and investment market access; government procurement, including railways; non-tariff measures; and intellectual property issues.
Along with the G-7 leaders’ meet later this month, another negotiating round between the two trading powers is scheduled for September 2016 in Brussels.
Meanwhile, the two sides are pursuing various other trade initiatives with other partners or groups of partners, with some overlap in membership. Indeed, how these efforts and others will change the overall global trading architecture as different overlapping groups adopt their own sets of rules has been a topic of growing debate among analysts.
For example, the EU is currently in talks with a Transatlantic Trade and Investment Partnership (TTIP) deal with the US. (For more on TTIP, see related story in this edition)
Washington is also one of the 12 economies involved in the Trans-Pacific Partnership (TPP) Agreement, which among its signatories includes Tokyo. This latter agreement is now in the ratification stage, with debates in the Japanese parliament, known as the Diet, already underway. Some officials have suggested that a Diet vote on the TPP could come later this year.
ICTSD reporting; “Japan, EU leaders agree to accelerate free trade talks,” KYODO, 4 May 2016; “Oshima: Diet seen voting on TPP in fall,” THE JAPAN NEWS, 1 May 2016; “Japan Diet panel resumes debate on TPP,” JIJI PRESS, 18 April 2016.