EU, Japan Officials Eyeing "Early Conclusion" of Trade Deal

23 February 2017

EU Trade Commissioner Cecilia Malmström and Japanese Foreign Minister Fumio Kishida said this weekend that they hope their two sides can complete negotiations for a free trade deal in the near term, after previously having attempted to conclude the talks last year.

The EU and Japan have been negotiating a free trade agreement since early 2013, having agreed two years earlier to examine whether such an accord would be beneficial. They have also been negotiating a “strategic partnership agreement” during that time. (See Bridges Weekly, 27 March 2013)

Meeting in the German city of Bonn on 19 February, the two officials reportedly discussed topics such as the relationship between domestic policy changes underway in the Asian economy and the broader trade talks, along with the current geopolitical scene, according to a press release from the Commission.

“While it was not possible to conclude by the end of 2016, as we had hoped, tremendous progress has been registered over the last few months,” said the EU trade chief. Malmström also suggested that the unresolved areas that remain “are the most difficult to be solved,” while suggesting that a compromise may not be too far off.

Kishida, for his part, reportedly told journalists this weekend that the two sides have “reaffirmed that it is extremely important (to reach) a broad agreement…. As soon as possible in order to counter protectionist moves.”

According to comments reported by the Kyodo news service, Kishida also said that he and Malmström are planning to organise another negotiating round soon. The last round was held in September 2016, with ministerial-level and technical meetings taking place in the time since.

Malmström has repeatedly cited the EU-Japan negotiations as one of the key elements on the 28-nation bloc’s current trade agenda, along with talks with the South American bloc Mercosur, together with other bilateral efforts involving countries ranging from Mexico to the Philippines.

“We will pursue our trade agenda in the coming months with those likeminded nations,” said the EU trade chief in a separate speech last month outlining the direction of the bloc’s policy for the coming year, particularly in the wake of the US election last November and other developments on the geopolitical stage.

Seventeen rounds in

At their most recent round in September, the European Commission reported that “good progress” had been made in areas such as investment, services, and customs and trade facilitation.

With regards to services trade, while advances were reported across a host of topics, the area of e-commerce did not see any “major breakthroughs.” On investment, that topic and corporate governance have reportedly moved forward steadily, while negotiators are still hammering out the investment dispute resolution terms.

Regarding the issue of goods market access, while discussions touched upon areas ranging from agriculture and fisheries to manufactured goods, the Commission report did not cite specific advances, but rather that the two sides “continued the clarification of their respective priorities and sensitivities.” Agriculture is widely considered to be among the most sensitive areas in these talks for both sides.

On non-tariff measures, an area of intense focus even before the bilateral negotiations kicked off, the Commission report referred to problems in terms of not having enough applications by industry or negotiating parties, while talks on Brussels’ “car annex” proposal are ongoing. For the latter, there is a “convergence of views” conceptually, though the EU’s executive arm said that more work is needed to develop textual proposals reflecting this progress and also determining how to implement such provisions.

The two sides are also said to be near agreement on a text for the chapter on technical barriers to trade.

Other areas still requiring much work following the latest round of talks included sanitary and phytosanitary (SPS) measures, which are those which related to food safety or animal or plant health.

Negotiators are also working on areas such as public procurement, intellectual property, competition policy, and trade and sustainable development, among other topics.

ICTSD reporting; “Japan, EU agree to push bilateral trade deal,” KYODO, 18 February 2017; “EU pushes for 2017 conclusion to free trade talks with Japan,” EURACTIV, 21 February 2017; “Fate of EU trade deal hangs on Japan’s elderly farmers,” POLITICO, 26 January 2017.

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