EU-Japan FTA: Offers Exchanged

At the beginning of April, the fifth round of negotiations between the EU and Japan concerning the free trade agreement took place in Tokyo. As the review after the first year of negotiations is rapidly approaching, the importance of negotiating rounds has gradually increased.

As a result, offers on the market access of trade in goods were exchanged between both sides. The main interest of Japan in this area is to eliminate EU tariffs in automotive, especially auto parts. In exchange, the EU demands to cut duties in eight areas, some of which are related to food products, especially wine and cheese. Other aspects of the deal, like customs procedures, technical and non-tariff barriers to trade, sanitary and phytosanitary measures, rules of origin, investment or intellectual property rights, were discussed as well.

Given that two economic giants sit on each side of the table, the negotiations have been so far rather cautious and especially the Japanese side was criticized several times for not proceeding quickly enough in the talks. That is also why European stakeholders pushed the Commission to implement the so-called review clause in the negotiating mandate, given the EU the possibility to suspend the negotiations if Japan does not make sufficient effort to remove non-tariff barriers. Although there has been some progress on the Japanese side in eliminating certain non-tariff barriers, EU businesses are still not sufficiently convinced by Japanese commitment in the negotiations.

While there are some good examples, businesses point out that new barriers are being raised in the meantime. Not surprisingly, the automotive sector has been most affected, but there are also other examples, like railways, pharmaceutics or electronics. Therefore, EU businesses see the review progress as a chance to push for a higher level of involvement in the negotiations and to progress more swiftly towards an ambitious agreement.