INTA debates EU-Japan trade

On October 7, the INTA committee held an exchange of views on the EU-Japan trade negotiations.

By Dods EU monitoring

08 Oct 2014

Please note that this does not constitute a formal record of the proceedings of the meeting. It is dependent on interpretation and acts as an unofficial summary of the debate

Pedro Silva Pereira (S&D, PT) started off by saying that as a newly appointed rapporteur he is looking forward to working on the file. The EU-South Korea FTA was the first trade agreement that the Parliament gave its consent to. The EU-Japan agreement was a different sort; it was the first trade negotiations after the Lisbon Treaty. From the beginning the Parliament followed the scoping exercise and the negotiations have been watched closely. At the time, the Commission presented a draft mandate for negotiations for adoption. The Parliament intervened and asked the Council to wait until the Parliament adopted its potion. The Council considered the Parliament’s views carefully. The review of the negotiations took place last May. The Parliament was very attentive to stakeholders, he continued, and noted that there have been strong concerns with regard to automotive industry facing non-tariff barriers in Japan. Another issue was public procurement and its exclusion in the Japanese railway sector.

He asked about roadmaps on non-tariff barriers with regard to public transport as well as on railways. He had heard that there has been a strong concern about the operation safety clause on railway. He then said that Japan has in place measures promoting so called K-car sales. Is there any progress on that, he asked? He also asked about progress made in the area of geographical indications, tariff offers in the agro-industry and the chapter on sustainable development.

Mauro Petriccione, EU Chief Negotiator for the EU/Japan FTA said that the EU-Japan FTA is one of the most important negotiations the EU has been engaging in terms of economic results for Europe. It is also one of the most comprehensive ones, he added. In terms of complexity it is comparable to the TTIP and CETA agreements.

The main reason why these negotiations are possible is because Japan decided that it needs to see serious change in the way it conducts economic activity. The Japanese government has the plan, the political will and the mandate to carry out these reforms. This is a difficult agenda, he said. As for cars, he said that there is a wide regulatory agenda. Negotiators are talking about how both sides converge more on regulatory matters. The Japanese have very similar views on international standards and on how they should be transposed and applied to national law, he noted. This offers to the EU great opportunity for the convergence with Japan. These negotiations were particularly well-prepared, he added. The scoping exercise has been in place, and the Commission conducted a full impact assessment for the first time. The agreement was also debated in the Council and the Parliament. In spite of that, a one year review clause was included in the negotiating mandate, and concluded successfully in a number of areas.

As for non-tariff barriers in the car sector, he talked about the agreement on the work programme for Japan which would be implemented in the same manner as the EU’s. He referred to ‘gold plating’ with regard to adopting international standards. This is the kind of stuff we discuss, he said, adding that Japan already has adopted some of these. Both sides are working together to have them reviewed.

The other element of the roadmap is food standards. Both sides agreed to have additives on the list, he informed the committee .

Regarding the railway roadmap, he picked up on unfulfilled commitment on clarification and transparency in the safeguard clause. The main complaint from Europe was uncertainty as to what the requirements were. There is a complex, but very efficient mechanism in the rail package on the clarification of what the safeguard clause applies to. However, the Commission is not entirely happy with the result as it does not address the market access issue. On a more general note, he said that the aim of the package was to solve the problem of transparency and address how the clause could be applied.

He said that the Japanese have essentially delivered on the one-year package. He then added that the Commission has been discussing with the Council to deliver its part of the package. It is a difficult technical issue, he said.

Cooperation with ‘technical Ministries’ has been very good on non-tariff barriers for European exports. Negotiations could be concluded in a positive manner and within a reasonably short timeframe, he believed, adding that the deadline is by the end of 2015. He added that the Japanese are good partners, but the negotiations remain very complex and difficult. There will not be much room for mistakes, he added.

On the automotive sector, one of the main focuses of the negotiations has been on car standards. The EU sells mostly luxury cars and brand names to Japan – it does not sell small cars. Cars that are commonly sold in Europe are not sold in Japan. The standard issue is fundamental, he said. If the Union’s competitiveness is affected by the cost there will be a problem. K-cars are important, but have not appeared strategic. The area on which European industry could compete with Japan is very small.

The Commission made it very clear that it would be difficult to see the end of negotiations if nothing happens in terms of taxation of cars in Japan. Trade impact of trade measures need to be addressed, he insisted. There has been considerable progress, but still insufficient.

On geographical indications, he said that the issue is more difficult than expected. Japan is also negotiating with US on this. Japan has recently improved its legislation in this regard, but it is not entirely satisfactory. It would be to set for something different than what the Commission has agreed with Canada, he noted.

As for tariffs, he said that this would constitute the number one winner with the Japan deal. The EU needs a full access to Japanese products if it wants to access tariffs on automotive and agricultural products. For this, negotiations will still have to continue.  

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