Japan-EU trade pact continues to elude over auto, dairy tariffs

“There has been significant progress but important issues that the two sides need to work on still remain,” Foreign Minister Fumio Kishida told reporters after meeting with EU Trade Commissioner Cecilia Malmstrom in Tokyo.

With Japanese and EU negotiators seeking to reach a broad agreement before their leaders meet this week, Kishida said he intends to visit Brussels for “final confirmation” in hopes of sealing the deal ahead of the meeting.

Agriculture, Forestry and Fisheries Minister Yuji Yamamoto, who joined the Kishida-Malmstrom talks along with EU Agriculture and Rural Development Commissioner Phil Hogan, echoed Kishida’s views.

EU demands regarding farm and dairy products are so tough that they are “not yet at the level Japan can accept,” Yamamoto told reporters after Saturday’s meetings, adding he may go to Brussels with Kishida to further advance negotiations.

Kishida said that when he and Yamamoto reported the results of the talks to Prime Minister Shinzo Abe, the prime minister told the pair to continue negotiating as hard as possible.

Japan and the 28-member bloc are trying to strike a broad free trade agreement before their leaders meet ahead of the Group of 20 summit of major economies in Germany on Friday. Together, they account for around 30 percent of the global economy. The free trade talks began in 2013.

Japan and the EU say striking a deal will send a strong message to countries that are leaning more toward protectionism and demonstrate the importance of free and fair trade.

Ahead of the start of the talks Friday, chief negotiators from the two sides had spent the past three weeks in Tokyo holding discussions.

“We have not yet reached an agreement. We are in deadlock,” Yamamoto told reporters after Saturday morning’s session with his EU counterparts.

Yamamoto and Hogan also held separate one-on-one talks to get a deeper understanding of their respective “political” stances, according to Yamamoto.

Later that afternoon, Minister of Economy, Trade and Industry Hiroshige Seko met with Malmstrom and urged the early elimination of the EU’s 10 percent tariff on Japanese automobiles, according to a Japanese official who attended the meeting.

Seko told the EU commissioner that Japan’s rivals in South Korea have a competitive edge in the European market thanks to a bilateral FTA that eliminated import duties on Korean automobiles.

Malmstrom said tariff cuts cannot easily be achieved because European automakers are the biggest source of jobs in the 28-member bloc, the Japanese official said.

“Intense negotiations ongoing this morning. Cars and agriculture the two big outstanding issues,” Malmstrom tweeted before the talks.

The EU is demanding the elimination of tariffs on cheese and more access to Japan’s market for wine, pork, chocolates and lumber.

Farmers in Japan are concerned a trade deal will trigger a flood of highly competitive farm products from Europe.

Source: The Japan Times

Link: http://www.japantimes.co.jp/news/2017/07/02/business/japan-eu-continue-wrangle-dairy-auto-tariffs/#.WVlvRojNzIU

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