A free trade agreement with Tokyo could boost European GDP more than the controversial Transatlantic Trade and Investment Partnership, Czech MEPs say after coming back from Japan.
The EU-Japan FTA is expected to boost European economy by around 0.8 % of GDP and some analysts compare the importance of the deal with that of TTIP where the number is 0,5 % according to preliminary expectations.
“If we look at the impact on GDP growth, FTA with Japan could actually be more important than TTIP,” ANO 2011 MEP Petr Ježek (ALDE), chairman of the European Parliament’s delegation to Japan stressed, after a recent trip to the country.
Japan is the EU’s second biggest trading partner in Asia, after China. European exports to the country are dominated by machinery, transport equipment, chemical products and agricultural goods. Machinery, transport and chemicals are also the main items of imports from Japan to the EU.
With the deal, EU exports could increase by 32.7 %, while Japanese exports to the EU would increase by 23.5 %, according to the European Commission estimates.
The EU and Japan have been negotiating for over 3 years now, and there have been 16 rounds of negotiations – the last one took place in April in Tokyo.
The next round of talks is scheduled for September in Brussels.
At the last G7 summit held in Japan’s Ise-Shima at the end of May, political leaders from Japan, the EU, France, Germany, Italy and the UK reaffirmed a commitment to reach political agreement on the deal as early as possible this year.
On Thursday (16 June), Japanese and European businesses supported this commitment when they met in Tokyo for a sector-to-sector meeting.
“At a time of global economic uncertainty, this agreement provides a unique opportunity to create real growth for two of the world’s largest economies,” representatives of Keidanren and the EU employers’ confederation BusinessEurope said in a statement.
But several difficult issues still remain to be cleared up.
While Japan wants European duties in the automotive sector and agriculture waved, the EU is trying to link this to the elimination of Japanese non-tariff barriers (NTBs), especially in the automotive and railway sectors. Tokyo has already made a number of concessions on the first list of NTBs presented in December, however, the EU wants to see more on the second list before moving on its own tariffs.
The European automobile industry is particularly concerned, and appealed to the European Commission to be careful about possible impacts of the deal. More Japanese cars are sold in Europe than European cars sold in Japan.
“On the other hand, the Commission has been consulting its approach to this issue with the industry representatives. Therefore no dramatic problems should be expected,” MEP Ježek told EurActiv.cz.
Above all, only 32 % of Japanese cars sold in Europe are imported. Two-thirds of them are produced right in the EU.