EU-Japan trade relations (debate) 
President
The next item is the debate on the oral question to the Commission on EU-Japan trade relations by Daniel Caspary and Jarosław Leszek Wałęsa, on behalf of the PPE Group, Syed Kamall, Robert Sturdy and Jan Zahradil, on behalf of the ECR Group, Niccolò Rinaldi, Metin Kazak and Marielle De Sarnez, on behalf of the ALDE Group, and Emilio Menéndez del Valle, David Martin and Vital Moreira, on behalf of the S&D Group (O-000088/2011/rév.1 - B7-0220/2011).
Jarosław Leszek Wałęsa
Madam President, in recent months, Japan has increased its interest in opening possible negotiations on a free trade agreement with the European Union. From the point of view of the European Parliament, the most important issue should be the non-tariff barriers, which has been emphasised many times at meetings of the Trade Policy Committee. The problem is not tariffs but the numerous restrictive regulations and obstructions faced by EU companies in gaining access to the Japanese market. I am in favour of greater cooperation between the European Union and Japan, but I believe that the priority should be the removal of these non-tariff barriers which restrict the access of EU goods to the Japanese market.
This is why paragraph 30 was accepted in the conclusions of the European Council in March and indicates the line to be taken and presented by the European Union at the EU-Japan Summit in opening negotiations on a free trade agreement. It is quite right to make the opening of these negotiations conditional on Japan showing goodwill in reviewing, inter alia, the issue of non-tariff barriers and restrictions on public procurement. It is worth bearing this in mind, all the more so as Japan is lobbying against the loss of competitiveness in the EU market as a result of the EU-Korea Free Trade Agreement which is due to come into effect.
Syed Kamall
author. - Madam President, I think - I hope - that most of us in this House would agree that our preference is for multilateral negotiations and a successful outcome for the Doha Development Round at the WTO. But, given the difficulties that we all know have been encountered there, I think the Commission deserves support in negotiating some of these bilateral agreements.
For this reason, I think we should actually be pressing ahead with an EU-Japan free trade agreement. I recognise that there are concerns over the natural disasters that have befallen Japan, but I have spoken to many Japanese colleagues, friends and others who believe that, if we tread sensitively, an EU-Japan agreement would send a signal that Japan is back on its way and is on the road to recovery.
If you look at the figures, in 2009, Japan and the EU together represented more than a quarter of global GDP and more than 20% of world trade, and had a combined volume of foreign direct investment of about EUR 200 billion. Given that the EU countries and Japan face common challenges, I think it is important that we look at some of these issues and address them through trade agreements.
Despite low tariffs, I think it is quite clear that bilateral trade volumes between the EU and Japan lag behind the bulk of the EU's trade partnerships with its other main trading partners. I think this is mostly due to the non-tariff barriers. It has been estimated that the cost of some of these barriers is actually higher than the existing tariff levels, and that most of the gains will come from removing these barriers. For companies within EU countries, there would be gains if we could tackle barriers to public procurement, to the medical devices market - where there is insufficient recognition of international standards, to services - including financial services and postal services, and access for SMEs. For the Japanese, there would be gains in the automotive and ICT sectors. But let us not forget that removing or reducing barriers to ICT products from Japan would be of benefit to the EU as well.
I think that, overall, there is a feeling on both sides that an EU-Japan FTA has the potential to become a true win-win for both sides.
Metin Kazak
author. - Madam President, I co-signed this initiative to table an oral question and a resolution in advance of the 20th Japan-EU Summit because I believe that the European Parliament, which will be asked to give its consent to any potential free trade agreement with Japan, should have its say at the earliest possible stage.
I believe that this opportunity should be used by Parliament to strongly support an FTA with Japan for the following reasons.
The European Union and Japan are industrial giants that share democratic values and together represent 38.5% of the world's gross domestic product. We share similar challenges: the rise of China, the global financial crisis, decreasing demographics and the need to access raw materials and energy sources and to achieve price stability.
Therefore, I see great potential in further developing trade relations with Japan, our sixth largest trading partner. The economic benefits are clear. The Copenhagen Economics report concluded that the bilateral elimination of tariffs and reduction of non-tariff barriers would benefit both businesses and consumers and drive economic welfare by EUR 33 billion in the EU and EUR 18 billion in Japan.
The potential launch of negotiations on an FTA agreement was backed by the Council as long as Japan was willing to tackle non-tariff barriers on market access and restrictions on public procurement. I would like to reiterate that non-tariff barriers and public procurement are crucial areas for European businesses where Japan needs to make significant concessions.
Of course, the European Parliament demands that the Commission be fully transparent in all negotiations and that we be provided with timely sectoral impact assessments. In addition, we will support bilateral safeguard measures, as was the case with the South Korea FTA, to avoid serious injury to sensitive sectors such as automotives, electronics, aviation and machinery.
In conclusion, I am firmly convinced that it is high time that Parliament showed its support for a future FTA between the EU and Japan, building on the establishment of a high-level group, especially in the wake of the March 2011 disaster.
David Martin
author. - Madam President, an EU-Japan free trade agreement clearly has the potential to create significant numbers of European jobs and to benefit European companies, and the reason for that is that EU penetration of the Japanese market is currently extremely modest by comparison with EU exports elsewhere.
In fact, according to the OECD, our market penetration in Japan is amongst the lowest, and the reason for this has been indicated by my colleagues. The problem is not high tariff barriers - the tariff barriers are relatively low - but rather non-tariff barriers, including regulatory complications, issues in relation to mutual recognition, poor access to public contracts, and so on.
The million dollar question for both the Commission and this Parliament is whether to insist that Japan continues to make progress in tackling these non-tariff barriers before we open negotiations, or to open negotiations in the hope that, by doing so, we will encourage Japan to reduce its non-tariff barriers. There is no easy answer to that question.
However, I think the omens are good that Japan does want to tackle non-tariff barriers. The Japanese Prime Minister has called for an 'open Japan' policy, and that is partly because he recognises that Japanese industry is stultifying in its present environment. It is also, of course, partly because of the anticipated impact of the South Korean free trade agreement on Japanese exports, but I think that, in addition, it reflects recognition of Japan's limited experience with opening up.
European companies have had improved access to telecommunications, car manufacturing, retail and the insurance sector in Japan, and that has not damaged the Japanese economy but has, in fact, encouraged innovation and development in Japan. So I think the omens are good.
On balance, my group takes the view that we still need Japan to show a little more willingness before we announce the opening of free trade negotiations. We are not against an FTA but we think that Japan needs to do a little bit more to prove that the Japanese Prime Minister can deliver on his words.
Karel De Gucht
Member of the Commission. - Madam President, the tsunami and earthquake that hit Japan last March constituted a major tragedy. The resilience of the Japanese people reassures us that Japan will be able to overcome that tragedy and to emerge from it stronger than before. The help offered and the solidarity expressed by the EU will also be instrumental in achieving this recovery.
This tragedy came a few months before a very important summit between the EU and Japan, scheduled for 28 May 2011, which is set to define the direction of our relationship for the years to come.
As you know, the previous EU-Japan Summit of April last year established a joint high-level group composed of senior officials to identify options for the comprehensive strengthening of all aspects of the EU-Japan relationship, in the political, economic and sectoral cooperation fields. On the trade side, the high-level group looked into ways of strengthening and integrating the economic relationship, addressing all issues of interest to both parties. These include tariffs, non-tariff measures, investments and procurement.
From Japan's side, the clearly stated preferred option is to start negotiations on a free trade agreement which includes preferential tariffs. However, from the EU side, an agreement focusing on tariffs would clearly not be enough. The problem with Japan is, indeed, not so much tariffs but the fact that EU exporters and investors still face all sorts of non-tariff barriers. Typical examples of these include cumbersome approval processes for medical equipment and certain food products, and lack of convergence with internationally recognised standards for car parts and components.
Barriers in these areas have been in place in the Japanese market for decades. We have raised these matters in the various bilateral dialogues between Japan and the EU over the past few years but little progress has been achieved so far.
In the light of this, we would need an agreement that would also tackle non-tariff barriers, increase market access for investment and open the Japanese public procurement market.
The focus of the high-level group's trade discussions has been on exploring how to achieve progress on these issues. A degree of progress has thus been delivered on a limited number of non-tariff measures from a list identified by the EU, namely three out of 27, but for most non-tariff measures on the list, we feel that Japan has failed to present a credible road map demonstrating how the problems should be solved. So, in the Commission's view, what has been achieved in the high-level group provides, at this stage, no more than a good basis for further discussion.
On 25 March 2011, the European Council reiterated the strategic importance of the EU-Japan relationship, confirming that 'the forthcoming summit must be used to strengthen this relationship and bring forward our common agenda'. In this regard, the conditions for a successful FTA should be explored on the basis that Japan can demonstrate its willingness to tackle, inter alia, non-tariff barriers and restrictions on public procurement.
Discussions are still ongoing with Japan. Last week, I met Foreign Minister Matsumoto precisely to discuss this matter. In my opinion, it is not yet clear how far we can progress, in the limited time before the EU-Japan Summit, with regard to fulfilling the Council's conditions. In particular, more work is needed in order to arrive at a shared level of ambition on agreeing the contents of the negotiation, as well as an ambitious but realistic outcome.
This could be achieved through a so-called 'scoping' exercise, which could be conducted after the summit. Once that has been done, we would examine the results and decide whether or not to launch the negotiations.
On the trade and economic side, the level of ambition should include, at least, aiming for the following: 100% duty and quota-free treatment for all goods; a robust and credible road map for eliminating a critical mass of non-tariff measures; an open investment regime to achieve levels of foreign direct investment into Japan comparable to those of other OECD countries; and a government procurement market with a level of openness matching those of the EU countries at all levels of government.
I should also mention that, if the summit leaders decide to go ahead with the option of a comprehensive bilateral legal framework, this should include both trade and investment relations and political relations and cooperation.
This comprehensive approach, encompassing all bilateral, political and economic relations in a balanced way, is necessary in order to fulfil our targets and our ambitions for a deeper strategic partnership.
We are, indeed, at a crucial stage in our economic relations with Japan, and there are still some issues that need to be clarified. I therefore welcome this debate and look forward to hearing your views on how we should shape this relationship in the years to come.
Daniel Caspary
Madam President, ladies and gentlemen, I would like to express my sincere thanks to the Commissioner for giving us an overview of the current status of the trade relations between the European Union and Japan.
Unfortunately, I get the impression that the situation with regard to these trade relations has barely improved in the last two years. You mentioned the summit in 2009 and the high-level dialogue and I get the impression that so far in these talks, we have not succeeded in obtaining any obvious additional market access for European companies in Japan.
Now that the first initiative, namely, this high-level dialogue, has been unsuccessful, I am very concerned that our primary concern is not the question of how we can perhaps achieve tangible success in this high-level dialogue, but instead we are already considering whether we should not negotiate a free trade agreement.
I can well imagine that a free trade agreement with Japan would make sense, but before we enter into such negotiations, it is not too much to ask that we first wait for the results from the existing instrument, namely this high-level dialogue. I want to be very open about this and I am not saying this in order to take away any negotiating chips from Japan, but because I would genuinely like to see whether Japan is serious about intensifying trade relations with us and genuinely opening up its markets and also its attitude to our products.
I would be very interested - unfortunately, Commissioner, you did not mention this at all just now - in how you intend to involve the European Parliament in the issuing of the mandate. I have the impression that we would have a great deal to say on the subject of Japan. With regard to the negotiations with India, Canada and also Korea, we as Parliament have repeatedly been critical of the fact that, in our view, the wrong priorities were set to some extent in the negotiations, and therefore it would be very helpful if you would involve Parliament very closely in this matter right from the issuing of the mandate.
Gianluca Susta
Madam President, Commissioner, ladies and gentlemen, the European Council's request to open negotiations with Japan on the conclusion of a free trade agreement must be assessed very carefully. We therefore welcome the Commissioner's cautious approach to this issue and we call on Parliament as a whole to follow that approach, which inspired our group's motion for a resolution.
The new Japanese Government has demonstrated - at least verbally - its willingness to open up its market, one of the most closed markets in the developed world. This positive attitude must be verified in practice, especially with regard to the 27 non-tariff barriers identified by the European Union, which must be lowered so that we can open negotiations with Japan and make them one of the priorities of our trade policy. We believe that improving these relations can help make Europe more competitive, since Japan accounts for 9% of world GDP, or over 35% when its GDP is added to our own.
Today, however, we cannot adopt resolutions unless they make the opening of free trade agreement negotiations subject to specific, binding and verifiable conditions; namely, that there will be genuine reciprocity and a proper impact assessment.
Firstly, Japan's protectionist policy in the automotive sector concerns us, because there is an imbalance between exports and imports. Secondly, we wish to raise the issue of non-tariff barriers. I am talking about a whole range of standards, from health and plant health measures to technical standards - especially in the agricultural and automotive sectors - export subsidy rules, customs checks and factors allowing for counterfeiting and also triangular trade with China and Korea.
To conclude, ladies and gentlemen, we ask that before Europe declares itself willing to open negotiations on the conclusion of a free trade agreement, it resolutely defines the Community interest that it intends to protect and specifies the areas in which it will request reciprocity from Japan. We hope that the Commission will take these comments of ours on board.
Kristiina Ojuland
on behalf of the ALDE Group. - Madam President, in December last year, I visited Japan and one of the concerns that was raised repeatedly by the Japanese officials was the slow progress in trade relations between the European Union and Japan. We all know that, unlike some other EU partners in the Far East, we share common values of democracy, human rights and the liberal market economy with Japan, making her a more natural partner for the European Union.
At the 19th EU-Japan Summit in April last year, it was agreed to establish a joint high-level group in order to analyse the progress in EU-Japan relations so far and draw up suggestions for streamlining our current activities. The importance of continuing to work on non-tariff issues was also stressed in the context of the joint high-level group and I hope that these agreements can be put into practice as soon as possible.
I would like to speak in favour of timely and concrete steps to alleviate non-tariff barriers in order to liberalise EU-Japan trade relations. Both markets would benefit greatly from upgrading trade relations between the EU and Japan, especially keeping in mind innovation and technologies. I would also welcome further cooperation on matters relating to cyber security.
I hope that we can improve trade relations with Japan and I look forward to further progress in these relations.
Keith Taylor
on behalf of the Verts/ALE Group. - Madam President, it is quite desirable to review the trading arrangements that we have with other countries and it is quite understandable that Japan sees the FTA as particularly attractive in relation to the recent Korea FTA.
There is a lot that we can support in the EPP-ALDE-ECR resolution but I think that they are making a mistake to 'strongly support' an FTA. That is a direct quote from paragraph 2. I think that is premature support when we do not have impact assessments on the environmental and social effects of an FTA. They are predicting the answer before identifying the effects of implementing the solution. Many people have commented about the non-tariff barriers and the work that has yet to be done by the high-level group. I think that needs a positive step forward.
When we bear in mind the importance of Japan as a trading partner - with bilateral trade with the EU standing at EUR 120 billion a year, and with the EU being the number three trading partner for Japan and the number two investor in Japan - I think we recognise that any bilateral agreement runs the risk of undermining multilateral agreements with the rest of the world and, in particular, with the developing countries. So I think that strong unconditional support for an FTA needs to be revised.
Finally, I would like to say that, whilst we have every sympathy with Japan, future trade policies simply cannot be based on who has had the most recent natural disaster.
Helmut Scholz
Madam President, Commissioner, just one topic should be the focus of attention when the summit is held between the European Union and Japan at the end of this month: the disaster that has devastated the people of Japan as a result of earthquakes, the tsunami and continuing radioactive contamination, and the concrete role that can be played by the EU, its Member States and individual citizens in helping to deal with the resulting problems in the short, medium and long term. That is why I once again wish to express my deepest sympathies to the Japanese people.
We must immediately extend offers of partnership and help in dealing with this disaster - particularly in view of the debate we have just held on Pakistan. The summit must produce concrete decisions, particularly in relation to cooperation in clearing contaminated areas and joint research and development in the area of renewable energy.
The possible development of our trade relations and economic cooperation through a corresponding agreement should not be simply a response to the nuclear accident. For this reason, negotiations should not begin too hastily, but should be examined with due care, paying particular attention to the different traditions and lifestyle.
In view of the size and strength of the two economies, particular care is required when agreeing a comprehensive, bilateral trade agreement. Many issues have been raised, including intellectual property rights and public procurement, and the investment capital has reduced the scope for political action on both sides. That is why long-term impact assessments are required in relation to the relevant chapters and aspects of any economic and trade policy cooperation agreed in the future between the 27 EU Member States and Japan. For this reason, the European Parliament, as a codecision-making authority, as well as the public at large, must also be consulted.
William  Dartmouth
on behalf of the EFD Group. - Madam President, most people know - but many do not - that, shortly after a country becomes a member of the EU, all its trade agreements are negotiated by the Commission and, specifically, the EU Trade Commissioner. Under this arrangement, the interests of all 27 Member States need to be satisfied, which, of course, means in practice that they will not be.
In consequence, an EU-negotiated trade agreement is likely to be less beneficial for an individual Member State - and, I have to say, the UK in particular - than if the Member State had been able to negotiate for itself.
Now, the rationale for all this is that the EU is a large trading bloc and because of this clout, the EU is able to negotiate a trade treaty that would not be open to a Member State to negotiate on its own. But what do we find here? The negotiations for the EU trade treaty with Japan have not even properly started, as the Commissioner said. Meanwhile, the comparatively small, but dynamic, economy of Switzerland already has a trade treaty with Japan, and has had since 2009.
Once again, here is further proof that the UK and the other contributing Member States would be much better off outside the bureaucratic contraption that is the European Union.
Franz Obermayr
(DE) Madam President, in 2009 between them, the EU and Japan produced more than one quarter of the world's economic output and accounted for over 20% of world trade, which is why a well-conceived free trade agreement with Japan is of central importance for the EU. There are synergy effects that can be exploited, as well as shared challenges, such as competition with China and secure access to raw materials.
However, bilateral safeguard clauses are also important in this agreement. I am thinking of sensitive economic sectors such as the automotive, electronics, aerospace and mechanical engineering industries. I am certain that Japan can and will be a fair and reliable partner.
The bottom line is that however important Japan may be as a trading partner, European citizens must be protected from any risk from radioactive contaminated products.
Jörg Leichtfried
(DE) Madam President, Mr De Gucht, ladies and gentlemen, this may seem an unusual way to open a speech in the European Parliament, but I must admit that I am not sure that this is the right time to conclude a trade agreement with Japan - or indeed whether such an agreement is advisable at all.
There are three reasons for my uncertainty. The first question is whether we are actually undermining our attempt to establish a multilateral agreement by agreeing a large number of external trade agreements with highly significant trading partners. Are we not in danger of concentrating too much on concluding individual agreements, which may prevent us from pursuing a multilateral system with appropriate and sufficient vigour?
Secondly, so far, I have not got the feeling that Japan is really meeting us half way in terms of market protectionism and non-tariff trade barriers. The wheels should already have been set in motion, otherwise the entire agreement is in danger of being too one-sided.
My third question is: what are the consequences? I do not intend to judge whether this is good or bad for us in the final analysis. However, I would like to know in advance how the social consequences are to be assessed, and how things look in terms of the environment or labour market. These are issues that I do not believe have been entirely clarified. Surely these questions should have been better assessed and researched in advance.
As some of my fellow Members have pointed out, if these points were to be clarified, the Commission would be well advised to consult the European Parliament when issuing a mandate. This would avoid many of the difficulties encountered with other trade agreements because we were not consulted. I would welcome such a procedure for all future trade agreements.
Reinhard Bütikofer
(DE) Madam President, Commissioner, ladies and gentlemen, it would seem that some groups are very sure that it is right for us now to seek a very ambitious free trade agreement with Japan. As you have heard, my group is not so sure. I myself have great sympathy with this position because I believe that by strengthening cooperation in trade, we can help generate a new economic dynamism in Japan, following the disaster that has befallen the country.
However, there are some fundamental questions that are inescapable. I do not intend to repeat what has been said about the need to predict the consequences in the bilateral area, or about the fact that we should avoid the mistake of first defining free trade priorities and then moulding European industrial policy to these as a dependent variable, or that the question of making a contribution to sustainability must be taken into consideration.
I should like to emphasise something else: I believe that the effects that such a free trade agreement between two of the giants of international trade would have on the entire structure of global trade must be discussed in greater detail than has been the case heretofore. When two such mammoths of the commercial trade sector enter into negotiations on a free trade agreement, then this is not simply a bilateral matter. Until now, there has been no free trade agreement between two economic superpowers, so this would be a first. But what does that mean? What is the strategic perspective? What effect will this have?
It is not enough simply to say we want multilateral trade and if we do not get it, then we will stick with the bilateral dimension of free trade and wait to see what happens. We are also responsible for making the implications clear to the European public, which is why the involvement of Parliament in the issuing of the mandate, as called for by several of my fellow Members, must be central.
George Sabin Cutaş
(RO) Madam President, the economies of the European Union and Japan account for 35% of global GDP. I believe that a free trade agreement between these two economic powers could provide benefits for both sides. However, the first thing which needs to be done is to remove the difficulties which form the basis and, in practical terms, stand in the way of drafting a really profitable agreement for both sides.
The Japanese market is currently subject to barriers, non-tariff barriers, as my fellow Members have also mentioned, which restrict import access, thereby impacting as a whole on trade activities and investments. As part of the negotiations it is conducting, the European Commission must strive both to promote a more transparent regulatory policy, which will help European companies to understand fully the rules for conducting trade with Japanese partners, and to deregulate access to public procurement. Finally, I also think that an impact study needs to be carried out, which will examine the effects of any agreement, particularly in the area of vulnerable European industries, such as the car industry, electronics and aeronautics.
Jaroslav Paška
(SK) Madam President, Commissioner, Japan shares many common interests with the European Union that are not limited to political issues, but also extend to economic and trade cooperation.
Although both Japan and the European Union are mature economies, their trade cooperation has failed to exploit the opportunities presented by their economic clout. In addition to duties, more effective trade cooperation is hindered by the numerous obstructions that Japan has placed in the way of standardisation and access to public procurement and government contracts. Although I believe that it is in our interest to improve trade cooperation with Japan, we must strive to make our cooperation correct, open, balanced and beneficial to both parties. I would therefore like to express my support for the European Commission in its pursuit of this objective.
Karel De Gucht
Member of the Commission. - Madam President, I should just like to touch upon two points. First, the relationship between bilateral and multilateral agreements. Some Members have advanced the idea that we should concentrate on the multilateral agreements rather than the bilateral ones. We do! As you know, the multilateral negotiations for the Doha Round are in dire straits, and we are the only big trading bloc that has been making proposals recently to try to bridge the differences between the developed and the emerging economies with respect to industrial sectors. But while we are really concentrating on the multilateral aspects of trade, on the other hand, we should not neglect all our bilateral relations with important trading partners.
Secondly, with respect to Japan, as many among you have been saying, it is really a 'chicken and egg' situation. Do you start the negotiations and then hope that in the course of the negotiations, you can resolve the non-tariff barriers that have been in place for many years, or do you rather try to do away with the majority of the non-tariff barriers as a precondition for negotiations on the free trade agreement? I think that, to a certain extent, we need that conditionality, because the real problem with Japan is not so much tariffs. Of course, the idea would be to eliminate 100% of tariffs, which normally you would not have with a developing or an emerging economy. The real problem is with respect to non-tariff barriers. We have been proposing a list of 27 non-tariff barriers which we think are crucial for our trade relationship, but in only three cases out of the 27 is there now a solution on the table which seems to be acceptable.
The Japanese claim that they have solutions for all the rest too, but we cannot see a solution in the proposals that they have been making to us.
So we believe that we need a scoping exercise so that we know what we are talking about. I hope that, in the course of that scoping exercise, we can do away with a number of non-tariff barriers, and that this will create the right climate for us to get down to actual free trade negotiations with Japan. That is how we see it. We see it, at least partially, as a precondition that we should stick to.
President
I have received four motions for resolutions tabled in accordance with Rule 115(5) of the Rules of Procedure.
The debate is closed.
The vote will take place on Wednesday, 11 May 2011.
Written statements (Rule 149)
Artur Zasada
I believe that a rapprochement in the field of aeronautics will create a huge opportunity for the European and Japanese economies. The European aircraft industry has long been the chief supplier of civil and military technology in the international market. Japan is also carrying out research into advanced solutions for general aviation as well as for passenger transport and cargo. It is estimated that the transport of passengers and goods by air will be one of the fastest growing branches in the coming decades. It is true that we already have examples of cooperation between partners from the European Union and Japan, including the EC 145 helicopter, designed jointly by Eurocopter and Kawasaki, but the potential for cooperation could be much greater in my opinion. I appeal for action to be taken for rapid European-Japanese cooperation in aeronautics, at company level as well as in research and development units.
