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POLITICS

Efforts to sign Japan-EU EPA, RCEP accord in 2016 accelerating

  • 2016-01-04 15:00:00
  • , Nikkei
  • Translation

(Nikkei: January 3, 2016 – p. 3)

 

 There will be a number of important trade talks on topics other than the TPP in 2016. Japan agreed at a summit meeting with the European Union (EU) last November to aim for signing an economic partnership agreement (EPA) “as soon as possible in 2016.” There is now a plan to hold a Japan-EU summit around the time of the G7 Ise-Shima Summit in May to reach an agreement.

 

 The main sticking point is the elimination or reduction of tariffs. The focus of interest is what compromise plan Japan will propose with regard to cheese and other dairy products in exchange for the EU’s elimination of its 10% tariff on Japanese cars. The EU is demanding greater concessions from Japan than in the TPP agreement, but Japan is concerned that if it makes major concessions, “the U.S. and Australia may demand a review of the TPP accord,” according to a Japanese negotiator. Japan will be constantly mindful of comparisons with the TPP agreement as it engages in negotiations.

 

 Sixteen nations, including China, the ROK, India, the ASEAN states, and Australia, are also aiming at reaching a Regional Comprehensive Economic Partnership (RCEP) agreement in 2016. It is widely believed that with the involvement of China and India, which are not keen on liberalization, the RCEP agreement is likely to have a lower level of liberalization and investment rules.

 

 The Ministry of Foreign Affairs (MOFA) favors a swift agreement because this will “raise the standard in ASEAN countries that are behind in economic development, such as Myanmar (Burma), Laos, and Cambodia.” However, there is an opinion in the Ministry of Economy, Trade and Industry that tends to prioritize the quality of the resulting agreement, on the grounds that “there is no need to overdo it if the economic effects will be limited.” A consensus has yet to be reached in the government.

 

 Meanwhile, talks for a trilateral free trade agreement (FTA) among Japan, China, and the ROK are likely to run into difficulties. Although the leaders of the three countries agreed at a summit meeting last November to step up the negotiation process, a senior MOFA official observed that “there has been no change in the attitude of the negotiators.” It is possible that the faceoff between Japan, which demands a high level of liberalization, and China, which is reluctant to liberalize, will continue.

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