World Economy
0

Japan, EU Press Ahead on Free Trade Pact

Japan, EU Press Ahead on Free Trade Pact Japan, EU Press Ahead on Free Trade Pact

Japanese and European Union negotiators meeting in Tokyo aim to reach a free trade deal that would stand against a protectionist tide threatening the global economy, and make the United States think twice over pursuing inward-looking policies. 

Japan and the EU have been negotiating since 2013, but talks have intensified since last week, with almost daily meetings to overcome key hurdles, including tariffs on Japanese automobiles and car parts and European cheese, pasta and other foods, Reuters reported. 

A Japan-EU deal could leave U.S. firms at a disadvantage, especially after President Donald Trump's withdrawal of the United States from the Trans-Pacific Partnership, or TPP, earlier this year. 

"There is an atmosphere among negotiators that Japan and the EU need to stop protectionism that is prevailing in the world," said a source familiar with the issue who declined to be identified because talks are ongoing. "The momentum is building for Japan and the EU to take leadership in promoting and executing free trade." 

In a sign of optimism, EU trade chief Cecilia Malmstrom said on Monday she could sign a provisional deal with Japan as early as next week. 

An agreement between the EU and Japan would "send a strong message to the United States that free trade is important and that you shouldn't be too inward looking," said another source, who declined to be named while negotiations were underway. 

Trump favors bilateral trade deals over multilateral accords and his decision to walk away the TPP, left the other 11 members of the Pacific Rim trading bloc, including Japan, in limbo. 

Although, together Japan and the EU account for about a third of global GDP, their trade relationship has a lot of room to grow—EU forecasts reckon by as much as a third. 

Their bilateral trade totaled $144 billion last year, whereas Japan-China trade was $262 billion and Japan-US trade was $192 billion. 

After unsuccessful attempts to conclude a deal with Tokyo the past two years, there is a sense in the EU camp that people will start to lose faith if they cannot wrap it up this year, an EU official familiar with the talks said. 

Add new comment

Read our comment policy before posting your viewpoints

Financialtribune.com