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European Union OKs Free-Trade Talks with Japan

Nov. 29, 2012
European Union and  Japan account for more than one-third of global trade Deal could take several years to negotiate EU countries call for safeguard clause for sensitive sectors

European Union trade ministers agreed Thursday to launch negotiations on a mega-sized free trade deal with Japan while pledging to safeguard Europe's struggling carmakers.

"We now have a clear mandate, confirmed by all the member states," said Europe's Trade Commissioner Karel De Gucht after ministers gave the European Commission a green light to open talks on a free trade deal, or FTA, which could take several years to negotiate.

Britain's Trade Minister Stephen Green immediately welcomed "the first big step towards liberalizing trade between two of the world's largest economies," which together account for more than a third of the globe's output.

But he cautioned that the EU was "starting out on a journey that will be long, tedious and painstaking."

It "could be three years, maybe more" before a deal, and "we could easily be talking about 10 years or more before we get full impact," he said.

But carmakers quickly slammed what the European Automobile Manufacturers' Association dubbed "a one-way street' for Japanese automakers.

France, whose flagship auto giant Peugeot Citroen (IW 1000/47) is in trouble, said it agreed to the negotiations after winning assurances of a balanced deal.

Safeguard Clause for Sensitive Sectors

Its trade minister, Nicole Bricq, said Italy, Romania, Spain and Slovakia had joined a call for a safeguard clause to protect sensitive European sectors, including automakers.

Britain's Green said the safeguards on the auto sector were "not expressed in specific numbers" or "constraints."

De Gucht said Europe in a "like for like" stance would not reduce tariffs before Japan delivered on regulatory barriers.

It was also ready to pull the plug on negotiations after a year if Japan failed to live up to commitments to remove non-tariff barriers.

“Eyes Wide Open”

"Europe is going into these talks with its eyes wide open," he said, while adding that he was confident that Tokyo was ready to open up its market, recently having finally agreed to grant liquor licenses for EU firms.

"No other partner has ever gone as far as Japan before we sat down at the negotiating table," he said.

Copyright Agence France-Presse, 2012

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