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EU-Japan Free Trade Agreement

Introduction

Harbour of Tokyo

© iStock.com/fotoVoyager

Japan is one of Germany’s most important trading partners in Asia. And Germany is Japan’s most important partnering country in Europe. Japan and the EU are linked not only by close partnership within the G7, but also by our strong economic relations which are underpinned by shared values. The envisaged EU-Japan free trade agreement is to strengthen economic and political relations between these two important trading areas and to give the EU a stronger role in the wider Asian region.

An EU-Japan FTA would also strengthen free trade as a whole and send a strong message against protectionism. The Federal Government is supportive of the EU's ambitions to use modern and ambitious free trade agreements in order to shape global trade policy and to put in place high standards, including for sustainable trade.

EU objective: securing a modern agreement that puts in place high standards

Negotiations for an FTA with Japan were officially launched on 25 March 2013. As trade policy falls within the remit of the EU, the European Commission is responsible for leading the negotiations and representing the interests of the EU and its Member States. The nineteenth and latest round of talks with Japan was held from 12 to 30 June 2017. A political agreement ‘in principle’ was struck at the 24th EU-Japan Summit that took place on 6 July 2017. The negotiations are expected to be completed in late 2017. By then, the few remaining points, including the issue of investor-state dispute settlement, are to be resolved.

The Japanese side has repeatedly stated that it has a keen interest in swiftly wrapping up the talks; not least as the US has stepped back from the project of a Trans-Pacific Strategic Economic Partnership (TPP). The key requirement for the EU and for Germany, however, is that the EU-Japan agreement must be ambitious across its entire scope and that it must abide by standards that are similarly high as those agreed with Canada in CETA. The EU wants its agreement with Japan to be modern, to provide for markets that are more open to European companies, and to stipulate high standards protecting the interests of consumers, the environment, and workers.

Frequently asked questions about the EU-Japan Free Trade Agreement

Why has the negotiating mandate of the EU-Japan Free Trade Agreement not yet been published?

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What is being done to ensure that the public receive sufficient amounts of information about the negotiations led by the European Commission on the EU-Japan FTA?

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How important is the agreement ‘in principle’ on an EU-Japan FTA?

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Essential points in the negotiations

Within the core economic part of the negotiations, the EU is pressing for the elimination of non-tariff barriers to trade, better access to the agricultural and services markets, and for greater access to Japanese public-sector contracts. For its part, Japan is interested in a fast reduction of the tariffs on industrial goods, particularly cars. This is an area where the EU insists on reasonable transitional periods being agreed.

Lately, some major progress has been achieved on non-tariff trade barriers. One of the priorities for the EU, however, is to establish mechanisms that will prove effective in preventing the establishment of new non-tariff trade barriers once the agreement has been concluded.

Progress on services, diverging opinions on public-sector contracts

Additional progress has recently been made on service and the relevant chapter is about to be consolidated. There are signs that a compromise will be struck on the extent to which maritime services and financial services are to fall within the scope of the agreement. For Germany, it is also very important that cultural and media diversity be protected.
The chapter on public-sector contracts is one of the most difficult. Japan has a tradition of being extremely cautious when it comes to opening these markets, whilst the EU would like to see them be fully opened for EU companies. The EU also wants to secure access to the Japanese railway market, which is currently fenced off.

Negotiations on investment protection ongoing

Where investment protection is concerned, the German government is supportive of EU efforts to put in place a modern system modelled on CETA. This would involve a careful definition of the standards of protection that apply to investments, uphold governments’ right to regulate, and see a transparent investment court be established. This court would use publicly appointed judges and have an appellate mechanism. Some significant progress has been achieved in the negotiations on the definition of standards of protection and on the provisions that are to maintain the right to regulate. Japan has accepted the EU approach. As far as investor-state dispute settlement is concerned, however, agreement has yet to be reached.

Federal Ministry for Economic Affairs and Energy pushing for transparency

In her dealings with the European Commission and other Member States, Federal Economic Affairs Minister Brigitte Zypries has been an advocate for greater transparency around the negotiations. The negotiating mandate (PDF: 111 KB) was published by the European Commission on 14 September 2017, when all of the Member States agreed that their concerns had been addressed.

The European Commission provides regular updates on its negotiations with Japan. To access this information, please click here (in German). Furthermore, the European Commission regularly consults with the European Parliament and civil society. For additional information on the issue of transparency, please go to our FAQ section.

Pressemitteilungen

  • 06/07/2017 - Press release - Free Trade Agreements

    Press release: Minister Zypries: "'Agreement in principle' on the EU-Japan FTA sends a strong signal for free trade and against protectionism"

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  • 22/06/2017 - Press release - Trade Policy

    Press release: Federal Minister Zypries meets with EU Trade Commissioner Malmström

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  • 28/04/2016 - Press release - Industrie 4.0

    Press release: State Secretary Machnig in Tokyo: Expanding cooperation with Japan on Industrie 4.0

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Further information