Process and negotiations
What was done to ensure that the public received sufficient amounts of information about the negotiations led by the European Commission on the EU-Japan FTA?
Throughout the entire negotiations, the European Commission furnished regular reports to the national governments of the EU Member States, the European Parliament, and to civil society organisations. Documents that were made available to the German government were automatically passed on to the German Bundestag as well. German MPs were able to access these documents at any time.
The European Commission also published additional information pertaining to the negotiations on its website, which can be accessed . This information includes reports about the individual negotiation rounds and the original text of EU proposals. The texts which the EU and Japan have agreed upon as part of their political agreement were published immediately after the agreement was reached. They can be found . In addition, the European Commission published the negotiating mandate on 14 September 2017.
Scope of the EU-Japan FTA
What does the EU-Japan FTA mean for the reduction of tariffs and non-tariff trade barriers between the EU and Japan?
As soon as the agreement enters into force, some 91% of EU exports to Japan will no longer be subject to tariffs. After various transitional periods, this will apply to 99% of all EU exports to Japan. By the same token, the EU will immediately eliminate tariffs on 75% of imports from Japan and raise this figure to close to 100% later on. In the vast majority of cases, tariffs will be eliminated upon entry into force of the agreement. Transitional periods will apply for some imported goods including Japanese vehicles, the tariffs on which will be incrementally lowered over a period of 7 years.
The removal of tariffs will make goods from Germany and Europe more competitive on the Japanese market. Export-driven industries, in particular, will benefit from streamlined export procedures and be able to tap into new fields of business. Consumers in Europe will find that lower import tariffs on Japanese products make these more affordable.
The agreement will also eliminate a large number of non-tariff barriers to trade. This mainly applies to the many Japanese rules and requirements that differ from international standards and standard practice and have hitherto made EU exports to Japan a complicated and expensive affair. Under the political agreement, Japan has notably committed to bringing its vehicles standards into line with international standards (EU/ECE).
Like all other FTAs concluded by the EU, the EU-Japan FTA will not have an impact on the standards that apply to products in the EU. The same also applies to food and agricultural produce. Only products that meet strict European requirements will be allowed into the EU.
As a general rule, free trade agreements are not an instrument used to foster privatisation. This means that neither the FTA with Japan nor those with other countries impose any requirements on national governments to privatise public services.
The FTA will come with specific provisions applying to municipal public services, including education, healthcare, water supply, culture and welfare services, that will ensure that all levels of government will be able to retain the scope they have to shape and regulate these areas.
Similarly, the FTA will not bar municipalities from reversing a decision to privatise services, for instance within the field of water supply, and from providing these themselves again.
The EU-Japan FTA will not have any impact on cultural diversity or funding for culture.
There will be numerous provisions to this effect in the various parts of the agreement. The EU will not enter into any commitment to opening the European market to audio-visual services from abroad. Furthermore, there are clear provisions that prevent any situation whereby governments would be required to open their cultural markets. Culture will generally be excluded from the ban on subsidies, which means that public-sector funding for culture will continue to be legal..
No, it does not. There is no need for this, given that the precautionary principle is firmly embedded in primary EU law (Art. 191 TFEU). This means that it cannot be abolished by an agreement under international law, such as the EU-Japan FTA.
As the negotiations progressed, the EU ensured that the agreement is in line with each and every EU requirement on food safety, including the precautionary principle.
The EU also ensured that the agreement protects the rights of the EU and its Member States to introduce regulation based on the precautionary principle. For instance, the agreement provides for the right to regulate, meaning that the EU and its Member States retain the right to amend existing rules and laws, and to introduce new ones. Furthermore, the agreement provides for general exemptions that will make it possible for the EU to take action to protect human, animal, and plant life, public health, and the environment.
There has so far been no result on investor-state dispute-settlement. The political agreement announced by the European Commission and Japan on 6 July 2017 merely specifies some of the elements pertaining to market access for investment, but not on investor-state dispute settlement.
The German government is supportive of the efforts undertaken by the European Commission to make modern investment protection rules modelled upon CETA a part of the EU-Japan FTA. This would involve the establishment of a transparent investment court with an appellate body and use judges that have been publicly appointed. It is important for the right to regulate to remain protected, as has been agreed in CETA. Investors must not become entitled to compensation for legitimate action that has been taken to protect the public interest.
What would be the impact of the envisaged rules on investment protection in the context of the EU-Japan FTA on the right to regulate?
The EU-Japan FTA must not unduly restrict the right to regulate. National governments must continue to have the right to amend existing regulation and legislation, and to introduce new rules. The European Commission and the Member States are advocating that provisions protecting this right to regulate be included in the EU-Japan FTA, similar to what has been agreed in CETA.
Both the EU and Japan have strict environmental regulation in place; the same applies to regulation protecting workers’ rights. Both sides agree that an FTA will have to safeguard existing rights and that the relevant rules must not be relaxed or watered down. Just as with CETA, the EU-Japan agreement bans both sides from engaging in unfair practices of fostering trade and investment, i.e. from failing to comply with or to enforce environmental regulations or labour law.
The German government is supportive of a strong chapter on sustainability and notably supports efforts to include provisions on biodiversity, sustainable forestry, and on illicit logging.
The German government is also advocating that compliance with the core labour standards defined by the International Labour Organization (ILO) be required under free trade agreements concluded at EU level. So far, Japan has ratified six out of the eight fundamental ILO conventions. In the context of the chapter on sustainability, the parties agreed that they will endeavour to ratify the fundamental ILO conventions where this has yet to happen. In the same chapter, the EU and Japan have reaffirmed their commitment to take effective measures to implement important environmental agreements and the Paris Climate Agreement.
Whaling and importing whale meat into the EU are banned in the EU. The agreement will do nothing to change this. Furthermore, the EU is an active member of the International Whaling Commission, the body that is best placed to raise the issue of Japanese whaling at multilateral level. The chapter on sustainability to be included in the future FTA with Japan can also serve as another platform for discussions with Japan on the subject of whaling.