EU set to make its mind up over trade talks with Japan

Wed Nov 28, 2012 8:53am EST
 
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By Robin Emmott and Kaori Kaneko

BRUSSELS/TOKYO (Reuters) - Britain is trying to convince France and Italy to agree to negotiations with Japan to create a free-trade area with the European Union despite concerns that a deal would hurt the continent's weaker carmakers.

European free-trade advocates, including Britain, the Netherlands and Sweden, want EU trade ministers on Thursday to formally ask the Commission - the EU executive - to start talks with Japan, the world's third-largest economy.

Paris and Rome, however, are determined to defend their carmakers against strengthened competition from Japan after a free-trade deal with South Korea was followed by rising car imports when it came into force in July 2011.

A deal between Europe and Japan would bring together two trading partners responsible for a third of global economic output, but because a deal would take several years to finalize, those pushing for an accord worry Japan could lose interest.

Japan is currently more focused on parliamentary elections due on December 16, as well as on a Pacific free-trade area that Tokyo sees as a priority.

"There is a window of opportunity that could easily close," said a British diplomat involved in discussions.

The plan is part of the EU's ambition to sign free-trade deals on behalf of its 27 member states with major economies, including Canada and the United States, in the hope that trade will help revive stagnant demand in the European Union.

Japan is the EU's third-largest trading partner after the United States and China, accounting for 150 billion euros ($194 billion) a year in trade in goods and services.   Continued...