CORRECTED-UPDATE 2-EU, Japan to seek trade deal despite carmaker fears

Thu Nov 29, 2012 12:25pm EST
 
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(Corrects 8th para to say Japan was EU's seventh-largest, not third-largest, trade partner in 2011)

* Deal comes after concerns from France, Italy

* EU car industry fears influx of Japanese cars

* Negotiations could take several years

By Robin Emmott and Sebastian Moffett

BRUSSELS, Nov 29 (Reuters) - EU trade ministers overcame resistance from the car industry on Thursday and agreed to start negotiations to create a free-trade pact with Japan, Europe's most ambitious step so far in a strategy to tie up deals with the world's biggest economies.

Agreement was reached only after France and Italy secured safeguards for carmakers that are already cutting jobs because of falling demand at home and worry that a deal could lead to greater Japanese imports and damage the industry.

EU negotiators were told they should pull the plug on the negotiations - expected to last two or three years - if Tokyo failed to remove the barriers to trade that Europeans say make it hard to do business in Japan.

Japan already has low or zero import tariffs, with no duty on Scotch whisky or French cognac for instance, and the real prize for Europe is removing special regulations on everything from music to imported cars.   Continued...