Japan
Automobile
Manufacturers
Association, Inc.

Issue No. 4, 2010

JAMA supports stronger EU-Japan economic integration

Following the "Europe 2020" strategy adopted by the European Commission on March 2010, the Commission launched a public consultation on the future direction of the European Union's trade policy in June this year. JAMA took this opportunity to provide its input on how EU-Japan trade relations should be developed in the future.

JAMA believes that a successful conclusion to the Doha Round of World Trade Organisation talks is essential for enhancing free trade, market access and a fair international business environment. Furthermore, JAMA believes that ever more ambitious economic partnerships and free trade agreements should be negotiated between willing countries in order to further stimulate global economic growth.

In addition to the agreements which it is negotiating with fast-growing countries, the EU should initiate free trade negotiations with developed countries such as Japan. A network of such ambitious free trade agreements, with harmonised rules so as to minimise the cost of implementing them, would actually help realise the ambitions of the Doha Round.

From this perspective, JAMA is of the opinion that an EU-Japan Economic Integration Agreement would promote common objectives such as smart, sustainable and inclusive growth, as targeted in the Europe 2020 Strategy. Indeed, the EU and Japan have great strength in advanced technologies and environmentally responsible products/services, whose competitiveness and growth would be strengthened by such an agreement. The diffusion of eco-friendly vehicles would be boosted significantly, thus contributing significantly to the goal of low-carbon road transport.

Direct investment has already contributed to job creation in the EU and Japan, with figures showing that in 2009 JAMA members employed 136,000 people in the EU. That same year, JAMA members’ cumulative investment operations in the EU amounted to a total of €21.49 billion, and they purchased €9.73 billion worth of EU-made parts. This would obviously be further boosted by a bilateral agreement incorporating a consistent and high level of protection of investment on both sides.

JAMA is concerned that the implementation of the free trade agreement between the EU and South Korea will leave JAMA members at a competitive disadvantage in the EU market, which could have an important negative impact on JAMA members’ production, employment and other activities across Europe.  The European motor vehicle market needs to remain balanced and highly competitive so as to allow for further economic integration.

Indeed, JAMA strongly supports the current efforts, announced at the 2010 EU-Japan Summit in Tokyo in April this year, to conduct a joint examination of ways to strengthen and integrate the Japan-EU economic relationship by addressing a range of issues of mutual interest, including tariffs and non-tariff barriers.

JAMA therefore believes that the EU and Japan need to develop an enhanced economic relationship as soon as possible, thus preserving the opportunities for growth, investment and competitiveness at the EU level.