Japan
Automobile
Manufacturers
Association, Inc.

Issue No. 1, 2011

JAMA urges the EU and Japan to formulate an Economic Integration Agreement as a priority task

In November 2010, the European Commissioner for Trade, Karel De Gucht, presented "Trade, Growth and World Affairs", the European Union’s vision for a renewed trade strategy.  The strategy’s overarching aim is to facilitate a more open trading regime within a fair and rule-based international framework.  In order to achieve this objective, the strategy sets out to deepen the EU’s trade and investment partnership with key strategic partners such as Japan.
JAMA has been a long-standing advocate for strengthening the economic and trade relationship between Japan and the EU.  Indeed, Japanese auto manufacturers have been and will continue contributing to the economy and employment in the EU.  In 2009, they not only produced 1.13 million vehicles and employed 136,054 people across the EU but recorded a cumulative investment in production and R&D facilities in the region of €21.49 billion.  

JAMA believes that closer economic cooperation has the potential to unlock considerable mutual benefits for the EU and Japan.  In a recent public consultation undertaken by the European Commission on the future of EU-Japan trade and economic relations, JAMA called for a high-level dialogue between the EU and Japanese governments aimed at developing an ambitious, wide-ranging Economic Integration Agreement (EIA) which would, JAMA believes, increase the flow of trade between the EU and Japan, spur economic growth, and create additional employment opportunities for both economies.

To arrive at such an agreement, JAMA recognises there is a need for substantive discussions on priority issues, including tariffs and non-tariff measures.  These should take place within the context of a full-fledged commitment to launch bilateral negotiations for an EIA.  Furthermore, JAMA believes that the discussions should aim for timely progress and a clear target date for the conclusion of a constructive agreement. 

One means by which to immediately advance EU-Japan cooperation would be, as the Japanese government has recently proposed, to develop a common global scheme for the type approval of whole vehicles (IWVTA), which would upgrade the current, parts-only mutual recognition process.  Common action in support of the IWVTA system from the EU and Japan at the United Nations’ WP29 could expedite the implementation of such a market access-improving scheme.
With regard to the potential environmental benefits to be gained through enhanced EU-Japan trade cooperation, JAMA strongly believes that an EIA would, for instance, boost the diffusion of eco-friendly vehicles in both markets, as both economies enjoy strong expertise in the field of advanced technologies and environmentally-responsible products and services.  This would help advance the transition to a low-carbon economy, in addition to bolstering the overall competitiveness of the European and Japanese automotive industries.

A further important issue JAMA raised in its submission to the Commission concerned the recently established free trade agreement between the EU and South Korea.  Specifically, JAMA voiced concerns over that agreement's possible negative impact on JAMA members, who would thus face a competitive disadvantage compared to Korean manufacturers.  An EIA, JAMA argues, is therefore necessary in order to maintain a competitive balance in the EU market.