Association, Inc.

Issue No. 2, 2012

JAMA reiterates its support for enhanced EU-Japan economic integration at a business seminar in Brussels

A business seminar on Future visions of EU-Japan partnerships for economic growth, organised by the Japan External Trade Organisation (JETRO), was held in Brussels on 8 March.  JAMA was among the speakers from both the EU and Japan—representing government, industry and academia—invited to present their views on an EU-Japan Economic Integration Agreement (EIA).  Speaker presentations were followed by a panel discussion.  

This event was particularly timely as the EU and Japan are currently engaged in a “scoping exercise” in regard to negotiations on an EIA.  From the European Commission, Mr João Aguiar Machado, Deputy Director General of DG Trade, indicated that a successful conclusion of the scoping exercise premised on further efforts by the Japanese government with respect to non-tariff and government procurement issues is the expectation of all concerned, and that the Commission is targeting an early wrap-up of this phase so that the EU’s 27 Member States will have sufficient time for a discussion of the Commission’s negotiating mandate prior to the next annual EU-Japan Summit.  Stressing that an EIA will strengthen the strategic partnership between the EU and Japan notably in terms of trade and investment, Mr Michitaka Nakatomi, Principal Trade Negotiator at Japan’s Ministry of Economy, Trade and Industry (METI), outlined the steps the Japanese government has taken in tackling non-tariff measures (NTMs).  The next key step, he added, will be the actual start of negotiations.

Presenting an industry perspective, Mr Yoshihiro Yano, Director General of JAMA’s International Department, discussed JAMA’s views on enhancing the EU-Japan partnership by means of a bilateral EIA.  He began by reviewing Japanese automakers’ activities in the EU (where they now have 13 plants in 8 countries, 12 R&D centres in 5 countries, employ an EU-wide total of 146,000 people, and purchased nearly 11 billion euros’ worth of EU-made auto parts in fiscal 2011).  The automotive ties between Japanese and European manufacturers help strengthen the competitiveness of both industries, Mr Yano said, pointing out that various EU-based partnership projects, initiated by Japanese automakers to promote the dissemination of environmentally-friendly vehicles, are also expected to create new employment.

Against the backdrop of a declining EU auto market amidst the economic crisis and a Japanese market still recovering from last year’s March 11 earthquake and tsunami, Mr Yano argued that an EU-Japan EIA will be instrumental in promoting economic growth in both the EU and Japan.

JAMA recognises that a core issue for the EU in this regard is that of NTMs.  Mr Yano explained that there are cases where Japanese regulations targeting environmental protection and safety are viewed as non-tariff measures from the perspective of the European industry.  The Japanese industry is likewise seeking a balanced solution, by means of internationally harmonised vehicle regulations.  Meanwhile, JAMA is working closely with ACEA, its European counterpart, on potential solutions in regard to the six areas identified by ACEA as presenting non-tariff issues.  

Mr Yano then introduced the results, released in February this year, of a study conducted by the Mitsubishi Research Institute to assess the impact on the automobile market of an EU-Japan EIA.  That study projects auto sales in the EU27 market in 2020 with EIA implementation at 17 million units, or 742,000 units more than the projected volume without an EIA.  For the Japanese market, auto sales in 2020 are projected at 4.4 million units, or 97,000 units more than the projected volume without an EIA.  The MRI analysis further projects that sales of European brands in both the EU and Japanese markets would increase by a combined total of 518,000 units (or a 4.2% increase over the scenario without an EIA) while Japanese brands in both markets would expand by 224,000 units (or a 3.7% increase), demonstrating that the early conclusion of an EU-Japan EIA would bring about a “win-win” situation for both sides.   

Mr Yano concluded his presentation by stressing that an EU-Japan EIA would bring new momentum for economic growth not only in the EU and Japan, but in the global economy as well.

Committed as they are to contributing to the further development of the automotive industry in the EU, JAMA members will continue working towards the launch of EIA negotiations, with high expectations of the cooperative relationship between the EU and Japan entering a new and vibrant phase.