MOFA: Japan’s view on the EPA achievement
AUTHOR
Ambassador Yoichi Suzuki
Former Chief Negotiator for the Government of Japan for the Japan-EU EPA Negotiations and Representative of the Government of Japan
Ministry of Foreign Affairs of Japan (MOFA)
The negotiations of the Economic Partnership Agreement between Japan and the European Union (the Japan-EU EPA) were launched in the spring of 2013. After four years of negotiations, Japan and the EU agreed to accelerate the negotiations in early 2017 in view of the various turn of the events taking place and reached an agreement in principle in July and finalised the negotiations in December of last year. As the chief negotiator engaged in the negotiations from the spring of 2017, I have a special feeling for this Agreement. This forum is a demonstration of the strong support of the people and businesses of Denmark to free trade without which the negotiations could not have been finalised. Therefore, I would like to express my respect and gratitude to the people and businesses of the Kingdom of Denmark.
The EU is one of the most important global partners of Japan, which shares with Japan such fundamental values as democracy, the rule of law, respect for human rights and an open economy.
Based on these shared fundamental values, Japan and the EU have pushed forward in parallel with the negotiations of the EPA those on the Strategic Partnership Agreement (SPA). The SPA stipulates that Japan and the EU will promote cooperation in a broad range of fields, such as peace and security, science and technology, counter- terrorism, disaster risk reduction and humanitarian assistance, and human and cultural exchanges. The SPA, together with the Japan-EU EPA, will provide the legal basis of the current and the future global partnership between Japan and the EU.
The Japan-EU EPA will create one of the largest free and advanced economic zones in the world. Namely, it will form a huge economic zone with approximately 640 million people, 28 per cent of the world’s GDP and 37 per cent of the world’s trade. The EPA will contribute to the economic growth of Japan and the EU and benefit greatly both Japanese and the EU’s citizens by its expected economic effects such as the vitalisation of trade and investment between Japan and the EU by mutual market liberalisation, the creation of job opportunities and the strengthening of the competitiveness of businesses.
Beyond its considerable economic value, the Japan- EU EPA is of strategic importance. Amid rising protectionist movements in the world, the achievements of the agreement in principle and of the finalisation of its negotiations demonstrated to the world the firm political will of Japan and the EU to take initiative to lead further trade liberalisation efforts in the world. The EPA sets an example to the world by its comprehensive, high standard and well-balanced nature, and will be a model for the future international economic order based on appropriate rules to promote free and fair trade.
This Agreement will bring about far reaching improvements of market access in the two way trade. For example on trade in goods, Japan’s tariff elimination rate based on trade value reaches a historical high level of approximately 98%. As regards liberalisation of trade in services, the Agreement adopts a negative list approach and basically covers all the sectors, that is to say the trade in services will be fully liberalised but for those restrictions listed in the respective schedules. This should considerably facilitate the understanding of service providers on both sides as to where lie the restrictions. With regards to government procurement, the Agreement makes it possible for EU suppliers to participate in open tendering by Core Cities of Japan, which was limited to local suppliers. The Core Cities of Japan are cities with more than 200,000 inhabitants and designated by Cabinet Order, the number of which is 54 as of 1 April 2018. In addition, in the railway sector, Japan makes a commitment in the Agreement to remove the so-called “operational safety clause” under which procurements related to the operational safety of transportation can be exempted from the application of the provisions of the Agreement on Government Procurement. These commitments in government procurement are unprecedented in Japan’s trade and economic agreements.
“The EU is one of the most important global partners of Japan, which shares with Japan such fundamental values as democracy, the rule of law, respect for human rights and an open economy.”
High-standard and 21st century rules are also provided for in the Japan-EU EPA in a wide range of fields including state owned enterprises, subsidies and intellectual property. As for the protection of geographical indications (GIs), which reflects Japan’s intention to protect its rich intellectual properties and those of the EU, Japan’s level of commitment is higher than any agreement between the EU and other third parties. More than 200 GIs of the EU, including those of alcoholic beverages such as wines or whiskies and those of agricultural products such as various cheeses, will be protected under the Agreement with its entry into force. In addition, in order to promote trade in agricultural products and food and, perhaps more important in the longer run, cooperation in sustainable agriculture, the Chapter on Cooperation in the Field of Agriculture is added to this Agreement. These achievements reflect the positions taken by Japan and the EU to put a great importance on the safety, tradition and quality of food.
With regard to the regulatory cooperation, the Agreement provides that, with a view to promoting good regulatory practices and regulatory cooperation between Japan and the EU, information and opportunities for communication will be provided for prior to the introduction of regulatory measures. In regulatory policies, Japan and the EU have common philosophies in many areas and mutually respect each other’s approaches. Therefore, increasing mutual understanding on the matters will be beneficial for both sides. In addition, we also established the Chapter on Transparency to provide an effective, predictable and transparent regulatory environment.
In terms of non-tariff measures, the Japan-EU EPA also provides high- standard cooperations in various fields. Regarding food additives, the improvement of transparency in the approval procedures, while maintaining high standard systems of safety and sanitation of food will be realised. Certain regulations for wine will also be eliminated with a view to facilitating importation and sales in both of our markets. In relation to the promotion of safety and environment protection, further cooperation to promote the establishment and harmonisation of international standards for motor vehicles and parts is also provided in the Agreement. Regarding sanitary and phytosanitary (SPS) measures and technical barriers to trade (TBT), rules based on the WTO Agreement are provided in this Agreement. In addition, in terms of movement of natural persons, the Agreement stipulates commitments beyond GATS, including those related to Intra-Corporate Transferees, which are expected to further facilitate Japanese investment in the EU.
The Japan-EU EPA dose not overlook the sustainability and the rights of the citizens. In the Chapter on Trade and Sustainable Development, Japan and the EU’s respective commitments to the relevant ILO conventions and in the international environmental agreements including the United Nations Framework Convention on Climate Change and the Paris Agreement are reaffirmed. The Japan-EU EPA is the first agreement of the kind for us to make specific reference to the Paris agreement. This Agreement also commits to the maintenance of high standard domestic environmental and labour protection and to the continuous improvement of these protections. Japan and the EU will regularly hold joint dialogues with citizens on the matters of environment and labour.
“Amid rising protectionist movements in the world, the achievements of the agreement in principle and of the finalisation of its negotiations demonstrated to the world the firm political will of Japan and the EU to take initiative to lead further trade liberalisation efforts in the world.”
In conclusion, visible and immediate benefits achieved in the EPA such as the improvement of market access are very important but I would like to put an emphasis on the future oriented function of the Japan-EU EPA which will have a longer lasting effect. The EPA included provisions to create a set of framework of cooperation by the two sides for further economic integration and as well as the promotion of free economic activities in a sustainable manner. The implementation of these provisions is of vital importance.
Currently, the officials concerned in both Japan and the EU are working together with great effort for early signing of this Agreement. In the next step, Japan and the EU will need to see the entry into force of the Agreement as early as possible, and, thereby bring benefits of this Agreement to the people of Japan and the EU, as well as demonstrate our leadership to the world.
Published 2018