Idea to scrap EU tariffs on Japanese cars in 7 yrs under study

June 16, 2017

Tokyo- Japan and the European Union are considering the idea of the EU's 10 pct tariffs on Japanese passenger cars being eliminated in about seven years after their envisaged economic partnership agreement takes effect, Jiji Press has learned. The two sides kicked off working-level negotiations on the free trade pact in Tokyo earlier this week, with the focus on reductions in Japan's tariffs on farm products from EU member countries and the EU's tariffs on Japanese vehicles. While Japan is calling for an early elimination of the EU's passenger car tariffs, Brussels apparently hopes to defer the move as much as possible, in consideration of Germany and other member countries where automotive industries are a core part of their economies. According to informed sources, the EU has informally told Tokyo that at least seven years will be needed to abolish the tariffs. Japan has been asking the EU to move up the tariff removal, pointing out that the EU scrapped its tariffs on passenger cars from South Korea five years after their free trade agreement went into force in 2011, the sources said. Still, Tokyo may have to cede ground on farm products if it hopes to win the EU's concessions on the automotive sector. In exchange for giving ground on the vehicle tariff issue, the EU is demanding that Japan make substantial concessions on important farm products, including cutting its 29.8 pct tariffs on Camembert and mozzarella cheese to zero. But Japan has sounded negative on the request, after the country's tariffs on such cheese products were maintained under the Trans-Pacific Partnership free trade agreement, according to the sources. Meanwhile, the EU needs to obtain consent from all 28 member states if it moves up the elimination of its tariffs on Japanese cars. This could affect the two sides' target of reaching a broad accord on the EPA within July, pundits said. Depending on Japan's response to the EU's requests concerning Japanese tariffs on key farm items such as dairy products and pork, the EU may toughen its stance, and calls for delaying the automobile tariff elimination to about the 10th year of the EPA effectuation could increase as a result, they added. (Jiji Press)