Summary European Automobile Manufacturers Association of car-makers slams the decision.
BRUSSELS: European Union trade ministers on Thursday agreed to launch negotiations on a mega-sized free trade deal with Japan despite bitter opposition from Europe s struggling car-makers.
"This is the first big step towards liberalising trade between two of the world s largest economies," said Britain s Trade and Investment Minister Stephen Green, adding it would bring "major economic benefits" to Europe.
But Europe s association of car-makers lost no time slamming the ministers decision to give the EU executive, the European Commission, a green light to open talks on a free trade deal, or FTA, which could take several years.
"This deal is a one-way street as far as the automobile industry is concerned," said Ivan Hodac, head of the European Automobile Manufacturers Association, ACEA, that includes the likes of BMW, FIAT, Porsche, Peugeot Citroen and Volvo.
"There is no justification for exposing the automobile, a major pillar of the EU economy, to an unbalanced FTA."
The EU, which together with Japan accounts for more than a third of the globe s output, is looking to accelerate trade deals worldwide to give its struggling economies a shot in the arm.
The EU s Trade Commissioner Karel De Gucht has said an FTA with Japan could increase EU gross domestic product by almost one percentage point, boost EU exports to Japan by one third, and add 400,000 extra jobs across the 27-nation bloc.
But car and car part manufacturers are fearful the removal of tariffs would lead to a rise in Japanese car imports, pointing to a previous trade deal with South Korea that bumped up sales of their vehicles in Europe.
Quoting a study, the ACEA said EU car exports would increase by a mere 7,800 units by 2020 compared with extra Japanese exports of 443,000 units.
Other European manufacturers meanwhile have complained of failing to find a footing in Japan, which has a reputation for being a closed market defended by walls of non-tariff barriers.
But EU sources say Japan is ready to open up its market, recently having finally agreed to grant liquor licences for EU firms.
As for the car industry, its troubles, they say, are due to the economic crisis and to over-capacity, not to competition from elsewhere.
De Gucht argues that many European industries favour a deal tying the globe s largest market to the world s third-biggest economy.
Among sectors he cited were agri-food, drinks, chemicals, ICT, services ad pharmaceuticals.
Britain too is supportive, eyeing up to 33 billion euros ($43 billion) a year in extra GDP and an extra 43 billion euros a year in additional export opportunities."
De Gucht has pledged to ensure Japan dismantles non-tariff barriers as set out in a roadmap agreed by both sides this year.
"If the implementation has not been satisfactory, I will stop the negotiations," he said.
He said he had also made it clear to Tokyo that Europe would not reduce tariffs before Japan delivered on regulatory barriers.
Struggling to boost growth and create jobs, the EU is looking at concluding a series of trade deals worldwide, in particular with emerging economies.
Should the EU conclude all the FTAs currently being negotiated, it would boost EU GDP by more than two percent, or 250 billion euros, officials estimate.
That would be the equivalent of economies the size of members such as Austria or Denmark.
