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European Commission

Karel De Gucht

European Commissioner for Trade

Why we should open free trade negotiations with Japan

European Commission, Brussels

18 July 2012

Good afternoon,

Ladies and Gentlemen,

The European Commission has today decided to ask Member States for the green light to open free trade negotiations with a major political and economic partner for us: Japan.

And we did that for very good reasons I believe.

First of all, Japan is our second biggest trading partner in Asia and a key partner with which we share common values like democracy and the rule of law. If growth in the next twenty years is likely to come from Asia, then overlooking Japan would be a serious mistake in our trade strategy. Together, already now the EU and Japan account for more than a third of world GDP.

Opening up this promising Japanese market even further could increase the EU's GDP by almost another percentage point and boost EU exports to Japan by one third. 400,000 additional jobs are expected as a result of this deal - in the EU alone.

Let's be clear: We need these jobs, and we need this growth in the current economic climate.

This is probably also the reason why a number European industry associations including the agri-food and drink, pharma, chemicals, ICT, express deliveries and services industry – to cite only a few - have expressed their strong support to this initiative.

I also know that there are concerns about the additional competition a deal with this developed economy would bring, and about Japan's current regulatory barriers. But let me assure you that we wouldn't start negotiations empty-handed:

I have made it very clear to my colleagues today that after one year of starting the negotiations, we will take stock on the progress Japan has made on dismantling the non-tariff barriers as set out in the roadmap we have agreed together. If the implementation has not been satisfactory, I will stop the negotiations.

I don't think we can be any clearer than that in our ambitions.

I have also made clear that Europe would not reduce any tariffs before Japan delivers concrete results on regulatory barriers – and this includes the car sector.

So we will walk to the negotiation table with a very strong starting position.

Ladies and Gentlemen, but let's also remind ourselves why we are doing this: trade liberalisation remains the cheapest way we have to stimulate our economy – we don't need tax payers' money for this.  If we conclude all our FTAs that are currently underway, we could boost the EU's GDP by more than 2 per cent, or €250 billion, which equals the size of Denmark or Austria. This is real growth, these are real jobs, and a trade deal with Japan would be a major piece in that puzzle.

The ball is now in the Member States' court: We will now submit our negotiating directives to the Council and the Member States will discuss them after the summer. I would ask them to seize this opportunity and to give the Commission a mandate to start negotiations soon.

Thank you.

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