Japan-Swiss FTA may offset lack of EU accord

by Shinya Ajima

Kyodo News

The free-trade agreement that recently took effect between Japan and Switzerland is expected to help Tokyo ease any unfavorable impact from the lengthy time it has spent trying to conclude a similar accord with the European Union, Swiss Vice President Doris Leuthard said.

Japan is still in the early stages of negotiating an FTA with the EU, having launched a private-public joint study panel, and lags behind neighboring economies, particularly South Korea, which agreed in July to sign a trade liberalization accord with the 27-member union.

Switzerland, while not a member of the EU, is located at “the center of Europe” and can offer a key gateway to Japanese exports and investments destined for the greater European market, said Leuthard, who was visiting Tokyo earlier this month to celebrate the enforcement on Sept. 1 of the Japan-Swiss FTA — Tokyo’s first such agreement with a European state.

With the bilateral FTA, Japan has obtained “easier market access” to the EU, she said in a recent interview. Switzerland has concluded an FTA with the bloc.

As the Swiss economy is integrated into the European market, Japanese firms having headquarters in Switzerland will find it easier to do business all over the area, the vice president said. “So I think this is quite promising for (Japanese) investors (who) head to Europe,” she added.

Experts say Tokyo’s inclination to protect domestic farmers from cheaper imports has often caused stumbling blocks in talks on free-trade accords with other major economies, including the EU and the United States.

Japan’s FTAs with Singapore, Mexico and Chile were concluded without serious friction in agricultural talks.

Leuthard’s visit earlier this month was also intended as an opportunity to exchange greetings with members of Prime Minister Yukio Hatoyama’s Cabinet.

The landslide victory that thrust Hatoyama’s then opposition Democratic Party of Japan into power in the Aug. 30 House of Representatives election was “obviously” the result of people who “wanted to have change,” she said.

As for Hatoyama’s key diplomatic policy of putting priority on nurturing Japan’s relations with other parts of Asia, indicating a shift from Tokyo’s traditional reliance on the United States and Europe, Leuthard said, “It is actually quite normal that you first try to have a good contact with your neighbors.

“By your history, it was difficult in the past,” she said, apparently referring to Japan’s colonial rule of some Asian regions before and during World War II.

“But we are in a new phase afterward.

“This may lead . . . to a peaceful region and good contacts among neighbors, which also could be (a) contribution to worldwide security and have (a) positive impact on the economy.”