In hunt for trade deal, EU approaches abolishing tariff on Japanese cars over seven years

JIJI, Kyodo

The European Union has decided to scrap its 10 percent tariff on passenger cars made in Japan over seven years under an envisaged bilateral economic partnership agreement (EPA), sources said Wednesday.

As part of the negotiations, the EU has also agreed to eliminate its 14 percent tariff on television sets imported from Japan over five years, the sources added.

Japan and the EU are believed to be on the verge of wrapping up negotiations on lifting or reducing tariffs for industrial products, a key sector for Tokyo.

The two sides are accelerating talks on cheese trade, with the EU demanding Japan further open its market to European products, the sources said.

Japan and the EU are aiming to strike a broad EPA deal at a ministerial meeting from Wednesday or during a summit between Prime Minister Shinzo Abe and EU leaders, European Council President Donald Tusk and European Commission President Jean-Claude Juncker, on Thursday in Brussels, home to EU headquarters, the sources said.

They have been redoubling efforts recently amid uncertainty over multilateral free trade agreements following the United States’ withdrawal from the 12-member Trans-Pacific Partnership and Britain’s decision to exit the European Union.

With the existing free trade agreement between the EU and South Korea in mind, Japan called on the EU to abolish its tariff on Japanese passenger cars within five years after the envisaged EPA takes effect.

The EU, however, has remained resolute in its position that it needs at least seven years to abolish the automobile tariff, the sources said.

The EU’s tariffs on electronic products other than TVs are expected to be generally eliminated immediately after the EPA comes into force.

In hopes for a breakthrough in the cheese trade negotiations, Japan has proposed creating a low-tariff import quota for mozzarella, Camembert and other soft cheeses and reducing regular tariffs on the products drastically over 15 years, the sources said.

The EU is requesting that Japan eliminate the tariffs eventually, while Tokyo has maintained a cautious stance. The two sides are also apart over the amounts of cheese products that will be imported under the quota.