EU and Japan to start negotiations for free trade agreement image

The European Union today agreed to start negotiations for a free-trade agreement with Japan, despite opposition from European automakers.

According to the ACEA lobby group, a free trade agreement with Japan will have a negative impact on the European auto industry and may lead to tens of thousands of job losses. ACEA cited a research from Deloitte which showed that the potential for increased car exports to Japan from Europe would not offset higher imports into Europe from Japan.

ACEA secretary general Ivan Hodac said a deal with Japan would be “a one-way street” as far as the automobile industry is concerned. The Deloitte study said EU car exports to Japan could increase by 7,800 units by 2020 if a deal was agreed, while additional Japanese exports to the EU could amount to 443,000 units. The logical fall in EU car production could lead to 35,000 to 73.000 job losses, ACEA warned.

Brussels-based ACEA industry group represents all major carmakers that sell cars in Europe, including Toyota and Hyundai. The organization said it will monitor EU-Japan negotiations to ensure the European auto industry’s two main requests are met.

The first is that vehicles manufactured and type-approved in the EU must be accepted in Japan without further testing or modification. The second refers to European small cars, which must be given the opportunity to compete on equal terms with Japanese kei-cars, which enjoy fiscal and other benefits.