UK backs Japan-Europe trade deal

UK backs Japan-Europe trade deal

By David Pilling in Tokyo

Published: April 6 2008 21:50 | Last updated: April 6 2008 21:50

The UK is pushing the idea of a Japan-Europe trade agreement in which Japanese manufacturers would gain better access to European markets in return for liberalising its financial services, airline and pharmaceutical industries.

One informed official said the process was still in its early stages and could run up against opposition in Europe, particularly from countries keen to protect against Japanese car and electronics imports.

Gareth Thomas, the UK’s international trade and development minister, declined to talk about the specifics of any talks, but said: “We are keen to increase trade with the Japanese. Britain still faces a series of difficulties in getting access to Japanese markets”.

Mr Thomas confirmed that the UK was sounding out other European countries about the possibility of opening more formal discussions, saying: “We will explore with other member states what further scope there is to improve the Japan-European trade relationship”.

Millennium poverty goals slip

The world is falling badly behind its Millennium poverty alleviation goals at a time when rich nations’ provision of aid is slipping, development ministers from the Group of Eight have warned in Tokyo, writes David Pilling.

Stefano Manservisi, European Commission director for development, said even though European donations had backtracked for two years, “Europe has the moral and political duty to push the agenda”.

There should be more intense talks about the quality and quantity of aid, he said.

One official said that, at current rates, goals on water and sanitation were 150 years behind schedule.

The ministers also agreed formally to link global warming and poverty reduction, saying developing nations would need extra help as the planet warmed. Japan, the US and the UK have set up a fund at the World Bank to help transfer carbon efficient technology to developing countries.

No Japanese trade official could be reached for comment on Sunday. But Tokyo has been pushing bilateral trade agreements, particularly with Asian neighbours, as complimentary to the stalled Doha round of international trade negotiations. Japan has been stung into action by China’s success in converting more intense trade relationships into political clout and, more recently, by the opening of trade negotiations between South Korea and the US.

Partly as a result, it has negotiated bilateral deals with, among others, Mexico, the Philippines, Indonesia and Thailand.

Japan’s trade partners concede that progress has been made in lowering the country’s non-tariff barriers, but complain about restrictions in some industries. Foreign airlines would like greater freedom to offer discounted tickets, for example, while European and US pharmaceutical manufacturers say the Japanese drug approval process is slower and more cumbersome than its international equivalent.

In financial services, foreign institutions have long pushed for a lowering of firewalls between banking and securities houses, which forces them to duplicate costly infrastructure. Japan has been discussing the possibility of taking such a step, though the mood has cooled recently, partly because the case for lighter regulation has taken a knock after the subprime debacle.

Japan’s efforts to free up trade bilaterally have been hampered by its strong farm lobby, whose reluctance to lower tariffs makes it harder for Tokyo to push for reciprocal liberalisation.

In Europe, any attempt at a fully fledged bilateral trade agreement could fall foul of countries that want to maintain higher tariffs on imports of manufactured goods made in Japan. Those barriers have forced Japanese car and electronics makers to build factories in Europe.