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EU-Japan EPA

On 25 March 2013, the European Commission and the Government of Japan launched negotiations towards what was then called a 'Free Trade Agreement' (EU terminology) or 'Economic Partnership Agreement' (Japanese terminology). After 18 formal rounds of negotiations and countless other formal and informal contacts and exchanges between the EU and Japanese Authorities, an agreement in principle was announced on 6 July 2017 on the main elements of what was now to be called the 'EU-Japan Economic Partnership Agreement'.

For quick summaries of information and FAQ about the FTA/EPA see the websites of DG TRADE, MOFA, JETRO (in Japanese only) and (slightly out-of-date) METI.

At its 19th annual meeting on 11 July 2017, the BRT welcomed this development with considerable delight, but urged the Authorities to bring the negotiations to a successful conclusion and to resolve the remaining questions for the benefit of both parties.

As might be expected, the BRT has strongly supported and encouraged the efforts the Authorities have made over the years that culminated in the announcement of the agreement in principle. On numerous occasions the BRT made clear its expectations (e.g. for a swift, comprehensive, ambitious and mutually-beneficial conclusion to the negotiations) and also sought to provide ideas for how to overcome obstacles to a successful outcome (e.g. in 2015 and 2016, the BRT urged, for the sake of our economies, political leaders at the highest level to intervene to resolve the deadlocks and bring the negotiations to a timely and ambitious conclusion.)

But what is more surprising is the visionary role the BRT played - much of what the BRT advocated in the past has been included in the agreement in principle.

 

 

The BRT's visionary approach

Right from its creation, the BRT has advocated international agreements to improve the business environments in the EU and Japan, although the nature of what it advocated evolved over time. Much of what it called for in the past has been taken up in the text that was 'agreed in principle' in July 2016:

In 2000 the BRT advocated common rules and a form of regulatory cooperation, predicted an important future role for digital technologies. But felt trade negotiations should be multilateral.

There is a crucial need for the early adoption of rules and systems suitable for global corporate activities in the current age, including consolidated tax systems, corporate regulatory reform, a transparent regulatory environment and trade facilitation, standardisation, MRAs, etc.... New digital technologies are creating a new and promising future, building a network society whose impact is far greater than we anticipated…. The mutual prosperity of our economies will be achieved only through cooperation between government and industry….The [BRT] Members… issued a strong policy statement supporting the multilateral system and the launch of a comprehensive WTO New Round, as well as further liberalisation and the elimination of obstacles to trade and investment.

 

In 2003, whilst maintaining its support for the multilateral trade negotiations at the WTO, the BRT advocated an FDI Enhancement Agreement between Europe and Japan.

[The] FDI Enhancement Agreement [would] provide a more structured framework to mutual efforts to promote and facilitate and increase in foreign direct investment. It is envisaged that such an Agreement would … address the many ideological and structural barriers inhibiting foreign direct investment between the EU and Japan in areas such as taxation, corporate reorganization, human resource allocation and the regulation of commercial activity.
The BRT felt such an agreement should:
-    Be an expression of unequivocal support toward the enhancement of FDI
-    Eliminate tax-related barriers to investment
-    Facilitate business development (human resource considerations)
-    Facilitate corporate reorganization (legal and tax perspectives)
-    Facilitate new business development through regulatory reform

 

By 2006 the BRT felt that time is running out for the WTO Doha Development Agenda (negotiations having started in 2001) and noted the increasing trend towards regional free trade agreements.

 

In 2007, the BRT maintained its support for the WTO but called on the EU and Japanese Authorities to give due consideration to explore the feasibility of an enriched economic agreement

As strong supporter of the WTO Doha Development Agenda (DDA) negotiations, the [BRT] continues to urge the European Commission and the Government of Japan to exert their utmost efforts in concluding ambitious negotiations by the end of this year.... The [BRT] is committed to creating the necessary conditions to deepen the full potential of EU-Japan economic relations, which are far from being fully exploited. With that in view and in line with its commitment to the WTO, the [BRT] proposes Japan and the EU authorities to establish a task force with business support to explore the feasibility of a Japan-EU Economic Integration Agreement, which should be an enriched economic agreement that includes priority issues for business such as strengthened regulatory cooperation, intellectual property, trade enhancement, and improving the investment environment.

 

 

Looking to the future

The BRT will continue to follow closely the on-going negotiations and will react as it sees appropriate (through direct contact with the EU and/or Japanese Authorities, or through public statements on this website, for example).

Specifically, the BRT will follow two issues with particular interest: In 2017, the BRT made it clear that industry should have a voice in any post-agreement monitoring mechanism (the European Commission has indicated it is open to receiving a concrete proposal from the BRT on this point) and that both Authorities should make public items as they are implemented and assess their impact on business, showing how the implementation addresses the particular issue raised in the EPA and how it might address other related issues including those not discussed in the EPA.