As the European Union and Japan begin negotiations on a free trade agreement this week, the European Automobile Manufacturers' Association (ACEA) has reiterated its calls for Japan to remove non-tariff barriers so that European brands are able to compete on an equal footing.

"We are strongly in favour of FTAs that are balanced and that provide real opportunities for export," stated Ivan Hodac, ACEA's Secretary General. "However we still have some reservations about an FTA with Japan. We question its potential to create sufficient opportunities for European exporters to counterbalance the greater access to the EU which Japanese manufacturers will gain as a result of tariff reductions.”

The proposed agreement would require the 27-member EU to dismantle its existing 10% customs duties, which ACEA said would represent a saving of €1.2 billion ($1.44 billion) a year for Japanese carmakers and of €1,500 per vehicle. 

Hodac called for acceptance by Japan for EU type-approved vehicles to be sold there without the need for further certification or modification. ACEA said it would work constructively with the European Commission and other relevant stakeholders to ensure that Japan fulfils its commitments to eliminate non-tariff barriers in the automotive sector.

According to the European Commission’s trade impact assessment report published last year, ‘barriers’ encountered by EU-based carmakers in Japan are mainly technical issues related to emission, safety and noise standards, which cause extra conformity assessment, development and production costs for EU exporters.

However, speaking for the European office of the Japanese Automobile Manufacturers Association (JAMA), director general Kazuhito Asakawa stressed that regulations governing safety and environmental standards were not barriers to trade but are put in place by the Japanese government only with the intention of “protecting the Japanese people”.

Asakawa also said that JAMA was involved in discussions with ACEA to make sure standards were harmonised. “For Japanese manufacturers it is the same for European manufacturers, harmonised regulation will be beneficial,” he told Automotive Logistics News.

According to ACEA, however, Japan also needs to speed up the compatibility of its vehicle standards with UN regulations and revise the privileges afforded its super-mini (or kei) cars.

This was not something Asakawa had a stance on in relation to free trade between the two regions but he did say that the FTA would promote the economies of both regions and allow their respective car industries to benefit. “I have never seen such an agreement disadvantage an economy,” he added.

This echoed the statement made by JAMA’s chairman Akio Toyoda who highlighted the mutually beneficial partnerships its members had with European companies.

“The Japanese automobile industry’s longstanding presence in Europe reflects its significant investment in the region over many years, where acting on the principles of competition and cooperation has allowed it to establish an ever-growing number of mutually beneficial partnerships with its European counterparts,” he stated. He said the agreement would promote trade, investment and industrial cooperation and lead to growth and expansion of the car industry in both Japan and Europe.

Despite this, ACEA is urging for what it called “the real and effective elimination of non-tariff barriers in the car sector”. It said it welcomed the fact that in twelve months the European Commission will assess whether Japan’s progress in this regard was “fully satisfactory", adding that the Commission had indicated it would 'pull the plug' on the negotiations if it failed.