Conclusion of EU-Japan FTA could add €42billion to EU GDP. The EU Commission is to open talks on a free trade agreement with Japan, following the agreement of a mandate today (Thursday) by the EU Trade Council attended by the Minister for Jobs, Enterprise and Innovation, Richard Bruton TD.
It is estimated that the successful conclusion of a free trade agreement between the EU and Japan could add €42billion to EU GDP.
While participating in today’s EU Council, Minister Bruton also laid out Ireland’s trade priorities for the upcoming Irish Presidency of the EU Council which starts in January.
Minister Bruton is also holding a bilateral meeting with his French counterpart, the Minister for Foreign Trade Nicole Bricq. This follows Minister Bruton’s recent meeting with UK Secretary of State for Business Vince Cable, and arrangements are being finalised for meetings with trade ministers from other Member States before the beginning of the Irish Presidency. These meetings are part of a drive to make progress on trade issues during the Irish presidency, in particular on agreeing a mandate to open negotiations with the US on an EU-US free trade agreement. Such an agreement could provide benefits of €120billion to the EU economy and over €100million per annum for the Irish economy, and will be prioritised during the Irish Presidency.
Speaking at today’s Council, Minister Bruton said:
“Jobs and growth will be at the centre of Ireland’s EU Presidency, and we will be aiming to make substantial progress on a series of trade issues, which can make a real difference to the EU and the Irish economy over the coming years. Today’s agreement on a mandate to open talks with Japan, which could lead to benefits of over €40billion to the EU economy, is an important step forward. This means that the largest and the third largest economies in the world will now start to hammer out a free trade deal to help their exporters do more business with each other. Today’s development also indicates the potential that exists for progress on free trade agreements with a range of countries, which could see major benefits for the EU and the Irish economy.
“The Irish Presidency offers major opportunities to help drive progress on a range of trade issues which could see major benefits, for the EU and the Irish economy, and I am determined to work hard to realise that potential in the interests of the jobs and growth we need”.
Over 30 million jobs or 10% of the EU workforce are dependent on sales to the rest of the world and this has increased by 50% since 1995.
Japan is the EU’s second biggest trading partner in Asia, after China, and together with the EU accounts for more than a third of world GDP. A trade deal with Japan could boost the EU’s economy by 0.8% and EU exports to Japan could increase by 32.7%, while Japanese exports to the EU would increase by 23.5%.
In 2011 Ireland exported €1,743 million in Merchandise and €1,515 million in Services to Japan. In the same year, we imported €796 million in Japanese Merchandise and €684 million in Japanese Services.
Our top five exports to Japan are organic chemicals, contact lenses and optical goods, soft drink concentrate, pharmaceutical products and medical devices. Our top five imports are medical and pharmaceutical products, organic chemicals, road vehicles, electronic components and integrated circuits and aircraft engines and parts. It is very likely that virtually all of this trade would see tariffs reduced to zero as soon as the FTA is applied.
Japan is the fourth largest economy in the world and a significant market for Irish business. In addition, Japan is Ireland’s 11th most important trading partner.