EU close to clinching key deals with Japan

Date: 13/07/2000

By Simon Taylor

Next week's EU-Japan summit in Tokyo promises to mark a significant step forward in relations between the two sides, with major breakthroughs expected on anti-trust cooperation and efforts to reduce technical barriers to trade.

European Commission officials are hoping that Union governments will approve an anti-trust agreement with Japan in time for the deal to be announced at the meeting between French President Jacques Chirac, Japanese Prime Minister Yoshiro Mori and Commission President Romano Prodi.

The accord negotiated by the EU executive and officials from Japan's Fair Trade Commission would commit the two sides to exchange information on international competition cases to improve efforts to combat monopolies. Under the agreement, which has to be scrutinised by competition and trade experts from national capitals before it can be approved, Union and Japanese authorities would also coordinate anti-trust investigations so that companies do not have to go though two sets of probes.

EU officials are also confident that the summit will mark the first signs of progress in efforts to agree a series of Mutual Recognition Agreements (MRAs) with Japan. Tokyo is expected to announce that it intends to introduce legislation next year to implement an MRA for electronic appliances. This would ensure that Japanese certification agencies could meet Union testing standards and would allow the authorities to disqualify agencies if they fail to carry out inspections properly.

MRAs allow international companies to save time and money when seeking approval to launch new products by making sure that all necessary safety checks required by the importing country can be carried out in the exporting country. The EU and Japan set the goal of agreeing MRAs for electrical goods, telecoms equipment, chemicals and pharmaceuticals at their summit last year, but progress in negotiations on individual agreements has so far been slow.

Officials say the Union will also raise concerns at the summit next Wednesday (19 July) about plans to privatise Japanese telecoms giant NTT. The Japanese premier has stated that the government should sell its €126-billion stake in the company to create more competition in the telecoms sector - NTT dominates the Japanese market, controlling 90% of all connections - but full privatisation is not expected for a couple of years.

The EU is keen to ensure that the Japanese government sets up an effective telecoms regulator to police a more liberalised market. It is also urging Tokyo to cut the charges levied for connections to people's homes and offices, known as local loops, to allow more competition among suppliers of Internet-based services. Japan has agreed to reduce charges by 22.5% over the next four years, but its trading partners have been arguing for a larger cut.

The forthcoming EU-Japan summit in Tokyo promises to mark a significant step forward in relations between the two sides, with major breakthroughs expected on anti-trust cooperation and efforts to reduce technical barriers to trade.