EU, Japan eye new friendship, weigh trade friction

Japan has pressed the EU hard for a formal summit announcement An EU-Japan summit Saturday seeking to elevate ties between the world's third biggest economy and its leading market to a new dimension, looks set to stumble on prickly differences over trade. Disaster- struck Japan, struggling to recover from a devastating March tsunami and nuclear meltdown, had pressed the European Union hard for a formal summit announcement of the launch of negotiations towards a free trade deal -- an accord worth tens of billions to either side.
But after months of tough talking heightened by a history of trade friction, officials said no such deal would be formally inked as the two sides scrambled to agree wording of a joint text only 24 hours before the summit start.
"This summit cannot launch negotiations but it can send a strong political message that we're seeking to launch negotiations," said an EU diplomat on condition of anonymity.
Along with pledges to take the road to free trade, the summit is expected to address Japan's demands to spell out a wide-ranging historic new partnership with the bloc of 27 nations and its half a billion people.
On trade, however, the EU says a mountain of work remains to identify sticking-points and compile a to-do list of issues to overcome before the EU's 27 member states will approve official negotiations paving the way to a free trade agreement (FTA) between the two economic giants.
Prompted by Britain, Europe's leaders in March called for FTA talks to aid Japan -- but on the proviso Tokyo lift restrictions to trade.
Trade ties consistently favour Japan, with Tokyo's better track record "partly a reflection of continuing market access problems for foreign firms in Japan," a European Commission report said this year.
That view is shared by European business leaders.
"We want to do business with Japan but there must be a clear give and take," said a business sector lobbyist who asked not to be identified. "We want to see clear signs from Japan that it is open to us."
Europe notably complains over unfair treatment in government procurement, comparing a 312-billion-euro procurements market (2.5 percent of EU GDP) open to Japanese companies in 2007, to a 22-billion-euro share (0.5 percent of Japan's GDP) offered to EU firms.
Even the European Parliament stepped up on the eve of the summit to warn against jumping into bed with Japan.
"Instead of rushing headlong into new negotiations over a free trade agreement, EU countries should insist on tangible results," said Euro-MP, Daniel Caspary, who sits on the assembly's trade committee.
The EU's signature of an FTA with Asian rival South Korea last year has upped Tokyo's insistence on a deal to offset fears that Japan's famed electronic appliances and automobiles may lose a competitive edge.
Britain's Foreign Secretary William Hague this month touted the prospects of a golden pot. The removal of tariff and non-tariff barriers could deliver over 40 billion euros ($60 billion) of additional European exports to Japan, and more than 50 billion euros of extra exports from Japan to the EU, he said.
The summit is expected to agree in principle to launch the FTA negotiations while continuing to define the issues up for discussion, and pledge to strike a wide-ranging "binding agreement" setting in stone the Japan-EU bond of friendship, or "kizuna."
Also expected are agreements to cooperate on nuclear safety, climate change, disaster management and international issues.
"I would like to reaffirm the EU's commitment to a genuine strategic partnership with Japan," said EU president Herman Van Rompuy on Friday, recalling the support voiced after Japan's earthquake and tsunami.
"Our commitment is firmly based on broad public support in the EU for closer political and economic ties with Japan, also demonstrated by the overwhelming expressions of support and solidarity after that terrible catastrophe."