June 3rd 2014

How do Regional Trade Agreements contribute to Japan’s Economic and trade objectives

1

The WTO and FTAs are Japan’s twin‐engine for trade liberalization.WTO : The foundation of the global trading systemFTAs : Agreements aiming for further trade liberalization beyond the WTO

WTO‐ Broad participation (159 members)‐ MFN

FTA

Japan’s Trade Policy

(billion)

‐ ASEAN, China and India: Accounts for 1/3 of the world’s economic growth.‐Middle income population in Asia: 1.46 billion (2010) ‐> 2.31 billion (2020)

Expansion of high/middle income population

0.0

0.5

1.0

1.5

2.0

2.5

1990 1995 2000 2005 2010 2015 2020

Phillippines

Malaysia

Singapore

Vietnam

Thailand

Indonesia

India

Korea

China

Expected growth of GDP in the world(growth from 2010)

Source: IMF Economic Outlook Source: Euromonitor International 2011

Expanding markets in Asia

2

Launched Negotiations ( 1 country )

Middle East Turkey

Japan‐EU・EPA

TPP( Trans‐Pacific Partnership )

* GCC: Gulf Cooperation Council (UAE, Bahrain, Kuwait,  Oman, Qatar,  Saudi Arabia)

In Force/Signed( 12 countries and 1 region )

Asia

SingaporeAsia

Viet Nam

Malaysia India

Thailand

Latin America 

Mexico

Indonesia Chile

Brunei Peru

ASEAN Europe Switzerland

Philippines

Under Negotiation( 4 countries and 5 regions )

Asia

C‐J‐K Europe EU

RCEP North America Canada

Mongolia

Republic of Korea(Negotiation suspended )

Latin America  Colombia

Asia/Pacific TPP Middle East

GCC*(Negotiation postponed )

Development of Japan’s EPA/FTA Networks

China‐Japan‐Korea FTA

Substantive Agreement ( 1 country )

Pacific Australia

RCEP( Regional Comprehensive Economic Partnership )( ASEAN, Japan, China, Korea, India, NZ and Aus. )

In Force/Signed

Launched NegotiationsUnder Negotiation

Substantive Agreement

3

In Force: 18.2%Including Substantive Agreement: 22.6%Including under Negotiation: 84.2%

In Force: 27.1%Including under Negotiation: 53.0%

Japan China In Force: 36.0%Including under Negotiation: 82.9%Korea

In Force /Signed: 26.0%Including under Negotiation: 67.6%

Coverage of EPA/FTA

‐ The items (Japan, China, Korea, USA, EU28, Others) are arranged in descending order of trade value within each progress status of negotiations.‐When a country is under negotiation with the same country  at the same time within a bilateral FTA and a plurilateral FTA ,the item is classified in more progressed status

(in force → signed → under nego a on → others). ‐ References of Trade Value: Global Trade Atlas (2013)‐ Percentages of items are calculated on rounded data, which may not necessarily added up to 100%.

In Force: 37.1%Including under Negotiation: 70.8%

USA EU28

18.2%

Australia4.4%

China20.0%

USA13.1%

EU9.7%

Korea6.0%

Others12.9%

Turkey0.2%

Others15.6%

Trade Value1,548 billion

USD(2013)

EU9.8%

USA9.6%

Others16.6%

3.9%China21.3%

Japan8.8%

Others12.9%

Others17.1%

Trade Value1,075 billion

USD(2013)

27.1%

1.4%

Japan7.5%

Korea6.6%Others

10.4%

EU13.4%

USA12.4%

Others21.2%

Trade Value4,160 billion

USD(2013)

37.1%

Korea2.7%EU

16.9%

Japan5.3%

Others8.8%

China14.6%

Others14.6%

Trade Value3,846 billion

USD(2013)

26.0%

Korea2.2%

0.6%USA14.0%Japan

3.2%Others21.5%

China12.5%

Others19.9%

Trade Value4,537 billion

USD(2013)

In Force

Under Negotiation

Substantive Agreement

In Force

In Force In Force

In Force

(Trade within the EU  area is not added up)

Under Negotiation

Under Negotiation

Under Negotiation Under 

Negotiation

Signed

Signed

Signed

LaunchedNegotiations

ＦＴＡＡＰ（Free Trade Area of the Asia-Pacific）

ＴＰＰ（Trans-Pacific Partnership）

China-Japan-Korea FＴＡ

United States

Canada

Mexico

Peru

Chile

Malaysia

VietnamSingapore

BruneiAustralia

ＮＺ

Roads to FTAAP

Japan

ＲＣＥＰ (Regional Comprehensive Economic Partnership)ASEAN 10 + Japan, China, Korea, India, Australia, NZ

55

In order to translate the FTAAP from a vision to reality, we agree the establishment of a new Committee on Trade and Investment (CTI) Friends of the Chair Group on Strengthening REI and Advancing FTAAP,to kick off and advance the process in a comprehensive and systematic manner towards the eventual realization of an FTAAP. This Group will coordinate and advance APEC work in this area, and intensify our efforts on: enhancing transparency among regional RTAs/FTAs; strengthening capacity building activities; formulating a Roadmap for APEC’s Contribution to the Realization of an FTAAP; and enhancing the analytical work of an FTAAP. We welcome the progress achieved thus far, and instruct officials to take concrete actions to produce tangible, meaningful outcomes this year and beyond.

Free Trade Area of the Asia‐Pacific (FTAAP)

Meeting of APEC Ministers Responsible for Trade Statement(18th/May/2014.Qingdao,China)

6

2006 The Trans-Pacific Strategic Economic Partnership (P4) Agreement among Brunei, Chile,Singapore, and NZ entered into force.

September 2008 The U.S. announced it would participate in the negotiations.

March 2010 The U.S., Australia, Peru, and Vietnam participated in the negotiations, 8 countries in total.

October 2010 Malaysia participated in the negotiations, 9 countries in total.

November 2011 Japan, Canada and Mexico expressed their interest in participating in the negotiations.

October 2012 Canada and Mexico participated in the negotiations, 11 countries in total.

March 2013 Japan announced it would participate in the negotiations.

July 2013 Japan participated in the negotiations, 12 countries in total.

Viet Nam

Singapore

Brunei

New Zealand Chile

USA

TPP

Peru

Australia

Vietnam

Malaysia

Canada

Mexico

Japan

Overview of the Trans‐Pacific Partnership

7

①Trade in Goods (Non‐agricultural products / 

Texitiles and clothing/ agricultural products)

②Rules of Origin ③Trade Facilitation④SPS

(Sanitary and Phytosanitary Measures)

⑤TBT(Technical barriers to 

trade)

⑥Trade Remedies(Safeguards, etc.)

⑦Government Procurement ⑧Intellectual Property Rights ⑨Competition

Trade in Services 

⑩Cross‐Border Trade in Services 

Trade in Services  Trade in Services  Trade in Services 

⑭Electronic Commerce ⑮Investment ⑯Environment

⑪Movement of Business Persons

⑫Financial Services

⑬Telecommunications Services

⑰Labor ⑱Institutional Issues ⑲Dispute Settlement ⑳Cooperation ㉑Cross Sector Issues

21 issues in TPP Negotiations

8

2013

Trans‐Pacific Partnership Ministers Chart Path Forward on Key Issues and Confirm Next Steps on Japan’s Entry (April 20)

・・・Ministers also confirmed that each TPP member has concluded bilateral consultations with Japan regarding Japan’s interest in joining the TPP. Today, Ministers agreed by consensus to finalize with Japan the process for entry in a manner that allows the negotiations to continue expeditiously toward conclusion – as was done with other members that joined the negotiations in progress. Japan can then join the TPP negotiations upon completion of current members’ respective domestic processes.With Japan’s entry, TPP countries would account for nearly 40 percent of global GDP and about one‐third of all world trade. TPP Ministers noted that Japan’s participation in the negotiation will underscore the economic significance of TPP and its promise as a pathway toward a Free Trade Area of the Asia Pacific.

Joint Statement of TPP Ministers

Concluded all bilateral consultations

April 20th TPP Ministerial  Meeting

Japan’s participation in the TPP Negotiations

“TPP members welcome Japan as a new member in Trans‐Pacific Partnership negotiations” (April 21)

“The existing TPP members particularly welcomed Japan’s commitment to achieving the shared goal of a comprehensive, high‐ambition, next‐generation agreement as rapidly as possible, consistent with the statements made by TPP Leaders and Trade Ministers on 12 November 2011 in Honolulu. We look forward to working with Japan as we seek to conclude a comprehensive and balanced package, taking into account the diversity of our levels of development.”

“The existing TPP participants will now complete their domestic legal procedures, where applicable, after which Japan will formally join and participate in the negotiations.”

Media Statement by Trade Minister of NZ, Tim GroserJapan has joined the negotiations 

July 23rd18th round of the negotiations in Malaysia

February 22nd – 25thTPP Ministerial  Meeting  was held in Singapore

9

2014

April 23rd – 25thMeeting between

President Barack Obama andPrime Minister Shinzo Abe

Around July TPP chief negotiators meeting will be held

May 19th – 20thTPP Ministerial  Meeting  was held in Singapore

Our joint efforts are grounded in support for an international economic system that is free, open, and transparent, and embraces innovation.  In order to further enhance economic growth, expand regional trade and investment, and strengthen the rules‐based trading system, the United States and Japan are committed to taking the bold steps necessary to complete a high‐standard, ambitious, comprehensive Trans‐Pacific Partnership (TPP) agreement. Today we have identified a path forward on important bilateral TPP issues. This marks a key milestone in the TPP negotiation and will inject fresh momentum into the broader talks. We call upon all TPP partners to move as soon as possible to take the necessary steps to conclude the agreement. Even with this step forward, there is still much work to be done to conclude TPP. 

The United States and Japan: Shaping the Future of the Asia‐Pacific and Beyond25th Apr. 2014

U.S.‐Japan Joint Statement

10

In Nov. 2012, European Commission obtained a negotiating mandate from the member states. In Mar. 2013, announcement of launch of EPA negotiations by the leaders of Japan and the EU.In Apr. 2013, 1st round of negotiations was held in Brussels.In Mar. 2014, 5th round of negotiations was held in Tokyo.Japan is interested in elimination or reduction of tariffs, while EU is interested in addressing non‐tariff measures as Japan has already eliminated most tariffs. (Examples of EU tariffs: Automobiles 10%, TV: 14% *both 0% in Japan)

European Council states they reserve “the right 'to pull the plug' on the negotiations after one year if Japan does not live up to its commitments on removing non‐tariff barriers.”(Nov. 29, 2012)

Overview

Around May – Jun. in 2014 the European Union's reviewSchedule

Japan‐EU EPA

11

We reaffirm the importance of strengthening the trade and economic relationship between the EU and Japan, and of the early conclusion of a highly comprehensive and ambitious Free Trade Agreement (FTA)/ Economic Partnership Agreement (EPA) which would play a vital role in this regard, notably by addressing issues related to market access forgoods, services and investment, procurement, including railways, and non‐tariff measures.

22nd EU‐Japan Summit Brussels, 7 May 2014 Joint Press Statement~ The EU and Japan Acting together for Global Peace and Prosperity ~

12

The UK and Japan are determined to reinforce our strong economic partnership, aiming to reach agreement in principle encompassing all the key issues on a comprehensive EU‐Japan Economic Partnership Agreement during 2015. This will address market access issues withregard to trade in goods and services, and investment and procurement. We are also committed to ongoing negotiations on the EU‐Japan Strategic Partnership Agreement.

UK‐JAPAN JOINT STATEMENT: A DYNAMIC STRATEGIC PARTNERSHIP FORTHE 21ST CENTURY

Goods Rules Sectoral non‐Tariff Measures

・Tariff on Goods

・Rules of Origin

・Trade Facilitation

・Trade Remedy

・Automobiles

・Chemicals

・Electronics

・Food Safety

・Process Food

・Alchohole

・Pharmaceuticals

・Medical Equipment

・Investment

・Trade in Services

・IPR・ＧＩ

・TBT

・SPS

・Competition

・Subsidies

・State Owned

Enterprises

・Transparency in

Regulation

・Regulatory Cooperation

・Business Environment

Negotiating Areas of Japan-EU EPA

14

Japan, the U.S. and EU have engaged in “Mega‐FTA” negotiations, namely TPP,Japan‐EU EPA, TTIP (Transatlantic Trade and Investment Partnership).The integration of developed economies via “Mega‐FTAs” contributes to globalgrowth and can form a basis for the 21st century global trade rules.

ＴＴＩＰ

Ｊａｐａｎ‐ＥＵ・ＥＰＡ

ＴＰＰ

“Mega‐FTAs”

In November 2012, announcement of  the launch of negotiations at the East Asia Summit.In May 2013, 1st round of negotiations was held in Brunei.In Aug. 2013, 1st RCEP  Ministerial Meeting was held in Brunei.In Sep. 2013, 2nd round of negotiations was held in Australia.In Jan. 2014, 3rd round of the negotiations was held in Malaysia.In Apr. 2014, 4th round of the negotiations was held in China.Goal ‐ to make rules to contribute to high‐level supply chains covering east Asia region and to realize user‐friendly EPAs with common  procedures across the region.

Overview

On Jun. 23rd – 27th 5th round of the negotiations will be held in Singapore.In Aug. 2014 2nd RCEP  Ministerial Meeting will in Myanmar.

ＲＣＥＰ（ＡＳＥＡＮ10 + Japan, China, Korea, Australia, NZ, and India)

Schedule

RCEP : Regional Comprehensive Economic Partnership

15

In November 2012, announcement of launch of FTA negotiations at China‐Japan‐Korea Economic Ministers’ Meeting.Goal ‐ to realize a comprehensive and high‐level FTA, covering investment and trade in services.

Overview

● Around Summer in 2014 5th round of negotiations will be held in China.

Schedule

China‐Japan‐Korea FTA

16

17

Japan‐Korea EPA(Negotiations Suspended)

【Launch】Dec. 2003

【Latest Negotiation Round】Nov. 2004   ※subsequently, negotiations suspended

【Bilateral Meeting】Oct. 2011 (PM Noda Visited Korea) : Agreed to conduct practices towards re‐entering into negotiations.

Japan‐Australia EPA(Substantive Agreement )

【Latest Summit Meeting】Apr. 2014.PM Shinzo Abe and PM Tony Abbott confirmed the substantive agreement on the Japan‐Australia EPA.

【Substantive Agreement 】The two countries confirmed: 1. The  EPA will create significant new 

trade and investment opportunities in the two countries.

2. They would proceed with work to sign  the EPA as early as possible.

Japan‐Canada EPA(Under Negotiation)

【Launch】Nov. 2012

【Latest Negotiation Round】5th Round in Mar. 2014

【Bilateral Meeting】Sep. 2013 (Japan‐Canada Summit)

Japan‐Mongolia EPA(Under Negotiation)

【Launch】Jun. 2012

【Latest Negotiation Round】6th Round in Apr. 2014

【Bilateral Meeting】Sep. 2013 (Japan‐MongoliaSummit) : Agreed to promotenegotiations with vigor toward anearly conclusion.

Japan‐Colombia EPA(Under Negotiation)

【Launch】Dec. 2012

【Latest Negotiation Round】5th Round in May 2014

Japan‐Turkey EPA(Launched Negotiations)

Other EPA Negotiations of Japan

【Launched Negotiations】Jan. 2014 

【Bilateral Meeting】The two leaders agreed that Japan and Turkey will open intergovernmental negotiations on concluding Japan‐Turkey Economic Partnership Agreement (EPA)

1. I wholeheartedly welcome the substantive agreement on the Japan‐Australia Economic Partnership Agreement (EPA) through diligent rounds of negotiations which began in 2007.

2. With the entry of this EPA into force, the current proportion of less than 30% of tariff‐free goods to total export value to Australia will increase to more than 80% of total export value. Moreover, a massive improvement in market access will be actualized in the automotive sector, which accounts for approximately half of our exports where currently the tariff rate is 5%.

3. Specifically, tariffs on approximately 75% of exported whole vehicles will be abolished immediately. In particular, the tariffs on Japan’s main export items, gasoline‐driven vehicles (from 1,500cc to 3,000cc) will be eliminated immediately and entirely. Besides, the tariffs on other types of vehicles will be abolished in the third year, regarding automotive parts, in addition to the immediate removal of some tariffs, all classes of automotive parts tariffs will be largely eliminated within three years.

4. Along with elimination of tariffs, high‐level agreements in a broad range of fields were achieved, including the stable supply of resources and energy including natural gas and coal, the liberalization of investment and trade in services, the improvement of rules for electronic commerce and government procurement, and the protection of intellectual property rights.

5. Japan and Australia share a close and critical economic relationship, and this EPA is a valuable framework for strengthening future trade and investment between our nations. The Ministry of Economy, Trade and Industry (METI) will continue its utmost efforts to achieve the signing and entry into force of the Japan‐ Australia EPA at the earliest possible date. 18

Statement by Minister Motegi on the Substantive Agreementon the Japan‐Australia Economic Partnership Agreement

7th Apr. 2014

19

Possible approaches;Implementing Bali Package, especially Trade Facilitation Agreement (TFA), andContinuing to deliver concrete outcomes.

Early adoption of TFA‐ Outcome of TFA should be ensured by early adoption of the protocol.

<<Schedule agreed in Bali Ministerial>>Adopt the protocol by the end of July, 2014Open the protocol acceptance by the end of July, 2015

Promotion of plurilateral negotiations‐ Plurilateral negotiations are an effective approach that the WTO could take,

especially in terms of “doability” .‐ Japan is actively engaging in ITA expansion, TiSA (Trade in Services Agreement) and

the launch of environmental goods negotiation.

Work program on the remaining Doha Round issues‐ Discussion on the work program has begun.‐ The work program should reflect the reality that emerging countries have become

major players in the global economy over the last decade.

Revitalizing WTO Negotiations