Cheese, please: Japan, EU said near agreement on trade pact

TOKYO, June 30: Japan and the European Union are rushing to finalize an agreement on easing barriers between their huge economies to help counter the backlash against free trade by U.S. President Donald Trump.

The two sides hope to have a deal before the Group of 20 industrial nations meets next week in Germany. Local reports said one main point of disagreement was Japan’s up to 40 percent tariffs on imported cheese.

“We are making our utmost efforts,” Japanese Foreign Minister Fumio Kishida said. “We need to take into consideration respective sensitivities and make utmost efforts from the perspective of national interests.”

He told reporters he expected the talks to be both “fierce and tough.”

The EU Trade Commissioner Cecilia Malmstrom and Rural Development Commissioner Phil Hogan were due to hold meetings with their Japanese counterparts. Kishida said the hope was for a deal to be set in a Japan-EU summit ahead of the G-20 gathering in Hamburg, Germany.

Together, the 28-nation EU and Japan form a market of nearly 640 million people and account for nearly a third of global economic activity. Japan is the EU’s second biggest trading partner after China.

European and Japanese leaders have remained committed to lifting trade barriers and expressed concern over the Trump administration’s “America First” approach to trade.

After Trump withdrew the U.S. from a Pacific Rim trade pact that had been championed by President Barack Obama, Japan and other Asian-Pacific countries involved continued talks on a revised version of that initiative, called the Trans-Pacific Partnership.

Both Japan and the EU also have a tradition of protecting their politically powerful farm sectors. Dairy products are an especially sensitive issue for both the EU, with its long traditions and half the world’s market for cheese, and Japan, where farmers are struggling to compete.

Japan has sought to limit its concessions on dairy imports in the EU talks to the 29.8 percent level for processed cheese, mozzarella, Gouda and Camembert agreed to during its TPP negotiations, Japanese media reports said.

“We will resolutely protect our interests. There is no cause for concern,” Yuji Yamamoto, Japan’s minister of farming, forestry and fisheries told reporters in Tokyo.

Japan is keen to see the EU reduce its tariffs on vehicles, electrical machinery and other industrial products.

Both sides are targeting each other’s “non-tariff measures,” such as onerous regulations that deter exporters from even trying to sell in a market.-AP