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* Abe sees EU-Japan trade deal agreement in 2015
* EU carmakers accuse Tokyo of shielding domestic market
* Japan, EU pressure Russia over Ukraine crisis
By Robin Emmott
BRUSSELS, May 7 The European Union and Japan
agreed on Wednesday to try to conclude talks on an ambitious
free-trade deal next year that would encompass about a third of
the global economy, despite European carmakers' scepticism about
An EU-Japan trade pact, potentially one of the world's
biggest, would be part of an emerging patchwork of sophisticated
accords between the world's richest countries as they search for
growth following the worst financial crisis in a generation and
the failure of global free-trade talks.
"We confirmed the importance of an early conclusion and 2015
is the target date for a basic agreement," Abe told a joint news
conference with European Council President Herman van Rompuy and
European Commission President Jose Manuel Barroso after a summit
at which they also discussed the Ukraine crisis.
Negotiations on a trade deal began in April 2013 and the
European Commission has estimated an agreement could add up to
one percent of gross domestic product (GDP) to both the Japanese
and the EU economies while deepening economic ties.
However, European carmakers such as Fiat and PSA
Peugeot Citroen complain that unfair requirements
hamper their access to the Japanese market.
Doubtful about Tokyo's willingness to remove barriers to
European exports, the Commission and member states, led by
France, had told EU trade negotiators to call off the talks
after a year if Japan did not show sufficient openness.
Commission President Barroso, whose officials negotiate
trade deals on behalf of member states, said on Wednesday he saw
"no objections" to the continuation of negotiations. EU
countries are expected to formally endorse that view on May 23.
According to an EU document seen by Reuters, Japan has met
most of Brussels' conditions for continuing talks but the EU is
still demanding that Tokyo end preferential tax treatment for
domestically produced small-engine cars.
European cars are unable to benefit from Japanese tax breaks
because they do not fit the criteria on size and power. Europe's
smaller cars are excluded from 40 percent of Japan's passenger
car market, according to EU car industry association ACEA.
GRAPHIC on EU-Japan trade: link.reuters.com/xem88s
After their talks, Abe and the EU leaders also urged Russia
on Wednesday not to exacerbate Ukraine's crisis. Brussels
threatened further sanctions against Moscow in the event of
further violence, which it fears could derail a planned
presidential election on May 25 in Ukraine.
"We call on Russia to refrain from any steps to further
destabilise Ukraine and instead to engage in a diplomatic
resolution of the crisis," said van Rompuy, who represents the
EU's 28 national governments.
"Further steps in destabilising Ukraine will call for
additional sanctions," van Rompuy said.
He spoke before President Vladimir Putin called on
pro-Russian separatists in eastern Ukraine to postpone their
planned referendum on independence on May 11 and said Moscow had
withdrawn troops from its border with Ukraine.
The EU and Japan have followed the United States in imposing
travel bans and asset freezes on dozens of individuals, some of
them close to Putin, over Moscow's actions in Ukraine, including
its annexation of the Crimea peninsula.
Western countries say Russian agents are directing the
uprising in eastern Ukraine and that Moscow is stoking trouble
with propaganda broadcasts into Ukraine that depict the
government in Kiev as "fascists".
But, mindful of their countries' business interests and
energy supplies, Brussels and Tokyo have held back on wider
"We call on Russia to follow the diplomatic path," said Abe,
whose country is a member of the Group of Seven major economies.
Japan plans to send observers to Ukraine's May 25 election.
Van Rompuy said the EU was open to holding more talks with
Ukraine, Russia and the United States, possibly in Geneva.
(Additional reporting by Adrian Croft; Editing by Gareth Jones)