* 27 EU states to hand Brussels task of talking with Tokyo
* Deal could add 400,000 jobs, percentage point to EU output
* Carmakers worry about closed Japanese market, imports
By Robin Emmott
BRUSSELS, July 18 The European Commission asked
EU governments on Wednesday for a mandate to negotiate a
free-trade deal with Japan, challenging strong resistance from
carmakers in the bloc who fear a surge in cheaper imports
hitting their home markets.
Announcing the Commission's decision to ask European Union
countries to let it negotiate with Japan on their behalf, Trade
Commissioner Karel De Gucht accused the automotive sector - one
of the most vocal opponents of the talks - of using foreign
competition as a "scapegoat" for its economic problems.
"We have to sort this out independently of free-trade
agreements," De Gucht told reporters.
"Let's not try to find a scapegoat somewhere ... Let's try
to get our act together and sort out what we have to do in this
automotive industry if it wants to have a brighter future."
EU leaders are expected to grant the Commission its mandate
at their next summit, in October. Talks could start early next
year and would take a couple of years to conclude.
The EU is seeking free-trade deals across the globe to lock
in access to fast-growing economies after 10 years of failure to
seal the Doha round of global trade talks.
The EU and Japan account for more than a third of global
economic output and a comprehensive trade deal would open up
markets for industries including chemicals and pharmaceuticals
as well as cars and car parts.
"If growth in the next 20 years is likely to come from Asia,
then overlooking Japan would be a serious mistake in our trade
strategy," De Gucht said.
The Commission says a deal deal could create 400,000 jobs in
Europe, increase EU economic output by almost 1 percentage point
and boost exports to Japan by a third.
"Let's be clear: We need these jobs, and we need this growth
in the current economic climate," De Gucht said.
The EU imposes a 10 percent tariff on imported Japanese cars
and European carmakers and their suppliers worry about a surge
of Japanese imports if that is lifted.
A free-trade deal with South Korea, in force for the last
year, led to a large increase in Korean car imports, something
Sergio Marchionne, chief executive of Fiat and head of
the European carmarkers' association ACEA, said was a "warning
sign" about a deal with Japan, Asia's biggest car exporter.
The EU sector's problems, after more than four years of
falling demand and profits, were illustrated by a recent
announcement by France's PSA Peugeot Citroen to cut
8,000 job cuts and close an assembly plant.
De Gucht said he had told Japan that Europe would not reduce
tariffs before Japan reduced its regulatory barriers. "This
includes the car sector," he said.
Britain, a leading proponent of the EU's trade agenda, said
it hoped talks could start as early as the end of this year.
British minister Norman Lamb said a trade deal with Japan would
be a "significant economic prize for Europe" that would generate
more than 70 billion euros a year for the EU.
The Commission must win the approval of the EU's 27
countries to proceed with Japan talks. There is a consensus at
least to start negotiations, diplomats say, and the Commission
is treading a careful path by agreeing to halt talks after a
year if Japan does not move on opening its markets.
Although there is barely a corner of the world where the EU
is not negotiating trade deals, the bloc has yet to seal an
accord with a major world economy. A deal with Japan would
probably follow a pact with Canada that is expected by the end
of this year, building on last year's agreement with Seoul.
The EU says that signing trade accords with more than 80
countries where negotiations have already begun - including
India - could create 2 million new jobs and make a 275 billion
euro ($340 billion) contribution to the European economy.