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France to vet EU trade negotiations with Japan
October 23, 2012 / 11:32 AM / 5 years ago

France to vet EU trade negotiations with Japan

PARIS (Reuters) - France is determined to defend the country’s struggling carmakers in European Union trade talks with Japan, ministers said on Tuesday after failing to obtain special checks on South Korean car imports.

The French government wants to ensure that a trade pact with Japan does not unleash a new wave of car imports like one triggered by a free-trade agreement (FTA) with South Korea.

France’s biggest carmaker, PSA Peugeot Citroen (PEUP.PA) announced plans in July to close a plant near Paris and cut 8,000 jobs.

The European Commission on Monday rejected an earlier French request to subject South Korean car imports to formal surveillance, which could have led to duties being reimposed.

“The government will see to it that the upcoming trade agreements between the EU and big industrialized countries preserve the interests of our industry,” Industry Minister Arnaud Montebourg and Trade Minister Nicole Bricq said in a joint statement.

“In this respect, the concerned parties will be consulted in the coming days about the conditions necessary for opening negotiations for a free trade agreement with Japan,” the ministers said.

The EU is in the process of trying to move ahead on two major free-trade agreements, with Japan and the United States. Both France and Italy are stalling because of concern that a Japanese deal would hurt their car industries with competitors including Toyota (7203.T), the world’s best-selling automaker.

Despite divisions between France and free-trade advocate Britain, EU leaders called at a summit last week for guidelines for negotiating with Japan to be agreed in the months ahead.

The EU-South Korea FTA is seen by the EU as a model for future trade deals and includes a safeguard clause allowing Brussels to re-impose duties if producers in sensitive industries are hit by a particularly strong surge in imports.

However, France says this could have been negotiated to limit imports more effectively to avert a sudden surge of cheap competition.

Korean car imports into the EU rose by 41 percent in the year to the end of June 2012, while the increase in France in the same period was 24 percent, according to Eurostat data.

French carmakers are losing market share to Korea’s Hyundai (005380.KS) and affiliate Kia (000270.KS), jointly the world’s fifth largest carmaker.

Reporting by Leigh Thomas; Additional reporting by Luke Baker in Brussels; Editing by Ruth Pitchford

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