December 14, 2016 / 5:58 AM / 2 years ago

Japan, EU in talks seeking free-trade deal by year-end

TOKYO (Reuters) - Japan and the European Union are holding last-ditch talks this week to try reach a broad free trade agreement by the end of the year, Japanese government officials said.

(L-R) European Commission President Jean-Claude Juncker, Japanese Prime Minister Shinzo Abe, Britain's Prime Minister David Cameron and German Chancellor Angela Merkel share a light moment as they gather for Japan EU EPA/FTA meeting at the summit of the leaders of the Group of Seven (G7) industrialized nations in Shima, central Japan, May 26, 2016. REUTERS/Eugene Hoshiko/Pool

The two-way trade talks have taken on greater significance after U.S. President-elect Donald Trump said Washington would withdraw from the Trans-Pacific Partnership, a 12-nation deal Prime Minister Shinzo Abe has said is key to his reforms and once a pillar of Washington’s pivot to the Asia-Pacific.

“Prime Minister Abe has said he aims to reach an agreement this year,” said a trade official who declined to be identified because he was not authorized to speak to media.

Japan is seeking cuts in EU tariffs on Japanese autos, auto parts and electric devices. Tokyo also wants the EU to cut red tape it says Japanese companies face doing business with the EU.

The EU will likely scrap duties on about 80 percent of auto parts imported from Japan by amount of trade immediately after a bilateral accord goes into effect, but Japan wants further concessions, the Nikkei business daily reported on Wednesday.

Japan, for its part, could ease the process for foreign companies bidding on construction and materials procurement for public entities, the Nikkei said.

The EU wants Japan to scrap tariffs on agriculture products such as cheese and wine and lower duties on pork, according to the report. Brussels has also complained about non-tariff barriers to auto imports.

If the two can work out the framework for a trade deal, EU Trade Commissioner Cecilia Malmstrom will visit Japan next week for talks with Japanese Foreign Minister Fumio Kishida, the Nikkei said.

Tokyo last week ratified the TPP despite Trump’s pledge to pull the U.S. out of the TPP pact, which does not include China.

Reporting by Kaori Kaneko; Editing by Linda Sieg and Kim Coghill

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