TOKYO (AP) — Japan and the European Union agreed Monday to start negotiations for a free-trade pact encompassing nations that account for nearly a third of the world economy.
Japanese Prime Minister Shinzo Abe, European Council President Herman Van Rompuy and European Commission President Jose Manuel Barroso spoke by telephone for 30 minutes late Monday, a Japanese government spokesman said. A Japan-EU summit set to begin Monday in Tokyo was shelved because of the financial crisis in Cyprus.
The leaders agreed to launch the negotiations toward a "deep and comprehensive" free-trade deal, with the first meeting set for next month, both sides said in a joint statement. The place for that meeting is not yet decided, Deputy Chief Cabinet Secretary Katsunobu Kato told reporters.
As global momentum builds for regional trade pacts, Japan has been eager to get started on talks with Europe. Earlier this month, Abe announced Tokyo will join talks on a Pacific trade pact, the U.S.-led Trans-Pacific Partnership. The U.S and EU announced free-trade talks earlier this year aimed at creating the world's largest free-trade zone.
In the phone conversation, the three leaders exchanged views on Cyprus and reaffirmed their commitment to enhancing economic growth and ensuring financial stability. Cyprus secured an agreement early Monday that paves the way for a 10 billion euro ($13 billion) bailout.
"Today marks a historical juncture," European Trade Commissioner Karel De Gucht, an official who did not cancel his trip, told reporters after meeting with Japanese government and business officials in Tokyo.
He was delighted the agreement was reached but acknowledged it was hard to predict how long the negotiations might take, adding that autos was one "sensitive" sector for the EU.
"We will do our utmost to come to a critical mass of understanding within one year," he said.
Although resistance to lower tariffs is high in some Japanese industries, such as long-protected rice farmers, manufacturers and others are concerned about being left behind by the trade agreements that other countries are negotiating.