Parliamentarians warn Swiss firms may lose out over Japan-EU trade deal

Japanese Prime Minister Shinzo Abe (centre) shakes hands with European Commission President Jean-Claude Junker (r), after signing a free trade deal along with the European Council President Donald Tusk (l), on July 17, 2018 Keystone

The wide-ranging free trade deal signed between Japan and the European Union on Tuesday is likely to put pressure on Swiss industrial companies and farmers which export to the Asian country, a Switzerland-Japan parliamentary group has declared. 

On Tuesday, Japan and the EU concluded an ambitious free trade deal which creates the world’s largest open economic area. The pact removes EU tariffs of 10% on Japanese cars and 3% on most car parts. It will also end Japanese duties of 30% or more on EU cheese and 15% on wines, and secure access to large public tenders in Japan. Europe’s food sector is likely to be one of the biggest beneficiaries from the deal, which should allow it to build on Japanese demand for cheese, chocolates, meats and pasta. 

In a statement on Tuesday, the Switzerland-Japan parliamentary group warned of the economic advantage that European competitors would be gaining from lower customs tariffs from 2019 onwards. Swiss parliamentarians are concerned that in the area of public tenders Swiss companies may fall behind. The statement follows a related study by the export promotion organisation Switzerland Global EnterpriseExternal link.

+ Read more about the recent visit to Japan by Switzerland’s president

Christian Democrat Elisabeth Schneider-Schneiter, president of the Switzerland-Japan parliamentary group, says Swiss firms deserve equal market access to EU companies. She is calling for the ten-year-old Switzerland-Japan free trade deal to be renewed. Last December, the centre-right parliamentarian filed a parliamentary question on this issue in Bern.

Despite visits to Japan in April by Alain Berset, who holds the rotating Swiss presidency this year, and Federal Councillor Ueli Maurer, no new negotiations are on the horizon.

The ambitious EU-Japan trade deal will remove most of the €1 billion in duties paid each year by EU companies exporting to Japan as well as a number of regulatory barriers. It will also open the Japanese market of 127 million consumers to the EU’s main agricultural and industrial exports. Officials say the accord should boost the EU economy by 0.8% and Japan’s by 0.3% over the long term. 

The deal comes amid fears that a trade war between the United States and China will diminish the role of free trade in the global economic order. The Japan-EU deal is also seen as a sign of shifting global ties as Trump distances the US from long-time allies like the EU, NATO and Canada.