In the context of the forthcoming signing of the Economic Partnership Agreement (EPA) between Japan and the European Union, The Romanian Institute for the Study of the Asia-Pacific (RISAP) organized the conference „Romania and the Japan-EU EPA”, on July 9, 2018. This free trade agreement (FTA) is the European Union’s largest FTA to date and it will have a considerable impact on trade and investment flows between Europe and Japan. Romania, a country that hosts numerous Japanese investments, will also be influenced by the agreement, which will open new opportunities for Romanian exporters.
The conference featured a panel of four distinguished speakers (in the order of their speeches): His Excellency Mr. Kisaburo Ishii, Ambassador of Japan to Romania, Mr. Ioan Mircea Pașcu, Vice President of the European Parliament, Ms. Gabriela Drăgan, General Director of the European Institute of Romania and Mr. Keisuke Mizuno, General Director of JETRO Bucharest. After the panel, Mr. Ion Vișoiu, from the Ministry of Foreign Affairs’ Asia-Pacific Division, delivered remarks prepared by Ms. Monica Gheorghiță, State Secretary for Global Affairs at the Ministry of Foreign Affairs of Romania, who, due to unforeseen circumstances, was unable to take part in the conference. The conference was moderated by Mr. Andrei Lungu, president of RISAP.
The conference was attended by over 70 participants, including diplomats from Embassies of EU member states and Embassies of Asia-Pacific states, Romanian Members of Parliament and Members of the European Parliament, Romanian diplomats and officials, directors of Japanese companies present in Romania, professors and experts, journalists and members of the general public interested in Japan.
In the opening speech, the president of RISAP, Mr. Andrei Lungu, described Japan and the European Union as active players when it comes to negotiating FTAs in the past few years, both having signed other important agreements, such as the The Comprehensive Economic and Trade Agreement (CETA) between Canada and the EU, or the The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), between Japan and ten other countries in Asia and America. He also expressed the hope that Romanian companies will be able to capitalize on the opportunities offered by the EPA, following the path of other success stories from the EU, like that of a Polish company that produces and exports pottery.
H.E. Ambassador Kisaburo Ishii, the first speaker to take the floor, offered an overview of the strategic and economic importance of the EPA, which, as the largest FTA in the world, sends a clear message against protectionism and in support of globalization. Ambassador Ishii highlighted how the EPA will improve market access to Japan for European companies, including small and medium enterprises. Ambassador Ishii also talked about the EPA’s importance for Romania and about bilateral relations between Romania and Japan. His Excellency highlighted Japanese prime minister Shinzō Abe’s desire for improved relations, manifested through his proposal in Bucharest, in January 2018, to begin negotiations for elevating relations to the level of a strategic partnership.
The next speaker, Mr. Ioan Mircea Pașcu, Vice President of the European Parliament, presented the numerous similarities between Japan and the European Union, prosperous democracies with a high degree of soft power. Mr. Pașcu presented Japan as a natural partner for the EU, enumerating different areas of high potential for cooperation between the two, such as nuclear disarmament, cybersecurity or promoting security and peace in different regions of the world. Mr. Pașcu also underscored the fact that Romanian companies which are already doing business with Japan will have much to gain from the ratification of the EPA.
Ms. Gabriela Drăgan, General Director of the European Institute of Romania, the next speaker, focused on the necessity of the EPA, its provisions and benefits, and the process of ratification, including the next steps. Ms. Drăgan presented the main provisions of the EPA, which aims to set high standards regarding trade and investment. She also walked the audience through the history of the agreement and then focused on the steps which are necessary for the agreement to enter into force. It is important for the EPA to be ratified before the conclusion of Brexit, in order for its provisions to equally apply to the UK for at least two more years after the UK leaves the EU, in March 2019.
Mr. Keisuke Mizuno, the General Director of JETRO Bucharest, the Romanian office of the Japan External Trade Organization, described the importance of Japanese investments in Romania and the main opportunities of the EPA. Mr. Mizuno began by explaining the role of JETRO, while also presenting the numerous Japanese investments in Romania, ranging from the automotive sector to IT. He then focused on the advantages of the EU-Japan EPA, which include not just the reduction of tariffs, but also the protection of Geographic Indications (under the agreement, seven Romanian GIs from the wine sector, like Cotnari or Murfatlar, will be protected in Japan) or providing access to Japanese government procurement for EU companies. Mr. Mizuno concluded by mentioning that the EPA will also help increase Japanese investments in Romania, where around 40.000 workers are already employed by Japanese companies, a number that is similar to those in France or Italy and higher than that in Spain, which are far larger countries.
Mr. Ion Vișoianu, from the Ministry of Foreign Affairs of Romania, then delivered the remarks prepared by Ms. Monica Gheorghiță, State Secretary for Global Affairs in the ministry. He talked about the importance of the agreement and the signal it sends, while also enumerating the benefits offered by the EPA. Mr. Vișoianu acknowledged the growing importance of Japanese investments in Romania. Romania is interested in the diversification of its export markets, with Japan capable of playing an important role in this. Mr. Vișoianu explained that the EPA will be especially helpful in the export of wines (the current tariffs of 15% will be scrapped) or fresh and processed meat.
The panel was followed by a question and answer session. One question directed at Mr. Keisuke Mizuno was which were the most important sectors for Japanese investments in Romania. The General Director of JETRO highlighted three sectors in which Japanese companies are active in Romania: the automotive sector, the IT sector and infrastructure development.
Another question focused on the ways in which the Romanian government can develop relations with Japan. Mr. Ioan Mircea Pașcu observed that the officials who have a special relation with Japan can play an important role in moving the relation forward. He also stated that the Romanian prime minister is interested in visiting Japan, to return the January visit of Japanese prime minister Shinzō Abe. Regarding the development of Romania-Japan relations, H.E. Ambassador Ishii responded to a question about the state of negotiations for establishing a strategic partnership between Romania and Japan, which began after the visit of the prime minister of Japan, Shinzō Abe, to Bucharest, in January 2018.
Asked about what is the perspective on the EPA of the Japanese companies that conduct business in Romania, Mr. Keisuke Mizuno informed the audience that some of these companies are interested in changing their logistics, in order to import more goods from Japan. He also emphasized that Japanese companies are more and more interested in investing in Central and Eastern Europe. Mr. Mizuno also offered some advice to Romanian companies and the Romanian government, stressing the need for Romania to be more energetic in promoting its market in Japan, as other countries from Central and Eastern Europe are more active.
One of RISAP’s researchers, Andreea Leonte, also asked Ms. Gabriela Drăgan what dispute settlement mechanism could be used by Japan and the EU in regard to investments, provided that the current EPA will leave out for the moment any provisions on dispute settlement, in order to speed-up its adoption. Ms. Drăgan observed that in the negotiations of the EU-Canada agreement, among the most controversial aspects was the investor-to-state dispute settlement mechanism, together with the protection of investors’ rights abroad. For this reason, Japan and the EU jointly decided to leave such matters for a later date and focus on the other important provisions of the agreement. Therefore, the chapters regarding investment protection and dispute settlement remain to be negotiated in the near future.
The presentations and discussions at the conference organized by RISAP highlighted the importance of the Japan-EU Economic Partnership Agreement in the context of the current trade environment on the global stage, the EPA signaling a strong commitment from Tokyo and Brussels for free trade, multilateralism and negotiations. The conference also emphasized the benefits the agreement will provide to Romania, both in the case of trade with Japan and investments from Japan.
The conference organized by RISAP concluded after almost two and a half hours and was followed by a networking buffet.