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Japan, EU Remain Apart in Free Trade Talks; Focus On Dairy, Autos

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TOKYO - Japan and the European Union remained apart Friday after the first round of their final-stage talks to conclude a broad bilateral free trade agreement before their leaders meet next week on the sideline of the Group of 20 summit in Germany.

"We have confirmed that an agreement in principle is within reach but...the differences remain large. We are not in a situation to be optimistic," Japanese Foreign Minister Fumio Kishida told reporters following the meeting with EU Trade Commissioner Cecilia Malmstrom in Tokyo.

Chief negotiators from Japan and the 28-member bloc have been in talks in the Japanese capital for the past three weeks as the two sides ramp up efforts to bridge differences over such key issues as European dairy products and Japanese automobiles.

Japanese Agriculture, Forestry and Fisheries Minister Yuji Yamamoto and EU Agriculture and Rural Development Commissioner Phil Hogan also held one-on-one talks before joining Kishida and Malmstrom in the meeting, set to resume Saturday.

Kishida said the talks are going to be "tough" but vowed utmost efforts as they make "final discussions with consideration for respective sensitivities."

Yamamoto also said he felt that the talks, launched in 2013, have come to the "final stage" but added, "The gap remains large."

Malmstrom said at the outset of the meeting with Kishida that concluding the deal would be a very "strong signal" amid the rise of protectionist sentiment around the world.

Upon arriving at Narita airport near Tokyo on Friday, the EU commissioner told reporters she and Hogan want to hold talks with Japanese counterparts to "see if there is a possibility maybe to finalize at least a majority of the deal."

The commissioner also said on Twitter, "determined to do our outmost to find a good deal for European companies +consumers."

Japan and the bloc, together accounting for around 30 percent of the world economy, are at odds over whether and when to cut tariffs on
Japanese automobile imports to Europe and on EU farm products shipped to Japan, mainly cheese.

A negotiation source said that Japan is ready to immediately eliminate tariffs on European wine if the European Union eases its regulations restricting exports of Japanese wine to the bloc, such as on sugar content and bottle size.

The two EU commissioners' visit to Tokyo suggests that the talks are reaching a stage where a political decision is required, an EU source told Kyodo News earlier.

The talks have recently seen renewed urgency amid uncertainty around multilateral free trade agreements following the United States' withdrawal from the 12-member Trans-Pacific Partnership and Britain's decision to exit the European Union.

Japan and the European Union say they hope to strike the free trade deal to send a strong message to countries leaning towards a more protectionist stance while demonstrating the importance of free and fair trade based on high-level rules.




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