TOKYO The European Union is ready to propose immediately scrapping import tariffs on most Japanese car parts in trade negotiations now under way, the Nikkei daily said on Friday.
The EU, in return, is pushing for Japan to cut or scrap import tariffs on agricultural products such as pork, cheese and wine, the paper said, putting Tokyo in a tight spot given strong domestic political opposition against opening up these areas to outside competition.
Japanese and European negotiators are continuing talks in Tokyo to reach a broad deal on signing an economic partnership agreement (EPA) in early July, the paper said without citing sources.
Signing an EPA with the European Union, which comprises roughly 10 percent of Japan's total foreign trade, is among key goals of premier Shinzo Abe's "Abenomics" stimulus programs and growth strategy to revive the country's stagnant economy.
The EU now imposes a tariff around 3-4 percent on auto parts and a 10 percent tariff on cars imported from Japan.
The EU is ready to scrap tariffs for more than 90 percent of auto parts imported from Japan immediately after the EPA takes effect, the Nikkei said.
The two sides remain at loggerheads on how long the EU would take to eliminate tariffs on cars. Japan wants them to be scrapped in seven years, while the EU is pressing to have more than 10 years to phase them out, the paper said.
Japan and the EU have been negotiating the EPA since 2013 to promote bilateral trade and investment by eliminating tariffs and improving investment rules.
(Reporting by Leika Kihara; Editing by Eric Meijer)