The European Union agreed that Japan had made enough progress towards opening its markets for the two sides to begin a sixth round of free-trade talks next month, despite some concerns over Tokyo’s stance on railway procurement.

The European Commission said in a statement that EU member states had backed the continuation of negotiations and that the next round would take place in Tokyo in the week of July 7.

EU members, doubtful of Japan’s willingness to bring down barriers to European exports, had told EU trade negotiators to pull the plug on talks after a year if Japan did not show sufficient progress in areas from food to cars.

A document seen last month by Reuters showed that the EU found Tokyo had complied with, or was in the process of complying with, most of its commitments to help reach a trade pact that could encompass a third of global economic output.

The Commission said on Wednesday that a number of member states had expressed concerns about one aspect of the talks, railway procurement.

The EU says that the use of an “operational safety clause” in much procurement by JR (Japan railways) and urban transport operators is in practice a means of hindering foreign suppliers.

According to a report commissioned for the Commission in 2009, EU producers of railway equipment could boost exports to Japan by 600 million euros ($816 million) if the market opened.

Some 60 percent of world production of railway equipment and parts takes place in the European Union, with operations of Siemens, Alstom and Bombardier.

Potentially one of the world’s biggest trade deals, an EU-Japan agreement could lift the economic output of both sides by almost 1 percent, according to the European Commission, at a time when both are struggling to generate growth.

Japan already has a zero rate of duties on EU imports, such as cars and whisky, and low tariffs on many other goods. However, Europe says regulation on everything from music to automobiles is a clear barrier to trade. (Reuters)