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EU to Japan: Drink more beer

A group of Tokyo businessmen and businesswomen toast with mugs of beer at a beer garden in Tokyo.
Issei Kato | Reuters
A group of Tokyo businessmen and businesswomen toast with mugs of beer at a beer garden in Tokyo.

European leaders have come up with a fix for the ailing Japanese economy: more beer.

More European beer, that is.

With the global economy slowing, countries around the world are looking for ways to ease trade barriers and spur growth. Japan's slide back into recession has added new urgency to Tokyo's efforts to boost exports.

But Japan's trading partners—including European Union officials hoping to strike a new trade deal next year—want Tokyo to pare back a thicket of obscure rules and product requirements that Europe says create trade barriers.

Take Japan's rules on beer. Many of Europe's finest brews can't be sold as beer in Japan because they don't meet Japan's strict requirements on malt content, according to an EU document obtained by Reuters. And coriander seeds—used in Belgian and German wheat beers to add a citrus flavor—are strictly verboten.

"For beer, the impact on trade is rather significant," the EU document said.

So, at the next round of talks on Dec. 8, EU negotiators plan to let their Japanese counterparts know that those beer rules have to go. Though Japan's beer market is the world's third-most profitable, European brewmeisters have been relegated to a few joint ventures that permit local production of premium beers, such as Heineken.

But tapping Japan's beer market is just a drop in the barrel of world trade, which has flattened recently after rebounding from the Great Recession in 2009.

Read MoreWhy the days of booming world trade may be over

Analysts cite multiple causes for the slowdown. The main reason: Outside the U.S., overall economic growth is slowing. China's once red-hot economy is cooling, due in part to a debt hangover following massive government spending to offset the global recession.

Europe remains stuck in a no-growth quagmire as it struggles to rid its banking system of bad debt. And despite a two-year government effort to jump-start growth, Japan's economy is headed in reverse.

With domestic economic stimulus policies around the world having limited impact, countries are pinning hopes on trade talks on multiple fronts aimed at reviving global flows of goods and services.

In the U.S., the pending shift in control of the Senate to a Republican majority has revived hopes of progress on trade, one of the few issues that offer at least some common ground between Republicans and the White House.

At the top of the list of U.S. trade ambitions is the proposed Trans-Pacific Partnership, a 12-nation trading bloc that imports more than $1.9 billion in U.S. goods every day. The White House is pushing for a comprehensive deal that would cover 40 percent of the global economy and extend from Asia to Latin America, easing trade restrictions on a wide range of goods and services.

But progress on the pactfirst proposed in 2005has been as sluggish as the latest outlook for the global economy. On his recent swing through Asia, Obama last week reported that "momentum was building" for the sweeping deal. But it remains to be seen whether that momentum will result in a concrete agreement any time soon.

Read MoreObama says momentum building on trade deal

Beyond winning support from Republicans, the White House partnership will have to overcome ongoing resistance from China, which is not part of the grand TPP bargain. Beijing is pushing a separate vision of how to promote Asian trade, known as the Free Trade Area of the Asia-Pacific, or FTAAP.


After more than a decade of talks, China this week clinched a landmark free trade agreement with Australia that broadly expands economic ties between the world's second-largest economy and one of America's closest allies in the region. The deal opens up Chinese markets to Australian farm exporters and the services sector while easing barriers to Chinese investment in resource-rich Australia.

Read MoreAustralia, China deepen ties with landmark free trade deal

Progress on the White House's TPP plan, meanwhile, has been stalled by a deadlock with Japan over Japanese restrictions on U.S. goods and services, including barriers to U.S. auto imports and farm products.

Those talks will now have to wait for the results of a snap election in Japan next month, after surprisingly bad economic data this week put pressure on Prime Minister Shinzo Abe to seek new policies to revive growth.

Read More New repair manual needed for Japan's broken economy

Despite the deteriorating economy, the new government will face ongoing pressure from politically powerful Japanese industries reluctant to lower trade barriers to products made elsewhere.

Including European beer.