Trade and the situation in Ukraine were at the top of the agenda during the 22nd EU-Japan Summit.
Both parties called on Russia to avoid aggravating the crisis in Ukraine, in an attempt to calm growing violence ahead of planned national elections later this month.
Herman Van Rompuy, President of the European Council, spoke of potential further sanctions.
“Further steps by Russia to destabilise the situation in Ukraine would lead to additional, far-reaching consequences for relations in a broad range of economic areas,” he announced. “We are ready to take decisions if needed.”
Keen to show a united front, Japanese Prime Minister Shinzo Abe and EU leaders agreed to aim to finalise talks on a free trade deal by next year – an ambitious project that would encompass around a third of the global economy.
“It is very important to have Japan on your side, on Europe’s side,” said Shada Islam, Director of Policy at Friends of Europe. “Because at the moment, the G7 has to stay united. And of course Japan is the only G7 country which has had its own territorial problem in the northern territories with Russia. So it’s important to have them on board.”
The EU wants to expand its exports in processed food and beverages and the car industry; Japan’s most protected trade sectors.
If a deal is reached, the EU estimates 420,000 new jobs could be created.
In April 2013 EU trade negotiators were told to stop the talks after a year if Japan did not show sufficient progress in a range of areas.
But trade ministers are likely to give the go-ahead to continue discussions after they assess an EU Commission review of the one-year period.