Relations with Asia will top the EU’s foreign policy agenda in the coming weeks, with May Summits planned with Japan, China and South Korea. These meetings are important, as leaders from the EU and Asia’s three dominant economies consider further efforts to revive the global economy and boost bilateral trade and investments. Discussions will also focus on the situation in Afghanistan and Pakistan, North Korea and Iran’s nuclear programme.
If past experience is any guide, the EU-Japan Summit on 4 May will attract much less attention than the 20 May meeting between the EU and China or the EU-South Korea Summit on 23 May. However, the significance of the EU meeting with Japanese Prime Minister Taro Aso should not be under-estimated.
Although badly hit by the global economic crisis, Japan’s economy remains the second largest in the world. The EU and Japan together represent close to 40% of global GDP and, with annual bilateral trade valued at about €145 billion, relations between the two economic giants is vital both for their own prosperity and for the functioning of the global economy.
Policy-makers on both sides often describe Europe and Japan as “natural partners” given their shared common values of democracy, the rule of law, social justice and human rights as well as a commitment to free and open markets. When they act on the global stage, both emphasise their ‘soft power’ tools of trade, aid and diplomacy which can be used to make friends and influence foreign governments. Both face the challenge of dealing with - and accommodating - the demands of new emerging economic powerhouses including, Brazil, Russia, India and China.
The EU recognised Japan as one of its “strategic partners” in 2003, but the two sides have not been able to translate their common concerns into a close, operational, strategic partnership which would allow joint policies and initiatives to tackle global challenges or seek solutions to shared problems. Acting together, the EU and Japan could wield substantially more clout in influencing and setting international standards on issues like trade and climate change. However, this potential remains untapped.
The EU-Japan relationship may now be largely trouble-free - the trade frictions of the 1970s and 1980s are firmly in the past - but it is also dull and uninspiring. Ambitious joint communiqués issued at Summits wax lyrical about assuming global responsibilities and promoting peace and security, but neither Brussels nor Tokyo appear in any rush to turn these words into action. Japanese officials worry that their country is “invisible and absent” from the EU’s foreign policy agenda. The EU complains that Japan has been slower than other countries in Asia to recognise the Union as a political power, not just an economic one.
Missed opportunities for joint action abound. EU-Japan cooperation initiatives in East Asia, for instance, remain few and far between. Although both the EU and Japan are reaching out to Africa, they have not undertaken any joint projects to speed up African development. Similarly, despite their common interest in combating protectionism and maintaining open trade flows, neither side has engaged in proactive collaboration in the World Trade Organization (WTO). On a bilateral level, both sides are struggling to implement the ambitious, but long and unwieldy Action Plan agreed in 2001 to bolster political and economic links. Progress is slow: earlier this year, an EU-Japan Science and Technology Agreement was finally signed after six years of negotiations; and the EU-Japan Civil Aviation Accord took five years of negotiations.
Yet Europe and Japan stand to gain immensely from strengthened dialogue and cooperation. Instead of seeking to expand their already-long laundry list of joint actions by extending the current Action Plan when it runs out in 2011, they should agree to inject new dynamism and creative thinking into their partnership by focusing on a limited number of key areas.
First, efforts must be made to strengthen the EU-Japan economic relationship. This could be done by negotiating an ‘Economic Integration Agreement’ (EIA) or at least a Free Trade Agreement (FTA) to help stimulate bilateral trade and investments. Businesses on both sides favour such a deal. European exporters who face tough regulatory and non-tariff barriers in Japan, including stringent standards and testing for consumer goods, say an EIA will help remove obstacles to trade and also ease strict and complex Japanese rules and regulations which currently stifle European investments in the country. Japan, which is actively negotiating FTAs with its Asian neighbours, wants a similar agreement with the Union. Among other things, the Japanese car industry fears that a new EU Free Trade Agreement with Seoul will give the South Korean automobile sector better access to European markets.
Second, with both the EU and Japan now reinforcing their global outreach, the potential for joint security - including human security - initiatives should be seriously explored. Joint strategies can be framed for Pakistan, where both the EU and Japan need to transform their economic presence into stronger political clout. In Afghanistan, cooperation to reinforce police-sector reform should be considered given the EU’s police training mission in the country and Japan’s recent decision to pay the salaries of 80,000 Afghan police officers for six months as part of a wider-ranging $2 billion reconstruction and development effort.
Following the EU anti-piracy operation off the shores of Somalia, Japan has also ordered ships into the area. Although its constitution does not allow the deployment of combat troops abroad, Japan is making logistical, aid and reconstruction contributions to US and NATO peace-building operations in Iraq and Afghanistan respectively. Similar participation in EU-led military missions should be considered.
Third, both sides can reinforce cooperation at both the bilateral level and in multilateral fora to tackle global threats such as climate change, poverty, energy security and nuclear proliferation.
Finally, the EU and Japan should work together - and learn from each other - as they strive to tackle common challenges posed by an ageing society, a diminishing labour force and common concerns about immigration.
Revitalising relations between Europe and Japan will require determination, hard work and imaginative thinking - perhaps hard to achieve at a time when both the EU and Japan are grappling with political inertia. But the rewards will be worth the effort. The EU can benefit from Japan’s insight, experience and expertise as it seeks to expand relations with other Asian countries, including China. Despite the economic downturn, Japan remains an important export and investment market for Europe. Tokyo, meanwhile, needs to expand its view of the EU as a political ally as well as economic actor. When they meet in Prague on 4 May, the EU and Japan should agree to translate their pro-cooperation rhetoric into action.
Shada Islam is a Senior Programme Executive at the European Policy Centre.