Japan’s Abe urges EU to avoid no-deal Brexit ‘by all means’

Presidents of the European Council and European Commission, Donald Tusk and Jean-Claude Juncker, receive Japanese Prime Minister Shinzo Abe, on Thursday 25 April.

Japanese Prime Minister Shinzo Abe urged EU leaders to avoid a disorderly departure of the UK from the European Union “by all means” as both sides pledged to strengthen their economic ties at a bilateral summit on Thursday (25 April).

Brexit has been a source of concern for Japan ever since Britons voted to leave the EU in mid 2016. The issue was brought up once again during an EU-Japan summit in Brussels yesterday.

“For Japan, the UK is the gateway to Europe,” Abe told Donald Tusk and Jean-Claude Juncker, the presidents of the European Council and the European Commission with whom he met on Thursday.

This is a message he also passed to British prime minister Theresa May, he added. For that reason, he said he hoped the UK’s withdrawal process would go “smoothly” in order to minimise the impact on the global economy.

“A no-deal Brexit is what we have to avoid by all means,” Abe insisted.

Japanese companies have invested a lot in the EU and they need “legal stability” in order to continue their business operations in Britain, he added.

The EU-Japan summit was held two months after the entry into force of an EU-Japan Economic Partnership Agreement. Once fully implemented, almost all tariffs on industrial goods will be eliminated in bilateral trade between the two sides.

“Our strategic partnership has never been stronger. It is built on shared values of liberal democracy, human rights and our commitment to openness, cooperation as well as free and fair trade,” said Tusk.

Old and new challenges, including free trade, climate change, cybersecurity, and a stable Korea peninsula have brought the two sides closer in recent years.

Chinese concerns

Both sides were eager to showcase unity. Europe needs reliable partners to uphold the multilateral order against attacks from the US and an increasingly assertive China. Japan, meanwhile, is looking for allies to support its G20 Presidency this year. 

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The European Union and Japan signed a long-awaited commercial trade deal on Tuesday (17 July), in an emphatic statement meant to counter US President Donald Trump’s attacks against free trade and the rules-based international order.

China has become a source of concern both for Japan and for the Europeans, who labelled Beijing as “systemic rival”.

Juncker insisted once again that China has to “accept the idea” that public export subsidies have to end, while urging Beijing to reconsider the forced transfer of technology it imposes on foreign companies operating on its territory.

Abe, for his part, added that “the international community should urge China to play a constructive role” in regional and international affairs.

EU officials explained that Tokyo is increasingly worried about China’s assertive stance and growing ambitions in the Pacific region.

Tusk emphasised the strong bilateral ties between the EU and Japan, saying both sides will remain “loyal to each other, no doubt about that”.

“Japan will remain our closest partner in Asia,” Tusk assured.

WTO reform

But despite public displays of mutual understanding, the EU and Japan achieved little progress on key issues such as the reform the World Trade Organisation, which is a top priority for Europeans, to address tensions in the multilateral system. 

However, the EU and the US disagree on how to reform the WTO, in particular its appellate body, a controversial issue which is likely to come up at the G20’s June summit in Osaka.

Abe tried reassuring Europeans, saying that G20 meeting will send a “strong message” to the international community about the reform of the organisation.

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But he sided with Washington by echoing US complaints, including that it takes “too much time” for the appellate body to reach a verdict.  

“We will like to engage in discussions with the EU and US,” Abe said, adding he looked forward for a “constructive dialogue” between Brussels and Washington in the coming months.

The EU is concerned that if countries fail to reach an agreement on the reform by the end of this year, unblocking the nomination of new judges to the appellate body, the WTO would not be able to play its role as referee of the international trade.

The joint statement agreed on Thursday said that “the EU and Japan will work together to improve the current WTO rules to address global trade challenges, particularly on rule-making in key areas, for a level playing field.”

Europe struggles to convince Japan on multilateral agenda

EU leaders will meet with Japanese prime minister, Shinzo Abe, in Brussels on Thursday (25 April) to progress on the bilateral relations, although Tokyo has been reluctant to follow the European ambition on trade and climate action.

In a veiled reference to China, the EU and Japan also committed to start negotiations with “other key WTO members” on strengthening industrial subsidies disciplines and to intensify cooperation to tackle forced technology transfers. 

Cybersecurity 

Meanwhile, data transfers will be a key priority during Japan’s G20 presidency as they will defend the concept of “Data Free Flow with Trust” (DFFT) Initiative.

The EU and Japan support an “open, free, stable, accessible, interoperable, reliable and secure cyberspace.”

This issue is becoming critical as countries across the world, especially the US, had expressed their concerns about the participation of Chinese company Huawei in the rollout of the next generation of communication networks (5G).

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Chinese telecom giant Huawei praised Europe’s handling of data and cybersecurity as it seeks to partner with the EU to set global standards to dispel concerns about espionage.

Although they didn’t talk about specific companies, Abe insisted that it is very important to take “collective action” on this front, and recalled that the G20 already recognised the importance of the security of network infrastructure.

He said that the discussion will continue during his G20 presidency.

As the US and other countries are excluding Huawei from 5G, Juncker added that “the EU is an open market” and all those who respect the rules are welcome and won’t be excluded for the sole reason of coming from China.

UK minister: Huawei leaks 'unacceptable', criminal investigation possible

British culture minister Jeremy Wright said on Thursday (25 April) he could not rule out a criminal investigation over the “unacceptable” disclosure of confidential discussions on the role of China’s Huawei Technologies in 5G network supply chains.

[Edited by Frédéric Simon]

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