Europe must take advantage of cooperation with Japan

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

Federica Mogherini [L] and John Kerry [5th from left] at Itsukushima Shrine. Japan, 10 April. [European Commission]

Japan is deeply concerned about the developments in Europe. Both partners have surprisingly a lot in common, and Europe should take advantage of mutual relations, writes Tomáš Zdechovský.

Tomáš Zdechovský is a Czech Christian and Democratic Union MEP (EPP).

Despite the huge geographical distance between Europe and Japan, and despite the differences in culture and traditions, there is no doubt that Japan belongs to the “broader Western World” comprising democratic countries with developed market economies. Both EU countries and Japan face the same or very similar challenges that basically all developed economies have to deal with.

Firstly, it is a very slow economic growth, secondly, a gradually changing economic structure associated with the post-industrial era, and finally, an unfavourable age structure of the population. In other words, countries on both ends of Eurasia are undergoing a period of economic stagnation and their populations are ageing. One could find more than enough common features, whether positive or negative.

No concrete date on the horizon

A trend of reinforcing mutual economic cooperation between the EU and Japan has been continuing in the recent years. Ongoing negotiations on the Free Trade Agreement and Economic Partnership Agreement (FTA/EPA) and on the Strategic Partnership Agreement (SPA) only demonstrate the established trend and increasing benefits of mutual relations.

The fact that Japan is nowadays the second most important business partner of the EU in Asia after China and the seventh most important business partner of the EU of all the world countries also illustrates the significance of EU-Japan relations. Last year, Japan accounted for 3.3 % of the total foreign trade volume of the EU. Exports to Japan represent a significant source of earnings for European manufacturers of motor vehicles, machines, medicines, optical and medical tools.   Therefore, the benefits of trading with the Land of the Rising Sun are indeed considerable.

The negotiations on FTA/EPA were launched in 2013 with the idea to bring benefits both to Japan and the EU. According to the estimates from 2009, the forthcoming agreement it is believed, will increase EU GDP by 0.8% and Japan´s GDP by 0.7%. It is also assumed that there might be more than 30% rise in European exports to Japan, and on the other side, Japanese exports to Europe might rise by more than 20%. So it is absolutely clear that both parties would profit from this agreement.

The Free Trade Agreement between the European Union and Japan was one of the major topics discussed during the visit of the European Parliament Delegation for relations with Japan. I experienced myself that Japan is extremely interested in materializing this agreement and that on the side of the EU there are no more obstacles that would pose a threat to it. Nevertheless, no concrete date has been specified so far. It is encouraging to note, however, that both parties have agreed on the necessity to speed up ongoing negotiations.

Shadow of Brexit

The cooperation does not only have a purely economic dimension as it covers many different areas. One of them is conflict resolution and rehabilitation of countries affected by war. The EU is together with Japan involved in post-war reconstruction and stabilization processes in the Western Balkans, Afghanistan, and Iraq. Both actors operate together in conflict areas such as the Gulf of Aden, Mali, Niger, the Democratic Republic of the Congo and South Sudan.

The EU and Japan have undoubtedly come a long way in their approximation. Mutual relations, however, may still encounter a number of difficulties. Given the current developments, it is, of course, impossible to avoid the issue of Brexit, casting a shadow over the EU economy and the EU as a whole. The British exit severely damages the world´s trust in the EU and may also have a negative impact on the relations with Japan. The Japanese wish to have stronger business relations. In order to achieve this, however, it is absolutely crucial to maintain a coherent and stable European Union.

Setting the future EU priorities in the area of foreign and security policy is also a significant issue. Regarding the current migration challenges, there is a real risk that Europe will primarily focus its attention on the Mediterranean area to the detriment of other strategic areas including East Asia. I could see myself that Japan has an interest in cooperation with the EU. The migrant crisis, however, poses an enormous threat to European stability. Therefore, it is no surprise that Japan is deeply concerned about the migrant crisis which is not yet over. Especially at a time when the EU as a whole represents the third biggest business partner for the Far East empire after the US and China.

But it is definitely not only the EU who is to blame for all the difficulties. There are problems on the Japanese side as well. Japan is quite naturally concerned about the political as well as economic growth of China, which might result in the fact that the Land of the Rising Sun will focus its attention primarily on balancing the Chinese influence by cooperation with other countries in East Asia. And, of course, to the detriment of cooperation with Europe. So one could say, with a little exaggeration, that Japan´s need to balance the power of the “Chinese Dragon” and Europe´s need to solve the migrant crisis are the same type of challenge.

Chance for Europe

Those challenges, however, do not detract from the fact that there are opportunities to strengthen the partnership even more. An increased focus on Asia and the Pacific is, after all, reflected in the Trade for All strategy from 2015, with the FTA/EPA being the crowning achievement of this strategy.

The forthcoming agreement on duty-free trade is, in my opinion, an exceptional chance for Europe as it will enable European companies to penetrate the quickly developing Japanese market. As a country with a high purchasing power, Japan might be an ideal opportunity for Czech exports as well. My country enjoys a good reputation thanks to its hops and machinery. And it only depends on us to what extent we will be able to take advantage of this. In short, Japan is a country that Europe should not forget about.

Subscribe to our newsletters