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1 Seminar Report 2013: 16th Japan-EU Conference – EU-Japan relations after the EU-Japan Summit

Summary A week after the 21

st EU-Japan Summit, the main morning sessions of the 16

th Japan-EU Conference

were devoted to EU-Japan relations after the EU-Japan Summit. One session addressed the “Japan-EU

Summit in 2013 and Future Perspective” bringing together Ambassador Shiojiri (Japanese Mission to the

EU) and EEAS COO David O’Sullivan. The next session addressed “Economic relations – with reference

to the Free Trade Agreement / Economic Partnership Agreement negotiations” and Mauro Petriccione

(DG TRADE) and Manabu Miyagawa (Japanese Mission to the EU) were the principal speakers.

Seminar Outline

Date: Monday, 25 November 2013, 10:00 – 12:15

Venue: Fondation Universitaire, 11 rue d’Egmont, 1000 Brussels (Belgium)

Part of: 16th

Japan-EU Conference : Japan and the EU : Living Together in a Multipolar World

Programme: for the full programme of the Conference click here

Part 1 – EU-Japan relations after the EU-Japan Summit

Japan-EU Summit in 2013 and Future Perspective

Moderator Dimitri VAN OVERBEKE, KU Leuven

Kojiro SHIOJIRI, Mission of Japan to the EU

David O’SULLIVAN, European External Action Service

Questions and Answers All participants

Economic relations – with reference to the Free Trade Agreement / Economic Partnership Agreement negotiations

Moderator András INOTAI, Institute for World Economics, Hungary

Mauro PETRICCIONE, DG TRADE, European Commission

Manabu MIYAGAWA, Japanese Mission to the EU

Comments Yorizumi WATANABE, Keio University

Questions and Answers All participants

Major issues discussedThis part of the Conference outlined the discussions at the recent EU-Japan Summit,

considered the nature or EU-Japan relations and evaluated progress made in the FTA

negotiations. It also addressed specific issues raised by the Audience.

2 Seminar Report 2013: 16th Japan-EU Conference – EU-Japan relations after the EU-Japan Summit

Japan-EU Summit in 2013 and Future Perspective

Dimitri VAN OVERBEKE, Professor, Faculty of Arts, KU Leuven Opening Remarks

Dimitri Van Overbeke noted that the conference was very timely, coming a week after the 21st EU-

Japan Summit and argued that the EU-Japan relationship should be lifted to a higher, more strategic

plane. He noted that the relationship goes far beyond mere trade issues that the Summit addressed a

broad range of topics and that Messrs Shiojiri and O’Sullivan had been stationed in Europe and in

Japan in the early 1980s – a period focused very much on trade conflicts. As then, we are at a turning

point in the relationship.

Kojiro SHIOJIRI, Ambassador Plenipotentiary, Mission of Japan to the EU The Japanese view

Kojiro Shiojiri felt the Summit had been substantial and constructive, noting that it was the first

Summit since negotiations for a Strategic Partnership Agreement (SPA) and a Free Trade/Economic

Partnership Agreement (FTA/EPA) had begun and that Japan and the EU are both struggling to find

a new paradigm. PM Abe’s 3 economic ‘arrows’ are intended to help Japan get out of deflation and

attain sustainable growth. ‘Active peace initiatives’ will enhance Japan’s contribution to regional and

global peace and security. The EU faces similar challenges – having shifted from crisis management

mode to economic growth and playing an active political role (e.g. on the Iranian nuclear issue).

Mr Shiojiri identified 3 key areas discussed at the Summit:

FTA/EPA and SPA – the Summit leaders1 committed to achieving comprehensive and ambitious

agreements at the earliest possible time (§32). The SPA and FTA/EPA will have equal

importance and significance for EU-Japan relations.

Advancing global issues – only 5 of the 46 items discussed at the Summit addressed bilateral

EU-Japan issues. The leaders must contribute to the world and address global interests.

Security and regional issues – both sides committed to taking the necessary steps to address their

responsibilities to increasingly complicated issues.

2014 will be a defining year for the EU-Japan relationship. The Summit leaders have asked ‘us to

expedite our work’ – next year we should address the substantial contents of the agreements. Deep

and substantial Agreements should not be our final goal but merely a tool to be used to heighten our

relations and will not be easy to change.

David O’SULLIVAN, Chief Operating Officer, European External Action Service The EU view

David O’Sullivan argued that although Japan is the EU’s oldest strategic partner in Asia and we

have much in common, the EU-Japan relationship has often ‘over-promised and under-delivered’

1 viz. the PM of Japan, the Presidents of the European Commission and of the European Council

2 “§” refers to the paragraph number in the Joint Statement issued at the end of the Summit

3 Seminar Report 2013: 16th Japan-EU Conference – EU-Japan relations after the EU-Japan Summit

and has not developed and matured in the way the synergies might have led us to hope. The trade

frictions of the 1980s gave way to a European fascination with all things Chinese in the 1990s/early

2000s. Now, we share economic challenges and can be allies and friends based on our shared

economic and political visions. Our negotiations arise from economic and political motives. Our

relations are not limited to economic ties. Japan’s future depends on Abe’s 3 arrows and the third

arrow relies on external pressure (through the TPP/EU-Japan talks). The EU also needs substantial

change. The SPA will provide the basis for deepening relations beyond economic areas. We must

develop mechanisms (to address transport links, energy, climate change, less traditional security

threats), but media communication is also important. It is significant that the Summit’s Joint

Statement3 agreed to take forward both the SPA and FTA/EPA negotiations. The EU and Japan are

also involved with other talks (e.g. Japan: TPP; EU: TTIP, CETA and EU-ASEAN). The Summit

leaders committed to meeting again before Summer 2014.

Mr O’Sullivan argued that Asia was an essential factor in EU security and prosperity. The facts that

the ASEM meeting and EU Summits with Korea, Japan and China have all just taken place and that

High Representative Ashton has recently visited Japan and Indonesia show a strong EU commitment

and engagement to the region. The situation in Asia is increasingly paradoxical with increases both

in economic interdependence and political tensions. Does Asia have the necessary institutional set-

up to manage these issues? Formal structures can be more productive than unilateral statements.

Europe (as one of the area’s leading economic/trading partners) could help Asia find a new modus

vivendi to defuse tensions.

Japan and the EU can cooperate in many areas, including civil and military missions and cyber

security. At the end of the day, political deals do not amount to much if there is no affinity between

citizens. Our relationship will depend upon us building a shared destiny among our people.

Questions & Answers

Various points were raised, during the Q&A discussion, including:

- Whether the seemingly positive signs from the WTO talks will impact on bilateral FTAs;

- Whether the Summit addressed Japan’s decision to ‘give up CO2 reduction targets’; and,

- Probable areas in which progress can be made.

Economic relations – with reference to the Free Trade Agreement /

Economic Partnership Agreement negotiations

András INOTAI, Professor Emeritus, Institute for World Economics, Hungary Opening Remarks

András Inotai argued that it was hard to get clear trading data – if a Japanese product is mainly

produced in China is it a Chinese export to the EU or a Japanese one? Relocation policies can have a

significant impact on bilateral trade. 14 different FTA discussions were launched in 2013.

3 第２１回日 EU定期首脳協議 共同プレス声明（仮訳）平成２５年１１月１９日，東京

4 Seminar Report 2013: 16th Japan-EU Conference – EU-Japan relations after the EU-Japan Summit

Both Japan and the EU are still interested in the multilateral framework, whereas China is more

interested in ‘multi-polarity’ (developing and incorporating its own rules). An optimistic view would

be that we are entering a peaceful century with the ‘hard approach’ (military interventions) of the

past 20 years giving way to ‘soft security’ as championed by the EU and Japan. Social security is

one area in which the 4 year political timetable and long-term economic issues create a division and

which can only be tackled by establishing consensus.

Mauro PETRICCIONE, Director, Asia and Latin America, DG TRADE, European Commission

The EU view

Mauro Petriccione noted that although the EU and Japan are both strong supporters of the

multilateral system that system has struggled to produce a 21st Century trade agenda. The EU is

therefore pursuing bilateral FTAs to mirror its internal market structures. During the financial crisis,

the internal market struggled. Now the EU is exporting more and making and selling more goods and

services, it has also been able to integrate countries with which it had historical trade deficits (e.g.

China) into its supply chain. So talks with Vietnam and Thailand are as much about opening them to

supply chain investments as opening up their markets. Japan is a different case – it is an interesting

market for foodstuffs, drinks, high-tech products, etc. Whereas European companies just target elites

in other countries, in Japan they can target the majority of the population. Despite having a strong

alliance with Japan at the WTO, there has been a long history of economic conflict. The problems of

the 1980s have left mistrust and disinterest, meaning that the EU presence in Japan and their trade

relations no way resemble the EU’s presence and trade relations with other developed countries –

hence the negotiations. Companies that were once seen as a threat are now fully integrated.

Although the negotiations began 8 months ago, they have had 4 years of preparation. Despite that,

we are still discovering things about each other. The talks leave very little room for complacency.

The goal is to overcome the suspicion of various EU Member-States and tackle the ‘infamous

problem’ of non-tariff barriers/measures (NTBs). Even the most sceptical are supporting us but

expect clear outcome – this ‘sets the bar high’. If talks are reduced to NTBs they will not get

anywhere. Broad, all-encompassing talks are needed – we need to be able to persuade those sectors

that we are meeting their expectations. ‘Substance over speed’ may be a cliché, but it is true. There

are powerful incentives to do things faster than the cautious approach negotiators have.

Manabu MIYAGAWA, Minister, Japanese Mission to the EU The Japanese view

Manabu Miyagawa repeated the Joint Statement’s §3 instruction to advance the negotiations. He

explained that the FTA/EPA should help economic recovery in both the EU and Japan through

accelerating sustainable economic growth and creating jobs and will be a major component of Prime

Minister Abe’s 3rd

‘arrow’ (trade, services, investment, regulatory cooperation and IPR protection

will all help the revitalisation strategy) and the EU’s similar efforts to reinvigorate its economy

through structural reforms. Moreover the Agreement would enrich the quality of life of citizens

through giving consumers more choice (already the EU’s share of the Japanese car market is 14x

that of US automotive companies). The EPA will harmonise cars’ safety standards, remove tariffs

and increase investment and employment. In addition, the FTA/EPA would strengthen tripartite rule-

making (the parallel EU-Japan, TPP and TTIP talks will create a positive synergy for regulatory

cooperation) and revitalise the WTO. Thus, a car produced in the EU/US/Japan could be freely

traded in the other 2 regions without requiring retesting. This would not be possible if talks focussed

exclusively on NTBs.

After 4 years of preparatory work and 8 months of discussions, the morale of the negotiating teams

is high and they share a common goal (the earliest possible conclusion). Good progress is being

made on Non Tariff Measures, further regulatory cooperation, market access for goods and services,

investment, intellectual property rights including the Geographical Indications, government

procurement, e-commerce and others. Negotiators are approaching a draft consolidated text.

5 Seminar Report 2013: 16th Japan-EU Conference – EU-Japan relations after the EU-Japan Summit

Business and civil society support the talks, as neither group can afford a prolonged discussion:

20 European business organisations published a joint statement on 12 November;

BUSINESSEUROPE and Keidanren published a joint statement on 15 November4;

A recent dialogue took place between the chief negotiator and 16 European business

organisations (including representatives of food and drink and automotive industries);

The EESC has organised a series of dialogues addressing the issues.

In his summary, Mr Miyagawa said that the FTA/EPA would have clear merits, should have the

earliest possible conclusion and that both sides have a strong political will and 100% trust in their

counterparts and the discussions enjoy the strong support of other groups.

Yorizumi WATANABE, Professor, Faculty of Policy Management, Keio University Comments

Yorizumi Watanabe argued that the FTA negotiations are epoch-making. He cited Wolfgang

Pape’s assertion that the 1970s-1980s ‘Japan bashing’, gave way to ‘Japan passing’ in the 1990s

(when the EU’s attention shifted to China) and to ‘Japan is nothing’ in the first years of the 21st

Century, and concluded that ‘Japan is somewhat back on track’. Abe’s 3rd

arrow (promoting private

investment) is the most important. Governments can stimulate it through taxation and regulatory

reform, trade liberalisation, boosting employment of women and foreigners, consolidating the public

deficit and agricultural reform.

Japan’s 2013 growth strategy will:

See infrastructure developments;

Promote private investment and individual ‘metabolism’;

Reform the employment system and enhance human capital (through the zero childcare waiting-

list project);

Create strategic markets through structural reforms (e.g. strengthen agricultural competitiveness

through farm consolidation); and,

Encourage SMEs to innovate.

Japan has experience negotiating broad agreements that transcend traditional FTAs and has

concluded 13 (accounting for 20% of its external trade). Japan plays a pivotal role in the Asia Pacific,

bringing together the Pacific Rim (to be covered by the rule-creating TPP) and East Asia (covered by

the RCEP talks). The negotiations for the EU-Japan FTA/EPA, TPP and TTIP Agreements have

synergies and could create a new momentum to reinforce WTO trade multilateralism. Thus, the EU,

Japan and USA should work together on multilateral and interregional approaches.

Questions & Answers

Various points were raised, during the Q&A discussion, including:

- Why the EU and US shares of the Japanese car market are small and stable;

- How the linking of tariff negotiations and other issues is perceived by both sides;

- Since bilateral FTAs benefit mainly large companies what can be done to help SMEs; and,

- The wish of civil society to have a ‘seat’ in any forum created under the FTA/EPA.

Links to copies of presentations from other parts of the 16th Japan-EU Conference

can be found on the event web page: http://www.eu-japan.eu/16th-japan-eu-conference

4 On the same day, the EU-Japan Business Round Table (BRT) also published a Joint Statement. The work of the BRT was acknowledged in §39 of

the formal Summit Joint Statement.

This report is published by:

The EU-Japan Centre for Industrial Cooperation

Shirokane-Takanawa Station bldg 4F 1-27-6 Shirokane, Minato-ku, Tokyo 108-0072, Japan

Tel: +81 (0)3 6408 0281 Fax: +81 (0)3 6408 0283 URL: www.eu-japan.eu

December 2013