1. Political Cooperation and Strategic Dialogues
So let me pick up a few areas of Japan-EU political cooperation and strategic dialogue, so that we work closely with a view to ensuring peace and stability in all parts of the world.
(1) East Asia All eyes are focused on the economic dynamism of Asian countries such as China, India as well as most of the ASEAN countries. The region, however, is not without some security and political problems and challenges. The Cold war may have ended with the fall of the Berlin Wall in 1989, but remnants of that period persist at the other end of the Eurasian Continent, most notably in the Korean Peninsula. Equally worrisome are newer threats such as terrorism, rising nationalism, and the growing development gap within and among countries in the region. There is a risk that these negative factors could overshadow the region's enormous potential, or could even lead to instability in the region.
I will demonstrate two major issues in East Asia, followed by Japan-EU cooperation in the region.
(A) North Korea The Democratic People's Republic of Korea, or North Korea, is still under the typical, Cold War era, totalitarian and dictatorial communist regime, and is one of the most urgent and delicate concerns in East Asia.
The most important issues about North Korea are the abduction issue and the nuclear issue.
(i) North Korea has abducted Japanese citizens, and the issue remains unresolved.
From 1977 to 1983, agents of the North Korean authorities kidnapped an unknown number of Japanese citizens in Japan and abroad. In September 2002, Kim Jong Il, the leader of North Korea, for the first time and after years of denial, admitted directly to then Prime Minister Koizumi that the North Korean authorities had kidnapped Japanese citizens. He apologised and agreed never to abduct foreign nationals again.
To date, of the seventeen identified abductees, only five Japanese have returned home since October 2002. None of the other victims have returned to Japan, and there has been no persuasive explanation from the North Korean authorities on the safety of the remaining twelve abductees. The Government of Japan repeatedly urges North Korea immediately to allow the survivors to return home and clarify the true facts.
It goes without saying that abduction is a violation of fundamental human rights.
(ii) The second issue is the development of nuclear weapons and missiles capable of carrying them.
North Korea's nuclear test on October 9th last year, following its missile launches of 4th and 5th in the same year, reminded us acutely of a threat to the security of Japan and other countries.
(Missile launches)
Against the missile launches, the UN Security Council unanimously adopted Resolution 1695 on July 15th. It condemned the launch of ballistic missiles by North Korea, sending a strong message by the international community.
(Nuclear testing)
Despite repeated warnings by Japan, the EU and the international community, North Korea, regrettably, announced that it had conducted a nuclear test on October 9th. On the same day, recognising that the nuclear test by North Korea constitutes a grave threat to the security not only of the region but of the world, including threat of the proliferation of nuclear weapons, the Japanese Foreign Minister and High Representative Solana confirmed over the telephone that Japan and the EU would continue to collaborate closely on this matter.
North Korea's nuclear test runs counter to the Japan-North Korean Pyongyang Declaration of 2002, the agreement of the Six-Party Talks on North Korea of September 2005, as well as the UN Security Council Resolution 1695 that I just mentioned.
On October 14th last year, the UN Security Council, chaired by Japan, unanimously adopted Resolution 1718. The resolution condemns the nuclear test and states that North Korea shall abandon all nuclear weapons and existing nuclear and ballistic missile programmes.
(iii) The Six-Party Talks
With the goal of achieving the "verifiable denuclearization of the Korean Peninsula in a peaceful manner", North Korea, China, the Republic of Korea, the United States, Russia, and Japan, the six parties have been meeting.
The Joint Statement of September 2005 included paragraphs, among others, where North Korea was committed "to abandoning all nuclear weapons and existing nuclear programs", as well as North Korea and Japan would undertake "to take steps to normalize their relations in accordance with the Pyongyang Declaration, on the basis of the settlement of the outstanding issues of concern". The outstanding issues include the abduction issue.
Since then, a series of meeting of the six parties have taken place. There have been ups and downs in the process. However, the most recent Six-Party Talks, which was just concluded at the beginning of this month, produced some positive results. Its main outcomes were as follows; (a) North Korea agreed to disable all existing nuclear facilities and to provide a complete and correct declaration of all its nuclear programs by the end of this year; (b) North Korea and the United States committed themselves to moving towards a full diplomatic relationship, including the possible initiation of the process to remove the designation of North Korea as a state sponsor of terrorism; (c) Japan and North Korea agreed to make sincere efforts to normalize their relations expeditiously in accordance with the Pyongyang Declaration; (d) Economic, energy and humanitarian assistance up to the equivalent of one million tons of heavy fuel oil (inclusive of the 100,000 tons already delivered) will be provided to North Korea; (e) The Six-Party Ministerial Meeting will be held in Beijing at an appropriate time.
Just a day after the agreement at the Six-Party Talks, President Roh Moo-Hyun of the Republic of Korea and the leader Kim Jong Il of North Korea, meeting in Pyongyang, agreed to end the current armistice and build a permanent peace regime and cooperate to convene a meeting among the leaders of three or four countries directly concerned aimed at officially declaring an end of war. Japan's basic stance remains to seek the normalization of diplomatic relations with North Korea, following the comprehensive resolution of outstanding issues of concern, including the abductions, nuclear weapons and missiles. The actual implementation of the measures as committed by North Korea at the Six-Party Talks is crucial and Japan will carefully monitor the situation in collaboration with other parties of the Talks and the international community.
The EU is committed to supporting Japan's efforts. At the Summit in June this year, Japan and the EU reaffirmed their strong commitment to the goal of denuclearization of the Korean Peninsula. The EU also confirmed its strong support for all efforts intended to lead to the earliest possible settlement of the abductions issue.
(B) China
Now, I would like to talk about another significant issue, China.
China's recent economic growth has been the marvel of the world. The Chinese economy now ranks fourth in the world after the US, Japan and Germany. Indeed it is larger than four of the G7 economies.
The Chinese economic dynamism provides opportunities, not only for Japan and the EU, but also for other countries in the world. Certainly, China faces social challenges such as growth gaps between rich and poor, between agriculture and industry, and among different regions, or problems relating to the environment, energy and water. However, it is expected that appropriate measures will sustain China's growth.
In the area of international politics, as you can see from the role it has been playing for the Six-Party Talks, for example, China endeavours to halp resolve issues that could impact negatively on itself and the broader region. Japan welcomes this sort of constructive Chinese engagement in the region.
Yet, one cannot overlook China's growing defence budget. It has been increasing for the past 19 successive years, including a double-digit growth for the recent decade.
Examining Chinese defence spending in 2006, the National People's Congress in March last year announced the figure to be 280.7 billion Yuan. For the 2007 defence budget, it was made public that the figure is to be 347.2 billion Yuan, approximately 44.5 billion USD. If we simply compare this figure with that of the previous year, it represents nearly a 24 percent increase over 2006.
The Chinese defence expenditures announced for 2005 are roughly double those declared in 2000, and triple those from 1997. These figures suggest a swift-paced expansion of military expenditure.
Non-existence of transparency may be the core of the problem. Clear explanation is lacking as to how the expanded expenditure is augmenting what capabilities to achieve what military objectives.
Also, in addition to the above published figures, it is said that there is still other military-related spending. This further augments the degree of non-transparency.
In order to build confidence among its partners, and to increase the predictability of the East Asian regional environment, it is expected that the Chinese government will implement policies, which are more open and accountable to its people as well as to the outside world. In other words, it is important that China will become a more responsible and constructive partner both in the region and the international community, as was stressed by the Leaders at the Japan-EU Summit in June this year. This will be a key to achieving the ultimate goal of a "stable and prosperous East Asia."
Japan is willing to establish a mutually beneficial relationship with China based on common strategic interests, as was mentioned by Japan's newly appointed Prime Minister, Mr. Fukuda, in his Policy Statement to the Japanese Diet two weeks ago, and to work together to contribute to the peace and stability in Asia.
(C) Japan-EU Cooperation in East Asia
On the European side, the EU plays an increasingly important and responsible role for the peace and stability as well as for the prosperity, within the international community. The political and economic evolution in East Asia is thus a subject of particular interest to the EU.
Examples of such European engagement, to mention a few, are in Ache, Sri Lanka, and the Korean Peninsula.
At the same time, it cannot be denied that, in Europe, there was, until recently, a strong tendency to regard East Asia mainly as an economic market. There was not enough understanding as to the security situation in the region.
Under such circumstances, at the 2005 Japan-EU Summit, the leaders agreed that strategic dialogue between Japan and the EU on security in East Asia should be enhanced. It is worth noting that it coincided with the period when the EU's possible lifting of its arms embargo against China was becoming a major issue in Europe. Japan has been conveying the message to the EU that in view of the security situation in Asia, the lifting of the embargo should not take place. Most recently, at the Japan-EU Summit in June this year, Japan reiterated its opposition. The first Japan-EU Dialogue on the East Asian Security Environment was held in Brussels, in September 2005. Through the discussions, the EU has come to better understand the security situation in East Asia. Since then, we are continuing this dialogue, to the satisfaction of both sides. (2) Central Asia
Central Asia is another region of mutual interest.
In June 2006, the Japanese Foreign Minister hosted in Tokyo the 2nd Foreign Ministers' meeting under the "Central Asia plus Japan" initiative. It was two years before that the first ministerial meeting among Japan and the Central Asia countries had taken place in Kazakhstan. The meeting adopted, in particular, an Action Plan, which includes the strengthening of intra-regional cooperation, for example, in measures against terrorism and narcotics.
Recognising that the stability and development of Central Asia are indispensable for the peace and prosperity of the Eurasian Continent as well as for the international community as a whole, Japan and the EU also started Strategic Dialogue on Central Asia. The first Dialogue was held in July 2006, and the second in January this year. The third meeting is scheduled to be held in the near future.
It is our understanding that the EU is very keen to foster relations with the Central Asia countries, and that the EU's strategy on this region is now being prepared. Japan is looking forward to working closely with the EU in this part of the world as well.
In fact, at this year's 16th Japan-EU Summit in June in Berlin, then Prime Minister Abe, the President of the European Council, German Chancellor Dr. Merkel and the President of the European Commission, Mr. Barroso reaffirmed their desire to further strengthen the longstanding strategic partnership between Japan and the EU. They also adopted the papers on priority actions to be taken as part of the Action Plan, as well as papers on the promotion of research and innovation and on the protection and enforcement of intellectual property rights.
The leaders also discussed global issues such as climate change, energy, WTO/DDA and development, as well as the international situation in such areas as North Korea, China, Central Asia, Middle East, Iran, Afghanistan and Russia.
Among others, they expressed the view that a long-term goal for reducing global greenhouse gas emission by half or more by the year 2050 needs to be established. Japan and the EU played a leading role at the G8 Summit in Heiligendamm in formulating the consensus on the global climate change issue. I myself was involved in the preparation for the meeting and witnessed that it went on successfully.
On Russia, the Japanese side pointed out the necessity to establish a partnership with Russia based on mutual common strategic interests. The EU side also mentioned the necessity to further develop relations with Russia, too, while the EU should be united in taking actions against Russia. With Russia, Japan has the issue of the Northern Territories, which are inherently Japanese. Japan has been tenaciously engaged in negotiations, in line with a consistent policy of concluding a peace treaty with Russia, through resolving the territorial issue. Japan will endeavour patiently toward resolution of the issue, while striving to promote exchanges between the two countries.
I would also like to touch upon here briefly Japan's relationship with NATO. In January this year, then Japanese Prime Minister Abe visited Brussels and met with the Secretary General of NATO. He addressed the North Atlantic Council and stressed that Japan and NATO are partners. As I mentioned, we have in common fundamental universal values. It is only natural that we cooperate in protecting and promoting these values. He, for example, made it clear that "Japan is investing in the future of Afghanistan because its stability is vital to Japan and the world." In the Indian Oceans, Japanese Maritime SDF vessels have been providing fuel to countries participating in Operation Enduring Freedom in Afghanistan, including nine NATO member states. Mr. Fukuda, the new Japanese Prime Minister nominated in this September this year, expressed his intention to continue the Maritime SDF' activities in the Indian Ocean and make his utmost efforts to obtain the understanding of the Japanese people and the Diet.
In this connection, I would like to commend your country for sending troops to the International Security Assistance Force, ISAF, in Afghanistan, in order to assist the Afghan authorities in providing security and stability, paving the way for reconstruction.
2. Japan-EU economic relations
As the number of Japanese affiliates grew, Japanese investment in Europe has grown steadily in recent years, and has reached around 14.7 billion USD in 2006. The corresponding figure to the United States was lower, which was 9.2 billion USD. I should also note that in 2006, the EU's investment in Japan was approximately 4.3 billion USD, considerably greater than the US investment into Japan.
This growth of Japanese investment has also produced employment opportunities in Europe. In 2004, Japanese auto manufacturers alone created more than 200,000 jobs in Europe; almost 40,000 of which were directly related to production, research and development activities.
Although the investment from Japan in your country is yet small, there exists the potential to attract more Japanese business people. Estonia enjoys very high economic growth rate and is often called one of the "Baltic Tigers". Your 2006 estimated growth rate was 10.9 %. This is partly because of abundant human resources of good quality. One of the areas that is worthy of note is IT. According to the 2006 statistics of the International Telecommunication Union, the number of subscribers of cellular phones per 100 inhabitants reached 125.19 in Estonia, while that in Japan was 79.32. It should also be reminded that the product management, software development and other technical functions of the "Skype" Company, that is often said to be de facto standard of Internet telephone, are located in your country.
In Estonia, there are some of Japan's brand companies. Toyota Baltic, whose capital is 100 % provided by Toyota Motor Finland, sells wholesale to the dealers in 3 Baltic countries. I hear that Toyota cars are most popular ones in Estonia. The branch of Makita Finland, Makita Oy Eesti filiaal is selling electric tools to Baltic countries, and its share in Estonia reaches about 30 %. Olympus Estonia is selling cameras and medical equipment, and SMC Pneumatics sells air compressors. It is also noteworthy that in 2005, one of the Japan's largest travel companies, JTB, agreed with an Estonian Governmental body promoting business activities, Enterprise Estonia, to cooperate in the area of sightseeing in both Japan and Estonia.
