Japan and the EU: A Valuable Partnership for the future

Speech by H.E. Takekazu KAWAMURA
Ambassador of Japan to the European Union

At the Teleki László Institute and Budapest Business School
In Budapest, Hungary

26, 27 June 2006

Good afternoon, ladies and gentlemen,

It is a great pleasure for me to be able to talk to you today on Japan-EU relations and to share my views with you all.

Due to Hungarian membership in the EU, Hungary and Japan have started developing a new sort of relations, in addition to the pre-existing cordial bilateral ties.

As the ambassador of Japan to the EU, I am here to speak primarily on Japan’s relationship with the EU. As this topic can be quite broad, I will divide it into three parts: a brief description of Japan-EU relations, Japanese presence in the EU, and the Japan-EU partnership in a global context.

But before doing so, allow me to say how honoured I am to be here in Budapest, specifically this year, the 50th anniversary of the uprising in Hungary. I was only a junior high school student when I learned about the revolution through the Japanese newspaper. At that time, there was no CNN and no Internet. Even though I was young, I remember the news very clearly. In retrospect, it was the same aspirations and perseverance that brought about the crumbling of the Berlin Wall in 1989. It is still fresh in my memory that Hungary’s opening of its borders with Austria, in the spring of that year, triggered the wall’s collapse. I would like to take this opportunity to pay tribute to the tremendous efforts and countless sacrifices that the Hungarian people have made to bring freedom and democracy not only to Hungary but also to other communist countries in Europe.

  I. Brief Description of Japan-EU Relations

I will start with a brief description of Japan-EU relations.

31 years ago, namely in 1975, as our relationship gained momentum, the government of Japan decided to open its Mission to the then European Communities in Brussels.

On the Governmental level

In 1983, regular dialogues started to take place twice a year at the ministerial level for foreign affairs. In addition, several ministers initiated discussions in their respective fields.

In 1991, with a view to further promoting these relations, Japan and the EU decided to raise their communication to the highest level; that is to say, to the Prime Minister on the Japanese side, and to the President of the European Commission and the Head of State or Government of the rotating presidency of the Council of the EU on the European side.

This Japan-EU summit has since been held annually, alternating its venue between Japan and Europe. This year, the 15th summit continued the tradition in Tokyo.

At the Summit held in April, the leaders noted a number of achievements since the last summit. Significant achievements included: the launch of the strategic dialogue on East Asia’s security environment; progress on the ITER project; the signing of the “Japan-EURATOM Agreement”; and the 2005 EU-Japan Year of People-to-People Exchanges.

The leaders reaffirmed their desire to strengthen the partnership between Japan and the EU, global partners that share fundamental values. They also agreed to cooperate for a more peaceful, prosperous and secure international community. In this context, they agreed to continue the strategic dialogue on East Asia and develop a similar dialogue on Central Asia.

Following up on the achievements of the “2005 Japan-EU Year of People-to-People Exchanges”, both leaders of Japan and the EU recognised the significance of continuing people-to-people exchanges. The EU welcomed Japan’s proposal of the “FRamework Initiative for Exchange Networks and Dialogues”, also called “FRIEND”. This programme is to further promote Japan-EU exchanges targeting young people, experts, EU officials, business people and so on. In particular, with regard to the exchange of young people, upon whom rests the future of Japan and the EU, Japan set a goal of accepting 4,000 youth a year. Tourism in Japan will be also promoted on an EU-wide scale as well. There were the results of the Summit this year.

The exchange of views between senior officials of the two sides has also become more frequent.

It is also worth noting that other high level communications are successfully taking place in the form of exchanges between members of the Japanese and European Parliaments, especially through annual “Japan-EU Inter-parliamentary Meetings”.

I do not need to emphasize that all these dialogues and contacts have contributed greatly to the furtherance of mutual understanding and enhancement of Japan-EU relations.

On the Business Level

As for the business aspect of our relations, dialogues between people in the private sector on both sides became active in the early 80’s.

Since 1999, these dialogues have taken shape in the form of the Japan-EU “Business Dialogue Round Table”, or the BDRT. There, business people discuss issues of common interest to improve the business environment. At the beginning, trade issues occupied a major part. Subsequently, various other economic issues have emerged on the agenda.

The BDRT is not just a private forum. It annually expresses its opinions and suggestions to political leaders of Japan and the EU for further improvement of the business environments.

Their contributions in this field are significant. One of the best examples is that, in 2004, the BDRT submitted a policy proposal on a framework to facilitate an increase in foreign direct investment.

Following the proposal, the Japan-EU Summit of that year adopted several important documents for effective cooperation between the two sides, including “The Cooperation framework for the Promotion of Japan-EU Two-way Investment”.

The 8th BDRT will be held this July in Tokyo.

People to People Exchange

Now, let me also explain about Japan-EU relations from cultural and social perspectives.

The “Japan-EU Year of People-to-People exchanges” ended with great success last year. As you can imagine, these events are contributing greatly to further personal and cultural exchanges between our peoples. I learnt that about 90 events were held in Hungary within this programme. The number of events held in Japan and the EU member countries exceeded 1900 in total, about 400 in Japan and the rest in EU countries.

I believe that we should continue to promote such exchanges, in order to strengthen the foundation of our relationship. Without a solid base at the grassroots level, political and economic exchanges would remain merely superficial.

Change in the nature of the relations

Ladies and Gentlemen,

The world has changed dramatically since the fall of the Berlin wall, and it is still changing. Faced with the changes on the international political stage, Japan and Europe have been trying to adapt as best as we can.

The application of the Maastricht and Amsterdam treaties, for example, has prepared the ground for a more stable Europe.

The introduction of the “Common Foreign & Security Policy” and the “European Security and Defence Policy” has gradually modified Europe’s image in the international political arena.

Japan, for its part, has re-examined its roles and responsibilities in the world. The need for Japan to contribute to peace and stability, as well as prosperity in Asia, the Middle East and other regions has become more accepted in the opinion of the Japanese people.

Nevertheless, it took Japan and the European Union ten years after the fall of the Berlin wall, to fully comprehend the need to expand the scope of dialogues on international political affairs.

Indeed, it was at the Japan-EU Summit held in 2001 that Prime Minister Koizumi and then President Prodi of the European Commission agreed on a “10-year Action Plan for Japan-EU Cooperation”. This Action Plan encompassed a wide range of political issues of international importance as well as economic, social and cultural areas.

September 11 only added the importance of our political dialogue addressing, in particular, the threat of terrorism. The weight of the roles for Japan and the EU in the international community is increasing, and Japan-EU consultations on international political affairs have become more frequent.

  II. Japan's Presence in the EU

Now, I would like to talk about Japan’s presence in the EU. As the overall relations between Japan and the EU have been developing, Japanese presence is getting increasingly noticeable in the EU.

In spite of Japan’s economic situation over the last 15 years, the number of Japanese affiliated companies in Europe has been increasing at a steady rate. The total number of Japanese affiliates in Europe grew from 2,162 in 1996 to 6055 in 2005. The growth is particularly noteworthy in new Member States such as your country, the Czech Republic, Poland and Slovakia. In the case of Hungary, for example, the number increased from 25 in 1996 to 107 in 2005.

Many Japanese companies are putting more focus on Eastern Europe when discussing their strategies abroad. In particular, when asked which countries they are considering to establish their new offices in, the top four countries are in Eastern Europe. Hungary comes third, ahead of Slovakia, Russia, Romania, China, Germany and Turkey. (Top 2 are Poland and the Czech Republic).

As the number of Japanese affiliates grew, Japanese investment in Europe has grown steadily in recent years, and has reached around 7.8 billion dollars in 2005. The corresponding figure to the United States was only marginally higher (12 billion). I should also note that between 2002 and 2005, the average figure of EU investment in Japan was approximately 4.5 billion dollars, considerably greater than US investments 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 and research and development activities.

It is also important to note that trade remains one of the important elements in our relationship: Japan is the fourth largest source of imports of the EU after the USA, China and Russia, while the EU is Japan’s fifth largest.

According to statistics obtained in October 2005, there were around 150,000 Japanese nationals residing in the EU 15 Member States, up from about 130,000 in 1997. Compared to the number of Japanese citizens living in the U.S., which was about 350,000 in 2005, it may not sound striking, but the figure for the EU nevertheless accounts for more than 15 % of the total number of Japanese nationals living overseas. At the time of October 2005, about 1 million Japanese people were living outside of Japan.

As the number of Japanese people living in Europe increases, so does the number of Japanese restaurants. At present, there are more than 40 Japanese restaurants in Belgium alone, while in Germany, the number is up to 300. You see a similar trend here in Hungary. I should note that the major customers for these restaurants are not only Japanese but also Europeans. The steady increase of Japanese investment in the EU, accompanied by the growth in number of Japanese affiliates/residents, has thus contributed not only to “growth and jobs” in Europe, but also to Europe’s cultural diversity.

  III. Japan-EU Partnership

The final part of my speech is about Japan-EU Partnership in a global context.

1. Cooperation towards peace and stability

Japan and the EU share fundamental values and principles of freedom, democracy, rule of law, human rights and a market economy.

You, the European people, decided to put war behind you and construct a society where the concept of military conflict was no longer imaginable. Japan itself renounced resorting to force as a solution of international disputes since 1945.

This determination to renounce the use of force is strongly rooted in the Japanese people. With a view to ensuring peace and stability, Japan works closely with the European Union in all parts of the world.

In more concrete terms, then, how do Japan and the EU cooperate? Let me show you a few examples.

West Balkans

The European Union is an actor par excellence in West Balkan affairs. It makes great efforts to maintain peace, and foster and re-establish economic and social stability there. Japan contributes to such European efforts by organising and supporting meetings in close collaboration with the EU and by providing technical and financial assistance of more than 1.1 billion dollars to the region this far.

One example of such collaboration is that Japan hosted with Ireland, then holding EU Presidency, “the Ministerial Conference on Peace Consolidation and Economic Department of the Western Balkans” in Tokyo in 2004.

Iran

Recognising the political and economic importance of Iran, Japan and the EU maintain close consultation with one another to explore solutions to the critical nuclear issue, and sustain world stability in this context.

Asia

The third example is our cooperation in 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, such as the Korean Peninsula and Taiwan issues, legacy of the cold war era. We, Japan and the EU, therefore, are engaged in close dialogues on East Asia and other issues in Asia as I mentioned earlier.

At the Japan-EU Summit last year, the leaders agreed to hold a strategic dialogue on the East Asian security environment. The first meeting of this dialogue was held last September, and the second dialogue took place recently to the satisfaction of both sides. The EU countries used to regard Asia mainly as an economic market. Through broader dialogues, however, the EU has come to understand and grasp more deeply the political and strategic situations of the Asian region, which will have important implications in relation to the peace and stability of the whole world.

Central Asia is another region of mutual interest.

On the 6th of this month, Mr. Aso, the Japanese Foreign Minister, hosted in Tokyo the 2nd Foreign Ministers’ meeting under the “Central Asia plus Japan” initiative. It was already two years ago that the first ministerial meeting took place in Kazakhstan. This year’s meeting adopted an Action Plan, which includes the strengthening of intra-regional cooperation, for example, in measures against terrorism and narcotics. In the Action Plan, Central Asian countries indicated their determination “to overcome various difficulties and reinforce their cooperation. Japan for its part, reaffirmed its “intention to support intra-regional cooperation with a view to complementing Central Asian countries’ own efforts and facilitating their cooperation”. Countries in Central Asia have appreciated Japan’s contribution, for example, of Grassroots Human Security Grant Aid for restoring school buildings, supplying instruments and materials to hospitals and other purposes (113 projects in 2004 and 2005 fiscal year).

As strategic partners sharing values, interests and concerns, Japan looks forward to working closely with the EU in this part of the world through the strategic dialogue which will take place in the very near future.

2. Common Issues: global and internal

Ladies and Gentlemen,

Japan and the EU face other common challenges. Some are global, and others are about our respective societies.

Global issues

Poverty plagues the world. To fight against such suffering, technical and financial assistance will continue from both Japan and the EU through more and better consultations. Environmental issues have also repeatedly been on our common agenda, and we are currently working closely together on a wide range of issues from climate change to energy efficiency. We are also working together on issues that range from the fight against terrorism to the proliferation of weapons of mass destruction and avian influenza to other infectious diseases.

Internal Issues

In addition to these world-wide issues, when we look at our own societies, we also find many issues in common. For instance, Japan and some of the EU Member countries are faced with rapidly aging societies, accompanied by extremely low birth-rates.

This implies a possible decrease in economic capacity if appropriate measures are not put in place. In this context, we could share experiences and learn from each other.

  IV. Conclusion

Ladies and Gentlemen,

All the issues I have just reflected on demonstrate the extent to which cooperation between Japan and the EU is important and desirable. On occasion, this may not be easy. I believe, however, that our partnership should continue to evolve, to meet challenges of today.

And before concluding my presentation, let me express 2 expectations for the future.

Firstly, I expect the EU to play an even more active role in the international community. I am one of those who believe in a strong Europe in this globalised and multi-polar world. The EU has been growing in terms of integration and expansion. Understandably, the EU has been often busy in internal process of discussions and coordination. At the same time, we note the weight of its voice in the making of multilateral efforts, be it in peace building or rule making, has been increasing.

Although the EU has begun to play positive roles on the world scene, I expect even more from the EU. I should hasten to add that Japan too has a global role to play, and that role is very often in step with the EU.

Secondly, within the EU, I expect Hungary to play an active and positive role. Hungary is important, not only because its economy is rapidly growing, but because it is rich in history and culture since the era of the Roman Empire, adding to the diversity and balance in European perspectives when Europe is making decisions, internal or external.

It goes without saying that the EU is not just an international organisation such as NATO or the United Nations. The differences lie in that the EU’s decisions affect directly and immediately the daily lives of the people of the member countries. Your safety and security, tackling organised crime and immigration issues are all dealt with by the EU. Your budgetary deficit is scrutinized by the EU. In short, areas which directly interest the citizens are handled by the EU. As a result, Hungary receives great benefits from being a part of the EU. At the same time, Hungary is expected to meet challenges and fulfil obligations that accompany its membership. Some economic and social reforms may prove to be painful. But it will be a necessary process leading to a more robust and prosperous Hungary and Europe. Hungary’s actions through the EU gain resonance in the long-term for a better future. Japan is ready and willing to support such Hungarian actions.

I understand that Hungary will take on the EU Presidency in 2011. Japan looks forward to working closely with the Hungarian presidency, but we do not have to wait till 2011. We will collaborate, either directly or through the growing EU in the years to come.

Thank you.