Shinichi Yokoyama, co-chairman of the Nippon Keidanren Committee on Europe, tells Martin Foster why his organisation wants an economic integration agreement with the EU
Progress on an economic integration agreement (EIA) between the European Union and Japan is lagging. What is the Keidanren doing to speed things up?
The Keidanren has made several proposals. The EU response to the first one in 2007 was negative to the point of being a flat refusal! One reason for this was tariffs. Japan places no tariffs on industrial products, while the EU has a 14% import duty on electrical products and 10% on automobiles. From the standpoint of the EU, there was no need to negotiate on tariffs, or enter into an EIA. A further proposal was made in April 2009, and the EBC welcomed the Keidanren’s call for an EU-Japan economic integration agreement immediately. The Keidanren was impressed by what Chairman Tommy Kullberg said, namely, “extending the four freedoms of goods, services, people and capital between the EU and Japan promises to bring many benefits of the European single market to Japan, spurring competition to the benefit of industry and consumers alike.” The Keidanren also seeks to deliver consumer convenience, and we can take coordinated action with the EBC. The third one was issued in November 2009, calling upon the government of Japan, the European Commission and the EU member states to start negotiations on an EIA as soon as possible. This year, as leader of the Keidanren mission, I am planning to visit the commission and the EU countries to convey how we are enthusiastic about an EIA.
The EU provisionally signed a free trade agreement with South Korea in October 2009. As a result, South Korean businesses may soon enjoy better access to European markets. What can Japan do to maintain the EU-Japan economic relationship in the face of closer bilateral relationships between Europe and other regions?
The FTA between the EU and South Korea is a damaging blow to the Japanese economy. The FTA puts Japan at an outright disadvantage on the tariff front, and threatens to rob Japan of its competitiveness. It is imperative that Japan and the EU enter into negotiations. The situation has become so serious that the only solution is an EIA.
Foreign direct investment into Japan has sunk to one of the lowest in the OECD. What should Japan be doing to increase investment from Europe?
EU representatives tell us that non-tariff barriers are still high, or that there are too many regulations. I feel there is some misunderstanding at work here. One factor is culture. The roots of Japanese and Western culture are different, but I feel there is a tendency to classify this difference as an obstacle. Overcoming cultural differences requires a lot of hard work, but it is important to make the effort to understand and overcome these differences.
Efforts to combat global warming are in the spotlight. How would an EIA affect environmental issues?
I believe the EU and Japan can cooperate on environmental issues. The EU and Japan possess superior environmental technology, and the EU has a well-developed awareness of environmental issues. The EU is leading the world in global CO2 reduction efforts. Japan survived the oil shocks, and made major advances in technological development while conserving resources and reducing energy consumption. We can be proud that Japanese technology stands alongside that of the EU, and is top-class when it comes to cutting CO2 emissions. If our two regions enter into an EIA, we will be able to set global standards for environmental technology among other things. We believe that the reduction of tariffs on environment-friendly goods should be incorporated in the EIA.
How can Japan maintain its position in the global economy, and what can Japan learn from the European example?
Japan was originally an under-developed economy that took off in the post-war period thanks to hard work, and the adoption of Western economic liberalism. Once an economy takes off in this way, it tends to expand to the level of more advanced nations. China and India have now taken off, and will continue to grow until they, too, have caught up. Japan needs to absorb the dynamism of those emerging economies in order to grow. At the same time, we can support them through technology transfer and so on. Such efforts will enable Japan and emerging economies to develop together. What can we learn from the EU? In a word, standardisation. The EU has brought together 27 countries, under the same treaty, and signed the Treaty of Lisbon. That is an achievement based on a kind of standardisation. Bringing together 27 nations, with different cultures and races, is a miracle. I believe this is something we should learn from the EU. An EIA would be one form of participation in this process, and what I want to say is, “Please let us in!”