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European Commission

MEMO

Brussels, 5 May 2014

EU-Japan relations and the 22nd EU-Japan Summit

Brussels, 7 May 2014

The European Union and Japan are like-minded strategic partners and major economies sharing common values and principles. Their 22nd bilateral summit will take place on 7 May in Brussels. The EU will be represented by Herman Van Rompuy, President of the European Council, and by José Manuel Barroso, President of the European Commission. Japan will be represented by Prime Minister Shinzo Abe. European Commissioner for Trade Karel De Gucht, Commissioner for Research, Innovation and Science Máire Geoghegan-Quinn and Energy Commissioner Günther Oettinger will also be present.

2014 will be an important year for the EU-Japan relationship. Twin negotiations are ongoing for a truly strategic partnership agreement to develop a wide ranging political, economic and social cooperation and for an ambitious free trade agreement that is expected to stimulate growth and employment on both sides. Negotiations, which aim at a major upgrade of EU-Japan relations and the realisation of the untapped potential in the relationship, are now in their decisive phase. For the FTA, the EU side is currently conducting a review of progress made after one year or negotiations, as foreseen in the Council negotiating mandate.

At the summit, leaders are expected to discuss:

EU-Japan political and economic relations. Economic developments and the political situation on both sides will be discussed, as well as the ongoing negotiations for a strategic partnership agreement and a free trade agreement. The summit will seek to reinforce the EU-Japan security partnership, inter alia by exploring the scope for enhanced EU-Japan cooperation in the context of crisis management missions and operations in Africa. Leaders will also give impetus for further progress in sectoral cooperation, including in the area of outer space, cyber security, research and innovation, and energy.

Regional issues, such as recent developments in the EU's and Japan's respective neighbourhoods will be on the agenda. In this context, the situation in the Ukraine, the Iranian nuclear programme, the situation in the Korean peninsula and in Syria will be discussed. The EU will reaffirm its views on the need for a peaceful resolution of conflicts in accordance with international law.

Global challenges, in particular the international climate negotiations, where ambitious and timely contributions are required, as well as the global economic situation and G20 cooperation will be discussed. The EU and Japan account for around 30% of global output and can thus make a major contribution to world economic stability. For the EU, economic growth and financial stability go hand in hand, in line with the G20 commitments. Leaders will also talk about the post-2015 framework for development cooperation and the multilateral trade agenda.

A joint press statement will be issued at the end of the summit.

Political cooperation

Over time, the EU-Japan relationship has expanded significantly beyond the economic arena. The negotiation of a strategic partnership agreement is set to pursue this upgrading of political relations. It is intended to reinforce political dialogue, affirm shared values and deepen sectoral cooperation and coordination in addressing global and regional challenges. It is to cover cooperation in a wide range of policies, including foreign and security policy, economic issues, sustainable development, justice, freedom and security, research and innovation as well as education and culture. Four rounds of negotiations have been carried out to date; the next round will take place shortly after the summit.

Both the EU and Japan are global actors and are seeking to cooperate closely on a wide range of political and global issues. They are both strongly committed to multilateralism and the rules-based international system and are important players on global governance, climate change and development cooperation. The two sides already have a political dialogue covering the full range of foreign and security policy.

Trade

Japan is the world's fourth-largest economy and trade has long been the predominant focus of EU-Japan relations. Japan is the EU’s second biggest trading partner in Asia, after China. In 2013, the EU represented 9% of Japan's trade, making it Japan's third most important trade partner. Japan was the EU's sixth largest export market and EU exports to Japan reached €54 billion in 2013. EU imports from Japan stood at €56 billion. The EU remains Japan’s third largest destination for exports and Japan’s second largest source of imports after China. Foreign direct investments (including from the EU) are still low in Japan when compared to other industrialised economies, but Japan is a major investor in the EU.

In March 2013, the EU and Japan decided to launch negotiations for a deep and comprehensive free trade agreement between the EU and Japan. Once in effect, this trade agreement could boost Europe's economy by 0.6% to 0.8% of its GDP; EU exports to Japan could increase by 32.7% while Japanese exports to the EU could increase by 23.5%. As a result of the agreement, 420,000 jobs could be created in the EU alone.

The negotiations aim at concluding an agreement covering the ambitious and reciprocal liberalisation of trade in goods, services and investment, as well as rules on trade-related issues and the elimination of non-tariff barriers, based on the shared understanding of the scope and level of ambition defined in the scoping exercise. Given the importance that the elimination of non-tariff barriers has for achieving a level playing field for European businesses on the Japanese market, the negotiating directives by the Council foresee parallelism between the elimination of EU duties and of non-tariff barriers in Japan. They also authorise the suspension of the negotiations after one year, if Japan does not live up to its commitments on removing non- tariff barriers. To protect sensitive European sectors, there is a safeguard clause.

Five rounds of negotiations have been carried out, and comprehensive market access offers have been exchanged for trade in goods, with offers for trade in services, procurement and investment to follow soon.

To assess the progress achieved during the first year of negotiations, in particular in the areas included in the roadmaps agreed in the context of the scoping exercise, the Commission is currently finalising a report which will be presented to the Council shortly.

Sectoral cooperation

An intricate system of sectoral dialogue and cooperation has been developed between the EU and Japan over the past decades. The two sides have concluded agreements in the fields of energy, competition, customs cooperation and mutual legal assistance.

Regular dialogues exist in the areas of macroeconomic issues, financial issues, industrial policy, employment and social affairs, transport, information and communication technology, the environment, agriculture, fisheries and maritime affairs, urban development, development policy and disaster preparedness and prevention.

The 21st summit agreed on the establishment of a dialogue on outer space. The 22nd summit is expected to launch a dialogue on cyber issues.

Research and innovation

Japan is one of the most innovative countries in the world. An agreement on cooperation in science and technology, in force since March 2011, is the foundation for cooperation between the EU and Japan in this area. Priority areas for reinforced cooperation include critical raw materials, aeronautics and information and communications technology.

In the EU seventh research framework programme, 109 proposals involving Japanese participants have been selected for funding, and 5 coordinated calls for proposals have been launched. The most active areas include information and communication technology, materials, environment and health. Marie Skłodowska-Curie actions are supporting the exchange of research staff from institutions in EU and Japan.

EU-Japan programmes and people-to-people exchanges

Four Japanese universities are hosting EU Institutes in Tokyo, in Kobe and in Fukuoka. The Institutes promote academic cooperation and education between Japan and Europe, in the areas of European political science, law and economics, but also in fields such as environment, medicine and other science and technology-related areas.

Since 1994 the EU Gateway to Japan programme has enhanced trade and investment between Europe and Japan, by introducing cutting-edge technologies, design and products from EU companies to the Japanese market. The EU and the Japanese Government co-fund the EU-Japan Centre for Industrial Cooperation.

In the area of cooperation in higher education, Erasmus Mundus and its successor, Erasmus Plus promote mobility of students and academics between European and non-European higher education institutions. Jean Monnet chairs and centres of excellence promote knowledge of and studies on European integration in Japan.

History of EU-Japan relationship

1959 Accreditation of Japan's first representative to the European Communities

1974 Establishment of the delegation of the European Communities in Tokyo

1991 First bilateral summit in the Hague

Adoption of a joint declaration on relations between the European Community and its member states and Japan, decision to intensify dialogue and strengthen partnership, including by holding annual summits

2001 10th summit in Brussels

Adoption of the EU-Japan action plan “Shaping our common future”, including four major objectives i.e. promoting peace and security; strengthening the economic and trade partnership utilising the dynamism of globalisation for the benefit of all; coping with global and societal challenges; and bringing together people and cultures

2006 Agreement for cooperation in the peaceful uses of nuclear energy

2009 Agreement on science and technology cooperation (entered into force 29/3/2011)

Agreement on mutual legal assistance in criminal matters (entered into force 2/1/2011)

2010 19th summit in Tokyo on 28 April; decision to set up a high-level group to identify options for the comprehensive strengthening of all aspects of Japan-EU relations and defining the framework for implementing it

Upgrading of EC delegation in Tokyo to European Union delegation in line with Lisbon Treaty

2011 20th summit on 28 May in Brussels; launch of cooperation in disaster prevention.

2013 Launch of negotiations for a Strategic Partnership Agreement and a Free Trade Agreement on 25 March 2013. 21st Summit on 19 November.

For more information on EU-Japan relations: http://eeas.europa.eu/japan/index_en.htm


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