3. Economic Diplomacy
It is becoming more and more important to actively promote economic diplomacy as the economic condition in Japan and abroad is becoming increasingly severe as represented in increasing instability in international financial markets, declining population, the falling birthrate and the aging population, and the fiscal deficit. In addition, the government’s top priorities have been Japan’s recovery and reconstruction from the Great East Japan Earthquake, and giving priority to addressing the reconstruction-related issues is required in promoting economic diplomacy.
The fundamental concept behind economic diplomacy toward reconstruction is a ‘Reconstruction Open to the World,’ as incorporated in “Basic Policy for the Great East Japan Earthquake and Tsunami Reconstruction Efforts,” which was adopted in July 2011. The solidarity and support from around the world that Japan received after the Great East Japan Earthquake showed anew the close ties between Japan and the world. In light of this, Japan aims to promote reconstruction in the disaster-struck areas, which would be a pioneer case to eventually revitalize the entire Japanese economy, by strengthening bonds (kizuna) with the international community and incorporating various types of vigor from abroad.
As a result of the accident at Tokyo Electric Power Company Fukushima Daiichi Nuclear Power Plant after the earthquake, many countries and regions imposed restrictions on import from Japan, including prohibiting import of Japanese products or requiring safety certificates of products imported from Japan. Active release of information and lobbying resulted in reduction of the regions and products subject to restrictions, but restrictions on Japanese products still remain in effect in many countries and regions. In close cooperation and coordination with relevant government ministries, agencies and institutions, the Ministry of Foreign Affairs of Japan will continue to provide accurate information in a timely manner on the latest situation in Japan and the safety of Japanese products to foreign governments, international institutions, foreign industrial sector and media, to promote relaxing and lifting of the restrictions.
The earthquake became a reminder of the importance of securing energy and other resources for Japan. While Japan depends on imports for the majority of its energy, mineral resources, food, and other resources, it has become an even more important diplomatic issue to secure stable supplies of resources as demand is increasing in emerging countries recently, and in 2011 in particular the situation in the Middle East and North Africa became unstable and the effects of the earthquake continue. From this point of view, Japan is strengthening multi-layered cooperative relations with resource producing countries, promoting diversification of supply sources, and advancing international partnership and cooperation through the International Energy Agency (IEA), the International Renewable Energy Agency (IRENA), and Food and Agriculture Organization (FAO) of the United Nations. Japan is also working on formulation of principles for Responsible Agricultural Investment (RAI), as its own initiative for food security.
Since fishery resources are valuable sources of nutrition not only for Japan but also for the entire world, Japan is playing an active role in securing sustainable use of fishery resources by utilizing its experience and technologies in the fisheries field and working with the regional fishery management organizations3 as a responsible fishing nation, while taking into consideration of the need for environmental protection at the same time. While cooperating with other countries, Japan has been actively contributing toward developing and implementing effective conservation and management measures such as appropriate fisheries management and elimination of illegal fishing in order to preserve and manage international fishery resources based on scientific evidence.
The recovery of the world economy is slowing against the backdrop of the spread of the European sovereign debt crisis triggered by the resurgence of the Greek debt crisis in May 2011, and other factors. The G8 Deauville Summit held in May in France discussed utilizing fora such as the G20 to address risks, including those arising from the European sovereign debt crisis. While the G20 Cannes Summit held in November in France when the European sovereign debt crisis was deteriorating since summer welcomed the political commitment of European leaders toward overcoming the crisis and formulated the Cannes Action Plan to realize strong, sustainable, and balanced growth of the world economy. For the prevention of protectionism, the G20 Cannes Summit reaffirmed the commitment to measures such as rectification of protectionist measures including new export restrictions, and the APEC Economic Leaders’ Meeting and Ministerial Meeting agreed to re-extend their commitment on standstill to refrain from imposing new protectionist measures through the end of 2015,.
Amid such an international economic situation, it is important for Japan to achieve growth incorporating vigor of the world, especially of the strongly growing Asia-Pacific region. As part of such effort, in a Cabinet decision in November 2010 the “Basic Policy on Comprehensive Economic Partnerships” the Government of Japan decided to take major steps forward from its present posture, and to promote high-level economic partnerships with major trading powers that withstand comparison with the trend of other such relationships and, at the same time, that it will first press ahead with fundamental domestic reforms in order to strengthen the competitiveness it will need for economic partnership of this kind.
On the subject of Economic Partnership Agreements (EPAs), the Agreement between Japan and the Republic of Peru for an Economic Partnership (Japan-Peru EPA) was signed in May 2011 and the Japan-India CEPA entered into force in August. Even after the Great East Japan Earthquake, Japan is promoting high-level economic partnerships with a wider range of countries, in a strategic and multifaceted manner, including making progress on negotiations on an EPA between Japan and Australia as well as efforts toward the prompt resumption or launch of negotiations on EPAs such as the ones with ROK and the EU, as well as the Japan-China-ROK trilateral FTA.
In relation to broader regional economic partnerships, based on the above Basic Policy, Japan has advanced information gathering as sell as consideration and discussion domestically concerning the Trans-Pacific Partnership (TPP) Agreement, which is the only path to the Free Trade Area of the Asia-Pacific (FTAAP) where negotiations have actually begun. In November 2011, Prime Minister Noda stated in a press conference that he had decided to enter into consultations toward participating in the TPP negotiations with the countries concerned, and he conveyed this decision to the countries concerned at the APEC Economic Leaders’ Meeting held in Honolulu in the same month. Regarding the East Asia Free Trade Area (EAFTA) and Comprehensive Economic Partnership in East Asia (CEPEA), Prime Minister Noda stated in the ASEAN-related Summit meetings held in Bali, Indonesia in the same month that, in addition to the TPP, Japan would also take the lead in contributing to the development of frameworks for economic partnership based on the ASEAN+3 (Japan, China, ROK) and ASEAN+6 (Japan, China, ROK, Australia, New Zealand, India), and gained the support of many countries.
In advancing liberalization of trade and investment, upholding and strengthening of the World Trade Organization (WTO) system which brings legal stability and predictability of international trade remains an important issue. At the eighth WTO Ministerial Conference held in December 2011, ministers shared the view that it was unlikely that all elements of the Doha Round negotiations could be concluded simultaneously in the near future and that explore different negotiating approaches. Japan will work proactively in pursuing these approaches.
To link the growth overseas to the growth of Japan, it is essential to continue exploring overseas markets. There is a great demand for infrastructure in the world, particularly in Asia. It is important to build “Win-Win” relationships where Japan supports development of those countries and realizes its own growth together with them by supplying Japan’s outstanding infrastructure technologies such as high-speed rail, water, and environmental technologies. From this perspective, the Ministry is working to improve and strengthen the structure for support private enterprise’s efforts by taking measures such as appointing “Specialists in Infrastructure Projects” at Japanese embassies and consulate-generals in selected countries, to provide active support for Japanese private sectors’ advancement into infrastructure development projects overseas.
Furthermore, Japan will actively promote the conclusion of investment agreements, tax treaties, and social security agreements, which are legal frameworks to support the overseas activities of Japanese firms’ as well as prepare conditions for their economic activities. The Anti-Counterfeiting Trade Agreement (ACTA), a new international legal framework to prevent counterfeit and pirated goods, of which negotiation began with a proposal by Japan, was signed by eight countries in Tokyo in October 2011. Japan will work toward its early entry into force as well as encourage Asian nations and other countries to participate.
3 These are international organizations established based on treaties on fishery management in waters of a certain size for fish such as bonito and tuna that migrate over broad areas. Examples of regional fisheries management organizations to which Japan belongs include the International Commission for the Conservation of Atlantic Tunas (ICCAT), the Commission for the Conservation of Southern Bluefin Tuna (CCSBT), and the Western and Central Pacific Fisheries Commission (WCPFC).