In 2012, the global economy experienced a deepening downturn. As was the case in 2011, this downturn was attributed to persisting uncertainty over the entire global economy following the European sovereign debt crisis. A slowing of economic development in China, India and other emerging countries and a sense of uncertainty on how the U.S. would respond to its “fiscal cliff” also contributed to economic woes. The uncertainty increased as food prices soared and commodity prices hovered at a high level. In this unstable economic environment, some emerging or developing countries began to exhibit some signs of protectionism and grew less willing to establish new trade rules. Domestically, while reconstruction from the Great East Japan Earthquake is well underway, the balance of trade deteriorated due to reduced exports--attributed to the strong yen and reduced demand from emerging countries--and increased fossil fuels imports. In order for Japan to maintain its growth, it is crucial that it strengthens free trade arrangements to discourage protectionism. It is also important that Japan considers a market of 4 billion consumers in the Asia-Pacific Region, which is expected to grow further, as indispensable to its own market and leverage regional vitality for the sake of Japan’s economic growth.
　Further multilateral cooperation is a key to addressing the European sovereign debt crisis and other issues facing the global economy. At the G8 Camp David Summit held in May 2012 in the U.S., the G8 Leaders agreed on the importance of a strong and cohesive Eurozone while affirming their unified desire for Greece to remain in the Eurozone. Additionally, the summit facilitated discussions on the importance of simultaneous pursuit of fiscal consolidation and economic growth. At the G20 Los Cabos Summit held in June 2012 in Mexico, the Los Cabos Action Plan was formulated, which is a political pledge by developed and emerging countries to work in cooperation as the G20 to restore market confidence and achieve global economic growth. Prior to the G20 Summit, Japan expressed its intention to contribute US$60 billion to increase the IMF resources in order to prevent exacerbation of the European sovereign debt crisis while also calling for specific action by individual countries. As a result, many countries, including emerging countries, presented specific contribution amount during the summit, and Japan made a significant contribution to forming agreement by other countries to increase the IMF resources.
　The liberalization of trade is crucial for maximizing opportunities for Japan’s growth. In order to firmly maintain the credibility of the multilateral trading system, Japan must strive to resist protectionism and continue to proactively engage in the Doha Round and other negotiations under the WTO, and to cooperate with relevant countries for further promoting trade liberalization throughout the world. Moreover, Japan is also expected to continue making contributions to the efforts of OECD to hold dialogues with emerging countries for the purpose of preventing bribery of foreign public officials and disseminating the prevalence of international standards in areas including investment.
　On bilateral or regional trade, it is also important that Japan continuously strengthens its endeavors to achieve high level of economic partnership. During the ASEAN-related summit meetings held in November, it was announced to launch negotiations for the FTA among Japan, China and the ROK and RCEP. Together with the TPP, the negotiations in which Japan has expressed its intention to participate, these serve as the regional initiatives for realizing FTAAP. Furthermore, at the Foreign Affairs Council’s meeting in November the European Commission obtained a negotiating mandate for the Japan-EU EPA, which cleared the path for the launch of negotiations between Japan and the EU. In addition to this, progress is being made in the EPA negotiations with Australia, Mongolia, Canada and Colombia as well as in the joint study for EPA with Turkey. Japan has also been proactively making contributions to discussions at APEC with the view to realizing the FTAAP. APEC economies agreed to the APEC List of Environmental Goods (54 items) at the APEC Economic Leaders’ Meeting held in Vladivostok, Russia in September. This allows APEC economies to make practical contributions to green growth while rejuvenating initiatives for trade liberalization.
　Securing stable supplies of resources is essential for Japan, which relies on foreign sources for many resources. Enhancement of the relationship with resource-rich countries and diversification of supplier countries are becoming more important as Japan has increased its dependence on fossil fuels since the Great East Japan Earthquake. Japan should also address such issues in the context of international cooperation on energy saving and renewable energy as well as the formulation of strategy to secure energy supplies in consideration of the impact of the Shale Revolution. In the face of expected world population growth and looming global food shortage, sustainable development of agriculture and the consequent stability of food prices are of increasing significance. In 2012, the drought in the U.S. and other difficulties contributed to the record high market prices of corn and soybean. In response, Japan advocated the cooperation towards food security on improving agricultural production and productivity, promoting private agricultural investments in a responsible manner and enhancing market transparency at international fora such as G8, G20 and APEC. Additionally, Japan, as a responsible fishing nation, has been promoting the conservation and management of marine living resources internationally with the regional fishery management organizations, including leading discussions on the strengthening of conservation and management measures of tuna stocks. In July, Japan signed the Convention on the Conservation and Management of High Seas Fisheries Resources in the North Pacific Ocean.
　In order for Japan to maintain a vibrant economy in the current environment, where domestic demand is on the wane as the country’s population decreases, connecting overseas growth to Japanese economic growth is becoming more important than ever. With this understanding, the Ministry of Foreign Affairs actively supports the overseas expansion of Japanese companies. Furthermore, in its effort to support Japanese business overseas, the Ministry proactively promotes the conclusion of investment agreements, tax treaties and social security agreements, which are legal frameworks required for a positive business environment. Furthermore, it has designated contact points for support to Japanese companies at all of its diplomatic missions abroad. They will provide information and deal with issues involving governments and other institutions of partner countries. They will also promote Japanese products and Japanese brands at diplomatic missions or facilities as well as undertake initiatives to protect intellectual property. In its efforts to protect intellectual property, Japan deposited the Instrument of Acceptance on the Anti-Counterfeiting Trade Agreement (ACTA) in October, becoming the first country to have concluded the agreement.
　As a result of the accident at the Fukushima Daiichi Nuclear Power Station of Tokyo Electric Power Company following the Great East Japan Earthquake, many countries continue to impose import restrictions on products from Japan and they have become one of obstacles to reconstruction of the affected areas. Through close cooperation with other ministries and organizations, the Ministry of Foreign Affairs has been striving to provide foreign governments and international organizations with accurate and up-to-date information of Japan’s efforts to strengthen its inspection systems and restrictions on distribution and encouraging foreign governments and international organizations to lift or ease restrictions. As a result of these efforts, Mexico, Peru and New Zealand have lifted restrictions in 2012 to join Canada and Chile, which lifted restrictions in 2011. The EU significantly eased restrictions in 2012. It is important to continue to strengthen these efforts and provide proactive support for Japanese companies, including SMEs, in order to enable them to expand their businesses overseas and to encourage the export of infrastructure, agricultural and fishery products.