The EU and Japan are joining forces in digitization

The summit agenda reflects the full spectrum of common interests. Von der Leyen and Michel will talk to their host Kishida about the improvements to the joint free trade area, discuss the impact of the pandemic and war on the economy, and discuss the security situation in Europe and Asia.

However, the focus should be on the common digital future. Whether it’s about the supply of semiconductors or data streams – both sides want to expand their cooperation, explain EU representatives.

The summit also follows on from the Düsseldorf meeting of the G7 digital ministers with EU Competition Commissioner Margrethe Vestager. On Tuesday and Wednesday, the group of seven industrialized countries, which also includes Japan, discussed intensified cooperation on Internet issues.

Years ago, the government in Tokyo launched an initiative aimed at improving the free flow of data between Japan and friendly countries. A common data room should guarantee this. Since the pandemic, the digitization of administration, business and society has been pushed forward with all our might.

Under the title “Digital Garden City”, Japan’s Prime Minister Kishida now wants to promote rural areas by digitizing them at high speed. He is also interested in global cooperation: In London, for example, he founded the “Japan UK Digital Group” with British Prime Minister Boris Johnson, which is intended to discuss issues relating to digital standards, among other things.

Japan and the EU have also been working together on economic strategy for some time, for example on the Global Gateway program, with which the EU wants to offer poorer countries an alternative to China’s Belt and Road Initiative (BRI) infrastructure program.
Japanese money can help reverse China’s financial influence in the Balkans and Africa. Japan is also influential in Southeast Asia as a long-standing major investor and interlocutor.

In a current study, the Konrad-Adenauer-Foundation, which is close to the CDU, advises the EU to cooperate intensively. “In order to avoid the states of the Southeast Asian state association Asean being drawn into China’s sphere of influence, the EU and Japan must continue their engagement, coordinate and pool,” say the authors.

Another important factor in the relationship is the bilateral free trade area, which was the largest and most modern in the world when it was established in 2019. Japan even opened up its state procurement system to European competitors.

The European and German economy is already seeing positive effects from the partnership agreement, despite the global trade problems caused by the corona pandemic.

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According to Björn Kongstad, Policy Director of the European Business Council in Tokyo, the agreement has not only strengthened trade relations between the EU and Japan. “It also put Japan in the minds of European companies in Europe and of course vice versa put Europe in the minds of Japanese companies.”

Markus Schürmann, head of the German Chamber of Commerce Abroad in Tokyo, shares this experience. “The agreement has a high impact,” he says. Schürmann observes a clearly increased interest in the German economy in Japan.

There are even measurable successes. In 2021, trade between the two countries increased by 7.5 percent to 41.7 billion euros. Not all sectors benefited from falling tariffs, as Japan did not levy import tariffs on many products.

“However, the food and beverage manufacturers are the key winners,” says Schürmann. Germany’s exports to Japan of dairy products have increased by eleven percent since 2018, and by as much as 27 percent for beverages and alcohol.

However, Schürmann also sees problems that need to be discussed at the summit: “We still see challenges in non-tariff trade barriers.” One example is pressure vessels, which play a role in mechanical and plant engineering. International standards are still not accepted in Japan. This leads to costly adjustments and custom-made products.
The biggest point of criticism remains the public tender system. “I’m not going to point a finger, but it’s fair to say we’re a little disappointed,” Kongstad said. “I am sure that the Commission is also disappointed.”

Schürmann names a specific problem: the often very short deadlines for companies to submit bids. “Tenders are often still structured in such a way that only a local business unit can actually react,” says Schürmann. And since the time for foreign companies is running out.

Japan is a driving force behind sanctions against Russia

“The intensive exchange is currently extremely important,” says the delegate from German industry. Also in view of the global situation, he welcomes the brisk travel activity of heads of government and state between Europe and Japan.

In fact, Japan is a driving force in Asia when it comes to sanctions against Russia. Tokyo is also supporting the oil embargo.

The summit participants have set themselves the goal of contributing to the reorganization of western security strategy. In the past, the EU and the USA often quarreled about the Asia strategy, but the commonalities are now being emphasized.

Michael Green of the American Center for Strategic & International Studies (CSIS) stresses that Washington agrees with Europe, Japan, Australia and Korea that the Indo-Pacific must remain a region of sovereign states and not be dominated by China. “The strategy is based on the fact that this is a multipolar region where Japan, India, Indonesia and South Korea are also important players,” says Green.

Central to the closer ties between the EU and Japan is the fact that they see each other as “value partners”, according to Green. It is not only about democratic values ​​in the narrower sense, but also about the value of a rule-based trading system.

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