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In his New Years Reflection on January 1, 2022, Prime Minister Fumio Kishida focused on two major issues: realization of a new form of capitalism to revive the Japanese economy, and advancement of realism diplomacy for a new era. This expert maneuvering of diplomacy and national security, which includes efforts to propagate universal values, navigate global challenges, and safeguard the lives and livelihoods of the Japanese people, will shape Japans economic diplomacy under Kishidanomics.

Japan has been strengthening economic diplomacy since Shinzo Abe came into power through his much-lauded Abenomics (launched in 2013). In 2016, the Abe government approved the Japan Revitalization Strategy 2016 (or Growth Strategy) to attract the global flow of people, goods, and money into Japan and turn the virtuous economic cycle into sustainable economic growth. Kishidas new capitalism vision echoes the latter.

Based on the Growth Strategy, since 2016 Japan has undertaken economic diplomacy through the following three aspects:

Abes successor, Yoshihide Suga, cemented this foreign policy outlook through Suganomics. Kishidas economic diplomacy, too, is centered on the above-mentioned three areas, with slight additions.

Under this outlook, Japan gives prime importance to economic partnership agreements (EPAs) and free trade agreements (FTAs) because they help capture the vitality of the growing market overseas and strengthen the basis of the Japanese economy. In this context, its partnership with the European Union (EU) is gaining credence, particularly over shared interest in strengthening and reforming the multilateral trading system under the World Trade Organization (WTO) and rejecting protectionism.

The EU and Japan are strong economic partners not only due to their alignment over free trade values, but also the volume of trade between them.

In 2002, East Asia, North America, and Europe together accounted for 80 percent of Japans trade a trend that has largely continued over time. Currently, Japanis theEUssecond-largest Asiantradingpartner after China, accounting for almost a quarter of global gross domestic product (GDP).

In 2001, the EU-Japan Action Plan, which laid out the framework for their political and economic linkages in the 21st Century, came to an end. Japan released an impact assessment report in 2012, which proposed entering into an FTA, as part of its free trade focus in economic diplomacy. Formal FTA negotiations began in 2013, and the EU-Japan Economic Partnership Agreement (EPA) was signed in 2018 (coming into effect in 2019).

This FTA created an open trade zone covering over 600 million people, and formed an integral part of Japans plan to use FTAs to achieve its economic fortification.

The EU holds immense importance for Japan in trade. As of March 2020, the EU accounted for about 12 percent of Japans total trade. Japan is also a major market for EU exports: about 58 billion EUR ($66.2 billion USD) in goods and 28 billion EUR ($32 billion USD) in services are exported to Japan every year.

Initially, the trade ties between the two were characterized by big trade surpluses in favor of Japan. However, during 2009-2019, the trade became more balanced, as the EUs trade in goods deficit with Japan decreased from 18 billion EUR ($20.5 billion USD) in 2009 to 2 billion EUR ($2.3 billion USD) in 2019. This relationship endured despite Japans trade barriers on EU firms.

Since the implementation of the EPA, trade has been expanding between the two sides. Within merely 10 months after the EPA was implemented, the EUs exports to Japan went up by 6.6 percent and Japans to the EU by 6.3 percent, compared to the same period a year before.

From a geo-economic security lens, the EPA allowed the EU and Japan to shape worldwide exchange rules in line with their high standards and shared values of democracy and the rule of law, especially in light of an increasingly economically aggressive China. The EPA conveyed a strong message about rejection of protectionism by two of the worlds biggest economies.

Moreover, the EPA has allowed Japan to strengthen the multilateral trading system, which ranks as one of Tokyos biggest priorities. Its implementation has helped Tokyo strengthen its trade outlook with individual European states like France and Italy.

It has also enabled the application of shared standards, such as for sustainable development with a specific commitment toward the Paris Agreement on climate change. In a broader sense, Tokyo has advocated those agreements, such as the EU-Japan EPA, serve as building blocks to higher trade liberalization at the multilateral level because they include a commitment to institution-building in addition to free trade.

Thus, Japan has chosen to enhance economic dialogue using the Asia-Europe Meeting (ASEM), which has led to better mutual understanding between the two regions on various economic issues and better coordination on economic issues of mutual concern in international platforms such as the WTO.

The Japan-EU FTA is certainly a critical variable in Indo-Pacific politics as a lynchpin of EU-Japan diplomacy that has a significant impact on regional players. At the time of signing, the EPA was termed a light in the increasing darkness of international politics referring to Chinas increased assertiveness, Donald Trumps inward-looking trade policies, and the escalating trade war between China and the US. Former PM Abe notably called the signatories the flag bearers of free trade.

Therefore, as an agreement between like-minded powers, the Japan-EU EPA also complements both actors Indo-Pacific outlooks. Japan and the EU share an understanding that the Sino-United States conflict is damaging to both their interests. Their positions and interests converge not only via their EPA, but also in their strategic partnership and connectivity agreements, indicating their willingness to use economic diplomacy to counter China.

The EPAs stand against regional protectionism, which led to strong concerns in China, built mutual grounds of economic synergy between Tokyo and Brussels. This was later reflected in the EUs Indo-Pacific strategy (launched in 2021), which aimed to defend and strengthen the current rules-based order (threatened by China) by working with partners with aligned economic and security interests in the region.

The EU strategy will execute a number of actions, including resuming or completing trade and investment negotiations with India, New Zealand, Australia, Thailand, the Philippines, etc. and building resilient supply chains with these allies.

For example, the resumption of FTA talks between India and the EU in 2021 after an eight-year hiatus has given a new impetus to the Indo-Pacific balance. Given that the EU signed a connectivity partnership with India (just two years after the one with Japan), it is likely that the FTA with India may be realized in the near future.

Greater EU-Japan-India cooperation will be an important feature for enhancing the EUs strategic presence in the Indo-Pacific. However, their trilateral relations in the Indo-Pacific are presently constrained by economic dependence on China, which makes them somewhat unwilling to provoke Beijing despite their security concerns. Nonetheless, the India-Japan-Australia-led Supply Chain Resilience Initiative (SCRI) is a potential avenue that could strengthen both Tokyos relationship with the EU and the EUs integration into Asia.

The EUs Indo-Pacific strategy particularly emphasizes increased outreach to regional bodies and mechanisms for enhanced cooperation in the region. Brussels growing focus means that furthering its economic interests in the region is not only essential, but also increasingly possible particularly with its expanding dynamics with India, Japan, and Australia.

The EU-Japan EPA could aid the expansion of the SCRI to promote collaboration between these states and create a mutually beneficial trading environment. The SCRI would also allow Brussels to diversify supply chains away from China, which is a priority for the EUs post-COVID-19 industrial plan.

The UK has also recognized the potential of the SCRI and free trade with Asian partners in its Global Britain agenda and could now, post-Brexit, also emerge as a strong partner.

In 2019, Japan signed an FTA with the United States (US-Japan Trade Agreement) too, which came into force in 2020. Japans FTAs with the US and the EU, together with the renewed trilateral partnership between them (November 2021) to address challenges posed by the non-market policies and practices of third countries, sends a strong signal to China against its unfair trade practices and coercive behavior.

This trilateral will only strengthen if the Japan-led Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is expanded to include the European Union and the United States. Following Chinas CPTPP bid (soon after the announcement of the Australia-US-UK AUKUS defense deal) there were renewed calls for both the EU and the US to join the pact, even though the US had pulled out in 2017.

The pact has also piqued the interest of countries like the United Kingdom and South Korea, ensuring immense potential for economic growth for all parties concerned.

Further, as Japan faces several social, political, and economic problems amid todays very fragile world order, its economic and defense security go hand in hand. Therefore, supporting economic multilateralism has become imperative to fuel Japans shrinking economy post-pandemic, which was given a boost in late December 2021 when Japans Cabinet approved a 107.60 trillion JPY ($940 billion USD) draft budget for the fiscal year 2022-2023.

Prime Minister Kishidas pursuit of economic sustainability by giving rise to a virtuous cycle of growth and distribution will be incomplete without building Japans multilateral economic diplomacy with the European Union, India, Australia, and the United States. Japans EPA with the EU is an ideal first step in consolidating their partnership, and continued focus on strengthening bilateral economic and security ties will help both actors achieve their respective objectives and vision for the Indo-Pacific region.

Author: Dr. Jagannath Panda

Dr. Jagannath Panda is a Research Fellow and Center Coordinator for East Asia at the Manohar Parrikar Institute for Defense Studies and Analyses, New Delhi. Dr. Panda is the Series Editor for Routledge Studies on Think Asia.

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[Asias Next Page] Consolidating Japans Economic Diplomacy with the European Union - JAPAN Forward

January 19, 2022 - Ottawa, Canada - Global Affairs Canada

Yesterday, the Honourable Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development, met virtually with Valdis Dombrovskis, European Commission Executive Vice-President and European Union Commissioner for Trade.

Minister Ng extended her appreciation of the EU's ongoing engagement in the Ottawa Group and support to advance work on WTO reform priorities. The ministers agreed to continue the momentum to address key issues, including trade and health, fisheries subsidies negotiations, agriculture negotiations, and WTO reform.

Minister Ng and Minister Dombrovskis committed to further strengthen bilateral commercial relations, including the full implementation of the Canada-European Union Comprehensive Economic and Trade Agreement. Minister Ng also discussed the importance of working together to address trade-distorting subsidies while also avoiding the creation of new barriers to trade and investments between Canada and the EU.

Disclaimer

Public Health Agency of Canada published this content on 19 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 January 2022 00:45:10 UTC.

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Minister Ng speaks with European Commission Executive Vice-President and European Union Commissioner for Trade - marketscreener.com

John Rapley is a professor at the Johannesburg Institute for Advanced Study. His most recent book is Twilight of the Money Gods.

The EUs dying, boasted Nigel Farage the morning after the 2016 Brexit referendum. Declaring, weve knocked the first brick out of the wall, he predicted a domino effect across Europe. Indeed, within days, far-right leaders across the continent were hailing the result and calling for referendums in their own countries, with Frances Marine Le Pen promising a Frexit vote within six months if she won the following years presidential election. Brexit, they all said, would make Britain great again and destroy the European Union.

Six years on, it seems Europe still hasnt got the memo. For that matter, neither has Britain. The United Kingdom, rather than leaping boldly into a brave new future, is imploding. Europe, meanwhile, seems to have found a new sense of purpose.

The British government calculates Brexit has knocked about 4 per cent off its long-term growth, with the U.K. now forecast to be the worst-performing economy in Europe relative to where it was before the pandemic. This surprises nobody except the Brexiters: Europe is the much larger economy and consequently took a much smaller hit from the loss of market access. The Brexit vote was thus akin to Canada leaving the North American trading bloc to stick it to the United States.

The economic squeeze has resulted in an annual loss of 32-billion ($55-billion) in tax revenue as it happens, about twice the amount Boris Johnsons infamous campaign bus said Brexit would yield for the countrys National Health Service. Instead, just to keep the NHS from collapsing under the weight of its backlogs, the same Tory government that promised to use the supposed Brexit bonus to cut taxes has instead jacked them up to levels last seen in the 1950s. Meanwhile, the vast trove of new trade deals that Brexiters promised the newly liberated country have amounted to, well, almost nothing. When Justin Trudeau said Britain lacked bandwidth for negotiating trade agreements, he knew what he was talking about.

It should hardly surprise anyone that, amid all this, support for Brexit has weakened. Polls now show that among Britons who have formed opinions on the topic, a clear majority not only believe the vote to leave the EU was a mistake but would, given the opportunity, reverse it.

European voters largely agree, their support for the union having mostly increased since the referendum.

And why not? Britain offers a salutary lesson. The country is cracking up not with laughter, but literally. In Scotland, Wales and Northern Ireland, both Brexit and the subsequent ascent of the Boris Johnson government have driven new supporters into the arms of the secessionists.

In Scotland, the Scottish National Party has found no more potent a campaigner for independence than Mr. Johnson himself, a man who apparently boosts support for secession each time he appears north of the border which, mystifyingly, he didnt even know existed, rather as if Mr. Trudeau had wondered why there was a sign outside Hawkesbury that read, Welcome to Quebec. Scotland voted strongly to remain in the EU in 2016, and many Scots see the Brexit vote as little more than odious English nationalism.

To a lesser degree, the same goes for Wales. Nationalism there has always been more a cultural than a political phenomenon, but since the 2016 referendum, support for independence has been rising there as well. As for Northern Ireland, while a majority still oppose reunification with the republic, Mr. Johnsons post-Brexit trade agreement with the EU has created a curious dynamic. Because the Good Friday Agreement required London to accept a deal that kept Northern Ireland effectively within the EU, its economy has taken less of a hit than the rest of the countrys. Over time, the pragmatic centre of the six counties could thus lean toward reunification on the grounds that they might as well secure the full benefits of Europe.

Oh sure, the EU remains a messy, often incoherent work-in-progress. It still struggles to produce common positions on how to deal with China or Russia, which is why the recent U.S.-Soviet summit largely bypassed European capitals. And competition among European capitals has meant, for instance, that the EU hasnt exploited the opportunities Brexit gave them to supplant London as Europes financial capital.

Still, the situation is a far cry from the fever dreams of people such as Mr. Farage. Shaken by the British fiasco, Europes far-right parties have not only struggled to build on their earlier gains but have largely abandoned their Euroskepticism, with Ms. Le Pen now saying she favours staying in the union. And the continents centrifugal tendencies, which during the 2011 euro crisis caused such deep splits between richer northern countries and southern Europe, waned considerably during the pandemic. Europes governments have agreed to an ambitious postpandemic investment program, to be funded by Brussels, a stark contrast to the cutbacks that are descending on Britain.

Today, as leading Brexiters fall over themselves to say this wasnt their idea, Brexit illustrates that old adage that victory has a thousand parents but defeat is an orphan. Brexit did yield a big bonus to Europe. Its now a safe bet that the European Union wont break up any time soon. But Britain? Place your bets. Were in for a ride.

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Opinion: Brexit hasn't ended the European Union - it's given it a new sense of purpose - The Globe and Mail

EU regulators should ban the mining of Bitcoin and other cryptocurrencies on the Proof-of-Work algorithm due to its energy intensity. Eric Theden, Vice Chairman of the European Securities and Markets Authority (ESMA), said this to the FT.

In his opinion, without the intervention of supervisory authorities, an increasing amount of green electricity will be directed to the extraction of digital assets, and not to replacing carbon energy sources.

He noted that in his native Sweden, bitcoin mining has already become a national issue.

The solution is to disable Proof-of-Work. The Proof-of-Stake algorithm has a significantly lower energy profile, Theden said.

What is Proof -of-Work and Proof-of-Stake?

In Sweden, he heads the Financial Supervisory Authority. Theden was appointed to the ESMA position in December 2021.

In November, the official, together with the head of the Environmental Protection Agency, Bjorn Reisinger, called for a ban on energy-intensive mining in the European Union.

There are other mining methods that can also be used for Bitcoin and Ethereum, estimated to reduce energy consumption by 99.95% while maintaining functionality, they stressed in a statement.

Possible support for the initiative of Swedish government agencies was announced by the government of Norway. They also referred to unjustified energy costs.

Recall that in July 2021, the French regulator proposed to give ESMA the authority to control the crypto industry.

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The European Union called for a ban on mining on the Proof-of-Work algorithm - The Times Hub

This informal meeting will be made up of a series of sessions dedicated to environmental challenges, attended by environment ministers, and a series dedicated to energy challenges attended by energy ministers. All of the ministers will meet for two joint sessions: one on the role of forests and the wood industry in climate, energy and environmental policies and one on the just transition.

Protecting natural environments and improving human health will be central to the environment ministers talks. The first session will focus on European action regarding phytosanitary products. In its Farm to Fork and Biodiversity strategies, the European Union set itself the goal of cutting pesticide use in half by2030. Achieving this goal means collectively carrying out the agroecological transition, in particular by ensuring that imported foodstuffs are produced in compliance with EU environmental and health standards. The focus of the discussions will be best practices in the EU Member States concerning the implementation of measures to reduce plant protection product use and the provisions to be incorporated into a harmonised European framework. The ministers will also address measures to ensure Europes high food safety standards are applied to imports of foodstuffs treated using phytosanitary products. They will also have the opportunity to discuss the need to ensure that dangerous chemicals banned on the internal market are not produced for export outside the EU.

Talks will then hone in on the EUs chemicals strategy for sustainability. Several pivotal texts will be recast by the end of2022, including the Reach Regulation and the Classification, Packaging and Labelling Regulation (CLP Regulation). Other projects on the agenda will include examining measures to stop dangerous chemicals banned in the EU being produced for export. Ministerial debates will identify measures to be taken to effectively implement the chemical management framework for the protection of the environment and public health (the One Health approach).

The third item on the environment ministers agenda is the fight against imported deforestation. The Commission published a proposal for a regulation on 17November2021 that aims to prevent goods from supply chains associated with deforestation and forest degradation from being imported into the EU. This draft regulation also aims to increase European demand for deforestation-free products. During this informal ministerial meeting, the environment ministers will highlight best practices, products and ecosystems to prioritise as well as cooperation with third countries, with the aim of ensuring that European action against deforestation is as effective as possible.

As for the energy ministers, they will continue ongoing debates that began in the European Council and the Council of Ministers, on protecting consumers from extremely volatile and historically high gas and electricity prices, while pursuing the Unions climate goals.

The primacy of energy efficiency, a principle based on reducing energy consumption and waste as a key lever, must be more systematically taken into account in public policy. Building this principle into other national and European climate change policies will be at the heart of the ministers talks whether they concern combatting energy precarity, security of supply, innovation or competitiveness.

Furthermore, the energy ministers will examine the outline for the new hydrogen economy: how to speed up the development of low-carbon hydrogen, while addressing current uncertainty regarding the technological difficulty of producing it and its place in Europes energy mix in the future.

The environment and energy ministers will also meet to discuss closely overlapping climate, environment and energy challenges. In the first joint session, together they will define the role in these policies of forests and the forestry sector and how to juggle the various challenges they face. This will namely concern enhancing carbon sinks and increasing renewable energy production. Forests are at the heart of the European Green Deal and the EUs transition to carbon neutrality.

Lastly, the ministers will consider the principles of the just transition and a green transition that is socially acceptable. The transition to a carbon-free economy and society involves major transformations that will change how we consume, produce, work, exchange and coexist. For it to be a success, Europe must ensure it is a socially just and inclusive transition that meets the needs of the most vulnerable people and places in society.

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Last reviewed on 20 January 2022

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Informal Meetings of Environment and Energy Ministers, Amiens, 2022 January - French Presidency of the Council of the European Union 2022 - EU News