EU-Japan summit to help define the G7 and G20 agenda
Japanese Prime Minister Yoshihide Suga and key EU leaders, led by European Commission President Ursula von der Leyen, meet on Thursday for a summit that will not only deepen their strategic partnership, but also set the order of the day. day of next month’s G7 and October G20 meetings.
This week’s discussions will focus on issues in several areas. The first is the multilateral front, including pandemic response and recovery; climate change; environment and circular economy; and major regional challenges and specific aspects of security and democratic cooperation, such as cooperation in the Asia-Pacific region.
However, it is the bilateral agenda that will generate the most enthusiasm, with leaders discussing the implementation of the EU-Japan strategic, economic and connectivity partnerships. The reason why this agenda is arousing such interest is the recent warming of Japanese-European relations, particularly under the US presidency of Donald Trump, when the two powers strengthened their leadership on international trade and the economic order based on rules.
This agenda is at the heart of Thursday’s summit because of the EU-Japan free trade agreement. The two sides want to take stock of the implementation of this gigantic agreement, which covers around a third of the world’s gross domestic product and nearly 650 million people.
The signing of the agreement helped set the agenda for the Japanese G20 in 2019, which promoted the international trade agenda. Italy wants to follow suit here in 2021 with its own presidency of the club of world powers, as it seeks to put post-pandemic economic recovery high on the agenda.
Ahead of the G20 leaders‘ summit in Rome in October, the host country is particularly keen to avoid the trade disputes that took place in Argentina in 2018 and Germany in 2017, the latter of which sparked a clash between Trump and host Chancellor Angela Merkel. . At that time, the German leader pushed for a strong reaffirmation of the principles of international trade by the G20, but the then US president achieved a partial victory by inserting language in the end-of-summit communiqué according to which countries could protect their markets with “trade defense instruments.” “
The EU-Japan deal took years to come to an agreement, with headlines captured by the removal of almost all tariffs on Japanese and European imports. This could be a particular boon for major EU exports to Japan, such as dairy and other food products, while Japanese automakers could also be big winners.
Japan remains the world’s third-largest economy, after the United States and China, and one of Europe’s largest export markets in Asia. In the EU, it is estimated that around 600,000 jobs are now linked to bilateral trade, with around 74,000 European companies exporting to Japan.
Beyond the numbers, however, both sides stressed that the trade treaty is also important because it is based on “values and principles”. This is in part because the deal is the first to be concluded by Brussels which includes language confirming the Paris climate agreement. Specifically, there is a commitment to support the Treaty of Paris by making a “positive contribution” to reducing climate change by reducing greenhouse gas emissions. This follows an initiative by the European Commission to ensure that all future EU trade negotiations include a reference to the key climate agreement.
However, it’s not just on the European front that Japan is making waves in international trade. Tokyo has also been at the forefront of 11 countries in Asia-Pacific and the Americas that have signed the so-called Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This new CPTPP block, which accounts for about 13 percent of global trade and a combined population of around 500 million, includes Australia, Canada, Singapore, New Zealand, Japan, Chile, Brunei, Malaysia, Mexico, Peru and Vietnam. In addition, several other countries are said to be interested in joining, including Thailand, Colombia, South Korea, Indonesia and the United Kingdom.
Both sides stressed that their trade treaty is important because it is based on “values and principles”.
Tokyo also has a big bilateral deal with the United States. Additionally, the UK-Japan Comprehensive Economic Partnership Agreement was Britain’s first post-Brexit deal. The UK deal is tailored to both economies, with benefits for digital and data, financial services, food and drink, and the creative industries. It provides an estimated boost to bilateral trade of over £ 15 billion ($ 21 billion), as well as a strong commitment by Japan to support UK access to the CPTPP. In doing so, the deal marks a closer alliance between the UK and Japan, which sees the two working together as London assumes the G7 presidency and seeks to champion international trade issues.
Overall, this week’s summit will once again polish Japan and the EU’s international trade leadership. And amid growing uncertainty about the future of the multilateral trading system, the rules-based economic order and liberal democracy itself, the dialogue will help shape the UK’s G7 agenda in June and the Italian G20 in October, both of which will promote commitments. multilateralism and international trade.
- Andrew Hammond is Associate with LSE IDEAS at the London School of Economics.
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