Visiting European Commission President Romano Prodi on Friday expressed strong support for Prime Minister Junichiro Koizumi’s reform agenda and vowed to strengthen EU-Japan relations on both the economic and political fronts.

In a speech delivered before the Diet on Friday morning, Prodi said he has “no doubt” Japan can overcome its economic difficulty, given its strong microeconomic performance and its technical, scientific and marketing knowhow.

“Japan’s problems are in many ways those of a mature economy,” said Prodi, who became the first European Commission president to make a speech before the Diet. “Japan is and will remain a major economy. We should not fall into the trap of easy pessimism about Japan’s future.”

Prodi, a former Italian prime minister, also stressed the importance of EU-Japan cooperation on issues including the Middle East peace process, global warming, World Trade Organization talks and the recent U.S. decision to impose emergency tariffs on steel imports.

“Japan and the European Union are not only alike in engaging with the world, we are alike in pursing a multilateral — not a unilateral approach — to tackling global problems,” Prodi said. “In an age of globalization we realize that cooperation is as important as competition.”

On the Middle East, Prodi said the EU will continue to work for a peaceful solution along with the international community and called for an immediate end to the violence there. “A military solution is not a lasting solution. There can be no peace without justice for all.”

He said later at the Japan National Press Club in Tokyo that the Middle East peace talks must include the EU and moderate Arab states as well as the U.S.

Prodi strongly opposed the U.S. decision in March to impose emergency tariffs of up to 30 percent on steel imports, including those from Japan and Europe, saying the EU might impose retaliatory tariffs on U.S. exports.

“We are challenging the U.S. decision” in accordance with WTO rules, he said, adding that the U.S. steel sector is “backward,” compared to those in Japan and Europe.

Japan is also urging the U.S. to drop its safeguard measures. Japanese officials have said that Tokyo will demand lower tariffs on other Japanese imports as compensation and will also consider imposing retaliatory tariffs on U.S. exports.

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