Japan and the European Union agreed Monday to step up their cooperation in dealing with North Korea, the Middle East peace process and other international issues at their annual summit in Tokyo.

Prime Minister Junichiro Koizumi, European Commission President Romano Prodi and Danish Prime Minister Anders Fogh Rasmussen, the current chair of the EU, concurred it is important to maintain dialogue with Pyongyang, according to a Foreign Ministry official who briefed reporters.

They agreed that efforts must be made to prevent tensions from escalating on the Korean Peninsula following a recent naval shootout between North and South Korean forces near their border in the Yellow Sea.

Koizumi said Japan will keep working toward resuming normalization talks with Pyongyang, while noting that Japan must also resolve the issue of “missing” Japanese, or people who Tokyo suspects were kidnapped by North Korean agents in the 1970s and 1980s.

Talks between Red Cross societies of the two countries over the search for what North Korea calls “missing persons” resumed in April, but a scheduled meeting for June was put off.

Koizumi told a joint news conference after the meeting that Japan and the EU agreed to keep working closely to seek the settlement of “unresolved security and humanitarian issues related to Pyongyang.” The EU has formal diplomatic ties with North Korea, while Japan does not.

On the Middle East, the leaders agreed to remain committed to holding an international conference on the peace process for future creation of a Palestinian state.

They did not discuss specifically U.S. President George W. Bush’s recent speech on Middle East policy, in which he called for the removal of Palestinian leader Yasser Arafat. However, both Japan and the EU noted the importance of U.S. initiatives in the Middle East peace process.

The leaders also agreed to continue providing support for the reconstruction of Afghanistan, and noted that ensuring security in the country is a priority after the assassination of Vice President Haji Abdul Quadir in Kabul on Saturday.

“We encourage all parties not to allow this incident to derail the positive process of the past nine months,” the leaders said in a joint statement released after the meeting.

They confirmed that other areas for cooperation in Afghanistan should include a fight against narcotics, the support of education, demining and reconstruction of basic infrastructure.

The Japanese and EU leaders also shared a common concern over U.S. “protectionism,” referring to Washington’s imposition in March of emergency tariffs on steel imports, the official said.

“We also share concern about the measures taken by the U.S. government in the steel sector and the need to resist protectionist pressures,” they said in the joint statement.

At the news conference, the two sides hailed recent developments in Japan-EU relations, particularly deepened political dialogue in dealing with a wide array of international issues.

“Our political cooperation carries increasing responsibility in the 21st century,” Koizumi said, stressing the two sides will boost cooperation in fields such as the fight against terrorism and peace efforts in conflict-ravaged areas such as Afghanistan and the Middle East.

While praising recent accomplishments Japan and the EU have made in various areas, Prodi touched on economic issues, saying the two sides shared the necessity of painful reforms as a prerequisite for growth.

“I am happy that in the last months, new figures are showing some better developments (in Japan) and that we are slowly but steadily improving,” Prodi said. “We have to change our economies and decision-making process . . . We have exchanged views about the necessity of making painful decisions. But this will have positive results in the medium and long terms.”

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