The past, present, future of the EU; bloc's bilateral relations with Japan

The first seeds of the idea of the European Union were sown on May 9, 1950, by then French Foreign Minister Robert Schuman. Hence, the date is now celebrated as Europe Day.

The relationship between Japan and the EU has entered a new phase as the 63rd anniversary of Europe Day is marked this year, with the two sides beginning negotiations last month toward further political and economic cooperation through a framework agreement and a free trade agreement.

EU Ambassador to Japan Hans Dietmar Schweisgut believes the EU and Japan will both benefit from the two accords, and that they are essential to boost growth for both parties. Schweisgut said the two tracks of bilateral negotiations will cover a comprehensive range of issues, from tariffs to cooperation on global and sectoral issues.

Below, in an exclusive interview with The Japan Times, he discusses the evolution of the EU and the bloc’s relationship with Japan.

Looking back on the past 63 years, how has the EU evolved?

There have been a number of stages of European integration since the Schuman Declaration. In the first stage, we worked to overcome the aftermath of World War II. It was important to secure peace in Europe, overcome the hostility and divisions of the past and embark toward sincere reconciliation. This was also a period of superpower confrontation between the United States and the Soviet Union, and so in the beginning, integration was about Western Europe.

The second stage started in the 1980s when the ambitions went beyond a customs union and an economic zone, and when the idea came up that the European Community at the time should build a genuine single market where trade barriers would be abolished, it went beyond physical barriers. This was also the time that border controls were abolished, enabling free travel in Europe within the borders of the signatories of the Schengen Agreement. We also saw the beginnings of closer political cooperation and the creation of the euro. There was an enormous dynamism in integration and the EU was going much further than many had imagined 10 or 20 years earlier, but this was still mostly confined to Western Europe.

The third stage began in the early ’90s after the collapse of the Communist system in Europe, which gave the opportunity to expand European integration to the whole continent. So when 10 new states joined in 2004, followed by Bulgaria and Romania 2½ years later, it was a historic moment that meant overcoming the divisions of the past, overcoming the Cold War.

What are the challenges and future prospects of the EU?

The biggest challenge will be to finally come out of the sovereign debt and financial crisis that started after the “Lehman Shock.” We have to build further on a new architecture for the eurozone, which would include stronger elements for a fiscal and political union and which will also have to include a banking union. The work is well advanced, and we are in the midst of a process that will not only lead to a stronger eurozone but also strengthen the EU as a whole. This also means we need to create this new framework to achieve growth and employment, and therefore how to increase Europe’s competitiveness is a very important element for the future.

It is also important to realize that enlargement is not completed. Discussions are ongoing with Turkey, Iceland and a number of other countries in the Western Balkans, and Croatia will become our newest member in July. It is important to see that this is something ongoing, and that despite going through a severe financial crisis, the EU has not stopped in its ambitions to become inclusive and make good on its promises.

We want to build on our partnerships with other countries in our neighborhood, such as Ukraine and the countries of the Caucasus, but after the Arab Spring it is also very important to build strong relationships with our neighbors on the other side of the Mediterranean.

We also need to advance our free trade agenda. The EU has always been a champion of free trade and the World Trade Organization system, but we have recently started building up our bilateral and regional trade relationships as well. We are starting negotiations with Japan, and we also looking at strengthening our ties in the trade, investment and economic areas with the United States, which is clearly our most important trade and investment partner.

It will be equally important to strengthen our role on the foreign policy front. We have many strategic partners and Japan is one of them, and a very important one. We see a strong demand from the international community for the EU to strengthen its role as a crisis manager, and we have been active in such countries and regions as Iran, the Middle East, the Balkans and in many parts of Africa. And with the rising importance of Asia in economic and political terms, Europe needs to increase its presence in this most dynamic part of the world and bring its voice to an area where we still see political tensions that fortunately no longer exist in Europe.

How about the EU’s relationship with Japan? How has it evolved?

Our relationship with Japan became institutionalized in the 1970s. The relationship was long dominated by trade issues, and there was less cooperation and more friction.

We saw each other more as competitors fighting for markets, and with a certain degree of suspicion. But much later, in the late 80s to early 90s, we began seeing each other in a more cooperative context. I believe it rather coincided with the time around when both Europe and Japan became stronger actors on the international scene and we saw that there were similarities between us, and possibilities for cooperation.

Now the EU-Japan relationship is entering a new phase with the beginning of negotiations on agreements on free trade and political cooperation, and this marks the start of a completely new era, where we can look back and say we started as competitors talking mostly about trade frictions to one where we talked about joint opportunities and cooperation to one where we are global partners, basically pursuing the same objectives and having the same values.

In economic terms, the EU and Japan have lots of unfulfilled potential. The total trade volume between us is about ?120 billion a year. That’s well below where it could be, although bilateral trade is more balanced now, with Japan having a surplus in trade in goods, but Europe having a surplus in services. So this could be a good starting point, and we both see that an FTA could provide new opportunities for growth and create a win-win situation where both sides have something to gain. Studies show that both Japan and the EU could add about 0.7 to 0.8 percent to their economic growth, and studies also indicate that if an agreement were really far-reaching and were to cover both tariffs and non-tariff barriers, it could create 400,000 new jobs in Europe.

Politically and diplomatically, the EU and Japan have a similar approach, and we are happy that Prime Minister Shinzo Abe is actively pursuing “values-based diplomacy.” The EU shares these values and that is why we are like-minded partners. Both Europe and Japan place emphasis on peaceful settlement of conflicts, the rule of law and the role of the United Nations. Therefore, we have much to contribute toward solutions for many global issues, such as energy security, climate change and cyber security.

In the framework agreement and FTA negotiations with Japan, are there any specific areas the EU wants to improve?

The EU has made it clear that to get the full benefits of an FTA with Japan, we should be ambitious, meaning we don’t only aim to abolish tariffs but also to dismantle non-tariff barriers.

Japan’s major interest is to abolish tariffs on cars and electronic goods. But the EU, while also looking at tariffs, is more interested in non-tariff barriers, where we think there are opportunities in automotive, chemical and pharmaceutical, food and other industries, as well as public procurement, where we feel the Japanese market is less open than that in Europe. We are not looking for preferential treatment for European companies, but equal treatment. We enter into negotiations with Japan because we want results. Everything is on the table, but of course, we want a balanced but ambitious and far-reaching agreement.

Is there a target as to when the parties want to sign the two agreements?

That would be as soon as we have negotiated a good deal. We want to move quickly. We are well-prepared, we know what we want and thus hope we can make good progress in the first year.

Politically and diplomatically, where do you see the EU-Japan relationship heading?

We have a common outlook on most international conflicts and there are already a number of good examples of our cooperation. We cooperate very closely on the Iran nuclear talks, and are both interested in the Mideast peace process. We also both fight piracy in the waters off Somalia. In that respect, the TICAD (Tokyo International Conference on African Development; the fifth meeting will be held in Yokohama in June) gives us an important opportunity to strengthen our relations with Africa, which is an increasingly important partner for both of us, and therefore we will see more opportunities for us to work more closely on Africa’s development.

We also expect the EU and Japan to cooperate on such issues as global warming and nuclear power security.

How can Japan help the EU overcome the debt crisis?

We appreciate Japan’s confidence in and support for the EU as we work to resolve the debt crisis. Japan has purchased bonds in the European Financial Stability Facility and has supported the International Monetary Fund, which has indirectly assisted us. Japan has played a very important and responsible role and is a very close partner also in the framework of the G20.

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