Japan and the European Union have concluded a connectivity partnership that seeks to cement cooperation while setting global development standards. The wide-ranging initiative ratifies their commitment to building quality infrastructure in developing countries and to ensure that aid to those countries helps recipients, rather than saddling them with unsustainable debt. It also aims to fill a leadership gap created by the shrinking multilateral profile of the United States under President Donald Trump and to balance China’s efforts in its Belt and Road initiative (BRI). Most importantly, it consolidates the Japan-EU partnership, a relationship that continues to assume greater significance.
Europe has concluded — rightfully — that its relations with Asia are weak. While there has been a Europe-Asia political dialogue (the ASEM meeting) since 1996, it has lacked substance. Europe has been more focused on security concerns closer to home along with domestic political developments. While the EU is a formidable economic force, it has never used that heft strategically.
That last failure assumes greater significance amid a push to develop infrastructure around the world. China has been instrumental in promoting that agenda. In 2013, it launched the BRI to link Europe and Asia, and its ambitions include Africa, the Middle East and Central Asia; some of its 60 projects extend as far as Latin America. China has said BRI spending will reach the trillions of dollars; not surprisingly, it has been endorsed by more than 150 countries and international organizations.
Japan has tried to balance China’s efforts, offering $110 billion through its High-Quality Investment Initiative, and Tokyo has developed partnerships with the United States and Australia to leverage their cooperation as well. In addition to the money that these countries are ready to offer, Japan and its partners are emphasizing principles to guide development lending. They want projects to be transparent and sustainable. These principles apply to debt burdens as well as environmental and labor standards. Prime Minister Shinzo Abe won endorsement of those principles at the Group of 20 meeting in June.
The agreement signed in Brussels last week reflects Europe’s desire to join the effort. Europe had already decided to spend €60 billion ($65 billion) on a EU-Asia connectivity plan that will include public and private investors. The accord formalizes Japan’s participation in that program and endorses “transparent procurement practices, the ensuring of debt sustainability and the high standards of economic, fiscal, financial, social and environmental sustainability.” As Abe explained in remarks last week, the goal is “not merely ‘connecting things’ but rather ‘connecting things well.'” Central to that effort will be the values and principles that animate the existing Japan-EU partnership: democracy, the rule of law, human rights and freedoms. Thus, the infrastructure to be built “must be quality infrastructure, sustainable, comprehensive and rules-based connectivity.”
While China is nowhere mentioned in the new agreement, there is no missing its influence. Those values and principles are intended to challenge Chinese lending, and to underscore the mounting evidence that its aid has been too heavy a burden for many recipients, forcing them to cede assets and sovereignty to pay off debts. China disavows any such intent.
If the program is to succeed, Tokyo and Brussels must do three things. First, ensure that it is fully funded. China’s influence is spreading throughout the world because it is providing funds to tackle real problems. Merely complaining about or criticizing lending terms is not enough. You can’t beat something with nothing.
Second, Japan and the EU must be consistent in the application of their principles and committed to the values that they insist guide their policies. There is suspicion that talk about values is empty rhetoric and that those governments will make key decisions on the basis of politics, not principles. Failure to live up to those standards will rob those countries of any moral high ground and undercut the value of their values.
Finally, the EU and Japan must develop a coherent and consistent policy toward China. International relations are evolving and countries that seek to shape foreign policy — rather than be shaped by foreign forces — must be guided by strategy. That need is more urgent than ever as the U.S. and China seem set on fighting a high-technology cold war. This year the European Commission published a document that identified Beijing as “a systemic rival promoting alternative models of governance,” an economic competitor and a partner in some areas.
Japan has yet to produce a similarly focused strategy, even though it too is both cooperating with Beijing and competing in key areas. Tokyo must articulate its own policy to have a framework to engage Brussels and work with it in Asia and points in between.