METI: METI Minister Nishimura Attends the 2nd EU-Japan High Level Economic Dialogue

The 2nd EU-Japan High Level Economic Dialogue was held on October 25, 2022. The Dialogue was attended by Japan’s Minister of Economy, Trade and Industry NISHIMURA Yasutoshi and Minister for Foreign Affairs HAYASHI Yoshimasa, as well as Mr. Valdis Dombrovskis, Executive Vice President of the European Commission for an Economy that Works for People, European Commissioner for Trade, and Ms. Mairead McGuiness, European Commissioner for Financial Services, Financial Stability and the Capital Markets Union. The overview of the meeting is as follows.

1. At the beginning Executive Vice-President Dombrovskis and Commissioner McGuiness made their opening remarks. Minister Hayashi stated that Japan and the EU need to further deepen their cooperation in order to address current important international economic issues including supply chain disruption and increasing commodity prices due to the impact of COVID-19 and Russia’s aggression against Ukraine, and expressed the intention to deepen mutual understanding on economic security issues. Minister Nishimura mentioned the importance of Japan and the EU working together to tackle attempts to be coercive based on economic power to meet their own respective interests, to promote economic security from a geopolitical perspective, and to strengthen cooperation with developing countries.

2. The Ministers and EU Commissioners affirmed that Russia’s aggression against Ukraine should not be tolerated and confirmed that Japan and the EU will continue to support Ukraine in cooperation with the international community, including the G7. The Ministers and EU Commissioners also shared their views on the importance of ensuring the stable supply of energy, food, and other resources. The Ministers and EU Commissioners also shared the recognition that, while the international order faces great challenges, Japan and the EU, as strategic partners who share fundamental values and cooperate in the promotion of free trade, should lead the free and fair economic order in the international community.

3. The Ministers and EU Commissioners discussed (1) Japan-EU Economic Policy Collaboration, (2) Sustainable Finance, (3) cooperation to Address a Level Playing Field and Economic Security Issues, and (4) Global Trade Challenges. An overview of the remarks from Minister Nishimura and Minister Hayashi are as follows.

(1) Japan-EU Economic Policy Collaboration
Minister Hayashi stated that Japan, with its “New Form of Capitalism,” and the EU, with its “NextGenerationEU,” have a lot in common in their economic policies, and that Japan expects to promote cooperation based on the “Japan-EU Connectivity Partnership.” Minister Nishimura raised the importance of working together for the sustainable growth of developing economies, as represented by the Global South, which has been greatly affected by the current situation. Both Ministers also took this opportunity to reiterate Japan’s request for the early lifting of the EU’s import measures on Japanese food products.

(2) Sustainable Finance
Commissioner McGuiness explained EU’s efforts in the area of sustainable finance. Minister Nishimura emphasized the importance of accelerating realistic energy transitions that utilize a wide range of technologies and energy sources, taking into account the various economic and geographical circumstances of each country. The Minister also emphasized the need for appropriate information disclosure to attract investment in order to achieve a GX which aims to shift to a clean energy-centered social structure and to simultaneously achieve decarbonization and economic growth.

(3) Cooperation to Address a Level Playing Field and Economic Security Issues
Minister Nishimura raised the importance of responding to challenges to the international order imposed by authoritarian states by addressing market-distorting measures such as opaque industrial subsidies, and by strengthening cooperation among like-minded countries on economic security issues such as sensitive technology management, and increasing outreach to the Global South. In the field of economic security, Minister Hayashi expressed his recognition of the need to further strengthen the international economic order from a security perspective and stated that cooperation among like-minded countries, including Japan, the EU and the US, is also important. On this note, Minister Hayashi expressed Japan’s intention to promote discussions toward next year’s G7 Hiroshima Summit, over which Japan will preside. Minister Hayashi also stressed the importance of transparent and fair development finance that complies with international rules and standards. Both Ministers also emphasized the importance of strengthening responses to economic coercion.

(4) Global Trade Challenges
Minister Hayashi underlined the importance of strengthening cooperation on international trade challenges, including those related to the WTO, in the run-up to Japan’s G7 Presidency next year. Minister Nishimura raised the need to promote discussions on WTO reform and other issues toward MC13 in order to promote a free and fair trade and investment environment. Minister Nishimura also highlighted the importance of avoiding trade disputes with other countries that may arise from introducing certain schemes without sufficient understanding among the international community, for example, as with the Carbon Border Adjustment Mechanism (CBAM). Furthermore, both ministers welcomed the start of formal negotiations for the inclusion of the provisions on the free flow of data into the Japan-EU EPA to play a leading role in discussions on global data governance.