Chapter 3 Japan’s Foreign Policy to Promote National and Global Interests Section 3 Economic Diplomacy central hub, and at the same time, creating Overview a virtuous cycle where the dimensions are (Recognition of the Economic Situation deeply linked to one another, and where and Japan’s Economic Diplomacy) the conclusion of one negotiation gives Although the world economy has been on impetus to other negotiations. Based on a recovery trend in 2017, the recovery has this strategy, in 2017, Japan-U.S. economic not been a complete one; the downside risk relations advanced smoothly through the is still present in the medium-term, and it is establishment of the Japan-U.S. Economic necessary to establish a robust foundation Dialogue, an agreement in principle was for the economy precisely at this time when reached for the Comprehensive and the economy is improving. Based on this Progressive Agreement for Trans-Pacific recognition of the economic conditions, Partnership (TPP11), and negotiations Japan has set out a strategic target that of the Japan-EU EPA were finalized. aims, in its economic diplomacy, to maintain Furthermore, in March 2018, Japan signed and strengthen an international economic the Comprehensive and Progressive system that is free and open, and founded Agreement for Trans-Pacific Partnership upon the rule of law. Alongside this, it has (TPP11 Agreement). moved forward on the four dimensions Japan has developed its economic of negotiations, namely the Trans-Pacific diplomacy with the aim of further Partnership (TPP) Agreement, the Japan-EU accelerating the promotion of economic Economic Partnership Agreement (EPA), diplomacy as one of the priority areas of Regional Comprehensive Economic Japan’s diplomacy, centered around the Partnership (RCEP), and the Japan-U.S. following three aspects: (1) rule-making Economic Dialogue. The four dimensions to bolster free and open global economic of Japan’s economic diplomacy are not systems by promoting the mega-EPA dealt with separately as individual issues; as described above; (2) supporting the rather, they have been tackled based on the overseas business expansion of Japanese basic strategy of expanding a network of companies through promotion of public- free trade across the world with Japan as a private partnerships; and (3) promoting 300 DIPLOMATIC BLUEBOOK 2018 外交青書-英語版30-3-3.indd 300 2018/09/07 13:03:46 Economic Diplomacy Section 3 resources diplomacy along with inward including addressing issues that are current investment towards Japan. and relevant to the times. At the 11th WTO Ministerial Conference (MC11) held in (1) Promotion of Economic Partnerships December, a ministerial declaration based The promotion of high-level economic on consensus among the WTO Members was partnerships constitutes one of the pillars not issued. However, with respect to issues of the Growth Strategy, which aims to such as e-commerce and fisheries subsidies, Chapter 3 raise the FTA ratio to 70% (18.9% in 2012) post-MC11 work programmes were by 2018. The Trans-Pacific Partnership decided upon, and ministerial statements (TPP) Agreement signed in February 2016 by like-minded Members were issued. In establishes new trade and investment rules the fields of e-commerce, micro, small and in the Asia-Pacific, and creates a huge medium-sized enterprises (MSMEs), and economic zone. The inauguration of the investment facilitation. Such efforts by like- President Trump’s new administration in the minded Members point to a new approach U.S. in January 2017 saw the U.S. declare in the WTO. In particular, with regard its withdrawal from the TPP Agreement. to e-commerce, Japan demonstrated its However, under Japan’s leadership, 11 leadership in the discussion process, and countries signed the TPP11 Agreement 71 Members, including the U.S., EU, and in Santiago, Chile, in March 2018. developing countries, participated in the Furthermore, negotiations of the Japan-EU joint statement. Economic Partnership Agreement (EPA) were finalized in December 2017. While (3) International Discussions Led by aiming for the signing and entering into Japan force of these agreements, Japan aims to Concerning the G7 Summit, where continue contributing to global rule-making the leaders of developed countries meet on trade and investment by carrying out to discuss policy cooperation, the G7 various negotiations in parallel, including Taormina Summit was held in May under the Regional Comprehensive Economic the Presidency of Italy. Half of the G7 Partnership (RCEP) and the Japan-China- leaders, including the U.S. President ROK FTA. Trump, were participating in the G7 for the first time, marking an “era of change” in the (2) Multilateral Trade Liberalization G7. At the same time, candid discussions (WTO) were held on the matters of securing The multilateral trading system centered peace and stability in the world, as well on the World Trade Organization (WTO) as realizing inclusive growth in the global plays a vital role in negotiations aimed economy, against the growing severity at trade liberalization as well as putting of problems such as the issues of North existing rules into practice, including Korea, terrorism and violent extremism, disputes settlement. With regard to and refugees. In addition to deepening the WTO negotiations that have been stalled personal relationships of trust between the for many years, efforts are ongoing to respective leaders, the leaders concurred explore approaches towards revitalization, that the G7, as a driving force of an DIPLOMATIC BLUEBOOK 2018 301 外交青書-英語版30-3-3.indd 301 2018/09/07 13:03:46 Chapter 3 Japan’s Foreign Policy to Promote National and Global Interests international community established based resources development revolution,” and on rules and the sharing of fundamental “digital trade,” to the world. values, will stand more united than ever The Organization for Economic before to address these issues. Cooperation and Development (OECD) is At the G20 Hamburg Summit (Germany) the “world’s largest think tank,” covering held in July, the leaders engaged in a frank a wide range of economic and social exchange of opinions on topics under issues. At the Ministerial Council Meeting the theme of “Shaping an interconnected held in June, discussions were held on world,” including the question of how the the theme of “Globalization.” Japan G20 can work together to address various emphasized the importance of maintaining downside risks while strengthening growth and strengthening the multilateral trading amidst global economy that remains at a system, ensuring level playing field, and moderate level alongside the presence of developing “quality infrastructure with such risks of a downward turn. Concerning open and fair access,” all of which were the response to problems such as the global reflected in the outcome documents of the economy, trade, and excess capacity, meeting. In this way, Japan contributed to which were also regarded as issues of discussions in the OECD. Coinciding with importance at the G7 Taormina Summit, the Ministerial Council Meeting, a signing Prime Minister Abe and other Japanese ceremony was held for the Multilateral representatives lobbied strongly for the Convention to Implement Tax Treaty causes, contributing to agreement among Related Measures to Prevent Base Erosion the G20 on the relevant commitments to and Profit Shifting (“Multilateral Instrument” these issues. With the support of the G20 or “MLI”). leaders, it was decided that Japan will assume G20 Presidency in 2019. (Supporting the Overseas Business Asia-Pacific Economic Cooperation Expansion of Japanese Companies through (APEC) is an economic cooperation Promotion of Public-Private Partnerships) framework in which 21 countries and (1) Support for Japanese Companies’ regions from the Asia-Pacific Region Overseas Business Expansion participate. At the APEC Economic The Government of Japan places great Leaders’ Meeting in Da Nang, Viet Nam, in importance on promoting the overseas November 2017, extensive discussions took businesses of Japanese companies to place on a wide range of topics, including incorporate the vigorous economic growth deepening regional economic integration, in foreign countries, including emerging strengthening MSME’s competitiveness countries, and to promote the steady growth and innovation in the digital age, and of the Japanese economy. Concerning promoting sustainable, innovative and the support it offers for overseas business inclusive growth. Prime Minister Abe expansion of Japanese companies, Japan has commented about Japan’s proactive stance been engaged in nationwide efforts towards for establishing “free and fair” trade rules, the achievement of concrete Government as well as Japan’s initiatives such as the goals, such as, for example, “achieving “productivity revolution,” the “human the Government’s target of approximately 302 DIPLOMATIC BLUEBOOK 2018 外交青書-英語版30-3-3.indd 302 2018/09/07 13:03:46 Economic Diplomacy Section 3 30 trillion yen in infrastructure exports by Great East Japan Earthquake and the 2020” and “one trillion yen in exports of accident at TEPCO’s Fukushima Daiichi agricultural, forestry, and fishery products Nuclear Power Station. MOFA has been and food by 2019.” disseminating accurate information Against this backdrop, the Ministry of promptly to the Governments and general Foreign Affairs has been working closely public of these countries and regions, and with diplomatic missions overseas, which has been tirelessly urging them to abolish Chapter 3