2. Economic Relations

EU and Japan cooperate based on the common principle of market economy.

EU and Japan are important trade partners for each other. Japan is the fourth largest export partner (4.8%) after the US, Switzerland, and China, and the third largest import partner (8.2%) after the US and China in 2003. Likewise, EU is the third largest import partner for Japan and the second largest export partner. Trade relations between the two have been balanced increasingly. However, there exist difficulties in Japanese social and economic structures still.

In terms of investment, Foreign Direct Investment from each other has become very important. Yet, FDI from EU to Japan is not much compared to that to the US because of Japanese bureaucracy, poor competition policy, and lack of independent policy.

In order to develop economic relations with each other, EU and Japan have held dialogues on various subjects such as regulatory reform, transparency of regulations, trade standards of products, intellectual property rights in Asia, deregulation, and mutual investment.

Various dialogues between EU and Japan are held in order to develop economic relations with each other.

• Mutual Recognition Agreement in 2002 for lowering cost of production by recognizing product standards of each other. (www.mofa.go.jp/region/europe/eu/agreement.html)
• EU-Japan Business Dialogue Round Table since 1999 (www.eujapan.com/europe/roundtable.html)
• Deregulation dialogue - for better-balanced trade
• Annual EU-Japan Journalists Conference since 1987 (jpn.cec.eu.int/relation/showpage_en_relations.programmes.conference.php)
• EXPROM by the Commission to encourage European enterprises to enter into the Japanese market
  • Gateway to Japan, EU export promotion campaign to the Japanese market, especially for small and medium sized companies (www.gatewaytojapan.org/eu/home.shtml?language=en)
  • Executive Training Programme - human resources development programme to learn Japanese business (jpn.cec.eu.int/relation/showpage_en_relations.programmes.etp.1.php)

EU and Japan also cooperate in international settings such as WTO to develop multilateral trade.

• Asia-Europe Meeting (ASEM), which started in 1996, consists of 25 EU member states, the Commission, and 13 Asian countries (Japan, Brunei, Myanmar, China, Cambodia, Indonesia, South Korea, Malaysia, Laos, the Philippines, Singapore, Thailand, and Vietnam) (europa.eu.int/comm/external_relations/asem/intro/index.htm; www.asem5.gov.vn)