With Japan against China

 

TOKYO/BRUSSELS/BERLIN(Own report) – With the conclusion of their free trade agreement, the EU and Japan are about to establish the world’s largest free trade zone. As was reported, the agreement between the two highly export oriented economic blocks, generating nearly 30 percent of the global economic output, could already take effect in early 2019. According to the EU Commission and German economic institutes the Japan-EU Free Trade Agreement (JEFTA) could lead to significant economic growth and the creation of hundreds of thousands of new jobs. On the one hand, the agreement is aimed at making up for eventual slumps on the US market and, on the other, is part of the containment strategy against China, the emerging powerhouse. Despite their differences, Berlin and Washington continue to cooperate in their opposition to Beijing. Parallel to the JEFTA agreement, the EU, Japan and the USA have declared that they will jointly take on China more aggressively over trade issues.

JEFTA

In early December, Brussels and Tokyo announced their finalization of the free trade agreement, they had been discussing for several years, the “biggest and most comprehensive agreement” of its kind.[1] The Japan-EU Free Trade Agreement (JEFTA) – negotiated between 2013 and 2017 – is not only of considerable economic value, but also of strategic importance, the President of the European Commission Jean-Claude Juncker and the Prime Minister of Japan Shinzo Abe wrote in their joint statement on December, 8. Both contracting parties were fighting the “temptation of protectionism.” This formulation was generally understood as a jibe at the US’ isolationist tendency under President Donald Trump, who aims to reduce the huge US trade deficit through trade barriers. With JEFTA, which could already come into effect in 2019, a free trade zone would be established encompassing 600 million inhabitants, which – in terms of economic output – would represent the largest alliance of its kind. Together the EU and Japan generate nearly 30 percent of the global economic output.

Optimistic Prognoses

Japan under Pressure

Following in the USA’s Footsteps

The impending slump on the US market has also increased pressure on Germany and the EU to find alternatives, thereby increasing the urgency for new free trade agreements. For example, shortly following President Trump’s election, Chancellor Angela Merkel intensified a number of free trade initiatives with South America, India and other emerging economies. Besides her intention of being able to offset any export slumps in the USA, Berlin hopes to be able to follow, to a growing extent, in the USA’s footsteps – even geopolitically. This applies also to the free trade agreement with the South American Mercosur international alliance, which has been in planning for more than 15 years, and, like JEFTA, has now taken on renewed impetus. Most recent prognoses predict an agreement at the beginning of next year. Whereas the free trade agreement with Mercosur is aimed at reinforcing the EU’s influence in the USA’s traditional sphere of influence, JEFTA’s strategic significance lies in its confrontation with China. The agreement contributes to the implementation of a containment strategy against the People’s Republic of China, as was already implemented during the Obama administration. Berlin seeks to obstruct – or even roll back – the emergence of China, as a powerhouse, with a series of free trade agreements in its geographic vicinity.

Together Against China

Berlin and Washington are cooperating in their containment policy against Beijing.[3] On the sidelines of the 11thMinisterial Conference of the World Trade Organization (WTO) last week in Buenos Aires, the United States, Japan and the EU agreed to put China more “under pressure” on trade issues. Together, they will “more aggressively” take on China over trade issues such as overcapacity in steel and forced technology transfers, it was reported. Especially German companies producing in China, have repeatedly complained that the Chinese state requires that they transfer technology. The joint approach taken by the USA, Japan and the EU, is an indication of the extent Beijing has “angered” the industrial nations with its modernization policy, according to media reports – and “how much they are worried, other countries could follow China’s example.”[4]

Full article: With Japan against China (German Foreign Policy)

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