EU Elections 2024: an outlook at the EU – Japan relationship
2024 will be one of the most significant election years in history. With more than 4 billion citizens eligible to vote in 2024, it's shaping up to be a year of democracy including for the EU going to elections in June.
The next five years will be critical for Europe's future. Defence and security have become central themes in the upcoming EU elections, driven by concerns over Russia's invasion of Ukraine and its impact on Europe's stability. As interest in the June elections grows, more Europeans are prioritizing security, peace, democracy and human rights, indicating a broader focus on global issues and the importance of casting a ballot.
Focusing east, the European Union and Japan have a long-standing and robust trade relationship both bilaterally as well as at international fora like the G7 and G20. The relationship stepped up significantly in 2018 when the EU and Japanese authorities signed the EU-Japan Economic Partnership Agreement (EPA), which is one of the largest bilateral trade agreements ever negotiated by the EU delivering positive impact for both parties.
Cooperation goes much deeper than this, with a recent increased focus on collaboration on political security as a response to increasing geo-political tensions and volatility. It's worth noting the EU–Japan Strategic Partnership Agreement (SPA) established in 2018, as well as the reaffirmation in April 2024, during the 5th EU-Japan High-Level Economic Dialogue, to collaborate closely on climate change, energy security, cybersecurity, and supply stability according to mutually agreed principles.
From the perspective of a Japanese company operating in the EU, like Panasonic, maintaining robust and resolute relations between the EU and Japan is crucial for growth, innovation and security. As mentioned, these two regions share a strategic partnership with more than 13 EU-Japan dialogues that are at both the political and technical level.
It’s essential for both the EU and Japan to continue these dialogues and expand upon them to ensure alignment on key issues like artificial intelligence governance and the free flow of data. It is not only about shaping rules in both markets but also driving forward global rules by setting in line with shared values. The previous 5 years has set a solid foundation and baseline for both the EU and Japan to build upon, key relationships and partnerships have been established and strategic goals aligned.
The partnership between the EU and Japan is clearly resilient and holds significant importance for both regions. However, the coming five years will bring new challenges. A key test will be transforming strategic dialogues and forums into concrete actions that lead to tangible outcomes. These outcomes should not only foster economic growth in both regions, but also support the success of Japanese companies in Europe and European companies in Japan.
This brings up the matter of regional sovereignty and autonomy. Both the EU and Japan recognize the importance of reducing reliance on third-country companies for critical supply chains and establishing a degree of self-sufficiency, as evidenced by the semiconductor shortage in 2020. However, they also acknowledge that collaboration with and support for third-country companies is essential for economic growth and innovation in each region. This creates a significant dilemma: finding a balance between achieving autonomy and fostering international partnerships. Addressing this challenge pragmatically is a priority for both the EU and Japan.
The ruling Liberal Democratic Party (LDP) in Japan suffered a major setback in the by-election held on June 28, 2024, mainly due to a pervasive mistrust over a "political funding scandal." Recent opinion polls indicate that the approval rating for Prime Minister Kishida's Cabinet has been stuck at around 20% for over six months. In this challenging environment, Prime Minister Kishida first faces the LDP's presidential election in the fall, which will likely determine the next prime minister, followed by a general election that will take place soon after.
Despite this political turmoil, Japan's policy landscape remains steady. Even if the largest opposition party, the Constitutional Democratic Party (CDP), wins the next election and takes power, significant policy shifts are not anticipated. This stability is underscored by shared values between Japan and the European Union, such as freedom, human rights, democracy, and the rule of law, ensuring their continued strong economic partnership. According to Eurostat, trade in goods and services between the EU and Japan grew by 21% in 2022 compared to 2018, when the Japan-EU Economic Partnership Agreement (EPA) came into force.
It is clear that 2024 will be a landmark year for democracy but more granularly it will be time to further ring fence the EU-Japan relations and build upon the already in place solid foundations of strategic dialogues. Now more than ever both the EU and Japan must align closer together to ensure issues that have no borders, such as climate change, AI, cybersecurity and economic prosperity through global trade are dealt with synchronistically.