The Tenth Japanese-German Forum met in Tokyo on February 2-4, 2002, under the joint chairmanship of Dr. Ulrich Cartellieri and Ambassador Ryohei Murata. At the opening dinner on February 2, we were fortunate to be joined by Mr. Yasuo Fukuda, Chief Cabinet Secretary, who confirmed the importance that Prime Minister Junichiro Koizumi attaches to the German-Japan relationship and reported on the close personal friendship that has developed between the Prime Minister and the Chancellor of the Federal Republic of Germany, Gerhard Schroder. Mr. Fukuda further indicated that the Prime Minister is hoping to visit Germany in the near future.

I. Political Dimension of the German and Japanese Response to the Terrorists Attacks-New Opportunities for German-Japan Cooperation in the International Community

The Forum participants shared the view that the terrorist attacks in New York and Washington have proven to be a watershed for Germany and Japan in terms of their place in the international community. Particularly for Japan, the passage of the Anti-Terrorism Special Measures Law on October 29, 2001 has enabled Japan to contribute actively to the efforts of the international community for the prevention and eradication of international terrorism. It is a dramatic departure from the traditional security role of Japan, as defined in conjunction with the U.S.-Japan Security Treaty and generally limited to East Asia. This has been considered to be a major political development in Japan, as the Law was passed with the support of both the Liberal Democratic Party, the governing party, and the Democratic Party of Japan, the leading opposition party.

Likewise, Germany has responded to the terrorist attacks with enhanced participation in the international peacekeeping mission within the existing framework of the European Union (EU) and the North Atlantic Treaty Organization (NATO). The German government’s expeditious and clear-cut affirmation of solidarity with the United States in response to the attacks had broad political support from the German public.

Dealing with extreme poverty and other social issues, as well as promoting democracy and freedom will be essential to the eradication of terrorism. In this connection, the need to take a long-term perspective was emphasized. It was reported both in Germany and Japan that government responses to the terrorists attacks have been accompanied by increasing support for official development assistance (ODA) among the public and greater interest on the part of NGOs in actively engaging in development work.

It was suggested that the following cooperative actions should be promoted between Germany and Japan:

1. Germany and Japan now have an opportunity to explore security cooperation between the two countries, given the new roles both countries have assumed in the international community.
2. Germany and Japan, as global civilian powers, should consult and work together to explore their role in nonmilitary areas for the promotion of peace and stability in the international community.
3. Policy research institutions in both countries should jointly contribute to the new level of political and security cooperation.
4. NGOs in both countries should explore ways to cooperate in addressing the common challenges.

II. German-Japan Cooperation on the Reconstruction of Afghanistan and Promoting Regional Peace and Stability

In both Session I and Session II, which focused on the “Future Development of Central Asia: the Role of Germany and Japan,” we discussed the critical role the two countries can play in bringing about peace and stability in Afghanistan and the broad area surrounding it. The Petersberg Conference laid the groundwork for the International Conference on Reconstruction Assistance to Afghanistan, which was hosted by Japan on January 21–22, 2002. These conferences symbolized the strong commitment on the part of both our countries to the promotion of sustainable peace and development in the area including Afghanistan, parts of China, northern India, Pakistan, Iran, parts of Russia, and the Central Asian countries of five. This may be critically important when the United States, despite its overwhelming military and economic resources, may become overstretched due to its global commitments. We recommend:

1. Germany and Japan should take the lead in constructing a firm basis for peace in the region through non-military means while actively taking part in security cooperation with the U.S.
2. Since Germany and Japan take a similar approach in assisting the five Central Asian countries through such activities as nation-building efforts and promoting small and medium-sized enterprises, there may be opportunities for cooperation in these areas.
3. The Japan-German Center in Berlin will host a seminar in Berlin to explore possible bilateral cooperation with the five Central Asian former Soviet Republics in June. Future possible cooperation should be explored on the basis of the outcome of that meeting.

III. Economic Revitalization of Germany and Japan—Common Challenges of Structural Reform

The economic challenges Germany and Japan have been facing and the ways to respond to them were discussed in both Session I on “Political and Economic Consequences of the Terroist Attacks for Germany and Japan,” and Session 4 on “New Frontier of Economic Development: German and Japanese Perspectives.” The increased need for financial resources in the aftermath of the attacks—also for military and security back-up measures—has made the problems of economic stagnation and high budgetary deficits in both countries even more pronounced. Instead of leading the respective regions of Europe and Asia toward greater economic growth at this critical period, Germany is regarded to be at the tail end of the EU countries in terms of economic growth, and Japan’s performance is equally dismal. It is obvious that structural reforms are needed to achieve economic recovery in both countries, but a number of common challenges—including the lack of a sense of crisis and the difficulty of generating strong support for such changes—are continuing to inhibit reform efforts.

Making use of innovative approaches in economic development through promoting entrepreneurship, provision of capital for small and medium enterprises, creation of new consumer demand, and other means have been constrained by government regulations and control. In order to seek a long-term economic development, we can not rely on an improved performance of the American economy or any other exogenous factors.

1. It is, therefore, recommended that a panel be established under the German-Japanese Forum to address the common challenges of structural reforms through joint exploration of the reason, why we can not undergo the necessary reforms, and what are the concrete steps that we should take.
2. Related to the above, despite the fact that there are many commonalities of the economic challenges Germany and Japan are facing, there is a paucity of joint research on these issues. Such joint efforts should be promoted for both sides to learn from and be stimulated by the experiences of each other.
3. Challenges of structural reforms are closely tied with the need to improve systems of governance with the redefinition of the roles of politicians, government bureaucrats, civil society leaders, and others. Joint exploration of political and social reforms to bring about more effective system of governance should be promoted.
4. The media should be brought to play a more effective role in having the public understand the urgent need for reforms and the need for sustained efforts to bring about such reforms.

IV. Strengthening the Global Trading System—Responding to New Challenges Posed by Recent Developments

The Doha Conference launched a new round of multilateral trade talks to address the growing challenges that the global trading system is facing. Doha was also significant in that the WTO accession procedure for China was completed, thus bringing one of the fastest growing economies into the global trading regime. Another important development in recent months was the passage of Fast Track authority of the President by the U.S. House of Representatives, which is now pending most likely passage through the U.S. Senate. In the third session of the Forum, we took up the implications for Germany and Japan of these recent developments for the global trading system.

We generally shared the view that though significant steps were taken in Doha, it is premature to call it an unequivocal success. The Doha Declaration contains many challenging goals that cannot be easily implemented, including ensuring that developing nations secure a share in the growth of world trade, emphasizing non-economic issues such as environmental and social standards, and attaching importance to transparency and participation. The implementation process of the Doha Declaration can be successful only through concerted efforts by all parties concerned, particularly the EU—with a strong role to be played by Germany—and Japan. An additional complicating factor related to WTO is the increasing number of bilateral and regional free trade agreements that may undermine the multilateral trading system.

We had an active debate on the implications of China’s accession to WTO. While China’s entry to a rule-based multilateral trading system was regarded as a positive development, questions were raised as to whether China can adhere to WTO rules, whether China might become a champion of the developing countries thus changing the dynamics of this global institution, and whether China’s economic development in the future will be in harmony with the continued growth of other economies in the region and elsewhere.

We discussed how Germany and Japan can work jointly and respectively to further strengthen the global trading system under such circumstances. Recommendations are as follows:

1. One reason for the successful conclusion of the Doha agreement was the support of the U.S., which may have been prompted by the circumstances following the tragic events of September 11th. It is important for Germany and Japan to encourage the U.S. to sustain its commitment to WTO in order to ensure close cooperation in the international community.
2. Europe/Germany and Japan have played significant roles in broadening the agenda for trade talks in the post Seattle period, and such efforts should be continued.
3. Working with China and other developing nations in trade negotiations in the coming years will be quite challenging, and, thus, it is imperative that Europe/Germany and Japan should work together closely to deal with the new situation.
4. Germany and Japan share a responsibility to open their respective agricultural markets for the sake of the development of the global liberal trading system.

V. Critical Need to Promote Greater Intellectual and Cultural Exchange in Order to Sustain and Promote Close Relationship Between Germany and Japan

A great concern was expressed during the Forum about a clearly perceived trend where Germany and Japan pay less attention to each other. In the case of Japan, this may be accounted for by a growing interest among younger Japanese in the neighboring countries in Asia and in English speaking countries. Such trend is underscored by a declining application by Japanese for the well known fellowship programs of the internationally known academic foundations in Germany. Similarly, interest of German students in Japan seems to be stagnant. There may be diverse factors behind this trend, but some concerted efforts are needed to reverse the trend, in order to increase the exchange activities as a critical underpinning of solid and productive German-Japan relationship. With such concerns, we recommend:

1. A comprehensive survey of the on-going intellectual and cultural exchange should be undertaken to map major actors in the exchange activities in both Germany and Japan as a basis for the exploration of an effective strategy to enhance these exchange activities.
2. With a view to enhancing the public interest and understanding of Germany in Japan, “Germany in Japan” should be organized with the support of diverse sectors in both countries in the near future in the manner similar to “Japan in Germany” which was held in 1999-2000.
3. Given the dramatic emergence of NGOs in both countries in recent years, exchange and cooperation with their counterparts in Germany engaged in similar causes should be promoted.
4. Greater “marketing” and public relations efforts should be made by academic institutions and foundations in Germany regarding availability of opportunities of academic studies for Japanese students.
5. It should be recognized that many courses in diverse academic disciplines are available in English language in German institutions, and such information should be widely disseminated to Japanese universities.
6. Though use of the English language has become predominant among younger Japanese, and though it can be often used in communicating with Germans, continued effort should be made to teach the German language to Japanese and to sustain intellectual exchange in the German language.
7. In order to promote exchange of student leaders in Germany and Japan, a “German-Japanese Students Conference” should be established following a very successful model of “U.S.-Japan Students Conference.”

February 3

Session I: Political and Economic Consequences of the Terrorist Attacks for Japan and Germany
Speakers: KITAOKA Shinichi, Professor, University of Tokyo
TANAKA Naoki, President, The 21st Century Public Policy Institute
Otto Graf LAMBSDORFF, Former Federal Minister of Economics; Chairman, Friedrich-Naumann-Foundation
Rainer BRUDERLE, Member of Parliament (FDP)

Session II: Future Development of Central Asia: Role of Germany and Japan
Speakers: TANAKA Akihiko, Professor, University of Tokyo
Volker STANZEL, Director for Asian and Pacific Affairs, Federal Foreign Office

February 4

Session III: Recent Developments In Global Trading System: Consequences for Germany and Japan
China’s Accession to the WTO
Ministerial Declaration
U.S. Fast Track
Speakers: WATANABE Osamu, Special Adviser, Japan Industrial Policy Research Institute
Rudiger POHL, President, Institute for Economic Research, Halle

Session IV: New Frontier of Economic Development: German and Japanese Perspectives
Speakers: YAKUSHIJI Taizo, Professor, Keio University; Vice President and Executive Research Director, Institute for International Policy Studies (IIPS)
Manfred LAHNSTEIN, Chairman, Lahnstein & Partner; Special Representative of the Board, Bertelsmann AG
Ann-Kristin ACHLEITNER, Professor, Technical University, Munich

Session V: Bilateral Cooperation in Intellectual and Cultural Exchange
Speakers: FUJII Hiroaki, President, The Japan Foundation
Irmela HIJIYA-KIRSCHNEREIT, Director, German Institute for Japanese Studies
Manfred OSTEN, Secretary General, Alexander von Humboldt-Foundation