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Japan and EU sign deal in riposte to China’s Belt and Road

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The EU and Japan have signed an ambitious deal to build infrastructure and set development standards in joint projects around the world, in a riposte to China’s far-reaching Belt and Road Initiative.

The so-called connectivity partnership will cover sectors from transport to digital industries as part of a wider effort to revive multilateral co-operation in the face of the US withdrawal from international agreements such as the Iran nuclear deal and the Paris climate change accord.

The agreement was signed in Brussels on Friday by Shinzo Abe, Japan’s prime minister, and Jean-Claude Juncker, European Commission president. It dovetails with EU plans to deploy €60bn to leverage investments of many times that value to improve ties between Europe and Asia. 

Mr Abe called the growing co-operation between Brussels and Tokyo, which includes economic and strategic partnerships, a “resounding declaration” at a time when “the values and principles we have held dear could waver or drift”.

Speaking at an event to mark the signing, Mr Abe said: “Whether it be a single road or a single port, when the EU and Japan undertake something, we are able to build sustainable, rules-based connectivity from the Indo-Pacific to the Western Balkans and Africa”.

While the agreement does not mention China by name, the overriding idea and the language used to promote the project were clearly crafted with Beijing’s Belt and Road infrastructure-building initiative in mind. 

The BRI has been endorsed by more than 150 countries and international organisations, including more than half the EU’s 28 member states. But it has faced criticism for being opaque, falling short on environmental standards and leaving some participant countries heavily indebted. China has defended its approach.

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The EU-Japan agreement calls for “transparent procurement practices, the ensuring of debt sustainability and the high standards of economic, fiscal, financial, social and environmental sustainability”. 

Mr Juncker said there was a need for infrastructure that could be built “without mountains of debt” or dependence on “a single country”. 

One EU diplomat suggested examples of the collaboration could include EU financing for Japanese companies that want to use drones to map roads in need of repair in African countries, and Japanese investors funding European renewable energy companies keen to expand in south-east Asia. 

The infrastructure drive is also part of a wider EU push to transform itself from “payer to player” — to better use the bloc’s economic heft in trade, aid and investment to achieve strategic foreign policy goals. 

The bloc has begun to take a tougher approach to China rise, making a landmark declaration earlier this year that Beijing was a “systemic rival” in some areas, as well as competitor or potential partner in others. 

Follow on Twitter: @mikepeeljourno

Via Financial Times

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