Toward Better Japan-Europe Economic Relations

Abstract

The Japanese of the nineteenth century saw Europe as the epitome of progress. Europe was the symbol of political freedom, new technology, and new ways of thinking. Japan and the rest of the world were stagnant and weak. Today, the situation appears to be totally reversed, at least to Japanese eyes. During the coming decade, many in Japan foresee that Western European economic growth rates will be lower than Japan’s. It is not totally surprising to them when they hear that Western Europe will also probably continue to have higher unemployment and inflation than Japan. The volume of international trade is not expected to show any dramatic increase in the near future, and newly industrializing countries (NICs) are becoming a threat to advanced countries. Many who foresee increasing rivalry among the industrialized nations for markets, resources, and investments point out that it will take time for Western Europe to modernize its industries and adapt to the new age. If inflation and unemployment will continue to be especially severe in Europe, and greatly intensified competition among the industrial nations is to be inevitable, with two of the main competitors being Europe and Japan, one might reasonably ask himself the following question: ’’Isn't it the time for both Japan and Europe to redefine their relationship into one that is more desirable by stepping back and taking a long and cool look at the illusions that their people hold about each other?” Japan and Europe are in a period of cogitation leading to fundamental adjustments in their views of the world, as they question their previous assumptions and seek new modes of action by placing their current trade and economic problems in a broader context.