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Chairmen's Summary of the 20th Conference of
the UK-Japan 21st Century Group
UK-Japan 21st Century Group Brocket Hall, 6-8 February, 2004

Brocket Hall,
6-8 February, 2004
UK-Japan 21st Century Group

The UK-Japan 21st Century Group held its 20th meeting from 6 to 8 February, 2004, at Brocket Hall, under the joint chairmanship of the Rt. Hon. Peter Mandelson MP and Hon. Yasuhisa Shiozaki, member of the House of Representatives.

Beforehand, at a meeting with Japanese members of the Group at No 10 Downing Street, the Prime Minister warmly endorsed its aims and work. Mr Shiozaki expressed Japanese gratitude, in particular, for the assistance provided by British forces to their newly arrived Japanese counterparts in Iraq, and also for Britain's decision to participate in the Aichi World Expo. Meetings were also held with the Deputy Prime Minister and the Secretary of State for International Development.

The 20th Anniversary

In 1985 the bilateral relationship was still confined primarily to governmental relations and the activities of a limited number of people on either side who had special links with or interests in either country. Mutual perceptions were dominated by growing Japanese industrial power, British economic and social problems and the Cold War. That was about to change. Our ties began to evolve almost entirely in a positive direction. Once acrimonious discussions on bilateral trade and investment matters gave way to a constant and wide-ranging dialogue on a very broad agenda. While before 1985 the dialogue between us on international matters had been limited, we are now constantly engaged in discussions on multilateral issues, ranging from security policy to climate change. Our interests and common values have led to cooperation across a broad range of global issues. Mutual perceptions have been transformed. The mutual benefits of Japanese investment in the UK have been widely acknowledged and appreciated. Due to this and to highly successful cultural festivals, inter alia, British understanding of Japan has increased dramatically at all levels.

The 21st Century Group has played a valuable role in the broadening of contacts in different areas. Some of its initiatives had made a real difference, in educational exchange and the promotion of contacts between NGOs, for example. The Group also played a crucial role in the UK's decision to participate in the Aichi World Expo. Rejuvenated and with a new name, it is exceptionally well placed to generate new ideas and initiatives. Throughout this landmark meeting, with its main focus on governance, the participants acknowledged the breadth of mutual interest in almost all areas and the crucial importance of developing new networks.

Pointers for the Future

While in the last decade Japan had been coping with the problems of economic maturity, Britain had enjoyed a long period of political, social and economic stability. Britain's economic and social problems of the postwar period had given way to a period of stability and progress. The UK had developed a certain resilience to unexpected or unfavourable events. The evolution from a manufacturing to a service-based economy had not been without pain, but it had created the foundation for a more balanced and smooth bilateral relationship with great potential for cooperation. The Group welcomed the significant improvement in the Japanese economy over the past year.

The development of regionalism was changing the way in which we would regard each other. The UK had gained greater influence at the heart of Europe. Indeed Japan tended to view its ties with the UK as an element in its relationship with Europe as a whole. Meanwhile, Japan was pursuing various options for regional cooperation in Asia. The UK should not be complacent about this trend nor lose sight of the relative economic power of Japan. There were risks in placing too many eggs in the China basket.

Emphasis was placed on the similarity of the domestic problems that both countries faced in many areas, even the scale was often different in each country. There was much to be gained from enhanced dialogue between those concerned:
- Aging societies and demographic imbalance would give rise to huge problems in funding of pensions and social welfare provision. Contacts between the Prime Ministers' offices must continue
- Housing and regional and infrastructure development
- Civil Society: valuable contacts had been established but much more could be done to share experience

Science and technology was another vital area of potential collaboration. A number of Japanese companies had committed significant investment to research facilities in the UK. Hitherto collaboration between UK and Japanese companies in this field had focused especially on electronics, biotechnology and chemicals. The latest trend was for cooperation on environmental issues, nanotechnology and genome science. There was scope for much more collaboration between universities in these and other areas.

The Group collectively expressed great disappointment at the recent trend in the UK of a reduction in the provision for Japanese studies courses. It was resolved that the UK Chairman should write to the Secretaries of State for Foreign & Commonwealth Affairs, Trade & Industry and Education urging an audit of current supply and demand and a review of appropriate measures to arrest the decline. There was a strong plea for selective approach that was sustainable.

As on previous occasions the Group noted the ever closer cooperation between the two governments on foreign policy. There was a renewed call for dialogue on China.

Corporate Social Responsibility

Major corporations in the UK and Japan were faced with a common challenge of adjusting to the changing socio-political and economic environment. They had played a key role in their respective societies in the past as engines for economic growth and social development. In the process, however, the negative impact of their activities had increasingly become a target of public criticism for causing major social problems such as environmental degradation and fatal health hazards. As a result, these corporations had become keenly aware of the need to redefine their role in society, to review their goals, and to review corporate governance as a factor in the establishment of management priorities. Against a background of growing economic interdependence, and given increasing opportunities for partnership between the UK and Japanese corporations, we felt that they should aim to exchange of information and to examine together how they could improve corporate governance.

Senior business leaders present expressed serious concern about the growing trend for national governments, international organisations, and other interest groups to issue regulations and codes of conduct which absorbed management time and diverted executives from running their business. NGO's criticism of corporate behaviour and corporate governance had on occasions gone too far. Nevertheless, corporate leaders acknowledged the need to pay serious attention to the interests of all stakeholders, including shareholders, employees, local communities and consumers, while pursuing their direct corporate objectives. The burdens were considerable since multinational companies had to operate in many different environments with a diverse cultural heritage and with different social values.

Political Governance

The UK and Japan were facing similar challenges in political governance with a marked decline in the public's engagement with central political institutions and political leaders. A sharp drop in voter turnout in both countries in recent years reflected this trend; a serious 'democratic deficit' had developed. Yet, confidence in representative democracy was still solid in Japan, and in the UK political parties continued to play an essential role in the political process. A major cause of public disenchantment in both countries with the present political system was the dominance of political professionals and interest groups and the failure of the present system to respond effectively to the increasingly diverse public interests. There was a growing demand from the public for greater direct participation in the political process, as shown by increased discussion of greater use of referenda.

Delegates repeatedly emphasised the crucial need for politicians and political parties to improve substantially the communication with their electorates. Improved transparency was also highly desirable. The media and civil society organisations, as well as advanced communications technologies, were important in this process.

Politicians in Japan were showing increasing responsiveness to the immediate needs of their electorates. Policy manifestos had been prepared before the last elections. But the popularity of politicians often lay in delivery and the electorate would be ruthless in their judgment of that.

Global Governance

The overwhelming military and economic power of the United States was an incontestable fact. The rest of the world was not capable of resolving major problems without the involvement in some form or other of the US.

Nevertheless, whatever the military and economic strength of the US, Iraq had demonstrated that the US alone could not resolve such problems. Not only was the sheer economic cost too great even for the US, it was politically imperative that the wider international community should be involved in the resolution of such problems. So the UK and Japan should make every effort, using their close relationships with the US, to exercise their influence to help to achieve international consensus in any given situation.

The UN, and, in particular, the Security Council, could not be ignored in the search for long term peace. Whatever its shortcomings it gave a legitimacy to the conduct of any operation. Reform of the UN and its many institutions was highly desirable, not least the addition of new permanent members to the Security Council, including Japan whose candidacy was strongly supported by the UK.

Delegates unanimously endorsed the need for unrelenting efforts to combat the proliferation of weapons of mass destruction and international terrorism. Some felt it was also vital to address urgently problems which contributed to the spread of terrorism. But all felt that the UK and Japan should cooperate closely, perhaps, initially through cooperation in the intelligence field. In the aftermath of the war in Iraq it was essential, too, that we paid careful attention to the justification for pre-emptive action to resolve crises.

British assistance to JSDF troops arriving in Iraq to carry out reconstruction work had been much appreciated. The dispatch of these troops was a landmark in postwar Japanese history. Japan was now taking a much more active part in international discussions on security and its greater involvement in such operations such as Iraq was warmly welcomed. There was much scope for enhanced cooperation between us in the context of international conflict resolution and peacekeeping.
There was a growing trend toward the creation of regional organisations for security. It would take time for the EU to develop a concerted approach but ad hoc efforts such as the current negotiations with Iran, showed that it had the potential to play an important role in the future. In East Asia, Japan was working to build up a framework for security cooperation. It was very important to engage China and Russia whose involvement was crucial.

Prospects for a Sustainable Environment

The deterioration of the global environment was an issue of major concern to the UK and Japan. Delegates emphasised the urgent need for reinforced collaboration to confront the dangers posed to the environment by present levels of economic activity and to forge a valuable and constructive partnership in the international debate on sustainability.

We had a common interest in persuading the US not to pursue a separate path and to reenter the mainstream debate on the environment. We should take advantage of the fact that opinions on the environment in the US were not monolithic; significant efforts were being made by States and by private enterprise to take action to protect the environment. We should also jointly put pressure on the Russians to ratify the Kyoto protocol. We might also work towards the inclusion of methane in the Protocol
Delegates identified significant potential for further cooperation on the development of technology to contain emissions. Such technology should be adapted to meet the needs of developing countries and shared with them. We should encourage industrialised nations to engage the developing countries in an effective debate on the importance of action to preserve the environment, notably China and India whose rapidly growing economies would generate a very significant proportion of the world's emissions in the decades to come.

Japan and the UK should continue and broaden their dialogue on nuclear matters. The meeting emphasized that global emissions targets could not be met without the development and adoption of new technology in this field. Fusion technology could be 'the light at the end of the tunnel'.

Governments should not underestimate their capacity to influence or educate public opinion. One message among many that they should get across was that business was not the enemy of the environment. While NGOs had a vital role to play, too, in this context, it was hoped that they would avoid some of their more excessive and inaccurate criticisms of industry. Corporate investment in technology to protect the environment had been substantial and its application often very successful.