Japan-Canada Partnership: Can We Afford to Take it for Granted?

Margaret Samuel, Chief Investment Officer and Portfolio Manager, Quadrexx Asset Management and Director, The Empire Club of Canada; Kazuma Sato, Student, Oakwood Collegiate Institute; The Reverend David Harrison, St. Thomas Anglican Church, Brooklin; William Thorsell, Director and CEO, Royal Ontario Museum; Dr. Roy Norton, Executive Director, International Relations and Chief of Protocol, Province of Ontario; Sid Ikeda, Special Ambassador, Japanese Canadian Cultural Centre and 2004 Governor General's Caring Canadian Award recipient; Don Black, Deputy Minister, Economic Development and Trade, Province of Ontario; John Koopman, Vice-President, Spencer Stuart and Immediate Past President, The Empire Club of Canada; Michael Donnelly, Dr. David Chu Professor in Asia Pacific Studies and Director, Asian Institute, Munk Centre for International Studies, University of Toronto; Keith Walter, Senior Vice-President, Sales and Marketing, MFC Global Investment Management; William Boyle, CEO, Harbourfront Centre; and John Craig, Partner, McMillan Binch LLP.

Introduction by Bart Mindszenthy

Mina-sama, konnichiwa Empire Club e youkoso.

And welcome to all of you.

Last fall, my daughter and her husband did something I've always wanted to do. They spent 10 days exploring just a little of Japan.

They discovered all too quickly that restaurant menus were not as a rule bilingual.

They discovered that her long-time pen pal was indeed a wonderful person, and that her family and community warmly welcomed Andrea and Julian.

They discovered a deep and rich history overlapped by galloping technology and at times overtaken and even overshadowed by world events.

I envied them, and I hope we might one day visit the Japan of myth and legend, of hurt and sorrow, of hope and dreams, of culture and contradictions. A place portrayed in so many ways, because it is perhaps a nation more complex than so many North Americans might want to accept.

Today, we have the pleasure of welcoming His Excellency, Sadaaki Numata, to his first official speaking engagement since becoming the Japanese Ambassador to Canada last fall.

He graduated in 1966 from Tokyo University with a bachelor of laws. After joining the Ministry of Foreign Affairs, he was sent to Oxford, where he obtained his master of arts in philosophy, politics and economics. He served at the Japanese Embassy in London from 1968 to 1970.

In the ensuing years, His Excellency has had a host of interesting positions in Tokyo and postings around the world.

From Jakarta to Washington, from Geneva and Australia to a return engagement in London, to a posting as Ambassador to Pakistan, our speaker has experienced this global village in a way few have.

And he got to speak a lot about global issues while serving for a time as his Foreign Ministry's official spokesperson.

Aside from a Vancouver stopover en route to the United States as an exchange student while in high school, the Ambassador visited Canada with Japanese prime ministers in 1974, 1980 and 1986 as a Ministry of Foreign Affairs official.

You also should know that His Excellency enjoys certain pastimes and skills only worldly ambassadors tend to experience and savour. For example, he's working on refreshing his French, and what better place than Ottawa. He enjoys music, and has been playing the guitar since his university days. It's alleged he has a wonderful singing voice, and now is considered the Japanese Embassy's answer to Gordon Lightfoot-san. And, he is fond of fly-fishing, skiing and good malt Scotch. I think those are certainly very worthy characteristics of any interesting and interested diplomat.

But a key characteristic of an excellent diplomat is to bring thoughtful, culture-crossing, challenging views and observations to share with those in other nations. To help bridge the still-too-wide global gaps in reason and understanding. To stimulate minds, views and visions so that we can find true and acceptable common ground among all the family of nations on this fragile planet.

And that is precisely the kind of excellent diplomat we have with us today.

Ladies and gentlemen, please welcome to the podium of the Empire Club of Canada, His Excellency, Sadaaki Numata, Ambassador of Japan to Canada.

Sadaaki Numata

Introduction

It is indeed a great pleasure and privilege for me to speak to you today. I felt humbled when I learned about the awesome list of the speakers that have appeared before this club over the past 102 years.

I can only speak as a practicing diplomat. There have been a number of things said about diplomats. Among them, the doormat theory holds that a diplomat is someone who finds himself between two countries for people to wipe their feet on. That would not have been very nice in the middle of a Canadian winter.

Luckily, nothing of the sort has happened to me, and my wife and I have felt warmly welcomed and very at home.

Where We Are

I feel comfortable with the state of Japan-Canada relationship, which is sound and relatively problem-free. The BSE problem is pending, but I believe that it is on the way to a scientifically based resolution.

At the same time, we cannot just sit back and relax and take our partnership for granted. There may be a risk of our slipping into complacency, if not apathy. We should be conscious that, to use a pugilistic metaphor, the Japan-Canada partnership may be "punching below its weight."

In fact, there is a feeling in Japan that Japan, as a nation, is punching below its weight, and there is apparently a similar feeling in Canada about Canada's role in the world. We are both given to soul-searching (or navel-gazing) about our respective roles and places in the world. In Canada, it may be a case of hankering after the golden age of Canada's role in world affairs, such as in the drafting of the United Nations Charter, the Suez crisis, UN peace-keeping, the Colombo Plan, etc. Japan, on the other hand, strove to rebuild itself from the debris of World War II, and, with its return to the international fold, has been seeking to play a more proactive role as a responsible member of the global community.

How Japanese See Canada

Japanese tend to think of Canada as a country of natural beauty (the Canadian Rockies, Niagara Falls, Prince Edward Island--Anne of Green Gables, and Northern Lights), a neighbour of the United States, a peaceful nation, and an exporter of natural resources such as wood and pulp, oil seed, pork, coal, etc.

A group of editorial writers for Japanese local newspapers travelled through Canada last autumn. Upon their return home, they told their readers that (a) Canada is a multicultural country (a "salad bowl" or a "mosaic"), (b) Canada is a "PKO (UN peace-keeping operations) big power," and (c) Canadians think of themselves not as "siblings" of Americans but as "cousins."

Through my travels so far to British Columbia, Alberta and Nova Scotia, in addition to Toronto and Montreal, I have only begun to see firsthand the rich diversity of Canada. Victoria is very much like England with a much better climate. Vancouver is really like an Asian city. Calgary evokes the image of cowboys with lassos. Halifax reminds us of the sea that both nourishes and kills people.

I am happy to see that this message of the diverse attractions of Canada is being spread to the Japanese people through the Canadian Pavilion at "EXPO Aichi, 2005," whose theme is "Wisdom of Diversity." I hope that as many of you as possible will have a chance to visit EXPO, which will go on until September 25. That will help us achieve our goal of increasing the number of Canadian visitors to Japan from the current 140,000 to 200,000 a year by 2010. The number of Japanese visitors to Canada was about 400,000 last year. We are aiming to double this to 800,000 by 2010. Let us hope that, in five years, we will have reached a two-way flow of one million visitors a year!

How Canadians See Japan

Canadians tend to think of Japan primarily in economic terms, such as automobiles and electronic products. I wonder whether their perception has kept up with the dramatic changes that have been taking place in Japan.

In the "lost decade" after the bursting of the bubble in the early 1990s, the Japanese economy has had to undergo painful adjustments to the harsh realities of the market. There has been a shift away from manufacturing such as autos, steel and chemicals, which used to be the engine of Japan's post-war growth, to information technology and services. The banking sector has had to grapple with a huge accumulation of bad loans and streamline itself. It has become no longer tenable in many cases to maintain the system of life-time employment and promotion based on seniority.

A host of structural reforms undertaken under the leadership of Prime Minister Koizumi has paved the way for an economic recovery led by the private sector without relying on heavy public spending. The "negative legacies" of the lost decade are being cleared away: the bad-loan ratio of the major banks has been reduced by half; corporate profitability is improving as labour restructuring has run its course; and the employment situation is improving. The economy has been expanding for three consecutive years, and is now recovering at a moderate pace, although there remain some signs of weakness. As the corporate outlook continues to improve and the world economy recovers steadily, Japan's economy is expected to recover steadily as well.

There are also some signs of paradigm changes in Japanese society. Non-Japanese CEOs have been appointed at top-notch Japanese firms, such as the Brazilian-born French Lebanese Mr. Carlos Ghosn at Nissan and the British-born Sir Howard Stringer at Sony. The CEO of BMW Japan, who had worked her way to the top from being a sales lady, has been recruited to rescue Daiei, a beleaguered supermarket chain, as its CEO. A hostile take-over bid by a 32-year old, T-shirt clad IT venture businessman to gain control of a major television network has been seen as a challenge to the old guard of the corporate and media establishment.

A New Economic Partnership

When Prime Minister Martin visited Japan last January, he agreed with Prime Minister Koizumi that Japan and Canada should try to realize the full potential of their relationship. Our two governments are in the process of developing an innovative economic framework, which will comprise enhanced co-operation in 15 priority areas including customs co-operation, investment promotion, regulatory co-operation, science and technology co-operation, and a joint study on the benefits and costs of further promotion of trade and investment and other co-operative issues.

As we move forward with this task, we should bear in mind the impacts that our two economies will have on the world economy from the following perspectives.

Firstly, Canada's GDP is about one-sixth of that of Japan, but Canada carries a great deal of weight in the world economy, if you take into account its influence on the U.S. economy. Japan is also a part of this linkage. For example, Canada produces five times more Japanese-brand vehicles than it imports from Japan, and exports them to the U.S., by far its biggest trading partner. With respect to Asia, Canada's International Trade Policy Statement published last week recognizes the inter-linkage between the Japanese, Chinese and South Korean economies, and states, "No lasting success can be achieved in China and other dynamic Asian economies without involving Japan." In fact, China is now Japan's second-largest trading partner after the U.S., and as many as one million Chinese may be working at Japanese-affiliated firms in China. Thus, China's weight to the Japanese economy or Japan's weight to the Chinese economy is much greater than simple bilateral trade figures suggest.

Secondly, Japan and Canada have both benefited greatly from GATT and IMF. These systems have been essential for Canada, which has the highest trade dependence (58.9 per cent of GDP in 2003) among the G7 countries, and Japan, which has to depend on imports for most of its energy and resources supply. They have both actively participated in the GATT/WTO rounds of negotiations, and have an important stake in ensuring the viability of WTO and IMF.

Thirdly, structural changes are taking place in the Japanese and Canadian economies. There is a shift under way from a goods-based economy to a knowledge-based economy. The focus is increasingly on the development of biotechnology in pharmaceuticals and chemicals and the "hydrogen economy" such as fuel cells.

The Asia-Pacific Context

Canada's interest in East Asia seems to lie primarily in the region's role in the global supply chain. For East Asia to play this role fully and benefit Canada, it is vital that peace and security in the region be maintained. Where does Japan stand in this context?

Unlike the Canada-U.S. alliance, Japan has forged its alliance with the U.S., in the wake of the defeat in World War II, across the vast stretches of the Pacific. The alliance has withstood many challenges over the years. Today, as a mature, stable ally of the U.S., Japan plays a key role in sustaining democracy, stability, and prosperity in Asia. For the past six decades, Japan has steadfastly maintained its determination never again to become a military power and its principle of resolving all matters by peaceful means, without recourse to use of force. Its Self-Defence Forces have never engaged in combat anywhere.

Japan has been an economic power for some time and is now evolving as a political power. China has long been a political and military power and is now emerging as an economic power. People sometimes speculate on the possibility of an intensifying rivalry between the two. It is clearly in their mutual interest for Japan and China to work together as partners for peace, stability and prosperity in the region. Japan, for its part, is determined to make every effort to deepen our mutual trust and understanding through dialogue and co-operation, thus building a future-oriented Japan-China partnership.

North Korea's nuclear program is a matter of acute concern to all of us, and we will continue to make every effort for the resumption of the six-party talks.

The Global Agenda

Japan and Canada share such basic values as freedom, democracy, belief in the market economy, and respect for human rights. We also share certain national traits. We do not seek to assert predominant leadership or throw our weight around, but prefer to work in concert with others through coalition and consensus building. We are both dedicated to peace. We have successfully co-operated, for example, on the banning of anti-personnel landmines under the Ottawa Convention. As such, we are well placed to co-operate on a number of global issues. We are working together toward the early realization of UN reform.

Over the past decade, Japan has become actively engaged in international peace-keeping and humanitarian relief activities. For these purposes, it dispatched its Self-Defence Forces troops to Cambodia, Mozambique, former Zaire, Golan Heights and East Timor. During the Operation Enduring Freedom in Afghanistan, the Japanese Maritime Self-Defence Force supply ships refueled Coalition vessels including Canadian naval vessels in the Indian Ocean. Some 600 Ground Self-Defence Force troops have been deployed in Iraq since January 2004 to provide humanitarian relief and support Iraq's reconstruction efforts. Canada has a proud record in peace-keeping and peace-building. We have a lot to learn from Canada's experiences in this field, and there may be scope for our further co-operation.

A pressing global challenge is the environment, especially climate change. We welcome Canada's initiative to host the COP11 and COP/MOP 1 in Montreal in November. Sharing the same target of 6-per-cent reduction of greenhouse gas emission by 2012 compared to 1990, we will have a lot to learn from each other, and also a lot to share with others in the use of advanced technologies to meet our common goals. We will be working together in moving beyond Kyoto towards a regime that encompasses the United States, China, India, and other countries that have not signed on to the Kyoto Protocol.

Development, especially African development, is a matter of urgent priority. Japan has provided one-fifth of the world's total Official Development Assistance (ODA) for the last 10 years, and will continue its efforts towards the goal of providing ODA of 0.7 per cent of our gross national income in order to contribute to the Millennium Development Goals. From this point of view, Japan will ensure a credible and sufficient level of ODA. This year is the "Year of Africa." Japan will hold the fourth TICAD (Tokyo International Conference for African Development) in 2008, and, in the three years to come, will double its ODA to Africa, with grant aid continuing to be its central feature.

Both Japan and Canada are promoting the concept of "Human Security," which aims at protecting and empowering people against critical and pervasive threats to human life, livelihood and dignity, and thus enhancing human fulfillment. Japan established the Trust Fund for Human Security within the UN, to which the contributions amounted to US$256 million by December 2004. Through the Trust Fund and other forms of ODA, we support projects and programs that address diverse threats, including poverty, conflicts, refugees and internally displaced persons (IDPs) problems, and infectious diseases such as HIV/AIDS and malaria.

The Security Council should reflect the reality of the 21st century, not that of 1945, in the composition of its membership. The Japanese people feel it unjust that, though Japan's contribution to the financing of the UN, amounting to some 20 per cent of the UN regular budgets, exceeds the sum of the contributions of the four members of the Security Council, that is the UK, France, Russia and China, it has been unable to take part in the key decision making.

Japan thus attaches the highest priority to the reform of the Security Council through the expansion of both the permanent and non-permanent membership categories, including both developing and developed countries for permanent seats. Japan will co-operate to the fullest with a view to reaching a decision on the reform of the Security Council before September, as proposed by the UN Secretary-General Kofi Annan.

Conclusion: A Mutually Enriching Global Partnership

If we lift our sight beyond our bilateral confines to the Asia-Pacific region and to the world, there are a number of fields in which our interests converge. It is the task of the policy makers on both sides to chart the ways in which we can work together as global partners.

Naturally, a global partnership needs to stand on solid bilateral underpinnings. There are some encouraging signs in this regard.

Parliamentarians in Japan and Canada represent the regional, social and other diversities of their respective countries, and play a very important role in bridging the two peoples. The parliamentary exchange between Japan and Canada is probably the most active exchange of its kind that Japan has with any country.

Everywhere I have travelled in Canada so far, I have come across a number of people whose children, brothers or sisters, cousins, nephews or nieces have been to Japan to teach English at secondary schools in various regions of Japan. These JET returnees, totalling more than six thousand and spread all over Canada, are bringing Japan closer to the people in their respective communities.

More and more young children are interested in learning the Japanese language. This is partly because young Canadians are increasingly attracted to contemporary Japanese culture, such as manga and anime.

In 2003 and 2004, we celebrated the 75th anniversary of the establishment of Japan-Canada diplomatic relations. I see 2005 as the year to energize our partnership and move forward on the path to a mutually enriching global partnership. I look forward to ideas and suggestions from the distinguished members of the Empire Club as to how we can set about this task and start "punching above our weight" together.

The appreciation of the meeting was expressed by John Koopman, Vice-President, Spencer Stuart and Immediate Past President, The Empire Club of Canada.