India growing economy with huge potential: Full text of WION interview with Finance Minister of Japan

Arun:  Welcome to The Diplomacy Show, where we look at the context behind the text, the meaning behind special events and gestures, the historical and geopolitical compulsions behind foreign policy decisions. 

Our conversation today will be with the Foreign Minister of Japan who is visiting India for the first time in his new capacity. This year is going to see a number of high-level exchanges between the two countries. The Indian Prime Minister would be expected to visit Japan in the middle of the year for the G-20 summit. The Japanese Prime Minister would be planning to come to India for the annual bilateral summit following the Indian prime minister's visit to Japan in October last year. The first ever two plus two ministerial dialogue between the two countries at the level of foreign and defence ministers is also expected to be held for the first time this year.

For Japan itself, as it looks around the world it would have anxiety related to uncertainties emanating from the US in its posture to its partners and allies. The rise of China poses an economic, military and technological challenge. US equation, relationship, negotiations with North Korea would cause it anxiety if it is not fully briefed. Europe which is again a very important partner for Japan in the framework of the Western alliance system is undergoing its own uncertainties with Brexit, the weakening of the voice of Germany and France, the rise of right-wing forces, of authoritarian tendencies in several countries. 

And there's a lot of focus today in its negotiations with Russia to have a peace treaty seventy years after the Second World War and looking at resolving the issue of four islands where there are territorial differences between them. 

Today we have a very special guest, his Excellency Mr. Tarō Kōno, the Foreign Minister of Japan. Welcome Foreign Minister.

Kōno: Thank you. Thank you very much, honoured to be on this program.

Arun: Thank you. You are visiting India and is this the first time you have come to India or you've been here before? 

Kōno: Well, this is the first time as a Foreign Minister. But, I have been to New Delhi and Mumbai before. Your government kindly invited my wife and I two years ago. So I visited New Delhi and Mumbai and before that, I attended a conference on energy policy. So it's good to be back.

Arun:  So you have had an engagement with India from before and although you've been Foreign Minister for a little over a year. And you'd have interacted with Indian leaders, I think you hosted the Indian Foreign Minister in Japan last year.  

Kōno: Yes.  

Arun:  The Indian Prime Minister was there in October but this is your first time as the Foreign Minister. Dealing with the relationship in that capacity and visiting India, what are the impressions you have formed. Where are we in the relationship?  

Kōno: Well, India has a huge potential and it is a growing economy with a young population. So it's good to have a very friendly relationship with India and Japan and India could be a natural ally in terms of our economy and defence and security. So I'm very glad to be able to visit India as a Foreign Minister.  

Arun: Both countries have now described the relationship as a special strategic and global partnership. Is that designation justified?

Kōno: I think so. India is the largest democracy on this planet and India and Japan share many common values, democracy, human rights, rule of law and we are strategically, I think aligned very nicely. So I think we need to work hard to develop this special strategic relationship into the future.  

Arun: In the statement that has been put out by the Japanese Foreign Ministry after your meetings here with your counterpart; the Foreign Minister and the Prime Minister. It has been said that India is the most important partner for Japan in the context of the free and open Indo-Pacific. Why is that? 

Kōno: Well, India is the largest recipient of our ODA (Official Development Assistance) and Japan is now the third largest investor in India. More than fifteen hundred Japanese companies are now very active in the Indian market and India as well and I think keeping free and open sea lines of communication is vital to the economic prosperity in not only Asia but for Africa, the Middle East, all the way across the Pacific to the western coast of the United States and we share common values of this free and open Indo-Pacific vision and India is the most important partner to making it happen. We need to work on connectivity for economic prosperity and also we need to work together to keep the law enforcement capacity of the countries along the coast and we can work together on this issue as well. So this relationship needs to be stronger and I think it is natural to say this is the most important partnership to make a 'free and open Indo-Pacific' happen. 

Arun: You referred to the important investment by the Japanese companies in India, the large number of Japanese companies present here, but if you look at the trade relationship and the total trade seems to be in the order of about 16 billion dollars. What more can we do to enhance our trading partnership? 

Kōno: Well, we are now working on RCEP. We hope to conclude this negotiation by the end of 2019. Also, we concluded TPP (Trans-Pacific Partnership) negotiations and India is welcome to join TPP. So now there is a lot of protectionism rising all over the world. But I think we can work to keep free and open trade and I think that is beneficial for India and Japan as well. 

Arun:  Defence is one area where India and Japan are looking at doing more and more. We have now agreed to hold the two plus two dialogue of foreign and defence ministers. There is a defence policy dialogue. We do a large number of exercises including the Malabar series of exercises. 

What can be done in terms of enhancing defence cooperation in terms of trade in defence or technology partnership? What's your sense of what are the obstacles there? 

Kōno: When Prime Minister Modi visited Japan last year, we agreed to start two plus two ministerial meeting process and we are holding a dialogue on cyber, dialogue on space. As you mentioned, the Japanese Maritime Self-defence Force are participating officially in Malabar exercise and Indian Army-Air Force is working with Japanese self-defence forces in joint exercises. So there is a lot of cooperation between our Self-defence Force and Indian armed forces. 

At the same time there are a lot of things we can do to get the defence industry going and so there is a lot of potential and creating very strong relationship between Japan and India or plus the US or even Australia will bring stability in this Indo-Pacific region and I think stability is a cornerstone for the economic prosperity of this region. So having a good, stable relationship between Japan and India, we can build on a lot of things on this fundamentals. 

Arun: Certainly, and in the context of the Indo-Pacific; we have the trilateral meetings between India, US and Japan and I think you along with your US and Indian colleague had a meeting in New York and the Indian and the Japanese Prime Minister had a meeting with President Trump recently in the framework of the G-20. So, how are you seeing the potential for the trilateral partnership in the context to Indo-Pacific and the Quadrilateral involving Australia? 

Kōno: We had a summit meeting among the three countries in Buenos Aires at  G-20 and probably this year in Osaka during the G-20 summit, there's gonna be another trilateral summit meeting. So, this trilateral relationship will be getting stronger and we can coordinate defence and security policy, we can coordinate economic policy as well and plus we are now having DG (Director General) level meeting including Australia.

Arun: Okay. 

Kōno: So, this is a new mechanism for this region to keep this free and open trade, free and open sea lines of communication. So it could be a good vehicle to build a multilateral relationship.

Arun: As countries are looking at new frameworks for interaction, new architectures for security and other forms of cooperation in the Indo-Pacific. Clearly, they're also looking at the rise of China; the economic, the technological, the military rise of China, its assertiveness be it in the South China Sea, the East China Sea, the Senkaku Islands. How are you looking at the challenge from the rise of China as far as Japan is concerned and in terms of Japan's interests and globally how should the world react and deal with that? 

Kōno: Well for last 40 years, the Japanese government, as well as Japanese private sector, helped the Chinese economy to grow. I think a stable growth of the Chinese economy according to the existing international order will give great opportunity for many other economies to prosper. But unfortunately, there is some disagreement with China such as protecting intellectual property right or industrial subsidies or sort of - forced technology transfer. 

So, we need to get China to play the game according to the international rule; but if China comes back to stable growth and they play the same game, it will provide a lot of opportunity for the region. At the same time, they are violating our territorial water in the East China Sea and their action in the South China Sea needs to be corrected. So on those fundamental issues, Japan has no intention to concede. I think we need to get China engaged in the International framework and try to get China to play according to the international rules. So, it is important to cooperate among US, Japan, India or another country and get China to play within their existing liberal international order, that will create a lot of opportunity. 

Arun:  Many have argued that the fact that the Chinese economic system is essentially based on state-owned enterprises and therefore; the manner in which they compete with private sector-led economies does not quite meet the WTO (World Trade Organisation) framework and rules and norms. So how can one deal with that challenge? 

Kōno:  Well, a lot of economic issues need to be solved within the framework of WTO. We are trying to get US, Europe, Japan, and another like-minded country to modernize the WTO. I think we need to address the issue of e-commerce and all those things need to be addressed within the framework of WTO. So, at the same time, we need to modernize WTO better. We need to ask each country; China, US, and others to play the game according to the WTO rules. 

Arun:  The relations with the United States are a very critical relationship for Japan since the Second World War. It's a very important security partner for Japan but of late there are voices emerging from the US; challenging or questioning US commitment to its allies, partners, security commitment. Given that, has that caused some anxiety concern in Japan about how the US is looking at its evolving role in the global context, in the context of the Asia-Pacific? 

Kōno: Well, I think the alliance between Japan and the United States is the cornerstone for security policy of Japan and President Trump and his administration's commitment to Asia or the Asia Pacific is still very strong in terms of security and defence policy. It is unfortunate that Washington left TPP and we are still hoping for the US to come back to TPP. But I think in general, in terms of security; the US is very committed to the region. So, we are not really worried about it and for example the issue of North Korea; I think the trilateral commitment among US, Japan and South Korea is very solid and we are working on North Korea to change the policy. So, I think the Trump administration; well there are a lot of issues but when it comes to the Asia Pacific or when it comes to the relationship between Japan and the United States, I think it's very stable and their commitment is real. 

Arun: In the context of North Korea, the US seems to have taken some very unprecedented steps and decisions in terms of President Trump agreeing to a meeting with Chairman Kim and there's talk now for a second meeting and for Japan, clearly whatever happens around North Korea is of deep interest including the issue of abduction of Japanese personnel and security concerns. Are you comfortable that the US has kept you fully informed about what they're doing with North Korea and how they're planning the next step? 

Kōno: Yes, Secretary Pompeo and the Foreign Minister Kang of South Korea and myself get together regularly and exchange the views and we are very solid and I think if North Korea makes right decisions, there is going to be a bright future for that country. So, a lot of things is now up to Mr. Kim Jong-un. If he makes the right decision for his country, Japan is ready to normalise the relationship with North Korea once they solve the issue of missile nuclear and abduction issues. We are ready to provide economic assistance to North Korea just like we did to South Korea in the past. So we are all waiting for his decisions and we are very grateful for the international community is united behind the U.N. Security Council resolution. So, I think President Trump is taking very strong leadership on this issue and we are waiting for their second summit meeting, it will be another breakthrough in this issue. 

Arun: Europe is another very important leg in the Western alliance system and Europe at the moment seems to be going through its own challenges. There is Brexit happening, For a long time, Germany and Angela Merkel were seen as leaders for Europe, setting the norms. She seems to have been weakened. The French President Macron who was seen at one stage as emerging as the new voice in Europe, he seems to have been weakened domestically. So, is there concern in Japan about the strength of the voice from Europe including because of the rise of right-wing forces, authoritarian tendencies in some countries. How are you seeing that and how is Japan looking at dealing with that challenge?

Kōno: Well, Europe is for democracy, rule of law, basic human rights. We share a lot of common values, you know. Europe, Japan, India; we are in the same boat I think and we welcome strongly united Europe. The Brexit and the possible no-deal Brexit worries us. It's true, but we hope that they could take care of that issue and I think it's time for Japan, Europe, India, and other democratic countries to share a little bit more burden to keep this liberal international order going. I think we have sort of relied on US bit too much, too long. Now the US is asking for some help, I think it's time for us to get a little bit more burden on our shoulder and EU and Japan conclude EPA and Strategic partnership agreement. So EU-Japan EPA is another signal that we are standing firm with the free trade regime and would like to convey the strong signal to the whole world. So, strong Europe, united Europe is welcome and we are for expansion of EU to the Balkan countries. So, I think Europe with a long history of democracy could take care of those issues and stand united. 

Arun: Expansion of Europe, expansion of NATO, of course, causes a lot of concern to Russia and Russia is an important political and defence partner of India. Japan has an important relationship with Russia. There's the issue of the islands since the Second World War. What's your sense of what can be done to improve really the situation between US and Russia, Western Europe and Russia so as to lessen Russia's increasing dependence on China which would be in the interest of neither the US nor Europe nor Japan and India? 

Kōno: Well since the end of the Cold War, Russia is no longer a security threat in East Asia and Russia could offer a lot of energy to Japan. Natural gas, electricity and all those things. So, Russia and Japan could be a natural partner in some area and Russia is a good friend of India for many years so there are probably a lot of things we can do together trilaterally and I'm very much looking forward to that. Now Prime Minister Abe has agreed with President Putin to expedite the process of concluding the peace treaty. 70 years after the war, we still haven't got a peace treaty with Russia. Now, I'm actually going to Moscow next week to start a new round of peace treaty negotiations and there are a lot of things we could invest in, especially Siberia Far East and there are a lot of things we can do together. So, I think it's good to have Russia on our side and I'm very optimistic. 

Arun: Well, I wish you good luck for your visit and the negotiations and as our discussion showed; there is a lot of convergence between India and Japan including because of our shared values and interests. I want to thank you for the effort you are making for advancing this relationship and thank you for joining this show. 

Kōno: Thank you very much.