Overview The aim of this introductory chapter is to describe and analyse three major contextual factors – European integration, Japanese economic development and a changing global environment. They provided the setting for the fifty years of EU-Japan relations covered by the chapters to follow and influenced the agendas and bargaining positions of negotiations including the shift from conflict over matters of trade to cooperation on global economic, environmental and political issues. A core element of European integration was the Common Commercial Policy. It implied that external economic relations would no longer be managed by individual member states, but instead be conducted at a European level with the Commission as the sole negotiating agent. The formation of a single European market also meant that agreements concluded between individual member states and Japan had to be translated into a unified European-wide framework. In the case of passenger cars, this led to the establishment of an EU-wide moderation scheme for Japanese exports known as the Elements of Consensus (see Chapter 10). The next subchapter gives a brief account of European integration and describes the basic elements of the Common Commercial Policy. A major cause for engaging in negotiations on the European side was the surge of Japanese imports, especially as they targeted industries that Europe considered important in terms of employment, income and/or growth potential. The fact that the Japanese market remained much less accessible to foreign products and services, including those exported from European countries, presented another important issue. Until the mid-1990s Japanese trade surpluses and European deficits largely influenced the agenda. Moreno Bertoldi even suggests that EU-Japan relations might have been mainly driven by current account imbalances and the underlying exchange rate movements (see Chapter 8). The surge of Japanese imports and the trade imbalances are closely related to Japan’s economic development that will be described in the third subchapter below. The fifty years covered in this volume saw many shifts in the global environment. Politically and security-wise, the end of the cold war removed a major threat to global stability, though it did not imply the beginning of worldwide

peace as exemplified by the subsequent outbreak of many local conflicts and the rise of terrorism. The fall of communist regimes in Europe and their transformation into market economies along with the fundamental market reform processes in China also terminated an ideological confrontation and opened the door to a truly global economic integration. The economic development of China – and to lesser extent India, Brazil and Russia – shifted the gravity of world economic activity from the former US-Europe-Japan triad to a multi-polar constellation reducing the global influence of triad members as well as the nature and weight of their respective bilateral relations. The fourth subchapter takes a closer look at the shifts in the global environment and their impact on EU-Japan relations. The last subchapter assesses how Japan’s economic development and the changing global context influenced the way that Japan was perceived and interpreted by European negotiators.