Japan and the European Union are preparing to implement a collaborative initiative focused on enhancing global economic security.
The new initiative involves both parties collaborating to establish global standards aimed at strengthening economic security. This includes reducing dependence on specific countries for the production and acquisition of semiconductor chips and other essential goods, as well as preserving the environment. The initiative is driven by worries about the influx of inexpensive products from China and other nations into the worldwide marketplace.
Both parties intend to seek assistance from the United States and similar countries to promote fair and transparent competition based on rules in international markets.
Japan and the EU are set to release a joint declaration during the upcoming high-level economic talks in Paris this May. The delegation will include Japan’s Foreign Minister Yoko Kamikawa, Minister of Economy, Trade and Industry Ken Saito, and the European Commission’s Executive Vice-President Valdis Dombrovskis.
The initial agreement between Japan and the EU, which marks their first official commitment to strengthening economic security, will outline the necessity for promoting supply chains that are transparent, resilient, and sustainable.
In order to avoid excessive emphasis on pricing of strategic goods, both parties intend to establish shared principles for public procurement and supporting private enterprises. These principles will include safeguarding the environment, diversifying supply chains to reduce dependence on any one country, and effectively addressing cyber threats. Detailed plans for implementation in each sector are currently under development.
Chinese companies are gaining a stronger foothold in the global market for electric vehicles, solar panels, and less advanced chips due to their competitively priced products. This advantage has led to an increase in their market presence. European Commission officials are expressing growing frustration with this situation, as they believe that the Chinese government is providing substantial subsidies to Chinese companies and deliberately maintaining low prices. In 2022, China’s trade surplus with the EU reached a record €400 billion, equivalent to approximately ¥67.6 trillion.
The forthcoming declaration is anticipated to convey apprehension regarding the present state of affairs: Due to industrial subsidies and other actions that disrupt the market, nations depend on particular sources for strategic goods, leading to the utilization of trade as a tool of coercion.
However, China still holds significant importance as a trading partner for both Japan and the EU. Instead of completely removing Chinese products from the market, both regions have opted to pursue “de-risking” strategies to decrease their dependency on China for essential goods and technologies.
Japan and the EU are working together to establish international guidelines aimed at preventing the global economy from reverting to protectionist measures. They are urging the Group of Seven, as well as emerging and developing nations in the Global South, to support cooperative efforts that ensure fair competition conditions.
Japan and the EU will also recognize their collaboration in enhancing economic security through the advancement of risk assessment analysis and the prevention of leaks in critical technologies like artificial intelligence and advanced semiconductor chips in the joint declaration.
