April 29, 2024
TOKYO – Japan and the European Union are planning to launch a joint measure aimed at bolstering international economic security.
Under the new measure, the two sides will formulate international principles to enhance economic security, such as avoiding overreliance on particular countries for procuring and manufacturing semiconductor chips and other strategic goods and protecting the environmentally. In the background of the plan is concern over cheap products manufactured in China and other countries that continue to flood the global market.
Both sides plan to call on the United States and other like-minded countries for support with the aim of fostering transparent, rules-based competition in global markets.
Japan and the EU are expected to issue a joint statement in May, when high-level economic discussions are scheduled in Paris. The meeting will be attended by Japan’s Foreign Minister Yoko Kamikawa; Economy, Trade and Industry Minister Ken Saito; and the European Commission’s Executive Vice-President Valdis Dombrovskis.
The joint statement — the two sides’ first concrete statement on enhancing economic security — will stipulate that Japan and the EU must promote “transparent, resilient and sustainable supply chains.”
To prevent an overfocus on the pricing for strategic goods, the two sides plan to impose as common principles for public procurement and subsidizing private businesses such conditions as protecting the environment, securing supply chains without overly relying on any single country, and adequately responding to cyberattacks. Specific details for each field are being worked out.
In the field of electric vehicles, solar panels and less advanced chips, Chinese firms are increasing their global market presence, an advantage granted by their products’ low prices.
Top officials from the European Commission are reportedly becoming increasingly frustrated with the situation, persistent in their claim that the Chinese government provides massive subsidies to Chinese companies and intentionally keeps prices low. In 2022, China’s trade surplus with the EU registered a record €400 billion — about ¥67.6 trillion.
The upcoming statement is expected to express concern over the current situation: As a result of industrial subsidies and other moves that distort the market, countries rely on specific sources to supply strategic goods, and trade is used as a weapon.
Nevertheless, China is an important trade partner for both Japan and the EU. Instead of eliminating Chinese products from the market, Japan and the EU have agreed to aim for “de-risking,” or lowering their dependence on China for strategic goods and key technologies.
As friction with China continues to intensify, the United States and other countries are stepping up efforts to bring semiconductor and EV plants to their own country.
Japan and the EU envision international principles to prevent the global economy from retreating into protectionism. Both sides are calling for understanding from the Group of Seven as well as from emerging and developing countries in the Global South to promote fair conditions for competition through cooperative initiatives.
In the joint statement, Japan and the EU also plan to acknowledge their cooperation in strengthening economic security by promoting analysis of risk assessment and the prevention of leaks in such key technologies as artificial intelligence and advanced semiconductor chips.