EDITORIAL | Japan, US Should Lead Towards Creation of Free and Open Economic Order

The inaugural ministerial meeting of the United States-Japan Economic Policy Consultative Committee (EPCC) — known as Economic 2+2 — took place in Washington DC on July 29. The ministers agreed that Japan and the US should take the lead in efforts to create a free and open international economic order.

Strengthening Japan-US solidarity in the economic and advanced technology sectors that are closely tied to national security are vital in opposing China, Russia, and other countries that threaten international peace and security.

The newly launched Economic 2+2 complements the preexisting Japan-US Security Consultative Committee, known simply as 2+2, which brings together the foreign and defense ministers of the two countries. For that reason, the start of the economic consultative committee represents a significant strategic move.

Hopefully, steady progress in the areas agreed upon by the two sides will lay the foundation for an economic order that will serve as a compass around which democratic nations from Europe, Asia, and elsewhere can rally.

A Plan of Action

In attendance at the meeting were Foreign Minister Yoshimasa Hayashi and Minister of Economy, Trade and Industry Koichi Hagiuda for Japan, and Secretary of State Antony Blinken and Commerce Secretary Gina Raimondo for the United States. The results of their discussions were contained in a Joint Declaration and 16-point Plan of Action.

The points of agreement covered a broad spectrum, including cooperating in the development of advanced technologies and strengthening the supply chain for next-generation semiconductors that can be used for AI (artificial intelligence) and other uses.

From left, Japanese Economic Trade and Industry Minister Koichi Hagiuda, Japanese Foreign Minister Yoshimasa Hayashi, Secretary of State Antony Blinken, and Secretary of Commerce Gina Raimondo at the State Department in Washington DC, July 29, 2022. (Tom Brenner/Pool Photo via AP)

They also agreed to cooperate in sharing information on cybersecurity threats and effecting export controls to prevent the outflow of critical and emerging technologies to unfriendly countries.

Furthermore, those at the meeting called for the promotion of fair and transparent development financing. Here they clearly had in mind China and its massive Belt and Road economic bloc initiative designed to saddle developing countries with debt while spreading Beijing’s influence.

Ready For Implementation

The administration of Prime Minister Fumio Kishida achieved passage of the Economic Security Law during the recent ordinary Diet session. There are many common points between the contents of that law and the areas mentioned by the 2+2 meeting. Hopefully, greater collaboration with the United States will produce symbiotic effects that will make Japan’s economic security more effective.

The energy and food crisis stemming from Russia’s aggression against Ukraine once again drives home for us the dangers of becoming reliant on authoritarian states. That is especially true for Japan, which neighbors a giant China that does not hesitate to engage in economic intimidation of other countries.

Considering the political risks inherent in a Chinese economy whose direction is arbitrarily decided by the government, we urgently need to establish an economic community centered on Japan and the United States that will be able and willing to cooperate with like-minded nations and regions.

May 2022 saw the establishment of the Indo-Pacific Economic Framework (IPEF), as proposed by US President Joe Biden. The 14 founding member-nations include Japan, the United States, and 12 other countries from Asia and other regions.

In order to see this multinational framework function effectively, it is important to work to include countries which find it difficult to escape dependency on China.

The first thing to do in order to achieve that aim is for Japan and the United States to deepen their cooperation in creating a rules-based economic order.

(Read the editorial in Japanese at this link.)

Author: Editorial Board, The Sankei Shimbun