Ore containing rare earths — Beijing (©Kyodo)
Canadian Prime Minister Mark Carney, an advocate of cooperation among middle powers, recently visited Japan. It is unusual for so many leaders － from Britain, France, and Italy, among them ー to visit Japan in quick succession and move to elevate bilateral ties. However, the international order is under severe strain, and critical minerals have emerged as a strategic fault line.
China is seeking to isolate Japan internationally. That makes it all the more important for Tokyo to build multiple, overlapping frameworks of cooperation and show that such a strategy will not work.
FOIP 2.0 and Economic Security
In her February policy speech, Prime Minister Sanae Takaichi said her government would strategically upgrade the Free and Open Indo-Pacific Strategy, or FOIP. Call it FOIP 2.0. Former Prime Minister Shinzo Abe first put forward the FOIP concept in 2016, but the geopolitical landscape has changed dramatically since then. The question now is how it should evolve.
First, as I argued in a previous column, Japan should contribute to economic security by making itself indispensable to the United States in strategic industries. Second, it should help Asian countries strengthen their autonomy in key industries through industrial cooperation.
In both cases, the central concepts are "indispensability" and "autonomy," the two pillars of economic security.
Japan's Opening to ASEAN
Of particular strategic importance is ASEAN, where distrust of the United States has grown under Trump-era tariffs even as China's presence has expanded. Precisely because Japan remains a country ASEAN nations are drawn to, it also becomes a partner America cannot afford to ignore. There is precedent for that in the second Abe administration.
Since the Fumio Kishida government, Japan has promoted the Asia Zero Emission Community as a regional framework for decarbonization. The Takaichi government should go further and propose a new initiative aimed at strengthening economic autonomy, centered on economic security.
In the growth strategy now being drafted, Tokyo should look beyond domestic investment and pursue an industrial policy with a wider reach. The glue binding countries together is no longer simply free trade. It is shifting toward economic security.
A New International Initiative on Critical Minerals
Another major challenge for FOIP 2.0 is China's economic coercion, in which rare earths are used as a strategic weapon.
Supply-side measures remain essential, including mine development to diversify supply sources and stronger national stockpiling. But demand-side steps are just as indispensable if countries are to reduce dependence on low-cost Chinese supply.
One such tool is the minimum price system proposed by the US. Under that approach, tariffs would be imposed on imports priced below a set floor. Vice President JD Vance has advocated using such measures to build a critical minerals trade bloc among US allies.
In February, Japan, the US, and Europe announced that they would work with like-minded countries to study a multilateral trade initiative for critical minerals. A minimum price system is only one option. Others include subsidy programs to narrow the price gap with cheaper Chinese materials and measures to guarantee long-term purchase agreements.
At the June 2025 G7 summit, leaders also issued a Critical Minerals Action Plan. With China clearly in mind, they began pursuing a fairer market shaped by standards such as reliability to reduce dependence and prices. That reflected long-standing Japanese efforts and will be carried forward to the 2026 G7 summit.
Any international arrangement will need to take these multiple dimensions into account. The US proposal has institutional drawbacks, but Japan should still treat Washington as a partner in the effort and work to embed it in a broader multilateral initiative.
Doing so will test Tokyo's ability to coordinate with the US and other like-minded partners in Europe and elsewhere.
A Strategy Rooted in National Experience
The oil shock of the 1970s led to the establishment of the International Energy Agency in 1974. To curb the influence of the Organization of the Petroleum Exporting Countries, oil-consuming countries created a separate international body to coordinate stockpiles and build systems for mutual support in emergencies.
The initiative is generally attributed to then-US Secretary of State Henry Kissinger. However, it began with an idea from a midlevel official at Japan's Ministry of International Trade and Industry, to which Washington responded. It is time to consider a similar international body for critical minerals.
In the 1980s, the world faced the prospect of bloc formation around the two major economic spheres of the day: European integration and the North American free-trade zone. Out of that sense of urgency, the Asia-Pacific Economic Cooperation forum was launched in 1989.
Although the idea is usually credited to then-Australian Prime Minister Robert James Lee (Bob) Hawke, it also originated with an official in Japan's trade ministry whose proposal gained traction after outreach to Australia, which shared the same concerns. Behind the initiative was not only an effort to check the rise of closed economic blocs, but also a strategic calculation to keep the US engaged in Asia.
Building a New Order
In the 1990s, the end of the Cold War led to the abolition of the Coordinating Committee for Multilateral Export Controls (COCOM). In its place, the Wassenaar Arrangement was established as a post-COCOM framework covering dual-use goods and conventional arms. Japan also made an important contribution there, with a Japanese proposal serving as the basis for coordination among Western countries.
History has much to teach. Looking at the path taken by earlier generations, Japan has shown real vision at key turning points in the international order. And it has done so in a way rooted in the country's character ー earning trust by coordinating among nations while giving due regard to others.
Today, the international order stands at the threshold of collapse. Japan should work to build new pillars of order in the Indo-Pacific and, at the same time, take the lead in strategic policy areas such as critical minerals. To flourish at the center of the international community, Japan will need both the resolve and the wisdom to play a central role in shaping a new order.
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(Read the article in Japanese.)
Author: Masahiko Hosokawa
