Japan, Germany agree to work together on economic security

Japan, Germany agree to work together on economic security

TOKYO Reuters agreed on Saturday to cooperate closely on economic security during their first high-ministerial government consultations, held amid tensions over global supply chains and economic disruptions caused by the war in Ukraine.

German Chancellor Olaf Scholz is looking at ways to reduce German dependence on Chinese raw materials, accompanied by six ministers to Japan.

The Russian invasion of Ukraine and the COVID-19 pandemic made us painfully aware of the difficulties that can arise when there is too much economic dependency in critical areas, said Scholz at a news conference after the talks.

He said that he and other partners are working on drawing the right conclusions from these experiences.

In a joint statement, the two countries stated their intention to strengthen cooperation on economic security and to establish a legal framework for bilateral defence and security cooperation, such as providing logistical assistance, and sharing our best practices to counter risks, in order to build a resilient supply chain that is safe and sustainable, and Germany holds inter-governmental consultations with a number of countries, including France and China. German officials said that the decision to hold its first consultation with Japan was of considerable political and symbolic importance.

Berlin hopes to learn about its raw material strategy and follow Tokyo's lead on how to cut dependence on imports after Japan passed a bill on economic security, according to a German government official.

In a move mainly focused on China, Japan's parliament passed an economic security bill last year that aimed at guarding technology and reinforcing critical supply chains.

Trade between Germany and China rose to a new record level last year, making Germany Germany's most important trading partner for the seventh year in a row despite political warnings in Berlin about excessive dependence.

According to the German statistics office, goods worth around 298 billion euro were traded between the two countries in 2022, up around 21% from a year ago.

Japan is Germany's second largest trading partner in Asia, but volumes in 2022 were less than a fifth of those with China.

Germany's centre-left government is looking at ways to wean itself off the reliance on China's economy, as it is considering taking a tougher line towards Beijing than its centre-right predecessor.

As Democracies and as highly industrialized, export-oriented economies, Japan and Germany are facing similar challenges in shaping digital and ecological transformation and strengthening the resilience of their economy in difficult geopolitical times, according to Franziska Brantner, state secretary in Germany's economy ministry.