Japan, EU eye launch of "competitive alliance" scheme to boost trade

Kyodo News

7 hours ago

KYODO NEWS - 2 hours ago - 21:04 | Japan, All, World
Japan and the European Union are preparing to launch an "alliance" framework to beef up their companies' competitiveness by promoting trade and economic security cooperation, diplomatic sources said Saturday, facing concerns over U.S. President Donald Trump's tariffs and Chinese trade practices.
The creation of the "Japan-EU Competitiveness Alliance" is expected to be announced at a regular summit meeting being arranged for July, when Japanese Prime Minister Shigeru Ishiba is likely to host European Council President Antonio Costa and European Commission President Ursula von der Leyen, they said.
The move will further align both sides' efforts to uphold a rules-based economic order, building on cooperation through a free trade agreement that removes tariffs and other trade barriers between the two economies, which account for 20 percent of the world's gross domestic product.
Under the framework, Japan and the EU will work together to diversify supply chains for rare earth minerals in the face of China's export restrictions on the elements crucial for the production of smartphones and other high-tech products, according to the sources.
They will also align subsidy conditions for environmental technology such as electric vehicle and hydrogen production to promote fair competition for manufacturers and reduce development costs.
On the trade front, the two sides will seek to promote reform of the World Trade Organization that is deemed dysfunctional, with the United States dissatisfied with the global body's response to addressing Chinese trade practices and other issues.
They will also seek to collaborate with the "Global South" emerging and developing economies as partners sharing values of free and fair trade as well as the rule of law, the sources said.
The EU is also eager to cooperate with a vast trans-Pacific free trade agreement involving Japan and 10 other nations, plus Britain that joined the accord in 2023. Some inside the bloc have called for joining efforts in rulemaking, as members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership weigh better business environment for digital trade and climate change countermeasures.