Governments in Japan and Australia are prioritizing economic security amid rising nationalism, social inequality, and financial volatility, a shift from the globalization that defined decades prior to the 2007-08 Global Financial Crisis. This was a central theme of the Japan-Australia Economic Security and Industrial Cooperation Symposium held November 5th.
Economic Security a Growing Priority
The symposium brought together government and private sector leaders from both nations, including officials from Japanese agencies focused on trade, industry, and resource supply – such as the Japan External Trade Organization, the Ministry of Economy, Trade and Industry, and the Japan Oil, Gas and Metals National Corporation (JOGMEC). Representatives from the Australian departments of Defence, Foreign Affairs and Trade, and Industry also attended.
One speaker at the symposium quoted Italian Marxist scholar Antonio Gramsci, stating, “The old world is dying and the new world struggles to be born.”
Japan’s Focus on Supply Chain Resilience
Japanese Prime Minister Sanae Takaichi has emphasized the need to strengthen Japan’s security in areas including food, energy, health services, and international security. She has initiated a review of Japan’s Economic Security Promotion Act, citing “the most challenging and complex economic security situation in the post-war period.”
Japan, previously a proponent of lean, just-in-time supply lines, is now focused on building redundancy into those lines. The shift acknowledges that security concerns may outweigh purely competitive pricing in procurement decisions, potentially conflicting with World Trade Organization rules or free trade agreements.
Concerns remain about the potential impact should international trade rules weaken, particularly regarding China’s behavior. Japan experienced a Chinese embargo on rare earth supplies in 2010 and recently faced threats of export controls on a wider range of critical minerals.
Diversification and Critical Minerals
Speakers emphasized that while decoupling from China is not feasible, diversifying trade relationships is crucial. Strengthening supply chain security requires collaboration with partners both upstream and downstream, described as a “comprehensive supply chain approach.”
Critical minerals are a key area of concern, presenting high investment risks due to technical complexities, opaque pricing, and China’s market dominance. Private capital alone is unlikely to be sufficient, necessitating government intervention and partnerships.
Financiers need assurance that offtake agreements will be honored even if China floods the market with cheaper materials. Secure and reliable market demand is essential, potentially requiring government support and collaboration with the private sector. Government entities also have a role in establishing sustainable mining and processing standards.
Several ventures already combine Australian mineral deposits with Japanese capital, including the Japan Australia Gallium Associates project, involving Sojitz corporation, JOGMEC, and Alcoa Australia.
Defence Industry Collaboration
The symposium also addressed defence industry collaboration, acknowledging that military modernization was previously deferred due to a belief in the diminishing threat of inter-state conflict. Both Japan and Australia reaffirm their alliances with the United States, while recognizing the increasing responsibility of middle powers to maintain security as the US share of the global economy declines.
Increased defence spending could lead to inflation in military hardware prices, highlighting the need for integrated industrial bases among partners. The AUKUS agreement offers a potential model for collaboration, as does Australia’s recent frigate acquisition from Mitsubishi Heavy Industries, which could spur wider collaboration in dual-use technologies.
Greater business-to-business dialogue between Australian and Japanese defence companies is needed, but requires prior government coordination. Some participants expressed hope for a formal security alliance between Japan and Australia, potentially marking the 50th anniversary of the Japan-Australia Basic Treaty of Friendship and Cooperation in June 2026.
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