Chairman Kobayashi’s Comments on Japan-US Summit Meeting

May 25, 2022

The first official, in-person meeting between Japan’s Prime Minister KISHIDA Fumio and US President Joe Biden took place in Tokyo on May 23. The two leaders reaffirmed their commitment towards realizing a free and open Indo-Pacific through stronger bilateral ties and increased US engagement in the region.

The JFTC welcomes this news, particularly Japan’s announcement that it will be joining the US-led Indo-Pacific Economic Framework (IPEF). It is growing increasingly important for the US to enhance its presence in this region, a fact that numerous forces have combined to shed light on in recent years. They include escalating geopolitical risks such as heightened military activity and disputes over sovereignty, the need to bolster supply chains, and the growing competitiveness of Indo-Pacific nations within the international community.

The IPEF is built on four pillars: (1) Trade; (2) Supply Chains; (3) Clean Energy, Decarbonization and Infrastructure; and (4) Tax and Anti-Corruption. It incorporates many of the same rules as the CPTPP, including those pertaining to digital trade and trade-related labor and environmental issues, and it promises to strengthen supply chains for vital goods and advanced technologies, such as semiconductors for example. On the other hand, some have criticized the new framework for failing to include any tariff-reduction or market-access components, and the JFTC acknowledges that those restrictions could hamper the framework’s effectiveness moving forward.

The JFTC would like the Japanese government to take a leading role in establishing future economic rules that will benefit IPEF member states. For instance, with respect to infrastructure and decarbonization, those rules will need to take into consideration how difficult it is for Asian nations to quickly transition from fossil fuels to cleaner energy sources. The JFTC will be looking to Japan to bridge interests in Asia and the US in order to help us find the best solutions.

The JFTC also calls on Japan’s leaders to continue lobbying hard for a US return to the CPTPP, as America’s involvement in that partnership will have a measurable impact on strengthening a rules-based system of fair and open international trade.