Rare earths and cutting business red tape in focus as EU, Japan eye economic upgrade
Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.
Strategic joint procurement of critical raw materials and tighter business-to-business links are set to form the backbone of a new 'EU-Japan Competitiveness Alliance,' according to a draft summit communiqué seen by Euractiv.
The initiative, first reported by Japan-based weekly Nikkei, signals a major ramp-up in EU-Japan cooperation, touching on economic security, industrial policy, and supply chain resilience, and is expected to be launched when EU and Japanese leaders meet in Tokyo on Wednesday.
'Both sides will accelerate joint efforts to monitor and strengthen supply chains in strategic sectors and identify strategic goods and sectors for further cooperation under the expanded High-Level Economic Dialogue,' the latest draft of the summit text states. Initial cooperation will focus on critical raw materials and battery value chains, especially for clean tech and digital industries, though future expansion 'could extend to other sectors in the future,' both sides are expected to say.
A new "economic two-plus-two" dialogue will bring together Japan's foreign and economy ministers with the EU's Trade Commissioner, Maroš Šefčovič, and industry chief, Stéphane Séjourné, officials on both sides confirmed to Euractiv.
While the summit communiqué invokes concerns about 'economic coercion' and 'non-market practices,' it carefully steers clear of naming China. Still, officials on both sides privately have acknowledged the new Alliance is aimed at reducing strategic dependencies on Beijing and other dominant suppliers.
The US, meanwhile, is not mentioned either – even as Washington threatens to impose tariffs on both by 1 August. Instead, EU and Japanese leaders will merely commit to 'continue to contribute to maintaining and strengthening a stable and predictable rules-based free and fair economic order.'
The pact includes pledges to deepen public-private cooperation, including dedicated business roundtables and industry platforms. Japanese business officials, however, remain wary, saying that excessive red tape continues to slow joint projects and hinder regulatory harmonisation.
In a new twist, the draft communiqué also proposes the launch of a 'Japan-EU Defence Industry Dialogue (DID)' to promote collaboration on advanced and dual-use technologies – explicitly linking economic and security cooperation for the first time in the relationship.
Japan, which signed a bilateral security pact with the EU last year, is now eyeing access to the bloc's forthcoming SAFE defence funds, though no formal timeline has yet been confirmed.
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