A 2025 Volkswagen ID.4 electric vehicle (EV) during a Great American Road Trip Expo hosted by the Department of Transportation (DOT) in Washington, DC, US, on Thursday, May 29, 2025. Japan and the EU plan to align subsidy policies for green technologies, including electric vehicles and hydrogen production. -Bloomberg
BRUSSELS: Japan and the European Union are set to launch a "Competitiveness Alliance" aimed at boosting corporate resilience and deepening trade and economic security cooperation, Kyodo news agency quoted diplomatic sources on Saturday (June 7).
The initiative is expected to be announced at a summit in July, which will likely see Japanese Prime Minister Shigeru Ishiba host European Council President, Antonio Costa and European Commission President, Ursula von der Leyen.
The new framework aims to reinforce efforts by both parties to uphold a rules-based economic order.
It will build on the existing Japan-EU free trade agreement, which eliminates tariffs and other trade barriers between the two economies that together represent 20 per cent of global gross domestic product.
Under the alliance, Japan and the EU will work together to diversify supply chains for rare earth minerals, amid growing concern over China’s export restrictions on these critical resources used in smartphones and high-tech manufacturing.
The framework also includes plans to align subsidy policies for green technologies, including electric vehicles and hydrogen production, to reduce development costs and ensure fair competition for manufacturers on both sides.
On the global trade front, the alliance will support reforms at the World Trade Organisation, which many view as weakened in addressing Chinese trade practices and broader systemic issues.
Japan and the EU will also seek stronger engagement with emerging economies of the Global South, promoting shared values such as free and fair trade, and adherence to the rule of law.
The EU, meanwhile, is exploring closer cooperation with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which includes Japan, the United Kingdom, and 10 other countries.
Some EU members have called for deeper collaboration in setting rules on digital trade and climate-related business practices. - Bernama-Kyodo
