A Deal over National Security for Business

Prime Minister Sanae Takaichi issued a joint declaration on cooperation in economic security with Australian Prime Minister Anthony Albanese in Canberra on May 4th. Both leaders signed a document for cooperation in securing supply chains of energy and critical minerals, which Japan seriously needed to maintain its economy. Believing that national security can be achieved through business context, Takaichi hopes to build a network for procurement of important materials without relying on China. 

Japan-Australia Joint Declaration on Economic Security Cooperation recognized that economic and technological resilience was a foundation to national security, evaluating their relations “special strategic partnership.” Takaichi calledbilateral relations with Australia a “quasi-alliance” in a joint press conference held after the meeting with Albanese.

 

“We are committed to sharing information and consulting with each other on economic security contingencies, including those related to geopolitical tensions, economic coercion or other significant market interruptions,” says the declaration. It can be supposed that “geopolitical tensions” includes Russian aggression to Ukraine, “economic coercion” means debt-trap diplomacy of China and “market interruptions” refers to imposing tariffs on foreign goods by U.S. President Donald Trump.

 

The declaration specifically focused on supply chain. “We express our strong concerns over all forms of economic coercion,” says the declaration, “that are leading to harmful overcapacity and market distortion, as well as export restrictions, particularly on critical minerals, that could have a significant negative impact on global supply chains. The phrase implies China’s restriction of exporting rare earths for dual-use to Japan in January. That action by China is supposed as a countermeasure against Takaichi’s comment on Taiwan contingency in November 2025.

 

Japan and Australia simultaneously issued other statements on economic cooperation. The Statement on Elevated Critical Mineral Cooperation listed six project of business sectors of both countries, including a joint venture and loan financing to Lynas Rare Earths, development of gallium recovery of Alcoa, production of high-purify magnesium by Magnium Australia, producing acid-grade fluorite in collaboration with Tyvan Ltd., and development of nickel cobalt resources in Kalgoorlie Nickel Project.

 

To unleash Japan’s business on weapons trade, Takaichi decided to remove five-category limits on exporting defense equipment in this April. The Statement on Enhanced Defense and Security Cooperation included “maintenance and sustainment of assets, including ‘Upgraded Mogami’ frigates.” Mogami is a Japanese frigate, which Australia decided to introduce to its navy and signed for joint development with Japan in April.

 

Takaichi explained in the press conference that transferring defense equipment to partner countries would contribute to deterring conflicts and strengthening Japan’s own security. While she stressed Japan’s basic concept toward security in Asia-Pacific region, which is called Free and Open Asia-Pacific (FOIP), it is likely that Takaichi’s encouragement of defense industry in Japan as a countermeasure against China’s advance will accelerate arms race in this region.

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