2023-10-27 11:44:15
Australian Prime Minister Anthony Albanese and U.S. President Joe Biden during the G7 Summit in Hiroshima, Japan, May 20, 2023. JONATHAN ERNST / REUTERS
Stability of supply routes, strengthening of export controls on sensitive materials and technologies, but also fight against economic coercion. The meeting of trade ministers of the G7 (Japan, United States, Canada, Germany, Italy, United Kingdom and France), Saturday October 28 and Sunday October 29, in Osaka (western Japan), should look into the growing trend to protectionism in the name of economic security dear to the Japanese government, which created a specific ministry.
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The debates should focus, among other things, on what experts call “the militarization of resources”, which involves strict control of production and exports. China seems particularly targeted with its decision, which came into force on August 1, to strengthen export controls on certain sensitive materials, gallium and germanium, but also graphite. China produces more than 80% of the world’s graphite. However, Japan, like South Korea, is very dependent on it. More than 90% of their graphite comes from China.
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Even if the Japanese government claims “have no particular concerns on this subject”the American legislation adopted in 2022 – Chips on microprocessors and Inflation Reduction Act (IRA) on the fight against rising prices, which tend to favor products manufactured in the United States – could also be mentioned by the members of the G7 and their guests, India, Indonesia and Australia.
Distrust
The measures adopted by Washington are already having a significant impact on trade, forcing many companies to redefine their strategies or certain countries to adopt their own legislation. The law adopted in May in Japan to promote “green transformation”, endowed with 20,000 billion yen (126 billion euros) in Treasury bonds over ten years, is an example. Canada passed a similar framework, as did France, with a new tax credit for French companies developing solar panels, batteries and wind farms.
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Japan and the United States also signed an agreement in March, which essentially addressed Tokyo’s concerns over the IRA’s rare metals requirements.
South Korea – not invited to Osaka, but which was at the G7 summit in May, in Hiroshima – remains very defiant towards American laws, but also the legislation passed by Paris, qualified by the South Korean economic daily Pulse of “French-style IRA”. “The IRA is mentioned at every meeting with the Americans. President Yoon Suk-yeol’s administration has pushed for a transition period and made it a priority to draw American attention to potential violations of World Trade Organization rules. and the free trade agreement with South Korea », observes Kim Min-seong of New York University Law School.
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