Tokyo Report | Economy | east asian
The new forum, which expands the allies’ strategic coordination on economic issues, will hold its first high-level meeting this week.
US and Japanese government leaders meet on July 29 in Washington, DC, for the highest-level version of a new bilateral policy coordination forum nicknamed the Economic Policy Advisory Committee (or “Economic 2+2”). This first Economic 2+2 ministerial meeting takes place in the context of a debate battle on Capitol Hill to pass legislation that will subsidize investment in semiconductor manufacturing in the United States, along with other provisions to protect America’s economic security and promote competitiveness. Japan has already passed similar legislation this year, and such efforts by both countries include measures to diversify supply chains, control technology exports and support scientific research to keep pace with China.
These are precisely the kind of complex modern issues combining technology, national security, economic vitality, and foreign policy for which this new 2+2 Economic mechanism was established. Coordinating their policies and even pooling resources can occasionally benefit both nations, but political sensitivities around these issues and the newness of this forum demand modest expectations at first. Developing the effectiveness of a long-term economic 2+2 between Japan and the US is more important than any immediate results.
US President Joe Biden and Japanese Prime Minister Kishida Fumio. Announced the 2+2 Economic of January, and several preparatory meetings have been held before the first ministerial meeting on Friday. US Secretary of State Anthony Blinken and Commerce Secretary Gina Raimondo will welcome their Japanese counterparts (Foreign Minister Hayashi Yoshimasa and Economy, Trade and Industry Minister Hagiuda Koichi) at the State Department.
The agenda is an eclectic mix that includes fostering domestic manufacturing of critical technologies, building reliable energy supply chains, and countering Chinese attempts to steal technology or use their economic clout for strategic gain at the expense of others. Allies could also to converse Guidelines for investment in infrastructure abroad and human rights guarantees in supply chains. Such a diverse agenda requires an unprecedented amount of collective effort among government offices that are not used to sharing leadership. Close cooperation with the private sector is also necessary.
The Economy 2+2 gets its Nickname from its similarity to the original “2+2” partnership process that brings together the leaders of Japan’s Foreign and Defense Ministries with those of the United States Departments of State and Defense. For decades, this Security Advisory Committee focused primarily on political and logistical issues related to US military bases in Japan. However, as global threats intensified in the 2000s and allies’ interests increasingly overlapped, they used the Committee to coordinate foreign policy strategy for new challenges with North Korea or the Middle East. . Today, the Security Advisory Committee is vital to coordinating policies to help Ukraine defend itself against a brutal Russian invasion. The Allies realized that coordination of foreign policy strategy alone was no longer enough, and the original 2+2 helped them buttress diplomatic strategy with military force.
A similar dynamic is playing out today on the economic front. In recent years, the foreign policy landscape has become more complex, as business and technological developments have a direct impact on national security. This is in part because supply chains are more concentrated and easily disrupted, digital transformation leaves critical infrastructure more vulnerable to cyberattacks, and new technological advances in a country can profoundly alter the balance of power. Addressing these challenges effectively requires cooperation with like-minded nations, but in this case, a combination of diplomatic strategy with trade and technology authorities is most useful.
However, it will be difficult to successfully launch economic 2+2 because the number of policy offices and relevant stakeholders is much larger than this simple 2+2 equation would imply. In Washington, for example, the Office of the US Trade Representative. believe that it should have a leading role in any new bilateral framework dealing with regional trade issues. The Departments of Energy, Treasury and Homeland Security also have interests in the Economic 2+2 agenda. Of course, they will be asked to contribute to these bilateral meetings, but will they be brought in as true partners in the process or simply seen in a supporting role? Many of these offices are not used to exercising their authorities in a coordinated multilateral manner.
Large amounts of money are also at stake. the congress is vote this week about a possible $50 billion in subsidies for domestic semiconductor manufacturing, along with $100 billion over five years for the National Science Foundation. japan is assigning similar resources, and both countries are spending more on the next generation telecommunications infrastructure research and other technologies of the future, including quantum computing. While it is natural for politicians to put national interests first when spending taxpayer funds, this situation underscores the opportunity that exists for both sides in terms of information sharing and policy coordination, which can help them get even more return on your investments.
Today, the alliance needs a strong and cohesive Economic Policy Advisory Committee to address emerging issues in the 21st century. Economic security, semiconductors, energy stability, pandemic preparedness, and other issues require new policy partnerships and public-private cooperation. As with the original 2+2 format, it will take time for participants to appreciate the benefits of close agency cooperation. When bureaucrats, politicians, and even business leaders begin to see Economic 2+2 as a preeminent forum to help them collectively address their own priorities, then the new committee will have realized its potential.