Germany, Japan Vow to Deepen Ties on Defense, Raw Materials

Japan and Germany vowed to deepen cooperation on defense and climate protection and work more closely together to reduce excessive dependencies in critical areas such as raw materials.

(Bloomberg) — Japan and Germany vowed to deepen cooperation on defense and climate protection and work more closely together to reduce excessive dependencies in critical areas such as raw materials.

Prime Minister Fumio Kishida on Saturday hosted Chancellor Olaf Scholz in Tokyo for the first German-Japanese government consultations which included a joint cabinet meeting and bilateral talks between key ministers for defense, economy, finance, transportation and foreign affairs.

“The international community is facing a time of great change and Japan and Germany need to cooperate even more closely than before to maintain and strengthen the free and open global order based on the rule of law,” Kishida told reporters after the meeting.

Scholz said the two had brought German-Japanese ties to a new level with the joint cabinet session. 

In a declaration issued after the summit, the two governments condemned Russia’s war in Ukraine. They also agreed to work to establish a legal framework for defense and security cooperation. Scholz told the news conference a German frigate would soon visit Japan.

Agencies from the two countries will collaborate on critical minerals supply, according to the statement. Germany and Japan also discussed possible joint procurement of raw materials between companies in their respective economies, Scholz said during the news conference.

Major developed nations such as Germany and Japan are competing fiercely for increasingly scarce resources, with access to metals and rare earths seen as crucial for the transition to cleaner and more technologically advanced economies.

In the global race for many of the commodities, China has become the dominant supplier or processor, leading to warnings about the government in Beijing wielding excessive influence.

Japan has been increasingly focused on economic security, appointing a minister in charge of pursuing it and passing a bill partly aimed at building resilient supply chains for key critical goods such as rare earths. In a new National Security Strategy published in December, Kishida’s government vowed to “curb excessive dependence on specific countries.”

Germany is in the final stages of drafting its own national security strategy in which economic resilience and reducing one-sided dependencies in areas such as energy and raw materials will also play a key role. China is expected to be described as an international partner, economic competitor and systemic rival.

Scholz has repeatedly stated that democratic nations must work more closely together to counter the influence of economic rivals with different political systems.

While the German leader has rejected an economic decoupling from China, he has urged companies to diversify their business ties in Asia. That is challenging because Germany’s trade links with China have been formed over decades.

German carmakers and their suppliers are trying to secure direct access to raw materials such as lithium and cobalt needed in the production of battery cells for electric vehicles.

Earlier this month, Japan’s Sojitz Corp and a Japanese government organization agreed to boost their funding of Australia’s Lynas Rare Earths Ltd. as part of efforts to cut dependence on China in their critical supply chains. America’s only rare-earths producer has agreed a deal to ship output from its new processing plant to Japan.

Japan has also signed up to join the US in tightening controls over the export of advanced chipmaking machinery to China, according to people familiar with the matter, although details haven’t been made public. On Thursday, Kishida and South Korean President Yoon Suk Yeol announced they would launch a new bilateral dialog on economic security.

Scholz was joined in Japan by senior ministers including Economy Minister Robert Habeck, who is also his vice chancellor, Finance Minister Christian Lindner, Foreign Minister Annalena Baerbock, Defense Minister Boris Pistorius, Transport Minister Volker Wissing and Interior Minister Nancy Faeser.

A delegation of senior German business executives accompanied Scholz and his cabinet team for wider talks with the Japanese government and company representatives on how to deepen ties on green energy and trade.

It is Scholz’s second visit to Japan as chancellor in less than 12 months. He also plans to attend the G-7 leaders summit in Hiroshima in mid-May where the topic of economic security and supply chain resilience will feature high on the agenda.

Scholz’s focus on Japan marks a clear shift from his predecessor Angela Merkel, who visited Tokyo only three times for bilateral talks during her 16 years in power even as she flew to China with large business delegations nearly every year.

Russia’s war in Ukraine exposed the dangers of over-reliance on a single supplier for energy imports and Scholz’s ruling coalition is keen to avoid similar dependencies when it comes to raw materials.

(Updates throughout with statement and press conference)

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