By Sophie Welsh
[Video Link]
This panel featured two leading policymakers and experts on U.S. and Japanese foreign economic policies, Dr. Aaron Forsberg, Minister Counselor for Economic and Scientific Affairs at the U.S. Embassy in Tokyo, and Mr. Rokuichiro Michii, Ambassador and Deputy Chief Negotiator for the TPP in Japan’s Cabinet Secretariat. They examined the two governments’ responses to recent challenges of the global economy, including threats to multilateral trade regimes, energy and food insecurity, supply chains, climate change, and competition for leadership in developing new technologies. The two speakers also suggested areas for further U.S.-Japan cooperation in economic and security policies in the Indo-Pacific region.
Dr. Forsberg outlined the priorities of the Biden administration’s Indo-Pacific economic strategy and focused his discussion on three of them. First, the administration has worked to integrate foreign and domestic economic policy objectives, pursuing economic growth abroad and at home that benefits workers and middle class. Second, the Biden administration is placing a new emphasis on economic security, sustainability, and resilience. Third, faced by security and technological competition in the Indo-Pacific region, the Biden and Kishida administrations have emphasized deepening and broadening of alliances and partnerships, based on economic and security interests. The Biden administration has launched new initiatives, including the U.S.-Japan Economic Policy Consultative Committee and the Indo-Pacific Economic Framework (IPEF).
Dr. Forsberg characterizes the current time as an “inflection point” in history, when we confront both old and new challenges, and must answer fundamental questions, such as what needs we must prioritize (economics, security, sustainability), what the best policy tools are, and how to demonstrate the benefits of rules-based order to other countries.
Mr. Rokuichiro Michii began his presentation by surveying Japan’s increasing commitment to and support for the World Trade Organization (WTO) and rules-based international trade order since the mid-1990s. From the early 2000s, Japan signed many free trade agreements with other countries and has actively contributed to Asia’s regional economic integration. Currently, Japan has 21 Economic Partnership Agreements (EPA) and Free Trade Areas (FTA) with 24 countries, which cover 79 percent of its total trade.
Most notably, Japan played a leading role in the formation of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), after the Trump administration withdrew from the Trans-Pacific Partnership (CPTPP) in 2017. The CPTPP has established the highest standards in trade rules and market access to date, include tariff liberalization which has reduced trade barriers by over 99%. It has established rules relating to state-owned enterprises (SOEs), labor, environment, and other topics. Currently there are several aspirant economies—including the UK, China, Taiwan, Ecuador, and Costa Rica—which have declared their intent to join the CPTPP, and its growing importance is an opportunity for Japan’s leadership in the multilateral trading regime.
Among the topics discussed in the Q&A were: whether or not pursuit of economic security (based on geopolitical interests) is consistent with strengthening the rules-based order; how international sanctions against Russia after its invasion of Ukraine would affect the rules-based order; and areas where the U.S. and Japan can further increase cooperation in their pursuit of economic and security policy goals.