Australia needs to revamp the Japan relationship to secure its Asian interests

Author: Shiro Armstrong, ANU

Prime Minister Scott Morrison’s trip to Japan in November 2020 for a historic summit deepened a relationship with Japan that is Australia’s strategic anchor in Asia — his sole official trip overseas in close to 19 months. The most important geopolitical, economic and security fault lines in the world run through Australia’s and Japan’s own backyard.

Australia’s relationship with Japan has never been closer, and Japan is of growing importance to Australia. The world’s third largest economy, it is Australia’s second largest source of foreign investment and third largest trading partner — having been second until commodity exports fell last year.

The Special Strategic Partnership between the two countries rests on deep economic complementarity, shared strategic interests, and deepening trust and familiarity.

But the Japan relationship must be reimagined to cope with accelerating economic, environmental and social changes in both countries and a dramatically changing geopolitical environment. Japan must be embraced as a most favoured partner to deliver on its potential to help deal with these challenges.

There is no room for national complacency about how ready the relationship is to serve this purpose. In addition to the transformation of the economic relationship, much about the region’s direction is yet to be negotiated and is too uncertain to take the present-day congruence of strategic outlooks between Japan and Australia for granted. The active, vital task of reimagination must be grasped by Canberra and Tokyo now.

The energy trade underpinning the two countries’ growing security relationship is already ebbing as Japan turns to decarbonisation of its economy. The shared strategic approach to China and the rise of global protectionism — notably in the United States and Europe — makes a far closer political, cultural relationship essential to both nations.

Australia, Japan and the region face a rising and more assertive China and an increasingly inward-looking United States that no longer commands economic or political primacy in Asia.

The US alliance framework remains the bedrock of Australian, Japanese and regional security and stability. The Quad that includes India alongside Australia, Japan and the United States reinforces that. But it is through open economic engagement that Australia needs to entrench US interests in Asia where US policies have been less supportive of the multilateral rules-based system. Japan shares those interests and brings serious economic heft to the task. Australia’s experience in the face of Chinese trade coercion demonstrates to the world that the open and contestable markets that the multilateral system helps to guarantee significantly blunt the effect of intervening in markets for political or economic gain because it offers alternative markets and suppliers.

The multilateral trading system is a vital strategic and security interest for Australia and Japan. It is also a crucial element in comprehensive regional security that integrates national security, economic and environmental sustainability objectives. This is the agenda to which the two countries must persuade their partners in the region, including China.

Today’s thriving Australia–Japan relationship cannot be sustained and elevated without substantial strategic investment from Australia. The old complementarities in fossil fuel-based energy and raw materials trade will not sustain the relationship as it has done in the past.

It is true that billions of dollars of Japanese investment now seek opportunities in hydrogen and renewables in Australia. That is the promise. Working closely with Japan, one of the world’s largest energy importers, will bring technology and investment to Australia’s trade and economic transformation. But that won’t happen without substantial national investment and joint national strategies to encourage and facilitate the massive transition in our trade that needs to take place to encourage it. The challenge requires a joint Australia–Japan Energy Initiative that combines government, industry, experts and stakeholder groups to accelerate and facilitate the energy transition needed in our trade.

There are significant assets from both countries’ investment in the relationship since its historic post-war foundation in the 1950s and 1960s. But the government-to-government, institutional and interpersonal ties that have serviced the relationship to date are not adequate to service the relationship now emerging.

A huge investment is needed in building the capabilities to manage the new relationship with Japan — to not only develop the familiarity with and understanding of how decisions are made, but to grasp how the levers of power and institutions work. That is an agenda that includes but goes well beyond Japanese language and Japan studies. Priorities include introducing and rewarding qualifications in Japan-literacy and experience in the public service and business; expanding the New Colombo Plan to postgraduate students; growing exchanges between officials; and a reverse JET program that brings Japanese graduates to teach in Australian schools.

Improved understanding of Japan will help both countries work together in managing the big geopolitical, economic and social impacts of critical and emerging technologies, including 5G, 6G, AI and quantum computing.

Fully embracing the Japan relationship is a whole-of-nation endeavour for Australia — one which will have to be led by the Commonwealth Government but must engage all levels of government, the National Cabinet, business and stakeholders across the community.

Australia need not wait for reciprocity in these initiatives but is likely to find Japan a willing partner.

Shiro Armstrong is Director of the Australia-Japan Research Centre in the Crawford School of Public Policy at The Australian National University and has led the production of the major independent report commissioned by the Australia-Japan Foundation on Reimagining the Japan Relationship released today.

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