Australia and Japan have signed an extensive joint declaration on economic security, which includes the development of stronger supply chains in terms of energy, food and critical minerals as the ongoing conflict in the Middle East keeps disrupting international trade.
The signing of this agreement took place between Australia’s Prime Minister, Anthony Albanese and Japan’s Prime Minister, Sanae Takaichi, during discussions at Parliament House in Canberra on Monday.
It will mean we are less vulnerable to global shocks like we are seeing right now because of conflict in the Middle East,” Prime Minister Albanese said in a statement.
The agreement comes at a time of acute pressure. Normally, about one fifth of the world’s oil passes through the Strait of Hormuz but shipping has been badly disrupted since the United States and Israel attacked Iran.
80% of that oil is bound for Asia, according to the International Energy Agency. ‘The effective closure of the strait has enormous impact on the Indo Pacific region,’ Takaichi said.
Japan is the top importer of liquefied natural gas from Australia, while Japan is responsible for seven percent of diesel fuel supplied to Australia.
This makes the need for the new agreement imperative to their energy cooperation.
Aside from energy, Japan expressed its keen interest in having a stable supply of critical minerals used in semiconductor chips, EV batteries, and weapon systems.
Australia leveraged its rich mineral resources to counter China’s monopoly in global rare earth supplies.
Furthermore, the leaders signed several other deals beyond the Strategic Resource Partnership, such as an Australia Japan Leadership Dialogue, cyber collaboration, strengthened defense and security cooperation, and increased engagement on critical minerals.
Last year, Canberra awarded Japan’s Mitsubishi Heavy Industries the tender for new frigates under Project Sea 5000 valued at $10 billion for the Royal Australian Navy, showcasing their expanding defense cooperation.
Takaichi reaffirmed that Japan will adhere to the contract.
In contrast, Foreign Minister Wong sought to dispel expectations of the trip opening the door for Japan’s participation as a fall back option for the AUKUS submarines worth $368 billion.
Recently, an Australian Strategic Policy Institute report authored by former defense official Richard Gray suggested Japan as a possible candidate to investigate submarine options.
The senator dismissed such speculation, noting that the government had an established strategy for the AUKUS pact, which will continue to be its priority.
Prior to her trip to Canberra, Takaichi delivered a speech on foreign policy in Vietnam, pledging to take action to ensure the Indo Pacific is open and free a strategy first outlined by her political mentor, the late Shinzo Abe.
The approach has since been embraced by many US allies to offset China’s expanding influence in the region.
In the face of volatile energy prices, strained supply chains and geopolitical tensions both governments believe they have made the right bet for securing their future.
