Section 3 Japan's Economic Diplomacy to Promote National and Global Interests

1 Overview of Economic Diplomacy

In the international community, as competition among nations arises in the fields of politics, economy, and the military, the balance of power in the international arena is changing in an increasingly rapid and complex manner, while uncertainty over the existing international order is growing. Amid a protracted COVID-19 pandemic, a dire global economy is showing signs of an overall recovery from an extremely severe situation. However, uncertainties remain due to inflation risks posed by such factors as a variance among countries' economic situations owing to a “vaccine equity gap,” ballooning governmental debt arising from COVID-19 countermeasures, rising maritime transport and other logistics costs, increasing energy and commodity prices, and a semiconductor shortage.

Amid these circumstances, Japan has continued its efforts for rule-making and further trade liberalization through economic partnerships. The Japan-UK Comprehensive Economic Partnership Agreement (Japan-UK CEPA) and the Regional Comprehensive Economic Partnership (RCEP) Agreement entered into force in 2021 and 2022, respectively. With regard to the World Trade Organization (WTO), which is central to the multilateral trading system, the 12th Ministerial Conference was once again postponed, this time from 2021 to 2022. However, discussions on important themes such as the COVID-19 response and fisheries subsidies negotiations are becoming increasingly active, and Japan must continue to guide reforms in coordination with the countries concerned. Furthermore, with respect to efforts by like-minded countries in areas such as e-commerce and services domestic regulation, Japan will continue to make achievements regardless of when the 12th Ministerial Conference is held.

Based on the above assessment, Japan has advanced initiatives with the aim of accelerating the promotion of economic diplomacy as one of the priority areas of its diplomacy, centered around the following three areas: (1) rule-making and initiatives through international organizations to bolster free and open global economic systems by promoting economic partnership agreements, while maintaining and strengthening the multilateral trading system; (2) supporting the overseas business expansion of Japanese companies through promotion of public-private partnerships; and (3) promoting resource diplomacy along with inbound tourism toward Japan.