Cooperation in sectors such as batteries, semiconductors, and rare earths to be strengthened.
The United States, Japan, and South Korea want to work more closely together to build resilient supply chains and develop key technologies. This is the result of a meeting between the trade and industry ministers of the three countries in Washington. According to a joint statement, the cooperation will focus on sectors such as batteries, semiconductors, clean energy, artificial intelligence, and the critical minerals needed for these technologies. The background is the implementation of the Indo-Pacific Economic Framework for Prosperity (IPEF), a trade and economic initiative launched by the U.S. last year (we reported) to work with Indo-Pacific countries in order to counterbalance China’s influence in the region.
The People’s Republic has established itself as a key electronics producer in recent decades. It dominates the supply chains for numerous raw materials such as rare earths, lithium, and gallium as well. Due to increasing geopolitical tensions, the U.S. wants to reduce its import dependence. The country is investing in the domestic minerals sector, and measures aimed directly at China, such as export controls on chips, have been introduced as well. Economic security has also been on the political agenda in Japan for quite some time. South Korea wants to broaden its supply chains but is simultaneously considering closer cooperation with the People’s Republic. Like Japan, the country is a major high-tech producer but only has a few of the raw materials it needs.
Gallium and Germanium: Criticism Regarding China’s Export Controls
Critical minerals and supply chains are featured comparatively prominently in the published declaration. The three countries seek improved processing and refining capacities, especially for rare earths and the permanent magnets made from them, to facilitate the transition to clean energy. Both, governments and the private sector, should become more active in this area. Without mentioning China by name, the export restrictions imposed by the People’s Republic last year on gallium, germanium, and graphite were criticized as they could lead to “unreasonable and significant supply chain disruptions.” The countries reserve the right to “take appropriate actions where necessary.”
Last week, the U.S. concluded a similar agreement with India as an emerging economic power in the Indo-Pacific (we reported). Japan and Korea, for their part, are expanding cooperation with countries such as Australia and Vietnam, which want to establish themselves as alternative suppliers of raw materials to China.
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