EU and Japan to launch new ‘competitiveness’ alliance

The EU and Japan are preparing to launch a new Competitiveness Alliance focused on the strategic joint procurement of critical raw materials and closer business relationships.

According to a draft summit declaration seen by Euractiv, the agreement marks a significant step in cooperation in the areas of economic security, industrial policy, and supply chain resilience. It is expected to be announced at a summit in Tokyo today (July 23).

Per the document, the strategic joint procurement of critical raw materials and the strengthening of ties between the business communities will form the basis of the new EU-Japan Competitiveness Alliance.

The final draft of the summit text states, “Both sides will accelerate their joint efforts to monitor and strengthen supply chains in strategic sectors and will identify strategic goods and sectors for further cooperation under the expanded High-Level Economic Dialogue.”

The initial cooperation will focus on critical raw materials and battery value chains, particularly for clean technology and digital industries, though both sides are expected to state that it “can be expanded to other sectors in the future.”

Officials from both sides confirmed to Euractiv that a new “economic two-plus-two” dialogue will bring together Japan’s foreign and economy ministers with EU Trade Commissioner Maroš Šefčovič and industry chief Stéphane Séjourné.

While the summit declaration expresses concerns about “economic coercion” and “non-market practices,” it carefully avoids naming China.

Nevertheless, officials from both sides privately acknowledged that the new alliance aims to reduce strategic dependence on Beijing and other dominant suppliers.

Meanwhile, the draft does not mention the US. Instead, EU and Japan leaders will only commit to “continue to contribute to maintaining and strengthening a stable and predictable, rules-based, free and fair economic order.”

The agreement includes commitments to deepen public-private cooperation, including private business meetings and industry platforms. However, Japanese business representatives remain cautious, stating that excessive bureaucracy continues to slow down joint projects and hinder the harmonization of regulations.

In a new development, the draft declaration also proposes the launch of a “Japan-EU Defence Industrial Dialogue” (DID) to promote cooperation in advanced and dual-use technologies. This explicitly links economic and security cooperation in the relationship for the first time.

Japan, which signed a bilateral security agreement with the EU last year, is now seeking access to the bloc’s forthcoming SAFE defense funds, but no official timeline has been set.

Hours before the announcement, Trump declared in a post on Truth Social that he had reached an agreement with Japan for a $550 billion investment in the US in exchange for reducing the high tariffs he imposed on Japanese goods to 15%.