In a bid to reduce the trade dependence on China – Indian, Japan and Australia have agreed upon launching an effective initiative to achieve supply chain resilience in the Indo-Pacific region. At present, China is said to be a major trading partner for all three countries.
In a virtual meeting held on Tuesday, India’s commerce and industry minister Piyush Goyal and Australian and Japanese counterparts Simon Birmingham and Hiroshi Kajiyama raised the need for a fair, free and predictable trade environment and called on like-minded nations in the region to take part as well. The ministers said in a joint statement that they instructed officials to work out the details for a launch later this year.
The development comes amidst escalating a standoff on the China-India border, Sino-American tensions and the ongoing COVID-19 pandemic. Several countries that are dependent on China for trade have already suffered from supply chain disruptions, thereby indicating the urgent need for diversification.
Shamshad Ahmad Khan, who is an expert on Indo-Japanese relations and visiting associate fellow at the New Delhi-based Institute of Chinese Studies, said in a statement that the three countries have deep apprehensions about China’s expansionist behaviour. “Australia’s relations with Beijing are fraying, while both India and Japan have unresolved boundary disputes with China that have escalated recently. Therefore, it is quite natural that they have adopted this strategy to keep China in check,” the statement added.
However, the tripartite move is likely to have a limited impact.
“We have seen in the past that India and Japan have signed various (free trade agreements) and lowered the tariffs with the partner countries (while denying) the same privilege to China. But it did not achieve the intended objective. Goods continued to flow from China disturbing the trade balance,” the statement further quoted Khan as saying.
The ministers, the statement said, recognised the pressing need for regional cooperation on building a resilient supply chain in the Indo-Pacific.
“They reaffirmed their determination to take a lead in delivering a free, fair, inclusive, non-discriminatory, transparent, predictable and stable trade and investment environment and in keeping their markets open. In light of the COVID-19 crisis and the recent global-scale changes in the economic and technological landscape, the Ministers underscored the necessity and potential to enhance the resiliency of supply chains in the Indo-Pacific region,” said the statement.
The three nations even called on other countries in the region who wish to join the initiative and share the same vision.
Japan has already called for cooperation with the Association of Southeast Asian Nations over supply chains resiliency and is expected to explore ways to combine the two initiatives. The three countries along with the US now form the Quadrilateral Security Dialogue which is termed as ‘Quad’ – an informal strategic forum that Beijing has reservations over for its potential to contain China in the Indo-Pacific.
US Deputy Secretary of State Stephen Biegun said in a statement that the Quad is preparing to hold a meeting later this year. “There’s going to be a meeting of the Quad, a ministerial meeting with the Quad this fall in Delhi, that’s the intention anyway, in person,” Biegun mentioned at the US-India Strategic Partnership Forum held on Monday.
“The Quad represents four extraordinarily solid democracies. That’s critically important because while interests will drive all our nations to make choices in the policy sphere in the Indo-Pacific and beyond, shared values that complement shared interests create a solid foundation. All four of us, of course, are Pacific powers,” he added.