Thread by @TGehrke_

Back from recent #Tokyo trip, many interesting discussions on #geoeconomics ie developments in 5G, investment screening, export control, industrial strategy, and the EPA/SPA. Talks with Japan's MFA, EU Delegation, think tanks and academia. Some observations: [LONG THREAD]
/1

For Tokyo, US implmt. of export controls under ECRA is next big thing. Shape and form of BIS/DoC 'emerging & foundational tech' still open but potential implications for Japanese (and EU) business is massive (extraterritorial enforcement/sanctions?)
/2
globaltradeandsanctionslaw.com/update-on-u-s-…

And Europe? As @MaaikeOh and @BrigitteDekker_ show in this recent @Clingendaelorg report, European debate on export controls almost absent, not part of any EU strategic documents (eg latest EU China Outlook). Equally pale at MS level
/3
clingendael.org/sites/default/…

COM proposed reform of existing export control regulation in 2016, to account for human rights risks of the export of (cyber) tech. The @Europarl_EN has continuously thrown its weight behind reform. Proposal stranded in Council, debate continues
/4
netzpolitik.org/2019/eu-states…

While HR link is important, acknowledging 'risks' go beyond strictly military application of tech (cf. @MachikoKanetake paper), need to protect European standards and norms for emerging tech also strategic for EU economic security. eg. tech sovereignty
/5
scienceopen.com/hosted-documen…

US approach trying to curb China's tech rise not in interest of Europe. But: 1) need to consider security vulnerabilities to tech exports beyond HR violations; 2) US approach requires strategic positioning on this matter by Europe, in any event.
/6

Problematic also: COM has no mandate to engage in dialogue/negotiations on issue with US or Japan. Dialogue with US under Executive Working Group could be a good venue, already platform for ‘strategic cooperation on China’. But MS must move this along in Council
/7

Back to Tokyo: process of investment screening reform ongoing. If reform passes (early 2020 possibly), foreign investors to notify regulators of foreign stake in companies of certain sectors at… 1%. Scope broad: incl. agriculture, internet services
/8
economist.com/finance-and-ec…

Not sure there is any real EU-Japanese dialogue/coop on investment screening (cases, practices, information)? The new EU regulation encourages international cooperation (Art 13). There is dialogue with the US. But Japan?
/9

Meanwhile, Japan's National Security Secretariat NSS will host a new International Economics division. MOFA, METI, MOF, and MOD will give more voice to security aspects of economic policy, enhancing Japan's capacity to act strategically in #geoeconomic era. Good move.
/10

Europe's decision making is ofc more dispersed. But institutional creativity better reflecting reality is pressing. At least: 1) COM Pres, Council of Ministers, HRVP need strategy service; 2) CFSP majority vote reform
(forthcoming #Biscop @EgmontInstitute paper on this)
/11

On 5G: Some Japanese officials not convinced by developments in Europe. Although EU joint risk assessment step in right direction, sticky points were Merkel 5G politics and lack of more specific indication how w/o exclusion risks can be mitigated
/12
ec.europa.eu/digital-single…

Japan effectively banned Huawei/ZTE from 5G procurement. Huawei also on 'chaser list' by Japan’s Center for Information on Security Trade Control (non-gov). List includes 'groups of concern'. Not binding, but signals acknowledged risks to exporters
/13
asia.nikkei.com/Spotlight/Huaw…

Japan also engaged in wider ICT supply chain review beyond 5G: 2018 Cyber Security report advised systematic measures for all critical infrastructure sectors. Cooperation with US is extensive, including between standard-setting bodies.
/14
export.gov/article?id=Jap…

This @NAR article echoed in my conversations: feeling that Chinese economic statecraft successful in carving up Europe. Japanese interest whether China policies result of different strategic thought or whether commercially driven, overlooking risks?🤔
/15
asia.nikkei.com/Editor-s-Picks…

Re industrial strategy in response to increased vulnerabilities from tech/digital dependence: Abenomics expanded funding for Public/Private R&D investment programme (PRISM) to support industry–academic partnership in strategic sectors, eg AI, robotics
/16
natureindex.com/news-blog/japa…

Also seeks to lift regulations to nurture tech start ups and tackle Google/Amazon monopolies with competition instruments. Exchange with EU could be fruitful, as...
/17
asia.nikkei.com/Economy/Japan-…

European debate on industrial strategy aspects of #geoeconomic competition maybe similar, eg:
Important Projects of Common European Interest; European Futures Plan (?); Digital Europe Programme; tweaks to competition policy (?)
/18
ft.com/content/033057…
ec.europa.eu/epsc/sites/eps…

Japan trade policy response to China's #WeaponizedInterdependence in 2005/2010 (rare earth ban) maybe part security part commercial: diversification of supply chain to minimize risk by opening SE Asian markets with FTAs (strategic) & rising labour costs in China (commercial)
/19

Japan weaponised its supply chain with SKorea, limiting access to chemicals for semiconductors, citing national security. Historic animosities exist, but security concerns linked to tech leadership (Samsung big supplier to Huawei) may be part
/20
nytimes.com/2019/07/15/bus…

Blurring lines b/w national security & economic security - between protection & protectionism - links to seminal work of @AntheaERoberts @choermoraes @VictorAFerguson.
The Japan-SKorea episode could also be considered in this light
/21
papers.ssrn.com/sol3/papers.cf…

So, issues for which EU and Japan could intensify #geoeconomic dialogue and policy coordination are clearly abundant. Both SPA and EPA could offer platforms where some of these aspects could be advanced and solidify EU-JAP as a powerful #geoeconomic force
/22

How this could look like in practice I will discuss in upcoming work on EU-Japan EPA/SPA as #geoeconomic instruments. Stay tuned.
/23; ENDS

@choermoraes @AntheaERoberts @Geoeconomics @henryfarrell @ANewman_forward @nicolaskoehler @markhleonard @HeikoBorchert @thorstenbenner @vtchakarova @EUJapanCentre @AkiraIgata @TSIA_Japan @bueti @AdelineHinderer @IuliuWinkler @KFJ_FP @HankeVela @EgmontInstitute