Australia-Japan Relations Essay

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Japan is Australia’s second most important economic partner, with trade and investment of close to US$80 billion annually — Australia is Japan’s fourth largest trading partner.

Less recognised is the strategic importance of the economic relationship: Australia is the largest supplier of strategic raw materials to Japan and underwrites its industrial strength.

Australia’s biggest growth potential lies in exporting services and high value-add products to China and throughout the region.

China is embedded in the global trading system and has shown it is keen to play a positive role in broader regional economic cooperation.

With last week’s decision to re-interpret the Japanese Constitution to permit commitments to collective defence, some see a thickening of security ties across the US–Japan and US–Australia relationship as naturally extending into a formal trilateral alliance.

But harder heads know that this would not be without considerable risks and that the region needs a broader framework in which to engage China and other players.

Today the Japanese economy is poised to escape two decades of low growth thanks to the economic policy package known as Abenomics, but the relationship with China is in disarray.

China is the most important economic partner for both Australia and Japan.

Australia supplies over 63 per cent of Japanese coal imports and 62 per cent of iron ore.

Outside of crude oil, Australia is the largest supplier of energy fuels to Japan, with Qatar recently catching up to Australia in the supply of LNG.

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