AlwaysFree: Japan, India, Australia To Reinforce Supply Chain Ties, Challenging China’s Trade Dominance

Japan, India, and Australia have agreed to work together to create supply chain resilience in the Indo-Pacific region, in what seems to be a bid to counter the trade dominance of China, a significant trading partner for all three countries. The trade ministers of the three nations, in a joint statement, said the initiative would be launched later this year. They also called on like-minded countries in the region to join the initiative.

The development comes amid escalating US-China tensions, a standoff on the China-India Himalayan border, deteriorating Australia-China relationships, and the COVID-19 pandemic. Many countries suffered supply disruptions during the pandemic due to their dependence on China, which highlights the need to diversify supply sources.

Japan, India, and Australia also participate in the Quadrilateral Security Dialogue (Quad), along with the US. The informal strategic forum, which was established in 2007, has been pushed as a democratic counterweight to China’s growing trade and geopolitical power.

Shamshad Ahmad Khan, an Indo-Japanese relations expert, in an interview with the Nikkei Asian Review, said the three countries had deep apprehension toward Beijing’s expansionist behaviour. Australia’s relationships with China are deteriorating, while India and Japan have unresolved territorial disputes with China.

Japan has an agreement with ASEAN to strengthen supply chain ties and is likely to combine the two initiatives. Meanwhile, India signed various trade agreements with Japan and reduced tariffs with other trading partners, while at the same time provided China with no same benefits. However, such measures have so far not achieved the intended goals. Chinese goods continue to flood the Indian market and disturb the trade balance, Khan said.

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