While defense issues will figure prominently in Prime Minister Fumio Kishida and U.S. President Joe Biden’s summit meeting later this week, the two leaders are also expected to announce boosted cooperation on supply chains and cutting-edge technologies — including semiconductors and artificial intelligence — all with an eye on China.

The two leaders will unveil a raft of new agreements, across the defense, security and economic realms, as Kishida visits Washington for a summit Wednesday, where he and Biden will seek to maintain momentum that has taken the U.S.-Japan alliance to fresh highs in recent years.

They will also label the bilateral relationship a “global partnership” as they look to bolster their standing at the vanguard of the chipmaking, AI and other advanced-tech sectors while pledging to work closely with other like-minded countries.

Speaking in Tokyo before departing for Washington on Monday, Kishida said that he hopes to use his visit to the United States to convey that Japan and the U.S. "are global partners, leading the international community in tackling a variety of challenges."

In terms of deliverables from the meeting, the allies are expected to use a joint statement after the meeting to outline an agreement on new subsidy rules for strategic goods such as semiconductors, storage batteries and permanent magnets, setting shared standards for the incentives they use to avoid overreliance on China, the Nikkei daily reported last week.

The report said the subsidy rules will be part of a broader conversation on creating transparent, resilient and sustainable supply chains.

Japan was once a leading producer of semiconductors, which are critical components of everyday goods and also important for weaponry, but has since fallen in the rankings to larger producers and exporters, including Taiwan and China.

As concerns of economic coercion and geopolitical flare-ups grow, Japan, along with the U.S., has sought to onshore the production of semiconductors and develop strategically important relationships through which to strengthen supply chains and hedge against political fallout.

In one move that will help lay the foundation for this ongoing push, the two leaders are planning to set up a framework for AI research and development through cooperation with U.S. chipmaker Nvidia, SoftBank Group’s Arm Holdings, Amazon and the University of Tsukuba and University of Washington, the Asahi Daily reported, citing unidentified sources.

Kishida’s lavish state visit will come as the United States continues to pursue ever-more harsh curbs on China’s access to semiconductor technology. Washington views Beijing's technological advances as a key national security concern, and has worked to severely limit these via a spate of measures. In particular, it views China’s ability to both purchase and manufacture certain high-end chips as helping advance Beijing’s military ambitions.

These measures have angered China, which has accused the U.S. of trying to contain its rise and economic growth, calling the moves "technological terrorism.”

As Kishida visits Washington for a summit Wednesday, he and Biden will seek to maintain momentum that has taken the U.S.-Japan alliance to fresh highs in recent years. | REUTERS

While Japan signed on to the U.S. effort last July, adding 23 products — including gear for making advanced semiconductors — to its list of export restrictions, Tokyo worked to keep its own measures low key to avoid overly antagonizing Beijing, its top trading partner.

But Biden is likely to press Kishida to take further steps, including expanding its measures to cover older-generation chips and chipmaking chemicals. Japanese officials and companies have voiced concern over such a move, saying it could erode market share.

Any developments on the chipmaking and supply-chain front will not be the first.

Last May, the two leaders agreed on the sidelines of the Group of Seven summit in Hiroshima to set up the U.S.-Japan University Partnership for Workforce Advancement and Research & Development in Semiconductors for the Future, a $60 million initiative involving 11 universities to help deepen ties between the industry and higher education in Japan and the United States.

The program’s aim is focused around developing talent to support the expansion and strengthening of the two countries' semiconductor efforts.

Japan has ramped up its semiconductor investment in recent years, overtly coaxing overseas investment through high-level meetings and significant subsidies — including to U.S. chipmaker Micron Technology's plant in Hiroshima Prefecture.

As it builds its own capabilities, Japan is also aiming to compete as an exporter. The nearly ¥1 trillion ($6.6 billion) Rapidus project in Hokkaido, which aims to foster a “Silicon Valley-style” semiconductor ecosystem, hints at the scale of this ambition. Earlier this month, the project received another financial boost — ¥590 billion in subsidies — while Kishida made a stopover at Taiwan Semiconductor Manufacturing Co.’s plant in Kumamoto Prefecture, as the prime minister continues to emphasize the significance it places on the sector.

Kishida said that after his meeting with Biden, he also plans to visit an area in North Carolina "where Japanese companies are making large-scale investments." The prime minister is expected to visit the site where Toyota Motor is planning to construct a fuel cell factory for electric vehicles, as well as a a Honda business jet plant.

Such a visit could highlight Japan’s eagerness to invest in and create jobs in the United States, and win plaudits from the Biden administration while also helping to head off any potential animosity from former President Donald Trump if voters return him to the White House in November’s presidential election.

But much of the summit will also focus on “historic” changes to the countries’ defense ties.

In one of the biggest changes to the alliance in decades, the two leaders are expected to agree on revamping the U.S. military’s command in Japan to help strengthen operational planning with the Self-Defense Forces as concerns rise over growing Chinese assertiveness and the possibility of a crisis such as a conflict over Taiwan.

Among other significant moves, an agreement allowing Japanese companies to handle major repair work for warships in the U.S. Navy’s 7th Fleet, which operates in and around Japan, is likely to be sealed, while the allies are also expected to create a new consultative body to promote defense industry cooperation.

On Thursday, Kishida will become the first Japanese leader to address a joint session of the U.S. Congress in nine years, with the prime minister’s speech said to focus on Japan’s role as a key partner of the United States in defending the global rules-based order — another gambit to tamp down any criticism that Japan is failing to pull its own weight on security issues.

Kishida will then join Biden and Philippine President Ferdinand Marcos for the countries’ first-ever trilateral leaders’ summit. China’s moves in the disputed South China Sea will top the agenda during that meeting as the three leaders look to ramp up efforts to counter what they see as Beijing’s growing assertiveness there.

Culled from Japan Times