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Gov’t faces challenges in promoting economic security law

By Ono Taro, Ito Hiroki, and Aibara Ryo

 

The panel of experts on enacting “economic security promotion legislation” (led by Keio University Graduate School Professor Aoki Setsuko), the signature policy pursued by the Kishida government, met for the first time on Nov. 26. The legislation has both “offense” and “defense” aspects. In terms of offense, it is aimed at promoting the development of cutting-edge technology, while in terms of defense, it is designed to prevent the outflow of technology and information. A number of issues need to be addressed, such as bilateral ties with China and restriction of corporate activities, so drafting the bill will be a tall order.

 

At the meeting, Minister in charge of Economic Security Kobayashi Takayuki designated the four key pillars of the legislation, namely, “bolstering supply chains,” “securing the safety of critical infrastructure,” “developing essential technology,” and “not disclosing patents.” “I hope you will propose the economic security legislation that is best for Japan by holding frank discussions, keeping in mind these four areas,” he said.

 

The meeting was held behind closed doors. Later the government will release minutes of the gathering, but the names of speakers will be kept anonymous. The panel is comprised of 18 people, including former National Security Secretariat head Kitamura Shigeru, who set up an “economic” unit inside the NSS, former Assistant Chief Cabinet Secretary Kanehara Nobukatsu, and other former bureaucrats who played a key role in laying out the nation’s national security policies during their tenure.

 

The government has also named members of the business community to the panel, including corporate executives from ANA Holdings, Canon, the Japan Chamber of Commerce and Industry (JCCI), and the Japan Business Federation (Keidanren). “Cooperation with the business community is indispensable,” a person close to the Prime Minister’s Office [Kantei] said.

 

Japanese businesses have strong ties with China, and there are strong concerns that [the legislation] may cause decoupling from that Asian neighbor. The economic security promotion legislation is aimed at building self-sustaining supply chains that are not affected by other countries and preventing the outflow of sensitive technology, with an apparent eye on China.

 

A senior executive of the business community warned that “the government must draw clear distinctions between what is good and what is bad.” At the meeting, other members also expressed this kind of opinion.

 

Cabinet Legislation Bureau calls for clear definition of economic security

 

It remains uncertain whether the economic security promotion bill will be fleshed out in time for the ordinary Diet session begins in January.

 

One challenge is the ambiguity of the concept of economic security. With global competition already underway among many countries to take the lead in this field, the Cabinet Legislation Bureau is asking the government to present “legislative facts,” which include a definition of economic security and grounds for the establishment of legislation, according to multiple sources close to the government and the ruling parties.

 

The economic security bill under consideration will include a regulation that would require the government to screen equipment to be used in critical infrastructure to see if it contains products from a country that could pose a security threat to Japan.  There are various opinions inside the government. A person close to the government says that “economic security is to prepare for unknown threats, and it is wrong that legislation cannot be enacted unless harm has been sustained.” Meanwhile, a senior Kantei official points out that “because [the economic security promotion law] will involve regulations, the concept must [first] be clearly defined.”

 

Some in the ruling camp are also cautious. In a speech delivered on Nov. 24, Liberal Democratic Party Policy Research Council Chairperson Takaichi Sanae, who also heads the party’s economic security headquarters, referred to the possibility of [the opposition camp] presenting a counterproposal. “If no consensus is reached during the [ordinary] Diet session, next summer’s Upper House election might be impacted. Depending on the content, I’m not sure whether [the economic security promotion bill] can gain the backing of the opposition parties.” She also noted that the government might want to present less controversial portions first. “It will be difficult for the government to decide when to submit the bill. The bill may be presented in portions.”

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