The Gulf tour undertaken by Japanese Prime Minister Fumio Kishida in Saudi Arabia, the UAE, and Qatar from July 16 to 18, 2023, marked a significant milestone in the process of expanding and diversifying the network of bilateral relations between the Gulf countries and Japan. This tour signified a shift from a sole focus on energy security to a broader collaboration encompassing defense, advanced technology, and the promotion of localized industries. The economic diversification efforts in the Gulf region, coupled with Tokyo’s imperative to expand its regional network of alliances, particularly in the context of its ongoing tensions with China, underscored the importance of this tour. The Gulf countries are actively pursuing the expansion of their global network of diplomatic ties and the advancement of non-oil economic and technological sectors. However, certain challenges persist, potentially posing a threat to this partnership. These challenges include Japan’s continued reliance on energy imports from the Gulf region and its predominant focus on investments in this domain. Furthermore, the absence of a unified Gulf perspective on relations with Tokyo further complicates the situation.
Areas of Cooperation between Japan and the GCC
There are several reasons that the GCC countries seek to enhance cooperation and relations with Japan at an accelerated pace, they are as follows:
1- Diversifying the network of international alliances of the Gulf states: Japan plays a significant role as a regional actor in Asia and as an international economic participant through its membership in the Group of Seven (G7) and the Group of Twenty (G20), which also includes Saudi Arabia. In line with the Gulf Cooperation Council countries’ objective of expanding their external alliances, both at the international and regional levels, Japan emerges as a crucial actor supporting this approach. This support has become particularly relevant following the political pressures exerted on the Gulf countries by their American ally, which has prompted them to diversify their alliances and relationships for both political and security reasons. Consequently, their focus has shifted towards defensive considerations rather than solely economic interests.
The Gulf states are also interested in securing Japan’s backing for their oil production policy, particularly in light of the Western pressures they faced due to their reluctance to increase production amidst the Ukrainian conflict. The Saudi Energy Minister, Prince Abdulaziz bin Salman bin Abdulaziz, emphasized this point during the Japanese Prime Minister’s visit to the Kingdom, stating that there is a shared understanding on energy matters and a mutual recognition of the significance of upholding stability and equilibrium in the global oil markets. Furthermore, both parties acknowledge the necessity of safeguarding the availability of energy resources across global markets.
2- Developing Gulf-Japanese Cooperation in the Energy Sector: The energy sector plays a pivotal role in shaping the relationship between the Gulf Cooperation Council (GCC) countries and Japan. This sector serves as a crucial and secure source of oil and natural gas for Tokyo, given its status as an advanced industrial nation heavily reliant on energy imports to sustain its industrial activities. Furthermore, Japan holds the third position globally in terms of oil refining, necessitating substantial imports of Gulf oil for both domestic consumption and refining purposes, with subsequent re-exportation. While Japan actively endeavors to enhance its utilization of clean energy sources, it remains dependent on fossil fuels to meet its energy demands.
In contrast, Japan is widely regarded as a reliable market for the Gulf countries. This is evident from the substantial volume of trade between Saudi Arabia and Japan in 2022, which reached a staggering $47.489 billion. Notably, the Kingdom of Saudi Arabia enjoyed a surplus of $34.052 billion in this trade relationship, primarily due to its significant exports of $40.771 billion to Japan. It is worth mentioning that the majority of these exports, amounting to $39.779 billion, were related to oil. Conversely, Japan’s imports from Saudi Arabia were valued at $6.719 billion, underscoring the concentration of the Kingdom’s exports to Japan in the energy sector. Consequently, Japan serves as a secure market for Saudi Arabia’s oil products, even amidst fierce competition.
The Gulf countries are actively seeking to capitalize on Japanese technologies to advance the clean energy sector, in addition to their reliance on fossil fuels. The Japanese Prime Minister emphasized this objective during his visit, highlighting the importance of collaborating with the Gulf countries to promote cooperation in the areas of ammonia and hydrogen. The ultimate aim is to realize the vision of clean energy, with both Saudi Arabia and the UAE affirming their commitment to partnering with Japan in order to establish the Middle East as a hub for clean energy and the extraction of scarce minerals.
Saudi Arabia and Japan have jointly announced the inception of the “Manar” initiative, aimed at fostering collaboration in the realm of sustainable energy. This strategic partnership signifies their commitment to realizing their respective aspirations of attaining carbon neutrality. The initiative will encompass the implementation of various projects that will actively propel the global shift towards cleaner and more environmentally friendly sources of energy.
3- The GCC countries are actively striving to enhance their technological capabilities and diversify their economies by adopting new technologies in various sectors, including manufacturing and management. Japan, being a significant player in this domain, can greatly benefit from this opportunity, particularly considering its keen interest in strengthening cooperation with the region’s countries to ensure a stable energy supply.
On July 16, 2023, the Gulf Cooperation Council (GCC) and Japan made a significant announcement regarding the recommencement of their negotiations on a free trade agreement. This announcement was made during a meeting between the Japanese Prime Minister, Fumio Kishida, and the Secretary General of the GCC, Jassim Muhammad Al-Budaiwi. In addition to this, both parties also endorsed a joint statement, signaling their commitment to resume the negotiations that were initially initiated in 2006. It is noteworthy that Japan holds the fourth position in terms of its global ranking. Furthermore, with regards to the Gulf countries’ exports, valued at $76.7 billion, Japan also holds the fourth position in terms of imports, valued at $22 billion.
During his visit to Saudi Arabia, Japanese Prime Minister Fumio Kishida affirmed the commitment of his nation to engage in collaborative efforts with Saudi Arabia in the domain of semiconductors. In parallel, Saudi Investment Minister Khaled Al-Falih expressed mutual agreement between the two countries to augment the Saudi Arabia and Japan 2030 vision, with a specific focus on energy transition and semiconductors. Al-Falih further urged the business sector to actively invest in these alliances, which are founded upon novel and pioneering technologies.
Japan and the United Arab Emirates (UAE) engage in a robust trade relationship. Thani Al-Zeyoudi, the UAE Minister of State for Foreign Trade, reported that the non-oil trade between the two nations reached a substantial sum of $14.7 billion in 2022. Furthermore, the UAE’s imports from Japan amounted to $12 billion in the same year, while their non-oil exports to Japan totaled $1.78 billion. Japan holds a prominent position as one of the UAE’s top 10 trading partners worldwide. The UAE places particular emphasis on enhancing the non-oil sector, exemplified by the signing of a memorandum on space activities for peaceful purposes and a joint declaration of intent on establishing an accelerator program for energy and industry security during Kishida’s visit to Japan.
Japanese – GCC Cooperation
The GCC countries employ various mechanisms to bolster collaboration with Japan in order to attain strategic and economic objectives. These mechanisms are outlined below:
1- The Gulf countries have demonstrated a tendency to augment the levels of comprehension and coordination with Japan through high-level visits involving leaders from both sides. Additionally, they have sought to capitalize on prevailing international developments in order to achieve further advantages. In the context of his Gulf tour, the Secretary-General of the Gulf Cooperation Council, Jassem Al-Budaiwi, convened a meeting with the Prime Minister of Japan in Jeddah. As a result of this meeting, it was agreed that a joint ministerial gathering would be organized in the near future, bringing together the foreign ministers from both the Gulf countries and Japan. The primary objective of this meeting is to fortify strategic dialogue and intensify collaboration across various domains.
During his visit to Abu Dhabi, the Japanese Prime Minister engaged in a meeting with the President of the State, His Highness Sheikh Mohammed bin Zayed. This encounter resulted in the signing of 23 memorandums and agreements, which encompassed memorandums of understanding and agreements aimed at enhancing the comprehensive strategic partnership between the two nations and diversifying their collaborative efforts. These agreements encompassed various sectors, including sustainability, renewable energy, health, space science, technology, the environment, as well as transport, infrastructure, industry, and other crucial domains. Furthermore, the meeting between the Emir of Qatar, Tamim bin Hamad Al Thani, and the Prime Minister of Japan, Fumio Kishida, yielded an agreement to elevate the level of bilateral relations to that of a strategic partnership, while simultaneously expanding the scope of cooperation across multiple sectors.
Saudi Arabia expressed a strong desire to enhance this collaboration during the recent visit of the Japanese Prime Minister. In their meeting, Crown Prince Mohammed bin Salman and the Prime Minister concurred on the need to fortify the strategic alliance between their respective nations. On May 24, 2023, Kuwait and Japan reached an agreement to establish a comprehensive strategic partnership encompassing various domains such as economics, trade, investment, healthcare, culture, science, technology, academia, renewable energy, as well as oil and petrochemical sectors. This decision was made during the third round of political consultations held in Tokyo.
3- Developing novel mechanisms for economic collaboration: The foundation of Gulf-Japanese relations lies in the economic aspect, specifically the exchange of energy for industrial and technological imports. However, the Gulf Cooperation Council (GCC) countries are currently endeavoring to enhance this cooperation and optimize the aforementioned equation in their favor. This entails leveraging Japanese expertise and technology to bolster localization processes, promote non-oil sector growth, and foster collaboration in the technological domain. Moreover, there is a shift from an import-oriented policy to one centered around knowledge transfer and joint manufacturing. Additionally, efforts are being made to strengthen energy exports to Japan while simultaneously establishing joint mechanisms for clean and sustainable energy. In line with this, the recent visit of the Japanese Prime Minister focused on exploring clean energy projects as a promising avenue for new cooperation between the two sides, particularly considering Tokyo’s heavy reliance on the Gulf region for energy imports.
The Saudi Minister of Investment, Khaled Al-Falih, has officially declared the initiation of a new era of collaboration with Japan, as both nations have entered into 26 agreements encompassing diverse sectors during Kishida’s visit. These agreements span across crucial domains such as healthcare, financial technology, finance, exports, logistics, tourism, entertainment, and information technology.
3- Supporting military and defense cooperation: Despite Japan’s limited military capabilities, both regionally and internationally, due to historical and political circumstances following World War II, it possesses a robust industrial structure for the development and production of weaponry. The Gulf states can potentially leverage this strength in localizing their own defense industries. This proposition was affirmed by the Japanese Prime Minister during his visit to the Gulf, where he expressed his agreement with the leaders of Qatar, Saudi Arabia, and the UAE to enhance collaboration in the energy and defense sectors. Previously, the focus of relations between Japan and the Gulf states revolved primarily around energy and economic cooperation. However, Japan is now actively pursuing deeper levels of engagement, particularly in defense and security matters, offering the Gulf countries the opportunity to benefit from advanced Japanese technologies.
On June 18, 2023, a meeting took place between Fayyad Al-Ruwaili, the Saudi Chief of the General Staff, and John Miura, the Director General of International Affairs at the Japanese Ministry of Defense. The purpose of the meeting was to explore potential avenues for collaboration and joint coordination in the military and defense domain between the two nations. The discussion also revolved around strategies to bolster and reinforce these cooperative efforts, considering Tokyo’s ongoing efforts to expand its military exports internationally, particularly following the reinforcement of its defense policy.
On May 26, 2023, the UAE Ministry of Defense signed a cooperation agreement with Japan with the aim of implementing joint research, development and production projects, in addition to enhancing joint cooperation and developing bilateral relations in various fields, especially in the defense and military fields. In January 2023, the second strategic dialogue session was held in Tokyo between the governments of Qatar and Japan, and it was agreed to enhance cooperation in the defense field, and exchange expertise in the technological field as well as cybersecurity.
Future Problems for the GCC
It can be asserted that the Gulf Cooperation Council (GCC) nations, particularly the United Arab Emirates (UAE), Saudi Arabia, and Qatar, have effectively established and nurtured a robust network of connections with Japan. They have adeptly capitalized on regional and global advancements to accomplish their objective of positioning themselves as influential regional players and formidable economic and technological forces. However, the future of these relations encounters various challenges, which can be delineated as follows: :
1- The potential consequences of the Sino-American rivalry are likely to exert pressure on the Gulf Cooperation Council (GCC) nations in their interactions with Japan in the foreseeable future. This pressure arises from the fact that the bilateral relations and understandings between Japan and the GCC countries are no longer solely based on economic and trade cooperation. Rather, security threats and political disparities have emerged due to Japan’s stance on China and its support for the US-Western alliance against China. Consequently, this tension may impede the progress of Japan’s future relations with the GCC countries, particularly in terms of political, strategic, security, military, and economic aspects, particularly with regards to oil and gas exports.
2- Divergent Perspectives on Foreign Policy in the Gulf: The Gulf region exhibits varying viewpoints, particularly in relation to foreign policy matters. This divergence significantly impacts the formulation of a unified or mutually compatible Gulf policy towards Japan. Such a policy would enhance collective gains, surpassing the benefits derived from bilateral cooperation alone. For instance, despite the Cooperation Council’s signing of an agreement with Japan in 2006 to establish a joint free trade area, its implementation remains pending, with ongoing discussions on the matter. In light of this, the Secretary-General of the Gulf Cooperation Council engaged in discussions with the Prime Minister of Japan during his Gulf tour, resulting in an agreement to resume talks concerning this specific file.
3- The trade relations between the Gulf countries and Japan are currently heavily reliant on the energy sector, specifically oil and gas exports from the Gulf to Japan, while technological and industrial products are imported from Japan. However, Japan is now actively shifting its focus towards the development of renewable and clean energy sources, aiming to reduce its dependence on fossil fuels. This transition in Japan’s energy strategy may have implications for the future of Gulf-Japanese relations.
During his visit to Doha, the Japanese Prime Minister emphasized his country’s commitment to collaborating with the Gulf countries in transforming the demand for oil into alternative energy sources, particularly renewable energies. This signifies Japan’s intention to diversify its energy mix and explore sustainable options in order to reduce its reliance on traditional fossil fuels.