In April 1957, Menzies became the first Australian PM to visit Japan and both he and Japanese Prime Minister, Nobusuke Kishi, made a pragmatic decision that would result in the Commerce Agreement being signed later that year. As the Northern and Southern anchors in the so-called ‘hub-and-spokes’ system based on the mutual military alliances with the United States, both countries saw the opportunity to invigorate their economic and energy security networks during the Cold War era.
As such, resource diplomacy and trade partnership have for decades been a fundamental element of the relationship.
Background of Japan-Australia Energy Cooperation
The 1957 Commerce Agreement opened the door to huge opportunities for both countries. In the 1960s, Japanese trading companies and steel makers partnered with Australian miners of iron ore and coal, and created a successful model of investment in projects with long-term contracts. Australia supplied sufficient natural resources to Japan, and contributed to Japan’s post-war recovery, powering their miraculously rapid economic growth.
In the 1980s, Australia became a reliable supplier of liquified natural gas (LNG) to Japan, supporting the country’s continued ascent to become the world’s second largest economy.
This mutually beneficial cooperation has remained strong in the post-Cold War period, facilitated by additional bilateral and multilateral free trade frameworks. For Japan, Australia has been its largest supplier of energy, such as coal, LNG, iron ore, and uranium.
