Merz proposes rule-based trade alliance in Tokyo as Germany weighs fighter jet talks with Japan

A trade alliance for rule-based commerce

Chancellor Friedrich Merz proposed a global political alliance for rule-based trade on Wednesday, 28 October, during his stop in Tokyo. The grouping would aim to defend, strengthen and develop trade rules, including those of the WTO, and to act together if that order comes under threat. Merz said 70% of world trade still runs under WTO rules and stressed that the alliance would not replace the organisation but push forward the reforms it urgently needs. He tied the idea to unlawful tariffs and economic coercion, and when asked about the United States he said the initiative was aimed at no one.

Merz put the case plainly in Tokyo:

“We are seeing the great powers pursue a new policy, and international rules erode.”

On Tuesday, 27 October, he had made a similar case in Singapore, where he backed an EU-ASEAN free trade agreement and closer EU links to the CPTPP, the twelve-nation trans-Pacific partnership.

Japan as a partner

Merz met Prime Minister Sanae Takaichi, who described the relationship as a premium partnership. Merz called Japan a neighbour despite the distance and a partner sharing the same values. Around 30 cooperation agreements were signed at state and private level, including public-private work on fusion and hydrogen technology, an area where both countries are among the leading states in fusion research. The two sides also agreed to source critical minerals from more suppliers, as China currently holds a dominant position.

“Japan and Germany are neighbours.”

The fighter jet question

Germany and France agreed in June to end the Franco-German FCAS fighter project after long disputes, and Berlin is now examining alternatives. One option is GCAP, a planned sixth-generation stealth fighter meant to be operational by 2035, which Japan, the United Kingdom and Italy are developing. Those three countries have already set aside more than 5.5 billion dollars (about 4.9 billion euros), and Canada takes part as an observer. British Prime Minister Andy Burnham had shown openness in early October to a German role in GCAP during his first visit to Berlin.

On Tuesday, 27 October, Airbus chief Guillaume Faury told a phone conference that joining GCAP was a possible solution, though other options exist. He said decisions on new partnerships rest with governments and should ideally come not too far in the future.

“We at Airbus still believe in the need for a sixth-generation fighter in Europe as a cooperation project.”

Merz said a review order on cooperation in fighter aircraft construction was ready. He also voiced concern about rising tensions in the Indo-Pacific, especially around the Taiwan Strait, and said Germany would keep its one-China policy.

Brussels and the WTO

EU officials welcomed the initiative but warned against high expectations. The European Commission is already in talks with the twelve CPTPP states on reforming the WTO, including stricter rules against subsidies that distort competition, a dialogue launched by trade commissioner Maroš Šefčovič. According to Handelsblatt, the EU trade department is sceptical of joining the CPTPP or merging the agreements, since the EU already has preferential deals with ten of the twelve members and the CPTPP sets lower standards on food safety and investment protection.

What comes next

Merz said he wants to discuss the proposal with all countries that share an interest in keeping rule-based trade. He also argued that bilateral EU agreements no longer suffice and called for work toward a large interregional agreement. His Asia trip continues in South Korea, while the response from the proposed partners and the decision on fighter cooperation remain open.