TOKYO -- Japan and the European Union will cooperate on funding infrastructure projects in the Middle East and Africa, in an apparent effort to offer an alternative model to China's Belt and Road Initiative and U.S. protectionism.
The Japan Bank for International Cooperation and the European Investment Bank will collaborate to extend loans for infrastructure projects in third countries. Nippon Export and Investment Insurance will also take part in the framework, which would support private-sector companies engaging in Eurasian business.
Japan and the EU are expected to sign a memorandum of understanding here on Monday at the first round of a bilateral industrial, trade and economic dialogue. The meeting will be attended by Japan's Foreign Minister Taro Kono and Economy, Trade and Industry Minister Hiroshige Seko, along with Jyrki Katainen, the European Commission vice president for investment.
The two sides will emphasize fiscal health and transparency in procurement for public works -- likely in response to concern over mounting debt in developing countries from Chinese Belt and Road investments. By bringing together their expertise on infrastructure and energy projects, they hope to help fair and sustainable investment rules take root internationally.
Japan's industry ministry and EU authorities will set up a working group to discuss collaboration.
With Tokyo and Brussels working to soon put into force an economic partnership agreement, the duo will likely stress the importance of free trade. They will affirm the role of the multilateral free trade system centering on the World Trade Organization in a tacit jab at U.S. President Donald Trump's protectionism.
The high-level meeting is the fruit of a July summit that brought together Prime Minister Shinzo Abe, European Commission President Jean-Claude Juncker and European Council President Donald Tusk.