Countries ought to take a "small-yard, high-fence" approach to international trade in which they vigorously mitigate security risks while preserving the wider benefits, a symposium here was told.
Held by Japan's Research Institute of Economy, Trade and Industry and the Australian National University (ANU) on Thursday, the symposium also heard that nations should tap their collective power to steer any one country towards globally accepted norms.
These suggestions come as the use of Chinese technology firm Huawei in global 5G networks is under scrutiny. The US has placed Huawei on its entity list over espionage concerns, while Australia has banned outright the company's technology in its 5G networks.
There is no legal ban in Japan, which wants to build better ties with China, but it is acting in lockstep with its security ally, the US, in an implicit code which has all its major carriers eschewing Huawei.
"International trade control used to be the framework with which we handled many of the critical technologies," said Mr Shin Hosaka, director-general for trade and economic cooperation at Japan's Ministry of Economy, Trade and Industry.
"But now that the areas of emerging technology and critical technology are converging, we have to revise how we deal with this and find a solution on how to balance the need for free trade and other risk factors," he added.
An Australian expert described a good regime as "an open one where companies compete with each other". Dr Christopher Findlay, an honorary professor at ANU's Crawford School of Public Policy, said it was necessary to avoid "crude industrial policy where a government tries to pick winners and intervene in the market".
Waseda University economist Shujiro Urata agreed, saying such subsidies could backfire and spark a "race to the bottom". He was among the panellists who called for internationally accepted norms for a digital age, noting China's iffy track record in other areas like infrastructure development has become cleaner after such rules were clearly set.
