Politics & Economics

Since Alaska became a state in 1959, Japan has been one of the state’s largest international trade partners, and a significant source of foreign investment. Japan is a consumer of many of Alaska’s major exports, including seafood, minerals, energy, and forest products. In 2023, Japan accounted for $710 million worth of Alaskan exports placing it as Alaska’s second biggest export partner. Japan was also Alaska’s 4^th biggest import partner exporting $159 million worth of goods to Alaska.

Both Alaska and Japan have unique characteristics that create the basis of the mutually beneficial economic relationship. Alaska’s vast amount of land and natural resources provide the state with potential to produce large amounts of critical minerals and energy projects, and both of those industries are supported by Japanese markets. In today’s global economy critical minerals are of exceeding importance for developing renewables and the technology necessary for data infrastructure. Japan also plays a role in sustaining two other pillars of Alaska’s economy: seafood products and tourism.

Alaska is among the largest global producers of many fish and shellfish species including sockeye salmon, Alaska pollock, Pacific cod, sablefish, yellowfin sole, and tanner crab, producing 60% of the total U.S. seafood harvest. Because Japan is Alaska’s biggest end market export destination ($650 million in seafood exports in 2022) economic conditions in Japan have significant effect in Alaska. Recently the weakening of the yen, effects of the Russia-Ukraine war, Russian market competition, and climate changes effecting fishing populations have caused immense turmoil in the industry.

Alaskan seafood is popular in Japan for a myriad of reasons. First it is sourced thousands of miles away from large sources of pollution in clean waters and it contains the top 10% purest sessile organisms in the United States. (Cleanliness of water is often determined by the NOAA by examining sessile organisms for pollutants.) Second Alaska State laws ensure the protection of natural resources, while sustainable fishing practices attempt to maintain reliable and consistent quality. And finally, third, Alaska is geographically positioned close to Japan along existing shipping routes enabling export at competitive market rates.  

Japan’s energy and mineral resource landscape has been complicated for some time. Japan possesses a rich cultural tradition as stewards of the environment, working with nature synergistically. Thus, many Japanese power companies seek ways to reduce carbon emissions and shift to greener sources where possible. This coupled with the fact that Japan is a densely populated island nation pushes Japan to look outwards for energy and mineral resources. Before the 2011 earthquake and tsunami, about one-third of Japan’s electricity came from nuclear power. Today Japan has been working to develop energy projects abroad that can yield imports. Alaska has hoped to position itself to fill some of those needs via mutually beneficial trade.

A variety of projects are underway in Alaska that hope to result in exports of LNG, ammonia, or hydrogen to Japan. Alaska struggles with a different energy crisis, it has abundant resources, but lacks the infrastructure and workforce to develop its stranded and remote resource locations even to support its own population. Additionally, Alaska has one of the world’s most rigorous permitting and regulatory processes in place. This ensures that Alaska’s pristine wilderness is preserved, but also impacts the complexity of development in the state. In such a circumstance Alaska must look to outside investors to make fiscally solvent the economics of development.

One such project of note is the public Alaska LNG project, that has since its conception in 2015, been focused on exporting to Japan. The project would source its natural gas from Alaska’s North slope. Collaboration on the project has been consistent over the years, but various political and technical factors have prevented the project from entering the construction phase. The current federal administration has expressed their support for the project and the impact of strengthening economics ties between Japan and Alaska.

Both Alaska and Japan are popular among international travelers and were affected significantly by the recent pandemic. Since the end of the pandemic tourism in both countries has seen significant booms. Tourists visiting Alaska have significant opportunity for varied adventure throughout its different regions and tourism is particularly active in the summer months with the cruise industry. Alaska also has the potential to grow its tourism sector in winter months with its vast mountains, quality snow, and auroras. Japanese tourists are the 8^th largest visiting country of origin making up 2% of Alaska’s international visitors. Interestingly Japanese tourists visit during Alaska’s winter season more than other demographics given the popularity of aurora viewing in Japan. Conversely, Japan’s landscape and climate varies by region and season, making it a popular vacation destination year-round. In the past Alaska has at times had direct passenger flights to Asia, but since those routes were closed tourism between Alaska and Japan has dwindled.

Currently almost all tourism from Asia comes through another U.S. airport first drastically extending travel cost and time. Direct flights to Tokyo from Anchorage would be 6.5 hours nominally. Travelers shortest available route includes a 3.5-hour flight to Seattle followed by a 9-hour flight to Tokyo, or a similar length route through Hawaii. There is optimism in the industry that new routes will open between Anchorage and Tokyo given that Tokyo, is Alaska’s fourth most common international destination and the 1^st-3^rd most scheduled destinations all have dedicated routes. If the route opened it would certainly re-kindle tourism between Alaska and Japan.

Regardless millions of Japanese citizens travel abroad each year. Unfortunately, the current value of the yen has made international travel more difficult. One particular demographic of Japanese tourists visit Alaska annually, those aged 65 or older. This demographic seems to be strongly influenced by American culture, fiscally sound, and regarding tourism in Alaska are often connected to industries tying Alaska and Japan. Those tourists may have once been involved in Japanese owned businesses operating in Alaska such as timber mills, resorts, railroads, seafood processors, or mining operations.

Those Japanese tourists often buy packaged tours that allow them to experience the beautiful nature of Alaska in a leisurely manner. Packaged tours are often comprised of day cruises, railroad adventures, and national park tours during the summer, and dog sledding, hot springs visits, and Northern Lights viewing during the winter. 

Japan has seen a sharp increase in international tourism within the past several decades. Most international tourists who visit Japan from outside of Asia are from the United States. In 2023 Japan welcomed more than 2 million visitors from the U.S. some of which came from Alaska through Seattle or Los Angeles. Japan in fact suffers in some regions from over-tourism and has been looking to divert some of its international tourists to other less common regions and destinations. Alaska likewise sees tourism primarily in South Central and the Inside Passage regions. Given Alaskan’s general predilection for the outdoors and less densely populated regions there is potential for tourism campaigns to Alaskans to promote tourism to those regions and further encourage the Japan Alaska connection.