The state capitol of Bismark, North Dakota. [Image: Kaya / Flickr (CC BY-NC-ND 2.0)]

North Dakota Expands Trade and Investment with Japan on Energy and Manufacturing

Japan Asia

On October 3, 2022, North Dakota Governor Doug Burgum and Lt. Governor Brent Sanford led a successful weeklong trade and investment mission to Japan with a 35-member group of North Dakota authorities and business executives. The tour highlighted the state's various trade, investment, and business prospects in a presentation to the Japan External Trade Organization (JETRO) and promoted the state as a prime location for investment during a reception with Japanese business executives at the US Ambassador's residence in Tokyo.

As of 2021, North Dakota had the second-highest GDP per capita across the northwest region at $81,795. Manufacturing, which accounts for 6.7% of the state's GDP, is one of the state's most important economic sectors, along with energy, agriculture, and technology.

North Dakota’s exports to Japan totaled $40.1 million in 2021, making it one of the state’s top 10 export markets. Additionally, Japan is ranked second, with the ASEAN region first, for North Dakota’s exports to the Indo-Pacific, focusing exports on agriculture, particularly oilseeds and grains.

During the tour in Tokyo on October 7th, Governor Doug Burgum and Sumitomo Corporation President and CEO Masayuki Hyodo signed a memorandum of understanding (MoU) between the State of North Dakota and the Sumitomo Corporation of Americas (SCOA), establishing a partnership to evaluate and develop businesses in the energy transition market with the goal of accelerating decarbonization in North Dakota and beyond.

The MoU is an important step to grow and diversify the state’s economy while also creating opportunities to enhance the state’s research and developmental aims to achieve regional clean energy, following an earlier MoU which Governor Burgum signed with three other north-western states: Minnesota, Montana, and Wisconsin.

The mission of the MoU is to create a heartland hydrogen hub to accelerate the nation’s clean energy, transportation, and agriculture toward 50-52% emission reductions by 2030, a vital step for America’s economy and the environment. The Department of Energy aims to select six to ten hydrogen hubs. As of 2018, Japan’s greenfield investment in all these states account for a total of $1.4b.

Governor Burgum’s weeklong trip to Japan highlights his continued commitment to strengthen trade between North Dakota and Japan. His administration met with members of a Japanese business delegation and several other JETRO representatives on August 31, 2021. The business delegation included business conglomerates such as Toyota, Mitsubishi, Mitsui, and Sumitomo Group.

According to SelectUSA, Japan ranks 3rd, along with South Korea, as one of the top sources of FDI investment to North Dakota. For the United States in general, Japan ranked the fourth-largest U.S. export market in 2021 and continues to rank among the top country in the Indo-Pacific for greenfield investments in the United States, investing $679 billion and supporting over 973,800 jobs.

Narupat Rattanakit is a Research Intern at the East-West Center in Washington. He graduated with a BA from Thammasat University in 2020 and is currently pursuing his MA in US Foreign Policy and National Security with a regional focus in Southeast Asia.