People are getting really excited about how the FMA movie is going to have a Japanese director and cast, and I certainly don’t blame them after the shitshow the Ghost in the Shell casting caused (and the slightly less famous whitewashing for the Death Note adaptation and Doctor Strange also happening at the same time) but they don’t seem to realize that this is happening because the adaptation is an actual Japanese film, being made and produced in Japan. I’m pretty sure the reason we’re getting news from Warner Bros is because they’re the ones who will distribute the film to North America (I don’t have a source on hand, don’t quote me on that) but make no mistake, this is not a Hollywood production and Hollywood did not put together a Japanese cast and crew, a Japanese film company did. Furthermore, considering the racial dynamics within the Fullmetal Alchemist universe, I’m not sure if an entirely Japanese cast would be appropriate if Hollywood was making it. While the demographics of Japan limit the Japanese film industry in their ability to put together a racially diverse cast, and while I don’t believe that all the Amestrian characters automatically have to be white even though Amestris is technologically based on Germany, the racial tension between the Amestrians and the Ishvallans plays a huge role in the story as a whole and especially in Scar’s character and arc, and regardless of which real-life race was assigned to them in a live action movie, it would be important that Amestrian and Ishvallans characters be different races if it were being made in Hollywood where such casting would be actually feasible. A purely Japanese cast would be a dream come true for most American anime adaptations, but in this case it would erase some important details of the story. Even outside of the Ishvallan storyline, diversity is still visible in the original show with the characters from Xing and Xerxes and with Amestrian characters who are visibly non-white like Paninya, Jerso or Izumi.
If Hollywood were to adapt Fullmetal Alchemist, a director of Japanese descent would still probably be a good idea considering that it’s still a Japanese story even if it isn’t necessarily about Japanese people, but a Japanese cast would not serve the story as well as a proper diverse cast would, and would waste a prime opportunity to create one when so few movies even bother to try.TL,DR; The FMA movie is being created by Japanese people because it’s being created in Japan, not because Hollywood got its act together. Furthermore, in this rare case a non-Japanese cast would probably be more appropriate if Hollywood were doing it anyway as long as they were able to replicate the diversity and complex racial dynamics of the original.