EU-JAPAN CENTRE FOR INDUSTRIAL COOPERATION

日欧産業協力センター

REPORT

The 16th Annual Meeting of the EU-Japan Business Roundtable

“EU-Japan Cooperation – New Opportunities for Global Growth”

(Tokyo, 8-9 April 2014)

Summary

The BRT Meeting this year proceeded under a general atmosphere of optimism brought by the

progress achieved during the 5th round of FTA/EPA negotiations. The EU and Japanese

industries addressed a message of support for the FTA/EPA negotiations process and

emphasized their readiness to make industry expertise available. Apart from the trade aspects,

the industries focused their messages on the need for the EU and Japan to work together and

play a leadership role to promote global regulatory and standards harmonization. Furthermore,

to explore opportunities to cooperate in businesses in or with third countries, as well as in

areas relating to innovation, energy, natural resources, climate change and human resources

development.

During the meeting, the BRT agreed on a set of 77 recommendations, which were presented in a

joint session with the authorities to representatives of the EU institutions and the Japanese

government. The Recommendations were personally submitted to PM Shinzo ABE by the BRT

co-chairs in the afternoon of 9th April. The submission to the Presidents of the European

Council and of the European Commission will follow.

A new Japanese side co-chairman, Mr. Kazuo TSUKUDA (Senior Executive Advisor for

Mitsubishi Heavy Industry) took over from Mr. YONEKURA (Chairman and CEO of Sumitomo

Chemical) at the closure of this year's annual meeting.

The BRT process, through its “joint character”, continues to reflect a “win-win” symbolism in

the dynamics of EU-Japan relations, particularly relevant in the current double layered (FTA

and SPA) negotiation context.

The next (17th) BRT annual meeting will be held in Brussels in 2015.

DETAILS

The EU-Japan Business Round Table (BRT), held its 16th Annual Meeting in Tokyo on

8 & 9 April 2014 under the theme of “EU-Japan Cooperation – New Opportunities for

Global Growth.” The BRT Agenda consisted of 3 main “topical sessions: FTA/EPA;

the New Industrial revolution/Sustainability; BRT’s future role); and a Joint Session

with the Authorities.

Attendance

The meeting gathered around 180 participants (70 European and 110 Japanese). It was

co-chaired by Mr. Hiromasa YONEKURA, Chairman and CEO of Sumitomo Chemical

Co., Ltd., and Mr. Fabrice BRÉGIER, President and CEO of Airbus S.A.S. Same as every

year, besides the representatives of the industries, the BRT Meeting was attended by

high-level representatives the Japanese and EU Authorities: Mr. Toshimitsu MOTEGI,

Minister of Economy, Trade and Industry of Japan, Mr. Yoshihiko ISOZAKI,

Parliamentary Vice Minister of Economy, Trade and Industry of Japan, Mr. Norio

MITSUYA, Parliamentary Senior Vice-Minister for Foreign Affairs of Japan, Mr. Takao

MAKINO, Parliamentary Vice-Minister for Foreign Affairs of Japan, Mr. Yasumasa

NAGAMINE, Deputy Minister for Foreign Affairs of Japan, Mr. Masahiro YOSHIZAKI,

Vice-Minister for Policy Coordination (International Affairs), Ministry of Internal

Affairs and Communications of Japan, Mr. Daniel CALLEJA CRESPO, Director General

for Enterprise and Industry of the European Commission, and Mr. Antonio PARENTI,

Deputy Chief Negotiator for the EU-Japan FTA, DG Trade, European Commission.

1st day - Tuesday, 8 April 2014

BRT Co-Chairs Lunch Discussions

During the BRT Co-Chairs lunch an interesting exchange of opinions took place.

Chairman H. Yonekura mentioned the conclusion Japan-Australia FTA after 7 years of

negotiations (started during Abe’s first mandate and was concluded under his second

mandate). The Japanese Agricultural sector shows signs of increasing confidence and

competitiveness. Some similarities with the agricultural sector in Europe were observed:

low contribution to the GDP, ageing and decreasing working force with a strong lobby

power. However, as underlined by Chairman Yonekura, the agricultural lobby is

starting to lose its influence in Japanese politics. Another observation made by

Chairman Yonekura was the current trend of a convergence between the undergoing

mega regional agreements negotiations ( TTP, TTIP, EU-Japan FTA..) towards a de

facto global trade liberalization system by 2020, covering about 90% of the World trade

which could be ultimately placed under the WTO umbrella.

SESSION I EU-Japan FTA/EPA

Chaired by Mr. Hiromasa YONEKURA

Mr. Tadashi OKAMURA (Toshiba) highlighted the progress on Japan’s NTBs and

government procurement. Then he recalled the importance of EU-Japan EPA

negotiations vis-à-vis the TTIP, TTP, and bilaterals in East Asia, hoped for a

preliminary agreement in 2016, and prompted for leadership in government officials,

business associations and firms.

Dr. Sadayuki SAKAKIBARA (Toray) started giving the example of textile federations in

the EU and Japan having successfully produced a joint statement seeking early progress

in tariff reductions, rules of origin, aligning to global standards, government

procurement and IPRs. Then he mentioned there should be a greater focus on

innovation, citing examples of Toray’s investment in Europe and its joint venture with

Daimler, and his hopes for EU firms to further invest in East Asia to increase

international ties and rules.

Guest speaker Mr. Yoshio NAKAMURA (Keidanren) mentioned 3 meetings in Brussels

between Keidanren and BusinessEurope having led to a common statement to promote

global rules in developing countries, on the common hope for progress of the bilateral

negotiations, highlighting results in the pharmaceutical, chemical and IT sectors, and

expected that auto sector in the US would align with EU-Japan certification.

Mr. Danny RISBERG (EBC) confirmed progress in the 5th round of EU-Japan

negotiations on issues like FDI, regulation and competition, and highlighted the need to

reach common standards and to enhance competitiveness to develop new products and

markets.

Mr. Markus BEYRER (BusinessEurope) confirmed that expectations have so far been

met and asked for continuing progress especially in services and government

procurement, bilaterally and in alignment to other international negotiations. Although

European businesses are increasingly demanding transparency, and industry has

monitored the process and reached out to public officials, so far the NGOs and trade

unions have not been particularly focused on the EU-Japan negotiations. However, this

situation that may change as an ambitious EU-Japan FTA/EPA aligns with the TTIP

and TPP negotiations. The need for closer cooperation between regulatory authorities

has been also emphasized.

Discussion

The participants (9) were generally all in favour of keeping the momentum of the EU-

Japan FTA/EPA negotiations. And all added interesting comments.

MOLYNEUX (JBCE): the negotiations should go beyond trade: innovation and idustrial

cooperation on specific sectors, taxing and transfer pricing issues and red tape cutting.

OHASHI (ANA): following the mentioning of the activities and recommendations of the

France-Japan Club, he focused on the progress of Japan-ASEAN “Open Skies”

Agreement and the recent purchase of Airbus planes which, he considered tomeet

Japan’s high safety standards.

SHIKANO (Sony): recalled the EU and Japan cyber/digital plans and the cooperation

between the ICT associations, and exhorted to fight protectionism and to promote

appropriate use of the Internet in an era of big data. On the IPR issues, the Japanese

industries are expressing their eagerness for the EU Unitary Patent but also their slight

doubts that the process will be finished within the current year.

YAMAGUCHI (Ajinomoto): discussed food additives, and the effort of the Japanese

government to simplify IP patents. He added that from the Chemical industry there are

no major tariff related issues while the regulatory cooperation and harmonization

(particularly the risk assessment) remain fundamental. He also recalled that, following

the French example, Japanese cuisine has just been registered as UNESCO’s world

heritage.

PLEŠKO (Cosylab): there is a great need for more global standards, and generally, less

NTBs to facilitate the internationalisation of SMEs.

BEYRER (BusinessEurope): We support sectoral cooperation between businesses and

regulators to move towards worldwide standardisation

KAWAGUCHI (Nissan): A recurrent topic brought by him throughout the BRT Meeting

was the pressure exercised by the EU-Korea FTA, particularly from 2016 when the

Korean cars exports in EU will be tax free, which add additional pressure towards

speeding up the EU-Japan FTA negotiations in order to assure a level playing field for

the Japanese exporters in Europe. He emphasized that now it’s “time for speed” despite

the complexity of the process.

SESSION II - The New Industrial Revolution and the Quest for Sustainability –

Green technologies, green energy and climate change

Chaired by Mr. Fabrice BRÉGIER, he opened the session highlighting the need of

transforming the current status quo of energy production and consumption, and by

mentioning the important role the industry has. The EU and Japan are at the forefront of

this process, as both nations possess not only a high awareness of the underlying

situation but also the technological ability to successfully manage a transformation

towards sustainability. Europe and Japan should team up to lead this development.

.

Mr. Kazuo TSUKUDA (Mitsubishi Heavy Industries)

He presented the very advanced draft of the Japanese government’s “Basic Energy

Plan” that was actually approved without significant alterations by the Cabinet three

days later. Chapter one overviews the effects for the Japanese energy market posed by

the Fukushima disaster: the government prompted the Japanese electricity utilities to put

all 48 nuclear plants off-line, which in turn forced Japan to import large amounts of

fossil fuel: compared to 2010, Japanese imports rose by ¥3.6 billion (largely contributed

to the largest trade deficit ever recorded of ¥10.15 billion), Japan’s CO2 emissions

increased by 83 million metric tons in 2013, and Japan’s energy self-sufficiency rate

dropped to 6.6%. Section one of Chapter two clarifies that “Safety” lies at the very core

of all energy policy principles comprising “Energy Security”, “Economic Efficiency”

and “Environment Protection”. In addition, the Japanese energy sector is undergoing

profound reforms aiming at diversifying the energy supply side and their utilized energy

sources, which in turn, shall help in reducing Japanese CO2 emissions. The appropriate

energy mix shall be determined after addressing issues like resumption of nuclear plant

operation, introduction of renewable energy, and global warming countermeasures.

Section two summarizes the main energy sources as well as its respective policy

measures. Chapter three has 10 sections on the long-term strategy of the Japanese

government for securing supply and demand. Chapter four presented a roadmap for

various projects on technological development that shall be announced by summer

2014. Chapter five points out that energy policy should be comprehensible not only to

people who are directly involved (energy specialists, business operators, public

officials) but also to a broader audience. In order to do so, a more thorough dialogue

with citizens should be promoted.

Mamoru Sekiyama (Marubeni)

He started claiming that global primary energy consumption will increase from 13.1

billion Tons of Oil Equivalent (toe) in 2011 to 16.6 billion toe in 2030 basically due to

demand growth non-OECD countries. Then he discussed the links between power

generation and carbon emissions. According to the IEA (2013) the power generation

sector is with 40% the single greatest contributor to global CO2 emissions, and coal

combustion makes for 70% of that. By area, non-OECD countries it is projected that

carbon emissions produced by the usage of coal are going to increase from 63% (2011)

to 76% (2030) among non-OECD countries. While renewable energies present the

fastest growth – from 11% (2011) to 19% (2030), their output is relatively unstable

(photovoltaic peaks around in midday, and wind farms only produce electricity when

wind blows), so unable to meet peak electricity demand. So coal will remain, despite its

large carbon footprint, an important energy resource even for Japan: the dominance of

coal is shrinking from 47% (2011) to only 41% (2030), according to the IEA World

Energy Outlook. He suggested for the EU and Japan to lead the implementation of new

technologies that address CO2 emissions. In conclusion, Mr. Sekiyama drafted an

integrated energy model in which coal and renewables complement each other. This

requires capable grid-solutions, flexible gas generation, battery storage systems, and

new CO2 technologies.

Mr. Sean O’Driscoll (Glen Dimplex)

Energy generation systems created 150 years ago are inefficient and costly, but

disruptive technologies such as wind turbines, solar photo-voltaics, and geothermal

systems are pressuring to decentralise them (as the telecommunications sector has done

in the past few decades). Prosumers are largely independent, small-scale consumers of

the electricity they produce, and only rely on the grid when it comes to shortages (he

claimed it will soon reach 20 million prosumers). For instance, in Germany 15 years

ago there were only 400 medium and large electricity production units, but nowadays

there are 1.5 million electricity producers connected to the grid. Moreover, Germany

has installed the equivalent of seven nuclear stations of solar generation (25% of the

global solar capacity). Yet, the management of the intermittency of renewables is a

challenge that requires a shift from production to demand management. And the key lies

in buildings. In developed countries office and residential buildings account for 36% of

all energy consumption, and 80% of that is for heating/cooling and for hot water that if

were provided by electric means 80% of the energy load of buildings would be flexible.

And this is a challenge that calls for innovation in small-scale distributive storage

technologies, which could even further decouple generation from consumption.

Potential energy storage technologies, which could do this, are (1) batteries, (2)

hydrogen, (3) pumped hydro and (4) thermal storage. Batteries and hydrogen are new

and quite expensive, while pumped hydrogen and thermal storage are already proven

effective although it is relatively unknown technology in Europe and Japan. In Europe

the install base for thermal storage has a potential combined volume of 400 GW in

winter and 170 GW hours in summer. For pumped hydro the storage volume could

amount to 100 GW hours. Finally, Mr. O’Driscoll offered a glimpse on Glen Dimplex’

newest thermal storage R&D project, called ENERNET and in partnership with Intel,

EirGrid, ESB, Scottish Winds, and other firms, attempting to bring energy and the

Internet together to set smart electric storage systems that would allow small-scale

distributive storage, load shifting at peak times and real pricing at real time.

Discussion

MR. FABRICE BRÉGIER opened the discussion with comments on Rifkin Third Industrial

Revolution ideas (www.TheThirdIndustrialRevolution.com) bringing Internet and

renewable energies together. Then 8 participants provided interesting insights.

LIENHART (Saint Gobain): there is much regulatory and business potential in reducing

energy demand, especially in the building sector. He stated that the cheapest energy is

the one that is not used and therefore the focus should be on reducing the energy needs a

in Japan. Hypothetically, if the specific European Directives would be applied to

Japanese households it would result in a reduction of consumption by 15%-20% and

Japan would regain its competitiveness.

ITO (Fujitsu): to reduce the impact of CO2 emissions in agriculture and forestry, Fujitsu

provides an environment monitoring system that allows farmers to control humidity,

sunlight, temperature and rain fall amount, etc. Yet, Japan could better utilise its

biomass resources learning from the EU, whose agricultural waste and forest resources

are used for energy generation.

SASAKI (NEC): Japan’s small surface prevents it from profiting substantially from solar

energy; and hopes that solar energy could one day be stored in very convenient liquid

form.

DE ROYERE (Air Liquide): hydrogen production requires lots of energy so lower costs

would help business competitiveness, but that does not seem to be happening in Japan.

While the US has shale gas and China coal, Europe and Japan can only rely on

expensive renewables and risky nuclear energy. Germany’s ongoing energy transition

(Energiewende) required in 2013 about €25 billion, large amounts that he believes

should be paid mainly by the consumer rather than industry to maintain

competitiveness, yet this struggle should be resolved in June if the European

Commission and the German Government reach a compromise. Renewable energy

sources are useful and needed, if the grid works out well. Hence enough storage means

(large-scale batteries, hydrogen, heaters, etc.) must be integrated in order to avoid

detrimental stress to the grid – at this juncture he also sees a lot of potential for

technological cooperation between Japan and Europe.

NAGAYAMA (Chugai Pharmaceutical): lectures by experts would encourage more high

school students to go on to universities into the field of sustainable development.

BEYRER (Businesseurope): the EU needs to focus more on cost competitiveness and

reduce the high costs of current climate and energy policy agenda. Renewable

technologies can create important business opportunities and help achieve some energy

independency (mainly from Russia), but the EU energy and climate policy is too

focused on energy transfer and feed-in tariffs, which increases energy costs immensely.

A few lessons can be learned from countries that were able promote renewable energy

without letting the costs sky-rocket.

RISBERG (EBC/Philips): good regulations and standardisation can help save costs, as in

the EU’s requirements to increasingly use LEDs.

FUKUKAWA (G|SPR|): EU and Japan could cooperate to address pollution and energy

needs in China, India and other developing countries, although price, standards and IPR

issues remain problematic.

SESSION III - Important Business Themes for the EU and Japan in the Post

FTA/EPA, and the Future Role for the BRT (Chaired by Mr. Fabrice BRÉGIER)

FUKUKAWA (Toyo University): gave a presentation on many different global risks and

on the global power structure as an introduction to his proposal for EU-Japan

cooperation to study ways to revive globalism (bilaterally, multilaterally and through

civil society exchanges).

ARAI (Sumitomo): to decrease global risks, EU-Japan should promote trade and

investment cooperation in Africa and elsewhere around the world, especially by SMEs.

RISBEG (EBC): the EU and Japan governments should focus on core issues to help

negotiate and soon sign an agreement.

SASAKI (NEC): there is a need to address global cyber risks

YAMAGUCHI (Ajinomoto): presented his company’s plans to expand from child to

mother nutrition, which require cooperation with other public and private actors.

BEYRER (BusinessEurope): exhorted governments to focus on the EPA.

SAKAKIBARA (Toray): nuclear energy is important despite social resistance, and

nuclear risks are extremely low despite the Fukushima accident.

NAKAO (Terumo): health care needs are similar in the EU and Japan, and could be

partially be addressed with info-communication technologies.

OKAMURA (Toshiba): wants for the BRT to focus on long-term strategy.

DE ROYERE (Air Liquide): Managing complex systems like utilities is very difficult and

requires much international collaboration. He suggested that the BRT promotes more

business groups around common themes.

On the future role of the BRT the need for a long-term structured vision/strategy

beyond the FTA/EPA context was emphasised, and in this sense, the idea of an “EU-

Japan 2050 Concept” was suggested. The BRT should, at the same time, keep raising

the level of its discussions, and should eventually focus on fewer technical details which

are better handled by organizations with more sectoral resources: BusinessEurope, the

Keidanren, the EBC, the JBCE, etc. The practice of having a mixture of EU/JP sitting

around the table, implemented since last year, should continue and should be also

reflected trough “mix working groups” on specific business topics of common interest.

Endorsement of Recommendations and Press Release

The endorsement proceeded with a round of applause. The new co-chair Kazuo

TSUKUDA (Mitsubishi Heavy Industries) gave a short speech exhorting for the EU and

Japan to continue working hard together.

Cocktail and Official Dinner

Guest speaker Mr. Toshimitsu MOTEGI, Minister of Economy, Trade and Industry

presented his good hopes for business-friendly negotiations. Mr. Takao MAKINO,

Parliamentary Vice-Minister for Foreign Affairs was not able to come.

2nd day - Wednesday, 9 April 2014

Breakfast Presentation

Chaired by Mr. Hiroshi TSUKAMOTO (EU-Japan Centre for Industrial Cooperation) it

had as guest speaker Dr. Haruhiko KURODA, Governor of The Bank of Japan, started

presenting data on Japan’s improved business sentiment and employment conditions

and on continuing positive GDP growth. He then focused on the Bank of Japan’s Bold

Monetary Policy (Abenomics’ 1st arrow!) of quantitative and qualitative monetary

easing (massive bond purchases to increase the monetary base in circulation) to get out

of the deflation equilibrium to reach and consolidate a low-rate (2%) inflationary

equilibrium, which compounded with a decrease in the nominal rate would render low

real interest rates and spur business investment and general consumption. This situation

was not addressed before due to multiple reasons and factors that changed over time

(the 1997 Asian financial crisis, 2008 Global economic Crisis etc), but it would last

some time, at least until the Bank of England exits first, and after studying the possible

effects on emerging economies. On the issue of “wage increases” that is part of the

Abenomics strategy and the potential loss of competitivity from the part of Japanese

businesses expected to perform wage increases for their employees, Mr. Kuroda

mentioned that some small increases will take place immediately while on the longer

term the increases will have to go in parallel for measures sustaining the productivity

and the real economic growth that are part of the 3rd arrow of Abenomics. Mr. Kuroda’s

also expressed his concern about the competitivity of the service sector in Japan. While

the manufacturing sector is expected to regain competitivity, the real problem remaining

in the service sector (50% share in the GDP) which is considered to be 30-40% less

efficient compared to the USA.

Joint Session with the Authorities

Chaired by Mr. Hiromasa YONEKURA (Keidanren & Sumitomo Chemical) who gave a

brief report on this year’s BRT recommendations followed by a brief report from the 5

Working Party leaders

WPA: Trade Relations, Investment and Regulatory Cooperation

The recommendations were reduced to 19 comparing with 31 last yaer for better focus

and concision.

Mr. Hitoshi KAWAGUCHI (Nissan) began highlighting that both sides agree that EU-

Japan FTA/EPA bilateral agreement must be balanced, comprehensive and ambitious;

that they support the WTO Doha Development Agenda; and that wish for both the EU

and Japan to apply international standards and support new global ones. Then he

showed Japan’s support for the EU 2020 (in particular its Single Market Act) and for

the Horizon 2020 R&D programme because of its internationalization and broadening

to business. Finally he detailed Japan’s key recommendations to the EU: lower tariffs

on electronic products and cars; lessened burden on chemical regulations (REACH),

taxation, company law and in Corporate Social Responsibility. The “non financial

disclosure” requirement and the EU provisions on “conflict minerals” were considered

to add an unreasonable extra burden to Japanese investors.

Mr. Danny RISBERG (EBC) then presented the EU side detailed recommendations to

Japanese authorities. Through mutual recognition, the standards and certification

requirements must be harmonised whenever possible, and international standards must

be accepted where applicable. End tax privileges of mini-cars (kei). Equalise

competition in services like postal and financial, and make sure that Japan lives to its

WTO-GATS commitments. Regarding freight and logistics the EU industries want less

red tape and a revision of the Authorised Economic Operators (AEO) system. Then he

focused on the need Japan has in promoting inward FDI by, inter alia, allowing tax

deferrals for capital gains stemming from direct cross-border mergers and re-

organisations, lengthening the NOL period, focusing on regulatory reform that

harmonizes product certifications with global industry norms and accepting

international standards. Finally, he emphasized that there should be improved access to

the public procurement market (especially in transport sector and infrastructure).

WPB: Life Sciences & Biotechnology, Healthcare & Well-being

The WP presented 11 joint recommendations.

Mr. Osamu NAGAYAMA (Chugai Pharmaceutical) mentioning that although Japan

highly regulates this sector, there has been progress in reducing barriers to imports on

medical devices, and that the issue of certification is still under discussion. Finally, he

highlighted the need for joint R&D cooperation.

Mr. Norikazu EIKI (Bayer Yakuhin): further highlighted the need of joint R&D

cooperation for further innovation; and requested that approval time for drugs be

reduced to 24 months.

WPC: Innovation, Information & Communication Technologies

Mr. Chiaki ITO (Fujitsu) first stated the need to remain transparent and open to all

stakeholders; to cooperate for ITA expansion and the liberalisation of internet services;

to increase cyber-security cooperation; to balance privacy protection and innovation in

reviewing personal data protection regimes. Then he prompted for greater R&D

coordination leading to international standards; and to further expand tax credits for

R&D, in particular for SMEs. Finally, more generally, he asked for a deepening of the

bilateral industrial cooperation.

Similarly, Mr. Stéphane ISRAËL (Arianespace) begun requesting enhanced industrial

cooperation, for instance, in space and defence equipment; in particular, he asked for

cooperation on navigation regulations for helicopters and on the mutual backup on

space launches;

WPD: Financial Services; Accounting and Taxation

6 general recommendations were presented by Mr. Tetsu OZAKI (Nomura Securities)

by Mr. Philippe AVRIL (BNP Paribas): avoid the negative impact of increasing

regulations in derivatives, and in company disclosure and in tax-avoidance measures

(BEPS Action Plan endorsed by the G20); tax treaties need to be simplified; the

implementation of financial transaction taxes in some EU member states, and

potentially more globally, it may impact negatively both secondary and primary

markets, which should be avoided; Japan should reach fiscal soundness by 2020 by

reforming its social security and tax systems; and Japan’s FDI taxing needs a complete

review, including lowering of rates, in order to attract more inward FDI.

WPE: Energy, Environment and Sustainable Development

13 joint recommendations were released

Mr. Hajime SASAKI (NEC) highlighted that nuclear energy is relatively safe and

presented some important challenges of renewable energies (lack of stable grids, not

always reduce greenhouse gases, etc).

Mr. Armand LAFERRÈRE (AREVA) requested that bilateral cooperation should continue

and focus on security of supply and modernisation, and he reminded the audience that

Europe is Japan’s only ally in nuclear full recycling;

Presentations by the Authorities

On Japan side Mr. Yasumasa NAGAMINE (Deputy Minister for Foreign Affairs); Mr.

Yoshihiko ISOZAKI (Parliamentary Vice Minister of Economy, Trade and Industry) and

Mr. Masahiro YOSHIZAKI (Vice-Minister for Policy Coordination, International Affairs

and Communication) addressed a converging message underlining the importance of

EU-Japan relations, the need for closer cooperation and the importance of the dialogue

and advise from the industries. The successful conclusion of the Japan-Australia

FTA/EPA has been clearly emphasized which, according to them, could be an example

that complicated issues like agriculture or food products can be overcome (with a hint to

EU-Japan FTA/EPA negotiations). On the EU 1 year Review Clause hopes were

expressed that the European Commission will persuade the Member States and will

push towards an early conclusion of negotiations, in this sense a support being

requested from the part of the industries. The progressive industrial associations’

dialogue on standard setting and harmonization has been also mentioned. An interesting

idea has been expressed by Mr. Isozaki on the “4th Arrow of Abenomics: Tokyo

Olympics2020” with the related economic and business/investment boost expected.

On the EU side, Director General Calleja of European Commission, DG Enterprise and

Industry, already at his 3d BRT participation, made a comprehensive presentation

focusing on the shared economic and societal challenges between the EU and Japan, the

main BRT recommendations of this year and the progresses achieved in the last three

years and the main elements of the renewed EU Industrial Strategy (aiming towards an

“Industrial Renaissance” in Europe). The EU Ambassador to Japan, Mr. Hand Dietmar

Schweigut emphasised the progress achieved in the 5th round of FTA/EPA negotiations

in parallel with the advance in the negotiations for a Strategic Partnership Agreement

which is paving the way for strengthened cooperation on environment, energy, climate

change that will generate additional business opportunities for innovative companies on

both sides. The importance of the BRT work “in the spirit of cooperation” has been also

emphasised in this context. On the Climate Change aspects the EU Ambassador

emphasised that the EU-Japan “alliance” will continue and that this commitment is

expected to be reconfirmed at the next Summit in early May. Mr. Antonio Parenti, the

Deputy Chief Negotiator for EU-Japan FTA/EPA, European Commission, DG Trade

emphasised the progress achieved in the 5th negotiation round, the Review process that

is to start at the beginning of May and the ultimate objective that remains the same: an

ambitious comprehensive agreement. In this sense the BRT recommendations are being

seen as very valuable as coming from the “end users” of such an agreement. Antonio

Parenti congratulated the Japan side on their conclusion of an agreement with Australia

and presented the similar results obtained by the EU in the negotiations with Canada

and Singapore.

Discussion

NARITA (Ministry of Health, Labour and Welfare): Japan has sped up the approval of

medicines and medical equipment, and now it is focusing on safety in its 3rd mid-term

plan (2015-2020).

INOKUCHI (Mitsui Sumitomo Insurance): exhorted for rapid conclusion of FTA/EPA

negotiations.

AVRIL (BNP Paribas): how to get long-term finance for infrastructure in emerging

countries?

NAGAMINE (MOFA) answered that through public private partnerships in the case of

Japan, led by JICA. This is an issue being discussed in G-7/G-20 gatherings.

BEYER (BusinessEurope): on balancing speed and quality. NTBs not reflected in

roadmaps.

Nagayama (Chugai Pharmaceutical): On the possibility of EU-Japan joint cooperation

and joint investment projects in third countries in the health and pharmaceutical sector,

he insisted on the need for a “joint push” for the implementation of universal health

insurance system in Asia and Africa.

STEIN (Volkswagen): emphasised that some clear progress has been achieved in the

FTA negotiations with the elimination of some of the NTBs, the change in the taxation

of Kei cars, the progress in safety regulation harmonization and the mutual recognition

discussions, however there are more steps to be taken. As an example he mentioned

Japan’s lack of acceptance of EU’s hydrogen battery tests.

DE ROYERE (Air Liquide): Addressed the following question: how can the EU and

Japan align their energy and climate objectives?

GOTO (MOFA): hoped for a globally equitable framework of CO2 emission targets.

CALLEJA (Commission) recalled the targets in the EU and believed that if EU and

Japanese auto industry collaborated both could have a global influence in setting such a

framework.

KAWAGUCHI (Nissan): reminded the relatively “speedy” conclusion of the EU-Korea

negotiations in just 3 years and asked how long the EU-Japan FTA/EPA negotiations

are expected to take. The representatives of the EU industries emphasized however the

need for balancing “speed” with “substance”. From the part of European Commission,

Director General Calleja explained that in a negotiation process of such complexity,

with multiple sectors involved, there is no place for improvisation and that good

preparation and a progressive step by step approach is necessary. Furthermore, the EU

Deputy Chief Negotiator, Antonio Parenti stressed that, since only 1 year of

negotiations has passed, it would not be impossible to achieve a conclusion in 3 years

providing that the right measures are taken, however, the difference in size should be

also taken into account when comparing different negotiation processes.

Closing ceremony

Co-chairman Fabrice BRÉGIER hoped for an enduring EU-Japan cooperation and

thanked everybody. At the end of the meeting, Mr. YONEKURA (Keidanren & Sumitomo

Chemical) passed the Japanese co-chairmanship to Mr. Kazuo TSUKUDA (Mitsubishi

Heavy Industries).

Press Conference by the two co-chairmen

Co-chairman YONEKURA summarised developments for an audience of about 20

journalists, 3 of them asking questions (Asahi, Nikkei, NHK)

BRT Recommendations handing over ceremony to the Japanese Prime Minister (9

April, 5,40 PM)

The BRT Recommendations were presented to the Prime Minister Shinzo ABE by the

BRT Japan side co-chairman Mr. Hiromasa YONEKURA (Sumitomo Chemical)

accompanied by the EU side co-chairman, Mr. Fabrice BRÉGIER (Airbus). The

succeeding Japan side co-chair, Mr. Kazuo TSUKUDA (Mitsubishi Heavy Industry) as

well as the former EU side co-chair Stéphane ISRAËL (Arianespace) were also present.

The EU authorities were represented by Ambassador Hans-Dietmar SCHWEISGUT and

the European Commission’s Director General for Enterprise and Industry, Mr. Daniel

CALLEJA CRESPO. Present were also the representatives of EU-Japan Centre for

Industrial Cooperation, MOFA, METI and the Prime Minister’s Secretariat.

Chairman YONEKURA emphasised that the BRT Annual Meeting took place right after

the 5th round of FTA/EPA negotiations and therefore the resulting recommendations are

very timely, particularly having in mind that the European Commission would soon

embark on its 1 year Review process. While introducing his successor, Mr. YONEKURA

expressed his satisfaction for being able to finish his BRT co-chairmanship with a

fruitful outcome and gave his assurance that Mr. TSUKUDA will work hard together with

his European counterpart. The EU side co-chair, Mr. Fabrice BRÉGIER expressed the

support of the European industries for the FTA/EPA process and the hope that the BRT

joint Recommendations will help the Japanese and EU authorities to reach an

agreement.

Prime Minister Shinzo ABE mentioned that he was timely informed about the BRT

fruitful discussions and that his administration puts great emphasis on opening the

markets, and consequently the EU-Japan FTA/EPA process is seen as an integral part of

Japan’s Growth Strategy. In conclusion, the Prime Minister emphasised once again the

importance his administration attaches to the EU-Japan FTA/EPA, along with the TPP

negotiations (which were just taking place in Tokyo). For the FTA/EPA negotiations

the industries are expected to play a greater role and the BRT support is important.

Summary and Conclusions:

- The sense of cautious optimism and expectation witnessed since last year from the

part of EU industries, encouraged by PM Abe's “3rd Arrow” (deregulation;

economic growth through; trade liberalisation), appears to have strengthened. Thus,

this year the discussions took place under a general atmosphere of optimism brought

up by the progress achieved in the 5th round of FTA/EPA negotiations which just

took place in Tokyo. In the view of the industries, this might signal that the

negotiation process is entering into its substantive stage.

- The issue of “speed” in the FTA negotiations has been repeatedly brought up by the

representatives of the Japanese industries (automotive industry in particular) as well

as by the Japanese authorities. In this sense, a comparison was repeatedly made with

the just concluded Japan-Australia FTA that was presented as an example of

overcoming difficult issues such as agriculture and food products.

- A recurrent comparison brought up particularly by the Japanese automotive industry

representatives (Nissan) was EU-Japan FTA vs EU-Korea FTA. The fact that from

2016 the Korean cars will enter the EU market tax free adds additional pressure

towards speeding up the EU-Japan FTA negotiations in order to assure a level

playing field for the Japanese exporters in Europe. In the same context, the

relatively “speedy” conclusion of the EU-Korea negotiations in just 3 years was also

reminded. On the other hand, the representatives of the EU industries emphasised

the need for balancing “speed” with “substance” while the EU authorities

representatives underlined the need for good preparation and a progressive step by

step approach given the complexity of the negotiations and the multitude of sectors

involved.

- The “1 year Review Process” was another recurrent issue brought into discussions

and it appears to be taken very seriously by both the Japanese industries and the

Japanese authorities. The EU industries (including BusinessEurope) appeared to be

generally in favour of a positive Review from the part of the European Commission.

- The Tokyo 2020 Summer Olympics, the “4th Arrow” of Abenomics, should be seen

as an integral part of Abe Government massive investment stimulus through

significant investment in infrastructure projects. In this context, there will be many

related business and investment opportunities, including for the EU companies.

- There is an increasing trend in EU-Japan industrial associations dialogue on specific

sectors, focusing on international standards and regulatory harmonization, a process

which should be further continued and enhanced.

- The possibility of EU-Japan joint projects (ex: infrastructure) in third countries has

been emphasized by the industries on both sides. A joint EU-Japan push for the

implementation of universal health insurance system in Asia and Africa would be a

prerequisite for joint cooperation and joint investment projects in third countries in

pharmaceutical and health sectors.

- On the future role of the BRT the need for a long-term structured vision/strategy

beyond the FTA/EPA context was emphasised, and, in this sense, the idea of an

“EU-Japan 2050 Concept” was suggested.

- Through its “joint character”, the BRT process continues to play an important role

and to reflect a “win-win” symbolism in the dynamics of EU-Japan relations,

particularly relevant in the current double layered (FTA-SPA) negotiation context.

A reforming trend is becoming visible simply through the fact that the “BRT

Reform and future role” has become an integral part of the discussions agenda.

Under the new European co-chairmanship of Mr BRÉGIER the number of

recommendations was this year already reduced by half to make them more focused.

A new dynamism in the BRT works is expected to be brought by the newly

nominated Japan side Co-Chair, Mr. Kazuo TSUKUDA, Senior Executive Advisor for

Mitsubishi Heavy Industry (MHI). Mr. TSUKUDA currently holds a very senior

advisory role at MHI, having previously served as its President, its CEO and the

Chairman of its Board.

Prepared by Silviu Jora & Minerva Fellows Team