JETRO Global Trade andInvestment Report 2018
Global Economy Connected via Digitalization
Key Points

🔶 Global trade
The world trade value of 2017 has increased for the first timein three years
🔶 Foreign direct investment (FDI)
Chinese outward FDI shows strong presence in the world🔶 World trade policies
Multilateral trading system facing serious challenges
🔶 Topics: Global economy connected via digitalization
Digital trade in which the data is growing more than goods
and services

Japan External Trade Organization(JETRO)
Overseas Research Department

JETRO Global Trade and Investment Report 2018
Summary Global trade■ In 2017, world trade (trade in goods, nominal export value) increased by 10.5% to$17.3 trillion (JETRO estimate) compared with the previous year and saw positive
growth for the first time in three years. In particular, growth in commodity-related
products, reflecting an increase in prices, and growth in semiconductor-related products
resulted in remarkable increases. The trade volume (export basis) also increased by 4.5%.
Both the value and volume of world trade showed its highest growth since 2011.

■ In the first quarter of 2018, the trade value of goods (from 34 major economies)
increased by double digits, at 13.3% for exports and 14.6% for imports over the same
period the previous year. A chain of restrictive measures on trade, however, has raised
concerns of a downside risk.
■ In 2017, Japan’s export amounted to $697.2 billion, up 8.2%, while imports also
increased by 10.5% to $671.0 billion from the previous year. This remarkable growthtrend resulted in increasing the trade surplus ($26.3 billion) for the second consecutive
year. Exports of general machinery such as semiconductor manufacturing equipment
were especially strong, with the recovery of global investment.

 Foreign direct investment (FDI)■ Japan’s outward FDI in 2017 decreased by 3.0% from the previous year to $168.6

billion (on a balance of payment basis, net, flow). This shows a slight decrease from its
peak in 2016, but it still remains the second highest level on record. There are signs ofre-expansion of previously stagnant business by Japanese firms in China.
■ Looking at the share of world outward FDI stock by country/region, it is observedthat the presence of emerging and developing economies, especially China, as
investment sources is increasing year by year. There is rising concern regarding
corporate acquisitions in Europe and North America by Chinese enterprises, while theChinese government is also strengthening control over outward investment. Asiancompanies, such as those of China, are expanding their presence in investment in Japan,such as capital participation or the sharing business.

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 World trade policies■ While the pace of FTAs going into force around the world has declined, two major

FTAs that will have a significant economic impact, the EU-Japan EPA and TPP 11, arecoming into effect. As Japan pays tariffs of about $2.6 billion per year in exports to the
EU (JETRO estimate), there are expectations for the reduction of tariff costs.
■ The total number of anti-dumping investigations initiated by all World Trade

Organization (WTO) members remains at a high level. In addition to the extensive
application of the conventional trade remedies such as anti-dumping measures, the trade
policy implemented by the US includes unilateral measures based on domestic law. The
existence of the multilateral trade system which shares a common foundation with therules of WTO has been shaken.

 Topics: Global economy connected via digitalization■ Within global digital trade, cross-border e-commerce and data flows grew more

remarkably than goods and services. “Digital-related trade in goods” (export basis,
JETRO estimate) accounted for 17.0% ($2.95 trillion, 2017) of the world’s total trade,
and in recent years, old digital-related goods are giving way to the new. While theoverall presence of Japan in the export of digital-related goods worldwide is declining,
Japan has maintained the world’s largest share of exports of semiconductor
manufacturing equipment and industrial robots since 2007.

■ Global cross-border greenfield investment and cross-border M&A transactions bydigital-related companies are increasing. While the US occupies the largest share (basedon the number of projects/deals) in both cases, the share of emerging and developing
countries which are proactively developing business outside of their borders, such as
China, is expanding.
■ The United States, which is home to the world's major digital companies, haspromoted the liberalization of digital trade through FTAs. Meanwhile, the EU is
proactively promoting the formation of digital-related rules even in non-trade fields suchas competition policy and tax reform. And China is imposing stringent domestic
restrictions on foreign capital investment. These facts demonstrate how digital trade
policy differs in each country. Under these circumstances, exploratory work toward
starting discussions on e-commerce by like-minded countries has been launched in the
WTO and is drawing attention as an indication of the significance of multilateral rule
formation for trade.

3

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Global trade 1： Global trade in 2017 shows upward trend for first time in three years■ In 2017, world trade (merchandise trade, nominal export value) increased by 10.5% to $17.3 trillion(JETRO estimate) compared with the previous year, seeing positive growth for the first time in three years.
This is due to acceleration of global economic growth and increased commodity prices (especially those of fueland metal). The trade volume (export basis) also increased by 4.5% from the previous year. Both the value andvolume of world trade showed its highest growth since 2011.
■ At the same time, the world’s import volume growth amounted to 1.3 times that of the world economic
growth rate, implying a departure from the “slow trade” of the previous five years.

World trade related indicators(All figures are percentages, unless indicated at the end of column)

World trade (export) (100 mil USD)
Nominal growth rate
Real growth rate
Price growth rate
World trade (import) (100 mil USD)
Nominal growth rate
Real growth rate
Price growth rate

Industrial production index growth rate (developed countries)

Fuel price index growth rate
Crude oil price growth rate
Natural gas price growth rate
Metal price index growth rate
Iron ore price growth rate
Food and beverage price index growth rate
Growth of nominal effective dollar exchange rate2013
185,434
3.1
2.6
0.5
188,830
1.7
2.2
-0.5
0.5
-1.6
-0.9
-3.7
-4.3
5.3
-0.7
2.2

2014
186,160
0.4
2.4
-2.0
189,638
0.4
2.9
-2.4
2.1
-7.4
-7.5
-3.0
-10.1
-28.1
-2.1
2.5

2015
161,820
-13.1
2.3
-15.0
164,879
-13.1
2.7
-15.3
0.3
-44.8
-47.2
-33.2
-23.0
-42.4
-15.9
15.3

2016
156,685
-3.2
1.6
-4.7
160,132
-2.9
2.0
-4.8
0.3
-16.5
-15.7
-34.5
-5.4
4.3
1.8
0.2

2017
173,162
10.5
4.5
5.8
177,458
10.8
4.8
5.7
2.5
23.4
23.3
16.4
22.2
21.4
1.0
-1.0

Note: 1) Both trade values and nominal growth rates are estimated by JETRO. See Appendix Annnotation II regarding the method of estimation.
2) The real growth rate is from the WTO. 3) The price growth rate was caluculated by dividing the nominal value by volume index. 4) All
commodity prices are indicated in the growth rate of the annual average. Crude oil prices are the average of Dubai, Brent andWTI. Natural gas
prices are from the Europe/Japan/US index. Iron ore prices are the import prices at China's CFR Tianjin port.
Source: Trade statistics of respective economies, "IFS (June 4, 2018)" (IMF), "WEO, April 2018" (IMF), and WTO data

（Billion USD）

20,00018,00016,00014,00012,00010,000
8,000
6,000
4,000
2,000
0

Trends in world trade (export basis)
Export value
Nominal growth rate (right axis)
Real growth rate (right axis)

(%)

25
20
15
10
5
0
-5
-10
-15
-20
-25
-30

(year)

Source: JETRO's estimates based on the trade sitatistics of respective countries, and WTO data
4

Copyright (C) 2018 JETRO. All rights reserved.

Global trade 2： Chain of trade restrictive measures becomes risk in 2018
■ The increase of world trade in 2017 was mainly driven by growth in commodity-related products such asfuel and metal (a contribution ratio of 45%), electrical equipment (especially integrated circuits andcommunication equipment), chemical products, and general machinery (especially computers and peripheral
equipment, semiconductor manufacturing equipment and turbines). In particular, growth in commodity-related
products on the back of increased prices and that in semiconductor-related products stood out. By
country/region, in addition to China and the US, both of which saw exports and imports increase for the firsttime in three years, Germany, and commodity-exporting countries have led the increase in trade.
■ In the first quarter of 2018, the trade value of goods (from 34 major economies where the data by product isavailable) saw double-digit growth, increasing by 13.3% for exports and 14.6% for imports over the same
period the previous year. A chain of restrictive measures on trade, however, does raise concerns of a downsiderisk. Globally, the pace of expansion of new export orders (*) in the first half of 2018 are slowing down every
month, and it is presumed that concerns about trade friction have been negatively affecting trade.
(*) Measured by the Global Manufacturing PMI new export orders, released by J.P.Morgan and IHS Markit.

World trade by product (export basis, 2017)(100 million USD, %)

Value

Share

Total exports
Machinery and equipment
General machinery
Turbines

173,162 100.0
71,642 41.4
20,739 12.0
1,211
0.7
Computer and peripheral equipment
5,522
3.2
Semiconductor manufacturing equipment760
0.4
Industrial robots
60 0.03
Electrical equipment
25,356 14.6
Communication equipment
5,784
3.3
Integrated circuits
6,252
3.6
Lithium-Ion Storage Batteries
224
0.1
Transport equipment
19,289 11.1
Automobiles
8,975
5.2
Automobile parts (excluding engines)
3,943
2.3
Precision equipment
6,257
3.6
Chemicals
23,562 13.6
Pharmaceuticals and medical supplies
5,369
3.1
Commodity-related products (total)
47,473 27.4
Fuel (mineral fuels etc.)
19,050 11.0
Non-fuel (metal, food and beverages) 28,423 16.4
Metal
13,682
7.9
Mineral ore
1,984
1.1
Base metal and its products
11,698
6.8
Food and beverages
14,741
8.5

World trade by country and region (2017)
ExportGrowth Contrirate bution

10.5
8.4
10.2
12.4
12.1
36.6
29.9
10.0
7.1
18.7
25.4
5.0
7.1
7.0
6.7
8.9
5.5
18.5
30.0
11.8
17.4
27.6
15.8
7.1

10.5
3.5
1.2
0.1
0.4
0.1
0.0
1.5
0.2
0.6
0.0
0.6
0.4
0.2
0.3
1.2
0.2
4.7
2.8
1.9
1.3
0.3
1.0
0.6

Value ShareUS
EU
Germany
Netherlands
FranceUK
Japan
East Asia
China
South Korea
ASEAN6
VietnamIndia
BrazilRussiaWorld

Advanced economies

Emerging/developing economies

15,467
8.9
58,892 34.0
14,487
8.4
6,524
3.8
5,352
3.1
4,496
2.6
6,972
4.0
44,020 25.4
22,631 13.1
5,737
3.3
12,732
7.4
2,151
1.2
2,968
1.7
2,177
1.3
3,578
2.1
173,162 100.0
106,037 61.2
67,12538.8

Growth ContriValuerate bution(100 million USD, %)Import
Share

6.6
9.5
8.6
14.3
6.7
6.4
8.2
11.1
7.8
15.8
14.6
21.8
12.2
17.5
25.2
10.5
9.1

0.6 23,429 13.2
3.3 58,385 32.9
0.7 11,672
6.6
0.5
5,747
3.2
0.2
6,242
3.5
0.2
6,240
3.5
0.3
6,710
3.8
2.8 37,375 21.1
1.0 17,896 10.1
0.5
4,785
2.7
1.0 12,104
6.8
0.2
2,130
1.2
0.2
4,450
2.5
0.2
1,507
0.8
0.5
2,275
1.3
10.5 177,458 100.0
5.6 111,018 62.6

12.9

4.9

66,44037.4

Growth Contrirate bution

7.1
9.7
10.6
13.9
9.1
-2.1
10.5
16.9
17.5
17.8
16.5
21.9
23.0
9.6
24.7
10.8
9.2

1.0
3.2
0.7
0.4
0.3
-0.1
0.4
3.4
1.7
0.5
1.1
0.2
0.5
0.1
0.3
10.8
5.8

13.7

5.0

Commodity exporters 25,813 14.9 18.3
2.5 22,860 12.9
9.0
1.2
Note: 1) Figures of "World," "EU," "Advanced economies," "Emerging/developing
economies" and "Commodity exporters" were estimated by JETRO. 2) Figures of "EU"include those of intraregional trade. 3) Member countries of ASEAN 6 are Singapore,
Thailand, Malaysia, Vietnam, Indonesia and the Philippines. 4) See footnote in the main text
regarding the definition of "Commodity exporters" (39 emerging/developing economies and 7
advanced economies). Figures of small countries which were unavailable or unable to be
estimated were excluded. 5) Advanced economies include 37 economies based on thedefinition of DOTS (IMF). Figures for "emerging/developing economies" are calculated bysubtracting "advanced economies" from the "world."
Source: Trade statistics of respective economies

Note: 1) JETRO estimates. See Appendix Annnotation II regarding the methodof estimation. 2) See Appendix Annnotation I regarding the productclassification.
Contribution of exports by economies, on a quarterly basis
Source: Trade statistics of respective economies(Year-on-year % change)
20
15
10
5
0
-5
-10
-15
-20
I II III IV I
2014

OthersCommodity exporters
ASEAN6
China
Japan
US

II III IV
2015

I

II III IV
2016

I

II III IV
2017

I
2018

EU26
World exports (growth rate)

Note: 1) World exports cover 210 economies. 2) See footnote in the main text regarding the definition of "commodity exporters." EU26 includes all EU member
economies excluding two commodity exporters (Greece and Cyprus).
Source: "DOTS (June 22, 2018)" (IM F)

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Copyright(C)(C)2018
2018JETRO.
JETRO.All
Allrights
rightsreserved.
reserved.

FDI 1: Japan’s outward FDI marks second highest level on record■ Japan’s outward FDI in 2017 decreased by 3.0% from the previous year to $168.6 billion (on a balance of
payment basis, net, flow). Although it decreased slightly from the previous year's peak, it still ranks the second
highest level on record. By country/region, investment in Asian countries showed recovery while that in the EU
fell by 17.8%. Investment in the US remained flat, but the country has remained the largest investment
destination for eight consecutive years.
■ Although Japan’s direct investment to China saw sluggish growth, changes have been observed in futurebusiness development plans of Japanese firms in China. Motivation of Japanese-affiliated companies in China
to expand business within the country has increased, a sign that Japanese business in China, which has beenstagnant, might pick up again.

Japan's outward FDI by country/region
Asia
China
South Korea
ASEAN
Singapore
ThailandIndonesia
Malaysia
Philippines
VietnamIndia
North America
US
Latin America
MexicoBrasilOceania
Australia
Europe
EU
UK
World

2015

2016

2017

35,057
10,011
1,593
20,920
7,010
4,057
3,213
2,918
1,531
1,446
-1,041
51,451
50,218
6,973
1,229
-193
6,669
5,676
36,08135,785
13,979138,428

13,7459,453
1,626-5,340-18,581
4,632
2,957
1,394
2,319
1,672
4,105
53,32752,58427,965
1,872
898
6,344
4,696
72,157
69,122
49,983
173,855

38,2669,679
1,700
22,011
9,677
4,724
3,388
935
1,006
2,001
1,060
52,87951,981
10,9501,201-3,593
3,185
2,213
59,536
56,845
21,628
168,587(Million USD, %)Percentchange
22.7
178.4
5.7
2.4
1.0
4.5
13.1
5.7
2.8
2.0
2.0
14.6
0.6
-32.9
0.6
-56.6
1.2
19.7
0.6
-74.2
31.4
-0.8
30.8
-1.1
6.5
-60.8
0.7
-35.9
1.9
-49.8
1.3
-52.9
35.3
-17.5
33.7
-17.8
12.8
-56.7
100.0
-3.0

Share

Jan-May,
2018 (P)19,8303,914
1,061
12,214
7,326
2,724
1,136
△ 347
257
888
1,579
302
△ 1,330
15,156
677
923
3,030
2,568
22,564
20,32812,246
61,692

Percentchange
32.1
59.9
6.3
14.4
1.7
153.7
19.8
88.9
11.9
305.2
4.4
18.7
1.8
5.9
0.4
-54.9
1.4
8.2
2.6
72.5
0.5
-98.6
24.6
56.7
1.1
1.5
4.9 1055.3
4.2
36.6
-38.1
33.0
-43.5
19.9
-2.6
100.0
-24.0

Share

Note: 1) The yen-based value is converted to dollars by quarter, using the average quarterly Bank of Japan interbank rate.
2) For after 2014, figures reflect the annual revision. 3) The cumulative total for 2018 is a preliminary figure.
Source: “Balance of Payment Statistics” (M inistry of Finance, Bank of Japan).

Ratio of Japanese companies planning to expand
business in China and ASEAN in the future(headquarters and Japanese-affiliated companies)

Trends in Japan’s outward FDI by type
190
170
150
130

(Billion USD)

80.0

Debt instruments
Reinvestment of earnings
Equity capital
Total

75.0
70.0

65.0
60.0

110

55.0

90

50.0

70
50

China (headquaters)

40.0

China (Japanese-affiliated companies)

30.0

17.1-5
18.1-5(P)

10
96
97
98
99
2000
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17

35.0

Note: 1) The yen-based value is converted to dollars by quarter, using the average quarterly Bank of Japan interbank
rate. 2) Figures are based on BPM6. 3) The cumulative total for 2018 is a preliminary figure.
Source: “Balance of Payment Statistics” (Ministry of Finance, Bank of Japan).

48.3

45.0

30

-10

（％）

ASEAN (headquaters)
ASEAN (Japanese-affiliated companies)

2011

2012

2013

2014

38.1

2015

40.1

2016

2017

Note: 1) Figures for headquarters are the ratio of companies choosing China or ASEAN as the country/region in which they plan to expand
business (over the next three years or so) to the total of respondents (headquarters in Japan) that answered "to expand new business and further
expand business overseas" in the survey in 2011-2012, and "to further expand business overseas in the future" in the years after 2013.
2) Figures for Japanese-affiliated companies are the ratio of companies choosing "expansion" regarding future business plans (in the next one or
two years) to the total of respondent affliates operating in the respective countries/regions (i.e. China or ASEAN). Consequently, the absolutevalues of headquarters' and affiliates' ratios are not comparable.
Source: Survey on the International Operations of Japanese Firms, and Survey on Business Conditions of Japanese Companies in Asia andOceania (JETRO)

6

Copyright (C) 2018 JETRO. All rights reserved.

FDI 2: China and East Asia increasing their presence
as sources of direct investment■ The share of emerging and developing countries in world outward FDI stock expanded to 23.8% by the endof 2017. Looking at the outward FDI stock by emerging and developing countries, the share of East Asia
(China, Korea, Taiwan, Hong Kong, ASEAN) accounted for 70.4% at the end of the same year. In East Asia,
China (including Hong Kong) has an overwhelmingly large share, accounting for 44.8%.
■ The presence of East Asian companies, such as of China, as direct investment sources also expanded ininward FDI in Japan. East Asia's share of cross-border M&A acquisitions of Japanese companies reached44.4% between 2015 to 2018, of which the share of China (including Hong Kong) accounts for 20.5%. Asian
enterprises' entry into the Japanese market has expanded, such as capital participation or the sharing business.
Breakdown of share in outward FDI stock by
emerging and developing countries and region

Share of developed and emerging/developing
economies in world outward FDI stock

(%)

(％)

（Billion, US$）

100.0

100.0

35,00090.0

90.0
30,000

80.0

80.0

70.0

25,000World outward FDI stock (right axis)

70.0

Share of developed economies

60.0
50.0

60.0

20,000Share of emerging/developing economies

50.0
15,000

40.0
30.0

23.8%

30.0

10,000

20.0

20.0
5,000

10.0

10.0
0.0

44.8%

40.0

1990

92

94

96

98

2000

02

04

06

08

10

12

14

16

0.0

0

Note:
1) Graph includes a total of 38 countries/regions defined as developed economies by UNCTAD.

100.0
90.0

16.0

80.0

10.3
16.7

70.0
60.0

20.2

17.8
49.2

44.7

10.0
0.0

11.6

44.4

2000～04US

2005～09EU

33.0

2010～14
East Asia

13.0

Note: 1) East Asia includes China, South Korea, Taiwan, Hong Kong and
ASEAN. 2) The data is until the end of June 2018.
Source: Thomson Reuters

98

China (including HK)

2000

02

04

06

08

10

12

14

16

Entry to Japanese market by Asian companies
Company

Overview

Powertech Technology Inc., the world's leading provider for IC backend
Powertech Technology
Electronic parts
services, acquired a majority of shares of Tera Probe, the provider of wafer
Inc. (Taiwan)
testing services. (May 2017)

Electric
machinery
Auto parts

Lenovo (China)

PC maker Lenovo bought a controlling stake of Fujitsu Client Cumputing
Limited which produces PCs and tablet devices. (March 2018)

Hisense Group, a major electronics company, acquired 95% of the shares of
Hisense Group (China) Toshiba Visual Solutions, which is responsible for Toshiba's visual products
business. (February 2018)
Ningbo Joyson
Ningbo Joyson Electronics, a major auto parts supplier, completed theElectronic Corporation acquisition of Takata, an automobile parts maker, through a US subsidiary.
(China)(April 2018)

Insurance

FWD Group (HongKong)

Insurance company FWD Group acquired AIG Fuji Life Insurance. (April
2017)

Drug

Ping An InsuranceGroup (China)

Ping An Insurance Group of China made a capital and business alliance with
Tsumura. (October 2017)

Service

Mobike (China)

Mobike, the world's leading bicycle sharing service company, started its
service from Sapporo. (July 2017)

ServiceTujia (China)

Tujia, a major Chinese vacation rental company, announced a business tie-up
with Rakuten involving a private lodging introduction service. (August 2017)

Service

Didi Chuxing (China)

Didi, a major ride-sharing company, announced a partnership with SoftBank
to provide platform services for the taxi industry. (February 2018)

30.9

2015～18
Other

96

CIS

Other

Source: UNCTADElectric
machinery

18.4

40.0
20.0

36.7

24.5

50.0
30.0

12.5

94

Middle East

Africa2) The figure for Central and South America exclude the financial centers in the Caribbean region.

Sector(%)

92

South Asia

Central and South America

Note:1) East Asia represent the figures for China, South Korea, Taiwan, Hong Kong, and ASEAN.

2) Figures for emerging and developing economies are obtained by subtracting the figures for developed economies from the total.
Source: UNCTAD

Cross-border M&A share within Japanby country/region on a deal basis

1990

East Asia

Source: Thomson Reuters, various reports, etc.

7

Copyright (C) 2018 JETRO. All rights reserved.

World trade policies 1: Japan-EU EPA to reduce EU tariffs by $2.6 billion annually■ The EU is a major trading partner that accounts for 11.3% of Japan’s trade. More than 60% of Japan’s
exports to the EU are taxable, with tariffs of around $2.6 billion paid per year (JETRO estimate), meaning there
are great expectations for reduced tariffs once the Japan-EU EPA goes into force.

■ TPP 11 is expected to come into force in early 2019. Once it does, an economic sphere will be created thatfor many members will account for a double-digit percentage of total exports.
Tariffs applied to EU imports from
EU tariffs imposed on imports from Japan (for items
Japan and South Korea
with an estimated value of over 30 million USD in 2017,100%
JETRO estimate)（1,000 USD, %）Taxed
Average
Tariffs paid
Applied(estimated)
Tariff rate
8703 Passanger vehicles and other automobiles 1,074,504
10.0
Parts & accessories for motor vehicles
8708
181,755
3.9(Head 8701-8705)
Motorcycles and cycles fitted with an
8711
68,873
6.1
auxiliary motor
8482 Ball or roller bearings and parts
53,4098.0
Turbojets, turbopropellers & other gas
8411
42,297
2.9
turbines, parts
TV receivers, including video monitors &8528
40,438
6.8
projectors
Optical elements, mounted; parts &9002
33,697
6.5
accessories
Electric ignition equipment; generators;
8511
30,8793.2
parts
4011 New pneumatic tires, of rubber
30,578
4.4
Total
2,582,393
3.4

HS
code

Item

ImportValue

Import 90%
ratio

10,746,534

13.9

4,718,911

6.1

12.0%

unknown;others80%

MFN（taxed）

60%

1,127,823

1.5

667,9290.9

1,472,549

1.9 40%594,1250.8

519,055

0.7

964,977

1.3

693,193
77,053,673

0.9
100.0

Note: T he amount of estimated paid tariffs was calculated by multiplying the import value of items at the six-digit HS
code level by the MFN tariff rates and adding up the values of items sharing the same four-digit level code, based on thedata as of April 2018.

Taxed
61.8%

70%

50%
Preferential（tariff-free）

30%
20%
MFN（tarifffree）

10%
0%

Japan

South Korea

Note: Based on data of 2017. MFN stands for Most Favored Nation tariff rate.
Source: Eurostat

Source: Eurostat and WT O

Ratio of export to TPP11 member countries (2017)(%)

Ratio of export to TPP11 member countries (export amount to partner country/total export amount)
Canada Mexico Peru

Total export
AmountAmount of amount (100Newof export
Singapore Malaysia Vietnam Brunei Japan
millionChile Australia
export toto TPP
Zealandnew FTA
USD)
11countries

1.4

Exporting Country

Canada

0.1

0.2

0.4

0.1

0.2

0.1

0.2

0.0

2.2

4.9

3.2

4,212

0.4

0.4

0.3

0.0

0.2

0.2

0.1

0.0

1.0

5.4

0.8

4,095

2.4

0.6

0.1

0.1

0.3

0.3

0.0

4.2 11.5

1.2

433

0.3

0.1

0.1

0.3

0.4

0.0

8.8 16.3

0.0

659

3.0

2.2

1.9

1.5

0.0 14.6 24.0

0.6

2,311

2.1

1.9

1.3

0.0

6.0 30.3

8.1

381

10.6

3.3

0.2

4.6 22.4

0.5

3,734

3.0

0.2

8.0 31.2

1.5

2,179

0.0

7.9 16.0

2.4

2,122

29.3 51.8

0.0

56

13.2

1.7

6,983

Mexico

2.8

Peru

2.7

0.9

Chile

2.0

1.8

2.5

Australia

0.5

0.1

0.0

0.1

New Zealand

1.3

0.7

0.2

0.3 16.4

Singapore

0.2

0.3

0.0

0.0

2.7

0.5

Malaysia

0.4

1.0

0.1

0.1

3.5

0.5 14.5

Vietnam

1.3

0.9

0.1

0.5

1.6

0.2

1.3

Brunei

0.0

0.0

0.0

0.0

2.8

0.0

7.6 11.2

0.8

Japan

1.4

1.6

0.1

0.3

2.3

0.4

3.2

2.2

2.2
1.8

0.0

Note: The thin shaded cells indicate the values between countries or regions where FTAs have already been in effect. The dark shaded cells indicate the values
between countries entering an FTA partnership for the first time through the effectuation of the TPP. The Agreement on the Global System of Trade Preferences
Among Developing Countries (GSTP) and the Protocol Relating to Trade Negotiations Among Developing Countries Agreement (PTN) are not classified as FTAs.
Source: Trade statiscits of each country and "DOTS" by IMF Data updated in June 20188

Copyright (C) 2018 JETRO. All rights reserved.

World trade policies 2: US shifts to utilization of unilateral measures■ The total number of anti-dumping investigations conducted by all World Trade Organization (WTO)
members in 2017 came to 248 cases, maintaining a high level. The US initiated 54 of these cases, which was
the largest number among WTO members, accounting for 21.8% of the total and marking a record high.

■ The trade policy taken by the Trump administration includes not only aggressive use of trade remedies, butalso unilateral measures based on American domestic law. The existence of the multilateral trade system whichshares a common foundation with the rules of WTO has been shaken.
Number of anti-dumping investigations initiated worldwide

400(Number of cases)

372

357

US Ratio (right axis)
296

300
246

250

311

234

226

221

200

248
229

15.0

208
173

165

157

236

218 217198 203

20.0

298

287

264

25.0

21.8%
(Record-High)

Number of Anti-dumping Investigations

350

(%)

165

10.0

150
100

5.0

50
0

95

96

97

98

99 2000 01

02

03

04

05

06

07

08

09

10

11

12

13

14

15

16

17

0.0

Note: Based on data of reporting countries.
Source: WTO Secretariat

Major trade-related decisions taken by the Trump administration
Date
23-Jan-17
31-Mar-17
18-Apr-17
18-Apr-17

Outline of measures
Withdrawal of the United States from the TPP
President orders to analyze factors of trade deficit and to enhance enforcement of trade remedies and violations of trade laws
Assessing the extent of enforcement of the Buy American Law and impact of trade agreements
Launch the Japan-US Economic Dialogue
Initiation of investigation on the effects on national security of steel imports based on Section 232 of the Trade Expansion Act of
20-Apr-17
1962
27-Apr-17
Initiation of investigation on the effects on national security of alminum imports based on the Trade Expansion Act of 1962
29-Apr-17
Establishment of Office of Trade and Manufacturing Policy
18-May-17 Notification to the Congress on renegotiation of the NAFTA
Investigating the effects of violation of IP rights and compulsory technical transfer requirements by China, based on Section 301
14-Aug-17of the Trade Act of 1974
16-Aug-17 First round of the NAFTA renegotiation
22-Aug-17 Launch the Special Session of the US-Korea FTA Joint Committee
The US Department of Commerce self-initiated antidumping and countervailing duty investigations of imports of certain
28-Nov-17
aluminum sheets from China
President Trump approves global safeguard measures on large residential washers and crystalline silicon photovoltaic cells and
23-Jan-18
modules
Determination of additional import tariffs on steel and alminum based on the investigation conducted under Section 232 of the
8-Mar-18
Trade Expansion Act of 1962
Determination of additional import tariffs on imports from China and strengthened investment restriction on Chinese investment
22-Mar-18
in the US, based on the investigation conducted under Section 301 of the Trade Act of 1974
27-Mar-18 Agreement in principle of the Special Session of the US-Korea FTA Joint Committee announced
Initiation of investigation under Section 232 of the Trade Expansion Act of 1962 regarding the effects of imported vehicles and23-May-18
automotive parts on national security
Initiates imposition of additional import tariffs on certain products from China based on the investigation conducted under
6-Jul-18
Section 301 of the Trade Act of 1974
9
Sources: White House, JETRO website
Copyright (C) 2018 JETRO. All rights reserved.

Digital 1: E-commerce and data flows grew more than goods and services
within global digital trade■ Analyzing the world‘s “digital trade” from the four indicators of (1) trade in digital-related goods, (2) trade
in digital-related services, (3) cross-border e-commerce (EC), and (4) cross-border data flows (see definition
below), the growth of cross-border EC and cross-border data flows have been especially remarkable in recent
years compared with digital trade in goods and services.
■ Global cross-border data flows in 2016 (used capacity of international Internet bandwidth in the world)increased to 264,968 gigabits per second (Gbit/s), which marked 165-fold compared with the data flows in
2001. Asia and Europe respectively account for 36.8% and 31.4% of these global cross-border data flows. In
terms of the compound annual growth rate (2001-2016), the growth in emerging and developing countries such
as Asia, Latin America, Russia CIS, Middle East and Africa have been notable.
Trends in world digital trade indicators (year 2014=100)(Year 2014=100)
250.0

Trade in digital-related goods

200.0

EC
169.9

Trade in digital-related services

224.6
Data
168.5

Cross-border e-commerce market (B2C)

150.0

Cross-border data flow

109.0

101.6

100.0
50.0
0.0

105.8

95.0

2002 03

04

05

06

07

08

09

10

11

12

13

14

15

16

17
(Year)

Note: 1) Figures for the cross-border e-commerce (EC) market are estimates/forecasts.
2) Trade and cross-border EC market are based on monetary export values, while cross-border dataflows are measured by the used international Internet bandwidth (bit size per second).
Source: Trade in goods: JETRO's estimates based on the trade statistics of respective economies;
trade in services: WTO data; EC market: AliResearch data; data flows: "ITU World
Telecommunication/ICT Indicators Database 2017" (ITU).

Trends in used capacity of international Internet bandwidth (cross-border data flows) in the world(Gigabits per second)

300,000

250,000

200,000
150,000
100,000

50,00002001 02

Asia: CAGR 88.7%
Europe: CAGR 59.8%
North America: CAGR 58.6%
Latin America: CAGR 88.8%
Russia/CIS: CAGR 99.1%
Middle East: CAGR 90.4%
Africa: CAGR 88.7%
Oceania: CAGR 68.9%
03

04

05

06

07

08

09

10

11

12

13

14

15

16
(Year)

Note: 1) Values were calculated by adding up the amount of "gigabits per second" of each year and eachcountry or region where the data is available. (As for the number of countries and regions, the smallest
one is 174 in 2006 and the largest is 208 in 2012). 2) The category of regions is the same as that of"world trade of products" in Appendix 3. "North America" includes the US and Canada. 3) CAGR, theCompound Annual Growth Rate, was calculated by data from 2001 to 2016.
Source: "ITU World Telecommunication/ICT Indicators Database 2017" (ITU)

Definitions of four indicators measuring “digital trade"

Digital trade was measured from the following four indicators, based on definitions by OECD and the Information
Economy Report 2017 of UNCTAD .
1) Trade in digital-related goods: This generally covers "ICT goods" defined by OECD, "IT related products" definedby JETRO, and electronics exports released by the Japan Electronics and Information Technology Industries Association(JEITA). Additionally, industrial robots, 3D printers and optical fibers/cables are included as digital-related goods.
2) Trade in digital-related services: Referring to the UNCTAD 's definition of ICT service trade, it is defined by trade in"telecommunications, computer and information services" from which data can be picked up from WTO service trade
statistics.
3) Cross-border e-commerce (EC) market: Cross-border EC trade value. This covers only business-to-consumer (B2C)
transactions.
4) Cross-border data flows：Defined by the international Internet bandwidth.
10

Copyright (C) 2018 JETRO. All rights reserved.

Digital 2: Old digital-related goods give way to the new■ In 2017, world “trade in digital-related goods” (JETRO estimate, export basis) amounted to $2.95 trillion,
2.5 times the amount in 2002. However, its share of total world trade slightly declined from 18.0% (2002) to
17.0% (2017).
■ Items driving modern digitalization (IoT, the increase of data volume and progress in automation throughAI/robotics, etc.) such as communication equipment, semiconductors and electronic components, measuring
and testing equipment, medical electronic equipment, semiconductor manufacturing equipment, industrial
robots and 3D printers etc., showed high growth (compound annual growth rate [CAGR]: 5.4%, 2007-2017),
while items that had traditionally driven digitalization such as computers and peripheral equipment, officeequipment, other electronic components, video equipment, audio equipment, etc., showed low growth (0.3%),
indicating the old is continuing to give way to the new.
World trade in digital-related goods (export basis)
Exports value of digital-related goods (right axis)
Exports value of digital-related goods: growth rate
Export value of non-digital-related good: growth rate
23.2
21.0

(%)
30
20
10
0

13.6
13.6

10.8

9.7

(100 million
USD)
35,000
11.3

4.4

3.9 3.0

6.8
1.0

-10

25,00020,000-3.5

15,000-1.5

10,000-14.6-2030,000

5,000

-30

0
(Year)

Note: 1) JETRO's estimates. See Appendix Annotation I and II regarding the method of estimation and productclassification. 2) The export value of non-digital-related goods was calculated by subtracting the export value ofdigital-related goods from the total of world exports.
3) Due to the revision of the HS code in 2007, data until 2006 and after 2007 are not precisely comparable.
Source: Trade statistics of respective economies

World trade in digital-related goods by product (export basis, 2017)
2017
Value
Computer and peripheral equipment, etc.
Computer and peripheral equipment
Computer parts
Office equipment
Communication equipment
Cellular phones
Semiconductors and electronic components
Electronic tubes and semiconductors
Integrated circuits
Other electronic components
Video equipment
Audio equipment
Measuring and testing equipment
Medical electronic equipment
Semiconductor manufacturing equipment
Industrial robots
3D printers, etc.
Digital-related goods: parts
Digital-related goods: final goods
Digital-related goods total
Digital-related goods in high growth (total)
Digital-related goods in low growth (total)

552,236
344,832
124,482
10,782
578,442
257,212736,187
110,948625,239448,336
159,669
17,731
248,459
109,760
75,996
5,955
6,339
1,577,141
1,373,355
2,950,495
1,761,138
1,189,357(Million USD, %)
CAGR
2007

Growth
2007-17
rate
18.7
12.1
0.4
11.7
13.1
2.2
4.2
15.3
-2.0
0.4
5.6
-1.8
19.6
7.1
6.4
8.7
8.0
8.6
25.0
15.6
5.1
3.8
0.6
3.5
21.2
18.7
5.4
15.2
9.3
1.3
5.4
7.9
-1.9
0.6
1.1
-4.7
8.4
10.6
4.2
3.7
4.3
3.7
2.6
36.6
8.8
0.2
29.9
8.0
0.2
14.1
3.6
53.5
12.0
2.8
46.5
10.5
3.2
100.0
11.3
3.0
59.7
12.0
5.4
40.3
10.2
0.3

Share

Share
24.2
12.6
6.9
0.6
14.1
5.1
20.4
3.6
16.8
17.9
8.8
1.3
7.5
3.5
1.5
0.1
0.2
54.2
45.8
100.0
47.3
52.7

Note: 1) JETRO's estimates. See Appendix Annotation I and II regarding the method of estimation andproduct classification. 2) Shaded cells indicate that they were recorded as higher growth rates than thecompound annual growth rate (CAGR) of the total of digital related goods. Digital-related goods in highgrowth represent the total value of those products.
11
Copyright
Copyright(C)(C)2018
2018JETRO.
JETRO.All
Allrights
rightsreserved.
reserved.
Source: Trade statistics of respective economies

Digital 3: Presence of Japan as exporter of digital-related goods declining■ Among the top ten exporters of digital-related goods, only Japan showed a negative CAGR from 2007 to2017 and dropped in ranking. Japan ranked at 23rd place in global digital-related service exports in 2017, andits world share remains mostly unchanged from 2005.
■ The decrease in Japan’s exports in digital-related goods was driven by the fall in exports of major items
such as semiconductors and electronic components (integrated circuits, in particular), other electronic
components, computer and peripheral equipment, and video equipment. However, Japan’s export ofsemiconductor manufacturing equipment (29.9% of the world’s share in 2017) and industrial robots (37.1% of
the world’s share in 2017) grew. In these two items, Japan has held first place since 2007.
Top 10 digital-related good exporters
Top 10 digital-related service exporters
Rank Economies
1
2
3
4
5
6
7
8
9
10

World
China
US

South Korea

Germany

Netherlands

Japan
TaiwanVietnamMexicoMalaysia(Million USD, %)2017
2017 2007 2007 2007-17
value
share share rank CAGR
2,950,495 100.0 100.0
3.0706,212 23.9
18.2 15.9
251,658
8.5
9.9 2
1.5
166,316
5.6
4.7 6
4.8
166,271
5.6
7.3 4
0.4
148,611
5.0
5.3 5
2.4
140,407
4.8
7.5 3
-1.5
138,711
4.7
3.7 7
5.4
88,8993.0
0.1 3940.5
87,959
3.0
3.1 9
2.5
83,425
2.8
3.5 8
0.9

Note: 1) The values of the world and Vietnam were estimated by JETRO.
Vietnam's actual value in 2016 was ranked 10th at 58.2 billion USD, while
its CAGR between 2007 and 2016 was 39.2%. 2) Values in the shaded cell
indicate that they are higher than the world CAGR. 3) Hong Kong,which mostly re-exports, is excluded from this table. The export amountof Singapore was ranked with values excluding re-exports.
Source: Trade statistics of respective economies

Rank Economies
1
2
3
4
5
6
7
8
9
10
23

World
IrelandIndia
US
Germany
China
UK
Netherlands
FranceSwedenSwitzerland
Japan(Million USD, %)2017
2017 2005 2005 2005-17
valueshare share rank CAGR
527,339 100.0 100.0
8.3
85,15916.1
n.a. n.a.
10.1
54,863
10.4
8.3 1
10.3
38,936
7.4
7.7 2
8.0
36,782
7.0
5.5 4
10.5
27,7675.3
1.1 11
23.0
25,589
4.9
7.1 3
4.9
25,065
4.8
n.a. n.a.
n.a.
18,311
3.5
n.a. n.a.
1.5
14,305
2.7
1.9 9
11.3
13,193
2.5
2.8 6
7.3
4,703
0.9
0.8 139.9

Note: 1) The CAGRs of Ireland and France were calculated by data from 2008
to 2017, as data in 2005 is not available. 2) Values in the shaded cell indicatethat they are higher than the world CAGR. 3) Ranking was created only withcountries and regions where data are available.
Source: WTO data

Japan’s trade in digital-related goods by product (2017)
ExportValue

Computer and peripheral equipment, etc.
Computer and peripheral equipment
Computer parts
Office equipment
Communication equipment
Cellular phones
Semiconductors and electronic components

Electronic tubes and semiconductors
Integrated circuits
Other electronic components
Video equipment
Audio equipment
Measuring and testing equipment
Medical electronic equipment
Semiconductor manufacturing equipment
Industrial robots
3D printers, etc.
Digital-related goods: parts
Digital-related goods: final goods
Digital-related goods total
Source: "Trade Statistics" (Ministry of Finance)

12,992
1,897
1,789
208
6,265
102
35,7789,094
26,685
26,152
6,347
171
22,114
4,961
22,7382,210
407
89,96650,441
140,407

Growth
2007-17
rate
9.3
4.8
-5.6
1.4
12.1
-7.6
1.3
11.2
-6.9
0.1
0.5
-11.0
4.5
12.3
-3.0
0.1 601.9
-13.0
25.5
7.8
-2.2
6.5
0.0
-2.0
19.0
10.8
-2.2
18.6
7.5
-2.9
4.5
13.0
-8.6
0.1
-24.0
-10.4
15.7
11.0
2.3
3.5
4.5
1.0
16.2
27.2
5.8
1.6
35.8
11.9
0.3
31.8
6.3
64.1
9.2
-1.9
35.9
15.5
-0.9
100.0
11.4
-1.5
12

Share

(Million USD, %)CAGR
GrowthShare
2007-17
rate
17.9
9.5
-0.2
12.4 12.6
1.5
2.5 14.2
-5.6
0.4
4.3
-1.2
23.0 10.1
11.4
14.0 10.0
26.3
20.6
8.0
0.3
4.5 -10.9
6.8
16.2 14.6
-0.9
12.5
4.1
-1.0
6.3 24.9
4.0
0.7
3.2
-7.1
9.9
9.5
2.1
4.7
0.5
5.2
3.8 62.0
4.6
0.0 15.4
8.6
0.1
-1.3
2.2
44.2
6.9
-0.4
55.8 13.2
5.2
100.0 10.3
2.3

Import

CAGR

Value
21,556
14,8582,973
467
27,664
16,85824,8195,354
19,465
14,996
7,606
822
11,897
5,645
4,595
48
63
53,10467,094
120,197

Copyright (C) 2018 JETRO. All rights reserved.

Digital 4: Global FDI by digital-related companies increasing■ Both the number of projects and value of global greenfield investment by digital-related companies (see thedefinition below) increased between the two periods of 2003-2008 and 2010-2017 (2009 is excluded to remove
the impact of the global financial crisis). While the number of global cross-border M&A deals by digitalrelated companies decreased between the same two periods, the overall M&A value increased due to theincrease in mega-deals.
■ The US accounted for the largest share of both greenfield investment and M&A transactions as an investor.
The share of emerging and developing countries, in particular China, is also expanding.
Global cross-border greenfield investment bydigital-related companies(100 million USD)
2,000

Averagefrom 2010 to 2017
3,128 projects

Averagefrom 2003 to 2008
2,348 projects

Global cross-border M&As
by digital-related companies（No.
（100 million USD）
of
Average
projects）
4,000 2,000
from 2003 to 2008
113.6 billion USD

Averagefrom 2010 to 2017
128.9 billion USD（No.
ofdeals）
4,000

1,500

3,000 1,500

3,000

1,000

2,000 1,000

2,000

89.4 billion USD

500
76.4 billion USD

Value

1,000

500

0
（Year）

0

Projects (Right Axis)

0

1,452 deals
Value

1,387 deals
Deals (Right axis)

1,0000（Year）

Note: 1) Data is constructed on the basis of various news reports. Projects thatare not completed within the year data is registered or estimated by FT are
included.
2) Total of 23 digital-related industries (sectors).
Source: fDi Markets (Financial Times)

Note: Deals in which the acquiror ultimate parent is classified as being in adigital-related industry are counted.
Source: Thomson Reuters

Global cross-border greenfield investment
by digital-related companies (Source country)

Global cross-border M&As by digital-relatedcompanies (Acquiror ultimate parent nation)

2003-2008
Average
Share
100.0
2,348
1,005
42.8
158
6.7
157
6.7
40
1.7
37
1.6
951
40.5
2,029
86.4

(No. of projects, %)2010-2017
Average
Share
100.0
3,128
1,049
33.5
283
9.0
161
5.1
30
1.0
103
3.3
1,503
48.1
2,625
83.9

World
US
UK
Japan
South Korea
China
OthersDeveloped economies
Emerging and developing
319
13.6
504
16.1
economies
Note: Table includes a total of 39 economies defined as developed economies
by UNCTAD. Figures for emerging and developing economies are obtained bysubtracting the figures for developed economies from the world total.
Source: fDi Markets (Financial Times)

2003-2008
Average
Share
1,452
100.0
419
28.9
71
4.9
128
8.8
84
5.8
16
1.1
734
50.5
1,217
83.8

(No. of deals, %)2010-2017
Average
Share
1,387
100.0
378
27.3
139
10.0
95
6.8
70
5.0
49
3.5
657
47.3
1,130
81.5

World
US
Japan
UK
Germany
China
OthersDeveloped economies
Emerging and developing
235
16.2
257
18.5
economies
Note: Table includes a total of 36 economies defined as developed economies
by UNCTAD. Figures for emerging and developing economies are obtained bysubtracting the figures for developed economies from the world total.
Source: Thomson Reuters

Definition of digital-related industry in foreign direct investment
Digital-related industries in cross-border greenfield investment and cross-border M&A correspond with (1) the ICT
industries defined by OECD and (2)digital-related goods in Section I-4 of this report. Cross-border greenfiled investment,
however, covers 23 industries (sectors) defined in fDi Markets in reference to industries mentioned above.
13

Copyright (C) 2018 JETRO. All rights reserved.

Digital 5: Digital companies in emerging and developing countries

promoting overseas business■ Comparing major American and Chinese digital companies, American companies are making sales invarious regions around the world whereas Chinese companies are highly dependent on their domestic market.
The latter, however, have been active in investing abroad, particularly in Southeast Asia, in the last few years.

■ Other emerging digital companies are also active in developing business abroad. Collaboration with theseemerging digital companies that provide such services as ride sharing, electronic payment and e-commerce will
increase new business opportunities for Japanese companies.
Business overview of major digital companies in the world
Company name(Year
Established,
Nationality)

Sales by geographicalsegments

Example of recent investments

Amazon(1994,
US)

US: 67.7%
Germany: 9.5%
Japan: 6.7%
UK: 6.4%
Rest of world: 9.6%

●Amazon acquired Whole Foods at $13.7 billion in July 2017. There are reports that the locations might be used as bases for offline stores. In Asia, in addition to its
enthusiasm to expand its business in India, Amazon started official services in Singapore in July 2017. It also acquired the most popular e-commerce company in the
Middle East, Souq.com, in March 2017.
●Among new projects, it has expanded its offline retail business, including Amazon Go, and announced in January 2018 that it would start health insurance-related
operations for its employees. In logistics, it has filed a patent for distribution services with drones.

Alphabet(1998,
US)

US: 47.3%
EMEA: 32.5%
Asia-Pacific: 14.6%
Other Americas: 5.5%

●Google announced it is going to increase its efforts for AI development, in order to improve overall products/services. AI centers (research laboratories) in various
locations, such as New York, London, Tokyo, and Tel Aviv have been engaged in the development. It also announced the establishment of new AI centers in Beijing,
Paris and Accra (Ghana).
●Although the comapny used to be active in acquiring IT companies, the number of acquisitions has decreased since 2015.

Alibaba(1999,
China)(Among Core
Commerce)
China: 85.8%
Rest of world: 9.7%
Others incl. logistics:
4.4%●In "New Retail," it is estimated Alibaba has invested about $8 billion in its proprietary grocery retail, Hema.
●Overseas, the company has been actively investing in e-commerce-related companies in Southeast Asia and India. In the Middle East, it constructed its first data
center in Dubai for cloud computing services in 2016 and already plans to start the operation of a second data center in 2018. It also has announced the establishment ofa research center in Israel.

Tencent(1998,
China)

China: 96.6%
Rest of world: 3.4%

●Compared to its rival, Alibaba, Tencent has more investments overseas. The biggest investment so far was the acquisition of major Finish game maker, Supercell.
●In Asia, Tencent is the major stakeholder of Chinese E-commerce giant, JD.com, and has invested in an Indonesian ride-hailing company, GO-JEK.

Note: 1) Overall sales and sales by segment are taken from each company's financial statements. Sales figures are those of 2017 for companies other than Alibaba and of the one-year period lasting until March 2018 for Alibaba. 2) "Nationality" indicates each company's major operationalbases and is not necceasrily the same as where the company is incorporated. 3) EMEA represents Europe, the Middle East, and Africa. Other Americas represents Canada and Latin America.
Source: annual financial reports, EIKON (Thomson Reuters), reports from JETRO overseas branches, related media reportｓ

Examples of emerging digital companies
RegionCompany (nationality)

Company profile

Major trends after 2017
・ May-2018: GO-JEK announced its international expansion to
GO-JEK
Vietnam, Thailand, Singapore and the Philippines.
(Indonesia)
・ June-2018: GO-JEK announced the opening of units in Vietnam
and Thailand.
・ August-2017: TrueMoney and KREDIT Microfinance Institution,
Ascend Money operates TrueMoney, a payment platform, andone of the largest microfinance institutions in Cambodia,
Ascend Nano, an online financing platform, utilizes cloud data andSoutheast Ascend Money
announced a partnership agreement on Bill Payment Service.
digital technologies. Ascend Money operates business in
Asia(Thailand)・ April-2018: TrueMoney has received an intermediary payment
Southeast Asia.
services license from the State Bank of Vietnam.
・ August-2017: FPT officially opened an office in Denver, US.
FPT
FPT is Vietnam's leading technology group. FPT Software, a・ September-2017: FPT Japan officially opened the Okinawa(Vietnam)subsidiary of FPT, has six locations in Japan.
Research and Development Centre, which serves as an Asian IT
hub.
・ March-2017: One97 communications entered the Canadian
One97 Communications
One97 Communications runs operations such as Paytm, amarket with the launch of the Paytm Canada app, through with
Southwest (India)
payment service.
which electricity bills, etc. are able to be paid.
Asia
ANI Technologies
ANI Technologies owns and runs operations such as an online
・ February-2018: ANI Technologies launched Ola in Perth,(India)cab-hailing service, Ola.
Australia.
MercadoLibre provides e-commerce services in Central and・ April-2018: MercadoLibre announced its partnership with PlazaSouth America, such as Argentina and Brazil. It accounts for the
Logística, a logistics facility developer, for the construction of a
Latin
MercadoLibrelargest shares of Argentina's and Brazil's e-commerce markets, atdistribution center.
America (Argentina)
38.9% and 19.3% respectively. It commands the second highest ・ April-2018: MercadoLibre will invest $275 million this year in
Mexico to establish distribution centers and more.
share in Mexico, at 8.5%.
Safaricom is a telecommunications company that provides
・ May-2018: Kenyan taxi-hailing firm, Little, which has a
Middle East, Safaricom
integrated telecommunication services, including fixed voice andpartnership with Safaricom, started operations in Uganda.
Africa(Kenya)data-transfer services as well as M-PESA, a mobile money
・ June-2018: An Indian fintech company purchases a part of Little
transfer services.
's shares.
Source: Reports from JETRO's overseas offices, press releases from the respective companies, "Passport"（Euromonitor International）, EIKON（Thomson Reuters）, various press
reports, etc.
14
Copyright
Copyright(C)(C)2018
2018JETRO.
JETRO.All
Allrights
rightsreserved.
reserved.
In addition to a motorcycle ride-hailing phone service, GO-JEK
provides a wide range of other on-demand services such as forfood delivery.

Digital 6： Diverse digital trade policies among major countries■ Having globally competitive companies in the country, the US has been working to liberalize digital tradesince the early 2000s through FTAs, gradually expanding the spectrum of rules to cover over time. In its
communications to the WTO, the country has emphasized the importance of discussing high-standard rules,
such as liberalizing cross-border data transfers.
■ The EU, concerned with the relative decline in competitiveness of enterprises in the region, is actively
involved in the formation of digital-related rules not only in trade but also in non-trade fields such ascompetition policy and tax reform, and these measures have led to discussions internationally.
Provisions of e-commerce chapters of US FTAs in force and US communications to WTO
FTAs in Force
Provisions

Chile
Jan.
2004

Definitions
Scope and general provisions
Custom duties on electronic transimissions
Non-Ddiscriminatory treatment ofdigital products
Domestic electronic transaction framework

Singapore Australia Morocco CAFTA

WTO
TPP

Jan.
2004

Jan.
2005

Jan.
2006

Mar.
2006

Aug.
2006

Oman
Jan.
2009

〇
〇
〇

〇
〇
〇

〇
〇
〇

〇
〇
〇

〇
〇
〇

〇
〇
〇

〇
〇
〇

〇
〇
〇

〇
〇
〇

〇
〇
〇

〇
〇
〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇

〇
〇

〇
〇

〇
〇

〇

〇

〇

Electronic authentication and electronic signatures〇〇

Online consumer protection
Personal information protection
Paperless trading

Bahrain〇

Peru South KoreaColombia Panama (Reference)
Feb.
Mar.
May.
Oct.
With2009
2012
2012
2012
drawn

Jul.
2016

Apr.
2018

〇
〇
〇

〇

〇

〇

〇

〇

〇
〇
〇
〇
〇

〇

Principles on access to and use of the internet for electronic commerce

〇

〇

〇

〇

Cross-border transfer of information by electronic means

〇

〇
〇
〇

〇

〇

〇

〇

〇

〇
〇

Internet interconnection charge sharing

Prohibition on requiring to locally locate computing facilities
Measures regarding unsolicited commercial electronic messages〇

Cooperation
Cooperation on cybersecurity matters

〇

〇

〇

Prohibition on Requiring trasnfer of or access to source code

Dispute settlement
Transparency (publication of regulations)

〇

〇

〇

〇
〇
〇
〇

〇

Note: Month and year indicates when the FTA came into force or when the communication to WTO was submitted.
Source: US FTAs in force and its communications to the WTO (JOB/GC/178, JOB/GC/94)

EU strategy for rule-making in digital field
Three Pillars

Better access for
consumers and① businesses to digital
goods and services
across Europe
Creating the rightconditions for digital②
networks and services
to flourish
Maximising the growth③ potential of the Digital
EconomyEuropean Commission; Digital Single Market strategy(Published in M ay 2015, and the M id-Term Review in M ay 2017)
M ajor actions

Outlines of examples

Strengthening the applicationof the EU competition law to - Google was charged a fine of 4.34 billion euros in July 2018.
the digital field by- For monopolistic supply to Apple, QUALCOMM was imposed a fine
Directorate-General forof EUR 1 billion in January 2018.
Competition
Proposal of digital taxation
system- EU member countries imposed corporate tax on digital companies.
- T entatively, a 3% online sales tax was introduced.

Proposal of Regulation for
online platforms- T he improvement of transparency in dealing information obtained bybusiness institutes- T he preparation of efficient solutions in case of conflicts

Modernization of EU
standardization policy
including strengthening
standardization in the ICT
field- Strengthening international standardization including for IoT and big
data- Collaboration in standardization with major countries such as Japan(e.g.: In the T BT Chapter of the EU-Japan EPA, collaboration between
standardization organizations is recommended.)

Note: Cases indicated above are exemplified by distinctive contents from the perspective of rule formation.
Source: M aterials of European Commission

15

Copyright (C) 2018 JETRO. All rights reserved.

Digital 7： Exploratory work towards starting e-commerce discussion launched■ Co-chaired by Japan and others, the launch of “exploratory work on electronic commerce” was declaredwith 71 signatory countries and regions, including the US, at WTO MC11 in December 2017. China has
participated in the work from 2018.

■ In the field of digital trade policy, various countries and regions are currently imposing regulations on theirown terms. The fact that both the US and China are participating in the exploratory work, however, reiterates
the importance of multilateral rule formation for trade.
Signatory countries/regions for exploratory
work on e-commerce

Outline of new WTO frameworks among
like-minded countries
Number ofcountries andregions (note)

Field

Electroniccommerce

71

Investment
facilitation fordevelopment

70

Services
Domestic
Regulation

58

Work programfor MSMEs

85

RegionWith the aim of economic development, considering
multilateral frameworks to facilitate direct investment
from the perspectives of improvement oftransparency of investment regulations andpredictability.
Deepening discussions on improvement of thetransparency of regulations on the service field, andon regulations not being more restrictive thannecessary.
Setting up a working group to strengthen MSMEs'
involvement in trade and strengthening existing WTO
initiatives.

Note: Number at the time of adoption of the joint statement at the WT O Ministerial Conference in Buenos Aires
Source: Materials of WT O Secretariat and various news reports

Country/
regionAsia

Australia, Brunei Darussalam, Cambodia, Hong
Kong, Japan, South Korea, Laos, Malaysia,
Myanmar, New Zealand, Singapore, Taiwan

Americas

Argentina, Brazil, Canada, Chile, Colombia,
Costa Rica, Guatemala, Mexico, Panama,Paraguay, Peru, United States, Uruguay

OutlineExamining aspects related to international trade inelectronic commerce.
Deepening the discussion for future multilateralnegotiations.

Country/region

Albania, EU, Iceland, Kazakhstan,
Europe,Leichtenstein, Macedonia, Moldova,
Russia, CIS Montenegro, Norway, Russia, Switzerland,
UkraineMiddle East,
Bahrain, Israel, Kuwait, Nigeria, Qatar, Turkey
AfricaNote: EU includes all of its 28 members as signatory countries.
Source: WTO Joint Statement (WT/MN(17)/60)

Overview of digital trade policies of major countries/regions
Characteristics

・In order to support its highly competitive companies to expand their business abroad, the government haspromoted liberalization of digital trade by improving market access.
US・The US leads other countries in standardizing rules through FTAs. In addition, it urges WTO members to
discuss high-standard rules, such as liberalizing cross-border data transfers.
・A data transfer framework called Privacy Shield was concluded and is currently operational with the EU.
・Concerned with the decrease of local companies' competitiveness in the digital economy, the EU has
been implementing its Digital Single Market strategy to unify its market by removing trade barriers.
EU
・The EU has relatively many FTAs with e-commerce provisions, but it is not very ambitious in further
liberalizing digital trade.
・China has imposed many domestic regulations to limit business opportunities for foreign countries, which
has been referred to as digital protectionism.
China
・Although China has concluded FTAs with e-commerce chapters with South Korea and Australia, thecountry has not been enthusiastic about improving market access or liberalizing digital trade.
・African countries claim they need industrial policies for growth of local digital companies and domestic
Africandigital economies. Some of the countries oppose high-standard liberalization due to the concern that
Countries
liberalization might narrow policy space for implementation of industrial policies.
・After joining TPP negotiations, Japan has been enthusiastic about promoting liberalization of digital trade.
Similar provisions to the TPP are observed in its FTAs with Mongolia and the EU.
Japan
・In its communications to the WTO, Japan emphasizes the importance of discussion on some of theprovisions in the TPP, such as free flow of information across borders.
16
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Source: Various materials

JETRO Global Trade and Investment Report 2018
Contents

Chapter 1: World trade and Japan’s trade• Section 1: Current state of the world economy• Section 2: World trade• Section 3: Japan’s trade• Section 4: Digital technology and the world economy and trade
Chapter 2: Global FDI and Japan’s FDI• Section 1: Global FDI• Section 2: Japan’s outward FDI• Section 3: Japan’s inward FDI• Section 4: FDI in the digital field
Chapter 3: Trends in global trade rule formation• Section 1: Current status of FTAs in the world and Japan• Section 2: Global trade policy trends• Section 3: Current status and issues of multilateral trade system• Section 4: Rule formation in the digital field
What is JETRO Global Trade and Investment Report?

■ History
In 1956, JETRO launched “Current Situation of Overseas Markets.” Since then, it has been issued as“JETRO White paper on International Trade,” “JETRO White paper on Foreign Direct Investment”(2 volumes), “JETRO White paper on International Trade and Investment.” Since 2010, "JETRO
Global Trade and Investment Report,” has been available free on our website below.

■ Key features
This is an annual report analyzing the trends of the worldwide economy, trade, FDI and trade rules
utilizing various data as well as reports from our overseas offices. JETRO Global Trade andInvestment Report is a report in which annual trade, investment and trends in trade rules can beunderstood at a glance.

■ The full text of the report (in Japanese) can be downloaded from the URL below.
https://www.jetro.go.jp/world/gtir/
17

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JETRO Global Trade and Investment Report 2018: Global Economy Connected via Digitalization
Key Points
Address any inquiries concerning this report to:
Japan External Trade Organization (JETRO)
International Economy Division, Overseas Research Department
1-12-32 Akasaka, Minato-ku, Tokyo 107-6006
TEL: +81-(0)3-3582-5177
E-mail: ORI@jetro.go.jp
Note: Figures may not sum up to the total because some are less than one unit.

Disclaimer of liability: Responsibility for any decisions made based on or in relation to the information provided in this material
shall rest solely on the reader. Although JETRO strives to provide accurate information, JETRO will not be responsible for an yloss or damages incurred by readers through the use of such information in any manner.
[Reproduction without permission is prohibited.]
Copyright (C) 2018 JETRO. All rights reserved.