2017

JETRO Global Trade andInvestment Report
Global Economy Reaching
Turning Point
Overview

Japan External Trade Organization (JETRO)
Overseas Research Department

C O N T E N T S

JETRO Global Trade and Investment Report 2017
〜 Key points 〜

１. Global trade declines 3.1%, downturn for two straight years

2

２. Slow trade continues while service trade sees robust growth3

３. Japanʼs trade balance marks ﬁrst surplus in six years

4

４. Japanʼs outward FDI marks record high5

５. Inward FDI from Asia to Japan continues to grow6

６. World trade policies reaching turning point

7

７. Background of inward-looking policies and new momentum toward
free trade regime

8

８. Value of multilateral trade rules reappraised inregulations and standards

9

９. Future of e-commerce market

10

10. Japanʼs current status of accepting and utilizing foreign personnel

12<<Disclaimer>>
Information provided in this material should be used at your own discretion. Although JETRO aims to oﬀer
information as accurately as possible, it will not take any responsibility for any loss that the information related tothis material may cause for the users.

1.

Global trade declines 3.1%, downturn for two straight years■In 2016, world trade (merchandise trade, nominal export value) declined by 3.1% from the previous year to $15.6trillion (JETRO
estimate), marking negative growth for two consecutive years. It is the first time since the period from1981 to 1983 that negative
growth was recorded in consecutive years. The trade volume (export basis) levelled off with a slight decrease of 0.2%, the lowest
growth rate since 2010. Meanwhile, the value of world trade has been declining at a slower rate since its highest rate of decline in thethird quarter of 2015, and is expected to see positive growth in 2017 overall.
■Factors contributing to pushing down the value of world trade were declines for the US and China for two consecutive years in both
imports and exports and declines for commodity exporters̶41 emerging and developing economies and seven developed
economies̶due to a drop in commodity prices. On the other hand, European countries such as Germany saw relatively brisk growth.
Vietnam and the Philippines also showed high increases in both import and export and in import, respectively.
■Looking at trade value by product category, approximately 80% of the decrease in world trade is attributable to declines incommodity-related products. Amid shrinking trade in many categories, however, certain products showed an increase, such astransport equipment, turbines, pharmaceutical products, industrial robots, semiconductor manufacturing equipment and integrated
circuits.

World trade related indicators

Trends in world trade (export basis)(All figures are percentages, unless indicated at the end of column)

World trade (export) (100 mil USD)

2012

2013

2014

2015

2016

176,680

182,542

185,006

161,124

156,201

0.0

3.3

1.3

-12.9

- 3.1

Nominal growth rate
Real growth rate

2.3

3.7

3.0

1.3

- 0.2

Price growth rate

- 2.2

- 0.3

- 1.6

- 14.0- 2.9

Industrial production index growth rate (developed countries)

0.4

0.2

2.1

0.2

0.1

Crude price growth rate

1.0

- 0.9

- 7.5

- 47.2- 15.7Natural gas price growth rate

13.1

- 6.6

- 6.5

- 30.2- 40.4

Metal price index growth rate

- 16.8- 4.3- 10.1- 23.0- 5.4

Iron ore price growth rate

- 23.45.3- 28.1- 42.4

4.3

Food price index growth rate

- 2.6

0.7

- 4.1

- 17.22.1

Growth of nominal effect ive dollar exchange rate

3.8

2.2

2.5

15.3

0.2

Export value（left axis）(Billion USD)

10

14,0005

12,0000

10,000

-5

8,000

-10

6,000

-15

4,000

-20

2,000

-25

0

-30
2001 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16（Year）

Source: JETRO's estimates based on the trade statistics of respective economies, and "IFS, May 2017" (IMF)(100 million USD, %)ImportShare Growth rate Contribution

Value

Share Growth rate Contribution

US

14,510

9.3

-3.5

-0.3

21,878

13.7

-2.7

-0.4

Mexico

3,739

2.4

-1.8

0.0

3,871

2.4

-2.1

0.0

EU

53,351

34.2

-0.2

-0.1

52,594

32.9

0.1

0.0

13,380

8.6

0.8

0.1

10,552

6.6

0.3

0.0

Germany

15

16,000World trade value by country and region (2016)
Export20

18,000Note: 1) Both trade values and nominal growth rates are estimated by JETRO. See Appendix Annnotation Ⅱ
regarding the method of estimation. 2) The price growth rate was calculated based on the price index of the
IFS. 3) The real growth rate was caluculated by dividing the nominal amount by price index. 4) All
commodity prices are indicated in the growth rate of the annual average. Crude oil prices are the averageof Dubai, Brent and WTI. Natural gas prices are Russian market prices. Iron ore prices are the import prices at
China's CFR Tianjin port.
Source: Trade statistics of respective economies and "IFS, May 2017" (IMF)

Value

Real growth rate (right axis) （％）
25

Nominal growth rate（right axis）

20,000World trade by product (export basis, 2016)(100 million USD, %)

0.0

Value

Share

Growth rate Contribution

France

5,009

3.2

-1.0

0.0

5,727

3.6

-0.1

UK

4,092

2.6

-11.0

-0.3

6,365

4.0

1.6

0.1

Total exports

156,201

100.0

-3.1

-3.1

Japan

6,446

4.1

3.1

0.1

6,070

3.8

-6.4

-0.3

Machinery and equipment

66,114

42.3

-0.7

-0.3

China

21,353

13.7

-6.4

-0.9

15,247

9.5

-4.8

-0.5

General machinery

18,851

12.1

-2.1

-0.3

South Korea

4,954

3.2

-5.9

-0.2

4,062

2.5

-6.9

-0.2

Turbines

1,071

0.7

5.7

0.0

ASEAN 6

11,107

7.1

-1.5

-0.1

10,388

6.5

-1.0

-0.1

Industrial robots

45

0.0

7.7

0.0

Singapore

3,299

2.1

-4.8

-0.1

2,830

1.8

-4.6

-0.1

Semiconductor manufacturing equipment

568

0.4

18.0

0.1

Thailand

2,137

1.4

1.3

0.0

1,958

1.2

-3.0

0.0

23,115

14.8

-0.6

-0.1

Malaysia

1,897

1.2

-4.8

-0.1

1,687

1.1

-4.2

0.0

Integrated circuits

5,337

3.4

5.3

0.2

Vietnam

1,766

1.1

9.0

0.1

1,748

1.1

5.6

0.1

Transport equipment

18,303

11.7

1.1

0.1

Indonesia

1,445

0.9

-3.9

0.0

1,357

0.8

-4.9

0.0

Precision equipment

5,845

3.7

-1.8

-0.1
-0.3

Electrical equipment

563

0.4

-4.0

0.0

808

0.5

21.2

0.1

Chemicals

21,566

13.8

-1.9

India

2,646

1.7

-1.3

0.0

3,617

2.3

-8.2

-0.2

Pharmaceuticals and medical supplies

5,064

3.2

1.7

0.1

Brazil

1,852

1.2

-3.1

0.0

1,376

0.9

-19.8

-0.2

Commodity-related products (total)

39,627

25.4

-8.9

-2.4

Russia

2,857

1.8

-16.8

-0.4

1,823

1.1

-0.3

0.0

Fuel

14,350

9.2

-18.7

-2.0

767

0.5

-6.1

0.0

751

0.5

-12.4

-0.1

Non-fuel (metal, food and beverages)

25,277

16.2

-2.2

-0.3

World

156,201

100.0

-3.1

-3.1 160,030

100.0

-3.0

-3.0

Metal

11,633

7.4

-6.0

-0.5

Advanced economies

96,99762.1-1.3-0.8 101,640

63.5

-1.7

-1.0

Food and beverages

13,644

8.7

1.4

0.1

Emerging/developing economies 59,204

37.9

-5.8

-2.3

58,390

36.5

-5.1

-1.9

Commodity exporters

13.7

-9.7

-1.4

21,008

13.1

-8.7

-1.2

Philippines

South Africa

21,437

Note: 1) JETRO estimates. 2) The value of "commodity-related products" was summed up from "fuel" (=mineral fuels etc.), "metal" (= mineral ore + base metal and its products), and "food and beverages" (= food+ oils, fats and other animal and vegetable products) .
Source: Trade statistics of respective economies

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." Figures of small countries
which were unavailable or unable to be estimated were excluded. 5) Advanced economies include 39
economies based on the deﬁnition of DOTS (IMF).
Source: Trade statistics of respective economies

Copyrightⓒ2017 JETRO. All rights reserved.

5
2

2.

Slow trade continues while service trade sees robust growth■Slow trade -an economic phenomenon where the growth rate of trade is smaller than that of the worldʼs GDPcontinues. The trade growth rate has been slowing down since 2012 when the growth rate of trade to that of GDP fell
below one. Slow trade is a particularly serious issue for emerging and developing economies.
■ Amid weak world trade overall, the stable growth of consumer goods is remarkable, as shown by continuing increases
in imports, even after 2012, of products such as passenger vehicles, telecommunications equipment, processed food,clothes and pharmaceutical products.
■As trade of services has done comparatively better than the sluggish trade of goods, we can say that it has proven moreresistant to the economic slowdown. By category, remarkable gains can be seen in telecommunications, computers andinformation as well as business services, and by region in exports of emerging and developing economies. Trade
expansion in the service sector is expected to bolster the growth of emerging and developing economies.

Ratio of world trade growth to world GDP growth(Real trade growth/real GDP growth)
Advanced economies
5.5

Emerging/developing economies

Products which sustained strong imports

World
JETRO Classification

5.0
4.5
4.0
3.2

3.1

3.0

1.5

2.1
1.7
1.2

1.8

1.7

1.6

1.0

2.2

2.1

1.9 1.9 1.9

2.0

2.6

2.5

2.3

2.2

2.5

1.5 1.6
1.6

0.8
0.4

0.5

2.8

4-digit HS code

3.5

0.9

1.0

0.8

- 0.5

0.7

0.3

0.0

-0.1
85

87

89

91

93

95

97

99

01

03

05

07

09

11

13

Imports in 2016
(Million USD)

11.9

2.0

Integrated circuits

639,507

13.4

4.4

Telecommunications equipment Capital/Consumer

578,667

20.9

4.6

Processed foodConsumer/Processed

540,23412.8

0.5

Pharmaceutical products Consumer/Processed

533,562

16.2

2.5

Clothes

Consumer

405,502

9.4

1.5

Footwear

Consumer

24,772

8.3

14.3

Parts

ShellfishConsumer

19,581

3.0

4.2

Beef

Consumer

11,0543.2

10.4

Sulphonamides

Processed

10,373

14.3

16.7

Precious and semi-precious stones Materials/Processed

10,362

14.5

21.4

Cocoa beans

9,121

3.2

7.8

Materials

1,513,986

23.7

-15.2

Intermediate goods

7,845,399

17.4

-2.8

Finished goods

6,797,561

14.3

0.2

Capital goods

2,852,965

16.7

-0.9

Consumer goods

3,944,596

12.7

1.1

Materials(Million USD, %)(%)(% point)

25.0

15.0
Total trade in services

20.0

Goods-related services

10.0

15.0

Manufacturing services on physical inputs owned by others
Maintenance and repair services

10.0
5.0

0.0

0.0
5.0

-5.0

-10.0

Growth rate of services minus
growth rate of goods (right axis)
85

90

95

2000

05

10

15 16 (Year)

Note: Service trade values after 2005 are based on BPM6. Values before 2004 are based on BPM5.
Source: "IFS, May 2017"(IMF) and WTO

4,879,290

100.0

3.7

166,010

3.4

3.2

85,140

1.7

- 1.2

1.7

9.9
0.5

Travel

1,205,480

24.7

4.0

Other commercial services

2,583,640

53.0

5.0

Construction

87,7301.8

0.7

Insurance and pension services

121,590

2.5

3.2

Financial services

420,270

8.6

3.7

Charges for the use of intellectual property

314,060

6.4

5.0

493,05010.1

6.9

1,093,270

22.4

5.5

Research and development services

140,530

2.9

7.1

Professional and management consulting services

357,970

7.3

3.7

Technical, trade-related and other business

573,220

11.7

- 0.8

71,6101.5- 0.0

Advanced economies

3,544,611

73.7

3.5

Emerging/developing economies

1,263,079

26.3

4.7

Government goods and services-15.0

2010-2016
Average
growth rate

17.5

Telecommunications, computer and information-10.0

Trade in services

Share80,870

Other business services

Trade in goods

Value

852,550

Transport

5.0

-20.0

(b)20122016

702,131

Word trade in services by categories (2016)

Growth of trade in goods and services-15.0(a)20032007

Passenger vehicles Consumer

Note: 1) Products under "4-digit HS code" were calculated from the statistics of the top 20 countries/regions
which accounted for over 70% of the world's imports in 2016. 2) Lines within the category of "JETROClassiﬁcation" indicate products of which the growth rate was positive during (b). The other lines within the
category of "4-digit HS code" indicate products of which the growth rate during (b) surpassed (a). 3)
Deﬁnitions of goods are based on BEC (the United Nations).
Source: Trade statistics of respective countries and regions

15 16(Year)

Note: 1) Real trade growth is based on import volume. 2) All years, except for 2016, in which either the trade
growth rate or GDP growth rate were negative are excluded. Years in shadow are those in which real trade
growth/real GDP growth fell below 1.
Source: "WEO, April 2017"(IMF) and "IFS(06/26/2017)" (IMF)

-25.0

Goods
classification(Memorandum) Trade by goods

0.2

0.4

Average growth rate (%)

Products

Note: 1) Due to constraints on data, the average growth rate of that of "professional and management
consulting services" was calculated from the data in 2012 and that of "technical, trade-related and otherbusiness services" from 2014 to 2016. 2)The total of the advanced and emerging/developing economies
not tally with the "Total trade in services" as the ﬁgures follow WTO's own estimates. Source: WTO

Copyrightⓒ2017 JETRO. All rights reserved.

3

3.

Japanʼs trade balance marks ﬁrst surplus in six years■In 2016, Japanʼs export amounted to $644.6 billion, up 3.1% from the previous year, and import was $607 billion, down
6.4%. The trade balance turned to a surplus of $37.6 billion, marking the first surplus in six years since 2010. As the firsthalf of 2017 also posted a surplus of $9.6 billion, we are seeing an underlying return to the black for the trade balance
overall.
■ In export, the US was the largest partner country for four consecutive years with $130 billion, up 3.3%, driven byincreases in automobiles and construction machinery due to robust consumption in its market. The export to China
increased by 4.2% to $113.9 billion, boosted by rises in semiconductor manufacturing equipment and automobiles andauto components. The EU saw a rise to $73.4 billion, up 11.2%, led by growth in such products as automobiles inGermany and railroad vehicles in the United Kingdom.
■While world trade experienced a robust export of consumer goods in the midst of a slow trade overall, Japan̶inaddition to a rise in passenger vehicles̶showed strong growth in many products within the categories of intermediate
goods and capital goods, including semiconductor manufacturing equipment and parts for airplanes and helicopters .

Japanʼs trade trends

Japanʼs exports and imports by major country/region(Million USD, 100 million JPY, %)Yen-based

Dollar-based

Total exports

2015

2016

Jan-Jun2017

625,068

644,579

335,209(Growth rate)
Total imports- 10.03.1

9.6

648,343

607,020

325,617- 20.7

- 6.4

12.5

- 23,275

37,5599,592(Growth rate)
Trade balance(Year-on-year difference)

99,557

60,834- 7,069

Total exports

756,139

700,358

377,881(Growth rate)
Total imports

3.4

- 7.4

9.5

784,055

660,420

367,460(Growth rate)(Million USD, %)

2015

2016

Total exports

625,068

644,579US

125,852

EU

66,004

China

109,266

YoYchange Contribution

Jan-Jun
2017

3.1

3.1

335,209130,019

3.3

0.7

73,39411.2

1.2

113,874

4.2

0.7

YoYchange Contribution

9.6

9.6

64,312

3.1

0.6

37,5734.9

0.6

61,567

17.8

3.0

ASEAN

95,052

95,5350.5

0.1

50,060

10.7

1.6

Total imports

648,343

607,020

- 6.4

- 6.4

325,617

12.5

12.5

US

66,63867,3711.1

0.1

35,70810.9

1.2

71,26574,9445.2

0.6

37,244

4.2

0.5

- 8.7

- 15.812.2

Trade balance- 27,916

39,938

10,422(Year-on-year difference)

100,245

67,854- 7,316

EU

89.8

90.0

92.3

- 1.0

0.3

5.1

China

160,674

156,444

- 2.6

- 0.7

78,020

4.2

1.1

103.0

102.6

104.2

ASEAN

97,95392,301

- 5.8

- 0.9

49,814

11.6

1.8

- 2.8

- 0.3

3.5

Crude oil import price

55.0

41.6

54.1

(Dollar/barrel, growth rate)- 47.7- 24.3

45.9

Exchange rate (yen/dollar)

121.0

108.8

112.3

- 12.5

11.2

- 0.5

Export volume index(Growth rate)
Import volume index(Growth rate)(Yen appreciation, %)Note: Yen-based values are converted to dollar-based values by JETRO.
Source: "Trade Statistics" (MOF)

Products of which export has increased evenunder trend of "slow trade"

Note: 1) Yen-based values are converted to dollar-based values by JETRO.
2) The volume index is on a 2010 basis.
3) Exchange rates are the interbank rate average for each period.
4) Growth rates are a year-on-year comparison.
Source: "Trade Statistics" (Ministry of Finance), "Foreign Exchange Rate" (Bank ofJapan)

Export value

Trade balance by product(Million USD)
400
300
200

91.7

84
61

100
0
-100

19.8

28.5

92
61

173
157

-32.3

-87.2

94

107

95

56

45

37

29

42

156
157

112

-142

-164

75.6

-248

161

-119.773
12140-122.8

37.6

67
5

58
5

65
8

133

125

132

-101

-186
-289

-265

Million
USD

2012 - 2016
Average
growth rate

Passenger motor vehicles, cylinder capacity >1500 cc, ≦3000 cc

Consumer goods

55,522

3.2

3.3

Machines for manufacturing equipment of semiconductor devices, IC

Capital goods*

8,114

2.0

-3.9

Gold, nonmonetary, unwrought

Processed goods*

6,378

10.1

18.4

Parts for airplanes and helicopters

Parts*

4,747

5.0

8.8

Parts & accessories for manufacturing equipment of semiconductor devices

Parts*

4,409

7.4

22.6

Passenger motor vehicles, with diesel engine, cylinder capacity >1500 cc, ≦2500 cc ) Consumer goods

4,272

4.9

8.5

Machines for manufacturing of flat panel displays

Capital goods*

3,459

18.3

4.2

Tankers

Capital goods*

3,383

2.5

1.1

Vehicular engines (over 1000 cc)

Parts*

3,170

4.3

2.6

Parts for turbojets and turbo propellers

Parts*

3,045

6.4

6.4

Parts for phone sets & other apparatuses for voice transmission or reception

Parts*

2,819

10.9

-12.4

Lithium ion batteries

-139
-258

-200

-23.3

-247

Parts*

2,615

3.4

7.5

Gold or platinum jewelry and parts

Consumer goods

2,314

19.1

19.8

Pharmaceutical products, not containing antibiotics or hormones

Consumer goods

2,217

11.8

6.2

Parts*

2,060

9.7

17.9

Microtomes (including parts and accessories)

Capital goods*

1,923

0.6

3.8

Outboard motors for marine engines

Consumer goods

1,679

1.2

-2.3

Mounted piezoelectric crystals

-300
-400
-500

07

08

09

10

11

12

13

14

15

16

Mineral fuels

Transport equipment

Electrical equipment

General machinery
Products by raw material (excluding mineral fuels)

Food
Other

Chemicals
Trade balance

Export volume
2012 - 2016
Average
growth rate

Category

Product

Industrial robots

Capital goods*

1,627

3.0

12.3

Beauty & skin care preparation

Consumer goods

1,590

11.4

18.1

Patient monitoring systems, medical imaging appatantuses, etc.

Capital goods*

1,402

8.9

-5.3

Note: Calculated based on the HS6-digit level. The top 20 export products in 2016 among products of which
export amounted to over a $100 million in 2016 and the average export growth rate from 2012 to 2016 waspositive.
* Intermediate goods (including parts and processed products) and capital goods
Source: "Trade Statistics" (MOF)

Notes: The numbers above this chart represent the trade balance.
Source: "Trade Statistics" (Ministry of Finance)

Copyrightⓒ2017 JETRO. All rights reserved.

44.

Japanʼs outward FDI marks record high■Japanʼs outward FDI in 2016 increased by 24.3% from the previous year to $169.6 billion (on a balance of payment basis,
net, flow), which was a record high since comparable records began in 1996 and surpassed its peak of $155.6 billion
marked in 2013. Looking at major countries and regions, investment in the EU almost doubled from the year before,
largely due to growing investment in the UK. The US accounted for approximately 30% of total investment, remaining
the largest destination country for seven straight years.
■ JETRO surveys indicate that there remains a shift to ASEAN among Japanese companies. In the overall trend ofrestructuring bases and functions related to sales and production at home and abroad, there is a growing pattern ofsuch transfers being made by Japanese companies from China to ASEAN.
■In FY2016, overseas sales of Japanese firms continues to account for a high share of their total sales at 56.5%. By region,
the Americas have seen the ratio increasing over recent years, accounting for slightly above a quarter of the total at
26.3%.

Trends in Japanʼs outward FDI by type
(Billion USD)

190.0

Debt instruments

Reinvestment of earnings

Japan's outward FDI by country/region

Equity capital(Million USD, %)

Total

170.0

Asia

150.0
130.0

2015

2016

34,477

10,886

6.4

Percentchange
-68.4

Share

Jan-May,
2017 (P)Share

12,775

16.6

Percentchange
-7.3
8.4

China

10,077

8,634

5.1

-14.3

3,633

4.7

ASEAN

20,624-6,098

-

-

6,710

8.7

2.3

Singapore

6,779-18,955

-

-

1,950

2.5

56.5

Thailand

3,926

4,064

2.4

3.5

2,348

3.1

53.5

110.0

Indonesia

3,306

2,924

1.7

-11.6

1,095

1.4

-7.1

Malaysia

2,893

1,409

0.8

-51.3

-252

-

-

90.0

Philippines

1,520

2,312

1.4

52.1

561

0.7

-56.6

Vietnam

70.0

India
North America

50.0

US
Latin America

30.0

1,439

1,854

1.1

28.9

856

1.1

16.2

-1,176

3,690

2.2

-

835

1.1

-46.9
-23.9

50,63053,08631.3

4.9

17,76623.1

49,31952,19430.8

5.8

17,742

23.1

-23.1

5,953

25,565

15.1

329.5

8,764

11.4

414.7

Mexico

1,188

2,545

1.5

114.1

-3

-

-

10.0

Oceania

6,917

5,953

3.5

-13.9

286

0.4

-83.0

5,943

4,309

2.5

-27.5

-58

-

-

-10.0

Europe36,10973,548

43.4

103.7

35,970

46.8

122.7

EU

35,63870,30841.5

97.3

35,524

46.2

138.9

UK

14,01747,800

28.2

241.0

12,405

16.1

78.2

World

136,423

169,582

100.0

24.3

76,882

100.0

36.9

16
17. .1-5
1-5
(P)

96
97
98
99
200
0
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16

Australia

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.
Source: “Balance of Payment Statistics” (Ministry of Finance, Bank of Japan).

Note: 1) The yen-based value is converted to dollars by quarter, using the average quarterly Bank of Japan
interbank rate. 2) For after 2015, ﬁgures reﬂect the annual revision. 3) The cumulative total for 2017 is apreliminary ﬁgure.
Source: “Balance of Payment Statistics” (Ministry of Finance, Bank of Japan).

Main transfer patterns of domestic and overseas
bases and functions by Japanese firms
Shift from Japan to China
Shift from Japan to ASEAN

(%)
40.0

Share of Japanese companiesʼ sales by region(%)

Shift from China to ASEAN
Shift from China to Japan
Shift within ASEAN

Fiscal year
(No. of companies)

37.4

35.0
30.0
24.2

25.0
20.0

19.8

22.0

19.0

15.3

15.0

13.7

10.0
5.0
0.0

22.7

16.2
12.0

12.9

8.2
4.5

3.4

4.1
0.4

1.3

FY2006(n=243)

FY2010(n=232)

6.2

5.8

4.7

4.6

FY2013(n=780)15.3

FY2014(n=798)

8.5
7.0
6.8

FY2016(n=458)Domestic Overseas Americas Europe

AsiaPacific

Other

2000

(547)

71.4

28.6

13.4

5.6

5.8

3.8

2001

(581)

68.5

31.5

14.7

6.1

6.3

4.4

2002

(592)

67.2

32.8

14.9

6.6

6.8

4.5

2003

(624)

66.5

33.5

14.1

7.0

7.7

4.8

2004

(669)

65.4

34.6

13.6

7.4

8.5

5.1

2005

(724)

64.9

35.1

13.8

6.9

9.5

4.9

2006

(751)

62.3

37.7

14.5

7.7

10.3

5.1

2007

(781)

60.8

39.2

14.2

9.1

10.7

5.2

2008

(817)

62.6

37.4

12.7

8.6

10.8

5.3

2009

(844)

63.3

36.7

12.4

7.5

11.3

5.4

2010

(320)

54.0

46.0

18.1

8.1

15.2

4.7

2011

(236)

53.1

46.9

17.7

8.9

15.0

5.3

2012

(221)

51.3

48.7

18.6

7.8

17.2

5.1

2013

(211)

45.6

54.4

21.5

9.2

18.2

5.5

2014

(212)

43.1

56.9

23.5

9.2

18.7

5.5

2015

(186)

41.7

58.3

25.9

8.9

18.4

5.0

2016

(176)

43.5

56.5

26.3

7.8

17.3

5.1

Note: 1) Companies surveyed: The accounting period is from December to March, and information isbroken down by location. 2) Figures for FY2016 reﬂected companies with ﬁnancial statements or securities
reports available by June 12, 2017. 3) Percentage = sales of each region/total sales. 4) Surveyed companies
include listed subsidiaries, which were double-counted. 5) Companies which combine multiple regionalsales such as “Americas and Europe” and “Europe and Africa”, were excluded.
Source: Aggregated sales amount of all companies based on thier ﬁnancial statements

Notes: 1) The ﬁgures above include cases of reported restructuring of bases conducted in the past two to
three years or planned for in the coming two to three years. 2) Multiple answers.
Source: "Survey on the International Operations of Japanese Firms" (JETRO) various issues

Copyrightⓒ2017 JETRO. All rights reserved.

55.

Inward FDI from Asia to Japan continues to grow■In 2016, the value of Japanʼs inward FDI (on a balance of payment basis, net, flow) was $34.9 billion, which surged
approximately six-fold from $5.6 billion reported in 2015 and marked a record high since comparable records began in
1996. By region, investment from the Europe increased significantly through such activities as mergers and acquisitions(M&As) in the pharmaceutical and automobile components industries.
■ At the end of 2016, Japanʼs inward FDI stock increased to 27.8 trillion yen, with its ratio to GDP for the first time hitting
the 5% level at 5.2%. Meanwhile, Asiaʼs presence as a major investor is expanding as its composition ratio to the inward
FDI stock of Japan increased to 18%.
■In recent years, the number and value of acquisitions of foreign companies made by those of Asia are increasing
considerably. The composition ratio of East Asia̶a total of that of China, Korea, Taiwan, Hong Kong, and ASEAN̶to theentire value of the worldʼs cross-border M&As spiked from 2.3% in 2000 to 13.6% in 2016. Of those countries, the valueof acquisitions by China hit the highest mark at $120.4 billion in 2016.

Japanʼs inward FDI by country/region

Inward FDI stock in Japan（Trillion yen）

(Million USD, %)2017
YoY change Jan-May(P) YoY change

973

1,361

39.8

-278

-

Taiwan

723

2,497

245.1

392

78.1

South Korea

939

563

-40.0

267

50.8

ASEAN

2,273

3,714

63.4

3,902

270.1

Singapore

1,842

3,046

65.4

4,273

383.9

North America

5,186

5,745

10.8

3,139

-3.8

5,199

5,761

10.8

3,227

-1.6

-2,027

1,714

-

1,390

402.2

US
Latin America
Oceania

-640

846

-

-408

-

Europe-2,721

18,477

-

-100

-

EU

-2,533

17,414

-

-399

-

World

5,585

34,897

524.8

8,247

-35.8

4.7

25.0

4.6

3.7

20.0

4.0

3.7 3.8

3.9 3.9

4.0

3.0

15.0
2.4
1.9 2.0

10.0

5.0 0.8 0.7

1.0

1.2

3.0

2.5

2.0

2.0

1.3

1.0

0.6

0.0

0.0

98
99
20
00
01

96
97

Notes: 1) The yen-based value is converted to dollars by quarter, using the average quarterly Bank of Japan
interbank rate. 2). For after 2015, ﬁgures reﬂect the annual revision. The cumulative total for 2017 is apreliminary ﬁgure.
Source: “Balance of Payment Statistics” (Ministry of Finance, Bank of Japan).

Note: Based on BPM6 over the entire period.
Source: "International Investment Position" (MOF, BOJ), data from the Cabinet Oﬃce

Trends in cross border M&As by Chinese and ASEAN firms

Share of inward FDI stock in Japan by region(Million USD)

(%)
100.0

(No. of projects)

China (Value)

140,000
80.0

ASEAN (Value)

China (no. of projects, right axis)
ASEAN (no. of projects, right axis)

120,000
37.7
42.9

51.6

46.6

46.8

48.7

400
Announcement of
One Belt One Road

80,000

300

40.0
47.1

0.0

600

500

100,000

60.0

20.0

5.0

16

-

Hong Kong

6.0

14
15

226.3

-40

12
13

4,235

-

10
11

43.8

-126

08
09

8,001

641

Reinvestment of earnings
Inward FDI stock／GDP（right axis）
5.2

06
07

5,562

China

30.0

04
05

Asia

2016

02
03

2015

（％）

Debt instruments
Equity capita

32.3

34.4

29.8

28.3

60,00025.9

40,000
15.5

17.4

18.0

End of2010

End of2014

End of2015

End of2016

North America

Europe

7.8

6.6

10.8

End of2000

End of2005
Asia

Latin America

200

Strenghtening of"Go Global" policy

100

20,0000

Other02000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16（Year）

Note: 1) Acquiror Ultimate Parent Nation. 2) The dates show when M&As have been completed.
Source: Thomson Reuters

Note: Because the BOP-related statistics have been revised, there is no strict continuity
in the data before the end of 2013 and after the end of 2014.
Source: "International Investment Position" (MOF, BOJ)

Copyrightⓒ2017 JETRO. All rights reserved.

6

6.

World trade policies reaching turning point■Measures to restrict trade introduced after the global financial crisis keep accumulating. According to the World Trade Organization(WTO), while 1,263 trade-restrictive measures that G20 countries introduced between October 2008 and October 2016 are in effect,
only 408 actions were lifted.
■The new administration in the US is deeply concerned about the trade deficit of the country. In March 2017, President Trump issued
an executive order to review the causes of the US trade deficit. The deficit with China in particular accounts for nearly half of theoverall trade deficit. US is likely to continue seeking the reduction of its trade deficit with partner countries by strengthening theenforcement of trade remedy measures and trade laws.
■The EU, which has continued its expansion until now through promoting supranational integration, is currently facing many difficult
challenges, such as negotiations with the UK on its withdrawal from the union, different stances among member countries on whatform integration should take, and immigration and refugee issues. Reflecting the intentions of western European countries centeringon Germany and France, the EU is modifying its policies to aim at multi-speed integration, which allows member countries to takedifferent stances by area̶such as Economic and Monetary Union and foreign policy cooperation̶for how fast and to what extent
they will tie with the EU depending on each countryʼs capacity and motivation.

Trade-restrictive measures of G20 countries

US trade deficit by major country

Trade-restrictive measures (average per month)
Trade-restrictive measures in eﬀect
Measures eﬀectively eliminated(Measures)

1,400(Billion USD）

25.0

1,200

20.7

20.3
19.0

19.3
18.0 17.7

1,000

15.6

0

20.0

18.7 18.6
17.0

17.2

-50

17.0
15.4

14.2

800

50

1,263

-100

15.0

600

China

-150

10.8
10.0

408

400

Japan

-200

Germany-250
5.0

Mexico

-300

200
0

from Until Until Until Until Until Until Until Until Until Until Until Until Until Until Until
Oct. May Oct. May Oct. May Oct. May Nov. May Oct. May Oct. May Oct. May
2008 2010 2010 2011 2011 2012 2012 2013 2013 2014 2014 2015 2015 2016 2016 2017

-400

Notes: 1) Trade-restrictive measures introduced since Oct. 2008 include measures aﬀecting imports andexports, trade remedies, and other measures.
2) Data aggregation of measures was conducted from the end of 2010 until Oct. 2016. The length ofperiod covered diﬀers according to the dates of publication of each monitoring report.
3) In the recent report published in June 2017, trade remedies were excluded from the categories oftrade-restrictive measures. However, in order to compare with the previous results, the number ofsuch remedies is added to the total ﬁgure.
Source: WTO Secretariat

Title

OutlineMar 31Omnibus Report on
Signiﬁcant Trade Deﬁcits

Assessment of major causes of trade deﬁcits, unequalburdens imposed by trading partners and impacts on
the economy of the United of States.

Mar 31

Establishing Enhanced Collection and
Enforcement of Antidumping andCountervailing Duties and Violationsof Trade and Customs Laws

Development of a plan to enforce antidumping andcountervailing duties as well as combat violations of the
US trade and customs laws.

Apr 18

Buy American and Hire
AmericanAssessing the extent of enforcement of the BuyAmerican
Law and impact of trade agreements, and to review theimmigration system including the H1-B visa program.

Apr 29Addressing Trade Agreement
Violations and Abuses

Identifying violations or abuses of WTO and any US
trade agreement and investment agreement.

Apr 29Establishment of Oﬃce ofTrade and ManufacturingPolicy

Establishment of oﬃce with the mission to advise thePresident on policies to decrease the trade deﬁcit andstrengthen the United States manufacturing bases.

Jan 23

Withdrawal of the UnitedStates from the TPP

Permanent withdrawal of the US from TPP, andpursuit of bilateral trade negotiations.

Jan 24

Construction of American
Pipelines

Development of a plan to use materials and equipment
produced in the US for all new pipelines within US
borders.

Apr 20

Steel Imports and Threats
to National Security

Investigating the eﬀects on national security of steel
imports based on the Trade Expansion Act of 1962.

Apr 27

Aluminum Imports andThreats to National Security

Investigating the eﬀects on national security of aluminum
imports based on the Trade Expansion Act of 1962.

Executive Orders
Presidential Memoranda

80 82 84 86 88 90 92 94 96 98 2000 02 04 06 08 10 12 14 16（Year）

Source: "DOTS, May 2017"(IMF)

Major events in European Integration andnumbers of member countries

Trade related Executive Orders and Presidential
Memoranda by President Trump (2017)
Date of signature

Canada-350

0.0（Number of member countries）

2009: the Treaty of Lisbon in eﬀect

30

27
25

25
2002: the currence euro adopted

20

1967: European Community established
1968: Completion of the Customs Union

1987: the Single European Act ineﬀect (the single market wasestablished in the end of 1992)

15

10

1957: the Treaty of Rome signed
1958: the Treaty of Rome in eﬀect
European Economic Community
EEC）発足established65

Note: Although there is no clear distinction between the two instruments above, as a matter or historical
practice, it seems that presidents are more apt to utilize executive orders on matters that may beneﬁt frompublic awareness. Memoranda, on the other hand, are often used to carry out routine executive decisions, or to
direct agencies to perform duties consistent with the law or implement laws that are presidential priorities.
Source: White House0

1993: the Maastricht Treaty in eﬀect
The birth of the European Union

Founding members
in 1957: Belgium,
France,West Germany,
Italy, Luxemburg,
Netherlands

15

12
9

1973
(accession):
Denmark,
Ireland,the UK

1957 and onwards

10
1981:
Greece1986:
Portugal,
Spain

1995:
Austria,
Finland,SwedenMarch 2019: the UK
will leave the EU
28

2007:
Bulgaria,
Romania2013:
Croatia

2004:
Czech Republic,
Cyprus,Estonia,
Hungary,
Latvia,Lithuania,
Malta,
Poland,Slovakia,
Slovenia

Candidiate countries:
Albania,
Montenegro,
Servia,The former
Yugoslav Republic ofMacedonia,
Turkey(Year)

Source: Website of the European Union

Copyrightⓒ2017 JETRO. All rights reserved.

7

7.

Background of inward-looking policies and new momentum toward free trade regime■Some Western countries have seen support for inward-looking policies against globalization expanding, with such
events as the UKʼs resolution leaving the EU, the Trump administrationʼs withdrawal from the TPP, re-negotiation of theNorth American Free Trade Agreement (NAFTA) and tightened migration policies. As growing disparities in income andemployment are said to be responsible for this trend, the main reason of the widening gap is generally considered to betechnological advancement rather than globalization.
■ With the emergence of a social stratum left behind by globalization being identified, the significance and effectivenessof establishing inclusive multilateral trade rules based on the WTOʼs initiatives have been reaffirmed. Over recent years,
the WTO has made steady progress.
■Among its achievements, the WTO Trade Facilitation Agreement -entered into force in February 2017- was remarkable.
Realization of simplified trade procedures and increased transparency based on the agreement is expected toencourage all players, including SMEs, to take part in trade.

Income inequality in US:
Share of each income group

Cost of using computers:
Compound annual growth rate

（％）

60

Bottom 50%

Middle 40%

Top 10%

Top 1%

0
-10

-11.0

-20

50

-30
40

-26.8

-29.6

-40

-23.5
-32.3
-41.4

-50

10

15
20

10
20

05
20

00
20

95
19

90
19

85
19

80
19

75
19

70
19

65
19

60

s-0

s-9
80

70

s-8

0s

0s

0s

s-6

s-7
60

0s

0s
s-5

Note: The compound annual growth rate was calculated by comparing the medians of the real cost per
million computations (2006 USD prices) of the corresponding decade.
Source: Revised data of table 6 of Nordhaus (2007) created by William D. Nordhaus

0
19

50

19

30

s-4

0s

（％）

40

20

0s

-53.8

-60

90

30

(Year)
Note: 1) The "middle 40%" ranges from the 50th to 90th percentile ranks. 2) Income data is based on theﬁscal income (the sum of all income items reported on income tax returns, before any deduction).
Source: World Wealth and Income Database (WID.world)

Outlook of WTO Trade Facilitation Agreement
Recent achievements or progress in WTO andplurilateral trade negtiations

Achieved results

Agriculture

Prohibition of export subsidies (2015)
Duty-free, quota-free for cotton exports from LDCs (2015)

Government procurement
Trade facilitation

Trade Facilitation Agreement in effect (2017)

Services

Amendment of the TRIPS Agreement on access to medicines
in effect (2017)
Negotiation of "Trade in Services Agreement (TiSA)" inprogress among 23 WTO members (since 2013)

Trade rules

Negotiation on fishery subsidies in progress (activated since 2016)

Environment

Negotiation of "Environmental Goods Agreement" in progress
among 18 WTO members (since 2014)

New issues

Discussions on e-commerce (since 2016)
Discussions on investment facilitation (since 2017)
Discussions on how SMEs can benefit from global trade(since 2017)

Intellectual property

Agenda in progress

Recent achievements or progress

Expansion of tariff-free products under the Information
Technology Agreement (ITA) (2015)
Revised agreement in effect (2014) which facilitated newaccessions

Market accessContents

Article 1

Publication andavailability of information

Recommending members to promptly publish information related to customs
procedure in an easily accessible manner such as through the Internet.

Article 3

Advance rulings

Introduction of advance rulings, publication of its
procedures, etc.

Article 4

Procedures forappealor review

Allowing traders to request appeal or review on
decisions made by customs.

Article 7

Release andclearanceof goods

Facilitating quick release and clearance of goods.

Formalities connected with
Article 10 importation, exportation and transit

Facilitating symplification of formalities connectedwith importation, exportation and transit.

Article 11 Freedom of transit

Recommending members to guarantee freedom of transit
including by applying transit charges, procedures and controls.

Section 2: Special and differential treatment (SDT) provisions

Article 14

Note: TiSA negotiations are conducted outside the WTO system.
Source: WTO Secretariat and other sources on international trade

Categories

IssuesProvisions

Section 1: Specific commitments members should implement

Category A: Provisions that the Member will implement by the time the Agreement enters into
force (or in the case of a least-developed country Member within one year after entry into force) .
Category B: Provisions that the Member will implement after a transitional
period following the entry into force of the Agreement.
Category C: Provisions that the Member will implement on a date after a transitional period following the entry
into force of the Agreement and requiring the acquisition of assistance and support for capacity building.

Article 17

Early warning
mechanism

Extension of implementation dates for Provisions in
Categories B and C.

Article 19

Shifting between
Categories B and C

Members may shift provisions between Categories B and C
through the submission of a notification to the Committee.

Article 20

Grace period forGrace period for the application of the understanding on
the settlement of disputes Rules and Procedures governing the settlement of disputes.

Section 3: Institutional arrangements and final provisions
Source: WTO "Trade Facilitation Agreement”

Copyrightⓒ2017 JETRO. All rights reserved.

8

8.

Value of multilateral trade rules reappraised in regulations and standards■Along with technological advancement, in recent years, strategic measures aiming to gain an advantage in international
development of goods and services by securing international standards are increasingly taken on the policy level ofcountries and regions as well as on the business level.
■ The inﬂuence of international standards have increased in the WTO system. However, as the range of targets thesystem covers is expanding from goods to services and systems, certain trends have been gradually emerging, such as
challenges in international standards̶including increasing diﬃculty for standardization organizations to coexist̶
and a recent tendency in international standardization for increasing numbers of standards to be created by private
agencies.
■ The number of the Technical Barriers to Trade (TBT) notiﬁcations̶sent by WTO members to the Secretariat in suchcases as creating regulations̶surpassed 28,000 since the system launched, with more than 2,000 added almost every
year since 2012. TBT notiﬁcations are contributing to increasing transparency in regulations. The TBT Committee at the
WTO has prevented trade disputes by handling speciﬁc trade concerns (STC) raised by WTO members.

Important elements regarding international
standardizaion strategies in major countries and regions
Country/Regions

WTO agreements and various rules forinternational standardizaion
WTO agreements

Elements

US- A tradition of attaching importance to market mechanism-Criteria developed in various fields by approx. 450 private institutes- Wide utilization of international standards under the WTO regime- Strategic promotion of unique standardization in high-tech fields

China- Standardization enhanced after joining the WTO in 2001
- Initiative taken in promoting standardization as a national strategy- Prominence of China growing in international standardization
organizations such as the ISO

ASEAN- Harmonization and mutual approval of rules and specifications among
member countries based on the ASEAN Economic Community (AEC)- Slow streamlining of standards and specifications in responding to real
economic conditions- An aim at mild harmonization in consideration of differences between countries

Japan- Nearing achievement of its strategic goal for increasing its presence ininternational standardization organizations by 2015
- Strategic formulation of standards in new fields

Agreement on Technical Barriers to Trade (TBT): All WTO members
Agreement on the Application of Sanitary and Phytosanitary
Measures (SPS): All WTOmembers
Government Procurement Agreement (GPA): Only applicable to signatories

Regulations

盟国
Laws and regulations
published by governments(Note that somestandards are incorporated
into regulations)Public procurement by
non-GPA countries

Note: 1) Only those WTO agreements related to standards are listed.
2) Regulations are written rules, the adoptation to which are obligatory.
3) Standards are written rules which are not compulsory in principle.
However, some standards are eﬀectively incorporated into national regulations.
Sources: Interview surveys and others

Top countries and regions pointed out by TBT
Committee regarding STCs (1995-2016)

WTO TBT notifications and STCs
(STCs)(No.of notifications)

120

Country/Region number of STCs

2,500
2,327
Previous STCs
New STCs

2,000

TBT notifications (right axis)
80
55 68

47
60
37

1,500
61

46

63

44

1,000

21

24
20
6

0

55

28

40

4

10

9
4
11 13
5
6

14 13

17 20

46

14

20
15 14 12
13 15

24 27

32

Private Standards: published by private
consorsiums and industry organizations
such as the GLOBALG.A.P

De facto standards

Source: Interview surveys, seminar reports

100

Standards
International Standards such as ISO(International Organization forStandardization) standards
Regional Standards such as EN Standards
published by CEN (European Committe forStandardization)
National Standards such as JIS Standards
published by JISC (Japanese Industrial
Standards Committee)

Conformity assessment bodies

EU- European standardization bodies such as the European Committee forStandardization (CEN) collaborate with international standardization bodies
such as the International Organization for Standardization (ISO)- Harmonization of regulations and standards within Europe through EU
Directives- Spread of European standards to other regions

43
29

35

42

500

47
37

31

0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016（Year）

Examples (year)

EU

98

Regulation on Chemicals (REACH) (2003)
Regulation on Classification, Labelling and Packaging (CLP) (2007)

China

60

Administrative Measure on Cosmetics Labelling (2015)
Compulsory Certification (CCC) System (2006)

US

47

Bioterrorism Act (2003)
Transportation of Lithium Batteries (2010)

South Korea

32

Food Industry Promotion Act (2009)

India

26

Alcoholic Beverages Standards (2013)

Brazil23

Draft Resolution on tobacco pruducts (2011)

Indonesia

21

Regulation on the label of processed foods (2013)

Ecuador

19

Resolution establishing a general conformity assessment framework(2013)

Russia18

Draft Technical Regulation on Safety of Alcohol Drinks (2012)

Mexico15

Energy Labelling Measures (Law for Sustainable Use of Energy)(2011)

Colombia

13

Commercial Truck Diesel Emissions Regulation (2011)

Japan

12

Labelling Guidelines on Wagyu Beef (2008)

Canada11

Amendment to Tobacco Act (2009)

Thailand10

Draft Notification for Labels of Alcoholic Beverages (2014)

Argentina

8

MERCOSUR Regulation on Alcoholic Beverages (2004)

Taiwan8

GMO Labelling (2015)

France8

Draft decree on a common set of symbols informing the consumer about recyclable products (2014)

Total

521

Note: Examples shown are the cases which relatively large number of WTO members raised as STCs.
Source: WTO TBT-IMS database

Note: "Previous STCs"refers to STCs which have been discussed in two or more meetings of the TBTCommittee in the WTO.
Source: WTO TBT-IMS database

Copyrightⓒ2017 JETRO. All rights reserved.

9

9.

Future of e-commerce market (1) Market and companies■According to the United Nations Conference on Trade and Development (UNCTAD), the sales value of world electroniccommerce (e-commerce) in business-to-consumer (B2C) transactions in 2015 is estimated to be $2.9 trillion. China
seems to have already overtaken the US as the worldʼs largest market. With Indiaʼs annual average growth rate from 2016
to 2020 expected to reach almost 40%, India is likely to grow at a larger pace than China.
■ A JETRO survey (FY2016) targeting Japanese companies shows that 24.4% of the respondents have used e-commerce
to sell products, with 47.2% of them being engaged in international sales. While many companies cited Northeast Asianand Western countries as current sales destinations, they have high expectations for ASEAN countries as future markets.
Some of the cases brought up in the field interviews illustrate that e-commerce has been serving as an alternative way
for them to expand into new markets.
■ In using e-commerce, many companies pointed out payment and logistics as challenges. Regarding payment systems,
a number of countries and regions primarily use cash-on-delivery and credit-card payment. However, in developing
economies without the necessary infrastructure, the establishment of alternative payment systems has become the key
to business growth. In terms of logistics, the availability of reliable logistics operators and the efficiency of customs areamong challenges that companies engaged in e-commerce have to face when delivering products to consumers. Thereare companies taking progressive approaches to address these issues around the world.

Sales value of B2C e-commerce in major countries and market share
2016（Unit:US$ million, %)Market share of major companies in 2016

2020
CAGR
(estimate) （2016→2020）

1st

2nd

3rd

China

366,078

650,210

15.4

Alibaba Group Holding

43.5

JD.com20.2

Sunning Commerce Group

3.1

US

312,064

533,514

14.3

Amazon.com

33.0

Wal-Mart Stores

7.8

eBay

7.4

UK

73,456

106,720

9.8

Amazon.com

26.5

eBay

10.1

Tesco

6.6

Japan

72,577

104,400

9.5

Amazon.com

20.2

Rakuten

20.1

Softbank(Yahoo!Shopping)

8.9

Germany

44,09470,068

12.3

Amazon.com

40.8

eBay

15.0

Otto

11.2

France35,76951,205

9.4

Amazon.com

10.7

Casino Guichard-Perrachon(Cdiscount)

9.9

E Leclerc

7.5

India

21,64881,633

39.4

Flipkart

39.5

Jasper Infotech (Snapdeal)

30.2

Amazon.com

12.1

Russia11,49420,09615.0

Maksus (Svyaznoy)

4.6

Wildberries

4.3

Ulmart3.6

Brazil10,36916,481

12.3

Rojas Americanas(Americans.com) 18.7

MercadoLibre

17.6

Casino Guichard-Perrachon(Pontofrio) 15.5

Mexico4,563

11,50526.0

MercadoLibre

Rocket Internet (Linio)

5.8

Amazon.com

9.5

5.5

Note: 1. The sales value is an estimate by Euromonitor International. The values are the sales of consumer goods to the general public via the Internet (excluding sales of motor vehicles, motorcycles and vehicle parts)through any
electronic device. Sales of delivery services, such as those of foods and household goods, and pickup at stores where the payment is made in the store are excluded. 2. The names in parentheses are major e-commerce platforms
or online shopping sites of the respective companies.
Source: "Passport" (Euromonitor International)

Progressive approaches to overcome some ofthe obstacles in e-commerce

Cases of overseas sales by Japanese companies via e-commerce
Firm Location Business Destination

Northeast Asia,
Metal
Southeast Asia
B Niigataproduct andEuropeC Osaka

D Tokyo

China
Food
and
processing
the USE

Russia CIS

The company sells products through major
local e-commerce platforms. Around two
years ago, one of its products ranked in the
top 20 of its product category in the US, andsince then, sales has been increasing.
The company sells healthy food products
and processed foods made in Japanthrough its own Russian online shoppingsite. 90% of the sales are paid by credit card.
The company uses an EMS and has not hada case where a package never reaches acustomer.

Source: Field Interviews

Operating Entity

Strategies

Cash onDelivery"M-Pesa" in Kenya is a moneytransfer service through its
Safaricom
mobile short message service.
(SMS Payment)
The fee is put on the user's
cellphone bills.

Credit card

The Alibaba Group Holding has
established its own mobile
payment system "Alipay" in China,
Alibaba Grouputilizing QR codes. Users can add
Holdingmoney from not only credit cards(Mobilebut also bank accounts and even
Payment)
by cash. It is expected that thissystem will spread, particularly indeveloping countries.

The availabilityof high-quality
logistics
serviceproviders

Africa's major e-commerce
platform Jumia has established
its own logistics network using
Jumia,
Alibaba Group motorcycles. The Alibaba Group
Holding also increased theHoldingdelivery efficiency in China by
consolidating local logistics
companies.

Payment

The company takes orders through its own
online shopping site after either the deposit
is made or payment via PayPal is recieved
and confirmed.
It also sells its products on B2B e-commerce
platforms specialized for the material
business, the sales volume of which has
surpassed that of its own shopping site.

The comapny sells its products in China
through trading firms while in Taiwan andNortheast Asia, the US through e-commerce platforms of
the respective sales destination. It was
Housing Northern
approached by a major American chain
equipment America andstore through the e-commerce platform.
EuropeThis made the company realize thepotential of e-commerce as an alternative
way to expand into a new market.

Trading
Hokkaido
firmIssues

Logistics'Go'A Miyazaki stonemaker

Outline

The company makes sales through its own
online shopping site to customers in theEurope,countries and regions where it has no partner
the US,
distributor. The comapny has also created a
Northeast Asia designated web page to introduce the culture
andof the "Go" game as well as the company's
Southeast Asia, sophisticated techniques to make "Go"-stones
etc.
to increase the brand awareness. Ordered items
are sent to customers after payment via either
credit card or PayPal is received and confirmed.

Last Mile
Delivery(Diverse
customerneeds inparceldelivery)Amazon.com

Amazon.com has been increasing
the scale of its own warehouses
in countries they operate withthe aim of expanding the areas
they can provide the sameor next-day delivery. It is also
seeking quicker and more
efficient delivery means byconducting trials of dronedelivery, for instance.

Source:Reports from JETRO overseas offices and various media reports

Copyrightⓒ2017 JETRO. All rights reserved.

10

9.

Future of e-commerce market (2) Regulations and international rules■While e-commerce market is expanding worldwide, there exist regulations which could possibly become businessbarriers. Data related regulations including data localization have continued to increase as the number of internet users
rises especially since the latter half of the 2000s.
■ As various international organizations have been trying to create rules for e-commerce, WTO, in response to themomentum of the establishment of rules which has occurred in tandem with the growth of the e-commerce market,
started discussions at the special session on e-commerce in July 2016.
■Free trade agreements (FTAs) have also included provisions on e-commerce since the 2000s. Many of the worldʼs nearly
60 FTAs with e-commerce chapters have been concluded between the US and its FTA partner countries. US-style
e-commerce chapters are prevalent.

Number of data related regulations in the world

Regulations related to e-commerce by country(Numberof regulations)

Regulations

90
80

80

VietnamDemanding companies in the information service
industry such as content providers to set up more than
one server with in the country.

RussiaRegulating companies which collect personal
information to set up servers which store the data of
consumers within the country.

India

Foreign-affiliated retailers which deal in a single brand areallowed to operate under 100% foreign investment when 30% of
their procurement comes from within the country. Whileprohibiting those which deal in multiple brands from conducting
e-commerce, it is permitted for companies producing products
within the country to sell products through Internet.

China

Requiring companies to obtain an operating license forvalue-added telegraph services in order to provide
Internet service to third parties through their own
platforms.

Personal
information
protection

EU

Making companies to appropriately process personal
data within the European Economic Area, andprohibiting them from transferring the data outside thearea in principle.

Opaque orcomplexregulations

China

Mandating companies to undergo a screening process
when collecting customer data from within the country thatis either stored domestically or transferred overseas.

65

Internet users
reached 2 billion

60

57
49

50
39 40

40
31

30
20
10
2 2 2 30OutlineDatalocalization

73

70

Country/Region

83

85

87

4 5 5

89

91

7

9 9

93

1111 12

95

13

97

15

17

99

22
20 21

01

24

03

Restrictions
on foreign
investment

42

33

27

05

07

09

11

13

Source: Servey reports of JETRO and materials from respectivegovernments

15 16（Year）

Source: Estimate by the European Centre for International Political Economy

Provisions on e-commerce by FTA
Provisions

Issues on e-commerce discussed in WTO
IssuesOverview

Discussions
in WTO

Solutions
by FTAs

1) Treatment ofdigitalcontent

2) Custom duties on3) Cooperation withelectronic transmissions
developing countries

How to classify value
generated bytransactions of digitalcontent.

Not imposing tariﬀs on
digital transfer in termsof technological aspects
and securement of theenvironment for free
trade throughe-commerce.

Developing countries
are concerned about
reduction of tax incomein accordance with thedevelopment of
e-commerce.

GATT is applied for
trade in goods, GATS
for services and TRIPS
for intellectual
property rights.
However,there is no
uniﬁed rule because
discussions on this
topic have divided byeach Council.

While the policy of the"Moratorium on
Customs Duties" hasbeen maintained since
the ministerial
declaration in 1998,it isa temporary measure.
When the moratorium
period is ﬁnished,
imposing tariﬀ will bepossible.

In order to gain anunderstandings ofdeveloping countries,
it is necessary to study
both positive andnegative aspects of thepromotion of
e-commerce
which might
adversely affectnational revenues.

Deﬁning digitalcontent in express
terms.

Permanently ensuringthat customs duties
will not be imposed on
digital transfers.

Setting forth provisions
regardingcooperation,including forsharing related information.

TPP
CETA
(Signed in Feb 2016) (Signed in Oct 2016)

Product that isdigitally
encoded.Digitised
representation offinancial instrument
not included.

Product that is digitally
encoded,produced forcommercial sale or
distribution, and that canbe transmitted
electronically. Digitised
representation of financial
instrument not included.

Commerce conducted
throughtelecommunications,alone or in
conjunction withother information andcommunication
technologies.

Not imposing custom duties
on electronic transmissions

✓

✓

✓

Non-discriminatory
treatment on digitalproducts

×✓×

Stipulating avoidance ofregulations without
specific obligation.

Mandating companies tomaintain domestic rules in linewith international standards.

No speficic obligation
imposed.

Online consumer
protection

✓

✓

✓

Personal information protection

✓

✓

✓

Electronic authenticationand electronic signatures

✓

✓

✓

Paperless trading

✓

✓

×

×

✓

×

No requirement on
location of computing
facilities

×

✓

×

No requirement ontransfer of, or access tosource code

×

✓

×

Cooperation

✓

✓

✓

Definitions of "Digitalproducts"("E-commerce" in caseof CETA)

Domestic electronictransactions framework

Cross-border transfer of
information, including
personal information

Source: Reports and papers of WTO and E15

Pacific Alliance(Entry into force
in May 2016)(Future negotiations considered)

Note: Check marks also indicate provisions which only prescribe an obligation to make an effort.
Source: Ministry of Economy, Trade and Industry, and respective FTAs

Copyrightⓒ2017 JETRO. All rights reserved.

1110. Japanʼs current status of accepting and utilizing foreign personnel■When Japanese companies develop overseas business such as by exporting and entering foreign markets, securing human resources
is the biggest issue. Domestically, Japan is facing a significant decline of people within the working generations which sustain
business activities. Comparing the countryʼs ratio of the working-age population to the total population with that of other major
developed economies, it is obvious that Japan is seeing a decline at an exceptionally high pace.
■In 2016, the number of foreign workers in Japan reached 1,083,769. This was the first time it exceeded one million. Among theseworkers, highly skilled personnel which support the overseas business development of Japanese companies generally fall into thecategory of specialized or technical fields, numbering about 200,000 people.
■When asked about the advantages of employing foreign personnel in a JETRO survey, “expanded sales channels” had the highest
response ratio among firms who employ foreign directors or managers. Being able to incorporate a diverse range of perspectives inmanagement through tapping into foreign human resources can have a significant effect for Japanese companies. As employmentof foreign personnel becomes common, it is expected that “contribution to development of new products” and “improved
problem-solving ability” which relate to technological innovation going forward are likely to grow.

Ratio of working age population (aged 15-64)
to the total population

Issues regarding overseas business(%)

FY2016(n=2,995)

FY2013 Change from(n=3,471)
FY2013

Personnel responsible for overseas business

55.3

41.2

14.1

Local business partners (alliance partners)

52.1

47.8

4.3

Information on overseas systems(tariff rates, regulations, permissions, etc.)

48.9

40.1

8.8

Information on local markets(consumers' preferences, needs, etc.)

48.6

39.4

9.2

Expansion of local sales networks

45.2

32.5

12.7

Cost competitiveness

38.0

27.0

11.0

Goods for local markets

31.5

21.4

10.1

Awareness of products and brands

30.9

-

-

Raising of necessary funds

18.5

16.2

2.3

Other

2.4

1.1

1.3

Nothing in particular

4.0

3.5

0.5

(%)

75

Japan
UK
70

Germany
US
65

60

55

50

Note: 1) Percentage to the total number of respondent ﬁrms. 2) Multiple answers. 3) The FY2013 survey did
not include the choice of "awareness of products and brands."
Source: "Survey on the International Operations of Japanese Firms" (JETRO), various issues

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
（Year）

Notes: Median estimates.
Source: "World Population Prospects: The 2015 Revision" (United Nations)Benefits of hiring/employing foreign employees by position

Trends in foreign workers in Japanby statuses of residence(%)

Benefits of hiring/employing foreign employees
Other

No answer
4.6

Positions of foreign employees

400

Directors

120 20.0 43.3 15.8 29.2 30.0 12.5 14.2 39.2 30.8 10.8

7.5

200

0

2008

2009

2010

2011

2012

2013

2014

2015

2016
(Year)

Note: 1) Data from the end of every October. 2) Based on the revised Immigration Control and Refugee
Recognition Law on July 1, 2010, "Technical Intern Training" is added to the list of statuses of residence
separate from "Designated Activities."
Source: Status of reporting on the employment of foreign workers by employers (Ministry of Health, Labourand Welfare)

Improved problem-solving ability

6.1

600

Improved inter-national negotiating ability

9.2 39.7 27.9

800

Improved language ability

Total number of foreign
workers in Japan

Increased motivation among Japanese employees

Residence based on status

Designated Activities

Strategic prepara-tion for localizationof manage-mentTechnical Intern Training

Activities without certiﬁcation

Contri-bution to develop-ment of new products

Specialized technological ﬁeld

Expanded sales channels

1,887 13.5 40.9 11.7 28.6 31.6 13.9

1,200

Financial eﬀects (sales, business performance, etc.)

Total

No. of ﬁrms

Lowering psycholo-gical barriers among Japaneseemployees in communi-cation with foreign nationals（1,000persons）

1,000

Franceforecast

Management at
division/department 270 22.6 50.7 20.4 38.5 33.0 15.6 14.1 49.6 31.9
manager level

6.7

3.3

Engineers

357 12.9 30.5 18.5 36.1 28.6 16.0

9.5 35.6 30.5 10.6

2.2

Generaladministrative staﬀ

755 13.1 37.7 10.3 28.3 35.4 13.4

9.3 44.5 29.0

4.1

2.5

General plant staﬀ

378 16.4 24.6

7.7 28.0 27.5 14.8

4.8

'Not currently hiring
foreign employees
but considering itin the future637 11.9 56.7 13.0 30.5 33.1 15.2

8.8 42.2 27.5

6.1

7.9 29.1 25.1 15.1

2.4

Note: Percentage to the total number of ﬁrms answering “currently hiring foreign employees” or “expecting
to consider recruitment of them”. 2) Multiple answers.
Source: "FY2014 Survey on the International Operations of Japanese Firms" (JETRO)

Copyrightⓒ2017 JETRO. All rights reserved.

12

For more information,please contact:

Japan External Trade Organization
International Economic Division
Overseas Research Department
ORI@jetro.go.jp