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EU-Japan Business Round Table
Tokyo Meeting, 3-4 July 2008

“Joining forces for competitiveness and sustainability”
Recommendations

1. Introduction
The EU-Japan Business Round Table (BRT) held its annual meeting in Tokyo on 3 and4 July 2008 in advance of the G8 Summit at Lake Toya in Hokkaido. The meeting wasco-chaired by Mr. Hajime Sasaki, Chairman of the Board of NEC Corporation, andBaron Georges Jacobs, Chairman of the Board of Delhaize Group, Honorary Chairmanof UCB.
Messrs. Yoshitaka Shindo, Senior Vice-Minister of the Ministry of Economy, Trade andIndustry, Hitoshi Kimura, Senior Vice-Minister of the Ministry of Foreign Affairs,Tsutomu Sato, Senior Vice Minister of the Ministry of Internal Affairs andCommunications, Hugh Richardson, EC Ambassador to Japan and Philippe Faure,
French Ambassador to Japan and representing the EU Council Presidency engaged inlively discussions with business leaders on the many problems that the European Union
and Japan face today.
Globalisation is producing a rapid acceleration in the borderless movement of goods
and services. However, this rapid pace of economic development is accompanied by afast-growing demand for energy, raw materials and food that produces significant
impacts.
The outlook for the world economy has become even less clear, due to disarray in theinternational financial markets and sudden rises in the prices of oil and raw materials,
while climate change is now recognised as a severe problem. Japan and the European
Union (EU) have a similar political base and shared values, which together account for
40% of global GDP. Given the complicated issues that the world economy is facing
today, the BRT calls for Japan and the EU to cooperate even more closely in the future.

Page 2The BRT members also discussed how to stay competitive through discussion of thereport by the joint taskforce created at the last EU-Japan BRT in 2007 and of thechallenges for EU-Japan cooperation as well as of EU-Japan cooperation in emerging
markets.
Throughout the meeting, there was a shared recognition of the need to intensify
EU-Japan cooperation, and the BRT agreed on the following recommendations to theAuthorities of Japan and the EU:
2. Overall Priorities
As a strong supporter of the WTO Doha Development Agenda (DDA) negotiations, theBRT continues to urge the European Commission and the Government of Japan to makethe utmost efforts to reach an ambitious conclusion.
The June 2007 BRT annual meeting recommended amongst others establishing ataskforce with business support to explore the feasibility of a Japan-EU Economic
Integration Agreement (EIA). In accordance with the recommendation, taskforces were
established both in Japan and the EU. Both sides discussed future EU-Japan economic
cooperation in areas such as innovation, environment, investment, services, regulatory
cooperation, mobility, security & safety and public procurement.
Both the Japan-side and EU-side taskforces underlined the importance of further
strengthening economic ties between Japan and the EU, based on an agreed set of issues,
although they have some different views about tariff issues.
The BRT Members welcomed the Joint Taskforce Report presented by the taskforce
leaders to the 2008 BRT annual meeting. The BRT thanks the taskforces for their great
efforts made and will follow-up on the jointly elaborated report.
The BRT expects that the EU and Japanese Authorities will discuss the taskforce reporton economic cooperation in full consultation with business associations on both sides.
Global issues such as food shortages, environmental issues, energy concerns and otherproblems continue to prevail. Biotechnology is increasingly recognised as offering
effective solutions to these challenges.

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Genetically Modified Organisms (GMOs) can improve farm productivity for future foodsupply and can provide more efficient raw materials to develop biomass-derived
products and bio-fuels. Both the Japanese and EU Authorities, in their respective
initiatives for environmental improvement, should recognise the production and use of
GMO plants as a matter of urgency.
The BRT recognises the challenges regarding environmental issues and the availabilityof energy and raw materials at a reasonable price. To this end, the BRT advocates thepromotion of innovative technologies to reduce reliance on fossil fuels, andimprovements in energy efficiency. Information and communication technologies, inparticular, can contribute to energy efficiency. It is therefore recommended that a joint
policy to investigate its contribution to environmental issues should be considered.
The participation of all major carbon-emitting countries, including the U.S., China andIndia, is essential for the framework of the post-Kyoto Protocol.
In addition, these countries should share reasonable and feasible mid-term (the years2020-2030) and long-term (the year 2050) global greenhouse gas (GHG) emission
reduction targets. To help achieve these targets, sectoral approaches based, for instance,on energy-efficiency or best available technology indicators would be effective.
Moreover, the transportation and building sectors should make a contribution.
Climate change, sharp rises in energy price, a stable energy supply and the growing
disparity between the rich and the poor are urgent issues that require the EU and Japanto seek solutions from a long-term perspective.
3. Immediate Action Items - Requests for Japan and the EU
The BRT calls on the Japanese and EU Authorities to provide immediately all necessary
leadership for close cooperation between government representatives and other experts,
in order to achieve a steady implementation of the proposals.
The BRT strongly feels it is necessary to take concrete actions that will create business
opportunities in the following areas:

Page 4(1) Realistic and concentrated measures to follow up the agreement of a structure forthe promotion of direct foreign investment.
••

Open investment regimes
Support for corporate development•

Promote a harmonised system for regulating low energy consumption andproduct labelling•

Ensure transparency and a common international understanding on transfer
price taxation••

Reduce the corporate tax rate
Protect intellectual property rights (IPR) by strengthening their enforcement
dealing with the issue of counterfeit goods(2) Promote harmonisation of accounting standards•

The ASBJ, IASB and FASB are cooperating on seeking convergence that will
establish accounting standards for Japan, Europe and the US so that in thefuture, although the situation in some countries (notably the U.S.) might affectthe decision of Japan to some degree, Japan will, at least, allow the option of
preparing financial statements in accordance with IFRS. In addition, Japan andthe EU are cooperating in seeking heightened international competitiveness fortheir capital markets, with the proactive participation of the Japanese and EU
Authorities responsible for regulating the securities industry.

•The IASB needs, under enhanced governance framework, to pay more attention
to the practical views of market participants in order not to develop standards
that are too theoretical. In this respect, the IASB should not focus only on thepublication of comprehensive income but also include the publication of income
excluding balance sheet items. In addition, the IASB should ensure wide
consultation on further application of fair value-based accounting.

(3) Information & Communication Technologies (ICT)••Support industry initiatives to utilize ICT’s tremendous potential to develop alow-carbon society•

Review copyright levy system and maintain and expand the Information
Technology Agreement (ITA)••

Support the development of Next Generation Networks for a dynamic society
Initiate a dialogue on e-government through Private-Public Partnerships

Page 5(4) World Trade Organisation•Political leaders in the EU and Japan have to continue their efforts for anambitious and successful outcome of the Doha Round, which would strengthen
the multilateral trading system, give the necessary answer to any protectionist
tendencies and lay the ground for sustainable and powerful growth of the world
economy in the 21st Century.

•The opening of the OECD markets has to be matched by significant tradeliberalization efforts from emerging countries, providing real new market access.
The BRT is particularly concerned about the substantial increase in flexibilities
for emerging countries and increased implementation periods for recently
acceded members.

•A successful conclusion must include ambitious reduction or elimination ofindustrial tariffs, improved market access for agriculture products with
reductions of trade distorting subsidies, and dismantling of non-tariff barriersand creation of a new horizontal NTB mechanism, vastly improved market
access in the services area, and much better harmonised WTO rules on tradefacilitation, anti-dumping and subsidies.

(5) Life Sciences and Biotechnology•

Re-evaluate biotechnology strategy and implement prioritised action plans
without delay.

•Improvement of R&D environments and the drug pricing system to promote
innovations and facilitate patient access to cutting-edge medical caretechnologies.

•Develop GM plants and improve the environment that supports their utilisationby cooperation between the EU and Japan.

(6) Sustainable development•

Appropriate policies are necessary for the accelerated diffusion and expanded
use of energy-efficient equipment and facilities, as well as nuclear energy andrenewable energy sources such as solar and wind power in order to prevent
global warming.

•Establishment of an effective mechanism for transferring and expanding the useof environmental and energy-saving technology, while protecting IPR, fromJapan and the EU into emerging economies whose GHG emissions are

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increasing significantly.
•Regarding the framework of the post-Kyoto Protocol to be decided at next
year’s COP15 in Copenhagen, all carbon-emitting countries must participate,share reasonable and feasible GHG emission reduction targets and agree on
carefully assessed methods to achieve them.