EU-Japan Business Round Table

JOINT RECOMMENDATIONS“EU & Japan – Taking strides towards a common sustainable future”
20 April 2016, Tokyo

1. Introduction
The EU-Japan Business Round Table (BRT) held its Annual Meeting in Tokyo
on 20 April 2016 with the theme of “EU & Japan – Taking strides towards acommon sustainable future”. The meeting was chaired by: Mr. Kazuo Tsukuda, Senior Executive Adviser of Mitsubishi Heavy
Industries, Ltd., and Mr. Fabrice Brégier, President and CEO of Airbus S.A.S.
The BRT had the pleasure and honour of welcoming high-level representatives
from the Japanese and EU Authorities:
 From Japan: Mr. Junji Suzuki, State Minister of Economy, Trade andIndustry; Mr. Yoji Muto, State Minister for Foreign Affairs; Mr. Tsuneo
Kitamura, Parliamentary Vice-Minister of Economy, Trade and Industry; Mr.
Yasuo Sakamoto, Vice-Minister for Policy Coordination, Ministry of Internal
Affairs and Communications.
 From the EU: Ms Elżbieta Bieńkowska, Commissioner for the InternalMarket, Industry, Entrepreneurship and SMEs, European Commission;
Mr. Antti Ilmari Peltomäki, Deputy Director-General, Directorate-General forInternal Market, Industry, Entrepreneurship and SMEs, European
Commission; Mr. Philippe Duponteil, Head of the Far East Unit,
Directorate-General for Trade, European Commission; Mr. Jonathan Hatwell,Deputy Head of Delegation, Delegation of the European Union to JapanThe meeting consisted of the following:
1. Discussion and adoption of general and sectoral recommendations to bothsides’ Authorities.
2. Discussion of (i) EU-Japan Free Trade Agreement/Economic Partnership
Agreement (FTA/EPA) and regulatory cooperation (ii) Circular economy (iii)
Improving the investment environment in the EU and Japan.
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3. High-level discussions with representatives of the EU and Japanese
Authorities.
The BRT Members unanimously agreed to submit their Joint
Recommendations to Prime Minister Shinzo Abe of Japan, European Council
President Donald Tusk, and European Commission President Jean-Claude
Juncker.
2. BackgroundThe economies of both the EU and Japan remain challenged by a slowdown inglobal growth and trade, turmoil in currency, oil and other markets, lowconsumer confidence, demographic issues, and geopolitical problems. Up tonow, these uncertainties have disincentivised companies from leveraging theirprofits and cash holdings to increase investments and wages in order to benefit
the general economy, and themselves, in the long run.
The BRT recognises and welcomes the efforts of both sides’ Authorities to stepup multilateral cooperation and coordination in order to improve market stability,
consumer confidence and global growth. The combination of these efforts withnew domestic policies holds the promise of shoring up the tightly intertwined
global and local economies and defeating the threat of secular stagnation.
Determined to keep recession and deflation at bay, Japan adopted strong
growth strategies such as Abenomics’ “Three New Arrows” (initiatives forStrong Economy, Child Care Support and Social Security) and negativeinterest rates; steady implementation of those policies is necessary. Likewise,
the EU is working to increase growth and employment through updated
competition, innovation and SME policies, and through instilling market
confidence. Yet, more can be achieved, especially in relation to theimplementation of the social aspects of the Stability and Growth Pact, and the
exploitation of the economic potential of the single market. In addition, thepotential exit of the U.K. from the European Union casts a shadow on both theEU’s economy and Japan’s interests in Europe.
As advanced economies, the EU and Japan are both responsible for promoting
sustainable, global growth. Currently, the global economy faces great
uncertainty. The growth in the volume of world trade is lower than the growth ofglobal GDP. This underlines the need to facilitate global trade and investment
flows. The EU and Japan should conclude an EU-Japan FTA/EPA as soon as
possible, in order to provide an impetus to the global economy, as well as totheir own markets. The EU and Japan are two of the world’s biggest
economies, and the EU-Japan FTA/EPA provides a unique opportunity to
deepen economic cooperation and stimulate growth.

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The BRT considers that the Trans-Pacific Partnership (TPP) reached last year,
and the EU-Canada Comprehensive Economic and Trade Agreement (CETA),
may help to spur the EU-Japan FTA/EPA negotiations.
At the 2015 BRT, both Authorities undertook to make utmost efforts to address
important concerns in the negotiation of the FTA/EPA by drawing on theexpertise of the private sector. In this connection, the BRT appreciates therecognition given to its work by the 2015 EU-Japan Summit. But concernedthat the FTA/EPA negotiations have not shown satisfactory progress, the BRT
again offers to support the Authorities in any way it can as they strive to bring
the negotiations to a swift, comprehensive, ambitious and mutually-beneficial
conclusion.
The BRT welcomes the undertaking of Prime Minister Shinzo Abe and EU
Commission President Jean-Claude Juncker when they met in Antalya in
November 2015, to instruct their respective chief negotiators to accelerate the
FTA/EPA negotiations and to continue to do their utmost efforts to reachagreement in principle at the earliest possible time in the course of this year.
3. Requests & Recommendations
EU-Japan FTA/EPA
Nine years have elapsed since the BRT “committed [itself] to creating thenecessary conditions to deepen the full potential of EU-Japan economic
relations, which are far from being fully exploited”1 and proposed the creationof a taskforce to assess the feasibility of an agreement. Since then, the BRT
has been supportive at every stage of the process.
The BRT is therefore concerned that not only has no framework agreement
been reached, but one still seems to be a long way off. The BRT recognises
and welcomes the progress that the negotiators have made in many areas
under discussion, but is concerned that momentum will be lost as time passes
without an agreement. In view of the political calendar in 2017, the BRT
considers it difficult to maintain momentum beyond the end of 2016. The BRT
stresses that 2016 represents the best window of opportunity for concluding
the negotiations of the EU-Japan FTA/EPA.
For this reason, the BRT reiterates its call from last year, that “[t]he BRT
believes that an aim of a speedy conclusion must come together with a highlevel of ambition. Should a sufficiently high level of ambition seem difficult toachieve on the basis of the technical negotiations, the BRT urges, for the sakeof our economies, political leaders at the highest level to intervene to resolve

1Part 1 – 2007: http://www.eu-japan-brt.eu/system/files/joint_recommendations_june07.pdf

3the deadlocks and bring the negotiations to a timely and ambitious
conclusion”2.
The BRT is strongly convinced that the EU-Japan FTA/EPA will lead to an
expansion of trade and investment, job creation and acceleration of growth inboth economies, as well as contributing to the creation of new opportunities for
global growth. The BRT highlights its request to the highest Authorities of the
EU and Japan to focus on addressing the remaining obstacles to theconclusion of a comprehensive, ambitious, high-level, and mutually-beneficial
FTA/EPA as early as possible.
The Working Party Recommendations presented at this year’s meeting
indicate the areas where the BRT can help facilitate the FTA/EPA negotiations.
An EU-Japan FTA/EPA, along with TPP and TTIP, will complement WTO rules
to facilitate international trade, and deepen regulatory cooperation, not only topromote the harmonisation of standards between the EU and Japan, but also
to act as a catalyst for regulatory harmonisation on a global scale.
Multilateral Cooperation
The BRT hopes that the Authorities of the EU and Japan will also continue tocooperate within the scope of the G7 and G20 to undertake measures forcybersecurity and cross-border data flows. In particular, in order to ensure thecoherence of data privacy and data free flow between the EU and Japan, theBRT hopes that the Authorities of both the EU and Japan will start their workon establishing a framework as soon as possible, recognising the EU-US
frameworks, so-called ‘EU-US Privacy Shield’.
Bilateral Cooperation
The BRT recognises that the upgrading of global value chains requires the
adoption of global rules to eliminate non-tariff measures which may obstruct
trade, and calls on both governments and businesses to further promoteregulatory cooperation, as the BRT has advocated for many years. The BRT
welcomes the fact that in the joint press statement of the EU-Japan Summit in2015, all Leaders expressed great expectations for further progress inregulatory cooperation between the EU and Japan, while noting thatcooperation will also need to be dealt with via the FTA/EPA negotiations.
The BRT also recognises the importance of measures to promote resource
efficiency/circular economies, and calls on the Authorities to cooperate further
to promote such policies in a manner consistent with fostering economic
growth.

2 Part 1 – 2015: http://www.eu-japan-brt.eu/system/files/Part%201%20Final.pdf

4The BRT further encourages the transfer of information and business skills
through the growth of FDI by European and Japanese companies and financial
institutions in the EU and Japan, thereby contributing to improvements in social
infrastructure, technological innovation, job creation and economic growth.
At the same time, the BRT seeks to address various global challenges throughexpanded and deeper cooperation between the EU and Japan. In particular, itseeks opportunities for cooperation and investment in life sciences,
biotechnology,
healthcare,innovation,energy,naturalresources,
environmental protection, climate change, demographic challenges, financial
markets, support for SMEs, and human resource development.
Finally, the BRT requests the Authorities of the EU and Japan to address thefollowing issues:(1) Trade relations; investment and regulatory cooperation; financial
services, accounting and taxation
The BRT calls on the EU and Japan to: Work for the conclusion of a comprehensive, ambitious, high-level andmutually beneficial FTA/EPA as early as possible. 2016 represents the best
window of opportunity to conclude the negotiation.
Furthermore the BRT:
 Expects further progress in WTO’s DDA negotiation to reach a new stage,
which should result in a mutually beneficial outcome for both developed
and developing countries.
 Strongly supports the regulatory cooperation to eliminate barriers to tradeand investment, and the joint development and application of international
harmonised technical requirement and procedures for the testing andapproval of products so as to minimise re-certification.
 Supports the timely development of business. Specifically, the BRT calls for
expansion of the number of bilateral social security agreements that havebeen concluded and for liberalisation of the movement of intra-corporatetransferees within the framework of an FTA/EPA.
 Recommends developing measures that will promote and assist eachother's SMEs within their own jurisdictions. The BRT also calls forcross-support, such as logistic support, various tax incentives, and othermeasures, to be included in the EU-Japan FTA/EPA negotiations.
 Supports the creation of an internationally fair taxation framework and levelplaying field. However implementation of BEPS Action Plan should not5create additional administration burden on business. The BRT moreoverrecommends pursuing a simpler, lighter and sensible tax system andeliminating double taxation.
 Maintains serious concern over the European Commission’s proposed
financial transaction tax.
Moreover, the BRT calls for the EU Authorities to speedily resolve the
EU-specific issues identified in the Working Party 1 document by the Japanese
Members of the BRT, and for the Japanese Government to resolve theJapan-specific issues identified in the Working Party 1 document by the EU
Members of the BRT.
(2) Life sciences and biotechnology, healthcare and well-being
Introduction
 The EU and Japan should formulate concrete strategies and action plans inLife Sciences & Biotechnology, thereby focusing on measures to support
the improvement of efficient healthcare practices, food security and supply
and innovations in biotechnology.
General The EU and Japanese Authorities should set up a clear framework to
implement the Nagoya Protocol on “Access to Genetic Resources”
including the necessary coordination with industries.
Healthcare (Pharmaceuticals, Medical Devices, Medicinal Gases, etc.)
 The EU should reinforce its innovation policy for member states and clarify
its healthcare policy, resulting in the appropriate assessment of the value ofpharmaceuticals and medical devices. In addition, MHLW should consult all
key stakeholders before and throughout the trial introduction of
cost-effective HTA (Health Technology Assessment).
 Japan should further support the implementation of new
innovation-rewarding pricing systems for pharmaceuticals, including
revision or reversal of the proposed changes to the market expansion rules,
moving towards eventual abolition of those rules, and the abolition of the
14-day prescription rule. Such measures would enhance the pricing
system’s promotion of innovative products.
 Japan should promote an innovation-rewarding pricing system for medical
devices in order to move towards a product-based, market-oriented
reimbursement pricing system for these products.

6 Japan should not adopt a yearly revision of reimbursement, which would
have a negative impact on the motivation of both pharmaceutical andmedical device companies to make investments for the introduction of new
products to the Japanese market.
 The EU and Japan should improve the pharmaceuticals and medical
device business environments by proceeding with regulatory
harmonisation and further extension of “Mutual Recognition Agreements” inorder to avoid redundant inspections of manufacturing facilities (e.g.
injectable pharmaceuticals and APIs) and ensure recognition of quality
management audit results for lower risk medical devices.
 National tests for vaccines should be eliminated or reduced to an absolute
minimum.
 Japan should support the reinforcement of strict regulations for GMP on
Medicinal Gases.
Animal Health The EU should introduce a 1-1-1 concept (one dossier – one assessment –one decision on marketing authorisation) for all animal health products,
thereby further harmonising the regulatory requirements for productregistrations, shortening review times and recognising GMP certification for
veterinary products.
 Japan should shorten the review times for new applications/productregistrations in animal health.
 The EU and Japan should promote the responsible use of antibiotics inanimal health.
 Japan should clarify registration requirements and shorten the review
process for introducing recombinant vaccines from the EU.
 Japan should promote animal welfare in animal drug administration by
accepting more overseas data and alternative approaches.
Plant Protection & Biotechnology
 The EU and Japan - working closely with the private sector - should speed
up research in plant protection and biotechnology and inform the public
regularly and accurately about the state of GMOs, based on soundscientific knowledge.
 The EU and Japan should shorten the review times for new applications/product registrations in both plant protection and biotechnology.
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(3) Innovation, information & communication technologies
ICT The EU and Japan should lead global rule making by taking coordinatedactions based on common principles to fully exploit the potential of socialtransformation by digital technology (cross-border data flows, cybersecurity,protection of intellectual property and technology on business, etc.).
Innovation in General Given the critical roles of digital technology, such as Internet of Things (IoT),
in supporting other sectors, the BRT urges both sides’ Authorities tomobilise all necessary tools for development and deployment of innovative
solutions and products.
Aeronautics
 Joint technology and project development are necessary to maintaintechnological leadership and competitiveness. More government-led
cooperation and support are needed.
Space Open markets and cooperation are key for the EU and Japan toachieve their goals in space and for industry to reach its potential. The
EU-Japan Space Policy Dialogue should bear concrete fruit from industrial
cooperation.
Defence industries
 We urge a continuation of the progress now being made between Japanand individual EU member states. We also recommend discussions
between Japan and the European Commission and the European Defence
Agency.
Railways The EU and Japanese railway industries can together continue setting
world standards with implications for expanded cooperation in third country
markets. Safety is a promising cooperation area, as well as harmonisationof technical requirements and mutual recognition of standards.

(4) Energy, environment, sustainable growth The EU and Japan support the 2015 COP21 Paris Agreement as a fair andeffective framework adopted by consensus of all participating countries. To
ensure that all major emitting countries ratify this agreement, as well as toenhance its fairness and effectiveness, it will be imperative to establish asystem with which the promises made by each ratifying country and theirfulfilment can be reviewed internationally.
8 There are invariably advantages and disadvantages to the adoption of
every energy source, and there is no form of energy that provides complete
satisfaction from both a stability and economic standpoint. In view of this, amulti-layered energy supply structure capable of functioning not only during
times of peace but also in emergencies should be established.
 Although fossil fuels emit greenhouse gases, they excel in terms of
economic efficiency and output stability. On the other hand, there is keeninterest in nuclear power generation from the viewpoint of promoting
measures against global warming and stably securing energy that is lesssusceptible to fluctuations in fossil fuel prices. Renewable energy is
expected to play a major role in countermeasures against global warming,and there have been recent signs of improvement in their cost aspect,which had been considered an issue against the use of renewable energy.
There are various options for renewable energy, including wind, solar,hydro, geothermal, tidal, and biomass. Also, there are remaining economic,
efficiency, and stability issues that need to be addressed, pointing to theneed for further discussions.
 Energy conservation is an initiative aimed at fulfilling the need for economic
efficiency, environmental compatibility, and energy security, and industries
in the EU and Japan should make every possible effort to develop andpromote the use of energy conservation technologies.
 Although resource prices are declining in the short term, resource
constraints are likely to inhibit economic growth over the medium to longterm. This is why it is imperative to improve the efficiency of resource use.
Actions to recycle or reuse for circular economy implemented by businesssectors accelerate resource efficiency. On the other hand, the pursuit ofresource efficiency through exceedingly regulatory approaches could
inhibit economic growth. Therefore, it is desirable to choose an approachthat will lead to economic growth, such as promotion through voluntary
efforts by stakeholders.

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