EU-Japan Business Round Table Annual Meeting

JOINT RECOMMENDATIONS“EU-Japan – The Dawn of a New Relationship”
11 July 2017, Brussels(Final Version)

1. Introduction
The 19th annual meeting of the EU-Japan Business Round Table (BRT) took place atthe Palais d’Egmont in Brussels on Tuesday, 11 July 2017.
The meeting was held just five days after the 24th EU-Japan Summit in Brussels at
which it was announced that an “agreement in principle” had been reached for an
EU-Japan Economic Partnership Agreement (EPA).
The 2017 BRT meeting gave the Round Table’s member companies andorganisations the opportunity to react to this news and also to address two other key
issues for EU-Japan business – the digital economy and EU-Japan cooperation onscience, industrial technology and innovation. The BRT Members were pleased towelcome representatives of the EU and Japanese Authorities to the Annual Meetingat which both Members and Authorities engaged in high-level discussions. The BRTadopted and submitted these 2017 Joint Recommendations, also containing key
recommendations from the BRT’s Working Parties, to the European Commission andwill subsequently submit them to the Government of Japan and to the EuropeanCouncil.
2. Economic and Global Context
Europe and Japan are among the largest economies in the world. The past year has
seen mixed economic news with Europe and Japan benefiting from the cyclicalrecovery in global manufacturing and trade that started in late 2016 1 . However,growth predictions are low and inflation levels in Japan and parts of the euro area
have not seen much improvement. Japan benefited from strong net exports andsome euro area countries, including Germany and Spain, benefited from strong
domestic demand. The IMF has predicted 1.2% growth for Japan and 1.7% for theeuro area in 2017, with lower growth rates in 2018 (0.6% and 1.6, respectively)2.
More open trade could boost demand for exports on both sides. This is the reason
why the conclusion of the EU-Japan EPA will play a crucial part in this economic
renewal.
1 http://www.imf.org/~/media/Files/Publications/WEO/2017/April/pdf/exesum.ashx
2 http://www.imf.org/~/media/Files/Publications/WEO/2017/April/pdf/c1.ashx

Three intergovernmental dialogues – the G7 Summit in Taormina, the EU-JapanSummit in Brussels and the subsequent G20 Hamburg Summit – gave opportunities
for Europe and Japan to demonstrate global leadership and engagement.
In another example of EU-Japan engagement, the CeBIT trade fair highlighted themutually beneficial roles that Europe and Japan can contribute to digitaltransformation. Following the event, at which Japan was this year’s Partner Country,
a Japan-EU Joint Press Statement on Facilitating the Free Flow of Data3 called for a“strengthening of the dialogue on the data economy and other issues” such as theEU-Japan ICT Policy Dialogue and the EU-Japan Industrial Policy Dialogue. Thepress statement further noted the signing of a Memorandum of Understanding for IoT
cooperation between the Japanese IoT Acceleration Consortium and the European
Alliance for Internet of Things Innovation. The joint press release also “committed[the EU and Japan] to a continuous exchange of views, using such opportunities as
the EU-Japan Business Round Table.”
The significance of the momentum that the EU and Japan have established at thepresent time cannot be overstated. This momentum must be maintained,strengthened, and solidified.
3. Evolution of the EU-Japan Economic Partnership Agreement
Ten years ago, the BRT “committed [itself] to creating the necessary conditions todeepen the full potential of EU-Japan economic relations, which are far from being
fully exploited” and called for the feasibility of a bilateral to be considered. The BRT
welcomed the formal opening of EPA negotiations in 2013 as “a new chapter in EUJapan bilateral relations” to deepen the relationship between EU and Japan andcalled for their completion as early as possible and with an outcome compatible withthe high level of their ambition. The BRT’s initial optimism became tempered withconcern given the pace of the negotiations. Throughout the past four years the BRThas emphasised that the final outcome should be “comprehensive, ambitious andmutually-beneficial”.
With the past year seeing uncertainties caused by geopolitical issues such as theUK’s Brexit vote and the change in priorities for the USA, an ambitious EU-Japan
EPA would transform EU-Japan relations; deliver tangible benefits; and provide thecertainty that companies look for when making investment and other strategic
decisions.
An EU-Japan EPA will also help ensure that the EU and Japan play key roles inharmonising rules by using international standards, being the leading voices inestablishing global trade rule-making, deterring protectionism, and, last but not least,
providing a much-needed impetus to our economies.

3 http://www.meti.go.jp/english/press/2017/0321_002.html - as of November 2022, this weblink no longer

works. An archived version of the page can be found in the National Diet Library WARP project athttps://warp.da.ndl.go.jp/info:ndljp/pid/10341576/www.meti.go.jp/english/press/2017/0321_002.html

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It is therefore with considerable delight that the BRT welcomed the news that the EU
and Japan have reached an “agreement in principle” on an EPA. The BRT recognisesthat this development is a considerable achievement and means that the EU andJapanese business communities can be optimistic that a final agreement will bereached in the near future. In the meantime, the BRT wishes that the negotiating
momentum is maintained and urges the EU and Japanese Authorities to bring thenegotiations to a successful conclusion and to resolve the remaining questions forthe benefit of both parties. The BRT pays tribute to the negotiators for their diligenceand hard work up this point. Along with other industry and other stakeholders, theBRT awaits the opportunity to study the text of the final agreement.
4. Strategic/Key Topics: Digital Economy, and Cooperation on Science,Industrial Technology, and Innovation
In addition to holding a detailed discussion on the EPA negotiations and its
exchanges with high-level representatives of the EU and Japanese Authorities, theBRT’s annual meeting addressed two already important areas for EU-Japan
collaboration which would undoubtedly be strengthened by an EPA:
Digital Economy
Digitalisation has ushered in a new industrial revolution, delivering societal, economic
and other benefits. EU-Japan cooperation on artificial intelligence (AI), Internet ofThings (IoT), and connected industries, underpinned by standardisation,interoperability, free flow of data, and future-proof regulatory frameworks will deliver
many additional benefits and offers opportunities for all sectors of the economy.
Dialogues on digital issues between the EU and Japan are welcome and can provide
an invaluable opportunity to ensure EU-Japan cooperation and coordination.
However, some significant challenges remain. It is important that the Authorities,
industry, researchers and other stakeholders work together to find appropriate, timelyand effective solutions.
Science, Industrial Technology and Innovation Cooperation
EU-Japan cooperation in science, industrial technology, research and development
and in innovation can provide breakthrough technologies that draw on thecomplementary expertise and know-how of EU and Japanese researchers, andprovide economic and non-economic benefits. Most BRT member companies haveinternational research activities. The BRT has identified three areas with goodprospects for closer EU-Japan cooperation – AI & IoT, future technology linked toaeronautics, and 5G. Memorandums of Understanding and coordinated and joint
research calls would complement existing private-funded research activities and leadto a convergence of industrial standards.
5. BRT’s Recommendations for the Future
Now that an agreement in principle has been reached on the EPA, the BRT urges theEU and Japan to begin looking beyond the EPA agreement and towards establishinga new high-level cooperation framework, which befits this innovation and digital age.

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Firstly, industry seeks a voice in any post-agreement monitoring mechanism toenable industry to identify potential issues that may arise during implementation ofthe Agreement. Even more critical will be how to handle new issues that arise after
the EPA has been concluded and pre-existing issues that were not covered in theEPA. A monitoring mechanism for all these issues (non-tariff measures (NTM), tariffs,etc.) should be addressed in a binding manner within the overarching EPA framework
giving way to concrete outcomes and not just addressed through official ‘dialogues’.
To ensure transparency and an effective implementation of the agreement, the BRT
calls on both Authorities to make public items as they are implemented and assess
their impact on business, showing how the implementation addresses the particularissue raised in the EPA and how it might address other related issues including those
not discussed in the EPA. We recommend that the respective lists be updated
regularly.
Secondly, the BRT reiterates its view that the upgrading of global value chains andsecuring the fruits of innovation require not only the adoption of global rules toeliminate non-tariff measures which may obstruct trade, but also forward-looking
creative regulatory cooperation including a convergence of standards.
For these reasons, the BRT calls on the Authorities of the EU and Japan to initiate
creative regulatory cooperation across the board and ensure the substantial
participation of industries from the EU and Japan in the process. We are ready tocontribute and provide input for the initiative.
Thirdly, in the realm of data security and data flow, the BRT emphasises the need for
resolute action and measures in order to ensure the coherence of data privacy andthe free flow of data between the EU and Japan.
In this regard, the BRT sincerely welcomes the Joint Declaration on the free flow of
information by Prime Minister Abe and President Juncker on 6 July in Brussels4 inwhich data flow, data protection, and the convergence of EU and Japaneselegislation were emphasised as representing the cornerstones of the digital economy.
The BRT also expects that the inaugural high level meeting and the expert meetingon Data Economy will be repeated, and hopes that the Authorities of both the EU andJapan will work on establishing a framework in the near future based on thedialogues.
Finally, the BRT calls on the Authorities of the EU and Japan to continue their efforts
to conclude an EPA in the near future, by building on last week’s agreement inprinciple and maintaining the momentum that both sides have worked hard toachieve.
Additional recommendations, prepared by the BRT’s four Working Parties, can befound in the Appendix.

4 http://europa.eu/rapid/press-release_statement-17-1917_en.htm

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