EU-Japan Business Round Table

RECOMMENDATIONS"Opening a New Chapter in EU-Japan Relations"
29 & 30 April 2013
Paris, France
1. Introduction
The EU-Japan Business Round Table (BRT) held its Annual Meeting in Paris on 29& 30 April 2013 with the theme of "Opening a New Chapter in EU-Japan Relations".
The meeting was chaired by Dr. Jean-Yves Le Gall, former Chairman and CEO of
Arianespace, and by Mr. Osamu Nagayama, Chairman and CEO of Chugai
Pharmaceutical Co., Ltd.
The BRT had the pleasure and honour of welcoming high-level representatives of
the Japanese and EU Authorities: Mr. Kazuyoshi Akaba, State Minister of Economy,
Trade and Industry of Japan, Mr. Masaji Matsuyama, Parliamentary Senior
Vice-Minister for Foreign Affairs of Japan, Mr. Soichiro Seki, Director-General forInternational Affairs, Global ICT Strategy Bureau, Ministry of Internal Affairs andCommunications of Japan, Mr. Daniel Calleja Crespo, Director General forEnterprise and Industry of the European Commission, and Mr. João Aguiar Machado,
Deputy Director General for Trade of the European Commission.

The meeting consisted of the following:
1. Discussion and adoption of general and sectoral recommendations;
2. Discussions on (i) the negotiations on a deep and comprehensive Free Trade
Agreement (FTA) / Economic Partnership Agreement (EPA) and a political andcooperation agreement between the EU and Japan, (ii) EU-Japan cooperation
including business with / in emerging economies, and (iii) resources issues;
3. Discussions with the Japanese and EU Authorities.
The BRT Members agreed to submit their joint recommendations to European
Council President Herman Van Rompuy, European Commission President José
Manuel Barroso, and Prime Minister Shinzo Abe of Japan.

2. BackgroundIn the EU, there are tentative signs that the European economy is starting to regain alittle of the confidence that it lost over the last couple of years. But there is much
more to do before businesses fully regain the confidence they need to put in place
private investment, which is the real driver of growth and employment. But Europe
must remain cautious as the virtuous circle of greater financial market stability, and1

improving confidence that the Euro Area is starting to benefit from, can quickly bereversed if political leaders become complacent and ease off on reforms.
In addition to the EU-Japan FTA and a number of on-going FTA negotiations, the EU
has recently launched discussions with the United States of America for anambitious and comprehensive free trade agreement. European businesses welcome
these initiatives as expansion of free trade, and opening markets for investment,
services, public procurement and raw materials are an opportunity for Europe.
In Japan, the Liberal Democratic Party and New Komeito won the general elections
last December. New Prime Minister Shinzo Abe has set out his policy for reviving the
economy and fighting deflation, consisting of “three arrows”: “bold monetary policy,”“flexible fiscal policy” and “growth strategy.” His Cabinet has implemented measures
to promote cooperation between the Government and the Bank of Japan onmonetary policy and put forth a national budget aimed at stimulating economic
growth and strengthening the nation’s infrastructure against natural disasters.
In addition, as part of its initiatives to spur economic growth, the Cabinet is steppingup efforts to establish economic partnership agreements with Japan’s major trading
partners. The Government will soon officially join the TPP negotiations, subject to thecompletion of the TPP member states' domestic processes; it has also started talks
on a Japan-China-South Korea free trade agreement. Negotiations for an RCEP, aregional comprehensive economic partnership agreement between Japan, China,
South Korea, Australia, New Zealand, India and the ten ASEAN member states, will
be launched soon. The market has responded positively to these policy measures,and business and consumer confidence has been improving.
The EU and Japan are two of the world’s most advanced economies. They sharecommon values. Together they account for some 30% of global GDP and 40% ofworld trade. Further enhancing EU-Japan cooperation will help create new growth in
the EU and Japan and will contribute to meeting such pressing challenges asimproving their international competitiveness; promoting trade by strengthening andenforcing multilateral trade rules; and preparing for the indispensable shift to asustainable world economy taking into account climate, energy, resources anddemographic challenges.
In its Joint Statement of April 2012, the BRT urged the European Commission and
the Council of the EU to speed up their respective work on the mandates toauthorise the European Commission to negotiate an FTA / EPA and a political andcooperation agreement with Japan, whilst also calling on the European Commission
and the Government of Japan to expedite their efforts to complete the scoping
activities. On 25 March 2013, following the conclusion last year of the scoping
exercise, the EU and Japanese leaders decided to launch negotiations for anagreement covering political, global and sectoral cooperation (“Cooperation
Agreement”) and an Economic Partnership Agreement (EPA) / Free Trade
Agreement (FTA) and expressed their commitment to the earliest possible
conclusion of these two agreements. The EU and Japanese Authorities held the firstround of negotiations from 15 to 19 April.

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3. Calls and Recommendations
The BRT welcomes the decision made by the EU and Japanese leaders to open a
new chapter in EU-Japan bilateral relations.
In the expectation that a deep and comprehensive FTA / EPA and a Cooperation
Agreement between the EU and Japan will boost EU-Japan trade and investment
and promote job creation and economic growth in both economies, the BRT
recommends that the FTA / EPA negotiations should be completed as early as
possible and their outcome be compatible with the high level of their ambition. The
BRT calls upon both Authorities to ensure that the negotiations will be undertaken ina transparent manner in order to enable industry to take possible outcomes into
account in future business strategies. The BRT also reiterates its call that theresulting EU-Japan FTA / EPA should be ambitious, balanced, mutually-beneficial,
comprehensive, and tackle major outstanding issues such as tariffs, non-tariffbarriers, public procurement, investment, services, competition, IPR, regulatory
cooperation including harmonisation and the mutual recognition of regulations andstandards. In addition, addressing elimination of tariffs and non tariff barriers inparallel in the negotiations is necessary to guarantee a successful outcome.
The Cooperation Agreement should provide support to the development of stronger
EU-Japan relations, commit to a broad dialogue on many forms of politicalcooperation, joint research and common undertakings, as well as common rules inbilateral collaboration, as befits two of the world's most advanced democracies.
The BRT also believes that, as the sole organisation of its kind consisting ofEuropean and Japanese business leaders, it can play an important and useful role insupporting those negotiations, and calls on the EU and Japanese Authorities to takefull account of proposals and recommendations from the BRT as they work towards
concluding an FTA / EPA and a Cooperation Agreement.
The BRT is a strong supporter of the multilateral trading system and expects that thisyear’s 9th WTO Ministerial Conference, scheduled in Bali in December, will conclude
an ambitious agreement on trade facilitation. Further progress must be achieved inother key areas, such as on non-tariff barriers. The BRT also follows with interest the
recently launched negotiations for an international services agreement and calls for
its design to be anchored within the WTO system. The WTO should also makeprogress on plurilateral sectoral agreements, and work towards clearer WTO
guidelines on the coherence between bilateral / regional / multilateral trade
agreements and the WTO system. Finally, the WTO should explore other topicalissues such as the relationship between trade and investment, competition, energy
and raw materials.
The BRT also makes the following requests to the EU and Japanese Authorities:(A) Trade, Investment, and Regulatory Cooperation
The BRT calls on the EU and Japan to:Conclude negotiations on the EU-Japan FTA/EPA as early as possible, while
ensuring that the agreement is ambitious, comprehensive and mutually beneficial.
The agreement should tackle major outstanding issues such as tariffs, non-tariffbarriers, public procurement, investment, services, competition, IPR, regulatory3

cooperation including harmonisation and the mutual recognition of regulations,standards and market authorisations. In addition, addressing elimination oftariffs and non tariff barriers in parallel in the negotiations is necessary toguarantee a successful outcome.
This should promote an ambitious expansion of trade and investment leading todeeper economic integration between the EU and Japan.
Provide greater mutual support of the WTO Doha Development Agenda to ensurethat the WTO remains a leader in the creation of rules and setting of standards on
trade at the multilateral level, encouraging its members to see the advantages oftrade liberalisation.

Strive to mutually recognise products certified under similar and equivalent
product standards and to cooperate on harmonising regulations and systems
where possible. They should also aim for enhanced cooperation in promoting
new global standards.

Support the timely development of business. Specifically, the BRT calls for
expansion of the number of bilateral social security agreements that have beenconcluded and for liberalisation of the movement of intra-corporate transferees
within the framework of an EPA/FTA

Aim for better regulation by improving information exchange between the two
Authorities and with business, and focusing on both existing and future
regulation.



Develop measures that will promote and assist each other's SMEs within theirown jurisdictions. The BRT also calls for cross-support, such as logistic support,
various tax incentives, and other measures, to be included in the EU-Japan
FTA/EPA negotiations.

Moreover, the BRT calls for the EU Authorities to speedily resolve the EU-specificissues identified in the Working Party A document by the Japanese Members of the BRT,
and for the Japanese Government to resolve the Japan-specific issues identified in the
Working Party A document by the EU Members of the BRT.

(B) Life Sciences and Biotechnologies, Healthcare and Well-Being
General The EU and Japan should formulate concrete strategies and action plans in life
sciences & biotechnology, thereby focusing on measures to support the
improvement of efficient healthcare practices, food security / supply and innovations
in Biotechnology.
Health care The EU Authorities should reinforce its innovation policy to Member States andclarify its healthcare policy, resulting in the appropriate evaluation of the value ofpharmaceuticals. In addition, the MHLW should initiate the HTA (Health Technology
Assessment) dialogue among stakeholders.
 Japan should further support the implementation of new innovation-rewarding pricing
systems for pharmaceutical products, including the abolishment of special price cuts
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at first generic launch, and the abolishment of the rule of re-pricing by market
expansion. Enhance competitive pricing systems in order to promote innovative
products.
Japan should promote an innovation-rewarding pricing system also for medical
devices in order to move towards a product-based, market-oriented reimbursement
pricing system.
The EU and Japan should improve the pharmaceutical and medical device businessenvironments by proceeding with regulatory harmonisation and further extension of“Mutual Recognition Agreements” in order 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.
Japan should support the reinforcement of strict regulations for GMP on medicinalgases.

Animal Health Europe should introduce a 1-1-1 concept (one dossier – one assessment – one
decision on marketing authorisation) for all animal health products, thereby further
harmonise the regulatory requirements for product registration, shorten review times
and recognise the GMP certification for veterinary products.
 Europe and Japan should promote the responsible use of antibiotics in animal
health.
Plant Protection & Biotechnology
 The EU and Japan should speed up research in plant protection & biotechnology andinform the public regularly and accurately about the state of play on GMOs, based on
sound scientific knowledge, closely working with private sectors.
 The EU should shorten the review times for new applications / product registrations
in both plant protection and biotechnology.

(C) Innovation, Information & Communication Technologies
ICT ICT is a driver of economic growth. The Authorities should uphold the balanced
multi- stakeholder approach that enabled the success of internet.
 The BRT requests both Authorities to work intensively on the trade liberalisation ofservices over the internet and ITA expansion.
 To further promote cloud computing the BRT calls for a review of the harmonisationof legal instruments such as cross border data flows.
 To sustain a free and global flow of information, the internet environment must be
trusted by society and industry. Both sides’ Authorities should cooperate on building
a safe and secure society by enhancing cyber security while protecting privacy andinvolving both the public and private sectors.
Innovation in General Both sides’ Authorities should increase their bilateral cooperation on common
challenges. The EU and Japan should improve their bilateral STI cooperation
arrangements and complement them with actions such as increasing the reciprocal
access to each other's research facilities.

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Aeronautics
 The BRT requests that the Authorities establish a permanent dialogue to upgradesignificantly the scale of EU-Japan industrial cooperation in aeronautics. They should
also establish a broad cooperation on environmental issues. Cooperation between
both aircraft certification authorities should be upgraded.
Space The BRT requests that the Space Authorities’ bilateral meetings should involve not
only the ESA and JAXA but also the European Commission and Japan’s Cabinet
Office. The Authorities should significantly upgrade the scale of industrial
cooperation in space. They should establish a formal and permanent dialogue onsatellite technology.
Defence The Authorities should, on the basis of bilateral agreements to exchange and protectclassified information, take advantage of the relaxation of Japan’s three Principles on
Arms Exports to develop strong ties in joint development and other cooperation.
Export control systems should be harmonised.
Railways The Authorities should promote a dialogue focusing on safety, innovation to foster
the modal shift to rail, and life cycle costs optimisation in railway transportation.

(D) Financial Services, Accounting and Tax Issues
On global financial market reforms:

The BRT recommends avoiding excessive ‘ring-fencing’ in each jurisdiction andduplication of regulations by ensuring effective supervision by the home country
and international coordination, because any constraint on flow of global banking
services could cause negative effects on corporate business activities.

The BRT requests that any financial market reform should fully address its
impact on effective functioning of relevant financial and capital market activities,
particularly for liquidity in the markets, before being introduced.



The European and Japanese Authorities and industries should continue to unite theirefforts to ensure an internationally consistent and level-playing field implementationof US regulations while preventing excessive extra-territorial and other prejudicial
application thereof.



The BRT expresses serious concern over the recently released EC’s draft Council
Directive implementing enhanced cooperation in the area of financial transaction tax(FTT), particularly with respect to its wider application and extraterritorial impact. If
imposed, the FTT will increase trading costs and result in reduced volume offinancial transactions and decreased liquidity, could impair legitimate hedging
activities by business corporations and impact primary markets eventually.

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(E) Energy, Environment, and Sustainable Development
Natural Disasters and Safety Measures
 The BRT requests that European and Japanese authorities adopt necessary
measures to optimize pre-crisis, crisis and post-crisis management: identification ofrisks and associated impact (human, environmental, technological, etc.), facilitatinginternational support during crisis, and strengthening collaboration towards anefficient and speedy recovery.
Alternative and Renewable Energies
 The BRT requests that Japan and EU further extend their collaboration on energy
issues and work together to promote a long-term strategy on a stable, safe,
competitive yet sustainable energy supply, addressing more specifically the following
issues: development of renewable energies, remodeling of energy systems, nuclear
safety and international standardization, nuclear fuel cycle, development of smart
cities and standardization of equipment used in smart grids (EV, batteries, etc.)
Global Warming Issues
 European and Japanese authorities should promote together a post-Kyoto frameworkon greenhouse gas emissions reductions
 The BRT requests European and Japanese authorities to set CO 2 emissions targets
in full transparency, fairness, and through dialogue with stakeholders.
Energy Efficiency and Energy Savings
 The BRT requests that Japan and EU continuously refine their regulations andincentives to promote energy efficiency and energy savings, including building andhousing insulation standards.
Raw Materials and Resources use
 The BRT request that European and Japanese authorities enhance theircollaborative actions on raw materials supply issues: mitigation of price commodity
volatility, R&D on recycling and material substitution, supporting countries to fulfill
EITI’s principles, etc.

(A) - (E) summarise the BRT's detailed regulatory and sectoral Recommendations.

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