Japan Machinery Center for Trade and Investment
401, Kikaishikou Building
3-5-8 Shibakoen,
Minato-ku,Tokyo105-0011
JAPANTelephone: +81-3-3431-9507
Facsimile: +81-3-3436-6455

JMC Response to the Public Consultation on the future of EU Japan tradeand economic relations
Do you wish your contribution to be made public?
- Yesa) What is the name of your organisation?
- Japan Machinery Center for Trade and Investment (JMC)b) What type of organisation is it?
- NGOc) What is your organisation's main area of activity?
- Japan Machinery Center for Trade and Investment (JMC) is a non-profit organization that
represents Japan’s major electronics and machinery manufacturers, trading companies andengineering companies. JMC’s activities emphasize multilateral trade and investment rules,
bilateral free trade agreements, environmental protection regulations, national industrialpolicies, trade related security measures, and trade insurance. The Japanese machinery
sector accounted for over 70 percent of total Japanese exports in 2009 to the EU.
Q1. What should be the objectives and priorities of the future EU - Japan trade andeconomic relationship? How should the EU pursue these objectives?
Japan and the EU have so far been building a mature and stable trade and economic
relationship, sharing many common values. It is important to draw on this relationship tocreate high level rules that can become a global standard to be disseminated widely
throughout the world. As a framework to do so, there is a need to quickly create the Japan EU Economic Integration Agreement (EIA) that is being proposed in the EU - Japan Business
Round Table (BRT).
Q2. How could the effectiveness of regulatory and trade dialogue/cooperation between EUand Japan be improved?
The JMC has more than 10 years of experience in using questionnaire surveys to compile
trade and investment barriers faced by Japanese companies in various countries and regional
integrations, and we have been requesting improvements. From our experience, we found that
there were more types of regulatory barriers faced by companies in countries and regions withcloser trade and investment relations and greater corporate presence. Japan and the EU haveJapan Machinery Center for Trade and Investment

been involved in mutual trade and investment for a long time and companies have beendeveloping business in various areas. In this context, Japan and the EU have been mutually
identifying many problems involving regulatory barriers up to now, and have been requesting
improvements. The JMC is aware that the EU and European companies have been facing
many regulatory barriers in Japan and have been making many requests for improvements.
We are also aware that Japanese regulations that differ from those in Europe have been
identified as problems. On the other hand, according to a survey done by the JMC, Japanesecompanies have been facing many different trade and investment barriers in the EU, and havebeen requesting improvements through the regulatory reform dialogue between Japan and theEU and other channels. (Please refer to the following URL for a list of barriers:
http://www.jmcti.org/mondai/top_e.html)
Needless to say, regulatory measures that are inconsistent with international rules should bepromptly redressed in accordance with the WTO rules. At the same time, Japan and the EUneed to mutually raise issues and make proposals for regulatory reform in order to promoteeven closer Japan - EU relations.
Merely having dialogue, however, would have little effect. If we are to have regulatory
reform that entails a certain level of sacrifice domestically, we would not be able to hope forprogress nor a high level of commitment including at the political level unless we have someform of treaty negotiations. For this reason, it is imperative to have broad-ranging discussions
including regulations and trade in the EIA negotiations.
In the EIA, it would be effective to; 1) include high level disciplines for liberalization andfacilitation over a broad area including trade and investment in goods and services, movementof people, standards and conformity assessment, 2) promote free and smooth movement ofpeople, goods, and capital between Japan and the EU, and 3) have regulatory dialogue andcooperation in line with the economic reality by incorporating a mechanism for cooperationand improvement of business environment in the EIA.
Q6. Are you concerned by tariffs or measures of equivalent effect in your field of activity?
Firstly, it is important to eliminate the high tariffs remaining in specific sectors in the EU suchas consumer electronics combining ICT and AV, copiers, automobiles, bearings, watches, andothers.
Secondly, it is essential to exclude any arbitrary element from the application of tariffclassification. For instance, for ITA related products, taxation based on any arbitraryclassification should be discontinued in accordance with the rulings of the European Court ofJustice and WTO panels, including the elimination of tariffs and other taxes and surcharge.
Thirdly, as a result of the duty drawback clause in the Korea - EU FTA, there will be an effecton competitiveness in the European market which may have an adverse effect on
employment by Japanese companies in the European market. In the event that the Korea - EU2Japan Machinery Center for Trade and Investment

FTA goes into effect, Korean products that can use the duty drawback will gain a competitive
advantage on the EU market if there is no FTA between the EU and the country of thenon-Korean company. Companies, other than Korean companies, that have madeinvestments in the EU for production mainly for marketing in the EU will be compelled toscale down their production in the EU due to a decline in sales arising from a loss ofcompetitiveness. This will lead directly to a decline in local employment and decline inpurchase of parts from local companies, causing serious damage to both the EU and othercountries including Japan that have been contributing to the EU economy.
Fourthly, conversely, if many of the tariffs in the EU can be eliminated through the Japan - EUEIA, it will have a positive effect on local production by Japanese companies in the EU andwe can expect to see greater employment in Europe.
Q9. Should the EU increase cooperation with Japan with a view to further simplifyingand accelerating customs procedures?
Have a pilot test for customs and logistics facilitation using IT with the aim of greater
simplification of customs procedures and speed up of supply chain operations for AEO(Authorized Economic Operator) based on the AEO mutual recognition between Japan andthe EU. More specifically, the aim is to create an environment for customs procedure that is inaccordance with the ACI Guideline (Customs Guideline on Advance Cargo Information)
whose basic concept has already been made known in the WCO (World CustomsOrganization). In order to do so, we would need to consider; 1) the code system for the UCR(Unique Consignment Reference), the common shipment cargo code for the Japanese and EUcustoms, 2) development of a common risk database, and 3) data-sharing by the Japanese andEU customs authorities.
Q11. Should the EU increase cooperation with Japan with a view to improving theprotection and enforcement of certain intellectual property rights?
It is important to cooperate in the Anti-counterfeit Trade Agreement (ACTA) and other fora
for strengthening enforcement of IPR in third countries. EU is taking pro-patent policy, has awell-developed IPR system, and is taking stringent enforcement measures against counterfeit
products. The EU should work with Japan that has a similar system for protection andenforcement of IPR to promote the harmonization and mutual use of various IPR systems.
For instance, it would be effective for Japan, U.S. and the EU to harmonize and mutually use
various application, search and examination practice such as the Patent Prosecution Highway.
It would also be effective to cooperate with Japan and other countries in negotiating aSubstantive Patent Legal Treaty (SPLT) to promote international harmonization of patent law.
Cooperation in enforcement vis-à-vis third countries will also be effective. TheAnti-counterfeit Trade Agreement (ACTA) for strengthening enforcement of IPR and3

Japan Machinery Center for Trade and Investment

international harmonization is expected to be concluded soon with the participation of Japan,
EU, and the U.S. However, developing countries are currently not forthcoming about
participation in ACTA with the exception of some countries. We hope to have the EU
cooperate with Japan and the U.S. to reach an early agreement to ACTA and have it go intoeffect as an Agreement. Japan, the U.S., and EU can then work together to urge China andother countries to join the ACTA.
Q18. In which ways could EU-Japan multilateral cooperation be enhanced in the comingyears?
Tariff reduction/elimination for environmental goods that is now under discussion in theWTO DDA is not only important for promoting trade and investment in environmental goods,
but also necessary for creating a sustainable society.
The EU has been taking innovative industrial policy from the perspective of environmental
protection. EU 2020 also identifies sustainable growth as one of the pillars of its growthstrategy. It has also been agreed at the EU Summit that priority will be given in the near termon energy policy and innovation policy based on this strategy. In energy policy, greater energy
efficiency is particularly important, and many policy initiatives are being taken in that
direction. Similarly in trade policy as well, the EU should work together with Japan and othercountries for tariff reduction/elimination of environmental goods including goods with highenergy efficiency and high energy saving performance.
Q23. Your comments
EU and Japanese economies have already been incorporated into the globalization process
and have been seeking regulatory reform mutually from the perspective of a global market.
Rather than only gathering problems regarding the Japanese market, since there are also
improvements that ought to be made in the EU as well, we would be able to have a moreconstructive discussion if we gather, in parallel, views from Japanese and European
companies and industries on improvements that need to be made in the EU.
Issues regarding tariff rates in Q6, services in Q12,13, and public procurement in Q15 areessentially issues for which improvements should be pursued in the WTO DDA negotiations
and other fora. Since the DDA negotiations are stuck, however, the EIA is the only forum
other than the WTO where any commitment can be made by the Japanese and EU economies
on improvement of these issues.

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