jJOINT STATEMENT
58th U.S.-JAPAN BUSINESS CONFERENCE

Building a Sustainable Future: A Blueprint for U.S.-Japan Leadership
Virtual Meeting
October 6 (United States) and October 7 (Japan), 2021
Members of the U.S.-Japan Business Council and the Japan-U.S. Business Council (the “Councils”)
held the 58th Annual U.S.-Japan Business Conference virtually, on October 5-6 EDT and October
6-7 JST, under the theme, “Building a Sustainable Future: A Blueprint for U.S.-Japan Leadership.”
The COVID-19 pandemic continues to have an extraordinary impact on business and society,further exacerbating existing economic and social challenges. Recovery will require significantly
more international coordination and cooperation from all, including the private sector. In thiscontext, the Conference assembled senior business leaders from the U.S. and Japan, who recognized
the importance of revitalizing economies to achieve sustainable growth, transitioning to a net-zerocarbon future and establishing more resilient and trusted supply chains.
The Councils also believe that the U.S. and Japan should further enhance coordination andcooperation, in close partnership with other like-minded countries that share our basic values suchas freedom, human rights and the rule of law, thereby protecting the enduring principles of ourdemocracies and enabling the international community to build more resilient, sustainable, diverse,
and inclusive societies. Towards these ends, the Councils committed to:
1. Support government policies that promote post-COVID economic recovery andrevitalization. The Councils view COVID-19 as an opportunity to build stronger, moresustainable economic and social systems, and believe that digital and green transformation are
key enablers for sustainable economic growth alongside life science, which will form the basis
to counter future pandemics. The Councils also believe that countering protectionism andrebuilding a free, fair, open, and rules-based economic order through multilateralism areessential for the prosperity of the Indo-Pacific region and the global economy. Thus, theCouncils urge both governments to:• Actively pursue policies supporting the free movement of persons, goods, capital, services
and data, while continuing comprehensive and effective measures to promote medicine andvaccine development and distribution to counter future pandemics;• Facilitate a globally consistent regulatory framework for international travel that establishes
common standards and science-based reciprocal easing of entry restrictions, such as

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recognizing accepted vaccination documentation issued in the other country;
Prioritize the implementation of a forward-leaning, market opening trade agenda, to include
promoting and joining major high-standard trade agreements, such as CPTPP and regional
digital agreements;
Focus on two-way foreign investment and business expansion that will revitalize ourrespective economies and create more well-paying jobs, increase innovation, and add
dynamism, as well as strengthening the bilateral economic partnership;
Address key factors that inhibit innovation and investment, such as high costs of doing
business, overly rigid labor rules, the need for skills upgrades, the regulatory environment,
taxation of globally mobile talent, and administrative procedures;
Facilitate investment and government support for growth sectors that promote innovation
and resiliency in the labor market, while ensuring long-term fiscal sustainability and “wisespending” policies;
Promote digitalization in areas where the pandemic revealed it has been lagging, such as
healthcare, education, and government, and among micro, small and medium-sizedenterprises (MSMEs), while promoting cybersecurity and bridging the digital divide;
Foster an environment that supports inclusive entrepreneurial opportunities and innovation
by increasing gender, racial and ethnic diversity in the workforce, particularly in leadership
positions;
Strengthen Japan-U.S. strategic cooperation and information sharing in the healthcare
sector, even in normal times, to promote R&D of therapeutic drugs and vaccines;
Consider ways in which the public and private sectors can collaborate to develop
mechanisms for providing and using data for the public interest in a way that balances
public interests and private rights, to facilitate response efforts in future pandemics;
Reject trade restrictions and managed trade provisions that negatively impact the global
economy and refrain from imposing trade barriers that complicate efforts to secure goods;
Eliminate tariffs based on overly broad application of national security policies, such as U.S.
import restrictions based on Section 232 of the U.S. Trade Expansion Act;
Eliminate market-distorting measures such as harmful industrial subsidies, trade-distorting
actions by state-owned enterprises and unfair trade practices as well as address challenges
such as those related to data localization, forced technology transfer, and the protection of
intellectual property rights; and,
Promote World Trade Organization (WTO) reform to ensure its future effectiveness,
including its dispute settlement system, successfully conclude the WTO negotiations on
fisheries subsidies and e-commerce, as well as expand the number of countries and products
covered by the Information Technology Agreement (ITA).

Support governments’ efforts to achieve a carbon neutral future and enhanceenvironmental sustainability. As the second and the fifth largest CO2 emitters respectively,

the U.S. and Japan are well positioned to lead the global effort to combat climate change. The
Councils applaud both governments’ commitment to demonstrate global leadership on the pathto achieving a carbon neutral future, including through the United States’ return to the Paris
Agreement and newly established bilateral initiatives. These pledges are important as theyencourage businesses to drive the innovation and financing of solutions while mitigating
emissions and increasing economic resiliency to climate change. To ensure an energy transitionis carried out in a way that mitigates economic harm for businesses, consumers, workers anddisadvantaged communities, and does not prematurely narrow various decarbonization
measures, the Councils recommend both governments:• Ensure climate goals set by the governments are achievable, durable, and developed throughan open and collaborative public process, in close coordination with the private sector;• Coordinate on energy policy in a way that does not negatively impact the U.S. and Japan’slong-term economic growth, energy security, other industries’ competitiveness;• Clarify policies for achieving the desired energy mix to facilitate business investment ininnovative technologies, and to promote realistic, phased, and planned transitions;• Promote a dialogue with the European Union and the rest of the international community
on how to proactively manage the energy sources needed to transition to carbon neutrality;• Introduce market-based mechanisms to promote decarbonization and consider policies tominimize impacts on disadvantaged communities and sectors for which decarbonization willbe especially challenging;• Promote investment, provide incentives, and establish appropriate regulations to facilitate
the development and implementation of innovative technologies, to include various types ofrenewable energy sources such as hydrogen power, in a manner that does not impede freecompetition or discriminate between domestic and foreign investors;• Recognize the unique and important role of natural gas to achieve a lower carbon future, as
the primary driver of emissions reductions progress, as well as the importance of nuclear
power as a source of low-carbon baseload power supply;• Support transformative climate adaptation and mitigation projects through multilateralfinancial institutions and funds;• Ensure that investors are provided with relevant environmental, social, and governance(ESG) information that is material to long-term business performance, and work to develop
flexible and practical taxonomies;• Support third countries’ decarbonization and the dissemination of environmentally friendly,
smart, resilient infrastructure in close cooperation with all relevant public financial agencies,
through mechanisms, such as the Japan-U.S. Clean Energy Partnership (JUCEP), to achieve
the G20 Principles for Quality Infrastructure Investment while promoting an appropriate
regulatory system such as bilateral voluntary offset credits;• Facilitate investment in sustainably produced low-carbon and recyclable materials, andincentivize the reuse and recycling of plastic to improve waste management and reduce
plastic waste as part of a circular economy; and,• Relaunch negotiations for the WTO’s Environmental Goods Agreement (EGA).
3. Strengthen supply chain security and resilience. The COVID-19 pandemic and global
tensions have revealed vulnerabilities in existing supply chains, such as those producing criticalminerals, semiconductors, personal protective equipment, and medicines including vaccines.
While acknowledging that a complete onshoring is neither realistic nor desirable, the Councils
agreed that the diversification of sourcing in certain industries among a range of different
countries, especially like-minded countries, is key to building a resilient and trusted supply chain
and mitigating risks facing business communities. The private sector can play a leadership rolein this area, with the support of governments and academia. Therefore, the Councils applaud
both governments’ efforts to address this issue through both bilateral and regional cooperation,such as the U.S.-Japan Competitiveness and Resilience (CoRe) Partnership and the Quad
Critical and Emerging Technology Working Group. The Councils encourage both governments
to continue these important efforts, as well as to work together specifically to:• Promote U.S.-Japan collaboration to foster investment and R&D to strengthen supply chain
resiliency, particularly for life-saving materials, and those items that facilitate
decarbonization, such as strategic minerals and rare earths;• Enhance public-private dialogues that address supply chain diversification and constraints
on the production and distribution of critical technologies and supplies, as well as promote
the trusted supply and procurement of ICT products and services, including theirdevelopment, lifecycle, supply chain, and management;• Enhance coordination among allies, and strengthen government support for companies by
increasing information sharing on security and trade controls that promote economic
security;• Ensure the scope of emerging and foundational technologies on investment review regimes
and export controls is narrowly tailored to balance governments’ need to address legitimate
national security considerations and promote economic growth, and ensure economic
security policies are developed through a comprehensive and transparent process;• Refrain from enacting punitive measures relating to supply chains or extending the reach ofdomestic preferences in government procurement to new products and sectors in a mannerthat violates international commitments and invites foreign retaliation;• Lead discussions in multilateral talks to remove export restrictions and other trade barriers
for medical goods as discussed in the Ottawa Group; and,• Support companies’ efforts to address human rights abuses such as forced labor in global
supply chains.
The COVID-19 pandemic’s impact and the trends it has accelerated will continue even after its
public health risks subside. Recognizing this, our sector-specific recommendations for the digital
economy, financial services, energy and infrastructure, healthcare innovation, and travel, tourism,
and transportation can be found in the supplements that follow.

The U.S.-Japan Business Council and the Japan-U.S. Business Council (“the Councils”) cooperate
closely and share broad consensus on issues related to the digital economy. In particular,
trustworthiness in Information and Communication Technology (ICT) is a global concern. As newtechnologies are introduced and new threats emerge, the only way to ensure trustworthiness andthe sustainability of our technology infrastructure is to have the correct recognition and strive
constantly to improve it. Bearing this in mind, Chapter 1-5 below details proposals for both the
U.S. and Japanese governments. Chapter 6 and its annex provide recommendations to business
communities in the United States and Japan, and potentially other regions, on issues oftrustworthiness in ICT.
1. Promoting the free flow of data across borders. To establish a trustworthy digital economy,
we believe that it is essential to not only promote reliable and free data flow by ensuring intercountry interoperability in terms of rules, architecture and trust anchors but also enable data usage.
The Councils remain committed to promoting policy frameworks that facilitate the flow of data
across international borders, including through concepts such as Data Free Flow with Trust(DFFT), which Japan advocated at the 2019 G20 Osaka Summit. We sincerely appreciate theefforts put forth by both governments to achieve this through robust digital trade disciplines, suchas the U.S.-Japan Digital Trade Agreement.
Meanwhile, digital protectionism, which restricts the free flow of data, has proliferated in somecountries and regions. We strongly encourage the two governments to continue working closely topromote trust and the free flow of data in multilateral fora such as the G7, G20, OECD, APEC,
and the WTO. The Councils encourage both governments to collaborate further to achieve a highstandard and commercially meaningful outcome in the Joint Statement Initiative on e-commerce in
the WTO including provisions that enable and promote the flow of data as early as possible.
2. Strengthening privacy, data protection and innovation. The Councils remain committed topromoting policy frameworks that facilitate privacy, data protection, and innovation. We encourageboth governments to promote high-standard privacy protection and open digital markets in
multilateral fora. We also urge the U.S. and Japan to continue working closely to adopt theseprinciples through established mechanisms such as the APEC Cross-Border Privacy Rules Systemand the OECD’s discussions on government access to personal data. The Councils notes theOECD discussions would quickly establish principles that give “obliged access” for law
enforcement to access data for investigations. The Councils understand that data flow andutilization of data, such as healthcare information, is important for addressing pandemics anddisasters. We urge both governments to continue to lead discussions aimed at establishinginternational best practices and norms through multilateral meetings and/or fora.
3. Developing and promoting secure and trusted next-generation telecommunication
infrastructure. The Councils believe that that secure and trusted next-generation
telecommunication infrastructure, including 5G and 6G or Beyond 5G technology will be both anenabler of innovation and a creator of new opportunities across all industry sectors. We also
believe that open, interoperable architecture is key to enhancing economic security by expanding
options for selecting trusted vendors and diversifying supply chains. We urge the U.S. and Japanese
governments to establish clear, secure and trusted ICT 5G technology public policies aimed ataccelerating development and voluntary adoption as well as the use of virtual, open, andinteroperable 5G technologies and solutions both domestically and internationally. Open Radio
Access Networks (Open RAN) are an important part of this strategy and are in the early stages ofmaturation. Moreover, we encourage the two governments to take initiative in accelerating the
adoption of these technologies by following through on the $2.5 billion and the $2.0 billion
commitments the United States and Japanese governments have made to investing in research,development, testing, and deployment.
We also urge the two governments to continue to cooperate and play a key role in adopting similar
policies for like-minded countries. This includes, for example, the early establishment andutilization of the “Blue Dot Network”, a certification system for high-quality infrastructure being
designed through an initiative formed by the U.S., Japanese, and Australian governments, thatutilizes the OECD framework. With private sector cooperation, the Councils hope it will bepossible to accelerate the adoption of open, interoperable architecture from trusted vendors andthe deployment of trusted 5G networks in other markets.
4. Striving to promote the utilization of Artificial Intelligence (AI). The Councils encourage
the two governments to promote the advancement of AI technologies through the development
and use of consensus-based, and industry-led and global based AI standards, not closed ones in
specific regions. We encourage the two governments to build and promote governanceframeworks that are flexible, risk-based, and driven by a transparent, voluntary, and multistakeholder process.
We encourage the two governments to work closely with industry and civil society to play a global
leadership role focused on the principles of human-centered values, fairness, explainability,transparency, security and safety and accountability. In this respect, we look forward to bothgovernments continuing to support discussions at multilateral meetings and/or fora such as
OECD Network of Experts on AI (ONE AI), and Global Partnership on Artificial Intelligence(GPAI).
Meanwhile, we hope the U.S. and Japanese governments will cooperate with industries and engage
in detailed discussions since we believe that it is what is needed to manage and equitably classify AI
systems on risk and to carefully consider the optimal balance between costs and benefits arisingfrom the responsibilities placed on stakeholders.

5. Promoting best practices and international standards to manage increasing cyber risks.
The Councils recognize that managing cyber risk, especially with regard to critical infrastructure, iscritical to the economic and national security of the U.S. and Japan and increasingly important forour nations’ bilateral digital trade relationship. Given the evolving nature of cybersecurity threats,
the Councils recognize that a risk-based approach is more effective for managing cyber risk thanprescriptive regulation.
Approaches to cybersecurity should adhere to industry-vetted actions that businesses can take toassess and enhance their security state over time. Allowing industry to combat evolving cyberthreats with evolving best practices and globally recognized standards permits a more flexible,
current, and risk-based cybersecurity approach.
Private industry greatly benefits when governments leverage existing cybersecurity framework bestpractices as a starting point, such as the NIST Cybersecurity Framework or the International
Organization for Standardization/International Electrotechnical Commission (“ISO/IEC”)
27103:2018 (information technology – security techniques – leverage existing standards in acybersecurity framework) for any future policy enactments.
We also appreciate that the two governments agreed in “U.S.-Japan Competitiveness andResilience (CoRe) Partnership” to reinforce collaboration and partnerships between research
institutions on quantum information science and technology through joint research and exchangeof researchers. In line with this, the Councils encourage the two governments to work closely topromote the development of cryptography communication capable of ensuring security inanticipation of the coming quantum computer age.
6. “Trustworthy” principles for ICT suppliers. The Councils understand that trustworthiness in
ICT is a concern for businesses all over the world. While this encompasses many different areas,
one issue of particular importance is the trusted supply and procurement of ICT products andservices. Whether an organization is a supplier or purchaser, ensuring that the development,
lifecycle, supply chain, and management of ICT products and services are trustworthy has neverbeen more important.
We set forth recommended principles in the “Annex to the Joint Statement Supplement of theDigital Economy Working Group for the 58th U.S.-Japan Business Conference”, which may serveas useful best practices industry is currently undertaking in the United States and Japan related tothe issue of trustworthiness in ICT.
The intention of these principles is not to exclude any company, but to encourage to strive for thehighest levels of trustworthiness. We hope that these principles would not only prove valuable forthe businesses in both countries, but also as a framework for best practices across the Indo-Pacificregion. We also hope these principles can provide a basis for further coordination with European
industry as well as with businesses in other countries which share similar commitments totrustworthiness in ICT.

Annex to the Joint Statement Supplement of the Digital Economy Working Group for the 58th
U.S.-Japan Business Conference:
Recommended Principles to Establishing “Trust in ICT Suppliers”
Various factors are relevant to assessing whether companies that manufacture, distribute, sell, or
supply (collectively “Suppliers”) ought to be treated as trustworthy sources of supply fortechnologies that enable the development and operation of critical ICT networks. Suppliers are“Trustworthy” when:
1. Technical risks associated with the Suppliers’ products or services are reasonably understoodand properly managed:
a. Technology is designed, developed, and deployed pursuant to a transparent, testable,
open, consensus standards-based, and process-oriented framework for identifying,assessing, and managing risk through the anticipated lifecycle of the product orservice, including:i. Protection of development and build environments against compromises to
production systems;
ii. Adoption of a “controls framework” aligned to global industry standards (e.g.,
ISO 27001), including implementation of granular, role-based access controls;iii. Scanning of code for known vulnerabilities;
iv. Modeling of anticipated threats and risks; andv. Maintenance of security of software and firmware update mechanisms andpathways.
b. Provenance, pedigree, and integrity of code, including open-source code, can bereasonably demonstrated to ensure securability of resulting products and compliancewith intellectual property rights;
c. Technology is capable of standards-based conformance testing of controls
implemented to manage risk—and also of ensuring repeatability of build processes
such that tested code can be validated against code in a finished offering deployed
and used in an operating environment;
d. Verifiable technical measures are implemented to ensure the application of access
controls that effectively limit access to authorized users, authorized processes acting
on behalf of authorized users, or authorized devices

e. Vulnerability handling, remediation, and disclosure policies consistent withinternational best practices are adopted, transparently communicated, regularly used,and capable of assessment to ensure compliance;
f. Information security and privacy practices for the protection of personal data andrespecting individual rights are adopted, transparently communicated, and assessed toensure compliance; andg. Controls, mitigations, policies, and procedures adopted by the Supplier should beclearly communicated and flowed through to:i. Suppliers of components and source code included in its products;
ii. Processors/sub-processors of confidential, proprietary, and/or personal data;andiii. Distributors, partners, and resellers who receive, install, integrate, sell, and/or
maintain the Suppliers’ technology in the market.
h. Stability of the supply of products and services is secured and business continuity
planning is prepared.
2. Suppliers demonstrate adherence to generally recognized norms of corporate behavior,including:a. Public “codes of business conduct” outlining the Suppliers’ core values, principles,and practices;b. Public trading of equity, or equivalent mechanisms, to ensure decision-making inaccordance with commercial considerations with regard to procurement, investment,
and contracting through transparency of ownership, partnerships, governancestructures, and funding sources;
c. Public demonstration of compliance with auditing and accounting standards generally
adopted in the marketplace (e.g., Generally Accepted Accounting Principles orInternational Financial Reporting Standards) designed to ensure the absence ofhidden, opaque, or otherwise non-commercially competitive sources of funding,financing, or subsidy;d. Internal governance mechanisms clearly articulated, enforced, and subject to external
review demonstrating a commitment to protect:
i. Security and privacy of users and customers against cyber-enabled attacks orother unwarranted intrusion;ii. Privacy and individual rights with transparency, fairness, and accountability;iii. Integrity of products, services, and data against theft, tampering, andunauthorized access;iv. Intellectual property against theft, infringements or misappropriation;
v. Fair and open competition;
vi. Environmental resources against damaging or unsustainable practices;vii. Human rights against forced or unfair labor practices; andviii. Good governance, public health and well-being.

3. Suppliers operate subject to both international commercial norms as well as national andinternational laws and standards, but make decisions on the basis of commercial
considerations and in response to market forces rather than undue direct governmental
control or influence over internal governance and operations as demonstrated by:a. Absence of arbitrary access to company data, facilities, resources, or operations andof mandates to cooperate with government directives – as demonstrated bytransparency and reasonable access to due process mechanisms allowing for challengeof such demands to be heard by an independent judiciary or other neutral arbiter.
b. Absence of requirements to include government officials in corporate structures ordecision-making processes that limit ability of Supplier to act as an independent entity
operating under market-driven – as demonstrated by transparency and public
disclosure of organizational/governance structure, ownership interests; and4. Suppliers are headquartered, formed, and operate under the laws of a nation that:a. Govern networks and connectivity services by demonstrating respect for the rule oflaw, shown by clear legal or judicial limitations on the exercise of power by thegovernment;b. Govern subject to the rule of law with adequate separation of powers protected by anindependent judiciary or other neutral arbiter of due process and protected rights; andc. Uphold internationally agreed norms, standards, and treaties essential to global
human development, such as the UN Sustainable Development Goals —including
being good stewards of environmental resources, implementing fair labor practices,protecting intellectual property, protecting public health and well-being andrespecting privacy and human rights—in the procurement and acquisition of ICT.

The U.S.-Japan Business Council and the Japan-U.S. Business Council (hereafter “the Councils”)
recognize that the ambitious target of achieving carbon neutrality by 2050, as pledged by theUnited States and Japanese governments respectively, has accelerated the momentum for
decarbonization. The Councils further welcome the joint statements, “Japan-U.S. Climate
Partnership on Ambition, Decarbonization, and Clean Energy,” and “U.S.-Japan Competitivenessand Resilience (CoRe) Partnership” issued by President Biden and former Prime Minister Suga,which will facilitate more concrete cooperation between the United States and Japan toward thisshared goal. The Councils hereby affirm their intent to contribute towards achieving carbon
neutrality in the United States, Japan, and third countries through this cooperation. The Councils
also note that disruptive innovation coupled with orderly transition will be necessary to achievecarbon neutrality, and that natural disasters, geopolitical risks and economic security need to betaken into account to enhance the resilience of the supply chain in a post-COVID-19 society.
Towards an Ambitious Carbon Neutral Target
The Councils recognize that the ambitious carbon neutral by 2050 target pledged by the UnitedStates and Japanese governments has accelerated the momentum for decarbonization, and theCouncils agree to work to help realize this target. No single technology can achieve this ambitious
target, and an “all-of-the-above” approach needs to be taken to maximize efficiency and carbon
reduction of both energy production and consumption. The Councils urge the two governments toconsider the following measures to promote all clean energy technologies:• Lead international rulemaking to achieve this ambitious carbon neutrality target through apragmatic and technology-neutral approach;• Continue efforts to deploy renewable energy such as on/offshore wind power generation andsolar power generation to improve the technology and efficiency of such renewable energy
sources, and to enhance the related supply chains in the United States and Japan; strengthen
the power adjustment capability including power grid to accommodate growing renewableenergy generation; and ensure sufficient power capacity and fair access;• Promote the switch to natural gas in the energy transition from other power generation
methods with higher emissions, and deploy natural gas-based power such as highly efficient gas
turbine combined-cycle power as a stable cleaner baseload power supply to help achieve
emission reduction targets;

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Discuss issues related to the utilization of nuclear power, another important source of lowcarbon baseload power supply, and continue R&D into innovative advanced nuclear
technology including passive safety features, small modular reactors and cooperation fordecommissioning;
Take steps to realize the enormous potential of a future hydrogen society, which can contributeto the decarbonization not only of the energy and infrastructure sectors, but also of a wide
range of other sectors such as the industrial and transportation sectors; and engage in crosssectoral cooperation to develop production technologies for all types of hydrogen andammonia and to establish the supply chain and storage/transportation infrastructure; and,
Provide economic incentives to promote low carbon solutions such as the deployment ofcarbon capture and storage, both for new and existing energy infrastructure and industry
sector.

Third Country Cooperation for Realization of a Free and Open Indo-Pacific
The Councils believe deepening the cooperation of the United States and Japan with third
countries in the Indo-Pacific region is vital to realizing a Free and Open Indo-Pacific (FOIP) forthe prosperity and security of this region. The energy and infrastructure sector is one of the key
pillars for this cooperation, and while we endorse the importance of further efforts to achievecarbon neutrality worldwide, we also recognize the importance of natural gas as a realistictransitional energy source for the region. The Councils urge the two governments to support thefollowing:• Continue U.S.-Japan cooperation on liquefied natural gas (LNG) issues in the region including
the establishment of a transparent LNG market, including for U.S. LNG exports, thedeployment of LNG-based energy infrastructure, the establishment of the LNG distribution
network within the region, the assurance of freedom of navigation, and raising internationalawareness of the role natural gas can play in promoting lower carbon energy in the region;• Expand U.S.-Japan cooperation to other forms of clean energy cooperation in the region suchas promoting emissions reduction at existing coal power plants, as well as converting coal
power plants to LNG-based infrastructure and to hydrogen-based infrastructure including
ammonia in the long-run;• Finalize the pragmatic and practical certification criteria for the Blue Dot Network (BDN)
which is a tool to accelerate the FOIP strategy, and fully develop the newly established JapanU.S. Clean Energy Partnership (JUCEP) together with policies of the new United States
Administration, including on the role of natural gas in regional decarbonization efforts, forpromotion of quality infrastructure; and,• Provide business matching opportunities for private companies from the United States andJapan to mobilize private capital, promote public-private partnerships, and reduce barriers to
execute energy and infrastructure projects in third countries to assist with their energy
transition and decarbonization goals and to materialize government-led programs andinitiatives further.

Promoting Innovation and Responding to Digitalization
The Councils agree that disruptive innovation, coupled with orderly transition, is necessary toachieve the ambitious carbon neutral target by 2050. Simultaneously, a response to risks in theenergy and infrastructure sector of the ever-expanding digitalization is essential. The Councils urge
the two governments to promote the following:• Improve the efficiency and product life of energy storage technology, and reduce the use of,and build recycling ecosystems for, critical minerals to keep up with clean energy-related
demand;• Develop more cost-effective and efficient CO2 capture technologies such as carbon captureand storage and direct air capture, and support the development of business models utilizing
captured CO2, such as CO2-EOR (Enhanced Oil Recovery) and methanation, to establish a
CO2 value chain;• Develop innovative technologies for production, transportation and storage technologies forhydrogen, ammonia and synthetic fuel, for their application in not only the energy andinfrastructure sector, but also across a wide range of sectors;• Utilize digital technologies to enable the energy and infrastructure sector to increase efficiency
and stability including demand-response and grid digitalization; and,• Enhance cyber security readiness and resilience against cyber attacks on critical infrastructure
as an essential response to expanding digitalization.
Resiliency Required for a Post-COVID-19 Society
COVID-19 exposed the vulnerability of supply chains which pursued economic efficiency while
disregarding risks such as dependence on a single country. In a post-COVID-19 society, natural
disasters, geopolitical risks and economic security need to be fully taken into consideration toensure the resilience of the supply chain, and promote smart, modern, resilient infrastructure. The
Councils recommend the following to the two governments for a post-COVID-19 society:• Promote policies for energy-related sectors that support economic security by balancing
economic efficiency and legitimate national security concerns, and cooperate to establish U.S.Japan alignment on such policies;• Strengthen public and private dialogues to diversify supply chains in the energy andinfrastructure sector, such as energy sources, energy infrastructure equipment and criticalminerals, to enhance resilience, and provide further economic incentives for diversifying supply
chains from U.S. and Japanese government financial institutions;• Expand cooperation between the United States and Japan, as well as other like-mindedcountries, to build resilient supply chains in the energy and infrastructure sector, accelerate theadoption of pre-disaster mitigation, and define the United States and Japan as respective“trusted partners” and avoid potential barriers that could hinder this cooperation; and,• Develop alternative options for products for which the diversification of supply chain isdifficult.

The Financial Services Working Group of the Japan-U.S. Business Council and the U.S.-Japan
Business Council endorse collective actions in five areas: Realization of a Sustainable and Carbon
Neutral Society, Regulations, Japan as a Global Financial Center, Promotion of Digital Financial Innovation, andSecuring the Future for an Aging Population.
1. Realization of a Sustainable and Carbon Neutral Society .
The momentum to achieve a sustainable and carbon neutral society has accelerated globally.
The financial services sector can play a key role in this effort, through initiatives such as
developing common taxonomies and supporting transition activities, in addition to promoting
sustainable finance and assessing climate change risk. This trend also offers the U.S. andJapanese governments, in coordination with the private sector, the opportunity to aligndomestic climate-related frameworks and to coordinate in international standard-setting. In thiscontext, the Councils’ recommendations are:
Reporting and Disclosure. Both countries’ financial regulatory agencies should engage in a
public-private dialogue for the purpose of considering disclosure and reporting standards
related to sustainable-financing activities, and climate-related risks and opportunities. The goal
should be to establish a framework for reporting and disclosure that balances investor needs fortransparency and informed decision-making with the need for financial institutions to haveflexibility within the framework in view of the uncertainties and subjective interpretation
inherent in any analysis of the assessment and impact of sustainable financing activities.
Principles for Taxonomies/Promoting Transition Finance. The Councils support thetransitional activities needed to achieve a sustainable and carbon neutral society in an orderly
manner, and encourage U.S. and Japanese regulators to work with other countries to develop
flexible and practical taxonomies, which avoid a “one-size fits all” approach.
Infrastructure Financing. Infrastructure is the foundation for enhancing productivity andcompetitiveness and realizing sustainable economic growth. The Councils support U.S.-Japan
cooperation in national infrastructure projects and urge the sharing of best practices to promote
green and clean infrastructure investment which contribute to green growth.

2. Regulations.
Financial regulations encourage healthy markets and sustainable economic growth. As an
essential piece of a healthy financial system, regulations should be regularly reviewed to ensure alevel playing field, take account of technological developments, and consider structural changes
in societies and international regulatory discussions. This should include measures to promoteeconomic security, where U.S.-Japan coordination and private sector input are critical to
avoiding negative unintended consequences and ensuring an appropriate balance between
growth and national security considerations. The Councils’ recommendations are in thefollowing areas:
Level Playing Field. A level playing field is an important regulatory principle for strengthening
financial and capital markets and avoiding inefficiencies and distortions in markets. Digital
innovation introduces various actors including technology companies into the financial services
value chain. Imposing the same regulations on the same activities by assessing risks for thefinancial system will promote competition and innovation while ensuring financial stability andconsumer protection.
Free and efficient capital market system. The amount of financing through global capital
markets in 2020 was the highest in history, reflecting enormous corporate finance needs amid
the COVID-19 crisis. Businesses of all sizes need well-functioning and multi-faceted capital
markets. Excessive and unnecessary regulations constrain access to capital for businesses,
making it harder for them to form and grow. The Councils believe that a free and efficient
capital market system is essential to economic growth and innovation, and encourage U.S. andJapanese regulators to review regulations based on the business environment.
International Regulatory Coherence. In recent years, market fragmentation has been a key areaof focus for global policy makers, regulators and market participants. The Councils applaud
efforts by global regulators to address market fragmentation and reduce gaps between global
standards and national regulations. We believe the next critical task is to implement a process
for consistent cooperation that can ensure deference, mutual recognition and/or equivalency
determinations and urge the U.S. and Japanese governments to formalize the process, such as
by establishing a financial regulatory forum to discuss regulatory issues in these areas.
3. Japan as a Global Financial Center.
The Councils support a multifaceted effort to strengthen Japan’s position as a global financial
center and laud the continued work to update and improve the quality and coverage of the
Corporate Governance Code and Stewardship Code, alongside other important measures toenhance Japan’s business environment and overall competitiveness. In this spirit, the Councils
encourage the Government of Japan (GOJ), and particularly the Japanese Financial Services
Agency (FSA), to continue these efforts including by engaging in and advocating for policy
measures to enhance Japan’s attractiveness. In addition, the Councils urge that GOJ and FSA
promote market development through public-private cooperation in order to become a driving
force in the global green finance market toward the realization of the Green Global Financial

Center. In particular, the Councils recommend the GOJ and FSA to focus on four key areas
below:• Corporate Governance and Transparency: Progress on areas such as board independence,
diversity, and accountability in accordance with revised Corporate Governance Code,coupled with measures to enhance the availability of diverse talent to fill demand forindependent directors is needed;• Improvement to the Finance Professional Ecosystem: Far greater numbers andspecialization are needed, as well as general modernization of employment practices,
including hiring, promotions, performance appraisal and termination;• Increase Individual Investment Market Participation: Particular attention is needed infinancial planning and fiduciary standards, as well as reforms in the individual investor
markets, including in advisor quality, sales practices, asset allocation; and,• Deepen the Institutional Markets: Institutional markets should be broadened and resources
allocated to creating a more nimble clearing and market infrastructure, expanded productrange and enhanced technology.
4. Promotion of Digital Financial Innovation.
After COVID-19, digital innovation has become increasingly important in every industry. In thefinancial services sector, it is necessary to address enhancement of financial products andservices and improve customer convenience by promoting digitalization at a faster rate thanever before. The Councils urge the governments of the U.S. and Japan to strengthen
collaboration in the following ways to harness the benefits of innovation while managing any
related risks:Central Bank Digital Currency. While central bank digital currencies are being researched
globally, the Councils appreciate that the U.S. and Japan, including respective central banks, arecarefully assessing the security risks and the impact on the financial system in their research.
The Councils encourage the U.S. and Japan to strengthen collaboration and to leadinternational efforts in cooperation with third countries.
Data Connectivity. The Councils’ financial services firms view data connectivity as a means toconnect to their customers, manage risks, and provide critical services globally and one of the
key factors to economic growth and financial stability. To that end, the Councils recommend
our two governments recognize the importance of financial services data connectivity; support
open data architecture; promote greater bilateral and multilateral engagement on data
connectivity; and strive for greater cooperation and consistency in general data regulations.
5. Securing the Future for an Aging Population.
The Councils recommend that both governments strengthen public and private collaboration to
motivate private retirement saving, including through insurance and private pension funds, andfinancial planning; to increase technology and financial literacy particularly for vulnerable
populations; to adopt a policy and regulatory framework that does not hinder insurers andother financial institutions from supporting the long term protection, investment, andretirement needs of society. This includes ensuring appropriate capital standards for insurers at
the global and national/jurisdictional levels and ensuring that long duration insurance andsavings products remain widely available to consumers as well as policy framework that
supports adequate individual asset formation including tax incentives or subsidies.

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Healthcare systems must constantly evolve to meet the changing needs of society and toincorporate new technologies that offer improved health outcomes and greater efficiency. The
COVID-19 crisis has made clear the link between health and the economy, underscoring the needto make strategic investments in healthcare and the importance of collaboration and coordination
between government and industry. The future sustainability of our healthcare systems, including
rapid response to pandemic threats, requires on-going dialogue and partnership between
stakeholders. In consideration of these factors, the U.S.-Japan Business Council and JapanU.S. Business Council (hereafter “the Councils”) propose a bilateral private-publicdialogue focused on elements of an innovative, equitable, efficient, and effective
healthcare system that provides patients with timely access to best available medical
innovations.
In our view, a sustainable healthcare system integrates the following four elements:
1. Innovation Ecosystem: Continuous creation of breakthrough innovation in healthcaretechnologies, medicines and vaccines, healthcare delivery systems, and healthcare provider
capability, which are supported by medical mechanisms to support the assessment of thebenefits of these innovations.
2. Patient and healthcare provider access to the best possible care: Optimal patient andprovider experience and access allowing the use of innovations to produce the greatest
return on health system investment to patients, their families, and the broader economy.
3. Budget Optimization: Efficient and flexible resource allocation driven by evidence thatmaximizes outcomes, minimizes unnecessary expenditures, and maintains capacity torespond to emerging challenges.
4. Data and digitalization: Effective data collection and analysis, with appropriate privacy
protections, to inform individual patient and health system level decision-making based on
actionable insights.
To achieve these priorities, the Councils recommend a formal dialogue where policymakers andindustry collaborate regarding technologies and innovative contributions to advance healthcare
sustainability.
This Joint Statement represents the collective opinions of the Councils and reflects the sharedinterests of Japanese and U.S. industry. Our objective has always been to support patient-centeredhealthcare while fostering the competitiveness and resilience of the industry and of the Japaneseand U.S. economies. Therefore, we support the “CoRE” partnership formed by former Prime
Minister Suga and President Biden. The dialogue we propose is consistent with the partnership’s
goals to support the competitiveness and resilience of our nations. The following policy
recommendations address issues currently impacting the sustainability, efficiency and effectivenessof our health systems and the ecosystems that enable innovations in various sectors.
Healthcare System Sustainability• For both: Enhance collaboration between governments to improve emergency preparedness
through a variety of avenues including: research and development, supply chain
management, therapy and diagnostic production and monitoring, and rapid evaluation of
medical value.
• For both: Improve regulatory review processes with staff expertise and adequate resources.
• For both: Ensure reimbursement schemes are aligned with the innovation in pharmaceutical,
medical device, diagnostics, sensors and patient support aids.
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Data and Digitalization
For both: With appropriate privacy protections in place, accelerate the collection and use oflife-course data including genome data by both the public and the private sector. Enhancetrust in processes that govern collection (including tools), use and reuse of data. The use ofreal-world data and big data in the evaluation of medical technology, such as costeffectiveness, will support progress of value-based healthcare.
For both: Allow private industry to utilize real-world data to develop and gain approval ofinnovative medical devices and innovative medicines, such as genomic medicine for cancer,
implantable and wearable medical devices with physiologic closed control system, andmedical imaging diagnostics assisted by AI.
For both: Promote alignment between U.S. and Japanese regulators in developing andimplementing new digital health policies, which accelerate, and reduce the cost of,developing innovative therapies and improve health outcomes by using technology to collectdata and support physician/patient interaction.
For Japan: Accelerate clinical trials by utilizing real-world data to replace placebo groups
where appropriate, and developing Decentralized Clinical Trials platforms.
For both: Permit industry, academia, government and medical institutions to collaborate in
the development of real-world databases of sufficient quantity and quality in order to improvedata utilization, including disease registries. This would support the innovation ecosystemallowing for more local research and development.
For both: Encourage the adoption of an interoperable IT platform that is used to support
integrated care across diagnosis, treatment planning and delivery, patient follow-up, andpatient data management, making IT platforms available to manufactures and healthcare
professionals.

• For both: Address ethical, legal and social issues on utilizing medical records and personal
health data.
• For both: Promote the use of remote practices such as telemedicine, which can be utilized inhome care.
• For Japan: Develop the environment in which individuals can access and utilize their own
medical records in medical institutions and personal health records.
• For Japan: Enhance an early introduction of a special law to promote protection andutilization of privacy information specific to healthcare that will contribute to the promotionof R&D.
• For Japan: Further support the development of a data platform for the traceability ofpharmaceuticals and medical devices.
Vaccines, Prevention, Functional Foods• For both: Adopt and strengthen science-based vaccination policies and public information
campaigns and give greater recognition to the societal value of prevention.
• For both: Recognize the evidence-based health benefits of functional foods, such as healthfoods and dietary supplements, so that the benefits can be communicated to promote publichealth.
• For Japan: Promote innovation and policies for new preventative screening services, forexample, to improve the rate of breast cancer screening, detect atrial fibrillation, consistently
monitor glucose levels with continuous glucose monitoring systems, and diagnose cognitive
impairment at earlier stages.
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Innovation Ecosystem
For both: Recognize the importance of innovation and pursue pharmaceutical and medical
device pricing and reimbursement reforms to reflect the value of these treatments in thecontext of the overall healthcare system. Recognize that pharmaceutical and medical device
price reductions have a minimal impact on the Total Cost of Healthcare while having asignificant impact on the amount of funds available for R&D slowing the pace of needed
innovation.
For both: Ensure the regulatory, pricing and reimbursement systems recognize the innovation
associated with the development of new indications for existing therapies.
For both: Ensure that any Health Technology Assessment (HTA) or Cost Effectiveness
Assessment (CEA) in the U.S. or in Japan does not delay patient access or restrict physician
choice.
For both: Pursue medical device and pharmaceutical evaluation schemes that link pricing toboth the patient outcomes and preference, as well as to the cost-offsets within the healthcare
system and the wider society.
For both: Maintain and provide new incentives for public-private research collaborations
and use dialogue with industry, academia, and medical-research institutions to identify
opportunities for greater partnership and policy reform to enhance coordination.

For both: Safeguard intellectual property protections that sustain risk-taking investment andlong-term research into new medical technologies and tools.
• For Japan: Further expand legally established combined medical care (combination of noninsurance medical treatment and insurance covered medical treatment).
• For Japan: Introduce pricing schemes suitable for innovative therapeutics such as cell andgene therapies and software as a medical device.
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Pharmaceuticals
For both: Explore opportunities to create additional benefit and plan design structures toreduce potential barriers to medicines and devices that out-of-pocket copayments may pose.
For both: Consider a Mutual Recognition Agreement (MRA) on Good Manufacturing
Practice (GMP) between the U.S. and Japan to improve supply chain management.
For Japan: Encourage innovation by applying cost-savings from the expanded use ofgenerics after the patent/exclusivity period of originators to pay for new therapies and/or
contribute to research funds.
For Japan: Simplify pricing and reimbursement rules to create a more transparent andpredictable operating environment.
For Japan: With regard to value-based pricing, consider the full range of benefits derived fromtherapies, including reduction of nursing-care expenses and improved labor productivity.
For Japan: Improve the Price Maintenance Premium Policy by expanding the product criteria
for medicines.
For Japan: Limit off-year price revisions to products where the margin of discount between
the National Health Insurance (NHI) reimbursement price and the medical institution
purchase price is larger than the market average.
For Japan: Maximize the utilization of Sakigake and conditional approval to expedite theavailability of innovative medical treatments where significant unmet medical need exists.
For Japan: Establish regulatory data protection for pharmaceuticals including new modalities
with the highest global standard.
For the U.S.: Abandon international reference pricing proposals, which do not reflect thevalue of the innovation or allow for sustained investment in future therapies to address unmet
medical needs.

Medical Devices• For Japan: Maintain current price revision formula and frequency (e.g., once every two
years). More specifically, we recommend the following:− Undertake functional category consolidation only with specific data-driven reasons fordoing so, including sufficient time for consultation with relevant companies and clinicalexperts within the affected categories and exclusion of newly established functional
categories for a certain amount of time to allow for stabilization of categories and datacollection.
− To the extent the Foreign Average Price (FAP) price revision rule must remain, maintainthe current FAP ratio, FAP comparator countries and R-zone level, eliminate the off-cycle FAP survey, and reduce the impact of short-term exchange rates on the FAP
calculations.
− Adopt a FAP floor to add fairness to a system that currently has an upper limit but nolower limit.
− Provide further clarification of Market Expansion Repricing rules and suspend
implementation until all outstanding issues are addressed in consultation with industry.
− Consider premium reimbursement opportunities for new “pioneer medical devices.”• For Japan: Establish a new infection control management fee specialized for operatingrooms to accelerate the use of medical devices related to infection control in addition to
STM (special treatment material), corresponding the COVID-19 situation and the increasing
risk of new infectious diseases.
• For the U.S.: Urge continued reforms to the Medicare program’s coverage, coding andpayment processes for new medical devices that improve the treatment and diagnosis ofMedicare beneficiaries.
• For the U.S.: Work with the FDA and Congress to reauthorize the FDA’s Medical Device
User Fee Program before it expires next year, and partner with FDA to ensure a more
efficient and transparent medical device facility inspection process, per the 2017 FDA User
Fee Reauthorization Act.

Travel, tourism, and transportation have created millions of jobs in the United States and Japan inrecent years. The COVID-19 pandemic, however, has significantly impacted our societies andeconomies, and consumer demand in these sectors has declined significantly. According to theUnited Nations World Tourism Organization, international tourist arrivals were 85% below 2019
levels between January and May in 2021, and the emergence of COVID-19 variants and continued
movement restrictions continue to hinder travel and mobility.
The U.S.-Japan Business Council and the Japan-U.S. Business Council (“the Councils”) recognize
the importance of public-private cooperation and offer the following recommendations—not only
to ensure the sustainability of these industries during and post-pandemic recovery—but also
because well-functioning cross-border traffic is crucial to economic and social recovery more
broadly. We believe these actions will support tourism’s rebound and help address the long-termchanges that may emerge in travel behavior due to the pandemic.
1. Restarting the Free Movement of People for the Recovery and Revitalization of theTravel, Tourism and Transportation Industries:
Although our response to COVID-19 has entered a new phase with increased vaccinations, theCouncils believe that resuming travel and tourism is essential for global economic recovery andthe revitalization of these sectors. The Councils encourage both governments to promote
cooperation with the private sector to safely restart the free movement of people while rapidly
distributing vaccines, particularly in Japan, to a wider age group and ensure the safety andsecurity of both tourists and those in the hospitality industry by employing a data-driven
approach to testing and screening protocols. The Councils also recognize the importance of
establishing digital infrastructure and developing common criteria for reopening international
borders, and make the following recommendations to both governments as follows:
Continued government support for business continuity:
The travel, tourism, and transportation sectors are highly diverse and include a significant
number of small and micro-businesses. Given the prolonged impact of COVID-19, continued
government policy and financial support should be provided to minimize job losses and protect
viable companies. It is also important to promote policies and investment that improve theattractiveness and resiliency of local tourist resorts as well as to stimulate travel demand when
the pandemic subsides.
Gradual lifting of the border enforcement measures:
As mentioned in the overarching Joint Statement, the Councils believe that vaccine certificate
verification is key to an early resumption of cross-border movement of people while preventing
the spread of COVID. We encourage governments to remove obstacles to private sector
collaboration by facilitating a globally consistent regulatory framework for international travelthat establishes common standards and science-based reciprocal easing of entry restrictions,such as recognizing accepted vaccination documentation issued in the other country. To realize
a gradual resumption of cross-border travel between our two countries, we urge the U.S. andJapan to create a roadmap for a step-by-step lifting of entry restrictions, such as eliminating theJapanese government’s limit on passenger numbers entering via international airlines, and for a
gradual removal of the quarantine period based on the local number of cases and vaccination
rates. These roadmaps should be developed in frequent communication with the private sector
to improve business predictability, while also communicating effectively with the public.
International standardization of health credentials:
The Councils recognize the importance of shortening the time required for entry and simplifying
procedures to reduce the stress of cross-border movement. We urge both governments toaccelerate digital transformation while increasing the capacity for required health inspections,and to provide vaccination certificates in multiple languages to be instantly recognized globally.
It is also important to streamline entry procedures internationally in a way that does not require
travellers to use multiple forms of vaccination certification. Additionally, the Councils encourage
the governments to play an active role in developing global standards for health credentials on a
non-discriminatory basis, and accelerate discussion at the expert groups formed by the U.S. andothers including the European Union.
2. Promote Future-oriented Initiatives Beyond COVID-19: New Trends
The COVID-19 pandemic is expected to have a permanent impact on consumer behavior,accelerating digital transformation across numerous industries. The Councils believe that new
tourism and life-style trends, such as telework, workcation and online tours, will lead to newopportunities for establishing more resilient and attractive travel, tourism, and transportation
services. The Councils encourage governments to support industries’ initiatives to develop
innovative services. Although the Tokyo Olympics was held without spectators, we hope the2025 Osaka Expo and the 2028 Los Angeles Olympics will showcase these innovations.
Promoting cashless payments:
With respect to Japan’s stated goal of increasing cashless payments to 40% of all consumertransactions by 2025, the Councils also recommend that Japan implement Near Field
Communication (NFC) Type A/B standards. These standards are already well-established in
metropolitan areas like New York, London, and Sydney and are becoming a preferred payment

mode due to its low infection risk. The Councils urge the Japanese government to develop
practical solutions through continued dialogue with all relevant private sector stakeholders.
Promoting Mobility as a Service (MaaS):
In the mobility sector, innovative technologies, such as automated driving, delivery systems thatutilize drones and robots, and efficient transportation systems that use big data, will contributeto developing smart cities and to solving common social problems in both countries, including
traffic congestion, manpower shortages, and environmental problems. For example, in both the
U.S. and Japan, new taxi rates, such as pre-defined fees and variable pick-up fees, are tested byusing big data. The Councils endorse these practices and request that both governments
promote digital transformation across numerous industries.
Facilitating e-commerce:
The pandemic has revealed that e-commerce is a lifeline, particularly for millions of people andsmall businesses hard hit by the pandemic. The governments should ensure equal treatment
between public and private delivery services to facilitate e-commerce. The Councils encourageboth governments to recommit to the World Trade Organization’s Trade Facilitation
Agreement articles on express delivery shipments, which often include critical medical supplies
and other time-sensitive shipments, to expedite the simplification of customs clearance
processes especially for low value goods and to avoid the imposition of new trade barriers.
3. Sustainable & Inclusive Development in Travel, Tourism, and Transportation
The Councils recognize that the pandemic should be viewed as an opportunity to initiate abetter future for the travel, tourism and transportation industries, where digitalization and low
carbon initiatives enable sustainable growth.
Ensuring inclusive development
The Councils encourage both governments to support inclusive development in the travel,
tourism and transportation sectors, such as developing attractive tourism resources and new
ventures that provide business opportunities for small and medium enterprises in rural areas
while ensuring equal access to technologies, services, and opportunities for work to all people
regardless of race, ethnicity, gender, age or any other status.
Encouraging government support for low carbon initiatives
The Councils are collectively committed to achieving ambitious carbon neutral emissions goals
and encourage both governments to support collaborative initiatives between the U.S. andJapanese industries, including the development of next generation aircraft utilizing advanced
technologies and other energy saving technologies in the mobility sector. In the airline industry,
Sustainable Aviation Fuels (SAF) have been identified as one of the key elements to help achievethese goals, and the Councils encourage both governments to remove barriers to the realizationof a cost-competitive SAF market, while providing incentives to foster investment andsupporting the establishment of a resilient supply chain and deployment of SAF.