JOINT STATEMENT
59 U.S.-JAPAN BUSINESS CONFERENCE
th

Washington, DC
October 11-12, 2022
Members of the U.S.-Japan Business Council and the Japan-U.S. Business Council (the “Councils”)
held the 59th Annual U.S.-Japan Business Conference on October 11-12 in Washington, D.C. The
Councils jointly represent 135 companies from both the United States and Japan, with sectors
ranging from digital economy and financial services, to healthcare innovation and energy andinfrastructure, and to travel, tourism, and transportation.
The COVID-19 pandemic continues to have a staggering impact on business and society, further
exacerbating existing economic and social challenges. In addition, Russia’s aggression against
Ukraine has not only shaken the international order but also had a tremendous impact on our
economic activities and the lives of our citizens in ensuring our national security in the future. In linewith the common intention of seeking cooperation to strengthen economic security, thegovernments of the United States and Japan launched a new framework called the Japan-U.S.
Economic Policy Consultative Committee (the Economic “2+2”) in July 2022. The Councils
welcome this effort to develop the U.S.-Japan alliance from an economic perspective.
At the same time, the global health crisis and changes in the international order resulting fromsecurity crises have presented the opportunity to reevaluate our approach to creating a healthier,more sustainable and resilient future. In this context, the Conference convened senior businessleaders from the United States and Japan, who shared common views on the importance ofpromoting innovative technologies, particularly in healthcare; modernizing infrastructure; andtackling macroeconomic challenges facing both of our societies.
The Councils also believe that the United States and Japan should further enhance coordination andcooperation in close partnership with like-minded countries that share our basic values with respect
to freedom, democracy, human rights, and the rule of law, thereby fostering more resilient,sustainable, diverse, and inclusive societies and facilitating a more transparent, rules-based
international economic order. Towards these ends, the Councils committed to:
1. Support government policies that establish the right policy architecture and regulatoryenvironment in promotion of innovation in healthcare, as well as the promotion of rapid
and equitable access for all people and relevant entities to digital health tools,
pharmaceuticals, and medical devices that are critical to public health interventions.
Over the past two years, the COVID-19 pandemic has highlighted the challenges to healthcare
systems across the globe, but it has also catalyzed innovations, accelerated the development anddeployment of new technologies, and emphasized greater cross-border collaboration. The
Councils also believe that the application of new technologies to the healthcare area is an urgent
challenge as we look ahead to the future aging of society in both countries. American andJapanese companies have been leaders in this transformation, and the two business
communities can lead in promoting innovation and ensuring broad access to these newhealthcare tools bilaterally and globally. Therefore, the Councils recommend that bothgovernments:• Promote more robust mechanisms for bilateral cooperation on digital health, such as
working-level dialogues, to maintain regular information sharing beyond COVID-19;• Ensure close coordination among the government agencies responsible for regulations,reimbursement, and oversight of government policy on healthcare innovation;• Pursue fair, transparent, and predictable reimbursement reforms for pharmaceuticals,
medical devices, and digital tools to reflect the value of these innovative products in thecontext of the overall healthcare system;• Support cross-border data flows to allow clinicians, researchers, healthcare companies andpatients to have access to comprehensive information across borders to drive decisionmaking, while ensuring privacy protection of health data and increasing patients’ trust;• Ensure that the respective legal and regulatory frameworks in the United States and Japanare up to date and in line with the need for developing a broad health IT infrastructure,
specifically regarding cross-border data flows, privacy considerations, and AI guidelines;• Promote data interoperability between health IT infrastructure, devices, and clinical systems
to optimize patients’ access to care;• Commit to flexible, risk-based frameworks that encourage AI innovation and collaborate
across borders to advance sound and interoperable practices in healthcare, while partneringwith the private sector, academia, and civil society to ensure patient confidence in AI;• Increase investments in cybersecurity to protect patients’ data, ensure uninterrupted care,and secure the entire health ecosystem;• Continue to promote paperless operations, which are essential to digital transformation in all
sectors but particularly affect healthcare;• Introduce pricing schemes dedicated for digital therapeutics such as software as a medical
device (“SaMD”) and for innovative therapeutics such as regenerative medicine, cell therapy,
and gene therapy; and• Enable Decentralized Clinical Trials, allowing a hybrid of in-person and remote visits tomedical institutions for trial participants by making maximum use of digital tools.
2.

Support governments’ efforts to build smart, modern, and resilient infrastructure which
will provide meaningful economic and quality of life enhancements to people in bothcountries and around the world. The Councils believe continued investment in infrastructure
will be critical for long-term economic recovery, and welcome both governments’ push tomodernize domestic infrastructure, including through the implementation of the U.S.

Infrastructure Investment and Jobs Act. The Councils also recognize the role the United States
and Japan can play in leading the infrastructure development in third countries throughinitiatives such as the G7’s Partnership for Global Infrastructure and Investment. To ensure
improved safety, mobility, and quality of life for decades to come, the Councils recommend thatboth governments:• Recognize that infrastructure modernization should be comprehensive and complete, andshould include healthcare system, energy security, clean energy, transportation, and digitalconnectivity;• Promote collaboration between the two governments and the private sector to develop a
realistic roadmap for innovation and implementation in the above areas;• Formulate a flexible and realistic approach to achieve a desirable energy mix based on atechnology neutral approach to reducing CO2 emissions;• Promote domestic energy production, infrastructure development and diversification ofenergy supply necessary to enhance energy security, including increasing the capacity andefficiency of U.S. LNG exports to the Indo-Pacific region;• Strengthen cooperation in clean energy technologies and infrastructure, such as LNG,
sustainable aviation fuel (SAF), hydrogen, Carbon Capture, Utilization and Storage (CCUS)
and nuclear;• Promote U.S.-Japan cooperation in building next-generation infrastructure, including
advanced data centers and 5G, 6G or Beyond 5G, and WiFi 6, as well as further spreading
the use of online services that enables the efficient use of existing and new infrastructure andresources, and improves the quality of life in remote areas, such as e-hailing applications andshort-term rental services;• Enhance bilateral collaboration in technology development related to the protection ofcritical infrastructure;• Advance infrastructure technologies and equipment supported by the U.S., Japan, and likeminded countries that are committed to the rule of law and the fundamental importance ofmarket mechanisms in economic decision making;• Encourage scaling up public financing and promoting investor friendly policies in emerging
economies to increase investor confidence and leverage private financing to help bridge theinfrastructure gap and fuel economic growth;• Address and bridge the digital divide to ensure that everyone is equipped to participate intoday’s modern economy and benefit from a 21st digital economy;• Promote the development and production of semiconductors in the United States, Japan,
and other like-minded countries to strengthen the trusted supply chain of criticaltechnologies pertinent to every aspect of infrastructure;• Enhance collaboration among allies and like-minded countries through the Indo-Pacific
Economic Framework and/or friend-shoring to deepen relationships and diversify supply
chains for critical raw materials used in storage batteries, such as rare metals and battery cells;and• Explore streamlining the CFIUS screening process for investment from trusted countries
like Japan, which will facilitate investment and bilateral cooperation on building resilient
supply chains and developing important advanced technologies that are critical to our mutualshared economic prosperity and national security, such as battery technology and energy
storage systems.
3. Encourage governments to pursue policies that reduce rising prices and support asustainable society: As the global economy continues to suffer under the weight of highinflation, the Councils encourage the governments to focus on policies that address root causesof the inflation and mitigate the negative impact on consumers and businesses. The Councils
also recognize the importance of fair rule-based governance for a sustainable future at a time
when the international economic order is faltering. Therefore, the Councils recommend thatboth governments:• Allow monetary policy the room it needs to stabilize prices for as long as necessary for the
price level to hit its target;• Promote corporate governance to ensure market credibility, including transparency ofcorporate accounting performance, and compliance with rules;• 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;• Recommit to the WTO’s Trade Facilitation Agreement’s articles on express delivery
shipments which include provisions on simplifying border processes and removing
unnecessary or duplicative documentation or paperwork, which is time consuming andexpensive for traders, particularly SMEs, without concordant benefits or impacts on safety
or security;• Agree to a robust set of rules to lower costs associated with the customs clearance process of
those shipments, in alignment with the WTO’s Trade Facilitation Agreement, such as higher
customs de minimis levels and a simplified “bucket system” for classification of goods, wherea small number of categories covers a broader range of goods found in the Harmonized
System;• Advance U.S.-Japan cooperation globally to eliminate market-distorting measures, such as
harmful industrial subsidies, trade-distorting actions by state-owned enterprises andunnecessary tariffs or unfair trade practices, as well as address challenges such as thoserelated to data localization, forced technology transfer including those that are conducted ona de facto basis, and the protection of intellectual property rights; and• Strengthen supply chain security and resilience between Japan, the United States, and otherlike-minded countries to curb cost-push inflation while keeping away from unilateral anddiscriminatory measures.
Our sector-specific recommendations for the digital economy, financial services, energy andinfrastructure, 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”) believe it isimperative to accelerate digital transformation by creating innovation and services that contribute to
new value creation to realize both economic growth and job creation. The Councils will steadfastly
approach these challenges and commit to playing a proactive role in tackling them, in close
cooperation with the U.S. and Japanese governments. With this in mind, we present the following
recommendations to both governments.
1. Strengthen and promote a rules-based global trading system. The Councils acknowledge theimportance of U.S. and Japanese government leadership in promoting global economic growth,particularly given the substantial efforts made by businesses to develop extensive value chains. We
call on the U.S. and Japanese governments to advance and strengthen a rules-based global trading
system that promotes economic growth and integration based on the high standards of the U.S.Japan Trade Agreement and the U.S.-Japan Digital Trade Agreement. These agreements serve asmodels for the expansion of the digital economy in a region that is expected to be the largest
contributor to global economic growth in the coming decades.
The Councils also believe that rejoining the Comprehensive and Progressive Agreement for TransPacific Partnership (“CPTPP”) would be the straightest and best path for realizing the U.S.
administration’s economic and strategic ambitions in the Indo-Pacific. We further recognize the
Indo-Pacific Economic Framework (“IPEF”) can be an effective framework for the region, provided
it includes enforceable commitments, in addition to high standards, that build on the U.S.-Japan
Digital Trade Agreement and digital trade chapter of the United States-Mexico-Canada Agreement(“USMCA”).
The Councils also encourage both governments to cooperate on reform efforts at the WTO to
improve and clarify the body’s discussion processes and procedures to strengthen the rules-based
global trading system.
2. Promote the free flow of data across borders. To establish a trustworthy digital economy, we
believe it is essential to promote reliable and free data flow by ensuring international interoperability
in terms of rules, architecture and trust anchors, while also enabling data usage.
We appreciate the efforts by both governments to promote policy frameworks that facilitate crossborder data flow, including through Data Free Flow with Trust (“DFFT”) and robust digital trade
disciplines, such as the U.S.-Japan Digital Trade Agreement. We also recognize the importance ofremoving the regulatory and operational barriers to data flows in parallel with the development andimplementation of trade rules. Japan’s 2023 G7 presidency offers a key opportunity to expand upon
the promise of DFFT and promote its implementation.
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 other multilateral fora such as the G20, OECD, APEC
and the WTO. The Councils encourage both governments to collaborate further to achieve a highstandard and commercially meaningful outcome in the WTO Joint Statement Initiative on ecommerce, including provisions, such as a prohibition of data localization and a permanentelimination of customs duties on electronic transmissions, that enable and promote the cross-border
flow of data as early as possible.
3. Strengthen privacy, data protection, and innovation. The Councils are committed to policy
frameworks that facilitate privacy, data protection and innovation. We encourage both governments
to embrace high-standard privacy protection and open digital markets in multilateral fora. We also
urge the United States and Japan to promote these principles through established mechanisms suchas the APEC Cross-Border Privacy Rules (“CBPR”) System, the Global CBPR Forum and theOECD’s discussions on government access to personal data. We are committed to working withgovernment leads toward a robust OECD agreement before the end of the year. As countries pursue
frameworks that protect personal information and support innovation, it is also important thatgovernments ensure any new regulation, both in design and implementation, is not discriminatory.
The Councils understand that the free flow and utilization of data, such as healthcare and financial
sector information, are key to addressing pandemics and disasters and to promoting e-commerce
and the digital economy respectively. We urge both governments to continue to lead discussions
aimed at establishing international norms through multilateral meetings and/or fora.
4. Develop and promote secure and trusted next-generation telecommunications
infrastructure. The Councils believe that secure and trusted next-generation telecommunications
infrastructure, including 5G, 6G and Beyond 5G technology will enable innovation and newopportunities across all industries. We also believe that an open, interoperable architecture is key toenhancing economic security by expanding options for selecting trusted vendors and diversifying
supply chains. Based on the U.S.-Japan Global Digital Connectivity Partnership launched in May
2021, we urge both governments to continue to establish clear, secure, and trusted Information andCommunications Technology (“ICT”) 5G technology public policies to accelerate development andvoluntary adoption, as well as the use of virtual, open and interoperable 5G technologies andsolutions both domestically and internationally. Open Radio Access Networks (“Open RAN”) are
an important part of this strategy and are in the early stages of maturation. We encourage the two
governments to take initiative in accelerating the adoption of these technologies by implementing
their respective $2.5 billion and the $2 billion commitments to invest in research, development,
testing and deployment. In the area of license-exempt spectrum, we welcome Japan's recent releaseof a portion of the 6 GHz band (5.925-7.125 GHz) as license-exempt spectrum and expect further
releases in the future. License-exempt technologies such as Wi-Fi are important not only to Japaneseconsumers and enterprise for on-premises networking and cellular offloading, but also to Japanesemanufacturers of consumer goods whose Wi-Fi equipped products require global access to 6 GHz.
We also believe that further research and development investments in 6G and Beyond 5G
technologies by the two governments will be imperative to increasing opportunities to use thosesolutions in the future.
We urge the U.S. and Japanese governments to continue to cooperate and play a key role inencouraging the adoption of similar policies, such as those that promote the development andimplementation of 5G, adoption of Open RAN, and investment in 6G and Beyond 5G, by likeminded countries. This includes through the Partnership for Global Infrastructure and Investment(“PGII”), a new framework announced by the G7 in June 2022 to provide support through theallocation of $600 billion by 2027, including private funding in infrastructure investment indeveloping countries. With private sector cooperation, the Councils hope it will be possible toaccelerate the adoption of open, interoperable architecture from trusted vendors and the deploymentof trusted 5G networks in other markets.
5. Strive to promote the use of Artificial Intelligence (“AI”).
The Councils call on the two governments to play a leading role in the promotion of the development
and utilization of AI technology based on the U.S.-Japan Competitiveness and Resilience (“CoRe”)
Partnership to reinforce collaboration and partnerships between research institutions on science andtechnology through joint research and the exchange of researchers.
The Councils encourage the two governments to promote AI technologies through the development
and adoption of consensus-based, industry-led, and global-based AI standards and to build andpromote governance frameworks that are flexible, risk-based, and driven by a transparent, voluntaryand multi-stakeholder process. We believe that both governments should encourage privatecompanies to invest in and maximize social benefits by using innovative AI technologies.
We encourage the two governments to work closely with industry and civil society to play a global.
leadership role to formulate ethical standards and principles that are focused on human-centeredvalues, fairness, explainability, transparency, security and safety, and accountability. We look forward
to support from both governments for multilateral discussions at meetings such as the OECD
Network of Experts on AI (“ONE AI”) and the Global Partnership on Artificial Intelligence(“GPAI”).
We hope both governments will cooperate with industry to manage and equitably classify AI systems
on risk and to carefully consider the optimal balance between the costs and benefits arising from theresponsibilities placed on stakeholders.
6. Promote the use of quantum information science and technology. We urge the two
governments to accelerate the implementation of cutting-edge solutions, such as useful and global
standard-based quantum information and computing, through the implementation of demonstration
schemes and joint development based on the U.S.-Japan CoRe Partnership. We also appreciatebilateral efforts to promote the development of cryptography communication capable of ensuring
security based on quantum technology.
We support the intent of both governments to conduct joint research and development projects ofthese critical and emerging technologies foreseeing the potential future acquisition and utilization ofsuch technologies, not only between the two countries but also together with like-minded countries.
In addition, it is critical that both countries identify and protect fair and rules-based standards
development processes and implement approaches to bolster the participation and capacity ofindustry in critical standards setting processes for emerging and critical technologies, such as
quantum computing.
7. Promote best practices and international standards for managing increasing cyber risks.
The Councils recognize that managing cyber risk, especially regarding critical infrastructure, isessential to the economic and national security of the U.S. and Japan and important for our bilateral
partnership on digital trade. Given the evolution of cybersecurity threats, the Councils recognize thata risk-based approach is more effective for managing cyber risk than prescriptive regulation.
We are aware that a collective defense mechanism capable of sharing in real time the traces of attacks
detected by companies and organizations is especially important, in light of our constant exposure
to threats targeting critical infrastructure.
Approaches to cybersecurity should adhere to industry-vetted actions that businesses can take toassess and enhance their security over time. Allowing industry to combat evolving cyber threats withevolving best practices and globally recognized standards permits a more flexible, current and riskbased 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.
8. Establish “Trustworthy” principles for ICT suppliers. Given the importance oftrustworthiness in ICT for businesses around the world in addressing international threats, the two
Councils reaffirm the Recommended Principles for Establishing Trust in ICT Suppliers in the“Annex to the Joint Statement Supplement of the Digital Economy Working Group for the 58th
U.S.-Japan Business Conference” and hope these principles will serve as a useful framework forestablishing best practices across the Indo-Pacific region.

The need to enhance energy security and resilience has been called for in the wake of events suchas the COVID-19 pandemic and the recent tightening of natural gas demand and supply. But the
U.S.-Japan Business Council and the Japan-U.S. Business Council (hereafter “the Councils”)
recognize that Russia’s aggression against Ukraine requires a more immediate and fundamental
global response. While the Councils welcome various efforts to ensure a stable supply of energy
taken by the United States and Japanese governments and the international community, the UnitedStates and Japan need to lead further efforts. The Councils also emphasize that efforts to achievecarbon neutrality cannot be slowed down, and careful navigation of the balance between energy
security and resilience, and energy transition is required in response to increasing extreme weather
events. As such, the Councils welcome specific nuclear and gas energy activities that arerecognized as environmentally sustainable economic activities by the so-called EU Taxonomy. To
achieve the carbon neutral target by 2050 set by both governments, continuous development ofinnovative technologies and deployment of clean energy infrastructure, building on the utilizationof existing baseload power supply, including highly efficient thermal and nuclear power, isnecessary. In addition, the Councils continue to be committed to cooperation in the Indo-Pacificregion to realize a Free and Open Indo-Pacific (FOIP).
Enhancement of Energy Security and Resilience
The Councils welcome the “Joint Statement Between the Ministry of Economy, Trade, andIndustry of Japan and the United States Department of Energy on Cooperation toward Energy
Security and Clean Energy Transition” dated May 4th, 2022, which aims to promote the assuranceof global energy security. We further acknowledge the role liquefied natural gas (LNG) can play to
alleviate global energy supply constraints and to serve as a reliable alternative to higher-emittingenergy sources, and shall promote exports of U.S. LNG to take this role. The Councils recommend
the two governments to consider the following measures for the United States and Japan to leadefforts to enhance energy security and resilience for stable energy supply of the world:• Establish a multilateral task force to diversify the energy supply, which can also ensure thesecurity and affordability of LNG supplies in the Indo-Pacific amid the rapid expansion of
LNG shipments from the United States to European markets in response to Russia’s
aggression against Ukraine;• Support the development and investment in infrastructure, including gas pipelines, LNG
facilities such as on the Pacific coast of Mexico and Floating Storage and Regasification Unit••

wherever deployable, to increase the capacity and efficiency of exporting U.S. LNG to the
Indo-Pacific while accelerating the deployment of clean energy technologies in the region;
Increase energy supplies through governmental frameworks among like-minded countries andbolster investments in infrastructure which can be supported by some of the permitting
reforms that will provide certainty for long-term investments to diversify supply chains andenergy sources; and,
Establish a clear pathway to expand safe utilization of nuclear power, and invest in developing
the skilled workforce required to do so, to enhance energy security and serve as an importantsource of low-carbon baseload power supply.

Constant Efforts to Achieve Carbon Neutrality
The Councils are aware that enhancement of energy security and resilience cannot slow efforts toachieve carbon neutrality. Careful navigation of the balance between energy security and resilience,and energy transition is required. The United States and Japan continue efforts to achieve carbon
neutrality under the “Japan-U.S. Climate Partnership on Ambition, Decarbonization, and Clean
Energy” as the center of the U.S.-Japan cooperation. The Councils urge the two governments to
support the following for the United States and Japan to demonstrate pragmatic and orderly energy
transition:• Continue commitments to deploy renewable energy including on/offshore wind, hydro,
geothermal, and solar power generation, and increase capacity and modernize power grids toaccommodate and efficiently utilize such power;• Switch to natural gas, a stable cleaner baseload power supply, from other fuels with higher
emissions, and deploy high-efficiency natural gas-based infrastructure such as gas turbine
combined-cycle power, for orderly energy transitions with pathways such as the future
conversion to hydrogen;• Incentivize deployment of carbon capture, utilization and storage (CCUS) for cleaner
utilization of existing infrastructure, decarbonization of hard-to-abate sectors such as theindustrial and transportation sectors, production of cleaner fuels including bluehydrogen/ammonia, sustainable aviation fuel and synthetic methane from methanation andreduction of other greenhouse gases such as methane and fluorinated gases; and,• Promote cross-sectoral cooperation to develop the entire hydrogen value chain fromproduction to transportation, storage and usage, and mobilization of all technologies related tohydrogen/ammonia to quickly realize a hydrogen society.
Development and Utilization of Innovative Technologies
The Councils emphasize that disruptive innovation which supports orderly energy transition isnecessary to achieve the carbon neutral target by 2050, set by both the United States and Japanese
governments. Also, no single technology can achieve this target, and an “all-of-the-above”
approach can mobilize all available technologies is required. The Councils urge the twogovernments to promote the following to accelerate development and utilization of innovativetechnologies:• Implement digital technologies in the energy and infrastructure sector including power grid anddemand-response for improvement of efficiency and energy-saving on the consumer side,
utilization of limited resources, and promotion of smart, modern and resilient infrastructure;• Develop standards to enhance cyber security resilience and readiness against cyber-attacks on
critical infrastructure;• Incentivize development of new technologies such as more efficient energy storage and CO2
capture (direct air capture) technologies, innovative advanced nuclear technology including
small modular reactors, accident-tolerant nuclear fuels, disruptive nuclear materials that can
improve the safety and economics of current and advanced nuclear reactors and fusion energy
technologies, and new types and advanced production methods of clean fuels including
different colors of hydrogen and innovative methanation in order to ensure a diversity ofenergy transition technology options and to drive cost reduction for affordability; and,• Establish a value chain of CO2 to achieve carbon neutrality, by promoting development ofbusiness model utilizing captured CO2.
Advancing a Free and Open Indo-Pacific
The Councils believe the cooperation of two countries in the Indo-Pacific region and realizing a
FOIP are critical for the prosperity and security of this region. Through the Japan-U.S. Clean
Energy Partnership (JUCEP) – the core framework of the cooperation in the region for the energy
and infrastructure sector – the United States and Japan can support like-minded countries in theregion to promote quality infrastructure for energy transition with consideration of different
circumstances in each country. The Councils urge the two governments to support the following:• Expand long-term U.S.-Japan cooperation in third countries where step-by-step transition isrequired. This includes utilizing coal power plants in cleaner ways such as ammonia co-firing
and CCUS – supported by the knowledge and experience of Japan with recognition of theirimportance from an energy security standpoint – to switch to LNG where feasible, and then to
allow such LNG infrastructure to convert with minimum modifications or to shift fuels, toaccommodate synthetic methane and hydrogen/ammonia for further emissions reductions;• Materialize the “Clean Energy, Decarbonization, and Infrastructure” pillar of the Indo-Pacific
Economic Framework (IPEF) to mobilize finance that will accelerate the development anddeployment of low-carbon and clean energy technologies in the region and the pillar of“Supply Chains” to secure the supply chain of energy infrastructure equipment and criticalminerals, and freedom of navigation; and,• Realize private business projects related to the energy and infrastructure sectors in the region
by utilizing multiple frameworks established by the United States and Japanese governments
through public-private dialogue, providing business matching opportunities for privatecompanies, encouraging mobilization of private capital and simplifying various procedures andreducing regulatory barriers in third countries.

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: Building a Healthy Financial System, Realizing
a Sustainable and Carbon Neutral Society, Developing Japan as a Global Financial Center, Promoting Digital
Financial Innovation, and Securing the Future for an Aging Population.
1. Building a Healthy Financial System
Financial regulations are the foundation for building a healthy financial system to encouragesustainable economic growth. As an essential element of a healthy financial system, regulations
should be reviewed regularly to ensure a level playing field, be harmonized across jurisdictions, take
into account technological developments, consider structural changes in societies and international
regulatory discussions. The Councils’ recommendations pertain to the following areas:
Level Playing Field. A level playing field is an important regulatory principle for strengthening
financial and capital markets and avoiding market inefficiencies and distortions. Digital innovation
introduces various actors, including technology companies, into the financial services value chain.
Applying the same set of regulations on the same activities regardless of the actor by assessing risks
for the financial system will promote competition and innovation while ensuring financial stability
and consumer protection.
Regulatory Harmonization. The Councils encourage U.S. and Japanese regulators to continue
working together on building a globally harmonized regulatory framework. In particular, financial
regulations on climate change are rightfully being developed globally, and international
harmonization of financial regulations in major jurisdictions, including the United States and Japan,
is vital. We believe it is important to implement a process for consistent bilateral cooperation, as
well as to discuss broader multilateral cooperation on climate change and other issues, and urge theU.S. and Japanese governments to formalize the process, such as by establishing a financial
regulatory forum to discuss regulatory cooperation in these areas.
Stable Inflation and Economic Growth. In view of surging inflation and its negative effects on the
global economy, the U.S. and Japanese governments and monetary authorities should implement
policies to strike a balance between stable inflation and economic growth, paying careful attention
to the particular circumstances of each country. The Councils request that the U.S. and Japanesegovernments and monetary authorities consider providing support to those severely affected byinflation, examining and addressing the side effects of monetary policies, and maintaincommunication with public to avoid excessive market volatility.
2. Realizing a Sustainable and Carbon Neutral Society
Russia’s aggression against Ukraine has resulted in a sharp increase in global energy prices,considerably affecting near-term momentum toward energy sustainability and carbon neutrality
globally. Given these challenges, the Councils appreciate the U.S. and Japanese governments
maintaining their commitments to carbon neutrality by 2050. The financial services sector can playa key role in this effort, through initiatives such as supporting transition activities, in addition topromoting sustainable finance and assessing climate change risk.
Review of Timeframe. Achieving carbon neutrality by 2050 requires considerable efforts by bothgovernments and private companies. Given the ongoing energy crisis, the Councils recommend
both governments review the timeline and milestones in the process and respond flexibly, while
maintaining the target of carbon neutrality by 2050.
Transition Finance. The Councils support the transitional activities needed to achieve a sustainable
and carbon neutral society in an efficient, sufficient, and orderly manner. The Councils support
strengthening public-private collaboration to promote sustainable finance and transition financeand to provide greater flexible financial assistance for attaining the target.
Reporting and Disclosure. Both countries’ financial regulatory agencies should engage in a publicprivate dialogue to consider disclosure and reporting standards related to sustainable financing
activities, and climate-related risks and opportunities. The goal should be to establish a globally
harmonized framework for reporting and disclosure that balances investor needs for transparency
and informed decision-making with the need for financial institutions and reporting entities to haveflexibility within the framework. Such flexibility is critical in view of the uncertainties andsubjective interpretation inherent in any analysis of the assessment and impact of climate change
and sustainable financing activities.
3. Developing 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. To this end, the Councils
encourage the Government of Japan (GOJ), particularly the Ministry of Finance and the Financial
Services Agency, to continue these efforts, which should include policy measures to enhance thegrowth of Japan’s financial markets and better serve the needs of Japan’s individual investors. Weurge greater cross-ministerial collaboration, which is vital for achieving these goals. In particular,
the Councils recommend focusing on four key areas:
Corporate Governance and Transparency: Further progress on areas such as board independence,
diversity, and accountability in accordance with revised Corporate Governance Code, coupled withmeasures to enhance the availability of diverse talent to fill demand for independent directors isneeded.
Finance Professional Ecosystem: Far greater numbers and specializations are needed, as well as
general modernization of employment practices, including hiring, promotions, performanceappraisal and termination.
Individual Investment Market Participation: Greater attention should be paid to financial planningand fiduciary standards, as well as reforms in the individual investor markets, including in advisor
quality, sales practices, asset allocation.
Institutional Markets: Institutional markets should be broadened and resources allocated to create amore nimble clearing and market infrastructure, expanded product range, and adoption of moresophisticated Information Technology.
4. Promoting Digital Financial Innovation
The COVID-19 pandemic has increased the need for digital innovation across every industry. In
the financial services sector, it is necessary to address the enhancement of financial products andservices and improve customer convenience by promoting digitalization at a faster rate than everbefore. At the same time, it is important that governments support regulations and policies that
ensure strong consumer protections. The Councils urge the U.S. and Japanese governments tostrengthen collaboration in the following ways to harness the benefits of innovation while
managing any potential risks:Central Bank Digital Currency (CBDC). While central bank digital currencies are being researched
globally, the Councils appreciate that the United States and Japan are carefully assessing thesecurity risks and their impact on the financial system. The Councils encourage the U.S. and Japanto strengthen collaboration and to lead international efforts in cooperation with third countries,
such as aligning a set of shared technical standards that would enable interoperability to integrate
CBDC with existing systems and infrastructure, and ensuring fair competition by avoiding
differential treatment between domestic and foreign companies in CBDC schemes.
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 as one of thekey factors to economic growth and financial stability. To that end, the Councils recommend bothgovernments recognize the importance of financial services data connectivity and promote publicprivate collaboration to pursue high-standard rules in the digital economy. We sincerely appreciate
the efforts put forth by both governments to promote policy frameworks that facilitate Data Free
Flow with Trust (DFFT) through robust digital trade disciplines.
Innovation. We recognize the importance of both governments’ continued efforts to eliminate
regulatory and operational issues for promoting digital financial innovation. With the advent ofdecentralized finance (DeFi), cryptocurrency, non-fungible tokens (NFTs), and other digital assets,
both countries’ financial regulatory agencies should provide market participants with timely, clear,and integrated guidance in this evolving area as legal certainty will be key to harness innovation.
5. Securing the Future for an Aging Population
With developed countries including the United States and Japan facing an aging population, bothcountries need to tackle the common challenge of ensuring financial sustainability. The Councils
urge both governments to collaborate with industry to formulate and implement policy
recommendations in the following areas:
Private Saving. The Councils recommend both governments to strengthen public and private
collaboration in incentivizing private saving, including through insurance, private pension funds,
and financial planning. The Councils support the GOJ’s “Doubling Asset-based Incomes Plan”
under Prime Minister Kishida’s new economic policy, which will help the public’s large personal
financial assets to be more effectively invested. We recommend the GOJ to address the obstacles
in order to optimize allocation of financial assets across the investment spectrum in Japan, from
corporate and public pensions to defined contribution plans and individual savings.
Insurance. The Councils recommend both governments adopt a policy framework, such as
through tax incentives or subsidies, that supports adequate individual asset formation. We also
recommend the governments establish appropriate capital standards for insurers at the global,
national, and jurisdictional levels, as well as ensure that long duration insurance and savings
products remain widely available to consumers.
Financial Literacy. As individuals activate private investments, increasing financial literacy becomeseven more important. The Councils recommend public-private collaboration on increasing
technology and financial literacy, particularly for vulnerable populations, as well as on financial
education for youth.

As the COVID-19 pandemic continues to dampen economic growth and disrupt livelihoods, andnew public health threats emerge, sustainable and predictable investment in healthcare innovation
is urgently needed to promote health system resilience, timely patient access to new treatments andeconomic competitiveness. These investments will enable the acceleration of transformativetechnological advances – such as genome editing and cell engineering, digital health solutions andartificial intelligence applications that promise to deliver new breakthroughs to patients at
unprecedented speed. Recent geopolitical events have also highlighted the importance ofcollaboration to ensure resilient supply chains for medical goods, which are critical to ensuring
patients are able to access needed healthcare products in a crisis. Even as the pandemic and related
developments have highlighted the critical role that healthcare innovation plays in promoting global
health and economic security, the Councils note with concern the proliferation of policies that risk
undermining innovation and reversing major advancements in healthcare investment,
compromising competitiveness for both countries. Of note, there is growing concern thatsignificant numbers of U.S.-approved innovative medicines will not become available in Japan in atimely manner or at all, due in part to the lack of transparency and predictability in the Japanesemarket for innovative medicines. Similarly, the research-based biopharmaceutical industry hascommented that recent U.S. policy developments will lead to fewer new treatments overall while
failing to improve affordability as promised.
The U.S.-Japan Business Council and Japan-U.S. Business Council (hereafter “the Councils”)
therefore reiterate their call for a bilateral private-public dialogue to improve timely accessto innovative medical products through innovative, equitable, efficient, and effective
healthcare systems. Recalling the four elements of a sustainable healthcare system set forth intheir 2021 statement, the Councils recommend that governments and the private sectors in boththe United States and Japan dramatically strengthen their collaboration to build a sustainable global
healthcare innovation ecosystem and strengthen supply chain resilience.
The Councils support ongoing discussions between the United States and Japan under the auspicesof the U.S.-Japan Competitiveness and Resilience (“CoRE”) Partnership, the Economic Policy
Consultative Committee (“EPCC”), and other bilateral dialogues and welcome the Japan-U.S. Joint
Leaders’ Statement (“Strengthening the Free and Open International Order”) issued by President
Joe Biden and Prime Minister Fumio Kishida in May 2022. We are committed to engaging in
discussions on policies that would contribute to the resilience of the global supply chain forpharmaceuticals and medical devices in collaboration with both governments.

This Joint Statement represents the collective priorities of the Councils, and we believe that thefollowing recommendations will help both government and industry advance greater health, whilestrengthening innovation in the U.S. and Japan.
1. Innovation Ecosystem
Reimbursement policies must reward technological breakthroughs and improvements to encouragecontinued investment and meaningful access for patients. For business and private sector investors
to prioritize innovation, policies must acknowledge and compensate for the risks and financial
losses associated with research and development. Fair and predictable reimbursements will ensurethat innovators continue to explore, develop, and refine cures and treatments for diseases and conditions to improve health.
1.1 Innovation in Healthcare•

For both: Develop and improve the R&D, regulatory environment and reimbursement system to encourage continued investment in the market.

•

For both: Create new initiatives to further public-private research collaborations and use
dialogue with industry, academia, medical-research institutions, investors and patient associations to identify opportunities for greater partnership and policy reform.

•

For Japan: Activate strategic dialogue on a “drug discovery innovation ecosystem” as a national strategy between the public and private sectors and promote the establishment of performance indicators and monitor progress of implementation of the MHLW “Pharmaceutical Industry Vision 2021.”•

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: Reform regulatory policies to adapt to changes in the R&D landscape such asincreasing biotech-led development of innovative medicines and medical devices (e.g., lower
hurdles to initiate development in Japan by reducing need for Japanese data).

•

For both: Prevent erosion of intellectual property protections that drive investment in biopharmaceutical research and are essential to research partnerships in Japan and the UnitedStates as well as around the world.
1.2 Evaluation of Innovation•

For Japan: Promote pricing approaches that consider the benefits derived from therapies,
including clinical outcomes as well as social benefits (e.g., getting people back to work, making it easier for patients and HCP, and increasing efficiency of healthcare services) and secondary economic payoffs (i.e., increased productivity).

•

For the U.S.: Advance value-based insurance design structures and improvements in patient
access that mitigate financial barriers to treatment and permit graduated payment options toallow patients to pay over time for larger expenses including those associated with advanced
medicines such as oncological treatments.
•

For both: Ensure that any Health Technology Assessment (“HTA”) does not delay patient
access or restrict physician choice.

•

For Japan: Exclude patented new drugs from the scope of price revisions (including off-year)
and market expansion repricing, similar to other G7 countries.

•

For both: Ensure the regulatory, pricing and reimbursement systems recognize the innovation associated with the development of new indications for existing therapies.

•

For both: Introduce financial initiatives that can reflect the value of innovation to encourage
the development of innovative therapeutics such as regenerative medicine, cell therapy andgene therapy, and for digital therapeutics such as software as a medical device (“SaMD”).

•

For Japan: Further expand legally established combined medical care (combination of noninsurance medical treatment and insurance covered medical treatment).

•

For Japan: Abolish Foreign Average Price adjustment system, which merely compares prices
of medical devices without any consideration to differences in healthcare systems and business environments among countries, to ensure U.S.-approved innovative medical devices
remain available in Japan.

•

For Japan: When reviewing Functional Categories for medical devices, work closely withindustry and ensure that any changes do not undermine rewarding innovation.
2. Digital Transformation•

For both: Promote alignment between U.S. and Japanese regulators in developing and implementing new digital health policies to reduce the cost of developing innovative therapies
and improve health outcomes by collecting data and supporting physician/patient interaction.

•

For both: Develop an environment in which individuals can access and use their own medical
records, while healthcare providers and researchers both domestically and internationally can
exchange medical data among different institutions to treat the same patient with adequate
privacy protections and patient permission.

•

For both: With appropriate protections and meaningful incentives, promote the development/adoption and use of interconnected/interoperable information platforms using international standards such as HL7/FHIR to support integrated care across diagnosis, treatment
planning and delivery, patient follow-up, and patient data management.

•

For Japan: Develop clear guidance/frameworks for healthcare institutions to store, manage
and share healthcare data that improves the quality and efficiency of the healthcare systemand public health, and to promote innovation.

•

For both: Address Ethical, Legal, and Social Issues (“ELSI”) including privacy, information
protection and antidiscrimination for accelerating the sharing of de-identified healthcare data.

Conduct an education campaign to raise awareness on the advances that can be achieved
with the sharing of anonymized medical data in driving evidence-based treatment solutions.
•

For both: Enable Decentralized Clinical Trials, allowing a hybrid of in-person and remotevisits to medical institutions for trial participants.

•

For both: Promote alignment between U.S. and Japanese regulators in cybersecurity risk
management approaches to protect against cyberattacks and data intrusions, ensure patient
safety and minimize enterprise risk.

•

For Japan: Establish a mechanism where the healthcare industry can properly deliver necessary information regarding pharmaceuticals and medical devices for patients and the public
by using digital technology.

•

For both: Promote the use of different treatment modalities such as telemedicine, which canbe utilized in the home.

•

For Japan: Further support the development of a data platform for the traceability of pharmaceuticals and medical devices.
3. Economic Security and Resilience•For both: Promote economic security policies that enhance resilience and encourage tradewith trusted partners.

•

For Japan: Establish regulatory data protection for pharmaceuticals including new modalities
with the highest global standard.

•

For both: Reinforce investment in R&D for advanced healthcare technologies to improve
the technological capabilities and industrial competitiveness of the U.S. and Japan.

•

For both: Establish initiatives to enhance mutually beneficial cooperation regarding components, material and manufacturing technology between Japan and the U.S. from the viewpoint of industry development and stable supply of digital health technology.

•

For both: Support countermeasures between the U.S. and Japan against infectious diseases
and disasters. Establish a market incentive system for R&D for antimicrobial drugs and vaccines and promote the fight against drug resistance (AMR).

•

For both: Reinforce global supply chains through alliances between the U.S. and Japan andwith their allied countries for stable supply of pharmaceuticals and medical devices.

•

For Japan: Ensure unexpected currency changes do not undermine the stability of thehealthcare business, supply chain resilience and a stable supply of medical devices and pharmaceutical products.

•

For both: Support the free and open flow of medical products across borders to ensure
timely access for patients.

•For both: Establish expedited regulatory review procedures for improved supply chain suchas relocation of manufacturing sites in the event of an emergency and regulatory reliance/sharing of reviews of post-approval changes related to manufacturing, and consider
other initiatives to support supply chain resilience.

•

For both: Establish a Mutual Recognition Agreement (MRA) on Good Manufacturing Practice (GMP) between the U.S. and Japan to improve supply chain management.

•

For both: Adopt and strengthen science-based pro-vaccination policies and public information campaigns, understanding that high vaccine uptake is essential to preserving economic and social resilience vis-à-vis pandemics and seasonal and endemic disease.

•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 and ensure the resilience of social security systems in ageing societies.

Amid the tension in the international community caused by Russia's aggression against of Ukraine,
it is essential for Japan and the United States to strengthen their collaborative efforts while looking
outward towards their friends in the Indo-Pacific region and beyond. The travel, tourism, andtransportation (“TTT”) industries are key platforms to promote dialogue, peace, tolerance, andsustainable development. The COVID-19 pandemic has taken its toll on the TTT industries overthe last two and a half years. Although its long-term impact on the industries remains to be seen,
increasing vaccination rates and changes in the composition of the virus suggest that the sectors
may be turning a corner.
According to the United Nations World Tourism Organization, global destinations welcomedalmost three times as many international arrivals in the first quarter of 2022 as in the same periodof 2021. Asia and the Pacific recorded a 64% increase over 2021, however levels were 93% below
2019 numbers as several destinations including Japan remained closed to non-essential travel. Whilethe number of inbound travelers to the United States and United Kingdom has recovered to about
70% of 2019 levels, Japan’s inbound tourism numbers remain below 10% of the industry’s peak in
2019.
The U.S.-Japan Business Council and the Japan-U.S. Business Council (“the Councils”) look tocontinue to partner with the public sector and offer the following recommendations, recognizing
the pandemic’s continuing effects on the TTT industries while keeping an eye towards the future
recovery of the industries. We believe our collective efforts will contribute not only to the recoveryof the industry, but also to growth in demand spurred by the creation of new business models,innovation, the Osaka-Kansai EXPO in 2025 and a broad recovery in the two countries.
1. Revitalization of the economy through implementation of lessons learned from thepandemic
The Councils commend the Kishida administration’s efforts to introduce measures to promote thereturn of business travel to Japan, including the resumption of visa-free independent travel to Japanand the elimination of post-arrival PCR testing, in line with the G7 members. At the same time,
we recommend the government take several additional steps to further ease border control
measures to facilitate an environment where people, goods, money and digital technologies canmove freely, thus advancing Japan's economic growth.

Implementing lessons learned from the pandemic
The Councils welcome the strengthening partnership between the two countries in the area of
public health, such as the Japanese version of the CDC recently announced by the Government ofJapan. Additionally, the Councils recommend the consideration of new crisis management systems
based on lessons learned from the COVID-19 pandemic. It is essential to see the roadmaps forthese systems early in the development process to improve the ability to react to similar crises in
the future. Additionally, it important to take advantage of the current JPY/USD exchange rate,currently at its lowest level in the last 24 years and attract inbound tourists to stimulate the recovery
and revitalize the Japanese economy. Restarting active cross-border travel between the U.S. andJapan will not only stimulate business between the two countries, it will also revive tourism, study
abroad, cultural exchange, and serve as the cornerstone for medium- to long-term economic
growth between the two countries.
Japan has made a strong push to promote the country as a tourism nation since the late Prime
Minister Abe returned to power in 2012. This policy led to TTT stakeholders to make significant
investments in their respective industries over the years. These stakeholders have since had
difficulty planning and strategizing for the return of leisure travel given the unpredictable effects ofthe pandemic. Going forward, the Councils recommended more transparent, clear, and frequent
communication on the government’s intentions to TTT stakeholders as the industries recover.
To the best of both countries’ abilities during the pandemic, Japan and the United States should
continue to hold close dialogue, share best practices to achieve a healthy balance between
socioeconomic activities and implementing systems for preventing infectious disease in addition topromoting the provision of healthcare. Effective communication with the private sector and public
is key.
2. Continue to promote the development and establishment of digital products andservices related to TTTThe COVID-19 pandemic has accelerated Japan’s promotion of digital transformation (“DX”)
which has led to new ways of doing things, making life easier both from a professional and private
perspective. For example, working from home and “workcations,” where location and time zones
are less relevant, have led to new forms of efficiencies in the workplace. The Councils look forward
to both governments supporting these types of new digital initiatives going forward. The Councils
also look forward to seeing these types of technologies showcased at the 2025 Osaka-Kansai
EXPO as well as the 2028 Los Angeles Olympic Games.
Promotion of new types of tourism

As a response to new work and lifestyle changes arising from the effects of the COVID-19
pandemic, the Councils recommend the promotion of less known nature and culture tourism
assets, local customs, and extended stays through less-traveled prefectures, in addition to tourism
promotion via digital platforms. Recruitment of new talent is also a key issue in the tourism
industry warranting the consideration of a hard look at current policies in place and enlisting the
support of both governments for the development of tourism human resources going forward.
Promotion of new transportation technologies and MaaS services
The Councils recommend Japan to continue to promote Mobility-as-a-Service (“MaaS”) initiatives
in the TTT sector. Innovative technologies such as driverless automobiles, delivery systems
utilizing robot and drone technology, and transportation systems utilizing big data are expected tocontribute not only to the development of smart cities, but also to issues facing both Japan and theUnited States in the areas of traffic congestion, labor shortages and carbon neutrality.
Promotion of usage of mobility and travel apps
The promotion of the availability and use of mobility and travel apps widely used globally would
lead to many benefits including the elimination of language barriers for travelers to Japan, increased
usage of local travel providers, promotion of visitation to destinations off the beaten path,increasing worker efficiency and productivity, etc. Current domestically developed apps are difficult
to use for international travelers given the lack of user-friendly English interfaces and inability touse international credit cards or payment methods. Increased usage of digital methods will also
allow for efficient methods to collect user data allowing TTT stakeholders to better understandtrends and plan for future growth.
3. Sustainability in Travel, Tourism, and Transportation
The Councils recognize that the pandemic should be viewed as an opportunity to initiate a better
future for the TTT industries, where digitalization and low carbon initiatives enable sustainablegrowth.
Ensuring inclusive development
The Councils encourage both governments to support inclusive development in the TTT 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 totechnologies, 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 andencourage both governments to support collaborative initiatives between the U.S. and Japaneseindustries, including research and development efforts of technology for the mobility sector andnext-generation aircraft. For example, in the automotive industry, it is important to pursue diverse
technology options according to local needs without limiting existing technology options. It isessential for the Japanese and US governments and private sector to contribute to the realization ofthese sustainable efforts by sharing technology widely to third countries. The promotion of nonfossil fuels is also crucial for the decarbonization of the entire energy value chain. In the airline
industry, Sustainable Aviation Fuels (SAF) have been identified as one of the key elements to help
achieve these goals, and the Councils encourage both governments to remove barriers to therealization of a cost competitive SAF market, while providing incentives to foster investment andsupporting the establishment of a resilient supply chain and deployment of SAF.