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

Towards a Stronger U.S.-Japan Economic Relationship
Washington, D.C.
September 18, 2019
Members of the U.S.-Japan Business Council and the Japan-U.S. Business Council (the“Councils”) held the 56th Annual U.S.-Japan Business Conference in Washington, D.C. on
September 17-18, under the theme, “Towards a Stronger U.S.-Japan Economic Relationship”.
This Conference assembled senior business leaders from the United States and Japan, whocommitted to promote a free, fair, and rules-based global trading system, as well as set an
example for sustainable economic growth in the Indo-Pacific region.
The Councils believe that continued U.S.-Japan economic and commercial cooperation remains
a critical stabilizing force globally amid elevated risks due to trade uncertainty and geopoliticaltensions. We believe the following recommendations will help strengthen our private sectors’abilities to compete in an increasingly complex and competitive environment.
1. Strengthen the bilateral economic relationship. As bilateral negotiations toward a
U.S.-Japan Trade Agreement progress, the Councils expressed optimism that a deal
would build upon the preliminary announcement by President Trump and Prime Minister
Abe on August 25 to further deepen U.S.-Japan trade relations. The Councils also
encouraged the negotiations to proceed based on the two nations’ joint statement issued
last September, with the ultimate goal of concluding a broad-based, high-standard, andforward-looking trade agreement. Specifically, the Councils stressed that any new trade
agreement between the U.S. and Japan should:
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Drive more job-creating investment in both economies;
Set high-standard trade rules that can serve as a new “platinum” standard;
Further expand two-way trade and investment;
Remain consistent with World Trade Organization (WTO) rules; and,
Reject managed trade and trade restrictions, which cause serious damage to consumers
and industries in both countries.

2. Strengthen and promote the rules-based global trading system. The Councils agreed
on the importance of U.S. and Japanese government leadership in promoting economic
growth and integration in the Indo-Pacific region, particularly since many businesses havedeveloped extensive value chains. The Councils recognized that the Comprehensive andProgressive Agreement for the Trans-Pacific Partnership (CPTPP) is an important step
forward for Japan and the region, and expressed hope that a U.S.-Japan Trade Agreement
will help drive economic growth in the region by expanding trade and raising standards
further. While both are important for regional trade, the global rules-based trading system
requires additional reinforcement. Accordingly, the Councils believe it is vital that bothgovernments:• Work collaboratively to resolve long-standing as well as emerging trade issues andpursue policies that will help remove uncertainty in global markets through the WTO.
Specifically, the Councils recommend that the U.S. and Japanese governments work
together with the European Union and other like-minded economies in the ongoing
efforts to address market-distorting measures, including trade-distorting industrial
subsidies, pursue needed WTO reforms, and work to ensure that the WTO Dispute
Settlement system is functioning effectively.
• Pursue reform in individual markets where we face joint competitive challenges. The
Councils particularly recommend prioritizing enhanced cooperation to address
challenges related to data localization, local content requirements, investment
restrictions, state-owned enterprises, forced technology transfers, intellectual property
rights, low-quality infrastructure projects that place lowest cost over best value overthe project life cycle, and other non-tariff barriers.
• Strengthen cooperation to advance regulatory best practices in global forums tocounter the use of discriminatory trade practices that may favor domestic firms overothers, and ensure a level playing field to foster a transparent and predictable businessenvironment.
3. Pursue policies that enable data to be moved and utilized across industries andborders. The Councils believe data can help facilitate the trade of goods and services, aswell as drive sustainable growth in both of our economies. We share concerns thatinconsistent regulations, data localization requirements, and overly prescriptive
cybersecurity guidelines are increasingly being used as non-tariff trade barriers thatthreaten economic activity. We encourage the two governments to continue to pursue
industry neutral, risk-based approaches that facilitate data utilization and the free flow ofdata across borders, while balancing concerns around privacy and security. The Data Free
Flow with Trust (DFFT) concept agreed to at this year’s G20 is a positive step in thisdirection, and specific recommendations can be found in the following Digital Economy
supplement.

4. Ensure that U.S.-Japan trade and investment is pursued as a fundamental national
interest. The Councils discussed the growing connection between economic and national
security policies, and stress that in this age of global supply chains, investment review
regimes and export controls on emerging and foundational technologies should benarrowly tailored to balance governments’ need to address legitimate national security
considerations and promote economic growth. As such, we reaffirmed our belief that any
legitimate policies should restrict trade as little as possible, and expressed our concern
over the United States’ possible imposition of tariffs on autos and auto-parts of Japaneseorigin, as well as the existing tariffs on steel and aluminum imports.
The U.S. and Japan are both capital-rich, technologically-sophisticated economies. The Councils’
members share many views about the opportunities presented by global trade, as well as
growing concerns about the challenges it faces, including the implications for key areas such as
innovation, digitalization and social security, with aging populations and persistent fiscal
constraints. While some, like those related to the digital economy, are cross-cutting, there are anumber of sector-specific areas that were discussed. Our 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”)
encourage the U.S. and Japanese governments to continue to promote and codify policies thatwill help grow the global digital economy. We believe that these efforts should be
simultaneously pursued through bilateral, plurilateral, and multilateral agreements that focus on:
1. Enabling data usage while strengthening data privacy and protection. The Councils
remain committed to promoting policy frameworks that facilitate data usage while enhancing
data privacy and protections. Any such agreement, should at a minimum include:• Commitments that ensure the ability for businesses in all sectors to move data acrossborders and a prohibition on the forced localization of data across all sectors.
• Commitments that the two governments will continue to take proactive andcoordinated leadership roles to promote a multi-stakeholder model for internet
governance, privacy, and cybersecurity around the world.
While a bilateral trade agreement that incorporates the above is important to the Councils,
we strongly encourage the two governments to continue work closely to promote the freeflow of data and extend high-standard privacy protections in multilateral fora such as the G7,
G20, OECD, and APEC. We are supportive of efforts by both governments to promote
frameworks that allow for self-regulation, utilize industry codes of conduct, and foster
international operability. We encourage the two governments to strive for greater adoptionof these principles through established mechanisms, such as the APEC Cross-Border Privacy
Rules system, and emerging concepts such as the Data Free Flow with Trust (DFFT)
initiative agreed to at the 2019 G20 Osaka Summit.
Additionally, we encourage the U.S. government to pursue federal privacy legislation thatwould protect consumers and eliminate a confusing patchwork of state laws.
2. Promoting best practices and international standards to manage increasing cyberrisks. Given the evolving nature of cybersecurity threats, the Councils recognize that riskbased approaches may be more effective than prescriptive regulation in addressing thosethreats. Any such agreement, should at a minimum:• Encourage to strengthen, jointly with industries the capabilities of their respective
national entities responsible for cybersecurity incident response, such as the
Department of Homeland Security, the National Institute for Standards andTechnology (NIST), the National center of Incident readiness and Strategy for
Cybersecurity (NISC), and Information Sharing and Analysis Centers (ISACs), among
others.
• Strengthen existing collaboration mechanisms for bilateral cooperation to identify andmitigate malicious intrusions or dissemination of malicious code that affect electronic
networks.
• Promote risk-based approaches that rely on consensus-based standards and risk
management best practices to identify and protect against cybersecurity risks and to
detect, respond to, and recover from cybersecurity events.
The Councils also support efforts by both governments to promote key International
Organization for Standardization (ISO) standards around risk management and assessment,
coordinate closely on cybersecurity capacity building programs with APEC and through the
U.S. Department of State’s Digital Connectivity and Cybersecurity Partnership.
3. Maintaining an innovative, open and inclusive framework for global rules on ecommerce. We encourage the two governments to pursue non-discriminatory treatment ofdigital products and services, and a permanent moratorium on customs duties for electronics
transmissions. Moreover, we hope the work for international rule-making on e-commerce in
the WTO will produce commercially meaningful results. These efforts should be as inclusive
as possible, while recognizing efforts made in the CPTPP, the EU-Japan EPA, and thepending USMCA.
4. Prohibiting forced localization requirements and forced technology transfers in
exchange for market access. We urge the two governments to continue work closely to:• Explicitly prohibit measures that require the use of local technology infrastructure,including computing facilities, in exchange for market access and other commercial
benefits.
• Pursue agreements that state that “no Party shall require the transfer of, or access to,source code of software owned by a person of another Party, or to an algorithm
expressed in that source code, as a condition for the import, distribution, sale or useof that software, or of products containing that software, in its territory.”
We also remain supportive of the ongoing efforts between Japan, the United States, and theEuropean Union to cooperate more closely on resolving long-standing issues around forced
technology transfers by third parties.
In addition to seeking these commitments in trade agreements, we also stress the importance ofU.S. and Japanese leadership related to the deployment of Artificial Intelligence and 5G
technologies. Joint efforts should focus on:

5. Striving to promote the utilization of Artificial Intelligence (AI). The Councils
encourage the two governments to promote the advancement of AI technologies throughthe development and use of global, consensus-based, and industry-led AI standards. We
encourage the two governments to build and promote governance frameworks that are
flexible and driven by a transparent, voluntary, and multi-stakeholder process.
Any efforts by the two governments in this area should be mindful of existing rules andregulations, incorporate risk-based approaches to AI governance, and maintain dataprotection regimes that recognize the need to collect, retain, and process data for AI
development, deployment and use. We also encourage the two governments to work closelywith industry and civil society to establish global ethical rules around fairness, bias, privacy,transparency and responsibility to explain decision making, human rights, and talentdevelopment related to AI.
6. Promoting the deployment of 5G networks and infrastructure. The Councils believethat 5G technology will be both an enabler of innovation and creator of new opportunities
across all industry sectors. As it is deployed, we encourage the two governments work
collaboratively to ensure that 5G communications networks are based on industry-led, open,
consensus-based international standards.

The U.S.-Japan Business Council and the Japan-U.S. Business Council (“the Councils”) arefocused on developing and deploying technologies to enhance our energy security and mitigate
climate change. Our businesses continue to focus on low-carbon and innovative solutions bothon the supply and demand sides of electricity and gas supply in our respective countries. We also
continue to identify business opportunities to deploy our resources, energy technologies andknowhow globally. The Councils encourage our respective governments to support member
activities with policies, tools, and frameworks for developing and deploying our low-carbon
technologies and ensuring greater penetration on a global scale.
Energy and Infrastructure Cooperation
The Councils remain committed to encouraging cooperation and development of energy andinfrastructure projects in the United States, Japan and globally. Joint efforts to promote highquality infrastructure development across the Indo-Pacific has been particularly welcomed,
however, we urge the two governments to consider the following to support this cooperation:• Clarify the roles, responsibilities, and programs of United States and Japan financial
institutions, such as the Overseas Private Investment Corporation (the Development
Finance Corporation from October 1, 2019), and the Japan Bank for International
Cooperation;• Ensure that the financial and policy tools for supporting energy and infrastructure
projects abroad extends to all forms of low carbon technologies, including natural gas,
nuclear, and renewable energy; and,• Increase advocacy and engagement efforts in target third countries to support ourmember business community efforts to secure energy and infrastructure projects.
Climate Change and Low-Carbon Energy
The Councils continue to encourage the development and deployment of clean energy
technologies to provide energy security and support shared climate change mitigation goals. Weurge the two governments to consider the following to support this cooperation:

j• Continue R&D and financial support to achieve economical deployment of carbon capture
and usage/recycle technologies to lower the carbon footprint of coal plants;• Promote U.S. natural gas exports and Japanese LNG-related technologies and knowhow toestablish greater footholds in existing markets while opening new ones;• Establish sustainable national frameworks for the deployment of renewable power such as
solar, on/off shore wind and energy storage technologies;• Develop hydrogen supply chains and infrastructure for power generation, stationary fuelcells, vehicles and other modes of transport to stimulate market development in the UnitedStates and Japan, as well as open new markets for our technologies globally; and,• Promote nuclear power including small modular and advanced reactors and United StatesJapan nuclear cooperation as a source of low-carbon baseload energy.
Digital Transformation in Energy Sector
The Councils recognize that digital technologies are increasingly critical to the energy sector. In
order to ensure that the sector is able to leverage these technologies most efficiently and securely,
we encourage the two governments to:• Promote a risk-based, industry neutral approach to cybersecurity and data protection that
extends to the energy sector; and,• Continue to support and promote the use of international standards for critical infrastructure
operators in the energy sector.
Innovation and Entrepreneurship
The Councils note that many of its members are developing innovative technologies in gas andelectricity sectors, including cyber and control systems, advanced generation nuclear reactors,
energy management systems, and energy storage systems. The Councils urge the two governments
to consider the following action to support the initiatives of our member companies:• Establish balanced and forward-looking energy policies that enable the development ofmarkets for these technologies.

The Financial Services Working Group of the Japan-U.S. Business Council and the U.S.-Japan
Business Council on September 18, 2019, together endorsed collective action in three areas:
Shaping an Interconnected Economy, Securing the Future for an Aging Population, and Strengthening Resilient
Economic Growth.
1. Shaping an Interconnected Economy. For the financial services industry, digital innovation
presents an opportunity to drive growth and competitiveness in the sector. However,
optimizing economic benefits to society and managing the policy and regulatory challenges ofdigital innovation require a high level of government-business cooperation. The Councils
recommend three areas of cooperation:
Level Playing Field. Level playing field is a key principle for strengthening financial and capital
markets and eliminating market inefficiencies and distortions. An effective regulatory
framework promotes innovation, fosters financial stability and protects consumers. An
effective framework applies the same set of rules so no entity benefits from an unfair advantage.
The Councils call for regulations that ensure that all industry competitors —whether
incumbents and new entrants— be subject to the same financial and legal requirements.
Open Data Architecture. In order to deploy new technologies to meet customer needs,
industries require full confidence in the ability to move data across borders. Restrictions ondata flow threaten security, weaken economic competitiveness, and undermine the efficacy andstrength of the Internet as a unified global network. The Councils recommend pursuit of aJapan-U.S. collaboration focused on creating a fully open data architecture, including a desired
timeline.
Cybersecurity. The growing frequency and sophistication of cybersecurity attacks pose criticalrisks to financial services companies. The industry is the primary target of malicious attacks and,collectively, financial services firms spend more to defend against and respond to cyberattacks
than any other sector. At stake are theft of sensitive data, disruption of service, breach ofconfidentiality and, ultimately, the stability of the financial system. As the pace and strength ofdigital attacks increase, the Councils recommend U.S.-Japan bilateral cooperation to build morecyber-resilient companies and a more secure information technology environment.

2. Securing the Future for an Aging Population. In the Asia-Pacific and around the world,
population aging – caused by rising life expectancy and declining fertility rates -- challenges
fiscal sustainability, financial market development and financial stability. The Councils urge
both governments to collaborate with industry to leverage the sector’s expertise related tosenior-friendly practices, economic data and policy recommendations regarding personal
retirement saving, healthcare insurance products and lifetime financial planning support.
Priority areas for cooperation are:Aging and Financial Inclusion. The Councils endorse the G20 Fukuoka Policy Priorities on
Aging and Financial Inclusion1, including increased support for financial literacy to build
knowledge of financial risk and risk mitigation.
Retirement and Long-term Investing. As populations age and pension fund liabilities rise, theweak financial position of pension funds heightens risks for current and future retirees. The
Councils recommend development on an enabling environment to induce greater individual
contributions to long-term savings, insurance and pension.
Policy Framework. Finally, the Councils urge adoption of a policy framework that does nothinder insurers and other financial institutions from supporting retirement and long-term
investing. This includes establishing an Insurance Capital Standard (ICS) that strikes the rightbalance between financial stability and economic growth. A policy framework that supports
adequate individual asset formation is also important, including tax incentives or subsidies.
3. Strengthening Resilient Economic Growth. Resilient economic growth is directly linked not
only to the ability of an economy to quickly recover during an economic downturn but also to
the sustainability of social and business activities. Resilient economies limit the magnitude ofloss and more quickly pivot to a sustainable growth path. In order to support economic
soundness in a challenging business environment, the Councils reaffirm our commitment tostrengthen resilient growth in the Japanese and U.S. economies, with a focus on the following
goals:
Regulatory Coherence. Inter-jurisdictional rules that are duplicative or conflicting create
regulatory fragmentation. For investors, this increases costs, limits hedging of a market andreduces risk diversification for investors. The overall impact – contracted markets and reduced
liquidity -- is a detriment to the economy. The Councils encourage greater collaboration among
financial regulators to foster international regulatory coherence, a critical of economic growthand sustainable development.

1 G20 Fukuoka Policy Priorities on Aging and Financial Inclusion: https://www.g20.org/pdf/documents/en/annex_03.pdf

Infrastructure Financing. Physical infrastructure underpins all economic activity.
Infrastructure increases productivity and competitiveness, spurs economic growth and builds
more resilient economies. Sustainability considerations are therefore important for
infrastructure investment, as represented by initiatives such as the Sustainable Development
Goals and Environmental, Social and Governance frameworks. Underfunding criticalinfrastructure hampers economic growth and exposes business and society to risk. Despite therisks, public and private sectors around the globe continue to underinvest in infrastructure.
The Councils endorse the G20 Fukuoka Principles for Quality Investment2 and urge
coordinated efforts from the Japanese and U.S. government to facilitate infrastructure financing
best practices.
Tokyo Financial Center. Tokyo has a rich history as a center of culture and technologicalinnovation. In view of the substantial comparative advantages of this megacity – democratic
government, rule of law, open data architecture, state-of-the-art technology and transport
infrastructure, leading global brands, a highly educated workforce and expansive culturalofferings – the Councils support a focused, multi-faceted effort to establish Tokyo’s position asa global financial center on par with the enormous depth and breadth of Japan’s economy.

2 G20 Principles Quality Infrastructure Investment: https://www.g20.org/pdf/documents/en/annex_01.pdf

Fundamentally, healthcare is an investment in the national and in the global economy. The R&Dbased pharmaceutical, medical device and dietary supplement industries continue to play vital roles
in improving the health and welfare of people in the world, including emerging markets, by driving
economic growth and job creation, developing innovative healthcare solutions that support thelengthening of average healthy lifespans, improving the quality of life, and reducing the economic
burden of disease. At the same time, the sustainability of social security systems, including
healthcare, remains a significant challenge to maintaining economic growth in rapidly aging
societies with a declining working-age population. The U.S.-Japan Business Council and the JapanU.S. Business Council (“the Councils”) recognize and welcome that important progress has been
made over the last several years in improving the competitiveness and attractiveness of the markets
in both countries, which is vital to fueling continued innovation in the future. To further promotethese trends, the Councils make the following specific recommendations in priority areas:
Improve Recognition of the Value of Innovation• For Japan: Improve the 2018 revisions to the Price Maintenance Premium by repealing thecompany requirements and by expanding the product criteria for drugs.
• For Japan: Limit annual pharmaceutical price revisions, which will be introduced in 2021, to
products where there are large margins between medical institutions’ purchase prices andNational Health Insurance (NHI) reimbursement prices.
• For Japan: Prevent annual price revisions for medical devices and maintain stability in thecurrent price revision formula.
• For both: Ensure that any health technology assessment (HTA) or cost effectivenessassessment (CEA) in the U.S. or in Japan does not delay patient access or restrict physician
choice.
• For the U.S.: Pursue market-based reforms that improve affordability and access for seniors
in Medicare Part D.
• For the U.S.: Abandon the International Pricing Index for drugs.
• 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.: Repeal the currently suspended Medical Device Excise Tax.

Enhance Clinical, Regulatory and Legal Systems• For Japan: Develop more public-private collaboration between the Japan Agency for
Medical Research and Development (AMED), academia, bio-ventures and thepharmaceutical industries to reduce barriers to translational research.
• 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 a regulatory data protection for biologics with the highest global
standard.
• For the U.S.: Support the intent of the Creating and Restoring Equal Access to Equivalent
Samples (CREATES) Act.
• For the U.S.: Support the U.S. Food and Drug Administration’s (FDA) efforts to achieve themedical device user fee program performance goals.
• For the U.S.: Partner with FDA to ensure a more efficient and transparent medical device
facility inspection process, per the 2017 FDA User Fee Reauthorization Act.
Increase the Efficiency and Effectiveness of Healthcare Expenditures• For both: Pursue pharmaceutical and medical device pricing and reimbursement reforms in
the context of the sustainability of the overall healthcare system.
• For both: Ensure that patient out-of-pocket copayments do not limit access to medicines.
• For both: Encourage innovation by applying cost-savings from the expanded use of generics
after the patent/exclusivity period of originators to new drugs.
• For both: Pursue medical device and pharmaceutical schemes that link pricing to both thepatient outcomes and preference as well as to the cost-offsets within the healthcare systemand the wider society.
• For the U.S.: Pass on pharmaceutical rebates to patients.
Encourage Preventive Measures• For Japan: Adopt pro-vaccination policies and give greater recognition to the societal valueof innovation relating to prevention.
• For Japan: Promote innovation and policies for new screening methods from a preventive
viewpoint, for example, to improve the rate of breast cancer screening.
• 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 both: Create an environment to enable the industry to study early disease detection andtreatment.
• For both: Support and encourage businesses’ voluntary initiatives to promote health andproductivity management in both countries.

Promote Use of Digital Health• For both: Encourage investment in digital health products; establish coverage and payment
policies that encourage technology innovation and patient access; and ensure regulatory
paradigms for digital health products are transparent, predictable, consistent, timely, andscience-based.
• For both: Build an understanding and accelerate the use of the value of health data, andenhance trust in processes that govern collection (including tools), use and reuse of data.
• For both: Promote alignment between the U.S. and Japanese regulators in developing andimplementing new digital health policies that accelerate and reduce cost of development ofinnovative therapies. More specifically, enact new public policies that support the delivery ofhealth care through promising new digital health technologies, such as artificial intelligence(AI), Big Data, practical use of Real-World Data, etc., and ensure that they are aligned withexisting standards and best practices developed by regional and global forums as well as withexisting laws.
• For both: Allow private industry to utilize real world data to develop and gain approval ofinnovative medical devices and innovative medicines, such as cancer genomic medicine andmedical imaging diagnostics assisted by AI.
• For both: Permit industry, academia, government and medical institutions to collaborate in
the development of real world databases of sufficient quantity and quality to assist industry
in the development of innovative medical devices and pharmaceuticals.
• For both: Create networked specialty centers that utilize a common IT platform to support
integrated care across diagnosis, treatment planning & delivery, patient follow-up, andmanagement of patient data as well as allow businesses to harness such centers.

Travel, tourism, and transportation are key drivers of economic growth for the United States andJapan. Japan’s ambitious national targets, for example, aim to attract 40 million foreign tourists by2020 and 60 million by 2030. Those tourists are expected to spend somewhere between $76 billion
and $142 billion (8 trillion and 15 trillion yen) annually in Japan—and the numbers will likely bebuoyed by events like the 2019 Rugby World Cup and the 2020 Tokyo Olympic and Paralympic
Games. For the United States, the numbers are even more impressive. Approximately 80 million
foreign tourists visited the United States in 2018 alone and the tourism industry generated over $2.5
trillion of economic activity.
While the U.S.-Japan Business Council and the Japan-U.S. Business Council (“the Councils”)
recognize that government efforts have resulted in the rapid growth of overseas visitors to Japanand U.S. tourism continues to thrive, there are actions the two governments could take to improve
tourism and maximize the economic impact of tourism. We believe that taking these actions will
not only support the efforts underway by the Japanese and Tokyo Metropolitan governments forthe 2020 Olympic and Paralympic Games, but will also bring increased tourism to rural areas inJapan and help sustain growth in the industry moving forward. Our suggestions include:
1. Leverage emerging technologies and enable innovative, travel, tourism, andtransportation services. The Councils believe that the continued expansion of innovative
demand-responsive, app-based tourism and transportation services would help enable thegrowth in travel and tourism sought by Japan. In addition to location-based ride-hailing andhome-sharing apps often used by local and foreign tourists, the Councils encourage bothgovernments to pursue policies that promote multi-modal digital mobility platforms, mobility asa service, and cashless payments. In particular, foreign tourists increasingly want and expect theconvenience of cashless payments, and have a better travel experience when the same payment
tools are offered in both their home and destination countries. Increasing the number ofmerchants who accept cashless payments, as well as increasing the use of technologies, such as
contactless acceptance, will result in the added benefit of increasing tourism expenditures.
Consumers increasingly expect such services, and we believe that these new technologies will
help expand the reach and spend of tourists in both markets.

The Councils recognize that the United States also has challenges in the areas of immigration
processing and aging transportation infrastructures including roads, port, airports and railways.
We recommend further discussions to accelerate cooperation between the public and private
sectors on how to leverage cutting edge technology to improve immigration processing andincrease the convenience and resiliency of transportation infrastructure in the United States.
2. Address uncertainties related to short-term rentals. Online and app-based travel platforms
are important tools in helping tourist destinations improve convenience and increaseaccommodation capacity for tourists, often with significant gains for communities and locations
that have not traditionally benefitted from an influx of tourism dollars, including rural areas.
While we support Japan’s efforts to address legitimate public safety challenges, our pastexperiences—such as in 2018 when the law on private lodging took effect—demonstrate that
there is still a need for the Japanese government to remove remaining barriers so that on-line
travel agencies and other app-based accommodation platforms can operate efficiently. They
include the annual cap that limits home-sharing to 180 days a year, differing local rules andordinances, and prohibitions based on specific dates and geographic locations.
3. Continue efforts to alleviate congestion on Tokyo’s infrastructure in advance of Tokyo
2020. Daily commuters and regular business operations have already maxed-out Tokyo’stransport system, raising fears of even worse congestion when Olympic visitors come to Tokyo.
In order to provide smooth transportation services without undermining normal economic
activity, the Japanese government introduced “TELEWORK DAYS of 2019” andrecommended that companies implement a variety of teleworking options, as well as introduce
staggered and/or flexible working hours. The Councils support these initiatives and areencouraged by the efforts of the Tokyo Metropolitan Government, the Cabinet Secretariat, andthe Tokyo 2020 Organizing Committee to organize the 2020TDM Promotion Project, theobjective of which is to control traffic demands to enable smooth event operations. We believethat this initiative will limit disruption to regular economic activity, and hope these initiatives
become a key legacy of the 2020 Tokyo Games.
Additionally, while passenger traffic at airports is a priority for tourism, authorities should be
mindful to continue to promote and facilitate air cargo traffic, which relies on the sametransport infrastructure and also plays a major role in economic growth.
4. Leverage technology to promote machine-assisted and autonomous transportation anddelivery services. The Councils recognize the importance of creating transportation options
that are convenient and accessible to all, including for those who cannot drive, so as to manage
congestion while ensuring the continuity of normal economic activity. For example, innovativetechnologies such as automated driving, mobile assistance robots, delivery systems that utilize
drones, and efficient transportation systems using big data will contribute to developing smart
cities and solving common social problems in both countries, such as traffic congestion,
manpower shortages, and environmental problems. For such new technologies to be put topractical use, safety and social acceptability will be critically important, and the Councils hopethat such new technologies are developed jointly by both the public and private sectors. Crossjurisdictional cooperation will also be critical to these technologies and other smart city
developments, and the Councils encourage the governments to avoid competing or conflicting
regulations and guidelines.
5. Address concerns regarding the continuity of the Integrated Resorts (IR) business. The
Councils recognize that IR will help grow Japan’s travel and tourism industries and contributeto regional economic revitalization by attracting significant investments of as much as over 1
trillion yen ($9.4 billion), creating tens of thousands of jobs, and catalysing infrastructuredevelopment in surrounding areas. In this regard, the Councils have concerns that under the2018 IR Development Act, the initial certification of the IR Area Development Plan is valid for
only ten years, and subsequent renewals are valid for only five years. Such a short certification
renewal timeline poses significant political risks to the continuity of the IR business as well as
uncertainty for third party investors. Therefore, the Councils recommend that the Japanese
government use the Basic Policies, which we expect to be issued in the next few months, todetail the regulatory framework and requirements for IR facilities and thereby comprehensively
address these concerns. In addition, the Councils recognize the need to address public concerns
about gambling addiction and money laundering, and recommend strong public-private
partnership to ensure that the IR projects positively contribute to the Japanese economy.