CELEX: 51995PC0188
Language: en
Date: 1995-05-23
Title: Proposal for a COUNCIL REGULATION (EC) on the implementation by the European Commission of actions to promote exports to Japan

COMMISSION OF THE EUROPEAN COMMUNITIES
                                      Brussels, 23.05.1995
                                      COM(95) 188 final
                                      95/0116 (ACC)
                       Proposal for a
             COUNCIL REGULATION (EC)
on the implementation by the European Commission of actions
                to promote exports to Japan
              (presented by the Commission)
 ---pagebreak---  ---pagebreak---                                  fXfLANATOPV MEMORANDUM
1.   THIS PROPOSAL IS TO BE CONSIDERED IN PARALLEL WITH THE
     COMMISSION COMMUNICATION ON BILATERAL RELATIONS WITH
     JAPAN.
     Three serious problems have been identified within Europe when promoting its
     exports to Japan :
          First, insufficient European companies are aware of the importance of the
          Japanese market, both in terms of its size but also because of the advantages it
          brings to a company which successfully establishes a presence on it. The
          Japanese market represents perhaps the largest single homogeneous market for
          European products (the US market being much more fractured and
          heterogeneous). In addition European firms which secure a foothold in Japan
          expose themselves to a climate of creativity and product innovation from which
          they can derive an increased competitive edge in other world markets. The
          development of relations with Japanese companies itself also provides an
          effective route into many Asian markets into which they are currently expanding.
          Too few European companies are aware of these opportunities, which need to be
          explained to them.
          Second, the peculiarities of the Japanese market are such that a specific
          programme devoted to assisting exporters to become familiar with them and to
          learn how to operate successfully in a Japanese business environment forms an
          essential ingredient of commercial policy towards Japan.
          Third, the level of entry costs into the Japanese market is high and thus the
          benefits to be gained through joint efforts by European companies are
          considerable. This leads to considerable economies of scale for many sectors if
          an European Community wide market penetration effort is undertaken.
          For these reasons, a significant budget has been devoted by the European
           Community to the promotion of exports, particularly from small- and medium-
           sized companies, to Japan for many years. Much of it goes to the long-running
           and successful ETP programme (Executive Training Programme). In more
           recent years the Commission has developed, in close cooperation with
           representatives of Member State export promotion authorities, cost-effective,
           focused procedures for introducing European companies to the Japanese market
           in its "Gateway to Japan" programme.
 As a conclusion, and because of the growing importance of the European Community
 programmes of promotion of exports to Japan in reinforcing European trade policy
 towards Japan on one hand, and on the other hand in complementing and adding value to
 the Member States' export promotion schemes, it is now necessary to take some formal
 action to consolidate those programmes.
 ---pagebreak---      A COUNCIL REGULATION IS NOW NEEDED TO PROVIDE THE
     PROGRAMMES PROMOTING EXPORTS TO JAPAN WITH A FIRM LEGAL
     BASIS.
     This point is a direct consequence of the Commission Communication to the
     Budgetary Authorities "on legal basis and maximal amounts"1 as all budget lines
     exceeding 5 MECU now need a specific legal basts.
3   THIS PROPOSAL INCLUDES THE FOLLOWING POINTS :
    Articles 1 and 2 of the draft Regulation indicate the type of export promotion actions
    which the Commission is authorised to undertake. The Commission is also requested
    to ensure that such actions would be compatible with the various Community
    policies.
    Article 4 lays down a consultative committee to assist the Commission in the
    performance of its duties under the Regulation.
    The legal act chosen is in the form of a Regulation, as the type of export promotion
    activities that will be financed are likely to effect private natural and legal persons.
    Finally, the legal basis of the act is Article 113 of the EC Treaty, since the object and
    purpose of the act is to influence the volume of exports to the Japanese market,
    which clearly forms part of the common commercial policy.
  SEC(94) 1106 final
 ---pagebreak---                                  COUNCIL REGULATION
                                           of....
 on the implementation by the European Commission of actions to promote exports
                                         to Japan
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community and in particular
Article 113 thereof,
Having regard to the proposalfromthe Commission1,
Whereas the Commission has submitted to the Council a communication regarding
bilateral relations with Japan2,
Whereas the persistent trade imbalance between the European Community and Japan is a
major cause of tension between both partners,
Whereas the Council has agreed in its meeting of 15 June 1992 that in order to reduce this
imbalance appropriate actions to encourage directly or indirectly and consolidate the
development of European exports should be taken,
Whereas European Community trade policies aimed at improving operating conditions for
business in Japan need to be backed up by practical and specific measures to support
European exporters' efforts and prepare them to operate successfully in a difficult market
with special demands and specific requirements,
 ° O.J. C...
 B
    O.J. C...
                                                         4
 ---pagebreak--- Whereas the broadest possible participation by undertakings in all Member States should
be encouraged, whereas experience has shown that export promotion can be carried out
efficiently by dealing with groups of companies from several Member States, thereby
generating critical mass effects and economies of scale,
Whereas the objectives and operating criteria of the actions to be undertaken have been
defined,
HAS ADOPTED THIS REGULATION
Article 1
The European Commission shall design and carry out the implementation of a trade
promotion programme to Japan to give support to European exporters at all the different
steps in building up a European company presence in the Japanese market.
 Article 2
                                                »
 1. The European Commission shall, in particular, undertake directly or indirectly the
      following activities, which shall be designed to be complementary to Member State
      activities regarding the Japanese market :
       - seminars, conferences, networking both in Europe and in Japan,
       - European Community group participation in fairs and missions in Japan, together
           with the corresponding recruitment of European exporters,
       - training programmes to build up a pool of executives able to communicate in
           Japanese in a business environment,
        - other activities designed to maximise the ability of European exporters to enter the
           Japanese market.
 2.    In implementing the above paragraph, the Commission shall ensure the compatibility
       of the specific activities with the various aspects of Community policies and shall
        strive for the maximum benefit possible to Community exporters to Japan.
  3.    The annual programme for implementing the measures defined in paragraph 1 will be
        defined according to the procedure in article 4, paragraph 2.
  Article 3
  In order to enable the European Commission to carry out the trade promotion programme
  and the specific activities mentioned in this Regulation, the Commission shall dispose.of
  the necessaryfinancialresources; for that reason, every year the European Commission
  will include a proposal for itsfinancialrequirements'for the activities specified in Article 2
  in the normal budgetary procedures;
                                                  *$
 ---pagebreak---    Article 4
   The Commission shall be assisted by a committee of an advisory nature composed of the
   representatives of the Member States and chaired by the representative of the
   Commission.
   The representative of the Commission shall submit to the committee a draft of the
   measures to be taken. The committee shall deliver its opinion on the draft within a time
   limit which the chairman may lay down according to the urgency of the matter, if
   necessary by taking a vote.
   The opinion shall be recorded in the minutes, in addition, each Member State shall have
   the right to ask to have its position recorded in the minutes.
   The Commission shall take the utmost account of the opinion delivered by the committee.
   It shall inform the committee of the manner in which its opinion has been taken into
   account.
V.
    Article 5
   This regulation shall enter into force on the day following that of its publication in the
    Official Journal of the European Communities.
    This regulation shall be binding in its entirety'and directly applicable in all Member States.
    Done at Brussels,
                                                             For the Council,
 V
                                                             The President
                                                        Q
 ---pagebreak---                                        Financial statement
Item B7-5022 :          Promotion of Community exports to non-Community countries, notably
                       Japan, Budget 1995
Article B7-851:        Promotion of European Union exports to Japan, APB 1996
                                                                         en MioEcus
   credits authorised 1995 (I)          credits requested 1996 (2)     variation in %
 commitments          payments        commitments          payments  commit     pay.
       1                 2                                     4     5=3/1      6=4/2
                                            3
9,140              8,540             13,000             12,500       42%        46%
(1) part of credits authorised for line B7-5022 intendedfor the action in question
(2) new line b7-851 (APB 96)
1. TITLE
        Proposal for a Council regulation on the implementation by the European Commission
        of actions to promote exports to Japan
2. BUDGETARY HEADING
        B7-5022
        B7-851 (1996)
3. LEGAL BASIS
        Article 113 of the EC Treaty
4. DESCRIPTION OF OPERATION :
   4.1 General objective
        To increase EU exports to Japan.
   4.2 Duration of the action; means foreseen for its renewal
                                                      \
 ---pagebreak---         Indefinite. Medium-term programmes are subject to annual contracts, renewable in
        accordance with the availibility of budgetary resources.
5. CLASSIFICATION OF EXPENDITURE/REVENUE
   5.1 DO/DNO:DNO
   5.2CD/CND: CD
   5.3 Type of revenue involved
        Contribution from industry, notably for the Executive Training Programme.
6. TYPE OF EXPENDITURE/REVENUE
       - 100% subsidy
       No.
        - Subsidy for co-financing with other sources in the public or private sector?
        Yes, subsidies not normally exceeding 50% are provided to professional associations and
        other responsible organisations for actions such as participation in trade fairs, missions and
        other promotional activities.
        - Interest subsidy
        No.
        - Others
       Financing of own initiatives, such as Executive Training Programme in Japan and the
        "Gateway to Japan" campaign, studies, market research and specific promotion campaigns.
        - Should the action prove an economic success, is there provision for all or part of the
           Community contribution to be reimbursed?
        All agreements include provision for the reimbursement of surplus funds.
        - Will the proposed operation cause any changes in the level of revenue?
        No.
        - Are receipts reallocated?
        Receipts from the Executive training Programme are used to offset the costs of future
           programmes.
7. FINANCIAL IMPACT ON APPROPRIATIONS FOR OPERATIONS
   7.1 Method of calculating total cost of the operation
                                                           ?
 ---pagebreak---         A. Measures aimed at improving knowledge of the Japanese market.
        The costs of the Executive Training Programme are calculated on the basis of 50 participants
        and consist of allowances for participants and costs for language tuition and other services
        provided by outside contractors.
        B. Measures aimed at developing the presence of EU industry in Japan.
        The costs of the "Gateway to Japan" campaign are based on the result of a call to tender for
        the management of the campaign. The budget for the caimpaign is considered to be the
        minimun required to sustain an effective and meaningful campaign.
        C. Measures to improve trade relations between the EU and Japan.
        We receive more requests for support than we are able to meet. The current budget is the
        minimum which will allow the flexibility to respond to requests from several sources and
        enable us to support programmes in several Member States.
8. WHAT ANTI-FRAUD MEASURES ARE PLANNED IN THE PROPOSAL FOR THE
   OPERATION?
        Methods of control (submission of reports, etc.) are included in all agreements or contracts
        between the Commission and beneficiaries of subsidies/contractors. We monitor closely the
        work of all contractors and all those given financial support. Wherever possible, a
        representative of the Commission participates in commercial fairs, seminars and conferences
        to ensure that activities are carried out as agreed. We verify all activities before payment are
        made and certain agreements also require organisations to submit of financial accounts
        certified by their auditors.
9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS
   9.1.       Specific objectives of proposed operation, population targeted
                 Specific objectives : links with the general objective
         The overall objective of EXPROM is to promote exports from the EU to Japan with a view
         to reducing the substantial Japanese trade surplus. Medium term objectives are to improve
        knowledge of the Japanese market, to develop the presence of EU industry in Japan, to
         promote the image of the EU in Japan. Short term objectives are to train a cadre of managers
         with an intimate and useful knowledge of the Japanese language and business culture to carry
         out a range of promotional activities to aid industry already established in the Japanese
         market and those trying to penetrate the market.
              - Target population
                       <
         All actions are designed to be of direct benefit to EU exporters.
                                                           ^
 ---pagebreak---              Is the operation incorporated in the financial programming of the DC for the years
     concerned? Yes
              To which broader objective defined in the DG's financial programming does the
     objective of the proposed operation correspond?
     The promotion of EU exports to Japan
9.2. Reasons for the operation
          - Needfor interventionfromthe Community budget
     The reasons for this operation are closely linked to the Commission's role and responsibilities
     in EU/Japan trade relations. Currently these relations are dominated by the substantial
     Japanese trade surplus. This results partly from difficulties experienced by EU industry in
     penetrating the Japanese market and the Commission spends much time negotiating with the
     Japanese to reduce barriers to market entry. But the Japanese take an interest not just in the
     EU's requests for the reduction of barriers but also in what pratical support we give to
     industry to help penetrate the market. They see our support for industry as evidence of our
     sincerity and commitment and of a coherent EU approach to the problem The Commission's
     export promotion activities thus have an impact on the overall EU relationship with Japan.
     Member States programmes could not play this role.
     The EU programme is able to target sectors which are important within the EU as a whole
     but not within individual Member States. For example, national trade promotion efforts
     concentrate heavily on consumer goods with capital goods somewhat neglected. Member
     States have explicitly welcomed EU action in this field. Similarly, it would not be cost
     effective for any one Member State to set up a programme to send young executivies to
     Japan. But at EU level the Executive Training Programme has the critical mass necessary for
     it to work.
     Three meeting a year between the Commision and export promotion expertsfromMember
      States ensure that the EUs activities complement and add value to those of Member States.
          - Choice of methods of intervention
              * advantages over alternative measures (comparative advantages)
              * analysis of similar operations at community or national level
           -   * main factors of uncertainty which could affect the specific residts of
              the operation
      The economic situation within Member States is affecting the confidence and activity of EU
      industry
9.3 Monitoring and evaluation of the operation
           - Performance indicators selected
                                                        \o
 ---pagebreak---               * output indicators
              * indicators of impact, following the objectives chosen
      The Executive Training Programme.
      Monitoring of profession activities of former ETP participants, monitoring of participants'
      progress throughout the programme, analysis of results obtained by firms who have
      participated in the programme.
      Gateway to Japan campaign: objectives set for each market sector against which eventual
      results are evaluated, independent evaluation commissioned at the end of each campaign,
      monitoting of the views of participating companies and industries.
      Individual actions: individual performance standards are selected for all actions.
           - Details andfrequency of planned evaluation
      - Periodic review of the ETP programme, normally a full review every three years.
      - Reports on each ETP participant during the programme and detailed reporting by
      participants after the conclusion of the programme.
      - Continuous reporting by consultants managing EXPROM projects.
      - Reports by external organisations organising activities supported by EXPROM.
      - Indépendant evaluation of export campaigns.
           - Evaluation of results
      Executive Training Programme
      Continues to produce good quality results, major problems having been resolved over the
      approximately fifteen years of its existence.
      Gateway to Japan
      The first year of the campaign is judged to have been succesfiil, firmly establishing the
      campaign's identity in the EU and Japan.
      Other activities
      Shorter term activities are evaluated on termination. Actions undertaken to date are
      considered to have met objectives.
10. ADMINISTRATIVE EXPENDITURE (PART A OF THE BUDGET)
       10.1. Will the proposed action involve an increase in Commission staff?
      No.
       10.2. Indicate the amount of staff and administrative expenditure involved in the proposed
       operation
       Three officials (one A, two B), and one END work full-time on EXPROM activities.
                                                       A\
 ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(95) 188 final
                                              DOCUMENTS
EN                                                                       02 11
                                     Catalogue number : CB-CO-95-212-EN-C
                                                             ISBN 92-77-88956-X
Office for Official Publications of the European Communities
L-2985 Luxembourg
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