Speech Günter Verheugen: het versterken van de economische samenwerking tussen Japan en de EU, Tokyo, 13 juli 2006 (en)

SPEECH/06/455

Günter Verheugen

Vice-President of the European Commission

responsible for Enterprise and Industry

Boosting economic cooperation between Japan and the EU

Visit to Japan on 13/14 July

Tokyo, 13^th July 2006

Honourable Members of the EU-Japan Business Round Table,

Dear guests,

Ladies and Gentlemen,

It is my great honour and pleasure to be with you in Tokyo and I would like to express my warmest gratitude to Mr Kobayashi for hosting this dinner. I am very much looking forward to our tomorrow´s discussion on how to design successful business relations between the EU and Japan, but let me already take the opportunity to share with you some general reflections tonight.

Japan and the EU have undertaken a considerable number of joint endeavours. It would grasp to short to reduce our relation to the fact that our two economies account for 40% of the world total GDP, that Japan is the EU´s third largest export market and the EU Japan´s second largest export market. We share more: promotion of global peace and stability in a changing world, responsibility for the global economic system, the protection of the environment and the promotion of sustainable development for present and future generations.

And we also face very similar challenges: how to cope with major global and societal changes, namely our biggest challenge, a major demographic change with low birth rates and ageing populations; how to foster competitiveness while maintaining our common mode of sustainable development and social responsibility and how to establish a successful industrial policy dialogue and trustful trade partnership.

Globalisation today is a fact. There aren’t any alternatives. We have to direct the change through a proactive approach to competitiveness and fair world-wide competition. Economic nationalism is not a solution. Partnership, based on common values and integrated economies, international co-operation and open markets, are the key.

Our European strategy for jobs and growth which we re-launched in 2005 is primarily based on three main pillars: the need to fully exploit our internal market; the need to avoid overregulation; and the need to boost innovation:

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  With 450 million consumers we in Europe have the biggest Single Market without borders in the world. Japanese companies are very well aware of that. But this Single Market is not yet complete, with a need for better integration of energy and financial markets, removing obstacles to the free movement of labour, the movement of goods, and in particular of services. The building of the single market is a dynamic process, not a one-off achievement. A strong, open, competitive single market is one of our responses to globalisation.
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  Equally important is the creation of a business friendly environment: Last year the Commission has launched the biggest and most wide-ranging initiative to date for cutting red-tape and avoiding overregulation. Over-regulation hampers the deployment of creative companies as well as potential investors. Investors who lay the ground for innovations and new markets take tremendous risks. They need legal certainty, not over-regulation. Our “better regulation” project means that no European regulation will be introduced without a complete analysis of the costs it will entail for the economy and for businesses. For the first time, we are also screening the entire corpus of European legislation from the point of view of competitiveness. This will lead to fewer and simpler regulations and will make life easier for companies and particularly for small and medium-sized enterprises.
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  The third element concerns the development of an innovative, knowledge-based economy. Innovation is clearly the key to competitiveness in a globalised economy. I am particularly pleased that Japan puts a strong emphasis on this approach in its recent “New Economic Growth Strategy”. There is no need to convince you that industry without innovation would be economic life without focus. In the end, it is enterprises that innovate, not policy-makers. However, in the EU we are working on a more ambitious innovation policy to support companies and to set a better operational framework. Here, we are lagging behind Japan. We have set the goal of raising our research investment from 1.9% of GDP to around 3%. To create the right conditions for enterprises to innovate, we rely on the continuous development of business clusters: these facilitate access to two things which are the life-blood of innovators - finance and business partners. At the same time, we are improving access of smaller enterprises to venture capital and we continue to develop our support for the internationalisation of smaller technology-based companies.

As our markets are closely inter-related, we need more openness. This is also the core issue of the ongoing WTO talks. Europe wants this Round to succeed. This is why we have already made considerable down payments during these sometimes acrimonious talks to keep the Round alive and kicking. Without EU’s commitment and its agricultural concessions we would not be as close to a deal as we are now.

But Europe cannot be the sole paymaster of the Round. For opening our farm markets and for reducing our farm support dramatically, we need better market access for the European industry via real cuts tariffs. The EU market for industrial goods is open and tariffs are the lowest in the world. Emerging economies still have very high tariffs and many of them have become internationally competitive in the main manufacturing sectors. We need to create a global level playing field via strong reduction of tariff peaks, high tariffs, and tariff escalation. I am hopeful that a balanced deal can be struck by the end of this month – to the benefit to all of us.

Our markets in the EU and Japan are closely inter-related. This is why it is so important that we do our utmost to break the remaining walls and concentrate on the development of our cooperation on several issues of direct interest to European and Japanese businesses:

Together, we have to better ensure the comprehensive protection of Intellectual Property Rights and the effective fight against counterfeiting. In my meetings with the Japanese government today I have suggested that Japan and the EU team up to fight counterfeiting together. What I have in mind is a joint initiative to boost our co-operation on defending intellectual property rights world wide. Our entrepreneurs have to be able to rely on a proper reward for innovation, based on sound and recognised rights, enforceable and enforced worldwide. Otherwise, why would our companies invest more in R&D for the sake of innovation? As key OECD economies, the EU and Japan have to develop closer customs cooperation and joint IPR enforcement in third countries. We have also to develop joint positions on IPR issues in bilateral dialogues with third countries.

Europe and Japan could envisage closer customs co-operation, including more data sharing. I could imagine joint border enforcement actions, joint enforcement in third countries and the creation of joint networks of EU and Japanese diplomats in third countries specially tasked with working on intellectual property protection.

Another area where I would like to see closer co-operation is to remove non-tariff barriers and to stop over-regulation and excessive burdens which kill growth, innovation and business development. By way of example, the liberalization of the financial service business in Japan, with the abolition of legal segmentation of banking, security and insurance, would certainly benefit to consumers and businesses. This is fully consistent with Japanese efforts to promote a strong reform drive.

We must also improve the foreign investment framework, both in Europe and Japan. Continuous pressure is needed, notably from the Round Table, to make our countries a more attractive place to invest. Despite the already strong EU-Japan relationship, more could be done to reduce barriers to foreign investment. For example, we need in Japan a proper tax treatment for cross border mergers.

Recently we have developed, with the strong support of the Trans Atlantic Business Dialogue, an ambitious EU-US economic initiative. I am extremely grateful that my Japanese counterparts have responded positively to my suggestion for an EU-Japan initiative today. We will follow this up and try to set up a joint action plan with concrete measures.

Ladies and Gentlemen,

We are all engaged in worldwide competition. We all accept that competition is in our mutual interest for business and customers, wherever they may be. A healthy investment climate depends upon more open markets, more predictable trade rules and conditions, and fair competition.

I rely on a strong input from the EU-Japan Business Dialogue Round Table to help us in achieving this. I am eager to discuss with you tomorrow morning your views and ideas in a spirit of partnership between policy makers and industry inspired by our common efforts to further strengthening our successful EU-Japan relationship.

Domo arigato - thank you very much for your attention.