European Union - Delegation of the European Commission to Japan

Today, the European Commission held a high level meeting on deregulation with Japanese Ministries. At the meeting, which was co-chaired by Mr Gérard DEPAYRE, Deputy Director-General for External Relations in the European Commission, and Mr Shotaro OSHIMA, Director-General, Economic Affairs Bureau, Ministry of Foreign Affairs, the Commission urged Japan to accelerate its deregulation process.

Commenting on the meeting, Mr DEPAYRE said:

“It is in everyone’s interest that Japan restarts its economy and creates the conditions for sustained domestic demand-led growth. Structural reform, notably deregulation, is an essential part of the policy mix needed to achieve this. A comprehensive and credible deregulation programme will enhance competition, thereby increasing business opportunities and improving standards of living.

Mature economies, like Japan’s and the EU’s, can no longer afford to be regulated in a way that isolates them from today’s global economy. Our experience in Europe demonstrates that deregulation works. Creating our Single Market was – and still is – essentially a process built on regulatory reform. It is estimated that the Single Market Programme created, in only its early years, additional income for Europe of the order of 60 to 80 billion ecu (9.500 to 12.600 billion yen) and around 600,000 new jobs. I should underline that these benefits came very quickly, contrary to the fear sometimes expressed that deregulation measures can only have a beneficial impact in the long term.

We fully recognise the progress in Japan to date. However, excessive regulation is still impairing competitiveness and slowing down the process of healthy structural change. The question has been asked whether, in order to restore economic growth, Japan should primarily rely on financial sector reform and fiscal stimulus, as opposed to the longer-term benefits of deregulation. I would like to stress that financial sector reform and fiscal stimulus measures will serve no purpose unless underpinned by deregulation. Structural reform is not an “optional extra”, to be put off to later. It is integral to lasting recovery and a prerequisite for securing long-term economic and financial security.

While regulatory reform is central to long-term economic recovery in Japan, it is also of great importance to the EU because it has the potential to eliminate a considerable number of trade barriers faced by European companies. We therefore attach particular importance to the inclusion in Japan’s revised deregulation programme to be announced in March 1999 of EU proposals submitted in October to the Japanese Government.”

Background

The establishment of an EU-Japan deregulation dialogue at experts level was agreed in 1994. It was reinforced in 1997 by a decision to hold a high level meeting on deregulation at least on an annual basis. At the EU-Japan Summit held in Tokyo on 12 January 1998, Mr. Ryutaro HASHIMOTO, then Prime Minister of Japan, Mr. Tony BLAIR, then President of the European Council and Mr. Jacques SANTER, President of the European Commission, agreed on the importance of further deepening the dialogue. Last March, Mr. Gérard DEPAYRE held a high level meeting on deregulation with Japanese ministries. At the EU-Japan Ministerial Meeting of 12 October, Sir Leon BRITTAN, Vice-President of the European Commission, handed over the new list of over 200 EU deregulation proposals for Japan. He expressed satisfaction at the quality and two-way nature of the deregulation dialogue, and stressed the importance for Japan to speed up its deregulation efforts.

Today’s meeting focused on a document highlighting 46 of the EU’s list of over 200 deregulation proposals for Japan. The highlights cover 4 horizontal areas (Administrative Procedures, Investment, Distribution and Competition Policy) and 9 sectoral areas (construction, agriculture and food, transport services, financial services, professional services, automotive sector, telecommunications, pharmaceuticals and cosmetics, and leather and leather footwear).

The list of highlights was drawn up on the basis of a number of criteria, including:

• Estimated Economic Impact and results for structural reform
• Complementarity with Japan’s stated objectives of regulating at minimum cost
• Speed and feasibility of implementation of the measures.

Notwithstanding progress in some areas such as telecommunications, financial services, automobiles and construction, the list of EU deregulation proposals demonstrates the magnitude of the work that remains to be done.

During his stay, Mr. DEPAYRE is also meeting with officials of the Ministry of Foreign Affairs, Ministry of International Trade and Industry, Ministry of Agriculture, Forestry and Fisheries and Ministry of Finance as well as senior Japanese politicians, representatives of the Deregulation Committee, and representatives of the European and Japanese business communities. The main subjects of these talks are the economic situation in Japan and the state of affairs on structural reform in Japan, including Deregulation.

The list of highlights, as well as the full list of the EU deregulation proposals are available upon request. The list of highlights is also available on Internet (http://jpn.ec.europa.eu).

For further details, please contact: Leonidas Karapiperis (Tel: 3239-0461), Dominique Inoue (Tel: 3239-0464) or Miwako Suetsune (Tel: 3239-0430).