EBC Meeting Minutes

EBC Board of Governors' Meeting

Thursday, 7 September 2006; Europa House 6F, 08:30 a.m.-10:00 a.m.

      

Attendees: R. Collasse, M.Reiterer, A. Murray, J. Edberg, K. Harris, H. Mueller,
M. Lachaussee, J. Bertrand, A. Pockett, G. Keown, H. De Mestier, C. Bystedt (for M.Makinen), T. Strand, H. Tempel, D. Buckley, G. Schlosser (for G. Zorn), S. Kamijo, A. Ponzetta, R. Scherpenhuijsen, F. Cazzoli, K.-U. Grathwohl, P. Valery, I. Pulford,
Special Guest: H. E. Ambassador Hugh Richardson
Regrets: J.-F. Minier, C. Eklund, R. Kracklauer, R. Mason, G. Zorn, M. Hoffmann, M. Makinen,
L. Dubois, D. Delgorge, V. Trelut, Y. Yamada, O. Benz

1. INTRODUCTION

The EBC Chairman welcomed Hugh Richardson, new Ambassador and Head of the Delegation of the European Commission to Japan, who joined the meeting to introduce himself and express support for and interest in the work of the EBC.

2. REPORT FROM THE EC DELEGATION

Michael Reiterer, Deputy Head of the Delegation of the European Commission to Japan, summarized recent developments.

  1. Participation of G?nter Verheugen, Vice President of the European Commission, in the EU-Japan Business Dialogue Round Table, 13-14 July 2006: Vice President Verheugen greatly appreciated the opportunity to meet EBC members prior to the start of the Round Table and valued the fact that the Round Table was largely focused on an open dialogue of concrete issues.
  2. Vice President Verheugen took the opportunity of his visit to Japan to hold discussions with four Government Ministers, Chief Cabinet Secretary Abe, Foreign Minister Aso, METI Minister Nikai and Ministr Yosano (Economic and Financial Policy).
  3. WTO Doha Development Agenda: Efforts are underway to revive negotiations following their suspension in July, but are unlikely to bear fruit until early 2007.By then, there will be little time left to reach agreement before US fast track negotiation authority expires, although it may be possible for Congress to extend this authority if a satisfactory deal looks imminent.
  4. EU Enlargement: Bulgaria and Romania are still on course for accession to the European Union in 2007. A number of stumbling blocks are slowing progress in the negotiations with Turkey. The Delegation has published a brochure on "European Union Enlargement: The implications for Japan", available on its website at http://www.deljpn.ec.europa.eu/data/current/IMPLICATIONS_0608.pdf
  5. The next Asia-Europe Summit (ASEM 6) will be held in Helsinki on 10-11 September 2006. Parties to the Summit are the EU Member States, the European Commission, ten ASEAN countries, China, Japan and South Korea. Prime Minister Koizumi attends. The Delegation would welcome information on the level of interest and participation amongst EBC member companies in the Asia Europe Business Forum, held in conjunction with the ASEM Summit in Helsinki.

3. REPORT FROM THE CHAIRMAN

  1. EU-Japan Business Dialogue Round Table, 13-14 July 2006: This was the first meeting under new EU Co-Chairman Georges Jacobs and the last under Japan Co-Chairman Mr Kobayashi, who is being replaced by Mr Okamura, Chairman of the Board of Toshiba Corporation. Mr Okamura has already appointed a 5-strong team to support him in the role. The Round Table agenda this year focused on concrete issues, which was welcome, although there is still scope to develop the event as a business-to-business dialogue. Nevertheless, the EU side succeeded in tabling the Airbus issue as well as finally securing agreement to launch a new Working Party on Financial Services. The EU co-chair of this Working Party will be the CFO of Axa Group (Japan side to be advised). The next Round Table will be in Brussels in 2007.
    The Round Table press release was distributed along with minutes approved by the EU-side (Japan side still reviewing their statements). Further documents can be found on the Round Table website at http://www.eujapan.com/europe/roundtable.html
  2. Meeting with European Commission Vice-President G?nter Verheugen, 13 July 2006: EBC members greatly appreciated the opportunity to brief Mr Verheugen on issues faced by European companies in Japan.
  3. Investment Group Lunch, 29 August 2006: Attendance at the August lunch was low, due to holidays. The Autumn schedule, including events hosted by Ministry of Foreign Affairs and the EBC, should generate more substantial discussions.
  4. Participation as EBC Chairman in ACCJ Lunch Panel on Corporate Social Responsibility, 7 September 2006: Comments will be largely based on Chanel's CSR approach, since there is no EBC Committee directly dealing with the issue.
  5. EBC White Paper 2006: Work is now underway in the EBC Secretariat to prepare the new White Paper, with a view to publication in November and a subsequent door-knock exercise. It is understood that the ACCJ White Paper will be published around the same time, with a major press launch followed by their own door-knock. The new ACCJ Chairman is keen to maintain close relations with the EBC on issues of mutual interest, but their plans for a joint seminar on medical services have been postponed.
  6. Final EBC Board of Governors meeting 2006: The date of the final meeting has been confirmed as Tuesday 5 December. The annual cocktail party will take place the same evening, hosted by Chanel.

4. REPORT FROM THE EXECUTIVE DIRECTOR

  1. Japan Market Expansion Competition (JMEC) sponsorship: As agreed, the EBC logo is appearing on JMEC materials and a number of Chambers are contributing to a short term bridging loan (until early 2007) while the JMEC raises its own funds. (A copy of the letter from the JMEC, dated 15 July 2006, was distributed, confirming these arrangements.)
  2. ETP promotion 2006: Work undertaken under contract for Eurochambres is now complete, with 2 out of 8 applications originally generated by the EBC ultimately successful. Two of these 8 candidates were not selected for interview, 3 of the remaining 6 withdrew at the time of selection and one was selected but his application was not attributed to the EBC. The EBC will therefore receive Euro 5000 in success fees (Euro 2500 per applicant selected), in addition to a basic fee for handling the promotion plus reimbursement of the full costs of the recruitment event, which it organized. The EBC Executive Director has indicated to Eurochambres that basing the success fee on the number of candidates ultimately selected is unfair, since selection decisions are out of the EBC's hands.
  3. ETPA/EBC staff replacement: Sarah Mayo has joined the EBC Secretariat to work two days per week on ETPA issues and 2 days per week for the EBC (in particular undertaking market research studies under contract for Eurochambres).
  4. 2007 EJBDRT - EBC involvement in lead-up: In the absence of a permanent sherpa for the EU Co-Chair, the EBC Executive Director is continuing to offer support and has held a first meeting with Mr Okamura's team. A key point of discussion was developing the Terms of Reference requested by the 2006 Round Table. While believing that the Japan side is already well-organised, Mr Okamura's team has agreed to assist in the drafting process. A first small meeting of representatives from the EU and Japan sides will therefore be arranged in October, with a view to developing proposals that can eventually be shared for wider debate. However, it is unlikely that any new Terms of Reference will be ready in time to affect the preparation of the 2007 event.
  5. Visit planning for EUCOMED Secretary General, 7-8 September 2006: In line with the service agreement between EUCOMED and the EBC, a visit programme has been arranged for the EUCOMED secretary general, Maurice Wagner, who has been invited by the Japanese Ministry of Health to contribute to its dialogue with industry. Efforts continue to ensure EUCOMED and the EBC present common messages on behalf of the European medical technology industry.
  6. Secretariat activities and meetings: Meetings have been held with representatives from the Birmingham Chamber of Commerce (mainly to discuss the ETP promotion) and from the Kansai region industry association (who are interested in cooperating with the EBC on publicising each others' events and possibly arranging joint events).

5. EBC WHITE PAPER 2006

Further funding commitments are needed to cover the cost of producing and publishing the White Paper, so the Secretariat will be sending out another reminder to potential sponsors this week.

Committee Chairs have been asked to submit their Committee's inputs to the White Paper by end September. The format for each Committee includes a short overview of progress made (or not) during the five-year term of the Koizumi Government, which will be used as input to the EBC's overall message to the new Government.
The White Paper is scheduled to go to the printers in October and to be published in time for the door knock exercise in November.

6. REPORT FROM THE POLICY DIRECTOR

  1. The Tax Committee has been working on the issue of how stock swaps arising from triangular mergers should be treated for tax. The Committee has now been invited to discuss its findings with METI, which is preparing for its own meetings with the Ministry of Finance.
  2. The new Media & Communications Committee has eight signed-up members, who will be holding their first meeting on 20 September, in order to discuss their input into the EBC White Paper.
  3. The Telecommunications Carriers Committee hosted a very successful seminar in July.
  4. The Materials Committee is currently working on tariff issues and exploring whether common messages might be developed with Japanese industry.
  5. The Airlines Committee is reporting some positive developments in the Japanese market. Concerns about possible cartel allegations have made Japanese airlines cautious about interfering in price filing of foreign carriers even though most bilateral agreements allow for that. Meanwhile changes seem to be afoot towards a fairer approach to allocating slots at Narita.
  6. The Human Resources Committee has presented the EBC Position Paper on Re-Entry Permits to the Ministry of Justice but sees little prospect of change in the foreseeable future.
  7. The EBC is participating in Task Forces established on the initiative of Embassy Commercial Counsellors, to follow-up issues raised in the EU-Japan Regulatory Reform Dialogue between formal meetings. For the moment these Task Forces are confined to discussing issues related to financial services (Article 65); re-entry permits; procurement; and forestry.

7. COMMENTS FROM THE COMMITTEE CHAIRS PRESENT

Automotive Committee: The Committee is currently in discussion with the Japanese Government on the issue of a fuel efficiency tax due to be introduced from 2015, where the Government is aiming for a strict target. Meanwhile, European manufacturers are promoting the environmental benefits of diesel cars.

Medical Equipment Committee: The Committee remains preoccupied with the lack of clarity in the regulatory guidelines, the slow product approval process, and the unrelenting pressure on operating costs as a result of the continuing fall in reimbursement prices. Collaborating with EUCOMED offers an opportunity to strengthen the European industry voice so long as common messages can be found.

Telecommunications Carriers Committee: Members will be discussing whether it is possible to formulate a shared EBC position on the Government's drive to promote new technologies.

Construction Committee: The Committee is focusing on three key messages - the need for more transparent tender processes in Japan; the scope for developing improved building regulations by examining and learning from the differences between Japanese and EU approaches; and the benefits of environmentally friendly building technologies, in which European companies have particular expertise to offer.

Animal Health: The Committee, together with its ACCJ counterpart, has issued a new Position Paper raising serious concerns about persistent (and even worsening) delays in the product approval process in Japan. Fortunately, it seems the Ministry of Agriculture, Forestry and Fisheries is finally acknowledging there are problems that need to be solved. The case may be bolstered by data coming out of the annual survey conducted by the International Federation for Animal Health that benchmarks national regulatory processes, and where Japanese companies will participate this year. Meanwhile, new rules on maximum residue levels are causing confusion and concern amongst many European companies exporting to Japan.

Retail, Wholesale, Distribution Committee: The Committee continues to work to identify issues of common concern to all Members. Meanwhile, the approach to privatization of Japan Post is giving particular concern to companies involved in the distribution industry.

8. FUNDING MATTERS

2007 EBC STAKEHOLDER FEES - FUNDING FORMULA

The Executive Director distributed preliminary calculations of 2007 fees per stakeholder, based on the data each stakeholder submitted to the EBC Secretariat in August. She reminded the Meeting that the funding formula, agreed by all stakeholders, was especially designed to take into account fluctuations in membership numbers and fees within their individual organisations, and the preliminary calculations reflected this. The calculations were distributed to the EBC Operating Board on 5 September, who agreed that they should be presented to the Board of Governors today for approval. It was therefore extremely regrettable that one stakeholder had last night advised a significant error in the data it had submitted, leading to the need to recalculate its own and every other stakeholders' fee. The resulting revised calculations were distributed to the Meeting.

The Chairman expressed disappointment that this situation should have arisen. He stressed that, now the EBC funding formula is fixed, it is imperative that each Chamber should check the accuracy of the data it submits to the EBC Secretariat to feed into the formula.

In view of this, the Executive Director will this week write to all Chamber Presidents to request that they verify their data for 2007 and seek their approval for the resulting fee calculations.

DRAFT BUDGET 2007

The Executive Director highlighted the key changes to the EBC budget in 2007, reflecting additional income from new funding lines developed by the Secretariat and a potential increase in salary costs (to cover the move of the Policy Director to full-time work for the EBC and additional part-time staff required to support the work associated with the new funding lines). When the chamber data are confirmed and the stakeholder fees recalculated, the draft budget 2007 (woth a dradt budget-2006 comparison) will be sent to the Chamber presidents for review. Written confirmation of the draft budget will be required by a deadline (to be announced)

9. NORTH AMERICA-EUROPE GOLF CHALLENGE IN JAPAN (DAIMLERCHRYSLER CUP)

Clas Bystedt advised that preparations for this year's Cup event were advanced, with strong interest in participating and sufficient sponsorship to cover costs.