EBC Board of Governors' Meeting

Thursday, May 24, 2007; Europa House 6F, 08:30 a.m.-10:00 a.m.

Attendees: R. Collasse, A. Murray, J. Edberg, S. Mayo, P. Van Den Heuvel, S. Huber, P. Greenan, G. Keown, R. Mason, A. Mankiewicz, I. Pulford, A. Frauenknecht, J-I. Olsen, P. Suszycki-Tanaka, H. Suzuki, D. Buckley, A. Goff, J. de Bock, M. Lauchaussee, M. Theoval, E. Ullner, M. Makinen, R. Scherpenhuijsen Rom, L. Zukauskaite

Regrets: G. Zorn, J-F Minier, D. Delgorge, P. Thewliss, O. Benz, J. Lawden, D. Steiner, S. Ginoux, G. Linzbichler, V. Trelut, C. Eklund, P. Valery, T. Varlid

A. INTRODUCTIONS:

Tour de Table
Attendees gave brief self-introductions. EBC Chairman Richard Collasse welcomed Andrew Mankiewicz as the new British Chamber of Commerce (BCCJ) President.

B. REPORT FROM THE EC DELEGATION:

Comments from the Delegation of the EC to Japan: P. Van Den Heuval/Minister Stefan Huber
Peter van den Heuvel (PvdH) introduced the new Deputy Head of Delegation, Minister-Counsellor Stefan Huber who recently arrived from Brussels. Minister-Counsellor Huber gave an update on the upcoming building project for a new EU Delegation compound and announced that a call for tenders within the EU community will be launched in the coming 2-4 weeks. The 35-37 million Euro tender will combine financing and construction contracts on the new compound that will be located near the German and French Embassies. The new Delegation building will be approximately 10,000 meters and include 17 apartments and residences in addition to offices. Minister Counselor Huber encouraged European companies interested in submitting bids for this work to contact him for additional information.
Peter van den Heuvel relayed the upcoming program of visitors：

• Recently appointed Director for North America, East Asia, Australia, New Zealand, EEA, EFTA, Alan Seatter, will be in Tokyo on a one day visit. Mr Seatter will receive briefings on Japan and meet interlocutors at METI, MOFA and the Cabinet Office. He will discuss Regulatory Reform and the challenges that the YEN-EURO rate are posing for European businesses among other topics.
• EU Parliamentarians will come to Japan for a Joint Parliamentary meeting. EBC Chairman Collasse and BRDRT Co-Chair Okamura will give a presentation on May 29.
• EU Commissioner for Maritime Fisheries Joe Borg will visit Japan from 31 May - 3 June 2007
• EU-Japan Business Dialogue Round Table (EJBDRT) in Berlin. Both Ambassador Richardson and PvdH will attend the EJBDRT and Ambassador Richardson will attend the EU-Japan Summit scheduled after the EJBDRT. The Summit will be held on June 5 and include a meeting and dinner. President Barosso and German President Merkel will represent the EU and negotiations on the final text for the joint press statement are ongoing. The Summit Statement is expected to be shorter than last year and be supplemented with annexes such as one on IPR protection and on the Innovation Policy, which is linked to the EU's 7th Framework Programme on R&D, under which, the EU has allocated 50 billion Euros. Currently 9 Japanese companies based in Europe are taking part in the 6th Framework Programme, but only one from Japan. The EU wants to expand Science and Technology cooperation, and a Science and Technology Cooperation Agreement is being negotiated. It is expected that the agreement might not be completed before the Summit, but perhaps by the end of the year. Another topic being raised enthusiastically by the Japanese is a possible Free Trade Agreement between the EU and Japan.
• EU Internal Market and Services Commissioner Charlie McCreevy will visit Tokyo (June 12-15) to hold meetings with Japanese Officials and financial institution representatives on a wide range of financial service issues. He will participate in a Symposium on financial services on June 14. Participation is open and free of charge.

C. REPORT FROM THE CHAIRMAN:

1. Investment Group Lunch - hosted by METI (April 19)
   The Chairman attended the bi-monthly Investment Group Lunch hosted by METI. The Chairman indicated that there was no substantive discussion, but noted that the participants for the lunch have changed as part of internal MOF personnel changes.
   EOB meeting in Osaka at Osaka Chamber of Commerce & Industry (May 22)
   The Chairman reported that the EOB meeting in Osaka was very successful and he extended thanks to all EOB members and their representatives who participated. Chairman Collasse remarked that the symbolic gesture of the EBC meeting with members of Japanese industry projected a very positive face for the EBC. The schedule began with an exchange of positions about the Regulatory Reform Program and Osaka Chamber of Commerce members concurred on many points. The Chairman gave a one-hour Press Conference and was pleased that the quality of questions was good, relevant, and technical. This event provided good press coverage and exposure for the EBC and resulted in 7 local and national news articles. Chairman Collasse pointed out that the Osaka business leaders are looking for increased investment for their Osaka renovation project and want more EU companies to locate there; currently few EU companies are there. At the end of the day the Osaka Chamber of Commerce offered a party for Osaka-based EU companies, consulates, and trade reps.
2. Meeting with Ambassador Richardson (May 24)
   The Chairman indicated that this routine, bi-monthly meeting would focus on refining the final draft of the BRDT Working Paper in order to share talking points with the Ambassador in advance of the EU-Japan Summit in Berlin following the BDRT.
3. Presentation to DCCJ (May 25)
   The Chairman will make a presentation to the DCCJ about the EBC and its work. He reminded EOB members that he is willing to give such presentations at the request of stakeholder Chambers, calling attention to a similar presentation that he made for the Japan Ireland Economic Association (JIEA). He welcomed invitations to do the same for other Chambers.
4. Presentation to EU and Japanese parliamentarians (May 29)
   The Chairman will be giving a presentation speech to EU and Japanese parliamentarians and looks forward to this joint-gathering as it will provide an important opportunity to convey specific EBC views.
5. Others
   Meeting of the JETRO Board - (May 23)
   The Chairman attended the JETRO Board meeting. The EBC and the ACCJ are offered a seat at this meeting which provides the EBC an excellent opportunity to engage METI officials.
   Dinner -
   The Chairman recently attended a dinner with British financial services expert Lord Levin, and the President of Shinsei Bank and Chairman of the Tokyo Stock Exchange. The Chairman shared an overview of the conversation related to Tokyo's goal of becoming the financial center of Asia and remarked that there remained an underlying disconnect in viewpoints and approaches advocated by the Japanese and foreign guests. There remains less Japanese interest in changing policies that would further this goal.

D. EU-JAPAN BUSINESS DIALOGUE ROUNDTABLE:

1. Update: programme, participants, EU-side Working Party 1 paper, Day 2 Paper
   There will be approx. 130 people (55 Japanese and 75 Europeans) attending the EJBDRT this year. On June 3, the EBC Chairman will deliver the joint Working Party 1 (Creating an Open Environment for Trade and Investment) (WP1) oral presentation that has been produced by the EBC in collaboration with the Japanese side. He will represent both the Japan and EU sides as the Japanese co-chair, Mr. Koeda of Nissan, cannot attend this year. The Japanese side has yet to provide their part of the full WP1 paper to be tabled at the BDRT although the EBC has prepared our section. Both sections will be collated to form a joint paper with a section of joint recommendations.
   On June 4, EBC Chairman will also give a speech on "Facing New Global Realities Together: Competitive challenges from emerging countries and strengthening EU-Japan economic co-operation."
   The Chairman conveyed his relief that the format for the BDRT had reverted back to the format of previous years, and would again offer the Working Chairpersons the opportunity to raise specific topics on the floor. The Chairman indicated that the EBC lodged a complaint supported by the Japanese side and the right to take the floor was restored.
   The Chairman noted the difficulty in getting Japanese members of financial services to attend. EBC wanted to get the FS representatives from both sides to the table and has insisted that there be an EU representative to express the views on financial service reform at the EJBDRT. The CFO of the AXA group will attend and give a presentation on life insurance, but the Japanese side of the Financial Services working group will not have a paper to present.
2. Terms of Reference
   Prior to this year there has been no institutional framework to the EJBDRT. To remedy this and provide structure to the process moving forward, the Executive Director and Kathy Harris drafted and submitted a Terms of Reference (TOR) for the EJBDRT proposal for inclusion in the agenda.

E. REPORT FROM THE EXECUTIVE DIRECTOR:

1. Staff changes
   Kathy Harris left the EBC at the end of April, and Sarah Mayo will be leaving the EBC at the end of May. Sarah has recommended an excellent replacement, who has been interviewed and has agreed to work part-time. She will begin at the end of June.
2. ETP Promotion: Update
   The deadline for application submission was extended because of a low response overall (only 80 applications throughout Europe instead of the hoped 120 or more). Two applicants have emerged since the first extension was issued which brings the total applicants from Japan to 6, two of which are strong candidates. The Executive Director will recommend an extension of the deadline next year to afford more time for recruiting and consulting. She added that the additional time demands were notable, and reminded EOB members that EuroChambres pays a success fee to the EBC for successful candidates.
3. EU-Japan EIA Position Paper
   The EBC has long advocated deeper economic ties between Japan and the EU, and though the EU called last year for an increase in accords in Asia, Japan was not included on the list of target countries. The EBC Chairman wrote to Commissioners Mandelson and Verheugen last year to state that Japan should remain at the center of the EC's Asian strategy. The EBC is concerned that under current circumstances, EU trade interests in Japan may be marginalized if a deeper relationship were not pursued. However, it has become clear that the Japanese government, the Japanese side of the BDRT and the Keidanren are aggressively pushing for an economic partnership agreement (EPA) that is centred on tariff elimination. The EBC agrees with the Commission that tariff negotiations should be left to the WTO's DDA talks. Accordingly, ahead of the BDRT, the EBC has prepared a Policy Paper advocating an Economic Integration Agreement that is centred on harmonization of regulatory processes and will focus on non-tariff issues. The paper was submitted to the BoG for comments.
4. White paper planning
   This year there will be a White Paper (WP) launch. The Executive Director advised the BOG that the WP outreach for sponsorship to pay for printing and translation would soon begin.
   
5. Office visits and miscellaneous activities
   • OECD visit (April 19)
     The OECD visited and requested information in questionnaire format on the tax system, labor market (productivity) and retail sector. The EBC enjoys a very good relationship with the OECD.
   • Europe Day Special (May 9)
     The Executive Director drew attention to the Europe Day news feature in the Japan Times. She mentioned that the Japan Times wants to expand the section next year with more advertisement and articles from the EBC committees. Contributions will result in significant discounts to the EBC to place ads for the ETP recruitment.
   • PCCIJ Inauguration Party (May 11)
     The Executive Director attended the event and delivered opening remarks on behalf of the EBC Chairman, who could not attend.
   • Asia Society Event (May 16-18)
     The Executive Director reported on the excellent content of the Conference with the glaring exception being the absence of EU representatives in the various panels. She relayed her comment to the organisers. Many regional trade Representatives and Ministers were present who provided comments and presentations. Overall the Conference was very informative.
   • Brought forward from "I" on the Agenda
     The Executive Director submitted the audited financial statements and reviewed the revenue and disbursements for 2006.

F. REPORT FROM THE POLICY DIRECTOR:

1. Committee items
   • Banking Committee
     The Banking Committee Article 65 / 33 Task Force on firewall restrictions recently made a presentation to the Financial System Council of the FSA In advance of this presentation the EBC made a strategic decision to target only a few issues rather than enumerate a large list of items. The result has been that easing firewall restrictions between banking and security firms has been taken on as a recommendation of the working group and is likely to be adopted also as a recommendation of the influential Council for Fiscal and Economic Policy of the Cabinet office.
   • Insurance Committee
     The Insurance committee has been giving presentations and issuing comments on the privatisation plan from Japan Post. One key question being discussed is how to establish a level playing field. The Committee has advocated a full FSA audit prior to providing a privatized Japan Postal insurance company with new licenses, an idea that has not yet been fully embraced by the Postal Privatisation Committee.
   • Airline Committee
     The Airline Committee is encouraged by the proposed Open Skies Agreement recently issued by the Council for Economic and Fiscal Policy though the sole focus on Asia is an issue of concern. It is unclear whether an EBC Position Paper issued 6 months ago contributed to movement on these issues, but certainly the outcomes are consistent with the EBC proposal.
2. Cross-cutting items
   • The EBC has received and is reviewing the final guidelines on tax deferral for transaction involving stock swaps between foreign and domestic firms under the Triangular Mergers scheme and is cautiously optimistic.
   • EBC-TV now has some broadcasts which will soon be available on the EBC website.

G. COMMENTS FROM COMMITTEE CHAIRS PRESENT:
Comments from Committee Chairmen present

• Human Resources Committee
  The Committee Chairman Richard Mason reported that the Committee is actively working to abolish the reentry permit system. As part of this effort Committee members are visiting politicians to discuss this issue and receiving positive feedback. There are indications that changes in the re-entry process may come about in November and may include a fast-track measure such as the fingerprinting of permanent residents (in advance) sometime soon.
• Telecom Carriers
  The Chairman Ian Pulford indicated that there had been some progress on the idea of "open reach" for European Telecommunications carriers. He noted that many questions concerning this issue arose during a joint session with Commissioner Viviane Reding but remarked that out of the discussions there had been no feedback from the Commission on the progress of her talks with GOJ officials.
• Retail, Wholesale, and Distribution Committee
  The Chairman David Buckley reported on two recent presentations to the Committee, one in March by a Tesco representative and another excellent presentation this past month by Professor Roy Larke the publisher of Japan Consuming. He noted that both presentations were aimed at increasing participation and membership in the Committee and also that Professor Larke's presentation is available on the EBC website.
• Defense Aerospace Committee
  The Chairman Michel Theoval reported that Japanese attendance at the Paris Air Show will be higher this year. He noted that Japanese airlines were still resisting Airbus planes, but that recent interest from ANA was offering some hope. He announced that the Airbus 380 will land in Japan on June 5. The Chairman also announced that there was an industry Benkyokai with 6 representatives to discuss defense material matters, and suggested that this meeting will likely lead to a series of follow-on meetings that will pursue relevant issues.
  

I. FUNDING & FUNDING LINES:
Review of "EBC statement of cash balances & cash receipts & disbursements 2006" completed (March 26)
The Executive Director referred to the financial statement in her summary report earlier in the meeting.

J. ORGANISATIONAL ITEMS:
Latest executive line-up - List to be distributed
R. Scherpenhuijsen Rom is moving from the BoG to the EOB and P. Van Oppen is moving to the BOG as they exchange roles as the President of the Netherlands Chamber.

K. ANY OTHER BUSINESS: 　
This will be the 5th year of the ACCJ/EBC Golf event sponsored by Daimler Chrysler. The event will be held this year on September 28, and will retain the name DaimlerChrysler Cup until Hans Tempel indicates a name change. Online registrations will begin in June, and the EBC will be seeking corporate sponsorships and prizes for the event.

Meeting Adjourned