JOINT MEETING of EBC BOARD of GOVERNORS, EXECUTIVE OPERATING BOARD and COMMITTEE CHAIRMEN

Tuesday, 5 December 2006; Europa House 6F, 08:00 a.m.-09:30 a.m.

Attendees: R. Collasse, M. Reiterer, J. Edberg, K. Harris, H. Tempel, A. Carbajo, F. Cazzoli, D. Delgorge, H. de Mestier, C. Eklund, S. Ginoux, R. Kracklauer, M. Lachaussee, M. Loefflad, H. Mueller, A. Ponzetta, I. Pulford, R. Scherpenhuijsen, V. Trelut, E. Ullner,P. van Oppen, T. Varlid, H. Wittich, A. Zimmermann, G. Zorn
Regrets: A. Murray, O. Benz, D. Buckley, C. Bystedt, L. Dubois, C. Eilersen, P. Gibb,
K-U. Grathwohl, D. Hoffmann, S. Kamijo, R. Mason, M. Makinen, H-P. Musahl, J-P. Oulevey, A. Pockett, C. Vellekoop, Y. Yamada,

1. INTRODUCTION

The EBC Chairman welcomed participants to this joint meeting of the EBC Board of Governors, Executive Operating Board and Committee Chairmen. He extended apologies from the EBC Executive Director, unable to attend due to a major ETP event in Paris.

2. REPORT FROM THE EC DELEGATION

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

1. EU-Japan Regulatory Reform Dialogue: The European Commission has issued a new booklet explaining the background to and purpose of the Dialogue and key achievements to-date. The 2006 Tokyo stage of the Dialogue took place on 1 December, following three days of preparatory meetings at expert level, with participation from Karel Kovanda, Deputy Director General for External Relations in the European Commission, and from the Government of Japan (GoJ). The Dialogue confirmed progress in respect of:
   • Telecoms, where scope to make an input into new developments may improve now that the GoJ has signaled willingness to discuss not only regulatory reform but also proposals for new regulation.
   • Transparency, where the GoJ has improved public comment procedures and agreed to issue no-action letters, although there have been very few examples so far.
   • Healthcare, where the GoJ is now more inclined to embrace global standards and to accept foreign data in clinical trials.
   • Air transport, where the GoJ has agreed to recognize the European Commission as the competent body to negotiate air service agreements.

   Other items raised by the European Commission in the Regulatory Reform Dialogue were:

   • Mergers & Acquisitions / legislation to enable foreign firms to enter into triangular mergers: the Ministry of Foreign Affairs indicated only that discussions within the GoJ remained finely balanced and the final outcome unclear.
   • Food standards: it is still unclear whether the GoJ is really committed to modernize food regulations.
   • Government procurement: the European Commission urged the GoJ to take a more positive stance in discussions in the WTO.
   • Privatisation of Japan Post: The European Commission underlined concerns that reforms should continue at a pace and enable foreign involvement in the newly privatized businesses.
   • EU beef imports: The GoJ explained that any decision to lift the ban on beef imported from the EU would inevitably take time because of the number of regulatory committees involved, while the European Commission noted that such committees had, when the occasion required, recently proved themselves capable of reaching rapid decisions.
   • Phytosanitary: While accepting there has been some progress on non-quarantine organisms, the European Commission pointed out that Japan remains in breach of WTO rules for reaching decisions without any sound basis in science.
   • Human Resources: The GoJ gave no indication that it is willing to abolish the re-entry permit system, although it is considering extending the visa period for experts from three to five years. It will continue to negotiate reciprocal social security agreements only on a bilateral basis with individual Member States. It has, however, signaled interest in establishing a dialogue with the EU to address other Human Resource issues.
2. Visit of Peter Mandelson, European Commissioner for Trade: Michael Reiterer advised that plans are underway for Commissioner Mandelson to visit Japan in March 2007 and the EBC will be invited to participate in the visit programme.
3. Deputy Head of the Delegation of the European Commission to Japan: Michael Reiterer confirmed that he will be moving in January to be EU Ambassador to Switzerland. The EBC Chairman thanked him for his support over the past four-and-a-half years and wished him well in his new role.

3. REPORT FROM THE CHAIRMAN

1. EU-Japan Business Dialogue Round Table: The EBC Chairman has had a first, introductory meeting with the new Co-Chairman on the Japanese side, Mr Okamura (Chairman of the Board of Toshiba Corporation). The EBC Executive Director will be meeting the EU Co-Chairman, Baron Jacobs, during her current visit to Brussels. Following the agreement at the Round Table meeting in July 2006 to launch a new Working Party on Financial Services, AXA had been designated co-chair for the Working Party on the EU side and it now seems that Mitsubishi Bank may chair the Japan side.
2. Presentations to Chambers of Commerce: The Chairman made a presentation on the work of the EBC to members of the German Chamber of Commerce and Industry (21 November), and on the EBC Annual Report 2006 to a joint meeting of EU National Chambers of Commerce, hosted by the British Chamber (1 December).
3. Presentation to EU National Ambassadors: At the invitation of Ambassador Richardson, the EBC Chairman presented the key themes of the EBC Annual Report 2006 to the Ambassadors of the Member States on 21 November.
4. Visit to German Ambassador: The EBC Chairman and Senior Vice-Chairman met the German Ambassador. Germany will hold the EU Presidency from January to June 2007 and will be managing preparations for celebrations to mark the 50th Anniversary of the Treaty of Rome.
5. EBC EOB Lunch: Ambassador Richardson, Members of the Delegation of the European Commission to Japan, and members of the Japanese Government's "Investment Discussion Lunch Group" joined the EOB for lunch on 20 November. (A list of those present was distributed.)
6. Lunch with European Commission Deputy Director General Karel Kovanda: The EBC hosted a lunch for Mr Kovanda and the EC Delegation on 30 November, giving EBC Committee Chairs an opportunity to highlight their key concerns ahead of the EU-Japan Regulatory Reform Dialogue on 1 December. (A list of those present was distributed).
7. Doorknock to present the EBC Annual Report 2006: The EBC has contacted all relevant Ministries, as well as the Cabinet Office, to requesting meetings to present the EBC Annual Report. Where at all possible, the EBC Chairman is present, accompanied by the Senior Vice Chairman / Vice Chairman and the Chairs of appropriate Committees. Regrettably, the EBC is often given very short notice of a meeting and so it is not always possible to put together the optimal delegation. Five meetings have taken place so far with more to be scheduled later this month and into January / February. Most of the EBC's interlocutors have been well-informed and constructive, although their commitment to boosting FDI is less certain.
8. BLCCJ event - Delighting Customers in Japan V: Attention was drawn to the latest in this series of events, to be held on 8 December, featuring the former President and CEO of IKEA Japan.
9. Triangular Mergers: The debate on the introduction of the triangular merger scheme has intensified in recent weeks. The EBC, along with the ACCJ, has been actively contributing, both to promote the scheme as a key measure for increasing FDI, and to counter scare-mongering from those wishing to limit the presence of foreign companies in Japan. The EBC will be invited in due course to contribute to the public hearing on the issue.
10. Annual EBC Cocktail Party, 5 December: The Chairman confirmed details of the party, taking place at the Chanel building in Ginza, as a thank-you to all those who have contributed to and supported the work of the EBC in 2006. He took the opportunity to express particular thanks to the Executive Director and Policy Director for their hard work and commitment in what has proved to be a very busy year, as well as to the EBC Senior Vice Chairman and Vice Chairman for their support.

4. REPORT FROM THE EXECUTIVE DIRECTOR

Written comments from the Executive Director were distributed, in her absence, to all participants. Attention was drawn in particular to:

1. ETP promotion 2007-8: The Executive Director was specially invited by Eurochambres to the kick-off meeting for the next ETP recruitment campaign, in order to present the work of the EBC in 2006 as an example of best practice. The meeting will also provide an opportunity for the EBC to raise concerns about the operation and funding of the 2006 campaign and to seek changes for 2007-8.
2. EBC Annual Report 2006: Copies can be sent on request to key contacts, at a cost of ?5000 per set (one English and one Japanese copy). Requests should be sent to the EBC Secretariat.

5. REPORT FROM THE POLICY DIRECTOR

Highlights of recent Committee activities include:

• Progress made by the Human Resources Committee in calling for abolition of the re-entry permit system, which applies to all foreign residents in Japan. After extensive research, an EBC Position Paper was developed and discussed with the Ministry of Justice, leading to an opportunity to make a submission to the Japanese Regulatory Reform Council. It seems the EBC argument has met with some sympathy from regulators, who nevertheless cite security concerns that make them unwilling to lift the permit requirement for all foreigners. Building on this, the EBC is now suggesting a solution based on a differentiated approach, whereby specified nationalities could be automatically granted a re-entry permit when their visa is issued, while others would still need to apply separately.
• The Airlines Committee has welcomed the fact that JAL and ANA have implemented automatic approval of prices filed by foreign carriers.
• The Medical Devices Committee, in collaboration with EUCOMED, has been able to intensify its dialogue with the Government and seen some progress in acceptance of foreign data in clinical trials.
• The Insurance Committee has prepared two presentations to the Postal Privatisation Committee, which is advising the Government on the privatization of Japan Post, arguing the case for a level playing field in the insurance market.
• The EBC was invited to present the concerns of foreign business to the Anti-Monopoly Law Committee, a largely academic body, considering possible improvements to Japanese competition law.
• The Banking Committee has held meetings with the FSA on the issue of the new conglomerate guidelines and firewalls, and is participating in the Task Force, established on the initiative of Embassy Commercial Counsellors, on financial services issues.
• As mentioned by the Chairman, the EBC has been working, alongside the ACCJ, to highlight the case for foreign company participation in the triangular merger scheme, to be introduced in 2007, as a key instrument for promoting FDI. Press releases have been issued to counter attempts, made by organizations apparently opposed to foreign participation, to have foreign firms excluded from the scheme or to render it unworkable for them.
• A press release has been issued to announce the publication on the EBC White Paper 2006.
  

6. COMMENTS FROM THE COMMITTEE CHAIRS PRESENT

Aerospace/Space/Defence Committee: The Committee has hosted a major reception, with over 500 participants including representatives from key Ministries and Japanese companies. This reflects a recent improvement in the business climate and new interest in European suppliers.

7. FUNDING MATTERS

The Chairman advised that all responses received from stakeholders by the deadline of 1 December indicate approval of the 2007 EBC fee calculations (based on data stakeholders submitted and the agreed funding formula) and the 2007 budget proposal. Written confirmation is still pending from DCCJ and the reply from the ICCJ remains outstanding.

8. DAIMLERCHRYSLER CUP

Erik Ullner advised that the cup event, sponsored by DaimlerChrysler, was won this year by the US team. Next year's event will take place again in the Autumn. There has been some discussion whether, thereafter, a combined EU-US team of winners from the DaimlerChrysler Cup should challenge a Japanese team in a new competition.