Economic Relationship between EU and Japan and JETRO’s ... · 3. Facilitating world trade and the...

Economic Relationship between EU and Japan and JETRO’s Activities

November 13th 2018

Tomohiro KanekoDirector General, Planning Department

Copyright © 2018 JETRO. All rights reserved.

Ⅰ. Overview of JETROJapan External Trade Organization (JETRO) Government-related organization to promote mutual trade and investment between Japan and the rest of

the world Established in 1958 Overseas offices: 74 (in 54 countries )* Japan offices: JETRO Headquarters in Tokyo, JETRO Osaka, 46 regional offices, the Institute of Developing

Economies (IDE-JETRO) ** Employees: 1,788 (1,047 in Japan and 741 overseas)***

*As of November 2017** As of July 2018***As of April 2018

JETRO Gunma

46th office

established,

July, 2018

46regional offices

-JETRO’s regional offices, located in 46 out of 47 prefectures, seek out promising local companies, mainly SMEs, and prepare them for international commerce.

JETRO Wakayama45th office established,

October, 201７

JETRO Shiga

44th office established,

July, 2017

Prefectures colored in pink

have JETRO offices. 1

Ⅰ. Overview of JETRO

JETRO’s main activities

1. Promoting Foreign Direct Investment into JapanJETRO Offers a range of support and serviced aimed at helping foreign firms set-up or expand business in Japan, in

particular firms seeing to set-up and manufacturing site, regional HQs or R&D hub. Focus industries include high-growth ones such as future energy, life science, tourism and other sectors with strong employment creation possibilities.

Specific activities include:Offering free temporary office space in key business centers in Japan, called Invest Japan Business Support Centers (IBSC), as well as access to expert advisers and help with establishment procedures and the like.

Providing firms with information on government regulations and highlighting the advantages of the Japanese market through seminars, the internet and other media.

2

Ⅰ. Overview of JETRO2. Supporting the overseas businesses of Japanese companies

Utilizing its well-developed global networks and accumulated know-how, JETRO contributes to the distribution of Japanese foodstuff, high-value added products & services and infrastructure throughout the world. For small and medium-sized enterprises (SMEs) in particular, JETRO creates global business opportunities and facilitates Japanese investment overseas. With these efforts, JETRO promotes win-win business relations between Japan and the rest of the world.

3. Facilitating world trade and the global economy as well as growth in developing countries.

Often in collaboration with international organizations, JETRO conducts research on the world economy, trade and investment, which contributes to the development of free trade systems and international business. To promote global partnerships, JETRO sets up study groups with private sector leaders and partners and presents its findings to governments concerned.

JETRO expert advising on product improvement (the Lao P.D.R.)

African Investment Promotion Forum organized by JETRO

3

11,430

6,749 7,616 7,619

6,501 7,000 7,585

7,985 7,982 8,657

7,292

5,518 5,821 6,411

6,642 7,649 8,169

8,625 8,152

8,754

0

2,000

4,000

6,000

8,000

10,000

12,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

輸出

輸入

Ⅱ. Relationship between EU and Japan

〔Unit: Billion Yen〕

〔Source：Ministry of Finance〕

14,606 16,112

14,851 16,715

20,527

27,307

32,021 35,032

37,971

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2008 2009 2010 2011 2012 2013 2014 2015 2016

Japanese FDI position toward the EU〔Unit: billion yen〕

〔Source :Bank of Japan〕

CAGR 17.8% (2011-2016)

Japan’s trade with the EU

4Copyright © 2018 JETRO. All rights reserved.

Export

Import

Employment Turnover

EU 498,856 34,993

UK 159,205 9,721

Germany 64,613 6,188

Belgium 50,211 5,775

France 41,513 2,923

Italy 35,488 1,222

Netherlands 34,554 4,558

Spain 19,688 1,134

〔Source: MOFA Statistical Survey on the Japanese Nationals Oversea〕

〔Source: METI Basic Survey on Overseas Business Activities〕

Economic Impact by Japanese Companies in the EU (2015)（Unit: person, billion Yen）

Procurement Value by Japanese Companies in the EU（2015）

5,583 billion Yen

4,480

4,710

4,974 5,027

4,810

5,047

5,302

5,512 5,605

4,000

4,200

4,400

4,600

4,800

5,000

5,200

5,400

5,600

5,800

2008 2009 2010 2011 2012 2013 2014 2015 2016

Number of Japanese-affiliated Companies in the EU

5



Copyright © 2018 JETRO. All rights reserved.6

Japanese manufacturers in EU procure More than 50% of parts/raw materials from EU

Countries and Regions of Parts & Raw Material Suppliers for Manufacturing (Breakdown Based on Value)

*1This graph shows the companies average response rate given for each procurement source. Each company calculated the percentage of their procurement sources to amount to 100% .*2, ”Local” indicates the country/region listed, Countries where respondents are less than 5 were excluded.*3 Procurement from Russia was 0% in all countries.

〔Source:2017 JETRO Survey on Business Conditions of Japanese Companies in Europe〕



Break down of Local Suppliers for Manufacturing (Breakdown Based on Value)

7

* ”Local” indicates the country/region listed, Countries where respondents are less than 5 were excluded


Weight of Japanese-affiliated suppliers in Central Eastern Europe


8Source: "International Investment Position of Japan" (Ministry of

Finance), "National Accounts of Japan" (Japan Cabinet Office)

The Japanese Government commits to expand inward FDI to 35 trillion yen by 2020.

The stock of inward FDI and its portion in the nominal GDP

Record high

Goal($ 315 billion)

×3

Ⅲ. Attractiveness of Japanese market

8

Copyright (C) 2017 JETRO. All rights reserved.

Perception of the Business Environment in Japanamong Foreign-affiliated Companies

A questionnaire was sent to about 1,600 companies with focus on foreign-affiliated companies supported by JETRO in their entry into the Japanese market. 260 companies responded.

Foreign-affiliated companies are generally performing well and positive about the economic prospects.

Current business conditions compared with the previous yearOutlook of business conditions in Japan(over the next one or two years)

[Source] JETRO Invest Japan Report 2017


9


Attractiveness of doing business in Japan（top three options）

Attractiveness of doing business in Japan is “The Japanese market” and “Stability of nation and society.”

Perception of the Business Environment in Japanamong Foreign-affiliated Companies

n=258

[Source] JETRO Invest Japan Report 2017


10

44.0%

25.9%

18.0%

12.1%

EU

North America

Asia

Other Regions

37.0%

37.0%

8.2%

17.8%

EU

North America

Asia

Other Regions

6,825 6,894

6,703 7,314 7,015 7,214

9,941 10,493

12,263

6,832 7,019

6,024 5,652 5,484 5,678

7,080 7,011 7,203

1,514 1,597 1,898 2,069 2,410 2,582

3,677 4,300 5,018

3,285 2,915 2,878 2,513 2,899 2,502 3,050 2,966

3,357

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2008 2009 2010 2011 2012 2013 2014 2015 2016

EU North America Asia Other Regions

〔Source: Bank of Japan〕

Japanese FDI position trend

Japanese FDI position (Regional Breakdown)

（unit：billion Yen）

11

EU’s Foreign Direct Investment in Japan



0

5,000

10,000

15,000

20,000

25,000

30,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

European

American

Asian

57.0%28.3%

11.0%

3.8%

European

American

Asian

OtherRegions

Turnover of Foreign-Affiliated Companies in Japan

〔Source: METI Survey of Trends in Business Activities of Foreign Affiliates〕

Turnover breakdown of Foreign-Affiliated in Japan(2015) Unit: billion Yen

Turnover of Foreign-Affiliated per company European Companies earn more than companies from

any other regions!

12

European-affiliated companies’ performance in Japan

（Unit: million Yen）


0

5,000

10,000

15,000

20,000

25,000

2007 2008 2009 2010 2011 2012 2013 2014 2015

European

American

mean

Asian



Achievements of JETRO (FY2003-2017)

Successful investment projects supported by JETRO（by industry, top 5 industries）

Successful investment projects supported by JETRO（by country/region, top 10 countries/regions）

Investment Promotion Activities of JETRO


13

FY2017 FY2003-2017

Successful startups/business

expansion193 projects 1,772 projects

Supported projects 1,741 projects 17,713 projects

No. Country No. of Projects

1 US 488

2 China 231

3 Germany 143

4 Korea 124

5 UK 102

6 France 90

7 Taiwan 62

8 Singapore 60

9 Australia 56

10 Hong Kong 50

Others 366

Asia35%

Europe30%

North America30%

Oceania3%

Middle East and

Africa1%

Central and South America

1%

1.Services (food and beverage, retail, consulting, other)

425

2.ICT & telecommunications 400

3.Electrical and electronic equipment, parts 172

4.Industrial machinery, parts 141

5.Pharmaceuticals and medical equipment, related services

102

〔Source : European Commission, Ministry of Foreign Affairs of Japan〕

Japan will recognize 210 EU’s GIs.This protects European farmers and producers selling abroad.

The deal will show commitments to internationally recognized environment and labour standards.

The deal will open up Japan’s services market to EU firms.

Expanding business opportunities will- Improve productivity- Accelerate GDP growth- create EU jobs – every €1 billion in EU exports supports

14,000 jobs in EU.

14

The deal will promote Japan’s foreign direct investment in

EU because;

- of improvement of investment climate

- Japanese companies would feel more familiar to EU

market as a result of closer trade relationship.

6. Promoting Investment

The deal will, especially in agricultural and motor vehicle sectors, enable two parties to;- discuss how to address issues when the two sides'

regulations diverge or are incompatible.- work more closely together on developing international

standards

The deal will expand the opportunities for EU suppliers to

participate in open tenders in Japan– Central and Sub-central.

In railways sector, the deal will also improve market access to

Japan for EU companies.

1. Improvement of Market Access

2. Protection of Geographical Indication

3. Government Procurement

5. Regulatory Cooperation

4. Trade in Service 7. Trade and Sustainable Development

Ⅳ. Advantages of Japan-EU EPA for the EU


Liberalization: approximately 94 % of goods in Japan

Liberalization: approximately 99 % of goods in EU


More than half of Japanese companies expect benefits from

Japan-EU EPA


Impact of EPAs/FTAs

Ⅳ. Advantages of Japan-EU EPA for Japan

No. of companies responding thatJapan-EU EPA would bring major advantages

16.5 points UP!!


More than half of Japanese companies expect benefits from EU-Japan EPA


Impact of Japan-EU EPA:Issues EU-based companies regarded as “major advantages”

Tariff Reduction/Abolition for imports from Japan

Expanding Business Opportunities

Ⅳ. Advantages of Japan-EU EPA for Japan

Ⅴ. JETRO’s promotion of trade and investment between EU and Japan

1. Contributing to EU economy and in enhancing investment and creating jobs by assisting Japanese companies in entering and operating within EU and exporting to the EU

Middle and Eastern Europe Investment SeminarSeminars were held in cities such as London and Vienna in order to disseminate information on local business primarily on the frontier markets of Central and Eastern Europe.

Dispatch of investment missions helping Japanese companies enter the EU marketJETRO arranged missions to learn about the actual conditions of local markets.

Individual support for entry to EU marketJETRO specialist individually supports Japanese companies from planning a strategy for entry to the EU market to implementing the strategy. This support program will be expanded to include EU member countries in addition to those of TPP11.

Dispatch of Japanese start-upsJETRO will facilitate collaboration between EU and Japanese start-ups.

17

Agricultural, Forestry and Fishery Products and Food・SIAL・ANUGA

IoT・CeBIT・Start-ups

Media Contents・Marché du Film・MIDEM

Design and Fashion・TRANOÏ Paris・Maison e Objet・Ambiente

Life Science・MEDICA・BioEurope


JETRO helps to forge partnerships between EU and Japanese companies through the following activities: setting up Japan Pavilion, participation to major trade fairs.

18


In EU-Japan EPA seminars and related events within Japan and Europe, JETRO promotes the utilization of the EU-Japan EPA between both sides

2. EU-Japan EPA Dissemination Seminar

EU-Japan EPA Forum in Copenhagen in April 2018

EU Japan Business Round Table in Brussels in May 2018

Since December 2017In Japan: 40 times (Tokyo, Kyoto, Osaka, and other local cities)In Europe: 21 times (Paris, Copenhagen, Brussels, Düsseldorf, Bucharest, Budapest, Madrid, and so on)

Ms. Malmström from the European Commission participated in both events

19

Disseminating information on the attractiveness of the Japanese market (business opportunities and how to establish a corporation in Japan)

Providing individual consultation services through JETRO’s specialists with extensive experience with legal matters, accounting and market analysis

Offering tentative free office space for overseas companies preparing business bases in Japan.

3. Assisting EU companies in investing in Japan


→ JETRO has so far assisted more than 486 European companies in entering Japan.

JETRO assists EU affiliated companies to enter the Japanese market and expand business throughout local regions.

20

To facilitate international collaboration between local SMEs through the Regional Industry Tie-up (RIT) Program, JETRO supports business exchange between SME clusters with advanced technology and industrial SME clusters in Europe, on a group basis.

Such activities facilitate exports, technological tie-ups and joint product development.

4. Contributing to vitalizing local industries both in the EU and Japan in the future


<Tie-ups in FY2018>

Japan EU Industry

Tokai and Hokuriku region Germany (Niedersachsen and other states)

Composite materials

Fukushima Germany (NRW) Renewable energy

Nagasaki UK (Scotland) Marine Renewable energy

Toyama Spain (Madrid) Pharmaceuticals

YamanashiGermany (Western and Southern parts)

Machinery-relatedindustry

Kitakyushu-city Germany (Bremerhaven)Offshore wind Power

21

Holding events in Africa and Asia to promote collaboration in third countries

In cooperation with Business France, JETRO held networking events between French and Japanese companies who are based in Africa/Asia

(Past Events)

Africa: Johannesburg, Nairobi, Abidjan

Asia: Tokyo, Ho Chi Minh

5. Holding events for collaboration in third countries


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