ACCJ Journal November 2008 by Paradigm

¥800 / November / 2008

For a Better FTA What kind of Economic Integration Agreement for the U.S. and Japan?

Investment Roundtable Women back to work Book: Gusher of Lies CEATEC Japan 2008 Einstein’s earthy Sendai

SPECIAL Advertising SECTIONS

Guide to Travel and Leisure Logistics and Supply Chain Management

Volume 45 / Issue 11 / November 2008

Mattias Westfalk

Contents

特集 Features カバーストーリー FTAの充実をめざして

アジア諸国の企業は、複雑で効果が薄く、とかく政治的

になりがちな二国間自由貿易協定に背を向けている。経済統合協定を模索する日米にとって重要な教訓だ。アンソニー・H・ローリー

FDI円卓会議

厳しかった1年を振り返り、海外直接投資の誘致を左右する幅広い課題について各業界の主要企業が意見を交換する。司会ジェフ・ボッティング

社会復帰する女性たち

ACCJ60周年“還暦”特別企画：CSRの現状と「ソフトランディング・タスクフォース」キャサリン・ショー

Cover Story For a Better FTA 12 Asian nations ignore bilateral Free Trade Agreements that are complex, political or ineffective—a valuable lesson for the U.S. and Japan as they consider an Economic Integration Agreement. By Anthony H. Rowley

FDI Roundtable 22 After a tough year for business, key industry players air their views on a wide range of issues affecting inbound Foreign Direct Investment. Moderated by Geoff Botting

Women Back to Work 30 ACCJ Kanreki Special: The Faces of CSR and the Soft Landing Taskforce. By Catherine Shaw

November 2008 / ACCJ Journal / 3

Contents

Volume 45 / Issue 11 / November 2008

Departments Note from the Editor 9 President’s Message 11 Media Watch 19 Precious water. Foreign students. Travel, tourism programs. Tokyo Chinatown. Parking demand down.

FCCJ

On the Spot 28 28

Kent Calder, director of the Edwin O. Reischauer Center for East Asian Studies at the School of Advanced International Studies in Washington, D.C., is interviewed by Julian Ryall.

Opinion Leader 36 Chris Nelson edits a daily briefing on international economic policy issues, foreign and security policy matters.

国際経済政策、外交政策、安全保障の問題について日刊ニュースレターを綴るクリス・ネルソンに聞く。

Classic Journeys 42 Einstein called Sendai a “fine place for learning,” and a distillery there now produces the “World’s Best Single Malt.” By Tony McNicol

Tony McNicol

FDI Portfolio 46 Makuhari International School. French connection. Nine hotels planned. Osaka FDI record. Design expo. Kansai JETRO success. Art specialists. By Julian Ryall and Nicole Fall. 42

Business Profile 52 Kevin Carroll is Executive Director of Earth-Appraisal Company, Ltd., environmental consultants specializing in risk management services to the financial and real estate sectors. By Julian Ryall

Science, Technology and Inventions 54 CEATEC Japan 2008 focuses on the convergence of devices, hardware, software, services and contents. By John Boyd

Advocacy Update 56 ACCJ Viewpoints

Behind the Book 59

John Boyd

Gusher of Lies: The Dangerous Delusions of “Energy Independence” by Robert Bryce, is reviewed by Tom Baker.

In the Final Analysis 60 54

4 / ACCJ Journal / November 2008

By Samuel H. Kidder, ACCJ Executive Director

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Congratulations to the ACCJ on your Kanreki.

ACCJ Leaders President Allan D. Smith AIG Companies, Japan and Korea Chairman Charles D. Lake II Aflac Japan Vice Presidents Michael J. Alfant Fusion Systems Japan Co., Ltd. Laurence W. Bates General Electric Japan, Ltd. William R. Bishop, Jr. Bishop & Associates Michael D. Bobrove (Kansai) Nihon Medrad K.K. Kumi Sato Cosmo Public Relations Corporation Mark F. Schwab United Airlines, Inc. Michael D. Weenick (Chubu) PAE Design & Facility Management Treasurer Nasir Majid PricewaterhouseCoopers Brett Jensen (Kansai) Colliers Hallifax Steve Burson (Chubu) H&R Consultants ACCJ Governors Vicki L. Beyer Morgan Stanley Japan Securities Co., Ltd. Charles M. Duncan Continental Airlines Christopher K. Ellis Chrysler Japan Company, Ltd. James Foster Microsoft Japan Harry Hill (Chubu) Oak Lawn Marketing, Inc. Tad Johnson Pratt & Whitney Aftermarket Japan KK John Kakinuki GE Consumer Finance Co., Ltd. Jiri Mestecky Kitahama Partners L.P.C. Sharon Baker Morin State Street Trust and Banking Co., Ltd. Douglas L. Peterson Nikko Citi Holdings Inc. Nicole W. Piasecki Boeing Japan Jay Ponazecki Morrison & Forester LLP Jim Weisser Weisser Consulting Ira Wolf Pharmaceutical Research and Manufacturers of America (PhRMA) ACCJ Executive Staff Samuel H. Kidder Executive Director Aron Kremer Deputy Executive Director

Congratulations to

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ACCJ Committees American Auto Industry Randy Krieger Architecture, Construction & Real Estate Kevyn Johnson/Michael P. King Asia Business Philip C. Jones B2B Sales Karl Hahne Banking and Finance Thomas Clark/Ernfred Olsen Capital Markets Douglas Hymas Charity Ball Barbara Hancock Competition Policy Task Force Robert Grondine Corporate Social Responsibility Patricia Bader-Johnston Direct Marketing Joseph Peters Environmental Naoki Arai Financial Services Forum Charles D. Lake II Food and Agriculture Collin Benson Foreign Direct Investment Nicholas Benes Government Relations Andrew Conrad Healthcare Steve Plunkett Human Resource Management Chris Lamatsch/Ken Somers Independent Business Doug Jackson Information, Communications & Technology Darren McKellin Insurance Jonathan Malamud/Grant Tanabe Intellectual Property David Case International Education Patricia Oâ&#x20AC;&#x2122;Keefe Internet Economy Task Force Jim Foster Investment Management David Monroe Legal Services Arshad Karim/Eric Sedlak Corporate Counsel Clair Chino Marketing Programs Dominic Carter Membership Relations Andrew Silberman Privatization Task Force David Hoover Retail Victor Luis Special Events Barry Bergmann Young Professionals Group John Ghanotakis/Daniel Lintz Taxation Jack Bird/Michael Shikuma Toiletries, Cosmetics & Fragrances Yukiko Tsujimoto Transportation and Logistics Jeff Bernier/Mitsuyo Teramura Business Aviation Task Force Gary Konop Travel Industry Kayoko Inoue/Vincent You University Briefing Program Richard May/David Satterwhite Kansai Chapter Business Programs Jiri Mestecky Community Service Kojiro Dan External Affairs Kiran Sethi Living in Kansai Barry Louie Membership Paul Dupuis Women in Business Mari Nogami Chubu Chapter Community Service Steve Burson Independent Business Jeremy Cowx/Jason Morgan Living in Chubu Lowell Sheppard Membership Relations Chris Zarodkiewicz Programs Steve Brown American Chamber of Commerce in Japan Masonic 39 MT Bldg. 10F, 2-4-5 Azabudai Minato-ku, Tokyo, Japan 106-0041 Tel: 03-3433-5381 Fax: 03-3433-8454 www.accj.or.jp / www.ecentral.jp

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Publisher Vickie Paradise Green paradise@paradigm.co.jp Editor-in-Chief Simon Farrell simonfarrell@paradigm.co.jp Senior Editor David Umeda Art Director Paddy O’Connor Graphic Designer Akiko Mineshima COLUMNISTS Tom Baker, Robert Cameron, Nicole Fall, Mark Schreiber CONTRIBUTORS Vicki L. Beyer, Alana R. Bonzi, Geoff Botting, Martin Foster, Justin McCurry, Darren McKellin, Tony McNicol, Anthony H. Rowley, Julian Ryall, Catherine Shaw, Richard Smith, Jeffrey Tanenhaus PHOTOGRAPHERS / ILLUSTRATORS Tony McNicol, Jeremy Sutton-Hibbert, Darren Thompson, Mattias Westfalk Published by Paradigm President Vickie Paradise Green Creative Director Richard Grehan Advertising Sales Eileen Chang, Sarit Huys, Helene Jacquet, Leai Kubotsuka Kamiyama Ambassador 209 18-6 Kamiyama-cho, Shibuya-ku Tokyo, Japan 150-0047 Tel: 03-5478-7941 Fax: 03-5478-7942 e-mail: inquiries@paradigm.co.jp www.paradigm.co.jp

Published monthly in Tokyo, on the 25th of the month, since 1964. Indexed in the PAIS BULLETIN. All rights reserved. The views and opinions expressed herein (other than editorials from the ACCJ itself) are solely the opinions and views of their authors. The ACCJ is not responsible or liable for any portions thereof.

Congratulatio ns to the ACCJ on your Kanreki

Subscription rates for non-ACCJ members One year ¥9,000; two years ¥15,000; three years ¥22,000. ¥800 per copy. Rates include domestic postage or surface postage for overseas subscribers. Add ¥7,500 per year if overseas airmail is preferred. Please allow eight weeks for changes of address to take effect. Subscription requests should be sent to info@accj.or.jp The ACCJ Journal welcomes story ideas from readers and proposals from writers. Letters to the editor may be edited for length and style. The ACCJ Journal is produced entirely on Apple computers

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Note from the Editor

Sharing the Spoils

ey to settling a bilateral Economic Integration Agreement, as featured in our cover story this month, is leveling the playing field in Foreign Direct Investment — both parties must benefit. After eight months of planning, our FDI Roundtable is published this issue on page 22, and we hope it contributes to ACCJ advocacy efforts. Participants’ busy schedules dictated the timetable as we sought the right substance and balance. The result is a topical and spot-on wrap-up of what the industry still faces. As U.S. Ambassador John Thomas Schieffer told me at his office in October, though, it’s worth noting what has been achieved by the ACCJ already in the way of FDI. “The Japanese have been better about FDI in Japan than in the past,” he said. The bottom line, Ambassador Schieffer says, is that it must be as easy for Americans to do business here as it is for Japanese to do business in America. “We’re not there yet. What you’re looking at is the same set of rules for both countries; and when you reach that, you increase trade and prosperity for both countries.” For full details on these issues, this month’s Viewpoints on page 56 succinctly outline the ACCJ’s

official advocacy position on FDI and M&A tax deferral, on expanding FDI to reinvigorate Japan’s economy, and on promoting international merger transactions. The end of the year climaxes in a flurry of ACCJ activity. The Shokai (Sign-up) Campaign in November and December rewards those who introduce new members with the chance of winning a great prize and offers cash credits to those recruited. Simply e-mail info@accj.or.jp for details. The annual Charity Ball this year is named after the ACCJ Diamond Anniversary — and, I believe, tickets are still available for what is billed as the foreign business community’s largest social gathering (see below).

simonfarrell@paradigm.co.jp

By Allan D. Smith / President’s Message

Advocacy Update

here are many ways that the ACCJ pursues “giving back to members.” Those generally fall into three broad categories: information-sharing, networking and advocacy. Information-sharing and networking activities are visible to all members because of regular communications sent directly to the membership. However, unless a member is an active participant in one of the ACCJ Committees, advocacy may be less apparent. I would like to take this opportunity to provide an update on some of the ACCJ’s recent advocacy initiatives. The ACCJ is commissioning a White Paper on the Internet Economy in Japan to assist its member companies in better understanding, evaluating and influencing the internal debate in Japan over the future direction of the Internet Economy. The White Paper, which is planned for completion in February 2009, is envisioned as a comprehensive bilingual document identifying key regulatory, business and economic challenges related to the Internet Economy in Japan and offering a corresponding set of recommendations drawn from international experience and best practices. The research and drafting of the White Paper is being overseen by the Information, Communications and Technology Committee, and coordinated by the newly formed ACCJ Internet Economy Task Force.

At the time of the 2005 Amendments to the Antimonopoly Act of Japan (AMA), the government agreed to a review to consider potential further amendments. ACCJ representatives have appeared at government study committee meetings to present the ACCJ’s views on the AMA. The ACCJ formed the Competition Policy Task Force, which has authored several Viewpoints and had numerous meetings with senior politicians, other business and professional organizations, the Japan Fair Trade Commission and the U.S. Government. The most emphasis has been on procedural due process protections. On November 13, the ACCJ will co-sponsor with Keidanren a major conference on international best practices in competition law enforcement. Since its establishment in June 2001, the U.S.-Japan Economic Partnership for Growth (EPG) has been an effective mechanism for addressing key bilateral economic issues. The process established under the EPG has at its core an annual cycle of dialogue between the two governments, including an exchange of regulatory reform recommendations, followed by a series of discussions between government officials, culminating in a report to the American President and the Prime Minister detailing progress made. The ACCJ has been highly supportive of this process and believes

that a robust government-togovernment mechanism to address bilateral economic issues is vital to achieving continued growth in the Japanese economy. Accordingly, this year, as the current administration comes to a close, the ACCJ has committed to take stock of the progress made to date under the EPG process, especially the Regulatory Reform and Competition Policy Initiative, documenting the many accomplishments and identifying the work yet to be done. The ACCJ Government Relations Committee is taking the lead role in this effort. The ACCJ Committees representing specific industry groupings form the backbone of our advocacy efforts. The examples above highlight that the Committees often work together to pursue common goals on issues with cross-sectorial impacts. If there are laws and regulations affecting your business that you would like to see changed, please contact Laura Younger, the ACCJ’s Associate Director for Membership Services, at: lyounger@accj.or.jp for information on the Committee or Task Force that would best address your concerns.

asmith@accj.or.jp Allan D. Smith is ACCJ President.

November 2008 / ACCJ Journal / 13

For a Better FTA Inefficiency, confusion, politics hamper plethora of Asian Free Trade Agreements.

ree Trade Agreements (FTAs) are spreading across the Asia-Pacific region — there are now more than 100 operating or under negotiation — and the number is expected to increase sharply following the failure of the WTO Doha Round of multilateral trade negotiations. But as these agreements proliferate, many FTAs are drawing criticism from the business community within and beyond the Asia-Pacific in regard to poor quality and complexity. Some critics, for example, blame the FTAs for dampening enthusiasm for multilateral trade liberalization, and claim that

14 / ACCJ Journal / November 2008

the business benefits conferred by such bilateral accords are of limited value. Others argue that competition among Asian nations to negotiate as many FTAs as possible is resulting in low-quality agreements, and that the motives of those who negotiate them are often as much political as economic No fewer than 108 FTAs, including so-called Economic Partnership Agreements (EPAs), exist at present in East Asia — meaning, the 10 members of ASEAN (Association of Southeast Asian Nations), plus Japan, China, South Korea, Hong Kong and Taiwan. Of these

agreements, 32 have been signed and are in effect; nine have been signed, but have yet to go into effect; and the remainder are at various stages of negotiation. Trade specialists and academics have argued fiercely about whether or not the spaghetti-like network (or noodle bowl) of FTAs in Asia is good for the region. Yet, until recently, the voices of those running businesses have scarcely been heard on the matter. Ironically, they are precisely the ones — exporting and importing companies, in particular — that are affected most directly by FTAs. Now that these voices are being heard, what they are

By Anthony H. Rowley / For a Better FTA

… the ASEAN Free Trade Agreement (AFTA) is regarded by the corporate sector as the most useful of the intra-Asian FTAs so far in operation.

saying is not always pleasing to those Asian governments eager to add to a large and growing stable of FTAs. Businesses complain, for example, that conflicting rules and regulations within the myriad Asian FTAs are confusing, time-consuming and costly to deal with. Some businesses even say that they often prefer to pay tariffs rather than deal with the added burden these FTAs carry. Recently, the Manila-based Asian Development Bank (ADB), together with the ADB Institute in Tokyo and the Jakarta-based Economic Research Institute for ASEAN and East Asia, produced a study assessing the impact of FTAs on the corporate sector. Some 464 firms of various sizes in textiles, electronics, motor manufacturing and pharmaceuticals were surveyed — 75 were in Japan, 221 in Thailand, 130 in the Philippines and 38 in Singapore. These companies said that the chief obstacle to making use of bilateral and semi-regional FTAs is a “lack of information” about how the accords work, and how to take advantage of them. A high proportion of firms cited “administration costs and time delays” involved in complying with rules of origin. These rules require a minimum proportion of components in a manufactured product to be sourced locally, before it can be exported to an FTA partner at reduced or zero tariffs. Furthermore, these rules often differ from one FTA to another,

making life especially difficult for multinational firms having production networks across Asia and whose finished products contain parts and sub-assemblies from many different countries. Some of the companies surveyed noted that the margin of tariff preference available under FTAs is not much bigger than that which all countries party to the WTO are obliged to offer each other anyway, under what is known as the “most favoured nation” — the MFN clause. Other firms said that complying with FTA procedures involves disclosing “confidential information,” while some that were surveyed also complained that “inefficient customs procedures” constrict the benefit of FTAs. According to the survey, the ASEAN Free Trade Agreement (AFTA) is regarded by the corporate sector as the most useful of the intra-Asian FTAs so far in operation. Many firms cited improved market access, availability of preferential tariffs, the ability to concentrate production and the availability of new business opportunities as reasons for liking the AFTA — although problems of documentation and “increased competition” were cited among the discouraging factors. The overall conclusion from the survey is that governments need to reduce the burden on businesses for compliance by simplifying rules of origin and other procedures — as well as

SNAPSHOT

Best Practices The 21-member Asia-Pacific Economic Cooperation (APEC) forum — which accounts for about 40% of the world’s population, 55% of GDP and about 59% of trade — set out these FTA and RTA (Regional Trade Agreement) Best Practices at the 16th APEC Ministerial Meeting in Chile in 2004. ■■ Consistency with APEC Principles and Goals ■■ Consistency with the WTO ■■ Go beyond WTO commitments ■■ Comprehensiveness ■■ Transparency ■■ Trade Facilitation ■■ Mechanisms for consultation and dispute settlement ■■ Simple Rules of Origin that facilitate trade ■■ Cooperation ■■ Sustainable Development ■■ Accession of Third Parties ■■ Provision for Periodic Review

promoting greater awareness of the accords and their benefits. It was also stated that trade liberalization can best be achieved by “multilateralising” regional trade accords in Asia and elsewhere, and “the best solution in terms of tariff reduction is to conclude the WTO Doha Round.” FTAs have their defenders. Ong Keng Yong, former secretary general of ASEAN, argues that bilateral trade accords represent a “highest common factor” approach that allows economically nimble nations to do deals with others, thus striking a balance of mutual advantage. The WTO multilateral approach, on the other hand, represents the “lowest common denominator,” where trade liberalization moves at the slowest pace, suggests Ong.

November 2008 / ACCJ Journal / 15

For a Better FTA

“What you are seeing in Asia is an explosion of FTAs which can best be described as ‘lower-class quality’ trade agreements.”

Critics, nonetheless, seem to be in the majority. Dean of the ADB Institute, Masahiro Kawai says that bilateral FTAs can result in trade “discrimination and diversion,” rather than trade creation — a view that finds sympathy among many in the business community. “What you are seeing in Asia is an explosion of FTAs which can best be described as ‘lower-class quality’ trade agreements,” says Andrew Conrad, chair of the ACCJ Government Relations Committee. Many of these Asian FTAs “have avoided the difficult issues’ hard questions,” such as whether the agreement is trade creating, Conrad tells the Journal. “A high-quality FTA would be one that is trade creating. In other words, one that creates new opportunities for trade and really opens up markets to allow new trade and investment. A lower quality [agreement] would avoid the tough issues and would not impact the flow of trade because there is nothing new in it. They are just codifying what already exists.” Conrad cites an example where countries have official import tariff bindings at an official level higher than the actual level actually charged. (The latter having been lowered so that local businesses can, for example, import goods used in manufacturing operations.) When negotiating FTAs, the country offers its partner a rate below the officially

bound tariff, but still above what is actually being charged. No new trade is created. “This sort of thing is going on a lot in Asia,” says Conrad, “and to the extent companies are not aware of FTAs, it is likely because they are not having an impact on the business environment.” ACCJ External Affairs Advisory Council Chair Laurence Bates has similar concerns. “I am worried that the [free trade] agreements may be getting watered down because of the motivation [for concluding such agreements] may be political,” he says. Some FTAs “may not have as much substance as proper trade agreements should have, and countries may not be making the concessions that they really should make in order to really improve the overall trade regime. “With the collapse of the Doha Round, these FTAs are becoming more important. Some people see illusory value in these agreements, which, in the case of certain Asian countries, may be more politically than economically motivated,” Bates says. “There may be rivalry going on — especially between Japan and China, but also involving ASEAN — as to who can sign more of these things with more countries. “That has the negative effect of diverting attention from Doha,” he says, “and it also has the tendency to encourage a lower standard of agreement, rather than the higher standard that we

SNAPSHOT

First Japan-Euro trade deal Switzerland became the first European country to agree a free trade accord with Japan, it was announced in October. Tokyo had previously signed Economic Partnership Agreements with nine countries, including Singapore, Indonesia, Mexico, Thailand and Chile. The deal was agreed at the 8th round of negotiations in Bern, Switzerland. Talks began in May last year to liberalize bilateral trade. Japan exported to Switzerland mostly autos and high-tech products worth Y355 billion in 2007, while watches accounted for one-third of Swiss total exports to Japan of Y613 billion that also included wine and cheese. The deal was seen as especially good for Japan because most Swiss tariffs will be scrapped or lowered under the accord, which also covers cooperation in investment and services.

should be looking at.” Fred Bergsten, director of the Petersen Institute for International Economics in Washington, D.C., singles out China for particular criticism. “Perhaps China wants to continue emphasizing its bilateral and regional trade pacts — which are of low economic quality — with other Asian nations for political reasons,” he told a conference in Washington, organized jointly by his institute and the Japan Economic Foundation. China may prefer bilateral FTAs to regional initiatives that would include Taiwan, said Bergsten.

November 2008 / ACCJ Journal / 17

“Diverse and conflicting rules of origin also create compliance costs and transactional burdens that can outweigh the benefits of the tariff reductions themselves.” “Such considerations would be extremely short-sighted on China’s part, in the light of its escalating trade conflicts with the U.S. and a number of other APEC members,” he asserted. “These conflicts are growing rapidly in the light of China’s large and rapidly expanding trade surpluses as it becomes the world’s second-largest trading country.” Conrad agrees. “People who study FTAs generally say that those in Asia are of lower quality,” he says. “In the U.S., for example, we have gold-standard or high-standard FTAs. “What would be optimal is an FTA that covers a full range of issues, so that the result will be trade creation,” Conrad says. “But, in the case of China — and to some extent ASEAN — they are more interested in market access and also in building relationships, than in getting concrete results.” The Business Roundtable — an association of chief executive officers of leading U.S. companies whose total annual turnover tops $4.5 trillion — is also critical of the FTAs that are mushrooming across Asia and beyond. As is stated in a Roundtable special report: “The proliferation of inconsistent bilateral agreements creates a problem of transaction costs, because each FTA has its own rules to determine whether goods qualify for duty-free treatment under the agreement.”

18 / ACCJ Journal / November 2008

“Diverse and conflicting rules of origin also create compliance costs and transactional burdens that can outweigh the benefits of the tariff reductions themselves,” says the report. “The burden of complying with rules of origin increases with the complexity of the rules and the number of different sets of rules that companies must navigate.” A solution to this problem, the Roundtable argues, is to integrate the U.S. FTAs by harmonizing the rules of origin in the various agreements into a uniform set of rules and combining them into a single system, as the EU has done. “This is a real issue,” agrees Bates of the ACCJ External Affairs Advisory Council. If Asia “ends up with a spaghetti network of bilateral free trade agreements at these low levels — all with different standards on these origin questions — it is going to be confusing and increasingly difficult. There is this de facto discrimination problem, although whether it is deliberate or not is another question. “If we are going to pursue bilateral agreements — which inevitably are going to become more important — then we should be looking at high-level agreements that really work to eliminate barriers altogether,” Bates says. “Increasingly, U.S. and Japanese companies that are doing business in the region focus on non-tariff barriers to trade and investment.”

SNAPSHOT

Key Issues Many FTAs must settle these concerns: ■■ Agriculture—Everyone wants food security, while some nations depend heavily on farm, fisheries exports ■■ Competition Policy—Some governments subsidize local firms to better compete with outsiders that demand market access ■■ Corporate Interests—Influential multinationals, lobbyists dominate trade talks ■■ Environmental Concerns— Developing economies are accused of overexploiting land, but argue that rich nations impose eco-standards they can’t afford and destroy their natural habitats ■■ Government Procurement— Accounts for large part of economies and transnationals’ profits ■■ Intellectual Property Rights—No innovation without protection, but some inventors get “unfair” government help with R&D ■■ Investment—FDI should benefit both countries ■■ Labor—Unions say globalization, low duties and technology encourage outsourcing that threatens jobs ■■ Rules of Origin—Often abused to reexport goods and avoid duties ■■ Sanitary and Phytosanitary Standards—Regulation of crops and food products to protect health and the environment can also be used to block imports ■■ Services— Free trade could harm basic community services by removing rules deemed trade barriers ■■ Technical Trade Barriers—Critics fear industries will set low safety standards just to “harmonize” regulations ■■ War, Geopolitics, Neoliberalism— Human rights ignored and governments rewarded in pursuit of political, corporate agendas

For a Better FTA

The agreed (although not yet ratified) FTA between the U.S. and South Korea is … an example of the comprehensive and trade-creating FTA that needs to be emulated throughout Asia.

The agreed (although not yet ratified) FTA between the U.S. and South Korea is held up by Bates and others as an example of the comprehensive and tradecreating FTA that needs to be emulated throughout Asia. By concluding a similar agreement with Japan, the U.S. could conceivably help to spread this “gold standard” throughout the region. “Another way of overcoming this problem [of low-quality FTAs] would be to conclude a broader FTA that brings together the many bilateral FTAs in effect or being negotiated, thus creating one common set of rules of origin,“ adds Conrad.

“For example, ASEAN+3 and ASEAN+6 agreements have been proposed and are being studied. But these agreements would be Asia-only and likely of lower quality. They would potentially create major new trade discrimination within the Asia-Pacific context [by virtue of excluding the United States, etc.].” At the Washington, D.C., conference, Bergsten, meanwhile, argued in favor of a Free-Trade Area of the Asia-Pacific (FTAAP), which leaders of APEC had promised to “seriously consider” at their meeting in Vietnam in November 2006. This move “launched a process that could ultimately produce the largest

single act of trade liberalization in history” — wider in its scope than even the WTO Doha Round and bigger in trade terms than the EU or NAFTA (North American Free Trade Agreement), said Bergsten. “The best long-term solution, and one strongly supported by the United States, would be to work toward conclusion of a Free-Trade Area of the AsiaPacific, which would encompass all the members of Asia-Pacific Economic Cooperation,” suggests Conrad of the ACCJ Government Relations Committee. “Studies have shown that a more inclusive agreement, such as an FTAAP, would benefit the region and the global economy more than an Asian-only FTA. “The Chamber believes that, since the United States and Japan together account for over 60% of APEC GDP,” he says, “the best next step toward achieving the vision of an FTAAP would be for the U.S. and Japanese governments to commit to negotiating a comprehensive, highstandard U.S.-Japan Economic Integration Agreement.”

Anthony H. Rowley is Tokyo correspondent for the Singapore Business Times and field editor (Japan) of Oxford Analytica.

November 2008 / ACCJ Journal / 19

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Media Watch

Water Business With soaring petroleum prices constantly in the news, much attention has been devoted to Japan’s strengths in hybrid and electric vehicles, and the up-and-coming fuel-cell technology. But oil is not the only precious substance facing a shortfall; another is water. According to data from UNESCO, the oceans account for 97.5% of the planet’s water. Remarkably, only 0.01% of the H20 on earth is fit for human use. Moreover, demand for this limited resource has been rising rapidly. Worldwide water consumption, estimated at 580 million tons in 1900, nearly doubled to 1.3 billion tons by 1950, and is slated to rise to 52.4 billion tons by 2050. As has been widely reported, China already faces a severe crunch. Research into global climate change and demographics suggests that by 2050, when the world population reaches 8.9 billion, perhaps as much as 45% of the world’s people — particularly those in Africa, the Middle East, the Mediterranean and the western U.S. — will face increasing water scarcity. Nikkei Business (June 30) devotes a 16-page special to the rapidly growing market for waterrelated technologies, which Toray Industries, Inc. projects will rise from ¥60 trillion in 2006 to ¥111 trillion by 2025. Some 40 investment funds for water-related technologies are currently in existence. Kenichi Suzuki, senior fund manager at Nomura Asset Management, tells the magazine about investments in his own World Water Fund, which rose from approximately ¥6 billion in 2004 to ¥120 billion by the summer of 2007. The world’s leading firms include France’s GDF SUEZ and Veolia Transport, America’s General Electric Company and Germany’s Siemens AG. Major players in the Japanese market include such infrastructural engineering firms as Mitsubishi Heavy

Industries Ltd., Toyo Engineering Corporation, Ebara Corporation, Kurita Water Industries Ltd. and Organo Corporation. Japanese firms are strong in two areas. One is helping factories achieve the “zero emissions” target by recycling water used in their production process. Sharp Corp.’s Kameyama Plant in Hiroshima Prefecture, which produces LCD panels for digital TVs, consumes 48,300 tons of water per day, about the same amount as a city of 200,000. The company requires the services of 40 technicians from Kurita Water Industries. The efforts have contributed to the companies’ bottom lines. FUJIFILM Corporation figures that, by using melted snow and other forms of smart water management, it has reduced costs at its factory in Fujinomiya, Shizuoka Prefecture, by about ¥1.1 billion over the past seven years. Another strength of Japanese firms is filtration and membrane technology, used in desalinization of seawater — in heavy demand in the Middle East, Africa and Spain. Toray Industries, Nitto Denko Corporation and Toyobo Co., Ltd. account for over half the world market. Despite Japan’s relatively abundant seasonal precipitation, its water resources on a per capita basis are actually below the world average (Canada being the highest by far). When agricultural imports are worked into the equation, Japan becomes a net importer of water. For instance, 500 liters is needed to grow a kilogram of potatoes; 900 liters for rice; 1,100 liters for corn; 1,650 for soybeans. A kilogram of beef requires 15,000 liters. Japan ranks first in terms of worldwide ODA for water- and sanitation-related projects. Its aid more than doubled from 2004 to 2005, when it rose to nearly $2 billion — about twice the level of U.S. government water-related aid in 2005.

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More Foreign Students With the aging of the country’s population and declining birthrate, the Japanese government has been becoming increasingly receptive to the idea of not only boosting the number of students from overseas matriculating at Japanese universities and other institutions, but also encouraging them to stay on after graduation and work for local firms. On July 29, a group composed of officials from six ministries announced plans effectively to triple the number of foreigners at Japanese institutions from slightly under 120,000 (as of May 2007) to 300,000. Writing in the Shukan Economist (Sep. 2), labor authority Masato Gunji points out that the ratio of students from abroad enrolled in Japan’s institutions, 3.3%, is quite low when compared to other

advanced economies such as the UK (24.1%), Germany (12.3%) and France (11.9%). While the U.S. is at a lower percentage (5.5%), it leads in terms of sheer numbers, with about 560,000 foreign students. Citing Ministry of Justice statisA recent survey of businesses, on tics, Gunji notes that, while the the contrary, found that only 9.6% number of foreign graduates had hired foreigners as regular or obtaining approval for change contract staff, as opposed to 89.5% of status and remaining here to of the businesses responding in work has roughly tripled over the the negative. The main reasons past decade, the number is still given for not hiring included low, just 8,272 in 2006. That is likely “lacking a system for recruiting to be changing soon, though. As them” (44.9%), followed by the global competition intensifies a “negative view toward hiring for quality human resources, the foreigners” (43.8%). Among Nippon Keidanren (Federation firms with 300 or more workers of Economic Organizations) sees on their payroll, the hiring figure the acceptance of more foreign reached 36.3%. Among companies students as a key component of its that had employed foreigners, 10-year vision for revitalizing the 79.5% stated they intended to economy. do so again in the future.

Travel Education As a result of greater efforts by Japan to attract more foreign visitors and to develop the travel infrastructure, the number of universities offering programs in tourism and hospitality has been increasing rapidly, with a commensurate rise in enrollment. The Sankei Shimbun (Aug. 27) reports that, according to data from the Ministry of Education, Culture, Sports, Science, and Technology, 37 institutions offered travel-related curricula, with a total enrollment of 3,900 students — a six-fold increase over 10 years ago. By the start of the next academic year in spring 2009, another three institutions, including Asia University in Tokyo’s Musashino City, have applied for permission to

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initiate similar programs, which is expected to boost total enrollment to over 4,200 students. Concerned over its imbalance in terms of outbound travelers to inbound visitors, the government in April 2003 launched its “Visit Japan” campaign, setting a target of 10 million tourist arrivals by 2010. In 2007, foreign visitors reached 8.35 million. The master plan for domestic tourism projects industry revenues of ¥30 trillion by 2010, up by ¥6 trillion from 2005. Interestingly, however, of the approximately 4,200 students with travel-related majors who graduated between 2004 and 2006, only 23% found employment in their field.

Media Watch

Eyes on Ikebukuro

Over the past decade, some 200 restaurants and shops run by Chinese have sprung up around the north exit of JR Ikebukuro Station. Confident in their swelling numbers, the Chinese feel there are enough of them in Tokyo to stake out their own turf, as did their compatriots in Yokohama and Kobe. So last January, the area’s Chinese merchants launched a campaign to designate the area as “Tokyo Chinatown Ikebukuro.” However, some local oldtimers seem strongly opposed to the idea. “This would destroy the neighborhood’s cohesion we’ve worked to build up over many years,” Mitsuru Miyake, chairman of the local merchants’ association, complained to Weekly Playboy (June 16). “They should work first at setting down roots and developing trust.” The Japanese merchants take a negative view on the foreign incursion, complaining that Chinese businesses haven’t joined their association and don’t contribute to cover the costs for decorative street

lighting borne by the other association members. The Asahi Shimbun (Aug. 28) reports that, on August 8, the opening day of the Beijing Olympics, a cooperative of 50 member businesses was formally established, with its own Web site, to market the area as a tourist destination. The cooperative already is planning to organize a Chinese New Year’s festival and hold workshops on Chinese cuisine, language and taijiquan (shadow boxing). The Chinese promoting the project also argue that Ikebukuro will need a new drawing card — as the opening of the new Tokyo Metro Fukutoshin Line from June makes it easier for commuters from the suburbs to access Shinjuku and Shibuya. The Chinatowns in Yokohama and Kobe have roots going back to the opening of treaty ports in the mid19th century; but, according to the Asahi, Ikebukuro only began drawing large numbers of Chinese after the collapse of the Bubble economy around 1991.

No Parking Zone “Coin parking,” as self-serve parking lots are called in Japan, are suffering from the double whammy of higher gasoline prices and oversupply. Nikkei Business (July 28) reports that at the Kirigaya intersection, about five minutes away from JR Gotanda Station, more than 10 competing establishments are in operation within a 100m radius. These began springing up rapidly after the imposition of draconian parking regulations in June 2006. A knowledgeable source tells the magazine that demand tapers off sharply at lots located beyond

300m from a station. Recently, some signs have sprung up reading “100 yen for 12 minutes.” This is the same as ¥500 an hour, but the phrasing appeals to users who may only need to park their vehicle for a short time. Park24 Co., Ltd., a lot franchising service, projected at the end of its fiscal year in October that revenues would decline by 8.1%, along with a 31.7% drop in operating profits. The value of its listed shares dropped by half in two months. Demand for night parking has been particularly dismal; and some

operators, such as the one serving the Nagoya Dome stadium, have dropped their rates to as little as ¥200 for overnight use. Summer vacation offered parking lot owners few prospects, since this year, many vacationers found it more economical to travel by rail or highway bus. As evidence, the Asahi Shimbun (Aug. 30) noted that, during the mid-August holiday peak, traffic jams of over 10km in length declined by about 20% from the 2007 levels. Other drivers took advantage of the 40% toll discount that expressways offer between midnight and 4 a.m.

November 2008 / ACCJ Journal / 23

photos tony mcnicol

FDI Roundtable

he good news about foreign direct investment (FDI) flowing into Japan is that it has steadily increased since the start of the new millennium. The not-so-good news is that the stock of FDI remains at an extremely low level, generally hovering around a mere 2% of Japan’s GNP. This figure compares to an average of around 20% for OECD countries as a whole. What’s more, Japan’s inward FDI is concentrated in a small number of nonmanufacturing business fields, such as wholesale, food service, retail and finance/insurance. It’s wholly absent in several other “sanctuary” industries, which include education, energy and health services. Another problem for foreign investors pondering a merger or acquisition in Japan is the recent resurgence of cross-shareholding among Japanese companies, a tactic that aims to keep outsiders at arm’s length. Japan’s FDI lag, however, could spell big trouble for the future of the country’s economy, some experts warn. Empirical studies show that, among other benefits, inward FDI creates jobs, leads to relatively high wages among local staff, introduces the latest management innovations — and, moreover, boosts productivity. As Japan faces a demographic time bomb in the graying of its workforce, which threatens to stall economic growth, it appears the country needs the benefits that inward FDI creates now more than ever.

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We sat down with experts to discuss the main issues behind Japan’s inward FDI. ACCJ Journal: Former Prime Minister Junichiro Koizumi’s famous target on inward FDI — to double it during 2001-2006 — seems to have been achieved, but, more importantly, has since been exceeded. Does this mean the government is living up to its pledge on improving Japan’s FDI climate? Smith: I think the government is committed to increasing FDI. The fact that Koizumi’s goal was met does indicate that. Even so, Japan is coming off a very low base. If you compare Japan to other countries, the level of FDI is still relatively very small. A small number is easier to double than a big number. The type of FDI that Japan really finds attractive is a company with a lot of cash coming in and building a Greenfield operation in an economically depressed rural area somewhere. So the FDI that perhaps the government thinks it wants and the FDI that we want is somewhat different. Paradise: Japan does recognize some of the serious economic problems it confronts. However, we Americans are not accustomed to the slow pace of change that characterizes Japan. Having said that, I believe that, through persistent dialogue and intelligent identification of opportunities, American and foreign investors have helped to prompt the Japanese government and economic leaders toward some

Moderated by Geoff Botting / FDI Roundtable

The type of FDI that Japan really finds attractive is a company with a lot of cash coming in and building a Greenfield operation in an economically depressed rural area somewhere.

Allan D. Smith, President of the ACCJ and General Counsel of AIG Companies in Japan and Korea

Robert F. Cekuta, MinisterCounselor of Economic Affairs at the U.S. Embassy in Tokyo

really positive developments — which, perhaps, Japan wouldn’t have been able to accomplish on its own. So the challenge for people like us will be to strike the right balance between continuing those efforts while not getting ahead of Japan’s capacity to change, at a pace it’s comfortable with. Cekuta: We’ve traditionally looked at the U.S. and Japan as something separate. But I don’t think we can do that anymore, especially on the investment side. Capital is flowing all over the world. We in the U.S. government are approached constantly by other countries asking for investment, so Japan is competing globally for capital. And when I say Japan, I mean Japanese companies and entrepreneurs who are competing for funds. But I think Japan has made the right statements. The prime minister’s statement in Davos was welcome. [At the World Economic Forum in Davos in January, then-Prime Minister Yasuo Fukuda pledged to continue reforms to facilitate FDI. Ed.] It would be helpful to keep on hearing that message and also getting that message internalized within the Japanese bureaucracy and society. Benes: The base is so low that it doesn’t take a huge number of transactions for the number to flip up tremendously in one year and give a lot of bragging rights — and then flip down the next year. But if you look at the cumulative base of FDI to GNP, then we’re still hovering somewhere between 2–3%. But the important thing to remember about

Nicholas E. Benes, founder and President of JTP Corporation and ACCJ FDI Committee Chairman

Theodore A. Paradise, an M&A expert and Partner at Davis Polk & Wardwell (G.J.B.J)

Koizumi is his message. He basically told the public in very clear terms: “FDI is good, and for the following reasons.” Among those reasons were bringing in know-how and new business models. In other words, his message was that things weren’t just about money, and that FDI was needed by Japan’s economy. This was in a country where everybody thought, “FDI? Well, that’s just money. We have a savings overbalance, so what do we need investment for?” So Koizumi changed a lot of the thinking in the paradigm. And he had the guts to set a public goal — speaking in the Diet, no less. Such actions change the attitudes of bureaucrats and public opinion. But do you think this has been a case wherein the government merely has set a target; looked at the figures; and, after noting that the basic pledges were met, then feels it can slow down the deregulation process? Benes: There is a tendency to think that way. But I would give the government a lot of points for continuing the process as far as various constituencies would allow them. Isn’t there a fairly widespread view among the Japanese public, even including those in business, that Japan doesn’t actually need FDI and that opening up to foreign capital is a way of placating its major trading partners?

November 2008 / ACCJ Journal / 25

… we think funds need to flow wherever the market says they are needed; that economic forces should be factors determining their flow. FDI in Japan (in millions of dollars) 150 120 90 60

JETRO

07 20

06 20

05 20

04 20

03 20

02 20

01 20

FDI stock (based on international investment position, net)

Smith: It depends on the area of business. Japan lags in such fields as pharmaceuticals, medical devices, financial services, and so on. There are very substantial companies that dominate the domestic market; but because they generally don’t compete overseas, they’ve fallen behind. A way of stimulating these domestic companies is to have foreign companies come into these areas, and bring new products and new ways of distributing them — and new ways of thinking about how those products are used. As Nick said, it’s not about getting money; it’s about getting know-how. Cekuta: We hear a lot from Japanese businesses and the government about certain areas, mainly financial services or services in general, where they feel a need for foreign investment. Those are interesting areas, but we think funds need to flow wherever the market says they are needed; that economic forces should be factors determining their flow. So we’ve been trying to open up for increased flows of foreign capital and knowledge to make companies that want to be competitive actually be more competitive. It seems that much of the Japanese public, if not the majority, has yet to be convinced of the benefits of inward FDI. Benes: That is a point. But if you were to create an index showing the percentage of the population that realizes that Japan needs FDI because the economy has long-term growth problems and lagging productivity, then I think that such an index

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has probably doubled in the last six or seven years. But it’s still not enough, because it would have doubled from only a small amount. So we don’t want a government that simply responds to certain requests from people like us or the U.S. government. Rather, we’d like to see a government that makes this issue a top priority of its own internal domestic policy and admits the country has a massive GDP growth problem as its population continues to shrink. The only way to solve this demographic problem is through increased productivity. And Japan is the country that benefits the very least from the productivity enhancements that FDI brings, compared to any other developed country. What needs to be done to facilitate higher rates of inward FDI in Japan? Smith: Foreign companies are really interested in acquiring a base, doing a friendly tie-up with an existing [Japanese] company, whether that’s a merger or acquisition, or whatever. Nick more than anybody knows the travails we had trying to get transaction models that would allow us to do such deals on a tax-deferred basis. We went through a long process of pressing for a tax-deferred transaction model, and what we ended up with was the triangle merger. But even that is very limited. You have to be a company listed on the stock exchange in Japan and have a presence here. So if you’re coming from overseas, and you’re not listed or you’re here as a branch, you can’t use that approach. So there is a very limited set of circumstances by which you can do a triangular merger. Paradise: From the perspective of foreign investors, that really is a significant hurdle. In addition, for a foreign investor to avoid tragic tax consequences, it must use its own stock to acquire a company in Japan. It’s a very, very cumbersome process — and, frankly, one that at least 90% of foreign acquirers would have absolutely no interest in pursuing. So, in addition to what Allan was talking about, it’s also necessary to do something that enables foreign companies to make acquisitions for cash in Japan without the devastating tax consequences that currently exist.

FDI Roundtable

I don’t think the biggest impediment is the public perception, but rather the attitude of certain business leaders here.

In Japan, in order to do a full acquisition for cash, effectively you would trigger a capital gains tax at the target-company level. The target company would be forced to report the transaction as being a recognition event. It would have to report the fairmarket value of its net assets and pay tax on that to the extent it exceeds the historical tax basis. For most companies, that’s a very big number. Benes: So you buy a company and think the price is X, but it’s actually X plus Z, with Z being the outflow tax from the capital gains tax that is suddenly owed — and is often a huge number. That may sound technical, but the gist is that M&As are still in the birthing process here, as far as getting the mechanics straight. The “tools” have yet to be clearly defined, and the bureaucrats are not M&A experts. When measures do get pushed through, amid resistance, often what gets lost in the shuffle are the mechanical details. Smith: Having said that, there is movement toward recognition that M&As need to be facilitated if you want FDI. This past summer, the government announced its prescription for the faltering economy, which doesn’t seem to include any measures to promote foreign investment. Instead, we have a package of stimulus measures, aimed at such things as preventing layoffs at small and mid-size companies, and boosting exports. Doesn’t that indicate a backward-looking attitude? Benes: I think it’s true that there has been some backsliding on FDI in the absence of a strong political leader.

Smith: I don’t think the biggest impediment is the public perception, but rather the attitude of certain business leaders here. They are the ones who are afraid of takeovers. They view anything that facilitates foreign entry as suspect. These people are sitting on companies with huge amounts of cash that aren’t very efficient. If these companies could be bought in a hostile takeover, they could be turned into very efficient companies that make huge profits. And these people know this. But we aren’t interested in hostile takeovers. Our deals always involve people with long-term relationships, who want to take those relationships one step further. Paradise: I’m going to disagree somewhat with Allan’s view. I think public opinion is the answer. Ronald Reagan and Barry Goldwater spent decades preaching the gospel of the free market in the United States. And corporate America was, frankly, backwards in hearing that message. It wasn’t until the U.S. suffered through a decade of horrible corporate performance that the U.S. public was ready to give Reagan his landslide victory, which led to the Reagan revolution. A similar thing happened in the United Kingdom around that time. I think Japan is now gradually getting the message, and that the FDI issue is a subset of the free-market story. Two incidents last year, involving TCI/J-Power and Bull-Dog Sauce/Steel Partners, received a lot of press. Do you agree with the many media assessments that the incidents highlighted a return to Japan Inc.? Or do you see them merely as two extraordinary events? Paradise: I don’t think either of those cases was important in establishing any kind of principle, or creating direction for Japanese corporate governance for the economy. Rather, I see them as indexes of where we are. The courts and regulators did things that reflected the sentiment of society at large. Cekuta: I think the international perception of the TCI case was important. When the Japanese government started making statements about TCI, the case made the front pages of the Financial Times. Global

November 2008 / ACCJ Journal / 27

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FDI Roundtable

Many Japanese managers have yet to get the message that they’re going to have to compromise with shareholders.

Do you think shareholder activism went too far in the TCI case? After acquiring a 10% stake in J-Power, TCI then slammed the company’s management, accusing it of mismanagement and other problems. Is that the right approach? Benes: Most of what TCI was doing was not slamming management, but constructive criticism. But I think the case really points out that we’re not over the hump. Many Japanese managers have yet to get the message that they’re going to have to compromise with shareholders. Paradise: Activist shareholders in Japan are in a learning process now. Mistakes were made in the past, but now they’re learning to communicate their message effectively to other shareholders, the press and the public in general. Are you concerned about the resurgence in crossshareholding among Japanese companies? Benes: About five years ago — when the Corporate Value Study Group waved a wand over takeover defenses, legitimizing them — prominent lawyers involved in that process told me that, “You’re going to see a lot more cross-shareholding.” And that’s

what precisely took place. What’s also happened is that the reporting requirements for companies’ top 10 shareholders have been loosened, so that now companies only need to report those who own at least 10% of a company. So we often don’t have a dependable clue about anyone holding 9.9% or less. This means that cross-shareholders can now more easily hide from view. And more of them are doing this now.

SNAPSHOT

FDI Confidence Index Results of a survey to gauge the impact of likely political, economic and regulatory changes on the FDI intentions and preferences of the leaders of top companies in 25 countries. Top 15 1. China 2. India 3. U.S. 4. UK 5. Hong Kong 6. Brazil 7. Singapore 8. UAE

9. Russia 10. Germany 11. Australia 12. Vietnam 13. France 14. Canada 15. Japan

Japan’s economy appears to be contracting and seems to have entered a recession. If it continues, do you think it will spur greater moves toward facilitating M&As and other FDI-related areas? Or could it go the other way? Paradise: Companies here tend to be very willing to accept foreign investment if it means saving the company from bankruptcy. And we’ve seen concrete examples of that in Japan. Until facing a crisis, management was complacent, unwilling to take the dramatic steps necessary. I think Japanese companies suffer from a culture of conservatism, which doesn’t want to take risks. But the situation that does contradict that general rule is bad economic conditions that lead companies to the brink of bankruptcy. That stimulates managements to take risks, to alienate certain constituencies, in order to enhance productivity and profitability — and to set their companies on a firmer footing. So I look forward to a day when it doesn’t take a recession scenario to make corporate leaders or the public recognize the benefits of risk-taking and free markets.

Geoff Botting is a freelance writer based in Tokyo.

November 2008 / ACCJ Journal / 29

readership looked at those articles and wondered, “Is Japan really open for business?” The concern is that business leaders are sitting in their boardrooms around the world and thinking about where they’re going to put their money and where the best returns are going to be. So when they read about the TCI case, they think, “Ah, that’s the old Japan.” I mean, their capital has to flow some place, and it isn’t going to flow here. I think that that perception was a major concern of people in the Japanese government and in business, including people outside Tokyo in the [other] prefectures. Smith: I think that the Bull-Dog decision was unfortunate because it sent the message of, “Let the shareholders decide.” What that means is that companies feel the need to get friendly shareholders on-board. In other words, the court decision gave management incentives to back the old model of cross-shareholding; and that means less shareholder activism and less pressure on corporate performance.

On the Spot Kent Calder

Under the last four Japanese prime ministers — Junichiro Koizumi, Shinzo Abe, Yasuo Fukuda and Taro Aso — do you see consistency in Tokyo’s attitude toward U.S. bases here, or has there been change? There has been a process of transformation, particularly under Koizumi. The agreement in 2006 was very important, the Two-Plus-Two roadmap; but I think the problem in Japan-U.S. relations is more at the intermediate level, especially since Koizumi left. Changes in the relationship under the administration of President George [W.] Bush have been overrated and some areas have been ignored entirely. That should be addressed. There’s the question of the environment, as well as economic and cultural exchanges. Bush and Koizumi have both pushed ahead and much [of what] they did has been constructive, but that was done without strengthening the political alliance. That’s what they need to focus on now, beyond the narrow military dimension. I think Abe made some important progress on the narrow issue, [but] at the cost of broader political understanding. Technology is making them go forward now, technology such as missile defense. That is important, but it needs to be built on a sufficiently strong political base. There are proposals to reduce the amount of money Japan pays as host nation support, which are supported by the opposition Democratic Party of Japan [DPJ]. Is that more an issue of a different strategic interpretation of how to react to China, for example, or merely a domestic political power play?

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FCCJ

Director of the Edwin O. Reischauer Center for East Asian Studies at the School of Advanced International Studies in Washington, D.C.

My broad sense is that it is much more political play than an underlying strategic issue. The DPJ itself is split on the strategic issue, with some of them very strongly committed to the alliance. Both the Liberal Democratic Party and the DPJ need to consider how the bases relate to the alliance. The DPJ’s Yukio Hatoyama has talked about the alliance without bases in Japan, and there has been that discussion within the party; but I’m not sure if that is the official position on that. I’m not sure how that would work in terms of defense power-projection. But there is political attraction in what is being said; my point is that the more the substance of these issues is discussed, then we will have political debate. Since the 1960s, the issue of U.S. bases has been relatively submerged by the Japanese political process. That’s unusual in comparison to other countries that host bases. There needs to be more discussion of why they exist.

By Julian Ryall / On the Spot

If Senator Barack Obama comes to power, I think we will see significant differences in [South] Korea, but not in base issues in Japan.

SNAPSHOT

Kent Calder A former special adviser to the U.S. Ambassador to Japan, Kent Calder has taught at Princeton and Harvard universities, and is the author of numerous books and articles on Asian regional politics. His latest publication is Embattled Garrisons: Comparative Base Politics and American Globalism (2007, Princeton University Press).

Do you see potential political transition in the U.S. and Japan having an impact on the bases here? I see major changes in the way Washington deals with Iran, Iraq and Cuba, as well as its trans-Atlantic relations; but when it comes to Japan and the U.S., I see a broadening of the relationship. That is essential because, since 9/11, there has been so much emphasis on security issues. Specifically on base issues, I think both sides would like to see a resolution to the Futenma issue because that is now tied up with larger proposals, including moving 8,000 Marines to Guam; and it will be a mess if this is not all ready. If Senator Barack Obama comes to power, I think we will see significant differences in [South] Korea, but not in base issues in Japan. If the DPJ came to power in Japan and acted swiftly on revising the Status of Forces Agreement [SOFA] and issues such as moving the Futenma base in Okinawa, what would your suggestion to Washington be on policy changes here? If the DPJ came to power in Japan, its ideas would have to be considered seriously, including revision of SOFA and removing troops from Okinawa. But there are many people who want the troops to stay there, so there will be opposition regardless of any decision. The simplest thing for Japan-U.S. relations would be for the two sides to go through with some of these changes, but be more responsive to the needs of [the] Okinawan people. We should

consider revisions to SOFA, but the problems are clear, in terms of interpretation and flexibility in operation. This is a work in progress. The costs of U.S. defense commitments have increased dramatically since 9/11; is this sustainable? The U.S. deployment in Iraq is at the heart of this, with the cost at $1 trillion and counting since five years ago. In the Pacific region, spending is between $30 billion and $40 billion a year in peacetime. The figure in East Asia has increased much less than elsewhere because Japan pays so much to the U.S. as host nation, such as the cost of all local staff, construction of new buildings, land rental costs and so on. I can’t give a precise figure, but it all pales in comparison to the Iraq war. Why will Japan not commit itself to collective self-defense? There are two levels at which that can be examined. The first is political and the question of how easy is it to overcome the problem of ambiguity. We cannot forget Japan’s historic peace constitution and the complexity of the Diet process. The political process here gives a lot of leeway to players who can sidetrack proposals for policy change, and that is why big policy change only occurs here at a time of crisis. In a crisis, the government has to respond. There is also the strategic side. There is belief in the alliance and its importance — I think the idea of unarmed neutrality that was common between the 1950s and ’70s has been pretty much dispelled — but I also think that Japan benefits from a certain degree of ambiguity. If it agrees with everything the U.S. says and does, then it does not have much leverage. The alliance should be more balanced, and then Japan could afford to be less ambiguous.

Julian Ryall is The Daily Telegraph’s Tokyo correspondent.

November 2008 / ACCJ Journal / 31

photos Mattias Westfalk

From left: Christopher LaFleur, Vice-Chairman and Head of Government Relations and Corporate Responsibility for Japan, JPMorgan Securities Japan Co., Ltd.; Eiji Wakiwaka, President, BP Japan K.K.; Peter Sykes, President, Global Dow Automotive General Manager, Japan & Korea Region, The Dow Chemical Company; Tom Pederson, Statutory Executive Officer, Head of the People and Communications Group, and the Chief Learning Officer, Shinsei Bank, Limited; Patricia Bader-Johnston, Chair of the CSR Committee, and Representative Director and CEO, Silverbirch Associates KK

Women Back to Work

Faces of CSR and the Soft Landing Taskforce.

bout 40 years ago, the renowned economist Milton Friedman wrote an article for The New York Times entitled, “The Social Responsibility of Business Is to Increase Its Profits.” Today, he would be hard pressed to find a CEO admitting to that once widely held view. The traditional definition of a successful business has since been expanded to include a wide range of activities and duties now generally referred to as Corporate Social Responsibility (CSR). For many organizations, CSR emerged as a direct response to their customers, the community and interest groups within which they operated. Nike is perhaps the best-known example of a company having embraced CSR in response to the sustained pressure exerted by NGOs in the 1990s on the company’s suspect labor practices in its factories. Nike responded quickly and decisively, implementing improved labor standards, monitoring programs and setting up a corporate Web site reporting program. Such a high-profile shift in CSR from a peripheral activity to a core business strategy was influential in broadening the scope of corporate responsibility.

32 / ACCJ Journal / November 2008

“In Japan, CSR is often identified with charitable contributions; but our companies have shown that it can go way beyond this — to be part of our everyday businesses and contribute to the bottom line,” said ACCJ President Allan Smith in his opening remarks at the chamber’s September Kanreki Special: The Faces of CSR Half-day Symposium. “It simply makes good sense to have a workplace that more accurately reflects Japan’s population and embodies a commitment to good corporate governance.” Speaking at the same symposium, Yoko Kamikawa, a member of the House of Representatives and former Minister of State for Gender Equality and Social Affairs, said she believes Japan is at the beginning of a “grand new start” in diversity that could dramatically change the dynamism of its society. Social and cultural trends, particularly as they relate to women, need to be understood within the Japanese business context, she said. “Japan’s declining birth rate, for example, should be as closely followed as the country’s GDP,” argued Kamikawa, stressing the link between gender equality and business profitability. “If we do nothing,

By Catherine Shaw / Women Back to Work

Popular media and the society at large have yet to fully embrace working mothers as positive role models. we will lack labor — and that is simply unviable.” Helping Japanese women to thrive in the workplace and work their way beyond the “concrete ceiling” has emerged as a major challenge for both the government and private sector here. Unlike relatively clear-cut solutions for issues such as reducing environmental impact, improving corporate governance, addressing philanthropy and upgrading workplace safety, achieving greater diversity and equality is constrained by a complex web of social, cultural and economic conditions. The main constraints in question remain the ones already well known. Many Japanese women stop working when they get married and start a family. The few who return to work tend to accept lower pay, junior positions below their previous titles, and continue to contend with Japan’s corporate culture of long working hours and networking after-hours. At home, men seemingly keep to extremely low levels of participation in domestic and child-rearing activities, resulting in working mothers having to effectively juggle two full-time commitments. Unfortunately, this often is done without the levels of compensation that justify the stress that goes with it. In essence, Japanese men are able to work the hours they do because, at home, they have someone taking care of everything else. Popular media and the society at large have yet to fully embrace working mothers as positive role models. “Balancing work and child-rearing is just too challenging,” said Kamikawa. There also exists a curious dichotomy. An alarmingly low national birth rate means Japan is facing a serious shortage of potential skilled labor, yet fewer children do not translate into Japanese women being able to forego familial responsibilities for the boardroom. Despite women pursuing high levels of education, the ratio of female managers in Japan is still significantly lower than in other countries, said Kamikawa. Not to be overlooked is that women who contemplate returning to work also find their business skills to be out of date and, therefore, suffer a loss of personal confidence.

SNAPSHOT

It is important to support women in a holistic way, says Mari Nogami, ACCJ Kansai Women in Business Committee chair and a Kansai representative of the ACCJ Soft Landing Taskforce team. “Networking and mentoring are two important ways where ACCJ can provide much needed practical help.” One recent event that has already proved popular with women is the annual ACCJ Walkathon, which this year was held in Kobe in October. “Our focus is on improving the environment for working women,” explains Nogami, “so we’ve created an enjoyable networking opportunity for women where they can learn what support is available. “It is also a chance to network with each other, invited NPOs, ACCJ members and sponsor companies,” she says. The theme of “Happy Working” is highlighted by a working-mother’s advice corner, as well as career, psychological and beauty counselling corners. “I think this is one of the best uses of the ACCJ’s diverse network of people with different experiences and the passion to promote more diversity in Japanese society,” Nogami adds.

Last year, in an effort to assist women re-entering the workforce, the government of Japan launched a new financial initiative to help update skills and provide practical business training. The Shakaijin no manabinaoshi program, overseen by the Ministry of Education, focuses on providing re-education through institutions of higher learning such as universities, junior colleges and vocational schools, including nursing schools. Each institution competed for government grants, by presenting plans for their re-education programs. In the summer of 2007, 124 institutions won grants for the following three years. The individual programs vary considerably in both time (from 10 weeks to one year) and content among the educational institutions. In Tokyo, Nihon Joshi Daigaku, or Japan Women’s University (JWU), elected to provide a comprehensive yearlong course on the Recurrent Education-Reemployment System (RERS) for women already holding at least a fouryear university degree. The first program involved 63 students who graduated in July 2008. It was deemed such a success that the university board already has voted to continue the training program after the expiration of government funding.

November 2008 / ACCJ Journal / 33

“Many Japanese companies tend to view older age as a handicap, without recognizing the value of experience and special skills.”

SNAPSHOT

An in-house daycare center opened in October at Mizuho Financial Group Inc.’s head office in Chiyoda Ward would help mothers balance work and child rearing, it was reported. The facility — for children of staff at Mizuho Bank, Ltd., Mizuho Corporate Bank, Ltd., and Mizuho Securities Co., Ltd. — will be operated by an outside company to care for up to 25 preschoolers aged up to six, from 8 a.m. to 9 p.m., the company said. The group opened a similar daycare center in June last year at its training center in Shibuya.

Lord Michael Hastings, Global Head of Citizenship and Diversity, KPMG International, speaks at the Soft Landing Taskforce launch.

According to Prof. Naoko Fuwa Thornton of JWU, most of the women who joined the course already had some job experience (from less than two years to more than 12) across a range that included the banking, insurance, government, retail and industry sectors. The yearlong training course included Englishlanguage improvement classes, business English and the study of current affairs in English. IT literacy, a key business skill in today’s technologydriven economy, formed a key curriculum component, introducing commonly used software and training on programming, graphics and Web page development. There were also corporate accounting and bookkeeping courses. The JWU program attracted the interest of the ACCJ CSR Committee, which had been seeking opportunities for the international business community to support government efforts at reintroducing women into the workforce. “We did our due diligence of the JWU program and candidates, and were very impressed by the length of the course and by how robust the training was,” says Royanne Doi, vice-chair for Diversity and senior vice president/senior regional counsel of APAC, State Street Trust and Banking, Co., Ltd. “We thought a partnership with JWU would offer an excellent opportunity for us to bring ACCJ members’ extensive business skills and resources directly to the students who had already shown the commitment to complete a year’s study,”

34 / ACCJ Journal / November 2008

explains Doi. “We were also able to bring ACCJ companies into direct contact with a group of highly motivated and well-trained women.” Working closely with JWU, the ACCJ established a pilot program to provide the July 2008 JWU graduates with an intensive halfday practical business-training program. “We called it the ‘Soft Landing’ because it is all about giving women a soft start, or reintroduction, to the business environment,” explains Mariko Nakazono, co-chair of the Soft Landing Taskforce that was formally established by the ACCJ following the success of the pilot program. “Several leading ACCJ member companies who are already fully committed to diversity kindly supported our initiative.” “It’s a win-win situation for the students and companies involved in the Taskforce,” explains Co-chair Adam Kassab, senior consultant of Human Capital Advisory Services at Mercer Japan Ltd. “Companies benefit from a wider pool of well-trained employees.” “Many Japanese companies tend to view older age as a handicap, without recognizing the value of experience and special skills,” observes JWU’s Thornton. “It is my hope that ACCJ companies will serve as a model to change such attitudes.” Twenty-three students attended seminars provided by State Street, Shinsei Bank, Limited and Deutsche Bank Group staff, covering Englishlanguage résumé writing, interviewing skills and logical thinking. PricewaterhouseCoopers then led a lively panel discussion on “Returning to the Workforce.” The program concluded with a networking event where ACCJ companies

Women Back to Work

“CSR is one of the ACCJ’s central themes for its 60th year, and this is an area where our pool of talent and skills are best used.

Soft Landing Taskforce Co-chairs (left to right) Mari Nogami, Adam Kassab and Mariko Nakazono at the ACCJ event in September.

and students were able to talk informally. “It’s not about quick fixes,” stresses Taskforce Co-chair Mari Nogami. “Not all the JWU students immediately went on to find work, but they are now far better equipped to make choices about how and where they will work. That is an important objective for us.” “It is a long-term process,” agrees Victoria Becker, a keen advocate of CSR and an ACCJ CSR Committee member. “We need to keep talking to the women who have completed the course and new students coming into future courses to keep our support relevant and practical. “The CSR Taskforce intends to build on the momentum created by our pilot project by continuing our relationship with the JWU program and extending our outreach to other universities,” she says. “Most importantly, the Taskforce will explore ways to bring together returning women and ACCJ member companies. “Future possibilities include further practical business training sessions, ACCJ scholarships to retraining programs, company tours, job fairs or a résumé clearinghouse system to match women to available full-time jobs or ‘returnship’ opportunities,” says Becker. It makes sense for the ACCJ to focus its CSR efforts where its particular skills lie, explains ACCJ President Smith. “CSR is one of the ACCJ’s central themes for its 60th year, and this is an area where our pool of talent and skills are best used.

SNAPSHOT

Not all women immediately seek full-time employment when considering a return to the workforce. A variety of opportunities exist—from volunteer work for local charities and schools, to internships that emphasize on-the-job training in a temporary position. Akane Ochi, one of the first successfully placed graduates of the ACCJ CSR Committee Soft Landing Initiative, says: “The practical experience I received during my internship helped me build confidence in working with others. It also even helped me land a job.” The ACCJ has seen similar success stories with other candidates who use Ecentral (www.ecentral.jp/), an online recruitment resource that provides a direct link between companies looking to source bilingual interns with motivated candidates looking for work in an international environment. Ecentral also offers HR managers opportunities to work closely with interns to determine if candidates will succeed within their organization. “Companies upload paid or unpaid internship positions for free, while job seekers can review jobs and intern listings at no cost,” says Royanne Doi, ACCJ CSR vice-chair for Diversity. http://internships.ecentral.jp Tel: 03-5403-7782

“The Soft Landing Taskforce provides an excellent opportunity for companies to demonstrate commitment to CSR practices, while accessing a pool of talented individuals who are motivated to prove themselves in the workplace, and who might not otherwise be offered the opportunity,” says Smith. “Given the changing demographics in Japan, firms that tap into this talent pool create a meaningful competitive advantage for themselves.” The collaboration between the government, JWU and the ACCJ is typical of a new partnership approach to CSR that already has seen success elsewhere. In an article about global corporate citizenship in the January/February 2008 issue of the Foreign Affairs journal, Prof. Klaus Schwab, executive chairman and founder of the World Economic Forum, argues that we have entered a new stage of involvement in broader issues of corporate citizenship. Today that means companies must not only be engaged with stakeholders, but also be stakeholders themselves, alongside governments and civil society, says Schwab. Governments are increasingly recognizing that complex problems like gender equality and diversity in the workplace require mobilization of far more

November 2008 / ACCJ Journal / 35

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Women Back to Work

“The mindset of government, business and men is slowly changing; but women in Japan also need to change the way they think about themselves and work.” resources than they alone can provide, and that business has skills and a resourcefulness they can bring to bear on the problems. “Governments are recognizing their limitations,” agreed British Prime Minister Gordon Brown at a recent international discussion on the state of CSR today. “If governments understand they need to make it possible ... partnerships can be transformative.” But with such high-profile collaborations, it is often easy to forget that the “target” of CSR must also step forward to play an active role in the partnership. “The mindset of government, business and men is slowly changing; but women in Japan also need to change the way they think about themselves and work,” observed one female attendee during a Community Action Learning session at the ACCJ September Symposium. “We need to believe in ourselves and want to be a part of the solution, not wait for others to fight the fight for us. “That is why the ACCJ program is so important: Japanese women can see others who have managed to balance work and life,” she said. “We need more role models like that.” The constraints women face also vary across industry, job specialization, and whether the employer is foreign or domestic, says David Price, managing director at recruitment specialists Robert Half Japan Ltd. “In HR, which tends to be a fairly conservative functional area, women are less likely

SNAPSHOT

Best Practices New York novelist Meg Wolitzer’s 8th book, The Ten Year Nap, (Riverhead Books, March 2008) provocatively analyses four friends who become mothers and quit careers in law, art, banking and movies. “The rest of the world doesn’t fall away when you have children. But your priorities are with your family. You’re not exactly asleep but you’re in the dream of family life,” she writes. Some critics objected to the word “nap” in the title. Wolitzer argues that many educated, middle-class U.S. women feel their anxieties are ignored because they are “privileged” with the choice of having careers or not. Ten years on, the four women face a life that is not what they expected, but one they have chosen. They are bored, directionless, worried about money, and perhaps too devoted to husbands, children and friends. The four are forced to confront their choices until a series of strange events changes everything. One Amazon reviewer said, “Wickedly observant, knowing, surprising, and always entertaining, as it explores the lives of these women with candor, wit, and generosity.”

to return to the workforce after having a family and more likely to have reservations about males or former co-workers reporting to them after receiving a promotion. “Yet, in technology roles and in the finance industry, this is much less likely to be an issue,” he says, “ especially within the foreign-capitalized [gaishi] firms.” The problems facing women in business today may seem intractable, but a partnership approach to dealing with the problems seems to offer a new way forward. In an issue of Harvard Business Review, the role of businesses is described as being critical in this collaboration, write Michael Porter, a Harvard Business School professor, and Mark Kramer, managing director of nonprofit organization FSG Social Impact Advisors. “When a well-run business applies its vast resources, expertise and management talent to problems that it understands and in which it has a stake, it can have a greater impact on social good than any other institution or philanthropic organization.”

Catherine Shaw is a freelance writer based in Tokyo.

November 2008 / ACCJ Journal / 37

n 1999, then-President Bill Clinton at the Seattle WTO warned us about the trade issues we have right now: globalization has losers, not just

winners; and it is the political class’s obligation to help the losers, and their families and communities, to make the adjustments, get the education, and build the needed social safety net. Clinton laid all that out, but everybody accused him of dividing the free-trade consensus, and blamed him for the collapse at the Seattle WTO. This year, the trade consensus in the U.S. has collapsed because we never dealt coherently with the issues Clinton had raised. Ways & Means Committee Chairman Charlie Rangle made a deal in May last year with the Bush Administration on behalf of the Democratic Party, he thought, for Congress to vote on the U.S.-Columbia FTA and move on other pending deals — as long as legislative language tightened up a bit on labor and the environment.

Rangle went back to the Democratic caucus, and he got his head handed to him by an enormously vocal minority — not necessarily with the truth, but certainly with powerful arguments. And nobody stood up to defend him. Now the Democrats’ leader on trade has been put on the defensive, and is unable to deliver; but the Bush Administration considers it had a deal that the Democrats have broken. One potential solution has been articulated for a year by the Senate Finance Committee Chairman Max Baucus: trade adjustment assistance (TAA). “I will move on the Columbia FTA if you make a deal on expanded TAA.” The AFL-CIO calls TAA “burial insurance”; but in reality it’s a program to help workers of the former industrial middle class get training to enter the new service-economy middle class. It’s an absolutely fundamental political and economic issue. But the Bush Administration and Baucus never found time to have this negotiation; yet, now, the President says: “Time’s up, the Fast Track clock will start on the 90 legislative days Congress has to act, or Columbia automatically takes effect.” And Baucus is saying: “No you’re not; you’ve got to do TAA.” Views expressed in the Opinion Leader column are those of the author and do not necessarily represent the views or policies of the ACCJ.

38 / ACCJ Journal / November 2008

illustration for the accj journal by darren thompson

Globalization’s Downside

By Chris Nelson / Opinion Leader

The prospect of Congress taking any negative trade action certainly bothers the Chinese, and perhaps causes some angst in Japan. There’s no question that you’re going to see tightened enforcement, if not now, then under a Democratic administration, for sure, on food safety and product safety, possibly on currency, certainly a more aggressive approach to insisting China implement its WTO and IPR commitments. But China in the past year has been getting much more prickly; file a case now, and you hear about it. Without question, there will be a rise in trade tensions with China, even without a Democratic administration, which will have a spillover effect into the political relationship. This is analogous to U.S.Japan in the 1980s, before both countries realized they really were interdependent, and a trade case didn’t imperil their alliance. But at the time, we worried the world was going to end because Kodak was mad. We are still in that stage with China, so the trade situation is worrisome and becomes more so when you factor in where the U.S. and world economies may be. If we land in a depression, who knows what a really frightened Congress might try? Chris Nelson is editor of the Nelson Report.

グローバリゼーションのマイナス面 1999年、当時のビル・クリントン米大統領

業別組合会議）は、TAAを“埋葬保険”のよう

は、米シアトルで開催されたWTO閣僚会議

なものとこき下ろす。しかし、実際には、従来

の席上、グローバリゼーションについて「勝者

の中産階級の工業労働者が職業訓練を受け

もいるが、敗者もいる。敗者とその家族や地

て新しいサービス経済の中産階級に移行す

域社会に手を差し伸べ、調整を図り、教育の

るための支援制度である。政治、経済の全く

機会を確保し、社会のセーフティネットを整

根本的な問題への取り組みなのである。それ

備するのが、政治に携わる者の仕事である」

なのに、この件について両者は交渉の機会を

と警鐘を鳴らした。クリントンは、こうした方針を提示したものの、自由貿易交渉の合意に

持てないまま、現在に至っている。大統領は、「時間切れだ。ファストトラック（早期一括審

水を差してシアトルWTO閣僚会議を失敗さ

議）は90日間で議決する必要がある。さもな

せた張本人と責められた。

ければ、コロンビア（FTA）が自動的に発効す

今年、米国で貿易協定の合意が得られな

る」としている一方、ボーカス委員長は「TAA

かったのは、かつてクリントンが提起した問題

を拡充しなければノーだ」と譲らない。

に一貫して対処してこなかったからだ。下院

議会が貿易の妨げとなる見込みに、中国

歳入委員会のチャールズ・ラングル委員長は

は不快感を催すはずだし、日本にも懸念を生

昨年5月、民主党の代表として（少なくとも本

じさせる可能性がある。いずれ規制が強化さ

人は民主党を代弁したつもりだった）対コロ

れるのは間違いない。今すぐでなくとも、民主

ンビアFTA（自由貿易協定）法案を議会で承

党政権となれば必ずや、食の安全、製品安全

認し、他の懸案事項にも着手する方向でブッ

性、通貨政策の面でも規制強化され、中国に

シュ政権と合意した。ただし、労働問題や環

WTO協定や知的財産権を守るよう強く迫る

境問題で法案を強化するという条件付きだっ

ことになるだろう。しかし、このところ中国は

た。その後ラングルは、この件について、民主

かなり神経質になっている。中国との間で貿

党幹部会でうるさ型の少数派に責め立てら

易摩擦が悪化することは必至で、米中間の政

れた。彼らの非難は、必ずしも的を射ていたと

治関係にも間接的に影響が及ぶ。

は言えないが、かなり説得力のある主張だっ

これは1980年代の日米関係に似ている。

たことは否めない。実際、誰もラングル擁護の

まだ互いの本質的依存関係を認識していな

声を挙げなかった。結局、ラングルは守勢に

かった頃だ。当時は、貿易上のトラブルが同盟

立たされ、先の合意は果たせそうにない。ブッ

関係を揺がすかに思われた。米中関係はまだ

シュ政権は一度成立した合意を民主党が破

そういう段階にあるから、通商関係も重大な

棄したと受け止めている。

懸念材料となる。米国そして世界経済の状態

有望な打開策のひとつに、1年前から上院

を考えれば、なおさら心配が募るというもの

財政委員会のマックス・ボーカス委員長が提

だ。もし大不況が訪れたりすれば、青ざめた

示してきた“貿易調整支援（TAA）の拡充と引

議会が何をしでかすか、わからない。

き換えならFTAについて手を打つ”とする提案がある。AFL-CIO（アメリカ労働総同盟・産

クリス・ネルソンネルソン・レポート編集長

オピニオンリーダーに掲載されている意見はすべて著者個人の意見であり、ACCJ の意見や活動を代表するものではありません。

November 2008 / ACCJ Journal / 39

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ooperation, as much as healthy, robust competition, is what defines quality in the travel and leisure sector, especially when it comes to accommodation and a hotel’s facilities. Being near public transportation — local, regional and international — also requires that hotels in key cities be located relatively near each other, albeit in their chosen districts of the larger urban centers. Getting back to what guests want to enjoy inside their hotel, the amenities — emanating from carefully executed surveys, genuine one-on-one interaction between customers and staff, and global databases on loyal guest preferences — cover fundamentally common areas of service. There is the popularity and growing concern for health and fitness, for example, and the appeal of wining & dining on a range of ethnic cuisine, in either a casual or sophisticated setting. Hotels devote their upper floors — with spectacular views — to such “standard” features. Hotel spas and signature ointments, treatment rooms with dedicated specialists, gyms and swimming pools cover the gamut of today’s care and grooming. Properly trained, globally experienced chefs bring an authenticity to their recipes that also take full advantage of the extensive fresh ingredients Japan can deliver. At the same time, it has become imperative for hotels to offer plans that cater to guests who demand exceptionally appointed guestrooms, an unmatched attention to detail — such as high-end mattresses, bedding and nightwear — and a level of service reflecting a hotel’s ultimate experience. While each hotel can provide distinctive benefits — and maintain them in all its brand properties in its respective city, around Japan and/or the world — there is, nonetheless, a fundamental consensus about what should be of exceptional quality. In effect, the universal components of hotel luxury guide the more discerning traveler in what to look for in special privileges when selecting where to stay. Probably in Japan more than anywhere else in the region, hotels must possess the capability to deliver first-rate facilities and provide well-trained professionals to handle the demands of clientele working in the world’s second-largest economy. The range covers wide-band, high-speed Internet access, flat-screen TV with computer capability, attractive working space inside guestrooms, to business center and lounge, and dedicated concierge on the executive floors.

Hotel Heaven Japan’s major hotels stand out in the region. Most critically, Tokyo, Osaka, Kobe, Nagoya, Fukuoka, Sapporo and other convention cities have developed a public infrastructure that encourages private-sector investment in delivering the highest standards of the region. According to the Tokyo Convention and Visitors Bureau (TCVB), the capital city provides 1,600 international flights to 90 cities, 2,800 domestic flights  and 4,000 trains to dozens of destinations. The TCVB goes on to say that the 89,000 hotel rooms in Tokyo include those of recent international hotel flagship openings and full-scale renovations at established hotels. Furthermore, according to the TCVB, with over 100,000 restaurants, including some of the finest in the world, Tokyo’s sheer range of dining options make for a gourmet paradise. The Kobe Convention & Visitors Association (KCVA) states that over 25 million people visit Kobe annually, where there are ample high-quality hotel accommodations within 30 minutes of Kobe Convention Center. Also, according to the KCVA, a total of 38 hotels offer 7,200 rooms, while many low-cost business hotels and urban-style guest hotels provide very reasonably priced accommodations, especially in comparison to the Tokyo area — an advantage valued by overseas visitors. Japan hotels focus also on common elements in interior decoration that can then reflect a distinct brand identity. These appointments range from the selection of lighting, color, wall and flooring, artwork and greenery, to furniture and fittings, bathroom amenities and fixtures. In effect, when choosing a double, twin, family guestroom or suite, guests coming to Japan can expect a consistency in quality regarding accommodations, facilities and service that make a hotel stay better than anywhere else in the region, if not the world. Scott Butcher General Manager Crowne Plaza Kobe

November 2008 / ACCJ Journal / 41

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Crowne Plaza Kobe Tel: 078-291-1121 Fax: 078-291-1151 E-mail: Banquet@cpkobe.com www.cpkobe.com www.crowneplaza.com Crowne Plaza Kobe, a well-known landmark, is quickly becoming the meeting place of choice for discerning guests from all over the world. Some 592 accommodations are fully equipped with free high-speed broadband. A wide variety of restaurants and bars include Japanese, Italian, Chinese and other cuisine to meet your needs. Some 23 function rooms range from small meeting rooms to large banquet rooms accommodating 2,500 guests buffet-style. Our staff assist in planning and managing your event, right down to the finer details. We provide the optimum in facilities for your successful business meetings and events. Being adjacent to Kobe’s Shinkansen Station, and only a 10-minute walk from Sannomiya, our hotel has easy access to major transportation options. The Kobe Airport is 20 minutes away, Kansai International Airport only 65 minutes away.

42 / ACCJ Journal / November 2008

After your meetings, Crowne Plaza Kobe becomes a relaxing amenity. The hotel is perfectly located on the hillside of the National Park to view Kobe’s famous nighttime panorama. Other specialties are a world-famous Angsana Spa that gives you the refreshing blend of treatments to rejuvenate the body, mind and spirit, as well as a swimming pool, sauna and training gym. The hotel provides refreshment after your busy day. Kobe’s “Place to Meet”—Crowne Plaza Kobe.

Evergreen Outdoor Center Tel: 0261-72-5150 www.evergreen-hakuba.com Since 2000, Evergreen has been instrumental in developing outdoor recreation activities, ecology tours and mountain-safety courses in the Nagano region. With programs that run year round, we provide safe, sustainable and professional tours. Evergreen will lead you along a path of excitement, personal challenge, teamwork and love for the outdoors. Evergreen’s staff are first and foremost focused on making your experience a safe and memorable one. Our internationally licensed instructors and professional guides are passionate about their work, and committed to providing fun and satisfying tours. Hakuba, Nagano is the gateway to the Northern Alps; it has massive peaks, the biggest ski hills and a base of over 4m of snow annually! Whether it is a relaxed day in the forest on snowshoes, a challenging day of instruction, or steep and deep powder riding in the backcountry, you’ll come away with experiences you won’t soon forget. Children have a ball in our newly redesigned Kids Ski Camps, where the emphasis is on fun first, then work on stages of skill development. Evergreen runs a professional daycare for children still a little young for the slopes or can manage only a half-day skiing. Let us set up a memorable winter getaway for your group.

Isetan Men’s Tel: 03-3352-1111 www.isetan.co.jp Come to where the cutting edge of fashion gathers, and the highest service is offered.

All nine floors of Isetan Men’s are devoted to what a man requires for a fashionable lifestyle. From shoes, bags and underwear (B1), to dress shirts & ties, accessories and cosmetics (1F), we offer first-class brands that also respond to our fashionable foreign customers and professional athletes who demand more than just the right fit. Along with imported global brand designer wear (3F, 5F), you will discover top-of-the-line brands designed with Isetan (2F)—plus exclusive floors for business (4F) and contemporary casual (6F). For the man on the go, there’s Isetan Men’s spa (8F)—and authentic golf wear & goods, and sports wear (7F). For the life of leisure, we provide acoustical instruments, art books, stationery, sunglasses and furniture (8F). Isetan Super Men’s Size Shop (7F) covers up to a 115cm waist and a height of 195cm, with shoe sizes up to 12in. Join our free membership club for foreigners residing in Japan and enjoy special privileges, such as a 5% shopping discount on cash purchases (certain conditions apply), interpreting and personal shopping assistance. I Club – Foreign Customer Service, Isetan Shinjuku (6F). Tel: 03-3225-2514, e-mail: iclub@isetan.co.jp, www.isetan.co.jp/iclub

MORI LIVING (Mori Building Co., Ltd.) Tel: 0120-52-4032 E-mail: residence@mori.co.jp www.moriliving.com Mori Building Co., Ltd. prides itself on its long experience in Tokyo, where the firm now operates 16 residences, including four serviced apartment properties. Most of these are located in Minato Ward, and include the widely recognized Tokyo landmarks, Roppongi Hills and Omotesando Hills. Mori Building residences and serviced apartments are marketed under the MORI LIVING brand, a brand that has come to be known as the benchmark for the highest standard of living in Tokyo. MORI LIVING residences are typically surrounded by lush greenery, and boast the highest levels of earthquake resistance technology combined with state-of-the-art security systems to ensure residents peace of mind. Mori Building takes

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special pride in welcoming residents from all around the world who are cared for by staff who offer impeccable hospitality to all. A typical MORI LIVING neighborhood is “a city within a city,” consisting of residences, workplaces, schools, entertainment, shopping, recreation and dining facilities all within easy walking distance. The community of residents includes prominent business and opinion leaders. The friendships you make, and the new ideas and possibilities you encounter are the MORI LIVING experience you are likely to treasure the most. MORI LIVING, Bringing new ideas to life in Tokyo.

Richard Mille Tel: 03-5537-6688 Fax: 03-5537-5024 www.richardmille.com/ www.richardmille.jp/ Swiss watchmaker Richard Mille not only represents the 21st century, but also applies what the new millennium has to offer in terms of greater technological performance and new materials. Our first wristwatch model, the RM 001-1, presented in 2000, captured Richard Mille’s passion for the world of Formula 1 and the technological resources that power it. Our high-performance wristwatches and no-nonsense, no-frills approach enable a series to grow, to embrace new materials—metallic & non-metallic alloys, ceramics, carbon nanofiber, silicium, etc.—that lead to superior technological solutions. The high-performance Richard Mille wristwatches are lightweight yet offer a wide margin of resistance to shocks and stress. Embodying the level of craftsmanship that produces the function, the accuracy in construction and reliability of F1 racecars, our quest for perfection ensures that each component—case, screw, bridge, wheel, lever, spring, base plate, balance wheel, etc.— fulfills its assigned task, yet come together into a balanced, integrated wristwatch. Come visit our Richard Mille Ginza shop, opened in December 2007, to experience—in a spacious, elegant setting—our new limited edition luxury watches that continue to harness the evolving core strengths of today’s industry. Ginza 8-4-2, Chuo-ku, Tokyo. 11:30-20:00, Mon-Fri; 11:30-19:00, Sat, Sun & Holidays.

Ruth’s Chris Steak House Tokyo Tel: 03-3501-0822 www.ruthschris.co.jp Ruth’s Chris Steak House, the largest upscale steakhouse company in the world, brought its first restaurant to Tokyo on October 25, 2007. Founded in New Orleans by Ruth Fertel (1965), the company has since developed and grown to span six countries and over 120 restaurants around the globe, including Canada, Taiwan, Hong Kong and Mexico. Ruth’s Chris is best known for its awardwinning steaks, and specializes in broiling custom-aged premium Japanese and American beef in its trademark 1,800°C ovens. Each signature steak is served on a sizzling 500°C plate to ensure the steak stays “sizzling” hot. The menu features steaks cut individually, ranging from 6oz (170g) to larger cuts of up to 40oz (1,134g) for sharing. In addition to prime-grade beef, the New Orleans-inspired menu includes a range of fresh seafood, other meat entrées, seasonal specialties, freshcooked vegetables and potatoes, as well as delicate homemade desserts. There’s a large number of original cocktails, spirits and beer, and an extensive collection of American, Australian and European wines. Located on the first floor of the newly refurbished Tokyo Club building, 3-2-6 Kasumigaseki, Chiyoda-ku, central Tokyo. Lunch: 11:00-15:00 (LO 14:30), Dinner: 17:30-23:00 (LO 22:00), every day. ¥3,000 (lunch courses) to ¥12,000-15,000 (dinner courses).

Sheraton Miyako Hotel Tokyo Tel: 03-3447-3111 Fax: 03-3447-3133 www.miyakohotels.ne.jp/tokyo www.sheraton.com/miyakotokyo In addition to our convenient location in central Tokyo, the Sheraton Miyako Hotel Tokyo provides genuine hospitality and comfort in a tranquil environment, surrounded by an exquisitely landscaped Japanese garden.

We offer a combination of traditional Japanese and contemporary Western, with an assortment of restaurants, banquet facilities, a swimming pool and guestrooms fashioned for complete comfort. The interiors of all 495 guestrooms combine Japanese and Western styles. The effect is harmonious and calming—just right for tourists and businesspeople seeking comfort without interruption. To ensure a sound sleep in a superior bed, every room has top-quality Sheraton Sweet Sleeper Beds. We believe our bed offers the best sleep in the world! Whatever brings you to Tokyo, you’re guaranteed a premier-quality stay. Our restaurants offer a choice of fine cuisine: Japanese, Chinese, French and Continental menus that cater to a variety of culinary preferences. And our soothing bars and lounges are perfect for your relaxing hours at the hotel. For those inclined to physical activity during their stay, we are equipped with a 25m indoor pool, private health club with sauna, whirlpool baths and training gym

Yaesu Fujiya Hotel Tel: 03-3273-2111 Fax: 03-3273-2180 www.yaesufujiya.com Situated near the Yaesu south exit of Tokyo Station, the hotel is ideally located for you to take a stroll around the Marunouchi area or the Ginza shopping district. It is most conveniently located for business and sightseeing in Tokyo. The warm and friendly atmosphere will make you feel at home. We have a wide range of accommodations, from practical Western-style rooms to quiet, restful Japanese rooms, so that you can enjoy a relaxing stay. We have a wide variety of restaurants. Katsura serves traditional Japanese cuisine and sushi, while Wisteria offers healthy Western cuisine. In the evenings, guests can enjoy our chef’s unique menu with a choice of over 100 wines selected by our resident sommelier. Our versatile facilities, including banquet halls and conference rooms, can meet all of your needs: be it for a party, wedding reception, business meeting or other kinds of functions. We look forward to serving you soon!

November 2008 / ACCJ Journal / 43

Whisky and Wordsmiths Earthy pleasures and cerebral pursuits of Sendai.

trolling from the station to Nikka’s Sendai distillery, I have an inkling why the “father of Japanese whisky,” Masataka Taketsuru, favored this remote spot in Miyagi Prefecture. It could almost be the Scottish highlands. Mist rolls down craggy slopes; even in August there’s a light drizzle. Only the humidity gives it away — that, and the vending machines by the side of the road. The 39-year-old distillery is the newer of two in Japan belonging to Nikka (their Hokkaido distillery was founded in 1934). A 30-minute train ride from Sendai, at a place called Sakunami, the outing makes for a pleasant day trip from the city. A hand-drawn sightseeing map available at the station details a few other low-key diversions, such as the Sakunami onsen 3km down the road. Along the winding road from the distillery’s gates to the main buildings, a sign reads: “Drive with care and with a smile.” That philosophy seems to be shared by the Nikka employee I’ve arranged to meet. As we take an unhurried stroll around the distillery, he tells me about his visits to

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the UK where Nikka has a distillery at the foot of Ben Nevis. When we reach the pot stills, I notice that they are decorated with Shinto shimenawa. Apparently, they are replaced each New Year’s when a priest comes to bless the distillery. Tours of the distillery run throughout the day, and the inevitable focal point is the tasting room. Three Nikka whiskies are on offer today — Miyagikyo 10 Year Old; Taketsuru 17 Year Old and Nikka apple wine. The two malts are very respectable, indeed. I’m not so sure about the apple wine, though, which smells like apple vinegar, and doesn’t taste much better. It is a legacy of the time when Nikka struggled to profit from its whisky. It is now 90 years since Taketsuru, determined to bring back the secrets of the Highlands’ finest, traveled to Scotland. I wonder what his mentors back then would think of Nikka’s current malts? At the World Whiskies Awards earlier this year, Nikka’s Yoichi 20 Year Old took the coveted prize for “World’s Best Single Malt.”

By Tony McNicol / Classic Journeys

That and some other special bottlings are available at the distillery’s well-stocked gift-shop. There’s more to Sendai than just whisky, though. In the culinary category, the city is closely associated with gyutan — that is, grilled cow’s tongue. For dinner, I find a gyutan restaurant near the station. The meat comes as part of a teishoku set meal — grilled sliced tongue, brown rice and ox-tail soup. It tastes great, though I can’t help wondering what happened to the bit in the middle of the cow. The next day, I check out the city’s inappropriately named morning market (it’s open all day). There is a lot of seafood and gyutan, of course, plus flowers, fruits and vegetables. The adjoining indoor Ameyoko market must have some connection with Ueno’s famous shopping district, at the other end of the Tokyo-to-Sendai mainline. Locally, the market is known as the “kitchen of Sendai” (which sounds like a nod to Tsukiji). Being just one short street, however, it can’t quite compete with the kitchen of Tokyo — though it is lively enough. The shoppers are a mixture of locals, tourists and older women in youthful clothes and heavy makeup. (The latter surely being mama-san shopping for their snack bars in the nearby entertainment district.) Along with the earthy pleasures of whisky and meat, Sendai is also well known for more cerebral pursuits. Tohoku University is the thirdoldest college in Japan. “Sendai really is a fine place for learning,” said Albert Einstein. “I had a special interest in coming to Sendai.” When the physicist came to visit the university, a crowd of 3,000 well-wishers turned up at the station to see him. Other famous visitors to the city have included Helen Keller and George Herman Ruth. The Babe hit a homerun at the then-baseball stadium (Nov. 1934), and a statue was erected where the ball landed on the right-field side. In a corner of the city, there is a shrine dedicated to academics, poets and other assorted wordsmiths. I couldn’t resist searching it out. I found the shrine to be slowly crumbling, weeds coming up through the pathways, pools of water, and ravenous mosquitoes everywhere — a great

PHOTOS TONY MCNICOL

Tohoku University is the third-oldest college in Japan. “Sendai really is a fine place for learning,” said Albert Einstein.

Prayers for academic success … and more.

setting for a Hayao Miyazaki animated film. A group of blue-and-white clad girl-guides arrived and gleefully rattled the shrine ropes and bells. One middle-aged lady with them spent a quiet minute patting a stone statue in the shrine precincts. The “stroking bull” is for praying for academic success. Perhaps her children are taking exams this year? Nearby were paper-covered tables for children to write down their supposedly learning-related wishes. I snuck a glance at a few prayers: “So that Akki passes her exam”; “So that I become slim and cute”; “I must have that license”; “Ueda-sensei, I love you!” I contemplated scribbling an entreaty to the kami of journalists: “So that I meet my deadlines and don’t get any facts wrong in my articles.” Getting There Sendai is 95 minutes from Ueno Station by the Tohoku Shinkansen. You also can fly there out of Haneda Airport. A shuttle bus runs Sendai from Sakunami Station to the Nikka Miyagikyo distillery on weekends. Tony McNicol is a freelance writer and photographer based in Tokyo.

TOKYO

Winners of 10 Temples on 2 Wheels: Christine Bella, JWT Japan; Holly Helt, Temple University, Japan Campus

November 2008 / ACCJ Journal / 45

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Daifuku Company, Ltd. Tel: 03-3456-2395 E-mail: terry_wagemann@ha.daifuku.co.jp www.daifuku.com Since 1937, Daifuku has become a global leader in the development of automated material-handling solutions for manufacturing, warehousing and distribution, operating in more than 16 countries. Our products range from simple utility carts and storage rack, to complete, fully automated warehouses, DCs, factories and cleanrooms. We provide a Total Solution, not just automated equipment. Total Design — We start by analyzing your total process. We have become a global leader not only by our experience, but also by dedicating ourselves to achieving a complete understanding of manufacturing and distribution logistics. Forming a partnership with our customers through each phase — interviews, analysis, concept, design, installation and operation — a Total Solution is realized.

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November 2008 / ACCJ Journal / 47

Chiba’s 1st International Public School

48 / ACCJ Journal / November 2008

FCCJ

nternational schools have long played a key role in the life of expatriate multilingual (and at least bicultural) families residing in the Kanto region. The schools of the Japan Council of International Schools (JCIS), accredited by such overseas bodies as NEASC, CIS and WASC, are permitted to function in Japan without having to fall under the auspices, and curricular guidelines, of the Ministry of Education. In the seven years since Akiko Domoto was elected governor of Chiba Prefecture, she has gone head-to-head with the Ministry of Education for the right to have an international school classified as an Article One institution, making it eligible for government funding. “I first saw the need for this kind of school in the 1970s, when I was a television journalist,” says Domoto. “In making a documentary about school dropouts, I found children returning from overseas had a very tough time. Many were bullied at school because they could not speak Japanese well. “I remember visiting the house of a lovely young girl, a talented figure skater who was born in Los Angeles,” she recalls. “She was so traumatized that she hid under the bed when we arrived.” The result is that children often stop speaking their

Akiko Domoto, governor of Chiba Prefecture and Paul Rogers, principal of Makuhari International School

second language because they do not want to be different. When Domoto first set in motion the plans for an international school within Chiba’s public education system, she envisaged it being tuition-free. She still believes that should be the case, but has reached “a workable compromise” with the education authorities. And in April next year, the Makuhari International School (MIS) will open its doors, providing instruction in English and Japanese that meets the requirements of the national curriculum. “For Chiba, this is also a key to our future in the global economy,” she emphasizes. “Today, we must compete for foreign direct investment with every other region in Japan. But, too often, we miss opportunities simply because we lack the social infrastructure to support foreign investment. “The key factor is international schools,” the governor

says. “Without them, you cannot support an international workforce.” In its first year, MIS will have classes from Kindergarten (from age 3), up to Grade 4 (age 9). From 2010, the elementary school will operate up to Grade 5, and in 2011 up through Grade 6. Kindergarten will provide a curriculum based on health, human relationships, the environment, language and expression. Grades 1 through 6 will follow a course of study centered around the skills and concepts covered in the Japanese and other international curriculums, but with the school’s distinct, creative flavor. Elementary School studies will include Japanese, English, mathematics, information communication technology, science, social studies, music, art, physical education, ethics, and personal, social and nature studies, as well as home economics for Grades 5 and 6. Around 250 students are expected to initially enroll; a student body of around 400 is the eventual enrollment target. The aim is to have between 20 to 24 pupils in each class, with the courses taught by dedicated and experienced foreign teachers. The campus is being built in the Wakaba district of Chiba City, and will include a

By Julian Ryall / FDI Portfolio

“The policies we write and the procedures that we employ are geared towards ensuring that children reach their potential.” single-story facility covering 3,800m2, and place emphasis on plenty of outdoor space. “My hope is to make our school much more than geographically convenient,” says Principal Paul Rogers, “to be so much more than just another ‘international school.’ “I want to make Makuhari the best international school in Japan,” he says. “A school that parents choose for its academic excellence, and a school so engaging and inclusive that both children and among other things, using parents look forward to Monday a diversity of resources, undermorning, and arrive at our school standing the diversity of chilwith a smile on their faces.” dren,” he says, “which, therefore, Being a new school enables means employing a diversity everything desired to be done of learning techniques, and right from the outset, according having a flexibility of approach to Rogers, a graduate of to the curriculum in general. Britain’s Hull University, who “Being a new school means went on to study at the Royal that all we do from the beginCollege of Music in London. ning is child-focused—and not Involvement from the planning [being] misled by other concerns,” and construction stages has meant says Rogers, who was the head that large outdoor areas have of St. Michael’s International School in Kobe, from 2002-2005, been incorporated into the school before becoming the founding campus, including a large playprincipal of the International ground and a nature study area. School of Tripoli and the British The teachers being interviewed International School in Bratislava. for positions on the faculty will “The policies we write and the need to demonstrate a commitprocedures that we employ are ment to their profession, flexibility and the desire to continue learning. geared towards ensuring that children reach their potential,” he says. “There is sometimes a belief “All children reach their potential.” that curriculums around the As well as being able to set lower world are so very different. tuition fees, thanks to its recogniThat misconception is often tion by the Japanese government based on how curriculums are as an Article One school, the taught,” Rogers says. “What the other benefits include donations curriculum is and how it is taught being eligible for tax reductions, are two very different things. graduates being eligible to take “We shall have an international entrance exams for Japanese approach that takes regard of,

A model showing how the school will look when it opens in April 2009.

high schools and universities, and MIS graduates considered to have completed Japan’s compulsory education requirements. “It is important to remember that schools are for children,” Rogers says. “Children always come first in all decisions that are related to our new school. As teachers, we go into education because we care about children and want the very best for them. “And for all the team behind the establishment of MIS — from the governor down — this has been the same: to ensure that children at Makuhari will get the very best education we can provide, and to make sure that we are there to provide something special for children who would otherwise struggle in any other school.” For more information — www.mis.or.jp or e-mail: info@mis.or.jp or tel. 043 296 0277. Julian Ryall is The Daily Telegraph’s Tokyo correspondent.

November 2008 / ACCJ Journal / 49

By Nicole Fall / FDI Portfolio

French Reconnection London-based retailer French Connection Group plc has bought back the other 50% stake in its joint venture, French Connection Japan Inc., from Renown Inc. The move means the group now will be directly involved in the day-to-day management of the brand in Japan. Previously, it only was engaged on a managerial level and in funding. Details of the transaction, according to French Connection, include payment in the form of a waiver for an outstanding $3.95 million loan due to Renown by French Connection Japan, and a cash payment of $479,600 by Renown to the group, according to fashion newspaper WWD. French Connection Japan currently operates 21 brand stores. In the fiscal year to December 2007, the Japanese business recorded sales of $17.7 million, with a net loss of $2.79 million. The

company said it hoped to move its Japanese business into profitability within three years. “Asia is an important market and represents a great opportunity for French Connection,” says Stephen Marks, chairman and CEO. “This move consolidates our position in one of the most important markets in the region.” Minoru Nakamura, president of Renown, said in Japanese press reports this year that he plans to sell 10 to 15 unprofitable brands that Renown owns or in which it has interests.

Nine Hotel Deal Wyndham Hotel Group has signed a non-exclusive agreement with Green Hospitality Management Co. Ltd. of Tokyo to open nine hotels in Japan during the next five years under the Ramada and Days Inn lodging brands. The hotels will be developed or managed, or both developed and managed, by Green Hospitality Management, a subsidiary of Green House Co., Ltd., a Japanese hospitality company whose businesses include contract food service, the operation of 500 Japanese and Chinese specialty

restaurants, and the management of 14 hotels. The agreement promises to quadruple Wyndham Hotel Group’s current presence in Japan. The company presently franchises three hotels in Japan: the Ramada Sapporo, Ramada Osaka and Ramada Kansai International Airport, south of Osaka. Wyndham is the world’s largest lodging franchiser, encompassing nearly 6,500 hotels under 10 brands on six continents. “To overcome the cultural, governmental and practical constraints of doing business in Japan, it is

critically important to partner with a local company that has demonstrated its ability to grow and maintain a successful analogous business in that country,” says Tom Monahan, Wyndham Hotel Group executive vice president, International Development. “Green Hospitality Management is an ideal partner for us because they have the requisite hospitality background to develop and manage our Ramada and Days Inn brands,” he adds. “We appreciate their enthusiasm, confidence and experience, and look forward to a very productive relationship.”

November 2008 / ACCJ Journal / 51

Osaka Bound Osaka Prefecture attracted a record number of foreign companies in FY2007 (ending March 2008), according to the Osaka Business and Investment Center (O-BIC). The number of foreign investments in the prefecture reached 36, up from the previous year’s 24, marking the highest level since the center was set up in April 2001 in a joint effort by the public and private sectors to encourage foreign firms to locate factories and offices in the prefecture. Investments from Asia accounted for 50% of the total, or 18 cases, with those from China reaching eight companies and from India four companies. Those

investments from the U.S. and Europe comprised 47.2%, or 17 cases, with those six businesses from the former. By industry, foreign investments in the fields of information technology (IT), biotechnology and R&D were the highest at 16 cases, with IT-related investments accounting for 12 cases. Of the 36 investments overall, 16 were made by foreign companies based

in Tokyo, such as LCD TV-material maker Corning International K.K. and PC manufacturer Dell Japan Inc. That number was up from four cases the previous year. The investments by such companies have been prompted, in part, by the concentration along Osaka Bay of TV-panel factories of electronics giants, such as Panasonic Corp. and Sharp Corp., according to O-BIC.

Designer Show For those of you in Japan who appreciate designs from afar, the country’s biggest trade event in this field, Designtide Tokyo, is a definite must-do. Held from October 30 to November 3, at Tokyo Midtown (Roppongi) and other selected locations, Designtide Tokyo brings together designers across a variety of fields—from interior and product design, architecture, graphic design, to textiles, fashion and art. In a world where design is increasingly important—and even low-cost goods need superior packaging design—this trade show allows manufacturers, journalists and buyers from all over the

52 / ACCJ Journal / November 2008

world to connect with designers and spread the word about their design activities. The show focuses on three areas: the Tide Exhibition, Tide Market and Tide Extension. The core of Designtide Tokyo is the Tide Exhibition—a trade center where new creations and ideas are introduced and exhibited. The Tide Market is where you can purchase products on display and where market research can be conducted. The Tide Extension is an exhibition of works shown throughout the city of Tokyo, held at individual shops and galleries connected to Designtide Tokyo, forming a single exhibition.

FDI Portfolio

Bank Expansion HSBC Premier has expanded its presence in Japan by opening its first Kansai branch and sixth Tokyo branch, offering a specially tailored banking service for high-net worth individuals looking for exclusive services, privileges and rewards. The London-based banking and financial services organization opened its largest HSBC Premier Centre so far, which started business on October 24, at the Kobe International House, on Flower Street, near JR Sannomiya Station. “As part of our globally linked up banking service, you can view all your accounts globally with one click through the Internet banking site. You can also enjoy fee-free worldwide remittance between HSBC accounts,” the company said in a statement. Stuart Milne, President and Chief Executive Officer, Country Manager Japan, The Hongkong and Shanghai Banking Corporation Limited, said:

“HSBC originally opened a branch in Kobe in 1869, and we are delighted to be returning to this historic port city as one of the world’s strongest and most highly capitalized banks. We look forward to bringing our unique HSBC Premier wealth management service to the people of Kobe and the wider Kansai region.” HSBC Premier opened in Ikebukuro on October 8, adding to its branches in Akasaka, Ginza, Hiroo, Marunouchi (pictured) and Yokohama.

Artistic Homes Art specialist nonaca k.k. has branched into interior design and art coordination, offering Tokyoites a one-stop shop for all furnishing needs. New Zealander Julia Barnes founded nonaca in 2007 by establishing an appointmentonly gallery called Nakaochiai, in the eponymous area close to Shinjuku. With a mission to make international contemporary art accessible to all, Barnes and her colleagues have used the experience to expand into full-service interior design. “As professionals in interior, nonaca`s talented interior designers and decorators can

Services include project managing new home setup; furniture, artwork and accessory coordination; the interior and interior design for rental and non-rental apartments. For those unable to travel to Nakaochiai, nonaca teamed up with Italian restaurant Sin in Aoyama in September to hold monthly art openings showcasing affordable contemporary art in a lively setting.

coordinate a quality package to suit your budget, as well as your property’s style, size and location,” says the nonaca president.

Contact Nicole Fall at nicole@fivebyfifty.com if you have ideas for this column.

November 2008 / ACCJ Journal / 53

Earth-Appraisal Co., Ltd.

Muck and Brass Eco industry cleaning up.

t may have been a bad year for business across the board, but there will always be brass in muck. Just ask Kevin Carroll. Executive director for EarthAppraisal Co., Ltd., Carroll has seen the company grow from seven employees just four years ago, to 80 full-time staff at four offices across the country today, while sales have increased by a factor of 10 in the same period. “We provide environmental risk management services, primarily to the real estate and financial sectors,” says Carroll. “When a purchase is going ahead, or a merger or acquisition, we carry out an assessment of the environmental issues to forestall any unforeseen capital expenditures or potential future claims.” That assessment not only is technical in nature—identifying whether a building contains dangerous amounts of asbestos or a plot of land is contaminated with heavy metals, dioxin or PCBs—but also puts a dollar figure on the amount that will be required to clean the site up. Armed with that information, a purchaser is able to have that cost taken off the price, or insist that the vendor carry out the remediation work. “Western firms have been doing this sort of due diligence for about 30 years now, but for Japanese companies it has really only begun in the last four years,” says Carroll.

54 / ACCJ Journal / November 2008

“Before that, it was lip service, at best. But now they are really able to see the benefits and understand that they will only attract international investment if they conform to international standards. “It has been slow in coming, but it is coming,” he says. Carroll first came to Japan in 1994 to help set up the local office of GE Real Estate. Over the next 10 years or so, he increasingly made use of Earth-Appraisal’s specialized skills, and so did not have to think long when the opportunity to join the board came along. “The way the big corporations in Japan have done this work is to set up a company within their group to carry out the assessment, and then do the physical cleanup of the soil, asbestos or other contaminants,” Carroll says. “But often those departments are not seen as a big money-maker; and, therefore, the staff are usually trained only in limited-response approaches, although some companies, like Hitachi, have done quite well.” The independent Japanese environmental companies tend to be very small and are usually “focused on the regulations,” says Carroll, with a wry smile, instead of being able to develop cost-effective solutions. “The Japanese environmental policies are generally not in tune with the times,” he says. “And, in the case of asbestos identification,

Biography

Name: Kevin Carroll Age: 56 Born: New York City, 1952 Education: B.S., Manhattan College Languages: English, some Japanese Lives in: Jinbocho, Tokyo Based in Japan since 2004 Career: Manager, Environmental Risk, GE Capital Real Estate; vice president of Vertex Engineering Services.

they’re just flat-out wrong.” Earth-Appraisal has been trying to make headway with Japanese regulators for the last three years on analytical standards for asbestos, one of the most prevalent — and harmful to human health — materials that the company comes up against. Carroll takes issue with the analytical process that is used to determine concentrations of the substance. The Japanese method employs an X-ray diffraction analysis, by which a sample is ground to a powder and subjected to X-rays. But grinding the sample inevitably destroys the fibers, which are the most potentially dangerous form of asbestos to humans. This method has been discredited in 90% of international regulations on asbestos. The rest of the world, including the United States, employs a method that uses a simple polarized light microscope and a

By Julian Ryall / Business Profile

“Western firms have been doing this sort of due diligence for about 30 years now, but for Japanese companies it has really only begun in the last four years.” layer of oil that has the effect of changing the colors of the fibers. As in many areas of bureaucratic life, Japanese ministries are hidebound to a panel of academics who make recommendations that are invariably accepted—but are not always in the best interests of the general public. Although in the case of asbestos, there are signs that the Japanese government has become more flexible. In May, the Ministry of Economy, Trade and Industry (METI) solicited comments from the public on an updated asbestos analytical method and, after taking into consideration feedback from industry and the U.S. government, published a revised standard to allow for the use of other internationally recognized analytical methods, including polarized light microscopy. It is likely that Japan will again tweak its regulations after the ISO Asbestos Committee finalizes a new draft on the international standard for asbestos identification. Another key advantage of the U.S. method is that it is much faster (25 minutes) than X-ray diffraction analysis (upwards of four weeks). In actuality, companies tearing down an old building simply do not have a month to spare while they determine the degree of contamination. “We analyze commercial buildings and residential units, and asbestos does account for a lot of what we do,” he says. “But we also identify heavy metals, such as lead, chromium, cadmium and arsenic, as well as PCBs, pesticides

and volatile organic compounds, including the chemicals used in the dry cleaning industry that vaporize and can be inhaled.” While there are certainly plenty of sites across Tokyo that need Earth-Appraisal’s attention, Carroll says the city is probably no better or worse than London or New York. “Tokyo has a long history of economic development, and the only difference here might be that the city developed out of small villages that traditionally had an area of expertise and tradesmen who were involved in that industry,” he says. “That means you still find the areas where printing was the local industry, and today those districts still have high levels of lead in the soil. Similarly, parts of the city which employed metal workers and places with munitions factories also have high lead deposits.” Much of the city also is built on reclaimed land that includes marine fill from the bottom of Tokyo Bay, which is high in heavy metals. In many instances, this marine fill was stabilized with hazardous waste fill from various industries. Carroll emphasizes, however, that there is generally very little risk to human health from these places because the water we drink does not come from the ground in these areas. Today, there is a rapidly growing understanding of the benefits — in terms of economics, human health and the image of a company — of “going green.” “Until three years ago, the concept of ‘green’ was something

SNAPSHOT

Earth-Appraisal Co., Ltd. Number of staff: 80 full-time Established: 2002 Location: 2-4-6 Kanda Awajicho, Chiyoda-ku, Tokyo Branch Offices: Sapporo, Osaka, Kyushu Main business: Environmental risk management; building engineering Key clients: Major international and Japanese financial institutions; real estate investment companies www.earth-app.co.jp/ kevin@earth-app.co.jp

that went in the annual report,” says Carroll. “In the last couple of years, from purely economic perspectives, that has changed radically. Companies are now locating in green buildings that save money because they save fuel — and corporations can see those savings in their bottom line. “They are also more conscious of where their waste is going,” he points out. “That’s not just the waste from the office or the factory that can be recycled and reused, but in their products as well. Take a mobile phone; it contains plastic and precious metals, and more companies are investing in recycling units that can recoup as much as 10% of their costs. “Not everyone is on board yet, but I have been surprised how fast it has happened,” Carroll says. “And now, more than ever, people want to know what they’re getting themselves into. That’s common sense.” Julian Ryall is The Daily Telegraph’s Tokyo correspondent.

November 2008 / ACCJ Journal / 55

PHOTOS John Boyd

Murata Manufacturing Co., Ltd.’s unicycle-riding Little Seiko showcases the company’s sensor technology.

CEATEC 2008 Today’s prototypes, tomorrow’s products.

eld in Makuhari Messe every October, CEATEC is guaranteed to brighten up the digital world of consumer electronics and telecommunications. With 196,000 visitors at the five-day event, more than 800 domestic and overseas companies, including 40 firms from the U.S., exhibited their latest and greatest. Some of the anorexic-looking prototype TVs seen at last year’s CEATEC had morphed into commercial products, and will be on the market by now. Sharp Corp., for instance, had on view two new Aquos models that measure just 2.28cm deep at their thinnest. The 56-inch and 65-inch LCD TVs sport a contrast of 1,000,000:1, which helps produce richer colors, including deeper blacks. A function that turns the screen into a still-image display (think of

56 / ACCJ Journal / November 2008

viewing a different work of art in high-def every day) might go toward justifying the ¥980,000 and ¥1.28 million price tags. Always determined not to be outdone, Sony Corp. unveiled an even thinner, though smaller, LCD TV, the 40-inch Bravia ZX1, measuring just 9.9mm at its thinnest. Rather than the usual fluorescent lighting used to backlight the panel, the new Sony model uses LEDs (light-emitting diodes) around the edges only. The set can be hung on the wall, and will go on sale only in Japan in November for ¥488,000. The price includes a separate media receiver that lets you transmit various video sources, such as a satellite TV broadcast or DVD and Bluray content, to the ZX1 wirelessly. NTT DoCoMo, Inc. demonstrated a concept phone dubbed the “separated phone” that allows the display to be

literally pulled from its phone half, with the separated magnetic parts continuing to function wirelessly via Bluetooth. Now you can speak into the phone while checking your business calendar on the display; see whom you are talking to if the videoconference mode is employed; or send over the phone the e-mail to which you are referring. A variation of the separated phone device allows you to change the virtual standard interface to a virtual keypad, or to an interface for playing games. When used as a keypad or game console, the magnetic display could be attached to any handy metal object for greater viewing convenience. Nissan Motor Co., Ltd. showed off its crash-avoidance technology in the form of cute little robot electric cars outfitted with bumblebee eyes. Nissan

By John Boyd / Science, Technology and Inventions

The robot car, using sensors with laser range finders, can detect obstacles within a 180° arc and signal the robot’s electronic controls instantly to change direction and avoid a collision.

Smart phones may one day eliminate the need for bulky car keys.

TVs are also getting thinner.

says its researchers studied the composition of the eyes in bees that enable the insect in flight to avoid colliding with obstacles within a 300° radius. The robot car, using sensors with laser range finders, can detect obstacles within a 180° arc and signal the robot’s electronic controls instantly to change direction and avoid a collision. The technology is still in the research stage, so is years away from any commercial launch. More than likely, it will be introduced in electric vehicles that normally are driven in close proximity to people — such as in warehouses, factories and loading bays. Nissan also has teamed up with DoCoMo and Sharp to develop the world’s first phone operating as a smart key to lock/unlock a car door, and switch on/off the engine. The phone incorporates Nissan’s current Intelligent Key

commercialization, though; they merely are intended to showcase the company’s prowess in sensor technology. And how they succeed. It was twelve deep near Murata’s pavilion when Little Seiko did her thing. Panasonic Corp. (formerly Matsushita Electric) impressed with its Tomorrow’s Lifestyle pavilion, which included a large plasma TV that moves on rails from the dining room to the living room, a 103-inch vertical communications display able to conjure up a virtual exercise trainer of your choice to put you through your paces. The TV also can be used to conveniently control particular home appliances such as the air-conditioner.

system — two-way wireless and electromagnetic technologies — so that, with the phone in your pocket, you merely touch the door’s lock to unlock/lock. The system also will prevent you from locking the car should you leave the phone inside, beeping out a warning in the process. In addition, music stored on the phone can be wirelessly transferred to the car’s stereo system. The model is due to be launched next spring. You have to credit the PR people at Murata Manufacturing Co., Ltd. The Kyoto Prefecturebased maker of such mundane products as ceramic capacitors manages to grab press headlines every year by incorporating proprietary sensors in appealing gadgets, such as robot helicopters, cyclists and, this time round, a unicycle-riding robot girl by the name of Little Seiko. None of these products is meant for

John Boyd is a freelance technology writer based in Kawasaki.

November 2008 / ACCJ Journal / 57

Advocacy Update ACCJ Viewpoints are the core products of ACCJ Advocacy. An ACCJ Viewpoint is a brief paper, generated by a committee, that expresses the Chamber’s official position on a specific issue. Viewpoints are primarily used to express opinions on current policies, policies under consideration by the Japanese and/ or U.S. governments, and policies under discussion in bilateral or multilateral forums. They are also used to raise new concerns about issues not currently on the Japanese government agenda. Facilitate Foreign Direct Investment into Japan by Expanding and Simplifying Tax Deferral for Reorganizations and M&A Transactions Foreign Direct Investment Committee

Renewed Commitment to Expanding Foreign Direct Investment into Japan Needed to Reinvigorate Japan’s Economy Foreign Direct Investment Committee Valid Through March 2009

Valid Through March 2009

Recommendation

Inward foreign direct investment (FDI) is becoming more and more important for maintaining economic growth in the face of increasing international competition and rapid globalization. The American Chamber of Commerce in Japan (ACCJ) urges the Government of Japan to renew its efforts to deliver on its commitment to increase FDI into Japan, by reforming tax rules applicable to cross-border and domestic corporate reorganizations and M&A transactions so that convenient tax deferral is available for a wide range of transaction structures on a flexible and predictable basis.

With inward foreign direct investment (FDI) more and more important for maintaining economic growth in the face of increasing international competition and rapid globalization, the American Chamber of Commerce in Japan (ACCJ) urges the Government of Japan to renew its efforts to deliver on its commitment to increase FDI into Japan, including by: 1. Issuing a Cabinet decision that clarifies to the international community that Japan is committed to dramatically increasing foreign investment, including by establishing a set of concrete goals with specific measures for increasing inward FDI; 2. Conducting a robust domestic informationsharing campaign to explain the need for increased inward FDI, to include undertaking studies showing the benefits of FDI and disseminating their results; 3. As part and parcel of the government’s comprehensive tax reform efforts, reforming tax rules applicable to corporate reorganizations, including by allowing flexible and convenient tax deferral for cross border stock swaps and all variants thereof (such as triangular mergers and stock-for-assets exchanges); lowering the statutory corporate tax rate to below 30%, targeting a level equivalent to that of the United Kingdom and Germany; and considering market-based reforms with the aim of encouraging a more rapid and dramatic shift from savings to investment; 4. Implementing measures to enhance Japan’s market for corporate control, including by: • Creating an environment that encourages publicly-listed companies to take steps to increase the number of

Promoting the efficient and effective review of international merger transactions Competition Policy Task Force Valid Through May 2009

Recommendation The American Chamber of Commerce in Japan (ACCJ) shares the Government of Japan’s goals of improving the Japanese merger control regime under the AntiMonopoly Act (AMA). As the Japanese Fair Trade Commission (JFTC) moves forward to amend the regime, the ACCJ urges the JFTC to incorporate higher threshold levels for merger notifications into the AMA to ensure that Japan will assert jurisdiction over only those transactions that have a significant relationship to Japan.

independent directors on their boards, regardless of the type of corporate governance structure. To this end, the Government of Japan should consider making it a requirement that at least 1/3 of the Boards of Directors of all publicly listed companies — both those operating under a committee structure and a corporate auditor structure — be “independent” (a higher standard than simply “outside”) directors; and • Taking steps to ensure that the use of anti-takeover devices does not become an impediment to the appropriate functioning of Japan’s corporate control market. 5. Following through with the Government of Japan’s commitment to enhance Japan’s international financial competitiveness, including by taking measures to implement the Financial Services Agency’s (FSA) “Plan for Strengthening the Competitiveness of Japan’s Financial and Capital Markets,” while providing meaningful opportunities for affected private sector foreign and domestic participants to comment on the Plan and its implementation; and 6. Adopting a comprehensive deregulation package with measures designed to promote entrepreneurship and innovation in the economy.

Released ACCJ Viewpoints can be read in full in the Advocacy section of www.accj.or.jp 58 / ACCJ Journal / November 2008

ACCJの「意見書」は、特定の問題に対してのACCJの公式見解を表明する委員会が作成した簡潔な提言書であり、提言活動の中核を成しています。現行の政策や、日本又は米国政府で検討中の政策、二国間もしくは多国間で協議中の政策についてだけでなく、新たな関心を高めるために現在日本政府の課題となっていない問題についても意見を述べています。

対日投資の促進のため、企業再

日本経済の更なる成長に必要な

編及びM&Aに適用される課税

対日直接投資の拡大に向けたコ

繰り延べ措置の拡大・簡素化を

ミットメントの改定を

対日直接投資委員会

権利に関する市場機能を損なわせないよう適

2009年3月まで有効英語正文

5. 金融庁（FSA）が策定した「金融・資本市場競争力

すべきである。なお「独立」社外取締役とは、社外取締役よりも更に独立性の高い基準を設けることを意味する。 • また、買収防衛策の行使が、日本における株主切な措置を講じる。強化プラン」を実行する措置を講じるとともに、国内外の民間セクターに対しプランの内容や実行に関する有意義な発言の機会を与え、日本政府が掲げる金融・資本市場の国際競争力の強化を実現

提言

グローバル化の流れと国際競争の激化に直面する

中、持続可能な経済成長の実現に寄与する対内直

中、持続可能な経済成長の実現に寄与する対内直接

接投資は、その重要性を一層増している。在日米国

投資は、その重要性を一層増している。在日米国商

する。

商工会議所（ACCJ）は、日本政府に対し、クロスボ

工会議所（ACCJ）は、日本政府に対し、対日直接投資

ーダーおよび国内における企業再編やM&Aに適用

（以下、対日投資）の拡大に向けたコミットメントの

される税制を改革し、多様な取引において、柔軟且つ

改定を行うよう以下の通り要請する。

予測可能な形で課税繰り延べ措置を利用できるよう

1. 対日投資拡大に向けた具体的な目標と明確な対

にすることにより、対日直接投資（以下、対日投資）の

策を策定し、外国からの投資の大幅な拡大を目指

拡大に向けコミットメントを改めるよう要請する。

し日本が全力を投じる姿勢であることを、国際社

6. 起業家精神やイノベーションを促進するための包括的な規制緩和政策を策定する。

会へ向けて明確に示すことのできる閣議決定を行う。

国際合併の審査をより効率的かつ効果的なものにするために競争政策タスクフォース 2009年5月まで有効英語正文

２. 国内で大規模なキャンペーンを展開し、対日投資の利点を示す調査結果を発信し、外国からの投資拡大の必要性を説く。３. 包括的な税制改革の柱として、国境を越えた株式交換およびその他類似取引（三角合併や株式による資産買収など）を利用し易くする課税繰り延べ措置や、英国やドイツと同水準を目標とした法人税の30%未満への引き下げなど、税法を企業再生に適したものへと改正する。また「貯蓄から投資

提言在日米国商工会議所（ACCJ）は、独占禁止法が定める企業合併規制の改善をめざす日本政府の趣旨に

へ」の迅速かつ飛躍的な転換を促進するため、市場に立脚した各種改革を検討する。４. 日本における株主権利に関する市場機能の強化を目指し、以下の施策を実行する。

賛同している。公正取引委員会が規制の見直しに動

• 企業統治構造の種類に関わらず、上場企業の

くなか、ACCJは、日本市場に重大な影響のある取引

取締役会が社外取締役数の拡大へ一歩を踏

のみを政府の規制対象とするべく独占禁止法に定め

み出すことを促す環境を整える。そのために、委

る事前届出基準を引き上げることを要望する。

員会設置会社、監査役設置会社を問わず、全上場企業における取締役会の最低3分の１を「独立」社外取締役とする要件を日本政府は検討

ACCJが公表した意見書の全文は、www.accj.or.jp のアドボカシーセクションでご覧頂けます。 November 2008 / ACCJ Journal / 59

Leave the Rest to us

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If anyone in your valued network is not an ACCJ member yet, help sign them up. Recommend a new member to connect the best in business. Call us at 03-3433-7304 for more information. The ACCJ Journal is a member benefit and the only business magazine sent to all ACCJ members.

Reviewed by Tom Baker / Behind the Book

Gusher of Lies: The Dangerous Delusions of “Energy Independence” by Robert Bryce PublicAffairs, 371 pp, $26.95

“

merica is addicted to oil,” declared U.S. President George W. Bush in his 2006 State of the Union address. His words reflect a sense of crisis that has led Senators John McCain and Barack Obama (one of whom will be elected Bush’s successor just as this review appears) to endorse the idea of “energy independence.” Robert Bryce is not impressed. “Every other country on the planet is addicted to oil, too. Other developed countries — namely, Japan, Germany and France — import nearly all of their oil and they have been doing so for years,” the Texas-based energy journalist writes in his new book, Gusher of Lies. Bryce argues that U.S. reliance on foreign sources for 60% of its oil cannot be substantially changed, and that this is not a problem. If energy independence were achievable, he writes, prices would not necessarily drop because “the price of oil is set globally. American oil traders are not going to voluntarily sell their domestically produced crude in the U.S. if they can get a substantially higher price in, say, London or Rotterdam.” But what if oil could be replaced by something else? Bryce takes a long look at — and dismisses — leading candidate

ethanol, which has failed to Iran is already embargoed by the become an independently viable United States, and Iraq is virtually product despite decades of government subsidies. He says that a U.S. “colonial possession.” Saudi Arabia is one country even if Americans stopped eating toward which Americans have and exporting their own crops, complicated attitudes, but Bryce there wouldn’t be enough farmland (i.e., for growing needed corn, argues that politics and diplomacy, rather than withdrawal from the sugar) in the nation for ethanol to oil market, are the best route to fully replace gasoline. improvement. After all, he writes, The author sees some value in Iran has “never had trouble selling solar power as a supplementary its oil” despite American energy source of electricity, but writes independence from that country, that it and wind, because of their with 500,000 barrels of Iranian intermittent availability, cannot crude a day going to Japan. become reliable sources until Despite its shrill title, Gusher of the invention of more powerful Lies is fact-filled and written in storage batteries. Bryce sees a generally calm tone. It makes the most potential in nuclear power — but it is politically unpop- a point the incoming president ular and cannot run cars—and should consider: “Energy indepenin natural gas — much of which, dence, at its root, means protechowever, is found in the same oiltionism and isolationism, both of rich countries from which energy which are in direct opposition to independence advocates wish to America’s long-term interests.” disengage. Noting that Canada and Mexico are the United States’ main Tom Baker is a staff foreign oil suppliers, and that 16% writer at The Daily of domestic crude was produced Yomiuri. by a foreign company (British Petroleum) in 2005, Bryce argues We are giving away three copies that people objecting to “foreign” of Gusher of Lies. Simply e-mail editor@paradigm.co.jp by November oil really mean “Middle Eastern.” 13. Winners will be picked at random. But most countries in that region Winners of The Back of the Napkin: are either U.S. allies, such as Lawrence Kieffer, NinePoint KK; Eric W. Sedlak, Jones Day; John Kuwait, or minimal oil producers, Chambers, Look Consulting Group. such as Syria. Major producer

November 2008 / ACCJ Journal / 61

By Samuel H. Kidder / In the Final Analysis

The ACCJ Effect

he advocacy Viewpoints that we feature in the Journal are just one of the ways we bring our message to Japanese policymakers and stakeholders. Advocacy also entails getting ourselves in front of the decision-makers and getting them in front of our members. Interestingly, particularly in this political season, building a relationship with the ACCJ is an established part of any Japanese Prime Minister’s credentials. One way we get our message out to Nagatacho is through our Diet Doorknocks. In this kanreki year when we are celebrating our 60th anniversary we, from time to time, look back through our records. In one banner year, 1994, we met with seven previous, current or future Prime Ministers. One of our prized VIP pictures in the ACCJ Boardroom shows Bob Grondine (President, 2000-01) and Don Kanak (President, 2002) meeting, and laughing, with Prime Minister Junichiro Koizumi. Prime Minister Keizo Obuchi gave an address at our 50th Anniversary Gala, and Yasuo Fukuda attended our Shinnenkai. Both Prime Ministers Shinzo Abe and Taro Aso used speeches to our members as one rung up the ladder of leadership. I can’t find any record of whether or not we met with Prime Minister Yoshiro Mori; but since he left office in 2001 with popularity ratings in the single digits, it seems likely he failed to recognize how important a connection to the ACCJ is for a Japanese politician. This year the ACCJ has welcomed a number of prominent Diet figures as featured speakers. Then-Minister for Financial Services Yoshimi Watanabe addressed us in April. DPJ heavyweight Katsuya Okada gave us his thoughts on combating global warming. Former Minister for Social Affairs and Gender Equality Yoko Kamikawa addressed CSR issues, and LDP strongman Hidenao Nakagawa shared insights on the spectacle of Japanese politics. So for pundits looking to predict Japanese political developments, I’d like to offer up the ACCJ effect.

Samuel H. Kidder is ACCJ Executive Director.

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