The Journal The Authority on Global Business in Japan

The American Chamber of Commerce in Japan (ACCJ) has been the voice of US business here for 70 years. Today, we are the leading foreign business organization, representing almost 3,500 members who drive billions of dollars in US exports and investments.

For several years, the ACCJ has been calling for a new bilateral trade dialogue and the chamber fully supports the negotiations expected to begin early this year aimed at achieving a new US–Japan Trade Agreement.

Why? Even though Japan is the United States’ fourth-largest export market, and this relationship already supports over one million US jobs, we have potential to do much more business together.

Consider the evolution of the US commercial relationship with Japan, and where we’re headed. For example, in 1985, medical technologies accounted for a little more than one percent of US exports to Japan. Today, that figure is seven percent of all US exports to Japan and a nearly 25-percent market share. To continue expanding these and other innovative US exports, we need to prioritize industries of maximum opportunity that will drive sustained economic growth in the 21st century.

Last month, at hearings of the Trade Policy Steering Committee with the US Trade Representative in Washington, DC, chamber Chair­man Christopher LaFleur outlined the ACCJ’s recommen­dation for four principles to guide US negotiators.

1. ENHANCE MARKET OPPORTUNITIES
US companies have won significant market share, not only in pharmaceutical and medical technology, but also in financial services, information tech­nology, and professional services. Those successes are not guaranteed over time, however, and evolving policies and regulations in Japan are beginning to disadvantage US pharma­ceutical companies that account for a major share of US goods exports to Japan. Preserving opportunities where US companies are most competitive should be among the very highest priorities in these negotiations.

2. FOCUS ON GOODS & SERVICES
Some US-made goods, such as in agriculture, face clear market access issues and we expect to see such barriers lowered or removed. We also believe conflicting, restrictive and outdated government standards discourage merchandise exports in multiple sectors, notably automobiles. Negotiators should seek bilateral adoption of common standards.

The negotiations should also deliver outcomes for US workers in services, where the United States enjoys a $14 billion trade surplus with Japan and where exports have grown 22 percent since 2007. There is further, immense opportunity in Japan to sell innovative services in areas such as cloud computing, online shopping, and electronic payments. Securing common standards and growth-oriented policies can help this success continue.

3. THE GOLD STANDARD
This negotiation is an opportunity to collaborate with a major US ally and a willing partner for a model agreement to raise the global bar. Amid an ever-expanding array of alternative trade arrangements, this agreement can and should set a new benchmark for the future of global trade. Specifically, we want it to advance shared ideals in intellectual property protection, regulatory transparency and best practices, and to strengthen the frameworks necessary for a robust digital economy, such as guaranteeing cross-border data flows protecting personal information and bolstering cybersecurity.

4. REINFORCE PRO-GROWTH REFORMS
Finally, the agreement should reinforce pro-growth reform in Japan. The pro-market reforms of Prime Minister Shinzo Abe designed to confront demographic headwinds and make Japan’s market more efficient, transparent, and growth-oriented, are working. Japan is now in its longest growth streak since the 1940s.

US companies and products compete well in areas where Japan’s reforms have leveled the playing field. Only a few years ago, the Japanese cellphone market was dominated by domestic technologies. Today, US companies lead with exports of informa­tion technology services having nearly tripled since 2014.

Continued expansion of US exports to Japan requires that Tokyo stays the course toward sustainable growth. These negotiations should reinforce those reform efforts and ensure workers and consumers in both countries see our future agreement as one in which both sides win.

It is no coincidence the ACCJ’s membership is at its highest ever level. US business in Japan is competing, winning, and supporting innovation and reform in key sectors of Japan’s economy. We look to these negotiations to expand those playing fields and ensure they remain level with a forward-looking, future-oriented trade partnership.

As talks toward a bilateral agreement progress, the ACCJ stands ready to offer private-sector expertise on every issue and to shape these negotiations. That authority comes from the contributions and commitment of our members, and I thank you all for being One ACCJ!

Sharing your views and input is something I always appreciate. Please write to me at: sshah@accj.or.jp

Sachin N. Shah is ACCJ President.
These negotiations should . . . ensure workers and consumers in both countries see our future agreement as one in which both sides win.