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2020 | OriginalPaper | Chapter

5. The Context for Foreign Firms: Trade, Investment, and Business Issues

Author : Eric Romann

Published in: Nonmarket Strategy in Japan

Publisher: Springer Singapore

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Abstract

This chapter is devoted to categorizing the various issues foreign firms used to and still encounter when doing business in Japan. The documents and archives provided by the two main international Chambers of Commerce, the ACCJ and the EBC, constitute the major material to refine the picture of foreign firms’ demands from the 1980s until recently.
Over the long time and very roughly, firms’ top claims may be grouped as regulatory environment, standards/specifications/technical requirements, taxation systems, and customs clearance procedures. Since the 1990s, structural reforms have been undertaken, and trade/investment agreements signed or negotiated, but many issues of the same spirit remain. American and European claims are fairly similar in industries such as automotive, medical devices/pharmaceutical, insurance, express delivery, and food industries. The focus differs slightly in areas such as intellectual property where the Americans concentrate on digital piracy versus luxury goods for the Europeans.
The perceptions and evolution in time of the ACCJ and a number of practitioners are analyzed in the following part. There used to be gaiatsu and external pressures in the past, but due to the domestic crisis, globalization, and the rise of China, the attitudes have changed for foreign business, which is now “inside the castle,” leading to more direct interactions between business and government. Before, trade issues were central, whereas nowadays, in globalization times, the major problems occur from laws and legislations that have become obsolete in regard to the technical and economic acceleration. Many issues are therefore related to the modernization or adaptation of old regulations to new products or services.

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previous chapter General Features of Domestic Lobbying in Japan
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Footnotes
1
ACCJ (2001). US-Japan Business White Paper. Tokyo: The American Chamber of Commerce in Japan; EBC (2000). The EBC Report on the Business Environment. Tokyo: The European Business Community in Japan; EBC (2001). The EBC Report on the Business Environment. Tokyo: The European Business Community in Japan.
 
2
The European Business Community became the European Business Council in 2005.
 
3
Japan has low tariffs in general, except for specific goods such as agricultural products, petroleum, textile, leather and so on.
 
4
See Vogel, S. K. (2006). Japan Remodeled: How Government and Industry are Reforming Japanese Capitalism. Ithaca, NY: Cornell University Press.
 
5
EBC (2015). The EBC Report on the Business Environment. Tokyo: The European Business Council in Japan.
 
6
US Trade Representative (2015). National Trade Estimate Report on Foreign Trade Barriers, Japan (211–226); US-Japan Business Council (2016). Re-centering Abenomics: New Structural and Regulatory, Reforms Remain Vital for Economic Growth. Policy Statement.
US-Japan Business Council: The US-Japan Business Council (USJBC) is a Washington, DC-based business association whose mission is to support US business interests in Japan and promote stronger economic ties between the United States and Japan. The council and its member companies act for the mutual benefit of both countries; it has been merged in 2012 with the US Chamber of Commerce to amplify the voice of the American business community on US–Japan economic relations.
 
7
Ishikawa, K. (2013). Buppin bôeki no shôheki no genjô to mondaiten. In Nihon keizai no seichô ni mukete: TPP e no sanka to kôzô kaikaku. Tokyo: The 21st Century Public Policy Institute.
 
8
In March 1984, the Japanese government led by Mr. Nakasone agreed after long debates to allow foreign representatives in these councils where the Japanese industrial policy is discussed.
 
9
Simplification of customs procedures and deregulations of customs jurisdictions, allowing remote filing of clearances at locations independent of the territory of the responsible customs office.
 
10
UNCTAD (2019). International classification of non-tariff measures.
 
11
AT Kearney (1991). Trade and investment in Japan: The current environment.
 
12
These two laws were naturally not designed only to govern the sole US–Japan relations; they were put in place after a shift in the US stance, judging that a reindustrialized Japan would serve better its interests in creating a barrier against the spread of communism, whereas in the immediate after-war, the Occupation authorities were rather seeking to dismantle the Japanese industry. The restrictions induced by the two laws, whose spirit intended to limit inward FDI into Japan to protect the renascent industry, were supposed to be relaxed after Japan regained its autonomy; in reality, they were used the backbone of Japanese industrial policy until the beginning of the 1980s. See Encarnation, D. J., & Mason, M. (1990). Neither MITI nor America: The political economy of capital liberalization in Japan. International organization 44(1), 25–54; Kushida, E. (2010), Inside the castle gates: How foreign companies navigate Japan’s policymaking processes.
 
13
See Cooper, H. W. (2014). US–Japan economic relations: Significance, prospects, and policy options. Congressional Research Service.
 
14
The modification of the Large-Retail Store Law was included in the bilateral negotiations, thus backing its adoption and allowing Toys “R” Us to enter Japan in 1991. See Baron, D. P. (1995). Integrated strategy: Market and non-market components. California Management Review, 37(2), 47–65.
 
15
ACCJ (1997). Making trade talks work: lessons from recent history. Tokyo: The American Chamber of Commerce in Japan; ACCJ (2000). Making trade talks work: an on-the-ground analysis of US-Japan trade agreements by American business. Tokyo: The American Chamber of Commerce in Japan.
 
16
Section 301 of the US Trade Act of 1974 that authorizes the President to take various actions, including retaliation, in reaction to a deemed violation of international trade agreements.
 
17
ACCJ (2001). US–Japan business white paper. Tokyo: The American Chamber of Commerce in Japan.
 
18
ACCJ (2006). US–Japan business white paper: working together, winning together. Tokyo: The American Chamber of Commerce in Japan.
 
19
ACCJ (2013, 2015). Health policy white paper. Tokyo: The American Chamber of Commerce in Japan.
 
20
PhRMA: Pharmaceutical Research and Manufacturers of America; AMDD: American Medical Devices and Diagnostics Manufacturers Association.
 
Literature
ACCJ. (1997). Making Trade Talks Work: Lessons from Recent History. Tokyo: The American Chamber of Commerce in Japan.
ACCJ. (2000). Making Trade Talks Work: An On-The-Ground Analysis of US-Japan Trade Agreements by American Business. Tokyo: The American Chamber of Commerce in Japan.
ACCJ. (2001). US-Japan Business White Paper. Tokyo: The American Chamber of Commerce in Japan.
ACCJ. (2006). US-Japan Business White Paper: Working Together, Winning Together. Tokyo: The American Chamber of Commerce in Japan.
ACCJ. (2013). Health Policy White Paper. Tokyo: The American Chamber of Commerce in Japan.
ACCJ. (2015). Health Policy White Paper. Tokyo: The American Chamber of Commerce in Japan.
AT Kearney. (1991). Trade and Investment in Japan: The Current Environment. A Study for the American Chamber of Commerce in Japan prepared by A.T. Kearney.
EBC. (2000). The EBC Report on the Business Environment. Tokyo: The European Business Community in Japan.
EBC. (2001). The EBC Report on the Business Environment. Tokyo: The European Business Community in Japan.
EBC. (2015). The EBC Report on the Business Environment. Tokyo: The European Business Council in Japan.
Encarnation, D. J., & Mason, M. (1990). Neither MITI Nor America: The Political Economy of Capital Liberalization in Japan. International Organization, 44(1), 25–54.CrossRef
Katzenstein, P. J., & Tsujinaka, Y. (1995). “Bullying,” “Buying,” and “Binding”: US-Japanese Transnational Relations and Domestic Structures. In T. Risse-Kappen (Ed.), Bringing Transnational Actors Back in. Cambridge: Cambridge University Press.
Schoppa, L. J. (1993). Two-Level Games and Bargaining Outcomes: Why Gaiatsu Succeeds in Japan in Some Cases but Not Others. International Organization, 47(3), 353–386.CrossRef
Schoppa, L. J. (1997). Bargaining with Japan, What American Pressure Can and Cannot Do. New York: Columbia University Press.
Sone, Y. (1987). Nihon ni okeru gaikoku robî. Keiô Gijuku Daigaku Hôgakubu, Sone Yasunori Kenkyûkai.
Tsujinaka, Y. (1994). Kokunai seiji kôzô to gaikoku robî: Nihon ni okeru tai aitekoku robî no hikaku bunseki. Leviathan 14. Tokyo: Bokutakusha.
Vogel, S. K. (2006). Japan Remodeled: How Government and Industry are Reforming Japanese Capitalism. Ithaca, NY: Cornell University Press.
Metadata
Title
The Context for Foreign Firms: Trade, Investment, and Business Issues
Author
Eric Romann
Copyright Year
2020
Publisher
Springer Singapore
Book
Nonmarket Strategy in Japan

Print ISBN: 978-981-15-7324-8

Electronic ISBN: 978-981-15-7325-5

Copyright Year: 2020

DOI
https://doi.org/10.1007/978-981-15-7325-5_5

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