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Business Roundtable and the Nippon Keidanren believe that
a United States-Japan Economic Partnership Agreement (EPA)
holds tremendous potential for the U.S., Japanese, and world
economies, and urge their governments to begin discussion
toward a framework for negotiation of such an agreement as
soon as possible.
To facilitate the launch of such discussion, our governments
should initiate a joint U.S.-Japan industry-academia-government
study and research. The joint study should be launched as
soon as possible. Business Roundtable and Keidanren will work
together to provide private sector input on the structure
and substance of negotiations for the following reasons:
- The U.S.-Japan economic relationship is critical to each
country's economy, stable regional development in Asia,
and global growth. Together, the two economies account
for 40 percent of global GDP.
- Each country is a key developer of technology and know-how
in manufacturing and services, and the two economies are
deeply entwined.
- The United States sells more goods and services to
Japan than any other country outside of NAFTA, and the
U.S. buys more goods from Japan than any other country save
China.
- Japan trades with the U.S. more than any other country,
and Japanese companies invest more in the U.S. than any
other country in the world. Japan's investments in the
United States employ roughly 600,000 American workers.
Likewise, the U.S. is the biggest foreign investor in Japan.
These economic facts reflect unprecedented good economic
relations in recent years. A U.S.-Japan EPA would build on
this interdependence by providing longer-term stability and
new opportunities for growth in the U.S.-Japan economic relationship,
symbolizing the continued vitality of the countries' alliance.
Moreover, an EPA would facilitate the ability of both countries
to continue and enhance their roles as global economic leaders
in a dynamically changing global landscape. Finally, an EPA
between the United States and Japan could be constructive
in facilitating broader economic integration in the Asia Pacific
region.
A U.S.-Japan EPA should be a comprehensive and high-level
agreement. While the economies are entwined, barriers
remain; there is significant untapped potential from this
tremendous economic relationship, for instance:
- Bilateral trade and investment has grown only gradually
in recent years, and inefficient regulation impedes economic
growth.
- An EPA would improve this situation by removing tariffs
and other barriers to trade in goods and services, ensuring
an open investment environment, promoting regulatory reform,
and facilitating secure and efficient movement of goods
and persons.
Moreover, an EPA presents an opportunity for the world's
two largest economies to set forth a blueprint of what international
economic liberalization should look like in the 21st century.
- An EPA could establish a new paradigm for economic openness.
In particular, an EPA could break new ground on addressing
important issues that United States and Japanese businesses
confront worldwide, including liberalization of trade
in services and investment, protection of intellectual
property rights, and difficult regulatory issues, and
establish high-quality templates for dealing with these
issues that could be taken up in other bilateral, regional
and multilateral trade agreements.
An EPA must complement, not replace, other efforts to
expand economic growth through trade and investment.
- In particular, the U.S. and Japan must continue to push
aggressively for multilateral liberalization at the WTO,
including conclusion of the Doha Development Agenda.
- At home, each country has important work to do on their
domestic agendas to ensure that their firms and workers
are maximally competitive.
But while world trade talks move slowly, the governments
have an opportunity to push ahead and lead by example, to
demonstrate the importance of open trade, investment and regulatory
reform, and to establish a new foundation for United States-Japan
economic relations.
# # #
Business Roundtable (www.businessroundtable.org)
is an association of chief executive officers of leading U.S.
companies with $4.5 trillion in annual revenues and more than
10 million employees. Member companies comprise nearly a third
of the total value of the U.S. stock markets and represent
over 40 percent of all corporate income taxes paid. Collectively,
they returned $112 billion in dividends to shareholders and
the economy in 2005.
Roundtable companies give more than $7 billion a year
in combined charitable contributions, representing nearly
60 percent of total corporate giving. They are technology
innovation leaders, with $90 billion in annual research and
development spending - nearly half of the total private R&D
spending in the U.S.
Nippon Keidanren (www.keidanren.or.jp)
is the key representative organization for Japanese business
and industry with 1,662 members. It represents the interests
of 1,351 leading, 130 industrial sector associations, and
47 regional economic organizations. Keidanren is committed
to contributing to the further development of the national
and global economy. Keidanren proactively works towards better
business environment both at home and abroad.
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