Japan urged to speed up deregulation

Date: 09/11/00

By Simon Taylor

THE European Commission is urging Tokyo to make faster progress in improving the business climate for foreign companies in Japan, although it acknowledges that advances have already been made in a number of areas.

In the latest in a series of requests for deregulation presented to the Japanese government, the EU executive calls for "sweeping reforms in the areas of competition, telecommunications, financial and legal services, testing/certification and standards". Its report says this would signicantly lower costs for all economic operators and stimulating investment.

The Commission argues that despite improvements in rules on pharmaceuticals and port services, other obstacles remain which make it "significantly more time-consuming and costly to set up a business or get new products and services approved in Japan than in other industrialised countries".

It says the high cost of basic infrastructure is one of the main deterrents to foreign companies doing business in Japan. This includes telecoms interconnection rates, landing charges at international airports and domestic transport costs.

The Commission also says EU firms are concerned about the "transparency, accountability, predictability and independence" of the regulatory process. The report points out that Japan does not have an independent regulatory authority for telecoms and decries "weak overall competition policy enforcement" which favours existing operators over new entrants.

The European business lobby group UNICE is calling for further action to ensure Tokyo's promises are turned into concrete action. "It is important to continue to press for deregulation because the good intentions are there but the results are quite limited," said international affairs expert Monique Julien.