electronic journal of contemporary japanese
Article 2 in 2005
First published in ejcjs on
25 April 2005
How to contribute to
Challenge of Regulatory Reform
Paul James Cardwell
e-mail the Author
Regulatory reform has become a dominant feature in the legal and economic
environments of states in different parts of the globe. Japan, however,
stands out as one which has taken limited steps towards comprehensive
regulatory reform. Developments over the past decade suggest that regulatory
reform has now become central to the economic and administrative reforms
undertaken by the Japanese government. The European Union (EU) has been
increasingly vocal in pushing for regulatory reform in Japan. The EU-Japan
Joint Declaration 1991, which established a new 'partnership' in
international affairs between the two sides, became the basis on which a
dialogue on market access began during the 1990s. This has since evolved
into a Regulatory Reform Dialogue by which the EU and Japan exchange
proposals for removing barriers to market access and related issues.
This article examines the nature of regulatory reform in Japan, and
analyses the Regulatory Reform Dialogue against the background of the EU-Japan
relationship. Although the amount of influence the EU has exerted on Japan
during this period of reform is difficult to determine, the importance of
the dialogue as evidence of a strengthening of the 'partnership' should not
Japan stands out amongst the most developed economies as one which has
only taken limited steps towards comprehensive regulatory reform. This is in
contrast to the regulatory reform of economic activity undertaken by the
member states of the European Union (EU)2 and the United States. The apparent
reluctance to reform in Japan can be explained by a number of factors, some
which were also present in other states, and some unique to Japan. The
primary reason was that consistently strong economic growth for three
decades until the 1990s meant that successive Japanese governments were wary
of making profound changes to the legal, administrative or economic system.
In recent years, and in light of the Asian financial crisis during the late
1990s, excessive regulation of economic activity has been identified as a
factor which has prolonged Japan's economic stagnation. Japan's political
and economic leaders have begun to see the potentially positive economic
effects of regulatory reform as part of an overhaul of the system in order
to revitalise the economy. The regulatory reform horizon in Japan has
therefore changed dramatically.
Recent changes to the Japanese regulatory environment have been welcomed
by the EU, which, along with the United States, has been vocal in lobbying
for regulatory changes. The strength of US influence on Japan and their
bilateral relationship has been well-documented3, but far less attention has
been paid to the EU-Japan relationship4. Nevertheless, the latter was placed
on a formal basis in 1991 by a Joint Declaration, establishing an EU-Japan
'partnership'. This has been followed by the establishment of a number of
bilateral channels for discussion of economic, political and other matters.
The Regulatory Reform Dialogue is one such important channel in which each
side has attempted to influence their respective regulatory frameworks.
The purpose of this paper is thus to examine the motivation and methods
of the regulatory reform drive in Japan, and to assess the opportunities the
EU has for influencing these reforms. In order for this to be achieved, it
is first necessary to examine the regulation and deregulation process in
Japan. This is followed by an overview of the development of the EU-Japan
relationship and examination of the EU-Japan Regulatory Reform Dialogue.
This allows for an analysis into the nature and pace of the regulatory
reforms underway in Japan as well as how successful the dialogue has been in
promoting the new 'partnership' between the EU and Japan. Although beyond
the scope of this paper, the Dialogue also reveals both how Japan has
reacted to an entity of regional integration, and conversely, to what extent
the EU has succeeded in speaking with one voice in an external relationship.
Regulation and Deregulation in Japan
Strong regulation has been a hallmark of the Japanese economy. Tight
control of the economy by the government through state ownership and
regulation of industry was maintained after 1945 in order for Japan to
'catch up' with more economically developed states. This eventually paved
the way for Japan's international competitiveness5. Statutory authority
allowed government ministries, particularly the Ministry of Finance and the
Ministry of International Trade and Industry, to build up considerable
control over the Japanese economy during the years of strong economic
growth6. Central to the ministerial control over industry was the system of
'licensing'. The powers of the ministries to grant permits and licenses in
order to regulate all those in the market is the essence of what was known
as 'Japan Inc'7.
Although Japan was by no means unique in maintaining strong regulation
during the post-war period, comparative studies suggest that regulation has
been more pervasive, more intrusive, more arbitrary, and more accepted by
the public in Japan than elsewhere8.
Despite the high prices for basic consumer goods such as rice caused by
strong regulation, the issue did not become politicised until the 1990s.
During the years of economic expansion there was little or no domestic
pressure for change. It seems that the Japanese public tacitly accepted
higher prices as a part of the method for protecting the national economy
and increasing prosperity9. This acceptance waned severely when the end of
the 'bubble' economy led to knock-on effects in the form of rising
unemployment and financial uncertainties, such as high-profile corporate
It was on the international plane that Japan became the target of
criticism because of the closed nature of its markets. Japan's relations
with the EU and its member states were strained by trade friction. The EU
joined a growing list of states and international organisations, such as the
Organisation for Economic Cooperation and Development (OECD), calling for
Japan to undertake regulatory reform.
The deregulation process in Japan began in the 1970s, though not always
with sustained vigour. The word 'deregulation' first appeared in Japan in an
OECD report advocating reform in 197910. Although there were some initial
moves towards reform in the early 1980s, especially following a fiscal
crisis at that time, it appears that the first substantial drive for reform
began in 198611. An advisory group set up by Prime Minister Nakasone delivered
a report concluding that reform of the Japanese economy and overseas trade
policy was needed12. Unfortunately, Nakasone's successors did little to act on
the report, in spite of the continued publication of influential reports
recommending a more open and transparent economy13. It has been noted that the
ministry bureaucrats given significant legal power in the post-war period by
the regulatory framework are unwilling to relinquish it14. Frequent changes in
leadership in the 1990s prevented deregulation from taking root in the
bureaucratic system until the pressure increased following Prime Minister
Koizumi's programme of reforms.
Many commentators on Japan have suggested that deregulation moves such as
privatisation of the rail and communications networks have been
insufficient, and mere window-dressing in order to pacify international
pressure15. Divergence has also occurred between the notion of reforms in the EU and its member states and Japan because of a linguistic difference in the
term 'deregulation'. The preferred Japanese term, kisei kanwa,
literally means 'to undertake a relaxation of the regulatory environment'
rather than kisei teppai (to abolish). Liberalising, rather than
eliminating, is therefore a better characterisation of Japanese
However, regulatory reform in Japan has now come to be seen as part of an
overhaul of the economic and legal systems. Such an overhaul is recognised
as necessary if Japan hopes to shake off economic stagnation. As regulatory
reform has now gained a place at the heart of the Japanese domestic
political agenda, the EU has recognised a prime opportunity to exert greater
influence in Japan. Its capacity to do so must, however, be seen in the
context of its relationship with Japan.
Regulatory Reform in the Context of the EU-Japan Relationship
The EU-Japan relationship was characterised for many years in the
post-war period by trade friction17. At the end of the 1980s, both the EU and
Japan attempted to gain greater international roles for themselves and
foster partnerships outside of their respective strong links with the US.
Both the EU and Japan expressed a desire to move their relationship on from
trade spats and engage in discussion on economic, political and other
The EU and Japan signed a Joint Declaration on Relations in 1991, which
promised to increase dialogue by, 'pursuing cooperation aimed at achieving a
sound development of the world economy and trade, particularly in further
strengthening the open multilateral trading system, by rejecting protectionism
and recourse to unilateral measures and by implementing GATT and OECD principles'19. Notwithstanding this commitment, the overall tone of
the Joint Declaration was political, rather than economic. It contained no
specific undertaking for regulatory reform on either side.
Although the Joint Declaration was vague in its terms and did not commit
either side to specific obligations beyond increasing channels for dialogue,
access to the highly-regulated Japanese market was of high importance for
the EU. Officials from the Japanese government and the European Commission
began discussing statistics on the performance of companies in their
respective markets of comparable products in 199220, examining if these reveal
any restrictive practices, and discussing what could be done if these were
found. This eventually become the Dialogue on Regulatory Reform in 1994.
The Action Plan for EU-Japan Cooperation21,
signed in December 2001, builds upon the Joint Declaration by expressing more
precise objectives for the development of the EU-Japan relationship. This
includes a provision entitled, 'Strengthening the economic and trade partnership
utilising the dynamism of globalisation for the benefit of all'. Importantly, the
Action Plan does not put the economic relationship in the vague terms as in the
Joint Declaration 1991, but includes a commitment to, 'reinforcing ・regulatory
reform dialogue in order to foster self-sustained growth'22. This
is an important disposition because it gives a formal basis for the dialogue
on market access and deregulation which was absent in the Joint Declaration.
The Action Plan also commits the two parties to continuing the dialogue with
a more 'consistent' approach in the future.
The most identifiable result of the Joint Declaration has been the
creation of a regular Dialogue on Regulatory Reform, which has taken place
since 1994. It can be seen as an important step for a number of reasons.
First, it is part of Japan's gradual steps towards greater openness and
internationalism. This is especially true in terms of market access and
investment. Second, the European Commission has established itself as a
negotiator on behalf of the member states in a third country and has
succeeded, at least in the context of this Dialogue, in gaining a
negotiating status on a par with the US. Third, the Dialogue and reforms
undertaken thus far shed light on the nature of regulations and the variety
of guises in which they exist on each side.
Although regulations which restrict market access feature most
prominently in the dialogue, other regulations which impede EU and Japanese
citizens in each others' territories as residents, businesspeople or
tourists are also considered. Some of these barriers are not necessarily in
the form of legal regulations but can also concern wider issues, such as
weak law enforcement, a lack of available remedies or grievance procedures,
restrictive practices and excessive administrative procedures.
The EU-Japan Regulatory Reform Dialogue
The EU proposals for regulatory reform in Japan are drafted at the
Commission Delegation in Tokyo in cooperation with the Commission's External
Relations Directorate-General in Brussels23. Member states suggest items to be
included in the proposals. The larger member states in particular tend to
keep a close eye on the development of the proposals in order to ensure that
their concerns are voiced. The UK, for example, has a deregulation expert
from the Department of Trade and Industry seconded to their Embassy in
Tokyo, specifically for this purpose24. The proposals largely concern areas in
which EU companies have experienced difficulties in accessing the Japanese
market. As such, the European Business Community (EBC), the trade policy arm
of the national European Chambers of Commerce in Tokyo, receives and
collates specific complaints and issues from its corporate members25.
When complete, the proposals are presented to the Ministry of Foreign
Affairs, which is followed by a hearing at the Council for Regulatory
Reform, part of the Cabinet Office26. At this stage clarifications or
justifications can be made to the proposals27. This allows an additional
opportunity for the EU to place particular stress on the areas which it
feels substantial action is needed. In recent years this stress has been
placed on the telecommunications and insurance sectors. It is also an
opportunity to voice and reinforce more general concerns over other legal or
regulatory issues, such as weak competition law enforcement.
This process is mirrored by the Japanese proposals for regulatory reform
in the EU. The Japanese proposals are submitted by the Mission of Japan to
the EU in Brussels to the External Relations Directorate-General of the
Commission. After several months of consideration and/or investigation, the
two sides exchange their responses to the proposals. These range from
justifications for maintaining the existence of specific regulations, any
reforms currently under consideration, to matters on which no action can be
taken because of ongoing investigations. Each side may then press for
further action to be recommended in the following proposals if necessary.
The dialogue continues on an ad hoc basis depending on the outcome of the
The EU Proposals for Regulatory Reform in Japan
An analysis of the proposals made by the EU to Japan and vice versa
reveals much about the nature of regulatory reform on each side.
The EU proposals for Japan concentrate on more fundamental issues of
regulatory reform which have already been completed (or are at least near to
completion) in the EU and its member states29. The continued dominance of the
privatised Nippon Telephone and Telecommunications (NTT) in the
telecommunications sector, the world's highest charges for airline landing 'slots' at Narita (New Tokyo) airport and the closed nature of the insurance
market are some of the main examples of barriers that foreign companies have
faced in Japan. The Commission proposed in October 2000;
Sweeping reform in the areas of competition, telecommunications, financial
and legal services, transport, testing/certification and standards・[which]
would go a long way towards lowering costs for all economic operators and
stimulating investment, to the benefit of both business and the consumer30.
It is interesting to note that these proposals are promoted as a way to
benefit Japan as a whole, and not merely to benefit the EU. The
self-interest of the EU in opening Japan's markets is evident. Nevertheless,
regulatory reform is promoted as a way for Japan to accept wholeheartedly
the opinion of the majority of the members of the OECD and WTO and thus to
play the greater international role it desires31.
As the EU notes, the basis of regulatory reform in Japan has been
completed in some areas, but there remains a lack of an overall spirit of a
promotion of competition in traditionally domestic-dominated markets. In the
words of the former Head of Delegation of the Commission:
Much of the easy work on regulatory reform has been done, and a number
of costly and prescriptive regulations have been stripped away. The time
has now come to capitalise on this. Regulations and practices need
eliminating or revising in order to make Japan a more attractive a place
to invest and do business32.
The primary target of the EU's proposals in 2000 was in the
telecommunications market. In response to increased criticism about its
dominance in the fixed-line and mobile networks, NTT was restructured in
199633. Japan has ratified the Fourth Protocol of the General Agreement on
Telecommunications Services of the World Trade Organisation. This agreed
that liberalisation and the promotion of competition are the best methods by
which to extend the benefits of the industry to the whole economy34. However,
it is felt that despite the break-up of the NTT group (which includes NTT DoCoMo, the largest mobile network in Japan by far), the constituent parts
of the group remain dominant in the domestic market. The lack of an
effective regulator hinders the opening of the market to others, despite the
abolition of excessive regulations35.
The main route for European companies to enter the Japanese market has
been to buy significant shares in Japanese companies rather than set up as
independent operators36. The European Commission has thus pressed for the
creation of a fully independent regulator in the telecommunications sector37
and greater enforcement of competition law across all areas of activity. The
most recent proposals from 2003 reflect the view of the Commission that
regulatory reform is not merely stripping away unnecessary regulations, but
promoting transparency and predictability. This applies to both the nature
of decision-making in government and in the business environment.
The EU, in its proposals, is quick to note where progress has been made
and to continuously promote the perceived benefits to the Japanese economy
and the consumer. In its latest proposals, the Commission recognises various
'successes' in regulatory reform in Japan. These 'successes' include the new
regulations allowing foreign lawyers to practice in Japan, and the
tightening of enforcement procedures under the Anti-Monopoly Act.
Japan's Proposals for Regulatory Reform in the European Union
The Japanese proposals for regulatory reform in the European Union are
presented to the European Commission in Brussels. Two major differences can
be noted from the nature of the Japanese proposals to the EU from the EU
proposals to Japan.
First, the nature of the proposals is clearly different. The EU's
proposals concern fundamental areas of regulatory reform which have yet to
be achieved in Japan. The proposals put to EU do not generally concern
issues where Japanese companies have found market access difficult or
impossible. Issues of unfair competition or a lack of transparency do not
figure strongly either. The latest proposals, delivered in November 200338,
concern some points in the regulation of the automobile, electronics and
telecommunications sectors, which are concerned either with technical
standards or customs rules.
Second, as a supranational body, the proposals concern not only
regulation at EU-level, but also proposed reforms in individual member
states. The EU's Common Commercial Policy grants exclusive competence to the
Commission to deal with third countries such as Japan39, but it is unable to
propose EU legislation in areas outside the Treaties. Unfortunately, some of
the issues of regulatory reform Japan would like to see resolved in member
states are outside the competence of the Commission. The most notable areas
of concern are immigration and fiscal issues. The list of proposals contains
many issues concerning the obtaining and renewal or work visas, the need for
unusual documents, the considerable lengths of time of such processes,
haphazard and/or regional differences in procedures within a member state
and so on40. The replies to these requests may come from the member states
concerned to the Commission, though general comments are sometimes made if
it has tried to coordinate EU wide policy41. The Commission therefore finds
itself in the position of being unable to propose solutions to the problems
Japan has raised because of a lack of widespread EU legislation in the
Other areas involving manufacturer and trade committee discussions
(particularly in the automobile sector) are clearly outside the competence
of the Commission as an institution43. On other issues, the Commission can
only coordinate and not harmonise areas of concern44. For example, the
Japanese proposals have highlighted the lack of coordination of tax systems
and social welfare as well as,
.. social policies, such as employment and environment policies,
[which] seem to create excessive restrictions or obstacles to positive
business activities by private companies45.
The Commission may welcome the Japanese proposals if it is also
dissatisfied with the regulatory situation in one or more member states. If
the Japanese proposals concern issues relating to, for example, free
movement within the EU, the Commission may take the opportunity to propose
legislation if it capable of doing so. Highlighting the difficulties
experienced by Japan can assist the Commission in proposing or modify
legislation46, or break a deadlock. A good example of the latter is the
Societas Europea (SE), the European Company Statute which was first proposed
in 197047 but until recently was never fully adopted48. The Commission has
always seen its adoption as an important step in completing the single
market. Japan has been keen for the statute to come into effect because it
would avoid the need for a company to set up a new subsidiary in another
Member State. It could be suggested that outside pressure, particularly from
Japan, can provide an impetus for the member states to adopt the Statute
more quickly, in order to attract Japanese investment, on issues of this
Conclusion: Evaluating Japan's Regulatory Reform and the EU-Japan
Regulatory reform has now become a key priority of the Japanese
government. During the last decade, it has come to be seen as an integral
part of the move towards renewal of Japan's economy and public
administration. Support for regulatory reform has not only come from the EU,
but also the US, international organisations such as the OECD and WTO and
various domestic bodies. The most significant of these is Keidanren, the
Federation of Economic Organisations. It has in recent years given its
wholehearted support to rapid regulatory reform in Japan and regards it as,
'the linchpin of economic reform'49.
Seen against the background of the EU-Japan relationship, it is clear
that the Regulatory Reform Dialogue set up under the auspices of the Joint
Declaration 1991 is a major step. The evolution of discussions about general
regulatory issues to a more formalised and regular dialogue is proof that
both sides have acted on their desire to forge the 'partnership' promised in
the Joint Declaration. This has been reinforced by Objective 2 of the Action
Plan agreed in 2001. By exchanging frank views on the respective problems
experienced by corporate and other actors due to regulations, the EU-Japan
relationship has evidently moved on considerably.
It is equally significant for the EU that it appears to have a similar
standing in regular reform dialogue with Japan as that of the US, for two
reasons. First, the Commission has established itself as a negotiator on
behalf of all the EU member states with the highest levels of government in
Japan. This would not be the case if Japan did not recognise the Commission
as truly representing the European interest. Similarly, it is unlikely that
any of the EU member states would individually be able to establish such a
high-level and regular dialogue with the Japanese government about
regulatory reform. Second, it is also evidence that Japan's international
outlook has widened beyond dialogue with the US and that it regards that EU
as a major economic entity.
Regulatory reform occurs at a slow pace in many countries, and Japan is
no exception. Of the reforms that have been undertaken since the 1990s, the
EU has been keen to recognise progress in its subsequent proposals.
Evaluating how much of Japan's regulatory reform so far has been due to the
influence of the EU is a difficult task. Many of the proposals detailed in
this article were also part of the US-Japan Deregulation Dialogue and put
forward by domestic bodies such as Keidanren. Furthermore, some changes
requested by the EU, such as enforcing competition law and increase
transparency within government, may take many years before they are in
Nevertheless, the mere fact that the EU-Japan Regulatory Reform Dialogue
has continued for over ten years is evidence that both sides regard it at a
valuable means by which they can attempt to influence changing patters of
regulation. Both sides have welcomed in their proposals the steps taken to
satisfy past requests. As the political will in Japan for regulatory reform
has increased over recent years, the EU has intensified its arguments that
reform can be a positive experience for consumers and international trade.
As far as the EU-Japan relationship is concerned, it is clear that the
Regulatory Reform Dialogue will continue for as long as necessary. The EU-Japan
Action Plan 2001 calls for further dialogue and cooperation on related
issues, such as the examination of methods to facilitate market access and
the recognition of respective industrial and technical standards. The
Dialogue has thus become one of the foundations on which the EU-Japan
'partnership' has begun to take shape. Just as the enlargement of the EU
offers new opportunities for trade and investment for Japan, regulatory
reform in Japan similarly promises much for the EU.
1. School of Law, University of Sheffield,
Crookesmoor Building, Conduit Road, Sheffield, S10 1FL, England
I wish to thank Professor Geraint Howells and Dr Richard Kirkham,
University of Sheffield, Professor John McEldowney, University of Warwick,
and two anonymous reviewers for their helpful comments on earlier versions
of this article. I would also like to thank the staff of the Delegation of
the European Commission, Tokyo, for their generous help and assistance
during my research period 2000-2001. Any errors which remain are my own.
An earlier version of this article was presented at the Socio-Legal
Studies Annual Conference, University of Glasgow, 6 April 2004.
2. The European Union came into existence
following the Treaty of Maastricht 1992. Although references relating to
events prior to 1992 should use the term 'European Community', in order to
avoid confusion, this paper only uses the term 'European Union' or 'EU'.
3. See, for example, an exploration of US-Japan
political, economic and security relations in G.D. Hook. J. Gilson, C.W.
Hughes and H. Dobson,
International Relations (2001) London: Routledge.
4. As well as Hook et.al. ibid., for an excellent
analysis of the EU-Japan relationship, see J. Gilson, Japan and the
European Union: A Partnership for the Twenty First Century? (2000)
5. T. Okazaki, 'From Wartime Controls to Post-war
Recovery', in F. Gibney (ed.) Unlocking the Bureaucrats Kingdom:
Deregulation and the Japanese Economy (1998) Washington DC: Brookings
Institution, p. 29.
6. S.J. La Croix and J. Mak, 'Regulatory Reform
in Japan : The Road Ahead' (1999) European Institute of Japanese Studies
Working Paper no.63, p.4.
7. M. C. Tilton, 'Market Opening in Japan', in L.E. Carlile and M.C. Tilton (eds.) Is Japan Really Changing Its Ways?
Regulatory Reform and the Japanese Economy (1998) Washington DC:
Brookings Institution, p. 165.
8. E.J. Lincoln, 'Deregulation in Japan and the
United States: A Study in Contrasts', in Gibney, op. cit., n. 5, p. 58.
10. T. Yayama, 'Who has Obstructed Reform?', in Gibney, op. cit., n. 5, p.93.
11. A high profile Commission set up by the
Ministry of Finance and Keidanren, named Rincho, proposed
privatisation of the air, rail and telephone companies in 1982. However,
Rincho was set up to address the problems associated with the fiscal
crisis, rather than addressing regulatory reform as means to open the
Japanese market to foreign competition: L.E. Carlile, 'The Politics of
Administrative Reform', in Carlile and Tilton, op.cit., n. 7, p.79.
12. The Report of the Advisory Group on
Economic Structural Adjustment for International Harmony (Maekawa Report),
submitted to Prime Minister Nakasone Yasuhiro, April 7, 1986.
13. For example, The Report of the Research
Committee on Economic Reform (Hiraiwa Report), submitted to Prime
Minister Hosokawa, 16 December 1993.
14. J.O. Haley, Authority Without Power: Law
and the Japanese Paradox (1991) Oxford: Oxford University Press, p.148.
15. M. Trevor, How the EU Approaches Japan,
Speech at the Nissan Institute, Oxford University, 1 June 2001.
16. M. Miyamoto, 'Deregulating Japan's Soul',
in Gibney, op.cit., n. 5, p.69.
17. One of the first comprehensive works on the
EU-Japan relationship addressed this issue in detail: A. Rothacher,
Economic Diplomacy between the European Community and Japan 1959-1981
(1983) Aldershot: Gower.
18. K. Iwanaga, 'Europe in Japan's Foreign Policy',
in B. Edstr (ed.) The Japanese and Europe (2000) Richmond:
Japan Library, p.227.
Joint Declaration on Relations between
the European Community and its Member States and Japan, 18 July 1991,
accessed December 2004.
20. Source: Political and Economic Section,
Delegation of the European Commission.
Shaping Our Common Future: An Action
Plan for EU-Japan Co-operation, 16 December 2001,
accessed December 2004.
22. Objective 2, Point 1
23. Source: Political and Economic Section,
Delegation of the European Commission.
24. Source: Interview with Tom Goodwin, DTI,
British Embassy, Tokyo, February 2001.
25. The EBC has a membership of 350 companies
grouped into twenty-seven industry committees, and it seems that the most
active committees are those where European companies have a presence in the
Japanese market already, notably pharmaceuticals, chemicals and electronics.
Source: European Business Community, Tokyo.
26. The Council for Regulatory Reform was
established by cabinet order under Article 37 (2) of the Act on
Establishment of the Cabinet Office on 1 April 2001, replacing the
Regulatory Reform Committee.
27. Interview with Ellis Mathews, Delegation of
the European Commission, Tokyo, January 2001.
29. The most recent EU proposals were delivered
in October 2003:
European Commission Priority Proposals for Regulatory
Reform in Japan, 16 October 2003, accessed December 2004.
European Commission Priority Proposals
for Regulatory Reform in Japan, 16 October 2000, p.2,
accessed December 2004.
31. ibid., p. 8.
32. O. Juul Jgensen, EU News (2000)
33. Tilton, op.cit., n. 7, p. 183.
35. European Commission Priority Proposals
for Regulatory Reform in Japan 2000, op.cit., n. 32, p. 8.
36. For example, Vodafone bought a 10% stake in
Japan Telecom, the third-largest mobile phone operator in Japan in 2001:
'Vodafone to expand into Japan', Japan Times, 28 February 2001.
37. European Commission Priority Proposals
for Regulatory Reform in Japan; op.cit., n.32
38. Japan's Priority Proposals for Regulatory
Reform in the EU, 14 November 2003,
accessed December 2004.
39. Articles 131-134 EC
40. The most recent proposals for reform
highlight various separate problems linked to visas and work permits in 12
member states, along with a request to have a proposed directive on freedom
of travel of third country nationals adopted. op.cit., n.40, pp. 18-22.
41. An example of this is the driving licence
issue and the difficulties faced by Japanese individuals in exchanging their
licences for national ones in each Member State.
42. For example, it is currently not possible
to offset losses incurred by a corporate subsidiary in another Member State.
op.cit., n.40, issue 4.7 presses for the proposal made by the Commission to
this effect on 6 December 1990 (COM(90)595) to be adopted. It is recognised
that this is a barrier to the single market, but would be problematic in
adopting without a study of comprehensive tax reform.
43. This was requested in the 2000 proposals;
Japan's Proposals for Regulatory Reform in the EU (2000) 26 October
accessed December 2004.
44. This concerns the lack of a uniform system
of social security across the EU. Regulation EEC 1408/71 coordinates, but
does not harmonise national systems, and applies only to EU nationals, and
not those of third countries. It is largely an issue to be dealt with under
bilateral agreements between member states and Japan, such as the agreement
between the UK and Japan, signed in February 2000: passed in the UK as The
Social Security (Contributions) (Japan) Order 2000 no.3063 (HMSO).
Japan's Proposals for Regulatory Reform
in the EU (2000),
p.1,accessed December 2004.
46. For example, the Merger Regulation 1989 (OJ
1990 L257/14) concerning the tax treatment for cross-border mergers,
exchange of shares etc within the EU has been a source of vexation for
Japanese companies. The Commission hopes for reform and is preparing a study
to present to the Council.
47. First proposal COM (1970) 600, later
proposals COM (1989) 268-1 final, COM (1991) 170 and COM (1993) 570
48. The statute was finally agreed in principle
at the European Council summit in Nice in December 2000: OJ C221/28 5.2. 7
August 2001. It came into effect in October 2004. The latest draft was much
less ambitious than earlier drafts because of wrangling over the differing
company law principles in member states.
49. Keidanren, Request for Deregulation
Proposal (1997). Keidanren also made a 451-item deregulation list
which was submitted to the government in 1999 and followed this up with two
reports in 2000 highlighting the most significant areas in need of reform,
and a policy document pressing for action in a range of areas including
pensions, distribution, telecommunications and investment: Policy
Recommendations and Priority Requests to the Japanese Government on the
Promotion of Regulatory Reform (2000); Keidanren demands resolute promotion
of Regulatory Reforms and the Establishment of a New System for the 21st
Century, 17 October 2000; Keidanren demands resolute promotion of
Regulatory Reforms and the Establishment of a New System for the 21st
Century, 17 October 2000.
Keidanren recently published a policy document entitled Japan
2025: Envisioning a Vibrant, Attractive Nation in the 21st Century which
states that under the objective of 'opening the nation', 'Lower regulatory
walls will be a catalyst for growth and a force raising economic performance
throughout the region'., see all these documents
accessed December 2004.
About the author
Paul James Cardwell is Lecturer in Law in the School of Law,
University of Sheffield. He
specialises in Public and EU law, and has studied at the Universities of
Warwick, Lille, Bordeaux and Nagoya, where he held a research scholarship
from the Association of International Education Japan, 1999-2000. He also
undertook a five-month research period at the
Delegation of the European
Commission in Tokyo. Although his primary research interests lie in the
law and politics of the EU, in particular the Common Foreign and Security
Policy, he maintains a keen interest in the law and international relations
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Copyright: Paul James
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