Hiroyuki Ishige: The Abe administration’s reform of the so-called bedrock regulations, as part of a growth strategy, will create new markets.
Who could have imagined two years ago that Japan would join the Trans-Pacific Partnership—or at least, that that will happen very soon?
It takes time, but the true impacts are coming.
Abenomics has changed Japan.
Japanese investment is creating more than 700,000 jobs in the United States, more employment than any other nation but one—coming second only to the UK.
Prime Minister Abe is also committed to the Invest Japan promotion program. He set a new goal of doubling the stock of import FDI by 2020. This is a very ambitious target.
“Ambitious” sometimes means “impossible,” but this is not a joke. Prime Minister Abe is serious. Japan is serious.
Shinzo Abe: As the final leg of this state visit, I have come to Los Angeles, which has a special place in my memory.
I would like to thank you, Secretary Pritzker, for coming to this meeting. And I would also like to say thank you very much, Ambassador Kennedy. You have given me full support on this visit.
Before coming to Los Angeles, I had an opportunity to meet with young Japanese entrepreneurs working in Silicon Valley. I asked them: “Why did you decide to start a company here in the United States instead of in Japan?” The top answer is that Silicon Valley has good weather. The second answer: Here in the United States and Silicon Valley, risk-takers are respected. This is different from Japan, and I believe it is most needed for Japanese businesspeople.
For the Japanese, Los Angeles, California, and the whole region of the United States is a place for making their dreams come true.
For instance, Mr. Nomo realized his dream of joining the Major League here in Los Angeles!
Beyond the vast Pacific Ocean sits Asia, the growth market of the world, and to the south, Latin American countries with huge potential.
Needless to say, there are markets over all of Japan and the United States. Corporations in the two countries cannot spare efforts to make investments in these huge markets. I want American firms to increase investment in Japan more and more.
Do you know how attractive Japan is as an investment destination? According to a survey of the level of interest in investment destinations in Asia as viewed by foreign companies, China took all the attention. This was before the start of my administration.
But lately, Japan takes first place in areas like research and development, sales, and distribution. Apple will build its Asian research and development center in Japan. The attractiveness of Japan is real, not fake. For example, the Competitiveness Survey by the World Economic Forum shows that Japan’s position has improved from ninth to sixth. Nonetheless, what I want is to be number one.
As we continue to improve Japan’s business environment and to raise market competitiveness, we expect foreign businesses to invest in Japan and to help, from a global perspective, unleash our market’s potential. I will not loosen the reins on the ongoing reform efforts. My cabinet submitted draft laws to the current Diet session that are aimed to crack the bedrock of regulations in sectors like agriculture, employment, and energy.
As for myself, I have been attending Diet meetings on the draft laws to facilitate the deliberation process toward the early approval. We won’t let our reform agenda step back or have its teeth taken out.
Even in the past two months, I have introduced a series of additional measures. In March, the cabinet approved the five promises for attracting foreign businesses to Japan. In three years’ time, all regional airports in Japan will allow easy access to business jets.
The corporate advisory system will assign state ministers as consultants for foreign companies that have made a large investment in Japan. In April, the first one-stop business establishment center was opened in Tokyo. With this center in place, any applicant is able to complete all the necessary registration for business establishment with just one stop.
Do you know which country has the biggest amount of investment in Japan? It’s the US. Do you know which country has the biggest amount of investment in the US? That is Japan. Foreign direct investment informs the core of the Japan-US economic relationship. We must work together with the US federal government, state governments, and both US and Japanese private sector companies so that investments both ways, in the US and Japan, will increase further.
For that goal to be achieved, I would like to see closer collaboration between SelectUSA, which Secretary Pritzker leads with President Obama’s support, and Japan’s Invest Japan, which is an initiative for promoting teamwork investment.
In 1957 my grandfather, Mr. Kishi, who was then the prime minister of Japan, made a visit to the United States. On his way back to Japan, he had a stopover here in Los Angeles—in fact, at this hotel. There was a declaration released aimed at starting a new era and age.
On my visit to the United States, I’m going to call the US-Japan alliance the Alliance of Hope. I do believe that collaboration and cooperation between the two countries will be more successful and fruitful, and that our dreams will really come true. I hope, and truly wish, that a new era is going to start from this moment. Thank you so much.
Caroline Kennedy: Prime Minister Abe, Secretary Pritzker, members of the delegation, Chairmain Ishige, distinguished panelists, friends from the United States and Japan, this has really been an amazing week. I’m honored to have been part of this coast-to-coast celebration of the US-Japan alliance—past, present, and future.
The prime minister began his visit in Boston, the birthplace of our nation and our democratic traditions—and the Kennedy family. In Washington, he outlined Japan’s commitment to our shared values of freedom, peace, and the democracy we both cherish. He shared his perspective on the future of our alliance with the president, and deepened their close working relationship. His speech to Congress acknowledged the shared pain of war and the extraordinary partnership the United States and Japan have built over the past 70 years. And now, Prime Minister Abe has come west—like so many before him—to look to the future.
Since becoming ambassador, I’ve seen the remarkable dynamism of the Prime Minister’s economic reforms. Others around the world are seeing it, too. The Global Strategic Management firm just ranked Japan in the Top 10 for foreign investor confidence—the highest in 10 years—and Prime Minister Abe has charted a course to double Japan’s foreign direct investment by 2020. All of you have a major part to play in this future growth, which will benefit your companies as well as your countries.
American CEOs are opening new offices in Tokyo almost every week and looking for business opportunities. Japanese companies are committed to fostering a global and diverse workforce. We know they will be successful because they are hiring more women at every level of government. The US has no more committed investors than the Japanese. Japanese companies already employ 700,00 Americans. Japan has been our largest source of foreign investment for the past two years, and Japanese investors are increasing their long-term commitments. That was evident in the large delegation of Japanese companies and senior executives that attended the recent Select USA conference.
But to be truly successful, this partnership must flow both ways. Agriculture, energy, insurance, pharmaceuticals, advanced manufacturing, scientific and medical innovation and research, and global health solutions are just a few of the areas of opportunity for US business. The work you are doing together is not just good for our economies, but good for humanity. Cutting-edge innovations resulting from these partnerships will impact everything from renewable energy and climate change to healthcare for our aging populations and for those in the developing world.
That’s why I commend JETRO for bringing us together today. I encourage all of you to come to Japan and see what I am talking about. Whether you’re a large corporation or innovative start-up, you will find opportunity and willing partners there. In order to make the most of this moment, there is still an important effort that needs to be made, and everyone in this room is critical to its success.
Yesterday I met with more than 25 senators about US-Japan relations. The most important piece of business that’s facing our alliance is the passage of TPP. I heard support, but also skepticism. I took questions about opportunity, and also about security in a changing regional environment.
I was asked: “Will this make a real difference for American companies and workers? Is Japan truly dedicated to being a partner in this agreement in a way that will lift up our nations and transform our economies?” I told those senators that, thanks to Abenomics, the answer is yes.
All of you here understand the importance of the US-Japan alliance. You’ve shaped its contribution to the peace and prosperity of the Asian-Pacific region. If you share Prime Minister Abe and President Obama’s commitment to building a free, fair, and prosperous future for our children and grandchildren, now is the time to get involved. The president and the prime minister are committed to making this a high-quality, 21st-century agreement, and the negotiators have been working around the clock to realize their vision.
Make your voice heard and reassure our elected officials that our future is interdependent—that America’s strength lies in alliances with those who share our fundamental values of democracy, rule of law, and equal opportunity. We have no stronger ally than Japan, and there is no better time to work together than now.
Penny Pritzker: I want to thank all of the American and Japanese business leaders here for your shared commitment to a lasting commercial partnership between the United States and Japan. Thank you to my friend Ambassador Kennedy for your leadership and for your work to deepen the economic and diplomatic ties between our two nations.
On a personal note, Japan holds a special place in my heart. My father was stationed there in the 1950s while he was in the US Navy. My brother lived in Japan in the 1980s. My son wrote his senior thesis at Yale about the Iwakura mission, which launched an era of modernization for Japan.
Now, as Secretary of Commerce, it is a true honor to carry on this family legacy of affection and partnership with Japan and its people. Fifty-five years ago, Prime Minister Kishi traveled to the White House to sign an accord that would form the basis of the modern US-Japan alliance: the Treaty of Mutual Cooperation and Security. At that time, President Eisenhower made a statement that defined not only the purpose of the treaty, but also the promise of our relationship to establish an indestructible partnership based on complete equality and mutual understanding.
In this same tradition, I was honored to join President Obama earlier this week to welcome Prime Minister Kishi’s grandson, Prime Minister Abe, to the White House, where together our leaders reaffirmed the enduring strength of the bonds between the United States and Japan. Prime Minister Abe, thank you for your visit and for your reiterating our countries’ joint commitment to bolster our indestructible partnership.
The United States-Japan relationship serves as an anchor for the Asia-Pacific region, and our economic ties are core to our dynamic partnership—a partnership that serves both our peoples well. Today, Japan is America’s fourth-largest trading partner, and it was our top source of foreign investment in 2013, with Japanese firms directing nearly $45 billion into our market. And with American firms accounting for $123 billion, the United States is Japan’s largest source of accumulated direct investment.
Indeed, our economic and commercial bonds are strong and thriving. But we live in a world of rising powers and emerging markets, where a long history of partnership is not enough. We must reinforce an economic architecture that will shape and secure our future. There are two essential cornerstones of that architecture: increasing two-way investment, and deepening trade through the Trans-Pacific Partnership.
We know that Japanese investments in the United States are good for Japanese firms and good for American workers. Today, Japanese foreign direct investment supports more than 718,000 good-paying US jobs, and as more Japanese companies invest here, those numbers will only grow.
To give one recent example, in February, Mitsubishi Electric announced plans to expand its manufacturing facility in Mason, Ohio, which will create 100 new American jobs. You heard, just a few minutes ago, the CEOs of Mitsubishi Corporation, Honda, and Kikkoman express their interest in expanding their companies’ presence here in the United States. They are not alone. We welcome and encourage the growth of Japanese investments here in the United States.
To make it easier for Japanese and other foreign companies to navigate the American market, the president launched SelectUSA, our first-ever whole-of-government initiative to attract foreign investments to the United States. Led by my team at the Commerce Department, SelectUSA is the first point of contact in our government when a foreign company is looking to invest in the United States. In fact, our lead representative for Japan is here: Keida Ackerman. She’s available to answer any of your questions.
A month ago, we held our second SelectUSA summit, where more than 2,600 business leaders from 70 international markets met with US economic development officers to identify new investment opportunities throughout our countries. Japan sent the second-largest delegation, with 98 participants representing more than 60 companies and seven trade associations. Building on the success of our summit, SelectUSA and its Japanese counterpart JETRO are developing a Memorandum of Intent to promote more direct investment in each other’s markets. So let us commit to completing that agreement by the end of this year.
As we focus on bringing Japanese companies to our shores, American firms would also like greater opportunity to invest in Japan. Expanding the US investment footprint in Japan is a win-win for our countries. Our businesses can bring complementary skills and technologies, new products, and additional capital to your market. When these businesses invest, it increases demand for our exports, which ultimately supports more jobs here at home. Whether a greenfield investment, a merger, or an acquisition, more American investment will contribute to Prime Minister Abe’s goal of spurring growth and competitiveness across Japan. We want to partner with the prime minister to meet his objective of doubling Japan’s inward foreign investment stock by 2020.
While barriers to entry into Japanese markets remain, we are encouraged by the recent steps taken by Prime Minister Abe’s government, including reforming corporate tax laws to support the interests of shareholders and establishing a code of conduct for companies listed on the Tokyo Stock Exchange. Building on this progress, we’ll create a more open and more welcoming climate for both American and foreign investors.
Before I conclude, I’d like to touch on our work to deepen US-Japan trade. Specifically, let me comment on the Trans-Pacific Partnership, which would be the most effective mechanism for paving the way to even stronger economic ties. Both the United States and Japan are committed to completing this high-standard agreement. As Prime Minister Abe has said, the whole world is paying close attention to the Asia-Pacific, as this region is achieving the highest rate of economic growth and brimming with the greatest amount of future potential anywhere. The prime minister is absolutely right. The market opportunity presented by TPP is profound. The Asia-Pacific’s middle class is set to grow to 3.2 billion over the next 20 years, which is nearly nine times larger than the entire US population. Right now at the Commerce Department, we are working through our domestic political and legislative process to move President Obama’s trade agenda forward.
But our bottom line is this: The Obama administration is all in on TPP. As Secretary of Commerce, I am fully committed to doing what it takes to get this critical trade deal completed and implemented. That’s why I’ve testified before Congressional committees on trade promotion legislation. I’ve called, briefed, and met with 34 senators and 86 members of the House—126 members of Congress—so far, to make the case for trade and to answer any of their questions on TPP. And I have traveled from districts in Washington State all the way to Virginia, and met with more than 1,000 business leaders to discuss the benefits of new trade agreements.
By nature, I’m an optimist and a planner, and my department is working tirelessly to lay the groundwork across the region in an effort to help American businesses capitalize on the eventual TPP. Since I came into office, Commerce has led 11 trade missions to the TPP region, including the one I brought to Tokyo last October. We now have more than 175 foreign commercial service staff in TPP partner countries. They are already working hard to prepare for a wave of new opportunities for our companies across the region. Our team is enhancing our industry-specific expertise delivered through business counseling, trade events, and reports on best prospects to ensure companies have the data they need to compete. We are updating our research on market opportunities in TPP member countries in order to be best positioned to deliver on the benefits of an eventual agreement. Put simply, if and when a deal is reached, it will be the responsibility of the Commerce Department to ensure that American businesses understand the benefits of TPP and can capitalize on them. A strong TPP is a game-changer for the US-Japan trade relationship.
The Prime Minister and I recognize that work remains to be done to resolve outstanding issues in the TPP negotiations, but we both aspire to bringing these talks to a swift and successful conclusion. By completing TPP, by deepening and expanding our two-way investments, we will form an economic foundation of the next great era of complete equality and mutual understanding between our nations. We will usher in and lead the next phase of our indestructible partnership. We will strengthen our legacy of economic cooperation founded on shared values, mutual interests, and mutual respect. And we will keep the Untied States and Japan open for more business together.