Domestic Regulations and - EU Business in Japan · More commitments on Professional & Business services, Environmental services, energy related services, on financial services & insurance,

EU – JAPAN EPA

“Trade in Services, Services

Domestic Regulations and

Mutual Recognition Agreement”

1

This presentation has been prepared with the sole purpose of simplifying the understanding of some parts of the EU-Japan EPA and bears no legal standing.

2Managed by Under the supervision ofwww.eu-japan.eu/epa-helpdesk

A. EU & Japan Trade in Services: Facts & Figures

B. The Services chapters and annexes

C. Market access Pillar

(incl. Public procurement in services)

D. Regulatory disciplines and cooperation

E. Movement of natural persons

F. Mutual recognition of qualification

G. Protecting Public services and policies

Table of Content

IMPORTANCE OF TRADE IN SERVICES IN THE EU-JAPAN TRADE RELATIONSHIP

21% 79%63.7%

36.3% of EU exports to Japan = Services

60759

34652

EU Exports to Japan – 2017 – Mio€- %

Goods Services

36.3%

Total: 95 411 Mio€

68874

18307

Japan Exports to EU – 2017 – Mio€- %

Goods Services

Total: 87 181 Mio€

21%


3

19,06020,246

24,97624,656 25,567

29,18431,576

34,652

34,200

14,194

15,585 15,54814,572 14,953 16,284

18,455 18,30719,305

3,973

3,975

4,6166,305

6,… 7,8648,483 8,428

8,231

2,875

4,188

3,155 3,061 3,2053,685

4,2524,862

6,026

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

(Mio € - 2010-2017)

EU Exports EU Imports UK Exports UK Imports

EU and UK Trade in Services with Japan

Source: Eurostat bop_its6_det.

IMPACT OF BREXIT:

UK = 24% of EU Exports of Services; and 31.2% of EU Imports!

EU Surplus:

+14 895

€Mio

+79.4% in 9

years


4

EU Exports of services to Japan per countries (Extra EU) –

€Mio – 2018

8231.6

54575368

3935

1981

142412891175.21005

996738

582.7471.6 302

250.6175.8

122.28577.6

4136.6

2523.2

23.1

19.918

40

1000

2000

3000

4000

5000

6000

7000

8000

9000

Source: Eurostat bop_its6_det.

UK Exports represent + 25% of

EU Export of services to Japan!


5

69

4

41

4.8

48

65

.9

41

61

.7

10

1.7

73

7.9

63

88

28

17

52

20

.2

76

94

.8

29

4.2

10

5.2

16

7.9

36

9.8

41

62

16

02

.5

22

.2

19

1.6

30

97

.1

35

49

.4

72

9.4

53

78

.8

20

.7

61

.3

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

EU Services Exports and Imports to Japan per sectors

(2018 - € Million)

Source: Eurostat 2019 – Note: Other business services comprise mainly: research and development, professional and management consulting services, technical,

trade-related services.

Exports - Total 34 200 – Imports - Total: 19

305

22.5% of Exports

14.2 %12.1%

18.7%

15.2%

7.4%


6

7

EU Exports and Imports to Japan per sectors

“Other business services” - (2018 - € Million)

22

21

.1

46

0

92

.9

66

9.1

54

4.2

23

.1

52

9.8

13

7.2

4.2

18

5.8

28

1.9

30

40

.5

13

46

.3

10

7.1

31

.8

55

3.6

45

0.7

4.3

27

3.6

55

6.9

7.8

40

8.2

53

2.5

11

31

.9

-400

100

600

1100

1600

2100

2600

3100


7

Benefits of EU-Japan EPA for Services Sectors

• Binding of current regulatory practice = increase legal certainty from WTO GATS Level (1995), and build on TiSA and TPP negotiations

• Transparency on Domestic regulation and licensing procedures• Independent regulators, universal services, etc.• Process for Mutual recognition of qualification of professional

services• Use of negative approach = more transparency for businesses, who can

easily find out what they cannot do in Japan• Increase access to Japan Public Procurement for EU services providers• Opens up services markets, in particular

• Financial services, . Telecommunications, • Postal and express delivery, . Distribution services,• Professional services, and . Transport services

A summary of the results of the EPA for the services sectors


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CHAPTER 8 = TRADE IN SERVICES, INVESTMENT LIBERALISATION AND ELECTRONIC COMMERCE

• SECTION A : General provisions• SECTION B : Investment liberalisation • SECTION C : Cross-border trade in services • SECTION D : Entry and temporary stay of natural persons • SECTION E : Regulatory framework

• SUB-SECTION 1 : Domestic regulation (Incl. MRA Qualifications) • SUB-SECTION 2 : Provisions of general application• SUB-SECTION 3 : Postal and courier services• SUB-SECTION 4 : Telecommunications services• SUB-SECTION 5 : Financial services• SUB-SECTION 6 : International maritime transport services

• SECTION F : Electronic commerce

WHAT’S IN THE EU-JAPAN EPA FOR SERVICES?



Annex 8Annex 8-A Regulatory cooperation on financial regulationAnnex 8-B Schedules for chapter 8

Annex 8-B I Reservations for existing measuresAnnex 8-B II Reservations for future measuresAnnex 8-B III Business visitors for establishment purposes, intra-corporate transferees, investors and short-term business visitorsAnnex 8-B IV Contractual service suppliers and independent professionals

Appendix IV Limitations of business activities of contractual service suppliers and independent professionals in Japan

Annex 8-C Understanding on movement of natural persons for business purposes

444 pages out of 1570 pages total of EPA = 28% of the text of EPA= on Services issues



http://trade.ec.europa.eu/doclib/docs/2018/august/tradoc_157232.pdf#page=1







Bidding level for EU & Japan before EPA = GATS 1995

Scheduling of Market access & National Treatment commitments using a

Negative list (2nd time for the EU)

GATS +; TiSA+; CP TPP+

More Commitments on Mode 1 (Cross border transactions)

Mode 3:Removal of all equity caps, with negotiated exceptions

Binding of current practise (i.e. Higher Market access than in existing FTAs),

with negotiated exceptions,

Standstill and Ratchet Clause (to lock in the autonomous reforms)

More commitments on Professional & Business services, Environmental

services, energy related services, on financial services & insurance, postal

and express, transport services, etc.

But not much improvements for the professional services!

C. Market access pillar


Adoption of a strong Horizontal Chapter on Disciplines for Domestic Regulation

(Chapter 18 of JEEPA):

Transparency of the regulation

Prior consultation of stakeholders

Impact assessment

transparency of the licensing requirements and procedures (Contact Point,

Proportionate to the goal, Clear Objectives, least burdensome administrative

costs as possible, short and predefined delays, “reasonable fees”, right of

appeal)

Sector specific disciplines (e.g. on Telecoms, on Postal, on Energy, Environment,

maritime and air transport, financial services, etc.) and Sector specific regulatory

cooperation (living agreement)

Disciplines on State Own Enterprises (SOEs)

Japan and EU active in the on-going WTOJoint Statement Initiative in WTO

D. Regulatory disciplines and cooperation Pillar


• A key priority for EU businesses in EU-Japan EPA• Temporary period only, not permanent migration• Negotiate faster Business Visa and Work permits delivery procedures:

Visa facilitation (Sensitive in EU – Competence- allowing spouses to work – a premiere!)

• In all Categories of Natural Persons Covered under Mode 4:1) Intra-Corporate Transfers (ICT)

• Managers• Specialists• Graduate Trainees

2) Business Visitors (BV) 3) Contract Service Suppliers (CSS)

(Employees of Juridical Persons)4) Independent Professionals (IP)

E. Movement of Natural Persons


• The Commission and Canada Federal government have found a way to go forward. AFramework Agreement in CETA describes the modalities how MRAs on sector specificprofessional qualifications, once concluded by the private sector together with the“licencing bodies”, will finally be transformed into the binding International treaty (FTA), bybeing annexed to the CETA.

• The European and Canadian architects have already agreed on their Recommendations foran MRA, which is now under scrutiny by the MRA Committee of CETA.

• A similar approach has been included into EU-Japan FTA, but the text is much less precise.There are no specific “Guidelines for the sectors”. And no specific “MRA Committee”, butthe “Committee on Trade in Services, Investment Liberalisation and Electronic Commerce”(Art. 22.3)

• Article 8.35 states that “Each Party shall encourage the relevant professional bodies in itsterritory to provide joint recommendations on mutual recognition to the Committee”.

• “Where the requirements are satisfied, the Committee shall establish the necessary stepsto negotiate, through their competent authorities, of a mutual recognition agreement.”

F. MRAs on Professional qualification


Nothing in JEEPA prevents governments and local public authorities from regulating in the public interest, including fordelivering public services, or adopting measures to protect or promote Japanese and European cultures.

Services of General Interest and Public Services like Heath Services, Social services, Education services, and Waterdistribution services have not been negotiated in CETA.

EU applies 3 layers of protection on these various public services in its commitments taken in trade agreements (WTO orBilaterals) :

1. “Services supplied in the exercise of the government authority” are excluded form trade deals (ex: Defence, Police,Justice et Public Administration).

2. Public Monopolies and concessions:

“In all EC Member States services considered as public utilities at a national or local level may be subject to publicmonopolies or to exclusive rights granted to private operators.”

A Explanatory Note specifies that: “Public utilities exist in sectors such as (…) environmental, health, transportservices (…)

3. For Public services in competition with private services (schools, universities, hospitals): Difference betweenestablishments “privately funded” and those “receiving public funds”. E.g. Are considered as « public » schools whereteachers are civil servants (payed by the State), hence, excluded from commitments.

Managed by www.eu-japan.eu/epa-helpdesk Under the supervision of

G. Protecting Public services and policies

15

16Managed by Under the supervision ofwww.eu-japan.eu/epa-helpdesk

INFORMATION SOURCES

Eurostat website: Eurostat bop_its6_det.

DG Trade website on Japan:

https://ec.europa.eu/trade/policy/in-

focus/eu-japan-economic-partnership-

agreement/

Eurostat bop_its6_det.

https://ec.europa.eu/trade/policy/in-focus/eu-japan-economic-partnership-agreement/

17

This presentation has been prepared with the sole purpose of simplifying the understanding of

some parts of the EU-Japan EPA and bears no legal standing.

Thank you for your attention

Pascal Kerneis – Managing Director

European Services Forum

QUESTIONS ?

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Domestic Regulations and - EU Business in Japan · More commitments on Professional & Business services, Environmental services, energy related services, on financial services & insurance,