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Introduction

• Since 2012, the Japanese and U.S. industries have provided input to the U.S.-Japan Dialogue on Digital Economy (DDE, formerly the Internet Economy Dialogue) on the development of digital economy-related policy frameworks, international cooperation in the field of cybersecurity, and the promotion of the use of trusted Artificial Intelligence (AI). We have also contributed to the joint development of digital markets and infrastructure in third countries.

• In light of the accelerating development and utilization of advanced digital technologies, including in the areas of AI and cybersecurity, we present the following policy principles that the U.S. and Japan should further explore, and specific measures that should be taken with regard to the digital economy.

1. Artificial Intelligence

• AI contributes to productivity improvement and innovation across industries. As AI becomes increasingly interwoven into daily life, we need to go beyond the debate on whether or not to utilize AI, and urgently realize a society that can enjoy the benefits of AI in all fields, while appropriately dealing with risks based on the principles of trustworthy and responsible AI that fosters innovation.

• Industries in the U.S. and Japan will promote the active development and utilization of AI toward the realization of Society 5.0, while supporting measures including, where appropriate, self-regulation focused on transparency and trust, to address risks such as infringement of intellectual property rights. The governments of the U.S. and Japan are expected to continue to take the lead in international rule-making based on the achievements to date in the Hiroshima AI Process, while ensuring alignment with the domestic regulation in both countries. Both countries should prioritize flexible and adaptive risk-based, multistakeholder approaches that are informed by internationally-recognized standards (e.g., ISO/IEC) and frameworks such as the NIST AI RMF, which provide valuable guidance for addressing fundamental requirements for AI trust and safety: data governance, transparency, accuracy, robustness, security, and bias mitigation, while respecting the voluntary efforts of industry.

2. DFFT (Data Free Flow with Trust)

• In order to realize Society 5.0 for SDGs (Sustainable Development Goals), it is essential to promote the use of cross-border data. Based on the G7 Digital and Technology Ministerial Declaration adopted in April 2023, commitments to materialize the DFFT must be fulfilled urgently.

• We support the G7's creation of an Institutional Arrangement for Partnership (IAP), and believe steady efforts are required to identify and eliminate barriers to cross-border business while utilizing privacy-enhancing technologies (PETS). The Japanese and U.S. industries shall do their utmost to cooperate with the U.S. and Japanese governments in these efforts.

3. Cybersecurity

• As increasing geopolitical tensions extend into cyberspace, cybersecurity has become a key area of national security as evidenced by the recently updated national security strategies of both the U.S. and Japan, which place a strong emphasis on strengthening cybersecurity across government, critical infrastructure, and supply chains. To achieve these stated goals, the U.S. and Japan should:

  • Discuss current and anticipated cyber regulation, balancing the need for safety and innovation. Where possible, assist in realizing harmonization of regulation and standards to generate cross-border value creation.

  • Build cyber capacity and resilience, in part by leveraging strong public-private partnerships, including a voluntary, risk-based approach, and internationally-recognized standards (e.g., ISO 27000 series and the NIST Cybersecurity Framework) to counter the growing threat of foreign adversaries, who are increasingly using both cloud and AI as force multipliers.

  • Rapidly increase the use of cloud and AI as essential enablers of cybersecurity capabilities and capacity building to counter increasingly advanced threat actors.

  • Enable the rapid sharing of cybersecurity vulnerability and threat information between countries and critical industry.

4. Conclusion

• The environment surrounding the digital economy in the U.S. and Japan is undergoing major changes. The Japanese and U.S. industries will continue to work closely together to make sensible policy recommendations to both governments and encourage them to pursue an agenda that supports the trusted flows of data, fosters continued innovation, and promotes economic growth.