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Executives' Comments  Press Conferences Chairman Sakakibara's Statements and Comments
at His Press Conference

June 26, 2017

EU-Japan EPA Negotiations

For the past 10 years the business community has hoped and called for an economic partnership between Japan and the European Union, and advocated the swift conclusion of such an agreement. Both partners believe that an EU-Japan EPA will generate growth and create employment in Japan and the EU, and contribute to the formation of free, open, and rule-based international economic frameworks. Amid rising trends towards anti-globalization and protectionism, agreement on a large-scale, high-level, comprehensive EPA between Japan and the EU, which together account for a third of the global economy and worldwide trade, would carry great significance, and send a powerful positive message to the international community. Prime Minister Abe has declared his desire to meet with EU leaders at the Hamburg G20 summit in July in the aim of reaching general agreement. The business community also has high expectations that broad agreement will be reached next month.

Nuclear Energy Policy

In light of the S+3E policy (safety, energy security, economic efficiency, and environmental conservation), the current Basic Energy Plan positions nuclear power as an important source of base-load energy subject to the prerequisites of assuring safety and gaining the understanding of communities where nuclear power stations are located, and business leaders support this principle. I am aware that Toshiba is downsizing its nuclear business and South Korea is moving away from nuclear power generation, but these trends do not affect Japan's fundamental energy policy.

The Diet recently approved the Japan-India Civil Nuclear Cooperation Agreement, which is scheduled to take effect this summer. Stable energy supply is a key issue in achieving the sustainable development of business in India. The agreement is expected to facilitate introduction of advanced Japanese technologies and improve the energy situation in India. At a summit meeting, the leaders of Japan and India confirmed their shared goal of achieving a world without nuclear weapons, and this agreement creates a framework that considers nuclear disarmament and non-proliferation.

I have seen reports concerning President Moon Jae-in's announcement that South Korea will halt construction of new nuclear power plants and not extend the lifespan of existing plants. Nuclear energy currently accounts for fully 30% of South Korea's total power generation. Given this situation, I will monitor developments with interest to see what specific course of action is taken to exit nuclear power generation.

Cabinet Approval Ratings

It is now four-and-a-half years since the Abe administration took office in December 2012. During this time, the administration has enjoyed high approval ratings. The ruling party has won four national elections. This is evidence of popular support for Prime Minister Abe's management of the administration. The Abe administration has been one of the most stable governments in recent political history, but falling cabinet approval ratings and rising levels of disapproval are now becoming a pressing issue for the government. During the most recent Diet session, the administration may not have provided sufficient explanation to gain the understanding of the people. Perhaps high approval ratings also caused some overconfidence in the government and the ruling party. At a press conference following the end of the session, Prime Minister Abe candidly reflected on these points and pledged to restore the confidence of the people based on lessons learned during the most recent session. I hope that he will earnestly explain the government's position to the Japanese people.

Tokyo Olympic and Paralympic Games

The Tokyo Olympics and Paralympics are a little more than three years away. The business community has launched the All Japan Business Committee for the 2020 Olympics and Paralympics, and will offer comprehensive support for the games and engage in activities such as fostering opportunities for people to get involved in the run-up to 2020, creating an enduring legacy, promoting widespread participation in sports, backing parasports, shaping a barrier-free society, and sparking regional renaissance. The Olympics and Paralympics are expected to have a major economic impact. Achieving this impact is the role of the business community.

Corporate Governance

The Japanese Government's Council on Investments for the Future has discussed the role of corporate advisors from a corporate governance perspective. The importance of corporate advisors varies from one company to another. The key point is to disclose to shareholders the role and purpose of corporate advisors. It is not acceptable for the number of corporate advisors in a company to be unknown.

As corporate activity becomes increasingly globalized, consolidated subsidiaries are rising in number. Naturally, parent companies need to appropriately manage governance of their group members. Recently there have been examples of shortcomings in governance, but companies cannot simply claim they were unaware of such problems because they occurred at an overseas subsidiary. They should ensure rigorous governance.

Minimum Wage

A certain level of wage increases is required in order to create a virtuous economic cycle, but the fact remains that such increases place strain on management of small and medium-sized enterprises (SMEs). Conversely, in an environment of labor shortages, there is growing pressure for wage rises, especially at SMEs, and some increase in wages will be required to secure personnel. Bearing in mind this background, Keidanren will take part in discussion at the Central Minimum Wage Council to reach an appropriate conclusion.

Takata Bankruptcy

I understand that Takata Corporation made an independent decision to file for bankruptcy protection under Japan's Civil Rehabilitation Act in the aim of rebuilding its business. I hope that the company will swiftly get back on its feet. Airbags are a vital automotive component, and I urge all those involved to work smoothly together to avoid supply uncertainties and market turmoil.

Executives' Comments