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Policy Proposals  Asia and Oceania The 6th Asian Business Summit Joint Statement

July 13, 2015

On July 13, 2015, 13 business organizations from 11 Asian Economies converged at Keidanren, Tokyo to hold the 6th Asian Business Summit. The leaders discussed the major challenges for Asian economies in view of the emerging global economic realities, and came up with a Joint Statement. The delegates agreed to play an active role in realizing the goals laid down at the Summit and to provide actionable inputs to the policy makers of their respective Economies. The Joint Statement reflects the expectations and aspirations of the Asian business community, and delineates the future role of the private sector in sustaining Asia's economic dynamism.

1. Regional Economic Integration

2015 is an epoch making year since the establishment of the ASEAN Economic Community (AEC) offers a momentum for formation of the Free Trade Area of the Asia-Pacific (FTAAP). The Summit urges the Leaders of each Economy to press forward with the ongoing FTA/EPA negotiations.

In order to achieve win-win, FTAs and EPAs should be comprehensive covering major sectors. Reduction of tariffs (including gradual reduction) on imported goods including parts and components would lower the price of the final product and thereby strengthen the competitiveness of the value chain as a whole. Liberalization of trade in services and investment would not only benefit foreign investors but will also benefit the hosting economies by bringing capital, new technology and creating employment. Ensuring appropriate protection of intellectual properties and guaranteeing remittance of loyalties would offer confidence to investors resulting in increased technology transfer to hosting economies. Improved business environment such as transparent domestic regulations and prompt administrative procedures would be applied equally to both domestic and foreign companies.

The Summit reiterates that EPAs and FTAs should not be exclusive. Any Economy that did not participate in the negotiations at the outset should be allowed to join subsequently, subject to terms and conditions that would be agreed with all other participants.

In addition, the Summit calls for Members of the World Trade Organization (WTO) to ratify the WTO Trade Facilitation Agreement (TFA) and simultaneously make meaningful progress on issues agreed at WTO Bali Ministerial in December 2013. Balanced implementation of the Bali Agreement will help WTO members move closer to Doha Round conclusion.

2. Human Resources

In order for the Asian Region to achieve growth not only through production and consumption, but also as centers of research and development, it is necessary to create an environment where high value added products and new business models can be created through innovation. To this end, an environment should be created where highly skilled professionals, regardless of nationality, can freely interact while resources are distributed to ensure progress of research and development as well as development of human resources.

To minimize the adverse effects resulting from demographic change, the Summit reiterates the necessity of facilitating the trans-border movement of natural persons. Special attention should be given to medical, care-giving, agriculture and construction sectors in which some of the Asian Economies face shortage of workforce.

3. Infrastructure

For the sustainable and stable growth of Asia, further development of infrastructure is required. Enhancing connectivity within the Region by providing infrastructure will attract foreign direct investment, facilitate industrial accumulation and establish basic foundations for resource and energy exploitation.

Enormous amount of funds are required for fundamental infrastructure development. Therefore, creation of packages for utilizing public funds and private funds is needed. Basic infrastructure is developed with public funds while the private sector can handle those areas that can be managed on a commercial basis. Funding and consultation by international organizations, as well as promotion of the Asian Bond Markets Initiatives (ABMI) are essential in meeting the diversifying financial demands. The Summit will work from private-sector standpoints and take active part in Public-Private Partnerships (PPPs) to promote infrastructure development in terms of both quality and quantity.

There is also a pressing need for appropriate design and operation of legal systems in host economies. This includes partnership with national companies on infrastructure development, free establishment of SPCs with substance, deregulation of trans-border movement of engineers and skilled workers, and transparency of government procurement procedures. Such measures would promote investment in infrastructure development by giving confidence to the private sectors.

4. Environment

Addressing climate change is a path that cannot be avoided when attempting to achieve a sustainable growth. Negotiations are currently under way aiming at a positive outcome at the 21th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 21). Asia accounts for more than 40% of global greenhouse gas emissions, therefore, it is important that we play an active role in this regard.

The Summit is of the view that the outcomes of COP 21 should be fair, effective and flexible so as to ensure economic growth while encouraging efforts towards prevention of global warming. It should be noted that enhancing energy efficiency is to make effective utilization of limited resources, and leads not only to energy security assurance and cost reductions, but also strikes a balance with economic growth and environmental protection. Private sector is committed for collaborating with the government in pursuing the energy efficiency policy by disseminating environmentally friendly technologies such as highly efficient coal-fired power generation, smart grid, light rail transit, eco-houses and eco-buildings. Schemes such as public funding, export credits, bilateral offsetting mechanism, etc. would help implementing the above efforts.

It is also important that each Economy cooperate on cross-border issues such as adaptation, counter disaster measures, water supply acquisition, waste recycling, and bio-diversity.

5. Security Issues

Along with economic development, energy and natural resources are getting scarce. The Summit agrees to cooperate in developing system and method of interchanging energy among the participating Economies as well as explore possibilities for joint exploitation and refinement of natural resources. It is also important to promote investment and technology transfer aimed at adding value to the available resources. In the meanwhile, export of energy and natural resources must be facilitated in a WTO compatible manner. The Summit also urges Leaders of the each Economy to cooperate in securing the energy and natural resources transport.

World population growth may result in supply-demand tightness of food in the medium and long-run. From the viewpoint of food security, the Summit urges the Leaders of each Economy, by utilizing public funds, to promote research and technical cooperation towards sustainable enhancement of food production. Private sector could contribute by disseminating agricultural, livestock farming and aquacultural technologies and upgrading transportation systems and thereby enhancing food supply chains that are commercially viable.

Today, private sectors doing business abroad are not free from the threat of terrorism. The business sector is committed to fulfilling its social responsibility towards building a safe and reliable society. The Summit strongly opposes any act of terrorism and urges each Economy to undertake every possible measure to combat terrorism and to ensure security of its nationals, while sharing information with private sectors as regards security.

Regional Affairs