Executives' Comments Press Conferences
Chairman Sakakibara's Statements and Comments
at His Press Conference
New Trump Administration
The inauguration speech of the newly elected President Trump made it clear that he is extremely eager to promote an "America First" approach and break with the previous administration's policies to embark in a new direction. The specific details of his policies have not yet been set out, but overall they are aimed at promoting industry. Major tax cuts, deregulation, and investment in infrastructure are policies designed to strengthen the US economy; if the US economy strengthens and becomes a driver for the world economy, this would also provide a boost for the Japanese economy, accelerating its recovery. We will be watching closely to see what kind of policies are announced, and how they progress.
In terms of trade policy, however, President Trump stated in his inauguration speech that the protection of US industry is the key to achieving great prosperity and strength. If we take this literally, we cannot help but feel concerned. Protecting domestic industry is not the way to achieve economic growth, progress, or change: industries protected by the government may get weaker, but they do not get stronger. Although President Trump has officially declared his country's withdrawal from the Trans-Pacific Partnership (TPP), therefore, we need him to understand that the TPP has great significance both strategically and economically, and it will be a source of prosperity and stability for the Asia-Pacific region. The Japanese business community will not give up on TPP. We will work with the Japanese government to appeal to President Trump, encouraging him to change his mind.
President Trump has also indicated a policy of reviewing NAFTA. A large number of Japanese companies have made huge investments in Mexico and built value chains in North America. Although there will be no direct effect on the Japanese economy immediately, depending on the direction this NAFTA review takes, it could eventually have a major impact on Japanese companies, and may lead them to change their strategies. There are numerous issues to be addressed, including the relationship with the World Trade Organization, so we will be keeping a close watch on the negotiations among the member nations—the United States, Canada, and Mexico.
Meanwhile, the Japanese business community will be addressing these moves toward protectionism by calling on the United States to work toward a free and open framework for trading and commerce. It is important to help President Trump understand that Japanese companies are integrating into US society, building interdependent relationships, and contributing greatly to economic development. Keidanren has sent missions to the United States two consecutive years, and in 2015 we held talks with Vice President Pence, then the governor of Indiana. We will use the relationships we have developed thus far to continue engaging with key people in the Trump administration. I also want to send another mission this year—once the new administration's policies and key people have become clear—to exchange opinions with leading government figures at the federal and state levels, as well as with the US business community.
The recent demonstrations witnessed in the United States are to some extent probably just the aftershocks of an intensely fought election. However, now that the new president has taken office, I think he will use his leadership to work toward social unity. I hope that measures to achieve unity will be set out, leading to the healing of divisions.
Spring Labor-Management Wage Dialogues
At the forum on labor-management wage dialogues held today, I called for companies that have expanded their earnings, and those with earnings improving consistently over the medium term, to actively consider increasing wages in terms of annual incomes. I am hoping that from now on labor and management at companies will hold talks in good faith, resulting in continued momentum toward increased wages. That should lead to a virtuous economic cycle that will start to make a real difference for a large number of people. I hope that these labor-management talks at companies will result in wage increases at the same level as last year, or higher. Nevertheless, how companies set about increasing wages, including pay scale increases, will depend on their individual circumstances—specifically their ability to pay higher wages, their business performance, and their labor-management negotiations. I indicated my thoughts with regard to wage increases in the 2017 Report of the Committee on Management and Labor Policy; I hope that companies will heed what I have said and approach their negotiations constructively.
Working Style Reform
Reforming working styles is a major topic of concern for Japan, and reducing long working hours and achieving equal pay for equal work are central to endeavors in this regard. In terms of reducing long working hours, the existing "36 Agreement" permits unrestricted overtime work provided it is agreed between labor and management. This needs to be changed, and Keidanren acknowledges that an upper limit should be set. However, continuity of business is also an important consideration, in addition to which we must take into account different types of work, seasonal variations in workflow according to industry, and the characteristics of individual industries. Working style reform needs to be examined from the perspectives of both protecting employee health and ensuring continuity of business operations.
Turning to the issue of equal pay for equal work, the key point is to rectify unjustifiable disparities between the treatment of full-time employees and of non-regular workers within the same company. Keidanren is calling on companies to improve their treatment of non-regular workers and switch such workers to regular employment, and I expect that they will make even greater efforts in that regard going forward. One reason Japan's virtuous economic cycle is not as strong as it could be is stagnant consumer spending. A factor behind this is the fact that people in their 30s and 40s, who should be at the peak of their working lives, are involuntarily employed as non-regular workers rather than full-time employees. If progress is made in improving the treatment of non-regular workers, this is expected to revive spending, which in turn should lead to a virtuous economic cycle.