Japan’s experience and perspectives towards international investment frameworks: Regional cooperation

with ASEAN countries

Hajime MatsumuraDeputy Director, Ministry of Foreign Affairs, Japan

Paris, 15 December 2010

　 Japan’s regional trade share (Year 2009)

ＡＳＥＡＮ14.0%

China20.5%

Korea6.1%

Taiwan4.8%

Hong Kong2.9%

AustraliaNZ

4.5%

USA13.5%

ＥＵ11.6%

Middle East10.1%

Others12.0%

　　 Japan’s trade with ASEAN in last decade (Trillion Yen)

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009-1

0

1

2

3

4

5

6

7

8

9

10

11

12

Export

Import

Trade Balance

　 Japan’s Investment in East Asia Countries

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009△1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

6,587

6,492

327

1,014

1,522

ＡＳＥＡＮ China

Taiwan Korea

Hong Kong

(Hundred Million Yen)

　 Japan’s FDI Stock in East Asian Countries

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

10,000

20,000

30,000

40,000

50,000

60,000

70,000

ＡＳＥＡＮ

China

Taiwan

Korea

Honkong

(Hundred Million Yen)

　　 Japan’s FDI Stock in Region (Year 2009) (total 70 .0 trillion Yen)ＡＳＥＡＮ ; 10.2%

China; 7.4% Taiwan; 1.3%

Korea; 1.7%

Honkong; 1.8%

USA; 31.2%

ＥＵ ; 23.6%

Latin America; 13.4%

Middle East; 0.6%Others; 8.8%

　　　 FDI in Japan ( 2009)

2002 2003 2004 2005 2006 2007 2008 2009-5

5

15

(Billion US $)

ASEAN ＥＵ USA

KOR TWN HKG

CHN

Japan’s BITs and EPAs with ASEAN Countries

Bilateral Investment AgreementsVietnam(2003), Cambodia(2007), Laos(2008)

Bilateral Economic Partnership AgreementsSingapore（2002） Malaysia（2005）Thailand（2007） The Philippines（2006）Brunei（2007） Indonesia（2007） Vietnam(2008)

Multilateral EPA ASEAN(2008)

Overview of

Japan’s Investment Agreements

Bilateral Investment Agreements ：Protection Type 1 Egypt(1977) 　　 2 Sri Lanka(1982) 3 China （ 1988 ） 　　 4 Turkey （ 1992 ） 5 Hong Kong （ 1997 ） 6 Pakistan （ 1998 ） 7 Bangladesh （ 1998 ） 8 Russia （ 1998 ） 9 Mongolia （ 2001 ）

Protection + Liberalization type10 Korea （ 2002 ） 11 Vietnam （ 2003 ）12 Cambodia （ 2007 ） 13 Laos（ 2008 ）14 Uzbekistan （ 2008 ） 15 Peru（ 2008 ）

Under Negotiation16 Japan-China-Korea17 Saudi Arabia 18 Colombia19 Kazakhstan 20 Angola 21 Kuwait 22 Papua

New Guinea 23 Algeria ＥＰＡ /FTA including Investment chapter 1 Singapore （ 2002 ） 2 Mexico （ 2004 ） 3 Malaysia （ 2005 ） 4 Chile（ 2007 ） 5 Thailand （ 2007 ） 6 Brunei （ 2007 ） 7 Indonesia （ 2007 ） 8 The Philippines （ 2006 ） 9 ASEAN(2008) 10 Switzerland （ 2009 ）

Under Negotiation 11 India Concluded /To be signed 12 Peru Concluded/To be signed13 Australia14 GCC15 Korea (suspended) 　　　　　　　　

Japan’s Practice on Investment Agreements

Investment Protection

Investment Liberalization/ Promotion/Protection (after Japan-ROK Agreement 2002)

General Features of Japan’s Investment Agreements Protection Type

Liberalization Type

1 National treatment in the pre- establishment

phase

No Yes

2 Most-favored-Nation treatment

in the pre-establishment phase

Yes Yes

3 Prohibition of performance requirements (TRIMs + α)

No

Yes

4 National treatment in the post- establishment

phase

Yes Yes

5 Most-favored-Nation treatment

in the post-establishment phase

Yes Yes

6 Expropriation/Compensation Yes Yes

7 War and civil disturbance Yes Yes

8 Transfer of funds Yes Yes

9 Investor-State dispute settlement

Yes Yes

10 State-State dispute settlement

Yes Yes

11 Joint Committee No Yes

12 Reservation list No Yes

An Example of Reservation List

The Advantages of Japan’s Liberalization-type Agreements

Promote more investment ←National treatment in the pre-establishment phase,

Prohibition of performance requirements(TRIMs +α) Increase transparency of investment regulations ←Reservation

list Ensure follow-up of investment agreement enforcement ←Joint Committee

　　　Stimulate more economic activities & economic development in host country

　

Japan-ASEAN Comprehensive Economic Partnership Agreement

Japan’s first multilateral EPA

Accumulation of originating materials (Art.29)

→Strengthen production networks between Japan and ASEAN region

Investment (Art.51)Subcommittee on Investment : Continue to discuss to imporve investment environment through progressive liberalisation, promotion, facilitation and protection of investment.

Towards substantive outcomes in August in 2011 　

Article 29 Accumulation

Originating materials of a Party used in the production of a good in another Party shall be considered as originating materials of that Party where the working or processing of the good has taken place.

Image of Accumulation

D

market

E

B J

H

Bila

ter

al E

PA

Bila

ter

al EPA

C

Bila

ter

al EPA

A

I

G

material

Japan

Market

０％ tariff

MFN→0% tariff

Product

Thank you for your attention!