2020 New Year’s Remarks by Chairman NAKAMURA Kuniharu

January 8, 2020

Happy New Year.

Looking back over the past year, a new emperor has acceded to the imperial throne, marking the end of the Heisei era and the beginning of the Reiwa era. The solemn enthronement ceremony, to which many foreign dignitaries from around the world were invited, impressively showcased our traditions underpinned by our long history, while heralding the dawn of a new era.

In the landmark year of 2019, Japan hosted a series of major international events including the G20 Summit and the seventh Tokyo International Conference on African Development (TICAD7). It was a year when the Japanese government displayed outstanding leadership and made Japan a key presence, not only in chairing the above mentioned meetings, but also in trade talks. Ensuing the successful agreement on TPP 11 (CPTPP) and the Japan-EU Economic Partnership Agreement, the government settled negotiations on a Japan-US Trade Agreement and a Japan-US Digital Trade Agreement, and managed to swiftly bring these deals into effect. In the sports arena, too, memories are still fresh of Japan’s first hosting of the Rugby World Cup, a splendid event where the stunning performance of our national team captured many hearts.

In business sector around the world, advances in technologies utilizing artificial intelligence and the internet of things triggered various changes in existing industries, and business models sometimes collectively referred to as the Fourth Industrial Revolution . While these promising areas of new growth appeared, tensions seemed to heighten further in the international situation. Uncertainties increased in international trade due to factors including US-China trade friction, Brexit, and issues between Japan and South Korea, and anxiety over economic prospects continued to weigh heavily on corporate activity. The US and China finally reached agreement on a Phase one trade deal at the end of the year, and the result of the UK election dispelled immediate uncertainties over Brexit, but both situations remain unpredictable.

Looking ahead to the coming year, regardless of the outcome of the US presidential election due to take place in the fall, it is widely agreed that competition is likely to continue between the world’s two economic superpowers, the US and China, a spreading the area of contest from trade to the security domain. US-China confrontation is already taking on a different dimension from trade friction, and is starting to impact on worldwide supply chains, casting a shadow over the global economy. I hope that fears of global economic volatility will be allayed by minimizing the negative effects of politics on the economy. The US presidential election will also have a major impact on Japan-US relations as well as geopolitical risks in the Middle East and East Asia, G7 unity, and global politics and economics. However, regardless of the outcome of US-China relations and the US presidential election, Japan must continue its steady efforts to promote rule-based free and fair trade and investment as well as broader data flows. In the short term, I eagerly wish to see the Regional Comprehensive Economic Partnership (RCEP), which was on the verge of agreement last year, settled in a form that includes India, creating the world’s largest free trade zone in Asia.

In parallel with expansion of free trade agreements, securing international agreements as well as rules and regulations to support free and fair trade and investment activities by Japanese companies is also crucial. I am delighted that the Japan-China Social Security Agreement, which the JFTC has long called for, is now in effect. We will continue to put together industry views on matters such as appropriate domestic and international tax systems, promotion of the conclusion of social security agreements and investment agreements, efficient logistics , and security trade controls, and to convey such views to the government and other relevant organizations.

Amid the recent trend for international organizations, governments, and enterprises to work together in addressing UN Sustainable Development Goals (SDGs), private sectors have again been called upon to make a commitment to problem-solving. The 17 goals advocated by the SDGs have a high degree of affinity with the broad business domain of Shosha (trading companies), and the JFTC has launched a special research project on the theme of “Shosha initiatives to achieve SDGs”. We are examining measures to further accelerate efforts in our member companies and compiling case studies of successful initiatives. Moreover, we regard global environmental issues as a priority long-term challenge that will affect future generations, and through the business activities of our member companies we are addressing a range of themes including the building of a low-carbon society, sustainable utilization of energy, water and other resources, and preservation of biodiversity in the aim of achieving sustainable growth that balances socio-economic development with preservation of the global environment. Through these activities, the JFTC will make every effort to be capable of contributing to the achievement of a prosperous world.

On recent visits to regional cities in Japan, I have frequently heard SME managers talking about difficulties caused by labor shortages. In that context, this year I would like to continue our focus on expanding our Action for a Better International Community (ABIC) activities. ABIC is a non-profit organization established and supported by the JFTC, and this year it will celebrate its 20th anniversary. ABIC has nearly 3,000 registered members, chiefly Shosha retirees, who use global business skills amassed over many years to respond to an array of needs in society. It is a veritable treasure trove of highly-skilled personnel with an extensive track record that includes providing management advice to regional SMEs struggling with business succession and labor shortages, dispatching human resource needed for international business expansion, and conducting Japanese-language education for foreign residents of Japan. In a new initiative, it has teamed up with the Japan Chamber of Commerce and Industry to gain opportunities to explain ABIC activities at major meetings and build platforms for matching ABIC members with the needs of regional chambers of commerce and industry and their member companies. In keeping with the government’s guiding principle of securing employment opportunities for people up to the age of 70 and to contribute to regional revitalization, we intend to publicize ABIC activities to as many people as possible and further broaden ABIC’s sphere of engagement.

The JFTC’s catch phrase is “Shaping the future toward a prosperous world.” This sentiment embodies the Shosha industry’s ideas on bringing society various new technologies and business models, and developing them in ways that will help create a sustainable and prosperous future that nobody has seen or experienced before. I hope that our activities in 2020 will go some way toward bringing these ideas to fruition.

The year of the Tokyo Olympic and Paralympic Games has arrived. I hope that this event will bring us many shared moments of excitement that will live on in our memories. I would like to conclude with the sincere wish that 2020 will be a productive year for you all.