The outbreak of COVID-19 in 2019 caused havoc in many countries worldwide, and it has continued to have a major impact on the business community. The Japanese railways industry has seen a decline in revenues due to the decline in passenger traffic, as the movement of people has been recovering but still much lower than the movement before COVID in terms of the commuting to office and school as well as the travelling especially inbound tourists. With this in mind, the EBC Railways Committee is keenly aware of the domestic market while considering the post-corona, and European manufacturers and Japanese railways operators are both committed to overcoming the difficulties and aiming for mutual prosperity.
On the other hand, Japanese railways manufacturers and railways operators face the reality of decreasing population, limiting the growth of their businesses and decreasing human resources for the operations and maintenances. Promoting the globalisation of business amid such challenges, expanding the footprint and offering railways vehicles produced in the region at competitive prices rather than producing and exporting from Japan are the only opportunities for further growth. In this respect, Japan’s railways can also be globalised, just as Japan’s automobiles industry succeeded in globalising in the previous century. Traditional Japanese railways suppliers, however, still lack the know-how, international experience, and production bases in foreign markets and experience with international standards to fully and cost-effectively support this stage of globalisation. EU suppliers are known for their global footprint, cutting-edge technology, and high quality standards. As a result, these suppliers can be the best partners to ensure that the Japanese railways industry globalises in a competitive environment and that each company grows in the future.
As global warming progresses, the suspension of railway infrastructure due to extreme weather phenomena is not only a problem in Japan, but also a global problem including the EU. In particular, knowledge and know-how leading to sustainable railway projects and CO2 emissions reduction should be shared between the EU and Japan.
Just as Japanese manufacturers need European expertise in a global competitive market, the EBC believes that the domestic market would also benefit from higher penetration of advanced European products and services. The aforementioned global expertise and references provide a good basis for continuing to deepen cooperation between the European Union’s railways technology companies and Japanese railways companies looking for Win-Win opportunities.
The EBC appreciates the efforts of both the European Commission and Japanese ministries at the conclusion of the EU-Japan EPA, which extend not only to technical work to align technical requirements including testing methods, and acceptance of certifications based on international standards, but also to local governments to which public procurement regulations will apply.
The implementation of the EU-Japan EPA was successful. We believe, however, that efforts should not stop with the agreement. It will be vital to further harmonise regulations and standards, and to eliminate double certification and testing to make it easier for European companies to do business and invest in Japan, and vice versa. The EBC furthermore hopes that the committee on technical rules set up during the EPA negotiations will continue its work to harmonise and achieve mutual recognition of standards and approvals.
On the same note, the EBC believes that the Japanese market would benefit from a national testing and certification scheme which should be used by all operators. The goal of the conformity assessment scheme should not be to limit differences in performance requirements where operators might have different requests and demands. The scheme would rather focus on safety which should be the same for all operators in Japan. It would give the authorities a better oversight on what safety protocols are used when it comes to railway related systems and equipment. Furthermore, this would remove the need to perform an assessment including testing to be repeated and would be beneficial to all operators and suppliers in Japan, whether they are foreign or domestic. The EBC believes that the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) together with Japanese operators should take a greater role to achieve this.
Key issues and recommendations
Mr. Shigetoshi Kawahara
c/o European Business Council in Japan (EBC)
Toranomon Hills Business Tower 15F
Minato-ku, Tokyo 105-6415
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