Policy Radar

Policy Radar April 2019

Beginning of a New Era

The Current Diet session will last until June 26th, 2019, which will include the change of an era (from Heisei to Reiwa) and the Imperial ascension. Two days later, the G20 will convene in Osaka.

Timeline for Major Upcoming Political Events
Timeline for Major Upcoming Political Events 2019

Data and Antitrust Law

Revision of the Data Protection Law

In an effort to modernize, the Japanese government will revise the current data protection law during the next regular Diet session (in 2020). Under the current law, even though individuals are able to stop companies from using their information under certain criteria, it has largely allowed companies to exploit private data. The Personal Information Protection Commission is considering statutes that would allow consumers control of how their information is handled by companies. Since the Japanese government is pursuing a free data zone with the European Union, it would require having stricter laws allowing customers to restrict companies using their data to send emails and the possibility of rescinding previously-handled private information.

Government plans periodic review of major tech companies

The Japanese cabinet has been mounting efforts to prevent major tech companies from taking advantage of SMEs in their partnering alliances requesting regular reviews from them. This will allow the government to inspect the practices of major tech players through the antitrust law on e-commerce websites, apps and platforms.

Telecommunications and Internet

Government approves plan to launch 5G wireless networks

On April 10th, the Japanese government finally approved plans to build 5G wireless networks across the country within a span of 5 years with an investment of JPY1.6 trillion. Among the criteria established by the government, they also announced that providers will be able to start their services in all prefectures within two years time and they plan to have base stations in at least half of the government-designated 4,500 blocks within the country. This reflects the Ministry of Internal Affairs and Communications’ efforts to build 5G infrastructure, not just in the profit-rich metropolitan areas, but also in rural areas.

The four providers selected by the government to begin this service in 2020 are Softbank, KDDI, Rakuten, and Docomo (the government has also been pressuring these companies to cut their service rates). Both the US and South Korea have now initialized their 5G coverage, offering a 100-fold speed from 4G and allowing for a bigger role of A.I. in the telecommunications infrastructure. The government is already thinking of how to promote a bigger role of 5G within medical and healthcare systems and will likely formalize a plan soon after feedback from the public and private sectors is received.

Climate Change

Government panel reveals intention to cut greenhouse emissions to zero

A government panel revealed that it has plans to draft a long-term climate change strategy (based on Japan’s proposal) before it heads into the Osaka G20 summit. The expert-led panel has highlighted the need for a more radical strategy of cutting greenhouse emissions to zero in 2050, overturning the original aim of slashing Co2 emissions by 80% by 2050. This more closely aligns with the goals of the Paris Agreement (which seek to maintain the rise of global temperatures below 2ºC).

The panel, which Prime Minister Abe attended alongside professors and the private sector, called for the further investment and development in renewables and to pull-back from traditional energy sources (like coal). Furthermore, the government is set to release in early May a new set of standards concerning the emissions by next-generation vehicles, previously categorized as ‘zero-emission’. It is reported that the new regulations will take into account the amount of carbon footprint that is used to generate power within the car.

Consumption Tax

Cabinet to continue with tax hike in October as originally planned

A close aide to Abe, senior LDP lawmaker Koichi Hagiuda, revealed that the government was considering to delay the consumption tax hike depending on key economic indicators for June by the Japan Central Bank (released 1st July). However, cabinet ministers, both Finance Minister Taro Aso and Cabinet Chief Secretary Yoshihide Suga, were fast to point out that the government will continue with its “consistent stance” to increase the tax rate from 8 to 10% in October.

This consumption tax hike has already been postponed twice, when the government delayed from October 2015 to April 2017, and then from April 2017 to October this year. The OECD has urged Japan multiple times to continue increasing tax rates to meet western equivalents, in order to be able to reach its goal of a fiscal surplus by 2025 and remain “fiscally sustainable”. They also pushed for Japan to adopt more flexible labor and wage system reforms.

Trade Agreements

U.S. and Japan trade negotiations begin with emphasis on agricultural products

Negotiations between the U.S. and Japan on a new trade deal started on the 16th of April. Trade will be the main focus of PM Abe’s visit in Washington D.C on the 26th of April. Moreover, President Trump will be the first foreign head of state to meet with the newly ascended emperor. The U.S. is determined to lower their trade deficit to Japan and hopes to lower tariffs on American farm products (i.e. beef products to be lowered tariffs), as well as include a chapter on digital trade in their future agreement.

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