The U.S. Department of State and the Ministry of Economy, Trade and Industry of Japan released "The United States-Japan 2004 Investment Initiative Report" June 8, a report outlining progress made toward opening Japan to foreign direct investment.

In a media note issued the same day, the Department of State said the report applauds Japanese Prime Minister Junichiro Koizumi's "strong commitment to encouraging foreign direct investment (FDI) into Japan, notably his pledge to double FDI stocks in Japan within five years."

"Both governments agree that foreign investment is a catalyst for economic growth in both Japan and the United States -- creating jobs, transferring technology, reviving corporations, and supplying risk capital," the State Department said.

The Investment Initiative is part of the U.S.-Japan Economic Partnership for Growth, established by President Bush and Prime Minister Koizumi in June 2001 to support economic revitalization in the two countries. It is chaired by U.S. Under Secretary of State for Economic, Business, and Agricultural Affairs Alan Larson and the vice-minister for international affairs of the Japanese Ministry for Economy, Trade, and Industry, Tadakatsu Sano.

U.S. DEPARTMENT OF STATE
Office of the Spokesman
June 8, 2004

Media Note

U.S.-Japan Investment Initiative 2004 Report
Stresses Progress on Opening Japan to Foreign Investment

The U.S. Department of State and the Ministry of Economy, Trade and Industry of Japan released today the annual report prepared for President Bush and Prime Minister Koizumi, who are meeting in Sea Island, Georgia. The United States-Japan 2004 Investment Initiative Report outlines the continued commitment of the Japanese Government to take concrete steps to reduce barriers to foreign direct investment in Japan.

The report applauds Prime Minister Koizumi's strong commitment to encouraging foreign direct investment (FDI) into Japan, notably his pledge to double FDI stocks in Japan within five years. Both governments agree that foreign investment is a catalyst for economic growth in both Japan and the United States -- creating jobs, transferring technology, reviving corporations, and supplying risk capital. As of 2001, Japanese-owned firms in the U.S. (not counting banks) employed almost 800,000 Americans. In that same year, there were over 700 American-owned firms in Japan (not counting banks), employing 500,000 Japanese workers. It also helps build deeper political and social understanding between the two countries.

The report documents the Initiative's success in promoting Japanese legislative changes to allow foreign companies greater use of merger and acquisition techniques. The United States will continue to work to increase business opportunities for U.S. companies seeking to merge with or acquire firms in Japan by ensuring that they are treated in the same way as Japanese corporations.

The report stresses the demographic transformation under way in Japan and the need to ease restrictions on investment in educational and medical services to allow Japan to better face these changes. Japan is now studying recommendations that if adopted could significantly ease entry for foreign universities, and has just passed legislation allowing certain advanced medical treatments to be provided on a for-profit basis in the context of Japan's "Special Zones for Structural Reform" program.

Both governments agree on the importance of public perceptions and conducted several outreach efforts in Japan and the United States to provide the public -- including our business sectors -- with information on the investment climate. U.S. and Japanese private sector executives worked closely with government participants in Investment Initiative meetings providing valuable insights into the investment marketplace.

Under Secretary of State for Economic, Business, and Agricultural Affairs Alan Larson and Japanese Ministry for Economy, Trade, and Industry Vice Minister for International Affairs Tadakatsu Sano chair the Investment Initiative, which is part of the U.S.-Japan Economic Partnership for Growth (EPG). President Bush and Prime Minister Koizumi launched the EPG in June 2001 to support economic renewal and revitalization in both Japan and the United States.