Trade and Investment Regime - Japan’s Perspective -

(2011) (1995) Source: Global Trade Atlas ～ Trade Share (2011) ～  TPP : 27% (Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, USA, Vietnam, Mexico, Canada)  RCEP : 47% (ASEAN, Australia, China, India, S. Korea, New Zealand)  JCK : 27%  EU : 11% Change of Japanese Trade 【 Export & Import 】 2 ASEAN-10 18% S. Korea 7% Other Asian Economies 14% USA 27% EU-27 16% Australia 2% Saudi Arabia 1% Others 11% China 5% China 21% ASEAN-10 15% S. Korea 6% Other Asian Economies 8% USA 13% EU-27 11% Australia 4% Saudi Arabia 3% Others 20%

機密性２ 3 RankCountry2011 1USA14,730 2UK14,125 3China12,649 -EU36,052 -ASEAN19,645 Japan’s Outward FDI Flow (2011) Source: JETRO (million dollar) Japan’s Outward Foreign Direct Investment Japan’s Outward FDI Stock

RCEP Under discussion by the governments ＮＺ USA Switzerland Took effect in Sep GCC Under negotiation GCC : Saudi Arabia, Kuwait, United Arab Emirates, Bahrain, Qatar, Oman EU Concluded scoping exercise Turkey Under joint study Republic of Korea Negotiation suspended Mongolia Under negotiations China-Japan-Korea Negotiation will be launched within this year Chile Took effect in Sep Mexico Took effect in Apr Revised in Apr Peru Took effect In Mar Canada Concurred with launch of negotiations Australia Under negotiation TPP Continue consultations toward participating with the countries concerned Malaysia Took effect in Jul Brunei Took effect in Jul Thailand Took effect in Nov Indonesia Took effect in Jul Singapore Took effect in Nov. 2002, revised in Sep Philippines Took effect in Dec Vietnam Took effect in Oct India Took effect in Aug ASEAN (AJCEP) Took effect in Dec Columbia Concurred with launch of negotiations Under Negotiation Under Study/discussion Took Effect/Signed 12 countries and 1 region 5 countries and 1 region 1 country and 3 regions 4 Development of Japan’s EPA/FTA Networks

5 Road to FTAAP

(1) WTO Information Technology Agreement (ITA)  WTO/ITA was established in 1997 to eliminate tariffs on IT-related products. Currently, 75 Members participate in the agreement covering 97% of the world trade of the products concerned.  Backed by industry’s request, Japan and the US led to launch the negotiation on the expansion of the product coverage. In May 2012, many Members supported starting the work of the ITA expansion.  In September 2012, APEC Leaders agreed to swiftly achieve a good outcome of the negotiations. Way Ahead - Concluding the negotiation swiftly. (2) A new agreement on Trade in Services (International Services Agreement : ISA)  A number of WTO members (currently 20 including Japan and the US) have been discussing a new agreement on Trade in Services toward high level of liberalization.  Being comprehensive in scope, including market access commitments that correspond as closely as possible to actual practice, providing opportunities for improved market access, and containing new and enhanced rules. Way Ahead - Aiming to start negotiations as early as possible. (3) The Anti-Counterfeiting Trade Agreement (ACTA)  The ACTA was inspired by Japan’s proposal to create a new international framework against counterfeit and pirated products.  8 countries including Japan and the US signed in Tokyo in October  Japan deposited the instrument of acceptance on October 2012 and became the first party to the ACTA. Way Ahead - Adding participants to the Agreement - Further development of the Agreement 6 Pluri-lateral Agreements Pluri-lateral Agreements have the potential for creating the basis of future multilateral system.

USA / Canada ① Gas production decreased in the U.S. Had been expected to increase its LNG import ② Since then, shale gas production increased rapidly LNG import became unnecessary ③ Shale gas production further increased Started to consider LNG export Qatar ① Increased LNG production capacity expecting LNG export to the U.S. ② Could not export to the U.S. Increased exports to Europe, instead ③ Increased export to Japan after the Earthquake. Russia ① Competing with Qatar in European markets ② Failed to agree with China on export price ③ Seeking to expand export to Japan after the Earthquake Japan Korea ① Demand in Japan increased after the Earthquake, ② Differential between LNG import prices in Japan/Korea and gas price in the West expanded China ① Increased natural gas imports from Turkmenistan ② Uncompromising on prices on imports from Russia EU ① Increased LNG import from Qatar ② Seeking new gas import routes bypassing Russia Turkmenistan ① Increased natural gas exports to China ② Seeking new gas export routes bypassing Russia Australia ① Supplying to Asian markets ② Expected to substantially increase its LNG supply capabilities Global Picture of Natural Gas Resource Trade