Press Conference by Minister Seko (excerpted version)

*Note: This is a provisional translation for reference purpose only.

9:26 - 9:36 a.m.
Tuesday, April 16, 2019
Press Conference Room, METI

Question-and-Answer Session

Japan Display Inc.

Q: As for JDI, INCJ has been supporting the reconstruction of business, but it will be under the umbrella of a corporate alliance between China and Taiwan.
Would you tell us your candid views, including your evaluation of the decisions made at the time when the government decided to provide them with assistance as a national policy, and also your thoughts on the concerns over technology leakage?

A: JDI announced on December 12 that they will receive financial support from the Taiwan-China alliance, which will become the largest shareholder.
At the beginning of 2012, when JDI was founded, INCJ concentrated Japan's advanced technological capabilities in order to strengthen its competitiveness in the global markets, particularly for LCD panels for mobile devices, which were expected to grow rapidly at that time.
Since the listing of JDI in 2014, the display market has experienced significant investment competition, which resulted in changes in the business environment including extremely severe price competition.
As a result, JDI's sales and operating income declined, and its share price was sluggish.
Under these circumstances, JDI and INCJ clarified their strategies, under the medium-term management plan of December 2016, to find global partners to secure the funds required for mass-production investments, rather than pursuing business development on a stand-alone basis. Since then, JDI has continued to examine ways to secure global partners.
I recognize that this partnership with the Taiwan-China alliance is in line with this strategy. I believe it is important for all parties concerned to make their utmost efforts to ensure the stability of management.
Regarding technology leakage, the current technology that JDI has put into practical use and sold is already being owned and put into use by competitors in other countries, and the mobile market, which is JDI’s primary market, is saturated. I believe that partnership with companies in other countries could be a viable strategy.
Regarding concerns over the leakage of sensitive technologies related to national security, I would like to refrain from making comments on individual cases. In general terms, it is obligatory under the Foreign Exchange and Foreign Trade Act for Japanese companies with sensitive technologies to notify in advance the merger with foreign entities, and the Japanese government conducts strict examinations from the viewpoint of national security.

WTO Appellate Body Ruling on Import Restrictive Measures by the Republic of Korea

Q: Last week, the WTO Appellate Body dismissed the panel's decision on the import bans that the Republic of Korea imposes on Japanese fishery products.
If it were in Japan, such a case would be referred back to the panel, but in the WTO, it results in making a fresh start and nothing is settled. Would you tell us what your thoughts are on this?

 

A: It is absolutely regrettable that Japan's assertion was not accepted at the Appellate Body.
I will continue to call on various channels in the Republic of Korea and other countries and regions that have taken restrictive measures to abolish such measures.
As for the outcome of this dispute settlement, METI is currently analyzing in cooperation with other relevant ministries and agencies what factors led to such a decision. Based on the results of the analysis, the Japanese government intends to take appropriate measures.

Q: Do you think this will have any impact on WTO reform, which Japan is currently working on?

A: We must first identify and analyze why such a decision was reached. Then, depending on what we find, the results may or may not have an impact on the WTO reform. I would like to refrain from making any predictive comment at this time.

Nissan-Renault Alliance

Q: I would like to ask about the management integration of Nissan and Renault.
Yesterday, you stated that, in general terms, it is possible to exchange opinions with the French government. I understand that the Japanese government has been taking the position of not being involved in private company issues. But in general terms, could the Government express its understanding at an informal exchange of opinions? The French government is the largest shareholder of Renault, while the Japanese government is not a shareholder. Does this mean that the scope of involvement of the two governments is different? Are there any difficulties for the Japanese government in this regard?

A: Regarding exchanges with the French government, since this is an ongoing diplomatic issue, I would like to refrain from making comments at this time. In general terms, it is natural to exchange opinions and share information with the French government.
At any rate, as I have been consistently stating, the Japanese government believes that it is important to proceed with discussions on concrete measures to maintain and strengthen the Nissan-Renault Alliance in a manner that fully satisfies the parties concerned. My belief in this point remains unchanged.

OECD Economic Review Report and the meeting with the Secretary-General Angel Gurria

Q: Yesterday, the OECD announced its Economic Review Report on Japan. It states that Japan has strengthened its economic growth, but the consumption tax should be raised to between 20% and 26%, due to considerable challenges including the aging population. As you will hold a meeting with the Secretary-General Angel Gurria this afternoon, would you tell us what your thoughts are on the report, and what you will discuss at the meeting?

A: I recognize that OECD has made such calculations, but I believe that the reality of whether or not the consumption tax rate can be raised to 26% is another matter. As this is not under the jurisdiction of METI, I would like to refrain from making comments.
I will meet with Secretary-General Angel Gurria today. Rather than discussing the consumption tax, I would like to exchange opinions on the OECD Ministerial Council Meeting to be held in late May, so that it and the G20, which Japan serves as chair, can be well coordinated with each other.
Specifically, I would like to frankly discuss initiatives to promote free trade, such as WTO reform, and governance in the digital economy era.

Negotiations for Japan-US Trade Agreement on Goods

Q: The first round of negotiations for TAG has started. Prior to the negotiations, the US Secretary of the Treasury Mnuchin requested again to add an exchange provision. Would you tell us what your thoughts are on the negotiations as a Cabinet member?

A: Since the negotiations have just started, I hope they will have constructive discussions, in line with the content of the Japan-US Joint Statement of September last year, that will promote bilateral trade expansion and benefit both countries.
I understand that Minister Motegi will not speak on the details of the negotiations until the final conclusion of all the negotiations. I have heard, at least, that it has been confirmed that the negotiations will be conducted in accordance with the Joint Statement.