Press Conference by Minister Nishimura (Excerpt)

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

12:34-12:53 a.m.
Friday, December 16, 2022
Press Conference Room, METI Main Building

Opening Remarks

Visit to Hyogo

I would like to say two things at the start. First, I will visit Hyogo on the 18th. This time, I will visit Nippon Shokubai and Daicel, two globally competitive chemical companies that have manufacturing bases in Himeji City, Hyogo Prefecture.
At Nippon Shokubai, I will observe catalyst technology that efficiently extracts hydrogen from ammonia and purifies it. At Daicel, I will hear about a system referred to as the Daicel Method that efficiently controls production using IT based on digital transformation (DX). I hope to gain some insight to address the two major issues of GX and DX in chemical plants based on actual workplace conditions.

10,000 New Exporters Program

Second, we will start the 10,000 New Exporters Program, which I will make several comments about now. The depreciation of the yen is a great opportunity from the viewpoint of starting new exports. We will provide comprehensive, hands-on support for SMEs and regional companies that have never exported their products before so that they can seize this opportunity to begin doing so. Specifically, METI, JETRO, and the Organization for Small and Medium Enterprises and Regional Innovation will work together while collaborating with the Chambers of Commerce and Industry and the Commerce and Industry Associations on four points. The first is to encourage companies to try exporting their products for the first time; the second is to provide consultation from experts on the possibilities of exporting as well as various types of support afterwards; the third is to provide subsidies for developing products for export and promoting their sales, and we will provide up to 30 million yen in manufacturing subsidies and other support measures towards this; and the fourth is to provide comprehensive support such as matching with trading companies and helping open online stores on EC sites. We would like to encourage as many SMEs as possible to take advantage of the program. The secretariat will explain the details later.

Question-and-Answer Session

IPEF

Q: I have two questions.
The first one is about the IPEF meeting that concluded yesterday in Australia. There was progress in discussions on cooperation in supply chains and other areas based on the draft outcome document presented by the United States. Please tell us your observation on this meeting’s outcome and what you expect for future discussions. That is my first question.

A: As you pointed out, the first meeting of the IPEF negotiations was held in Brisbane, Australia. I heard that the participating countries held lively discussions on the four areas that were agreed to at the ministerial meeting held in September in Los Angeles: trade, supply chains, clean economy, and fair economy. Some of the discussions were based on the text. Japan considers IPEF to be extremely important from the viewpoint of the United States' involvement in the economic order in the Indo-Pacific region.
I have received a report that constructive contributions were made to the discussions at the meeting in Australia from the viewpoint of establishing both high-quality economic rules and meaningful economic cooperation with the 14 different participating countries.
Because the meeting is the first step toward the IPEF taking shape, I have heard that it was a meaningful meeting in which each country shared their concerns without reserve, thereby deepening mutual understanding, and leading to another ministerial meeting at some point.
I also personally exchanged views with related ministers when I traveled abroad, as well as on the phone and online. I will continue working closely with the ministers of the participating countries to achieve the new economic framework with both high-quality rules and inclusiveness.

Carbon Border Measures

Q: For my second question, the EU agreed in principle this week to introduce so-called border carbon tariffs, which are effectively tariffs on imports from countries with loose environmental regulations. Please tell us your thoughts on how this will affect Japanese companies or how the government will respond.

A: I understand that the European Parliament and EU member states reached a provisional agreement on the 13th regarding the so-called CBAM, or the Carbon Border Adjustment Mechanism, which the EU had been considering implementing.
Among other things, the agreement will add hydrogen and some downstream products such as screws and bolts to the sectors affected by the mechanism in addition to those in the initial draft, including steel, aluminum, cement, fertilizer, and electricity imports. However, the specific text has not been presented, and many points are unclear. It is expected that there will be a formal agreement on the Carbon Border Adjustment Mechanism based on discussions on the carbon emissions trading system, or ETS, and its reform. We will continue to collect information, analyze the effects on Japan, and continue dialogs with the EU to design a system in the future.
As you know, Japan will also compile a specific direction for carbon pricing by the end of this year. Repeating the concept, the framework encourages early initial investment for decarbonization in a competitive manner. We will impose a certain amount of burden that increases as the investment is delayed. We want to promote advance investment and design a system that will provide incentives for early investment. We do not think that the EU's mechanism will become effective immediately. It may rather take years depending upon further discussions. In the meantime, products from Japanese companies should be competitive and praised because of their low-carbon and decarbonized nature. We will advance efforts toward these objectives in Japan.
We have been holding dialogs with the EU on whether the EU's mechanism is consistent with the WTO framework, and whether it is a fair system. We will continue holding thorough dialogs.

Semiconductor Export Controls Against China

Q: Regarding export controls against China, you said during the previous press conference that you are communicating with the countries concerned, including the United States, in various forms. Please tell us if there have been any developments.

A: As I answered before, we are communicating and conducting various exchanges, and I also exchanged views with US Secretary of Commerce Raimondo earlier. However, I will refrain from answering your question, as they are diplomatic exchanges.
As you know, Japan has been conducting strict export controls in accordance with the Foreign Exchange and Foreign Trade Act and in cooperation with the international community. Based on this policy, we will continue to take appropriate measures while considering trends in regulations in other countries.