Europe urges more reforms in financial services, telecoms

Japan needs to promote further regulatory reforms in sectors such as financial services and telecommunications to boost its economy and improve foreign firms’ access, a European business group in Japan said in a trade paper released Friday.

“While recognizing recent changes in the Japanese business environment, the report shows the need for a more dynamic regulatory reform program and for actions to eliminate the pervasive non-regulatory barriers to trade that still persist,” European Business Community Chairwoman Isabelle Hupperts told a news conference.

“Issues for the New Millennium — The EBC Report on the Japanese Business Environment” covers 26 sectors in “an attempt to identify and discuss unresolved issues affecting European trade and investment in Japan,” she said.

It urges Japan to make further improvements in areas such as deregulation, accounting practices and financial supervision, product approval processes and government procurement procedures.

On telecommunications, the EBC called for a sharp and immediate cut in interconnection fees that Nippon Telegraph and Telephone Corp. charges its competitors.

“Japanese interconnection rates remain substantially more expensive than best practice in Europe. This stifles competition by making it difficult for new entrants to compete with the dominant carrier,” the report says.

Japan plans to cut NTT’s access fees by 22.5 percent over four years, but the United States and the European Union have been calling for a sharper cut.

The report also recognizes positive trends in restructuring of the Japanese financial system but calls for more reform and transparency.

“One of the most serious problems facing the Japanese financial system is the continued existence of bad debts and the opaque accounting practices that conceal them,” the report says.

“It is imperative that the Japanese government does all that it can to promote transparency in the financial sector, as improper disclosure and financial accounting practices undermine confidence in the financial system.”

Clinton to add pressure

KOBE — U.S. President Bill Clinton will probably meet with Prime Minister Yoshiro Mori before the Group of Eight summit and is expected to push the government to further deregulate Japan’s telecommunications industry, U.S. officials said Friday.

“The president hopes to meet with the new prime minister as soon as possible and will likely do so before the G8 summit,” U.S. Ambassador Tom Foley said here.

“When they do meet, one of the topics of discussion will be deregulation of the (information technology) industry,” said Robert Ludan, the local U.S. consul general.

Foley arrived in Kobe with a delegation representing 16 U.S. firms seeking foreign investment in the Kobe area in such fields as telecommunications.

Foley stressed the importance of further deregulation of the telecommunications industry and urged Japan to make good on its earlier promises.