The 20th annual meeting between the California Chamber of Commerce and Japan business leaders highlighted California’s continuing interdependence with one of its largest trade and investment partners.
Leading the Japanese business delegation were Hironori Kobayashi, chair of the Japan Business Association of Southern California (JBA) and director for the Americas of All Nippon Airways ANA Co., Ltd., as well as Tasha Yoroz, president of the Japanese Chamber of Commerce of Northern California (JCCNC) and managing attorney for Yorozu Law Group.
Representing the CalChamber at the Wednesday, September 8 virtual meeting were Allan Zaremberg, retiring president and CEO; Jennifer Barrera, incoming president and CEO; Susanne T. Stirling, vice president, international affairs; and Nikki Ellis, international trade assistant.
Discussion Themes
The JBA and JCCNC meeting covered a variety of themes, including California’s current tight labor market and ways Japanese companies could overcome this challenge. State and federal labor, energy, environmental, visa and trade policies also were on the agenda.
The group also spoke about the many important Japanese contributions to the California economy, as Japan is the top foreign direct investor in California. Lastly, the group asked the CalChamber to share its top priorities.
Trans Pacific Partnership
Japan was among the 11 Pacific Rim countries that signed the revised Trans-Pacific Partnership on March 8, 2018 in Santiago, Chile, finalizing the trade and investment agreement just over a year after the U.S. withdrawal left its fate in question.
The pact, renamed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP-11), retains all the tariff reductions and eliminations from the original version signed in 2016 by the 11 nations and the United States. The CPTPP suspends 22 other provisions, including some intellectual property rules.
The CPTPP reduces tariffs in countries that together amount to more than 13% of the global economy — a total of $10 trillion in gross domestic product. With the United States, it would have represented 40%. Even without the United States, the deal spans a market of nearly 500 million people, making it one of the world’s largest trade agreements.
Britain made a formal request to join the CPTPP on Monday, February 1, 2021, seeking membership in the 11-country deal to open new avenues for post-Brexit trade and influence. The CPTPP removes 95% of tariffs among its members: Japan, Canada, Australia, Vietnam, New Zealand, Singapore, Mexico, Peru, Brunei, Chile and Malaysia.
The CalChamber supports considering the United States re-entering the CPTPP.
Strong California-Japan Ties
California continues to be the top exporting state to Japan, accounting for more than 16.6% of total U.S. exports. Japan has remained California’s fourth largest export market since 2010, after Mexico, Canada and China.
California exports to Japan, the world’s third largest economy, totaled $10.65 billion in 2020. Computers and electronic products accounted for 18.9% of total exports.
Imports into California from Japan were $20.36 billion in 2020, with transportation equipment accounting for over a quarter of total imports. California is currently the top importing state in the United States for products from Japan.
In California, Japan is the largest source of foreign direct investment (FDI) through foreign-owned enterprises (FOEs). Japanese FOEs in California in 2020 provided 115,420 jobs through 3,672 firms amounting to $10.6 billion in wages, down from 121,223 jobs through 3,880 firms amounting to $10.988 billion in wages in 2019.
The top jobs by sector are: manufacturing, wholesale trade, retail trade, financial activities, and professional/business services. (World Trade Center Los Angeles FDI Report, June 2021).
Other Notes
The annual report prepared by JCCNC and JBA includes the following: It is said that the first arrival of a Japanese person to California was in 1850. Following this, the first official Japanese delegation to the United States arrived in San Francisco on March 17, 1860.
Since then, California and Japan have built a strong relationship through various historical, cultural, and economic events. California and Japan have established 98 sister cities — 25% of all sister cities in the United States.
For more information on Japan, please visit the CalChamber’s Japan Trading Partner Portal.
