On March 25 this year, Japan and the European Union announced the launch of negotiations toward an EU-Japan Free Trade Agreement. Business organizations on both sides, not least the European Business Council in Japan (EBC), raised a cheer, relieved that at last work could begin on unlocking the true potential of the EU-Japan relationship.

That potential has been estimated by the European commissioner for trade, Karel De Gucht, to be equivalent to a boost to Europe's economy of up to 0.8 percent of GDP, an increase in EU exports to Japan of over 32 percent and in Japanese exports to the EU of over 23 percent, and the creation of 400,000 additional jobs in the EU alone. As he has said, "We need these jobs, and we need this growth in the current economic climate."

No one should underestimate the work involved in forging a free trade agreement that delivers such benefits and meets the expectations of both sides. For more than 40 years, the EBC has been documenting examples of obstacles frustrating EU trade and investment in Japan and we have made countless recommendations for their removal. We want to see mutual recognition of standards and market authorizations to the extent possible and/or adoption of international standards; the elimination of tariff and non-tariff barriers as well as unnecessary bureaucracy; fair competition and equal treatment of all companies, domestic and foreign, including in services; improved conditions for foreign direct investment, including in the banking and asset management sectors; and incentives for investment in research and development that properly recognize and reward innovation, providing opportunities also to small and medium-size enterprises (SMEs). So from the EBC perspective alone, the to-do list is long.