ECONOMY

Firms face obstacles in doing business in Japan

During his official visit to Japan last week Prime Minister Costas Karamanlis offered his hosts samples of olive oil and olives: It was a rare case of products from Greece finding their way to Japan. Economic and commercial relations between Greece and Japan have many dimensions and great significance, as they stretch beyond trade to tourism, shipping, loans, Greek-Japanese business partnerships both inside and outside Greece, direct and indirect investments of Japanese funds in Greece, the existence and activity of a significant number of Japanese firms in Greece and other things. However, Greek exporting efforts to Japan have had little success to show to date, so the world’s third-biggest market remains untapped for this country’s products and entrepreneurs. A study by the Exporters’ Association of Northern Greece (SEVE) has identified a series of obstacles in the way of Greek products to the Far Eastern country. Some of those parameters could be diminished or corrected, while the rest should not at all discourage Greek entrepreneurs, SEVE says, but rather draw their attention to how this market is formed and what adjustments are required in order for anyone to be successful in Japan. The main difficulties identified are: 1. The need for direct flights from Athens to Tokyo, since Olympic Airlines ended this route. This is a very serious problem for the further expansion of Greek-Japanese economic and trade relations, both for practical and for psychological reasons, as goods cannot travel directly and Japanese entrepreneurs hardly ever change planes to visit a country. The resumption of the Athens-Tokyo service, either directly or with a strategically chosen stop (Beijing, Moscow or Istanbul) is a basic move for the upgrading of relations between the two countries. 2. The lack of a large Greek population in Japan to promote Greek products in the Far Eastern country. 3. Japan has virtually no Greek restaurants, through which Greek food and wine and even culture could be promoted, strengthening Greece’s image. 4. The geographical distance and the high real costs involved discourage many Greek entrepreneurs from visiting Japan and approaching its market. 5. The differences in business culture render contacts between Greek and Japanese businesspeople more difficult, with communication being harder due to the limited language skills many Japanese have. What is more, Greek entrepreneurs are finding it tough to accept the composed nature of their Japanese counterparts, their lack of spontaneity and the slow pace with which they make decisions. 6. The absence of an official stand in Japan’s international exhibitions hampers Greek exports, as Greek businesspeople hardly ever take the big financial risk to have a direct individual participation unless they already have business relations with Japan and therefore profits to reinvest. Japanese entrepreneurs are avid users of exhibitions as a tool for finding new business partners and alternative suppliers. 7. Greece’s direct rivals such as Spain and Italy have made great efforts for decades in the Japanese market so that they now have a solid base for promoting their products, while having a strong and broad network distributing their exports down to retailing. This makes it very difficult for similar products from Greece to penetrate the Japanese market. Getting big in Japan SEVE suggests that Greece can improve its bilateral trade relations with Japan (i.e. increase exports, raise the number of Japanese tourist arrivals, attract investments and know-how from Japan, increase business cooperation etc) through the following measures: – Improvement of the existing infrastructures, or creation of missing ones, such as a direct air connection. – Participation in international exhibitions. – Organization of seminars informing Japanese investors about Greece. – Exchange of formal visits. – Strong participation in EU programs about Japan. – A double taxation avoidance agreement, a measure which had been put on hold for years. During Karamanlis’s visit, Athens and Tokyo agreed to speed up the agreement’s conclusion. – The operation of Japanese banks in Greece. These, as well as other measures, are deemed by SEVE to be the necessary groundwork for Greek entrepreneurial activity to expand. The exporters’ association adds that Greece possesses all the comparative advantages to become a strategic commercial and economic partner for Japan in the broader Southeastern Europe region, provided the Greeks realize, utilize and promote them appropriately. Ahead of the next Asia-Europe Meeting (ASEM), SEVE also recommends that the entry of Russia in this forum could constitute a joint objective for Greece and Japan. This would bring a new dimension and a new perspective for Greek business activity, too, in the context of ASEM. Finally, the Finance Ministry’s «Ermis» action plan for Japan could become the main factor for the improvement of Greece’s position in its relations with Japan, under the conditions that there will be the infrastructure required to render the program’s proposed interventions more effective and their funding will have been secured.