Original publication: October 2016
Author: Marc Thomas, Research Administrator
Short link to this post: http://bit.ly/2FyZ0zS


Japan’s population was 127 million in 2014. It has being declining since its peak of 128.1 million in 2008[1]. It is also ageing[2] and concentrated in the main metropolitan areas[3]. The country’s economy is equally in a grey area. It has been stagnating since the early 1990s, and the situation worsened with the 2007-2008 financial crisis and the 2011 Fukushima disaster. Overall, GDP at current prices decreased by 5.3% between 2000 and 20131, while other Asian nations were booming. Nevertheless, the country remains the third largest economy, after the US and China. It enjoys a very high standard of living, and it is characterised by a remarkable scientific and technological development.


This particular context necessarily influences the transport system in a particular way. The domestic transport demand is on a downward trend – which is unique among developed countries: between 1990 and 2014, the number of passenger-kilometres (pkm[4]) within Japan decreased by about 6%; the number of tonne-kilometre (tkm[5]) by 24%1. The modal split is also peculiar in Japan because of the paramount importance of (high quality) passenger rail and waterborne freight – this dependence on maritime transport being more and more a cause for concern in the context of growing tensions with China.

The current government’s stimulus policy (the “Japan Revitalisation Strategy”) also impacts the transport system. Historically highly protected markets are opening up to competition, in particular with respect to air transport. Besides, public investment in transport infrastructure is on the increase after twenty years of decline[6], notably to rebuild the Fukushima area[7].

The government also intervenes to improve the competitiveness of business, including through direct subsidies. This is the case in some ports, for instance, or to set up a “logistics strategy” for the whole Asian area. Public funding also aims at facilitating research and development of new technologies, in particular in the fields of automation and alternative energy sources.

In this context, the EU and Japan have being negotiating a Free Trade Agreement since March 2013 and it turns out that some of the stumbling-blocks relate to the transport sector, namely:

– The access to public procurement in Japan’s railways and urban transport, which is currently almost impossible since there is neither standard nor certification for these products – while Japanese products can penetrate EU market once certified as complying with EU standards.

– The access to Japan’s automotive and transport equipment market, which is hampered by the lack of clear standards and the related cost of certification, as well as some tax measures. In return for (further) concessions, Japan demands duty free access for its cars (currently at 10% ad valorem[8]).

– The imbalance in access to ports, since the movement of empty containers between ports in a Member State, and the movement of international goods between ports situated in different Member States are free within the EU but, respectively, very limited and prohibited for foreign operators in Japan.

Link to the full briefing: http://bit.ly/585-900

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Map of Shinkansen network in March 2016

The Shinkansen lines constitute a dedicated network, separated from the conventional one by a different gauge. Contrary to TGV or ICE in Europe, the Japanese high speed trains (except the Akita and Yamagata Shinkansen) cannot run on the conventional network. This results in much higher infrastructure costs than those found in Europe. This also contributes to the remarkable frequency and punctuality of Shinkansen services.

[1]     Statistics Japan; Japan Statistical yearbook 2016, Chapter 13.

[2]      In 2014, life expectancy at birth was 86.8 years for women and 80.5 years for men – a world record for both genders.

[3]     Statistics Japan; Statistical Handbook of Japan (2016), Chapter 2.

[4]     A passenger-kilometre (pkm) is equivalent to the movement of one passenger over one kilometre.

[5]     A tonne-kilometre (tkm) is equivalent to the movement of one tonne of goods over one kilometre.

[6]     Traditionally, Japan is by far the OECD country that devotes the smallest share of its GDP in transport infrastructure (1.1% in 2013, i.e. circa 48 billion euros). Source: International Transport Forum, Statistics Brief July 2015.

[7]     Ministry of Land, Infrastructure, Transport and Tourism, White Paper on land, infrastructure, transport and tourism in Japan, 2014.

[8]     EU import tariffs range from 10% on finished passenger cars to 22% on larger-sized trucks.


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