WORLD TRADE
ORGANIZATIONWT/TPR/M/32/Add.1
17 October 2000
(00-4058)
Trade Policy Review Body
28 and 29 January 1998
TRADE POLICY REVIEW
JAPAN
Minutes of Meeting
Addendum
Communication from the Permanent Mission of Japan
The following communication, dated 19 July 2000, was received from the Permanent Mission
of Japan with the request that it be circulated to Members.
__________
I wish to refer to the Trade Policy Review of  Japan in 1998 and have pleasure, though it be
rather late, in transmitting to you enclosed the written answer on behalf of the Government of Japan.
Please note that the attached data refers to January 1998, except where any specific mention
of an alternative period is made.
It would be appreciated if the details herein could be circulated to the Members.WT/TPR/M/32/Add.1
Page 3
OUTSTANDING RESPONSES TO QUESTIONS
Deregulation
(U.S. – 39)  How does the Government of Japan intend to institutionalize its deregulation efforts now
that the Administrative Reform Committee's mandate expired on 18 December 1997?
(E.U. - 2.3)  Will the GOJ publish reports on the state of play of the deregulation proposals submitted
over recent months by its trading partners (the EC submitted a list of around 200 proposals on
18 November 1997)?  If so, when will the reports be published?
(Australia – 2)  The Japanese Government's Deregulation Action Programme (DAP) has provided a
useful mechanism to lobby for the removal of regulations which, directly or indirectly, impede access
for imports.  Australia welcomes Japan's recent decision to establish a replacement programme when
DAP expires in March 1998.  What is the nature of the replacement programme?  Will there be any
changes to the opportunities for trading partners to have input to that programme?
(Hong Kong - 7)  (Ref:  WT/TPR/G/32, p. 18, para. 68)   The Japanese Government mentions in its
Report that further deregulation measures are expected in future.  In this context we have noted that
the Japanese Government recently announced its decision to establish a new three-year deregulation
programme as from 1 April 1998.  We would be interested to know the principal sectors/main areas in
the Japanese economy whereby such measures are being implemented, and in what way suchmeasures will improve exporters' access to the Japanese market and foreign investment in Japan.
In March 1999, the Government revised the Three-Year Programme  for Promoting
Deregulation (1998-2000)(Annex 1).  The revised programme has two parts:  the first Part describes
general principles and cross-sectoral approaches, the second is the list of 917 items of reform.  The
Government is taking actions in line with the revised programme.
The revised programme shall be revised again by the end of this fiscal year as a tentative
deadline.  Toward the revision, the Regulatory Reform Committee, which is the reinforced and
renamed Deregulation Committee, is now deliberating new issues and challenges and monitoring
Government actions.  At the same time, the Government is inviting the opinions and requests on
regulation from public (not only within Ja pan but also from abroad) for the revision.
Public-Comment Procedure
(U.S. – 41)  What plans does Japan have to make its policy process more fair and transparent,
particularly regarding adoption of a formal rule making process which would give the public prior
notice and opportunity to comment on proposed regulations?
In March 1999, the Government adopted the "Public Comment Procedure for Making,
Amending, or Repealing Regulations" (Annex 2), by cabinet decision to invite comments and
information from public with relation to regulations established by any means other than law.  TheProcedure became effective since 1 April 1999.
Competition Policy
(European Union - 2.15)  (Para. 65, page 71, document WT/TPR/S/32)  The European Commission
would be grateful if Japan could provide a complete list of cartels remaining in place in
January 1998.
The number of cartels implemented dropped to 14 cases at the end of March 1999.WT/TPR/M/32/Add.1
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Note:
The number of cartels implemented dropped from a peak of 1,079 cases at the end of
March 1966 to 14 cases at the end of March 1999.
Fiscal year 1965 - 1993 1994 1995 1996 1997 1998
Number of cases 1,079 - 67 53 41 12 15 14
* The number of cases is at the end of December 1997.
(European Union - 2.16)  (Para. 6-7, page 72, document WT/TPR/S/32)  Do the June 1994
"Interpretations concerning Administrative Guidance under the Anti-monopoly Act" apply only toadministrative guidance issued after the publication of "interpretations"?  If so, how is older
administrative guidance "interpreted"?  How does th e JFTC ensure that all administrative guidance
is presented to it for "interpretation"?  The Eur opean Community would appreciate receiving a list of
all administrative guidance valid today for each Ministry.
Japan Fair Trade Commission (herein after JFTC) published "Guideline concerning
Administrative Guidance under the Anti-monopoly Act" (herein after "Guideline") in June 1994.  The
interpretations, now that it is formulated and published, supersedes the Interpretations "Concerning
the Relation between the Anti-monopoly Act and Administrative Guidance" (16 March 1981, JFTC).
JFTC will coordinate other administrative organ based on this Guideline after it was published.  JFTC
will apply this new Guideline to administrative guidance that would restrict or inhibit fair and free
competition.
In Japan, diverse forms of administrative guidance are exercised in broad range of fields.  All
administrative guidance are exercised on trade between entrepreneurs, and the effect is different from
a case by case bases.  Therefore, JFTC would not apply to this Guideline to all administrative
guidance.
JFTC considers it would be more and more important to prevent the effect of administrative
guidance that restrict or inhibit fair and free competition.  JFTC not only responds prior coordinationwith the administrative organ, but also coordinates with other relevant administrative organs those
guidance restricts or inhibits fair and free competition positively.
As mentioned above, JFTC coordinates administrative guidance with administrative organ if
it restricts free and fair competition.  But JFTC does not have any list of administrative guidance (to
make sure, administrative guidance are not released in general).
(European Union - 2.5)  Para. III, page 79 of document WT/TPR/S/32 refers to a JFTC study from
February 1995 which found that a number of problems remain in the distribution sector.  Is the JFTC
planning to take action on these remaining problems?
The Japan Fair Trade Commission (herein after JFTC) conducted a survey on the actual
situation regarding transactions between large-scale retailers and their supplies in February 1995.Even though the survey found transaction between th em would tend to be fair after JFTC issued
"Guidelines concerning distribution systems and bu siness practices" (Guideline) in July 1991.  But
number of problems remain in the distribution sector, JFTC found it is necessary to let the contents of
the Guideline known among large-scale retailers.  JFTC demanded the related business organizations
in distribution sector and one of large-scale retailers to let the contents of the Guideline better known
among their members in order to improve business practices between large-scale retailers and their
supplies.WT/TPR/M/32/Add.1
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Note:
1. JFTC issued "Guidelines concerning distribution systems and business practices" (Guideline)
to contribute to preventing firms and trade associations from violating the Anti-monopoly Act and
helping in the pursuit of their appropriate activities by specifically describing, with respect to
Japanese distribution systems and business practices, the types of conduct which may impede free and
fair competition and violate the Anti-monopoly Act.
2. Problems remaining:
(1) Taking any act specific in one of the foll owing items, unjustly in the light of the
normal business practice, by making use of one's dominant bargaining position over
the other party.
(2) Causing the said party in continuous tran saction to purchase a commodity or service
other than the one involved in the said transaction.
(3) Causing the said party in continuous transaction' to provide for oneself money,
service or the economic benefit.
(United States – 16)  The JFTC rarely brings crim inal cases.  Indeed, JFTC published statistics show
that only three criminal accusations have been filled during fiscal years 1992-97.  Criminal
enforcement is at the core of competition law enforcement - the JFTC must be more aggressive on thisfront.  To this end, the JFTC should coordinate more closely with the Ministry of Justice (MOJ).
What efforts are being made by the JFTC to incr ease coordination with the MOJ and to substantially
increase criminal enforcement of Japan's competition law?
The Japan Fair Trade Commission may (herein after JFTC) find that there exists any act
violate the Anti-monopoly Act (herein after in AMA), it recommends the firms/industries concerned
to cease and desist from such an act.  The JFTC orders to pay surcharges that are imposed on the
margin by price cartels, files accusations acquired the prosecutors requesting criminal sanctions.  TheJFTC handle these administrative measures case by case bases, therefore it is not appropriate to
discuss about implementations of the AMA only based on the number of criminal accusations.
In order to cope adequately with criminal accusation and prosecution regarding violations of
the AMA, the JFTC issued "The JFTC's Policy on Criminal Accusation Regarding Anti-monopoly
Violations".  The JFTC in June 1990 announced its policy to actively accuse to seek criminalpenalties on price-fixing, bid-rigging, such as vici ous and serious violations of the AMA, which are
considered to have wide spread influence on people's livings.
Therefore, the JFTC makes efforts at getting information and investigation on violation on
regarding violations of the AMA and exchange opinions and information with prosecuting authority.
(United States – 19)  What is the JFTC's monitori ng process for firms /industries found in violation of
the AMA, firms convicted/find/placed on probation by the MOJ, or firms that have been investigated
and warned about anti-competitive practices?
The Japan Fair Trade Commission (herein after JFTC) may order the firms/industries
concerned to cease and desist from the violation.  Also, the JFTC demands them to report measures to
secure the implementation of the order.  Moreover the JPTC scrutinizes the case after the report whenit would be necessary.WT/TPR/M/32/Add.1
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Tariff
(Hong Kong, China  - 1)  While appreciating Japan's efforts in reducing tariffs, it is observed that
tariff peaks are still found in certain textiles and clothing items, fur garments, leather goods, and
footwear.  Does Japan have any plans to go beyond its UR commitments, and further reduce tariffs
for these and other tariff items?
Although duties on Japan's textiles and textile products may be relatively higher when
compared to the low level of duties on other Japanese manufactured goods, these are even lower thanthose of other countries.
Japan committed significant tariff reductions on the items you mentioned during the Uruguay
Round negotiations, and has steadily continued to implement these commitments.
It would be very difficult that Japan reduces the tariffs beyond its UR commitments, because
the domestic textile industry has been under severe circumstances due to rising imports, a sluggishdomestic consumption, and its weak management base  attributing to the small scale of enterprises.
(New Zealand  - 2-4)  What criteria are used by Japan to assess whether tariffs, including specific
duties, are set at appropriate levels, i.e. levels which encourage competition in the domestic market?
Is consideration given to the total impact of ta riffs on end-users, both processors and consumers?
Has Japan given any consideration to the disproportionate impact of specific duties on levels ofprotection in the agricultural sector?
The out-of-quota rates have been set based on the Tariff Equivalents which were derived from
the gaps between internal and external prices, as stipulated in the Agreement on Agriculture.  Japan
has fully committed itself to the reduction schedule of tariffs for agricultural products, therefore the
levels of tariff rates have been reduced year by year.
End-use tariff concessions are determined by taking account of various effects on end-users,
both processors and consumers.
Mandatory Technical Regulation
(Canada – 12)  An explanation is requested as to how voluntary standards can be applied as
mandatory regulations.
Technical regulations sometimes cite voluntary st andards as the specifications applying to the
standard in question.  For example, the Building Standard Law stipulates that the quality of buildingmaterials used in the sections of building foundations and major structural elements covered under
major government ordinances must in principle conform with the Japanese Industrial Standards (JIS)
designated by the Minister of Construction, or the Japanese Agricultural Standards (JAS).
(E.U. - 2.19)  With regard to flat glass, are the new energy conservation measures, which were
announced, now applicable?  Have the Japanese authorities completed standards on insulating glass?What are the performance coefficients envisaged for insulating and low emission glass?  Could the
Japanese authorities envisage the recognition of IS0 standards for fire proof glass along with
Japanese standards?
Energy conservation for housing is addressed in the "Evaluation Standards for Building
Owners" and the "Design and Building Guidelines", which were formulated in 1980 on the basis ofthe Law concerning the Rational Use of Energy and amended and strengthened in 1994.  The current
standards stipulate the insulation performance of ceilings, walls and floors as well as openings such asWT/TPR/M/32/Add.1
Page 7
windows, and in some regions of Japan, double-glazing or other glass with a strong insulation
performance is also required.
In order to develop even higher energy conservation standards, review of the above standards
is under consideration and draft amended standards were released last March.  The views of parties
concerned are currently being heard and consideration of the standards is continuing.
Further, it is difficult to make a response regarding fire-resistant glazing, as it is unclear to
which of the multiple ISO rules on this issue the E.U. question refers.
SPS
(E.U. - 3-7)  (Para. III.42, page 58 of document WT/T PR/S/32)  Now that we ar e almost at the end of
fiscal year 1997, does Japan have any results available from the Quantitative Risk Assessment
referred to?  If not, when are full results expected?
Japan has been assiduously examining methods for Quantitative Risk Assessment for animal
quarantine, referring to guidelines of the Inte rnational Organization for Epizootics (OIE) and the
methods which have already been employed by other countries.  However, since the work involves
assessments of factors which are intrinsically difficult to conduct quantitative analysis, the scheduled
three-year study is not making as much progress as we expected and needs considerable time to
conclude.
(E.U. - 3-10)  Does Japan foresee a simplification of the complicated questionnaires to be completed
before the granting of authorization to export meat products to Japan?
The OIE code allows meat importing countries to request necessary information from
exporting countries for the purpose of preventing the in filtration of animal infectious diseases through
meat products from other countries.  Japan regards this practice as a deserved right for the importing
countries that bear the risks of infiltration.  Japan has not requested excessive information from the
exporting countries and has dealt with this issue fairly.  Therefore, Japan does not intend to simplifycurrent forms of our questionnaires.
Import Promotion
(E.U. - 2.10)  Over the last few years, the GOJ ha s argued that its import promotion budget should be
reduced in line with a declining trade surplus.  Now that the surplus is increasing rapidly, it would be
expected that the import promotion budget would be increased in 1998.  Information available to the
European Commission suggests the reverse is this case.  Can the GOJ make additional efforts to
boost its import promotion budget in 1998?
(E.U. - 2.11)  Many of the incentives under th e heading of "Import promotion" are awarded to
Japanese companies (tax reductions etc.) and are intended for the demand of imported goods.  What
measures, if any, do the Japanese authorities intend to take in order to increase the supply of foreigngoods to the Japanese market?
Japan has continued to work to advance import promotion measures, and despite the tight
fiscal conditions pertaining since FY1998, extended the term for special tax measures for imports of
manufactured products, widened the eligibility for policy-related finance, and expanded service
businesses within FAZ.
Japan expects foreign companies to make active use of these measures since we provide to the
relaxation of applicable requirements and other incentives to foreign affiliates.WT/TPR/M/32/Add.1
Page 8
(Rep. of Korea – 4)  The Republic of Korea certainly appreciates the efforts done with the FAZ
programme.  However, it seems that such prog rammes do not bring substantial benefits to the
Member Countries, as it focuses on developing 1ocal cities rather than on stimulating foreign
companies by providing them with incentives.  Could Japan provide more information on how the
FAZ programme can represent a concrete advantage for Member Countries trading with Japan?
The bulk of Japan's imports are handled by a few major cities, primarily due to the lack of
import infrastructure in regional cities.  The Foreign Access Zone (FAZ) scheme is intended topromote imports by establishing the necessary facilities in these cities, and thereby increasing the
number of import centers.
In addition to establishing import facilities in designated local cities, Japan also provides
specific incentives (special depreciation for certain facilities and buildings, tax reductions and
exemptions for land-related taxes, loan guarantees , etc.) to domestic and foreign entities engaged in
import-related businesses recognized to make a particular contribution to import promotion.  No
discrimination is made between domestic and foreign importers in granting these incentives within
FAZ.
To facilitate international business, JETRO's FAZ support centers provide information and
consulting services to domestic and foreign importers, and the central government supports localgovernments to organize exhibitions, business meetings and other import promotion activities.
The above measures clearly extend concrete benefits to member countries.
Intellectual Property
(Canada – 8)  While Canada notes and encourages measur es to improve trademark enforcement, are
there parallel efforts to ensure that trademarks are not speciously granted in such a way as to block
legitimate imports, for example in the case of the trademark granted for the use of the word "organic"
for beverages, even though the term is well known to refer to a method of production?
Trademarks, under application which consist solely of a mark indicating in a common way
the method of manufacturing the goods, can not be registered.
In the case of an application made for a trademark constituting the letters "organic", for
example, where the above provision applied, such a trademark could not be registered.
Government Procurement
(U.S. – 13)  Japan excluded NASDA (the National Space Development Agency) from  the GPA as a
covered entity, stating that no equivalent cover age was offered by any major trading partner.  Can
Japan further explain this rationale, particularly in light of the United States' decision to include the
National and Aeronautic and Space Administration (NASA) as a covered entity?
In conducting space development Japan maintains the basic policy of "establishing the
domestic technologies".  Japan considers that operations of NASDA which is carried out along this
policy does not inherently meet with the GPA'S procurement procedures based upon the fundamental
principle to procure good quality products of moderate price with non-discriminatory manner.
However, during the negotiations on this agreement taking into account the scale of the
procurement in NASDA's space development projects and the necessity for being offered spacedevelopment related entities to the GP by the major members engaging in this field such as U.S. and
E.C., Japan explained several times that, despite the Japan's basic policy on space development, JapanWT/TPR/M/32/Add.1
Page 9
was ready to offer NASDA with appended explanatory note on the condition that both U.S. and E.C.
should provide equivalent offer.  On the other hand, although Japan recognised that there was an offerfrom U.S. of NASA from the beginning of the negotiat ions, Japan considers that Japan, U.S. and E.C.
should present balanced offers all together in order to establish international fair procurement
procedure in the space development field.  Considering above-mentioned, Japan decided to exclude
NASDA from the GPA as a covered entity.
Agriculture
(E.U. - 3-2)  Since the Administrative Reform Committee report of December 1996 (referred to in
para. IV.7, page 89, document WT/TRP/S/32), what further progress has there been in relation to:
(1) tile deregulation of production, processing and distribution of raw milk;  and (2) the modification
of the pricing system and other measures for wheat and barley?
(1) Deregulation of production, processing and distribution of raw milk
A study group on regime for designated milk producers associations published a result of its
study in October 1997, in response to the report by the Administrative Reform Committee in
December 1996.  Necessary reforms, including the amendments of January 1998 to the Cabinet Order
of Temporary Law for Compensation Price for Producers of Milk for Manufacturing Use, were made,
in accordance with the report which called for mergers of producers associations and deregulation ofdairy farmers' business activities.
(2) Wheat and barley policies
a. In view of the changing situation in production and marketing of wheat and barley in
recent years, the Study Group on Wheat and Barley Affairs had conducted a study on
wheat and barley policies since March 1997, and drew up a report entitled "The New
Direction of Wheat and Barley Policies" in December of that year.
b. The report concluded that there was a need for:  improvement of quality and
productivity of domestically produced wheat and barley through switching over of
current marketing system controlled by the government to marketing by private
sector;  and consideration of new measures aiming at stabilization of management of
wheat/barley producers.
c. The government will consider new concrete policies for wheat and barley in
accordance with the directions the report indicated.
(E.U. - 3-3)  What steps has Japan taken in rela tion to the government-sponsored livestock projects
identified as ineffective or having outlived their usefulness by the Management and Coordination
Agency in February 1997?
In response to the recommendation made by the Management and Coordination Agency,
Japan abolished some of the extension and facilitation programmes in livestock sector which had been
identified as ineffective or having outlived their usefulness, and also changed implementation
practices of certain part of the programmes.
(E.U. - 3-11)  Since the requirement for rice produce rs to sell their output to the government has been
abolished, what proportion of Japanese rice production has not been sold through these officialdistribution channel?WT/TPR/M/32/Add.1
Page 10
Total demand for rice in 1997 Rice Year was 9,700 thousand tons, of which only
710 thousand tonnes were sold by the government.  The rest of rice marketed included voluntarilymarketed rice, etc., which accounted for some 93 per cent of the total demand.
Under the current system, the role of the gove rnment is limited to the stockpiling, and, in
principle, the government-marketed rice is released to the market after one-year period of stockpiling.
(E.U. - 3.12)  Given that the set-aside provisions, designed to cope with the over-production of rice,
have not produced the expected results, what alternative policies is Japan considering in order toachieve this objective?
With regard to rice, the production-restricting measure has been taken in order to keep the
annual production less than the domestic consumption.  The measure has been effective and land
more than originally planned has been set-aside.  The recent demand and supply situation is due to the
unexpected bumper crop.
In order to stabilize the supply-demand situation and the price, the government conducted a
study which aimed at the reconstruction of rice policies in general.  This resulted in the publication of
a report in November 1997 which was entitled "The Outline of New Rice Policies".
The report specifically set the target area to be set-aside in 1998 growing season as
963,000 ha, which is 176,000 ha larger than the previous year.  In response to the report, moreover,the government of Japan has decided to introduce a new measure aiming at stabilization of rice
farming management and to implement a measure aiming. at establishment of desirable paddy
farming system which harmoniously combines rice farming and set-aside.  These policy measures are
to be implemented for two years, and are expected to bring about proper level of domestically
produced stockpiling rice.
(Australia - 4)  Agriculture has to date largely been excluded from Japan's deregulation efforts.  To
some extent, Japan's agricultural policies have been framed by its view that food security is anessential element of those policies.  Australia supports the comment in the Secretariat report that food
security can be attained through liberal market access and diversification of supply.  Australia also
notes the growing fiscal pressures caused by Japan's agricultural support policies, as well as the
negative effects of agricultural support and protection on the competitiveness of downstream
industries and on consumer welfare.  Given these developments, what plans does Japan have forderegulation of the agricultural sector?  What options are likely to be canvassed in the review of the
Basic Agricultural Law?  And, given that pressures for international agricultural liberalisation will
continue, including through the next WTO agriculture negotiations, how will Japan ensure that it is in
a position to respond to this?
In Japan, there has been a growing need for a fundamental reform of agricultural policies,
including establishment of new agricultural basic law, so as to respond to the changes in social
environment and progress of globalization.  In the light of such environment, the Investigative
Council on Basic Problems Concerning Food, Agriculture and Rural Areas, an advisory committee to
the Prime Minister, was established in April 1997 and has started the discussion.
To enable the Council to discuss the new direction of policies on food, agriculture and rural
areas from various points of view, it consists of members from wide range of interested parties,
including farmers union, food industry consumer s groups, business, academics, and experts of
environmental issues.WT/TPR/M/32/Add.1
Page 11
In December 1997, the Council published an inte rim report outlining various points at issue.
The Council will listen to public opinion on the interim report and submit a final report in the summerof 1998 to show the direction of policies.
In response to the discussion by the Council, the Government of Japan will draw up a new
guideline for agricultural policies which aims at the development of agriculture and rural areas and the
improvement of the people's living in the 21
st century.
(Australia – 7)  While Australia welcomes the bringing forward last year of the timing of the SBS
tender process, we would like to see several SBS tenders (with increased quantities) held in the
April-May period to allow Japanese consumers access to Australia's new season crop which is
available from early March.  Can Japan comment on the likelihood of further advancing the timing of
tenders?
Four SBS tenders were conducted in FY1997, with total quantity of about 55,000 tonnes.Nothing has been decided yet regarding the SBS tenders in FY1998.  In any event,
consideration will be given to the domestic needs and to the experience of the implementation of the
system so far.
(Australia – 8)  Similarly, can Japan comment on the possibility of spreading the timing of the much
larger minimum access tenders more evenly throughout the year?  Both the Australian rice industryand the Japanese consumer would benefit from Australia's counter-season production.  Spreading the
timing also would ensure Australia was not disadvantaged vis-à-vis northern hemisphere producers.
The imports of rice are conducted to assure the rice suitable to domestic demand and end-use
is imported at the necessary timing.  In accordance with this general principle, minimum access
ordinary tender was conducted five times in FY1997.
The timing of the minimum access tender in 1998 has not been decided.  The consideration
will be paid to the above-mentioned principle,
(Australia – 9)  Australia has expressed its concerns to Japan over its provision of imported minimum
access rice through Japan's Food Aid Programme.  Australia considers that this practice acts as a
restriction on access to Japan's consumer market.  We also believe the practice undermines the
Uruguay Round outcome which was designed to provide access to the Japanese consumer market for
foreign rice producers.  Does Japan have any plans to amend its approach in this area?
Japan has been faithfully implementing the UR commitment concerning the minimum access
of rice imports.
When the rice imported through minimum access is used for food aid, attention is paid to
ensure the national treatment with regard to minimum access rice, and to observe the condition
1 under
which the special treatment of rice is admitted.
Nothing is decided concerning future food aid.
(Australia – 10)  While the safeguard measure for beef imports to Japan was sanctioned under the
Uruguay Round, Australia would like to see changes in the way it is applied.  In particular, we are
concerned that once the safeguard is triggered the higher tariff applies for the remainder of the year
                                                     
1 Effective production-restricting measures, minimum access opportunities etc.WT/TPR/M/32/Add.1
Page 12
with no linkages to future levels of beef import s.  Does Japan intend to review this situation, which
leads to increases in standard import prices?
Emergency tariff measures for beef imports were introduced in accordance with the
negotiations with trading partners in the Uruguay Round, and there is no plan to review the measure.
(Australia – 11)  Australia welcomed the reductions in sugar tariffs which will take effect in
April 1998.  We noted Japan's intention to reduce bound rates on sugar considerably by 2000
(Secretariat Report, page 39, Chart III.2).  We note also that the Chart in the Secretariat Reportcombined both sugar and sugar confectionery.  What was not clear from the Chart was the reason for
the continued discrepancy between the tariffs for sugar and those for sugar sweeteners.  What are
Japan's plans for further lowering the tariffs on sugar to bring them more into line with tariff levels
for sugar sweeteners?
Demand for sugar has been on the decline in recent years, due to the increase in sugar-added
food preparation.  In order to maintain and increase the demand for sugar, the tariff on raw sugar was
reduced in April 1997, and is to be reduced again in April 1998 (from ¥15/kg. to ¥10/kg.).
This reduction will make the tariff levels of sugar and sugar sweeteners more or less in line.
Further reduction is not planned.
(Australia – 12)  Australia is concerned that regulations set by the Japan Racing Association (JRA)
restrict the number of horses racing in Japan and prevent foreign owners setting up and operating
stables in Japan.  In addition, a high tariff barrier on imported horses inhibits foreign horses entering
Japan.  Although current access arrangements have not been changed, the dialogue between the
Australian racing industry and the JRA deepened as a result of the OTO instigated JRA mission to
Australia last year.  The JRA also gave a new under taking to review liberalization arrangements post-
1999.  What progress can be expected in this area this year?
The restriction by the JRA of the number of foreign horses racing in Japan is being dealt with
according to the Plan to Deregulate the Number of Foreign Racing Horses whose target is the year
1999.  In parallel, the consideration is currently under way on how to deal with the matter after the
year 2000.
With regard to the registration of owners who live abroad, the JRA will, based on the survey
so far, further survey and consider the issue, bearing in mind that the fairness of horse racing shouldbe secured and that the similar degree of examinat ion will be conducted to owners living abroad as
those who live in Japan.  It will be concluded by March 1998.
One point should be noted:  in order to ensure the fairness of horse racing, the domestic
owners are also prohibited from setting up and operating stables.  The rule should be equally applied
to owners living abroad.
As a result of the Uruguay Round negotiations, the import tariff of racing horses is to be
reduced by 15% over six years, until it comes down to ¥3.4 million per head in FY2000.
Banking and Securities
(E.U. - 3.18)  How will Japan's response to the Asian financial crisis affect implementation of the Big
Bang measures announced in financial services?
With regard to the Asian currency crisis' effect on Japanese financial institutions, we do not
envisage the crisis will immediately bring considerable influence to the management of the JapaneseWT/TPR/M/32/Add.1
Page 13
banks.  It is because most their borrowers in Asia are Japanese companies and their affiliated ones that
locate in Asian countries and therefore they do not have to concern very much to secure their claims,moreover, the amount of their exposure is relatively small considering the size of their asset.
Concerning the financial system reform, the Ja panese government considers it important to
make steady process in the reform following the schedule announced in June 1997, while taking all
necessary measures to ensure stability of the financ ial system, in order to gain firm confidence in our
financial system from both home and abroad.
(E.U. - 3.19)  Can the GOJ explain the steps it is ta king to ensure financial institutions disclose the
true extent of their debt on their balance sheets?  In this context, has a new accounting system been
agreed?  What other measures are being taken to improve transparency in the financial sector?
When is it expected that the new financial rules and administrative structure for supervising financial
markets will be adopted and implemented?
Shouldn't disclosure towards customers be mandated such as the management condition of securities
companies?
Regarding the current situation of the securities companies' disclosure, all securities
companies are required to make notification under the commercial law, whereas securities companies
regulated under the Securities and Exchange Law are obliged to submit their financial report as part ofdisclosure.
It is our goal to accomplish further completeness of disclosure by giving requirements on
securities companies to provide business disclosure in the same way as the financial institutions such
as banks, in view of attaining the principle of se lf responsibility, at the same time accelerating market
transparency amid deregulation movement in the securities market.
Please explain what measures are being taken regarding the financial institutions' disclosure of their
own debts on the balance sheet.
Financial institutions in our country are required to list their debts on the balance sheet,
providing disclosure on various items.
Please provide information regarding the timing on when to implement structural reform of financial
administration.
The Financial Supervisory Agency is to take effect on the day which is decided by the
government ordinance within the days starting from 1 April 1998 through 1 July 1998, based on the
establishment law.
Meanwhile, many related bills from the securities bureau and banking bureau of the MOF are
to be offered at this Diet Session, along with the concrete measures and schedule of financial system
reform made clear by 3 discussion groups including the Financial System Committee last June.Therefore, we are proceeding are plans so as to take effect during June of this year.
(E.U. - 3. 20)  In terms of the GOJ's commitment to  reform of the financial markets in Japan, does the
GOJ consider that part of the current problem is related to overcapacity in terms of financial
services?  Does the GOJ agree that the maintenance of unviable and excess banking sector capacity
would blunt the extension of a market led sector which is at the heart of the Big Bang reforms as wellas reducing market opportunities for efficient foreign financial institution?WT/TPR/M/32/Add.1
Page 14
Currently, the Japanese government is making steady progress in the financial system reform,
which is one of the six major reforms of the current cabinet.  We aim at revitalizing the Japanesefinancial market to an international market comparable to the New York and London Markets, under
the three principles of free, fair and global.
At the same time, we aim at a highly transparent financial administration based on market
principles under the rule of self-responsibility.
We are now implementing a structural reform of the market including comprehensive and
drastic deregulation and we plan to submit numerous relating bills to the Diet.  Through these
measures, we would like to construct an open and vital financial market.
(E.U. - 3.21)  What proposals from The report of  the Administrative Reform Committee is the
government planning to implement in the financial sector during the next phase of deregulation?
1. In the financial sector, we have already implemented deregulation of core issues such as
liberalization of deposit rates and reform of the financial system, in order to promote competition and
increase convenience.  And in the insurance sector, we have implemented a comprehensive
deregulation for the entire sector including liberalization of cross-sectoral entries between life and
non-life insurance companies.
2. In the Deregulation Action Programme (a three year programme from FY1995), which was
formulated to promote deregulation in a planned manner, there are 409 items regarding the financial
sector.  As of 1 October 1997, 376 items have been implemented.  We plan to formulate a new
three-year deregulation programme starting from FY1998.
3. Besides these, a plan to complete the financial system reform including drastic deregulation
by 2001 was made public in June 1997.  Steady progress has been made in this reform, such as
expanding the range of business operations for subsidiaries of banks, securities companies, and
insurance companies, and necessary legislation for introduction of financial holding companies.
Construction Services
(Canada – 17)  As Secretariat document notes (para. 85), Japan in many service sectors has assumed
no bindings with regard to cross-boarder supply due to "lack of technical feasibility".  We note for
example that cross-border trade in construction services is unbound due to lack of technical
feasibility in Japan's schedule of commitments.  The Secretariat report (para. 91) however indicates
that imports of construction services amounted to yen 523 billion.
Can the Government of Japan provide information a bout the mode(s) of delivery for these service
Imports?
There exists no statistics by mode on the import amounts of construction services by our
country.  But incidentally, the amount of ¥523 billion shown in the Secretariat note indicates the totalamount which foreign enterprises sent abroad in connection with the costs of construction and
installation works they undertook in 1996 within Japan.
(Canada – 18)  According to the Secretariat Report (see para. 92), a "sound financial  base" is
required in order to obtain permission to access the Japanese construction market.  Can the Japanese
authorities clarify and define what is meant by the term "sound financial base"?
In many services sectors the level of particip ation by foreign service providers appears low
notwithstanding the apparent openness of the Japanes e Schedule of Commitments.  For example, asWT/TPR/M/32/Add.1
Page 15
the Secretariat report indicates, there are only 34 foreign lawyers out of a total of 16,000 in 1997
(Sect. report para. 165) and 77 foreign affiliated construction firms out of a total of 557,000 (Sect.report para. 91).
In order for a firm to obtain a construction business license, they are required to be possessed
of such foundation of resources and financial trustworthiness as will be sufficient to fulfil a contract in
accordance with Construction Business Law.
Concretely, a firm wishing to obtain a ordinary construction license must full under either of
the following categories:
(1) the net worth of the firm is more than ¥5 million;
(2) the firm has the ability to raise funds for more than ¥5 million;
(3) the firm has the record of having continued business as licensed for the past five years
immediately preceding the time of application for a license.
Furthermore, in the case of obtaining a special construction business license necessary to
enter into a subcontract of more than a specified amount, a firm is required to fulfil all of the
following conditions:
(4) the deficit of the firm does not exceed 20% of their paid-up capital;
(5) their ratio of liquidity is more than 75%;(6) their paid-up capital is more than yen 20 million, and net worth is more than
¥40 million.
These rules are imposed for the purpose of ensuing proper implementation of construction
works introducing appropriateness of contracts for construction works.
(Australia – 24)  As Japan's housing and constructio n sector is one of the most important growth
areas for Australian exports, especially in prefabricated housing and building materials, we are keen
to see further improvements in access for housing and building materials.  What further reforms does
Japan intend to make, especially in the harmonization of standards with international norms?
Accepting overseas building materials is already implemented and is already conducted.  That
is, building materials that meet foreign standards are admitted to be usable in Japanese Building
Standard Law.  For example, lumbers used in 2 X 4 construction materials, we have recognized
lumbers of 18 standards in USA, Canada, and Australia as equal to Japanese standards.
Transport Services
(Norway - 2)  On maritime transport services the reform programme referred to, in Section IV:  Trade
policies by sector, para. 164 of the Secretariat's report, was introduced in April of last year.  It is
expected that there will be less governmental intervention in establishing "proper" competition levels.
Could the Japanese delegation please give an update on the implementation of this programme?
The Comprehensive Programme of Logistics Policies describes enforcement of deregulation
including an investigation for abolishing Supply-Demand Adjustment.WT/TPR/M/32/Add.1
Page 16
As for the deregulation in the maritime transport services, the Administrative Reform
Committee deliberated and submitted its final opinion in December last year.  It recommended thatthe current license system for business operation (Supply Demand Adjustment) should be abolished
and replaced by a permission system and that the fee approval system should be abolished and
superseded by a fee filing system.
Ministry of Transport (MOT) is planning to implement deregulation in this business reflecting
these opinions.  ln this process MOT is intend to build consensus with the parties concerned, throughdeliberations in the Committee for Maritime Transport and others.
Comments:
To further discuss the issue, the Council for Transport Policy, the Committee for Maritime
Transport started discussion in May of 1998.  It deliberated on specific approaches for deregulation in
the port transport business sector to realize the Administrative Reform Committee's final opinion, andpublished its final opinion in June of 1999.  A bill for amending the Port Transport Business Law
shall be drawn up and introduced in the Diet session from January 2000, to take effect within 2000.
(E.U. - 3.26)  With regard to maritime transpo rt, para. 1V.159 (page 143) of document WT/TPR/S/32
mentions licenses for port service providers but does not make reference to discussions on Japanese
port practices between different interested parties during 1997, in which this issue was also taken up.In this context, it is important that licenses for port service providers will be granted to foreign
applicants in a transparent and non-discriminatory  manner.  What are the G0J's expectations with
regard to the effective implementation of the 3 and 4 party agreements reached in late 1997 in port
services?
(With regard to port transport license, the Secretariat's report indicates that no new license has been
admitted for these ten years, which is not true.  11 new licenses were given in a year from April 1996
to March 1997.)  There are no discriminatory measures in the Port Transport Business Law.  Whenforeign companies applied for the licenses, their application would be treated and judged by standards
described in the law, just the same way as those of Japanese companies.
No foreign companies has applied for port transport business license so far.
In last October, to improve the existing prior consultation system, the four parties concerned
(MOT, JHTA, Japan shipowners' Port Council, and Japan Foreign Steamship Association) agreed to
simplify the system and to ensue transparency in the process, such as to cut down consultation
matters.
Moreover, with regard to the alternative process in which JHTA has no rule, the three parties
concerned (MOT, Japan shipowners Fort Council, and Japan Foreign Steamship Association) agreed
that MOT would give assistance needed in setting and enforcing this process, under the principle ofnon-governmental intervention into labour-management problems.
Revision of labour-management agreements is needed to enforce some items in the four
parties agreement, and this means that the agreement as to these items will not be enforced until these
labour-management agreements are revised.
However, other items in the four parties agreement have already been enforced, such as
ensuring transparency in procedures, or actions by MOT as a mediator in case of disputes.WT/TPR/M/32/Add.1
Page 17
As mentioned above, meaningful reform has been implemented in the existing prior
consultation system.
Though no shippers has undertaken the alternative process in the three-parties agreement,
MOT is determined to give assistance needed in se tting and enforcing this process, under the principle
of non-governmental intervention into labour-management problems.
(The Secretariat's report also indicators that JHTA obstructs Sunday Operations, which should be
totally denied.  The enforcement of Sunday Operations is not decided by JHTA, but by labourmanagement negotiations.  Sunday Operations are being enforced in major ports.)
(U.S. - 37)  It is our understanding that no Type I or II stevedoring licenses have been granted to
foreign companies wishing to provide harbour transportation services.  Can Japan reconcile this fact
with the statement in the Secretar iat's report (para. 161) that there are no discriminatory measures
with respect to foreign participation in international maritime or auxiliary services?
No foreign companies have applied for port transp ort business licenses so far, in spite of the
fact that there are no discriminatory measures in the Port Transport Business Law.
When foreign companies applied for the license s, their application would be treated and
judged by standards described in the law, just the same way as those of Japanese companies.
(E.U. - 3.25)  With regard to air transport, paragraph 1V.148 (page 140) of document WT/TPR/S/32
says that airport slot allocation for intentional flights is coordinated with IATA schedule
Coordination conferences and allocation is not subject to government regulations.  Who/which body
is in charge of slot allocation?  Which rules or guidelines, governmental or non-governmental, or
administrative guidance, are followed in slot alloca tion?  Can GOJ confirm that all slot allocation,
including reallocation of unused slots, take place according to the 1ATA guidelines alone and that the
non-discrimination principle is fully applied?
The slot coordination at the Japanese congested airports (Narita and Kansai) is being
conducted in a fair and non-discriminatory manner by the IATA Slot Coordinator.  The Coordinator is
entirely responsible for all of the slot coordinati on process, is independent from the government and
applies the IATA guidelines and IATA-approved, locally established rules.
(Switzerland – 17)  On page 141 para.149 of the Report by the Secretariat it is stated that a new slot
allocation standard was established and has been im plemented since March 1997 in order to improve
the slot allocation process.
Could we receive some additiona1 information abou t the impact of this new economic instrument
regarding the two major international airports (New Tokyo (Narita) and Kansai), especially with
regard to the situation for applications for foreign carriers?
The slot allocation rule relating the Haneda Airport (implemented since March 1997) is
applied to only domestic air services, so it doesn't affect a foreign carrier,
In April 1997, restrictions to limit the supply of services to two or three carriers on most
routes were eliminated (page 141, para 153 of the Report by the Secretariat).
(Switzerland – 18)  What is the impact of this liberalization especially regarding the possibilities for
foreign carriers?WT/TPR/M/32/Add.1
Page 18
The standard to limit the supply of services to  two or three carriers (abolished in April 1997)
has been applied to domestic air services, so it doesn't affect a foreign carrier
Tourism
(Switzerland – 19)  A potential entrant to the tourism market must register with the Minister of
Transport.  It is specified on page 146, para. 174 that inter alia, the employment of appropriate
"tourism business managers" is required for registration.
Could you specify this requirement?
A travel agent must assign one or more "certified travel service supervisors" to each of his/her
offices.  A certified travel service supervisor is required to undertake the following activities:
(a) ensure the upgrade of quality of the persons operating a travel agency business engage;
(b) guarantee the Implementation of the conditions of transactions to protect clients who deal with
travel agents;  and (c) ensure the upgrade of service level which is offered by travel agent.  A certifiedtravel service supervisor must attend to the business of administration or supervision in order to
ensure certainly in rendering travel services at the office concerned such as explanation of terms of
transaction, issuance of travel condition document, advertisement and settlement of complaints from
clients regarding travel arrangements.
(Switzerland – 20)  What is an "appropriate" tourism business manager?
To obtain the qualification of "certified travel service supervisor", he/she has to pass the
national examination.
(Switzerland – 21)  Are there any nationality requirements?
Absolutely none.
Professional services
(Australia – 25)  Will Japan be moving to improve access in professional services, particularly:
counting third-country experience towards the five year experience requirement for practising foreignlaw;  the removal of the requirement that accounting, auditing and bookkeeping be supplied only by
accountants qualified as "konin-kaikeishi" or by an audit corporation;  and allowing foreign engineer
and architects to practice the full range of engineering and architectural activities?
With regard to the practising experience requirement which is one of the standards for
approving qualification, we will take action to amend the law so that the practising requirement ofhaving engaged in practice in the country of primary qualification is shortened to three years or more
and the experience having engaged in practising legal business concerning the country of the primary
qualification in a foreign country other than the country of primary qualification may be calculated in
that period.
Among the services provided by certified public accountants, i.e. accounting, auditing and
bookkeeping, bookkeeping services can be provided without a license.  Auditing services is permitted
only for certified public accountants, which includes foreign licensed certified public accountants,
because it requires highly technical knowledge.  We recognize that the situation in your country is the
same on this point.WT/TPR/M/32/Add.1
Page 19
In Kenchikushi Law as is said in article 4, item 3 and other related orders, for those who get
overseas architect licences, we provide exceptions that enable them to acquire a Japanese kenchikushilicence considering their country's licence system and their experiences in Japan and their countries.
Legal Services
(U.S. – 33)  Japan established the "special joint enterprise" rather than allow foreign lawyers to enter
into partnerships with or hire bengoshi.  Foreign lawyers in Japan find this mechanism quite
unsatisfactory, and stated in a Petition that they filed in September 1997 that the special joint
enterprise "is an impractical highly regulated a rrangement between individual gaiben and bengoshi,
which creates unnecessary costs for clients and unnecessary complications for both gaiben and
bengoshi".  Moreover, only a very small number of the foreign legal consultants in Japan have made
use of this mechanism.
According to an amended law implemented on January 1995, gaikokuho-jimu-bengoshi are
allowed to establish a "specific joint enterprise" with bengoshi.  This system of a "specific joint
enterprise" is institutionally quite similar to a partnership and it takes the form of a continuous
business enterprise, the purpose of which is to handle legal cases as a collaboration between
gaikokuho-jimu-bengoshi and bengoshi.
The Ministry of Justice and the Japan Federation of Bar Associations jointly established a
"Study Commission on the Issue of Foreign Lawyers," which carefully considered the system of
acceptance of foreign lawyers and how the system should be as well as other related issues.  On
October 30, 1997, they proposed the system so that limits arising from the purpose of the "specific
joint enterprise" would be abolished in legal case s which had transnational elements thus enabling
gaikokuho-jimu-bengoshi and bengoshi to consistently provide a legal service based an a
comprehensive and integrated cooperative relationship in each area of their work leading to a final
solution.  Taking this proposal into consideration, the Ministry of Justice has decided to take thenecessary steps to amend the law in this Diet session.  Consequently, the Ministry of Justice believes
that it will be able to substantially respond to foreign and domestic remands.
In addition, nine out of eighty-six gaikokuho-jimu-bengoshi are participating in this "specific
joint enterprise" at present.
(U.S. – 34)  It is essential that the liberalization of Japanese legal services keep pace with ongoing
deregulation and market liberalization to ensure that both Japanese and foreign parties are able to
obtain fully integrated transnational legal services in Japan as well as for cross-border transactions.
However, unreasonable and unnecessary restrictions on the provision of legal services prevent both
foreign and Japanese lawyers from offering integrated transnational advice.
The system of the acceptance of foreign lawyers is deeply related to the system of bengoshi
which forms a part of the judicial system in our country, and therefore from the viewpoint of
protecting the client and so forth, the requirements for accepting foreign lawyers and the range of
practice have to be stipulated.
Incidentally, the "Study Commission on the I ssue of Foreign Lawyers" proposed a wider
relaxation of the practising experience requirement which is one of the acceptance requirements for aforeign lawyer;  allowance of the third country law under certain requirements hereby expanding the
range of practice of accepted foreign lawyers and wider relaxation of regulations related to the
purpose of the "specific joint enterprise" as described in 33.  Referring to this proposal, the Ministry
of Justice has decided to take necessary steps to amend the law in this Diet session and believes
consequently that it will be able to substantially respond to foreign and domestic demands.WT/TPR/M/32/Add.1
Page 20
(U.S. – 35)  What are the prospects for the Government of Japan allowing partnerships between
bengoshi and gaiben (foreign lawyers), and the employment of bengoshi of gaiben, just as bengoshiare allowed to hire foreign lawyers.
As "employment", in legal terms means that the employee obeys the instructions or orders of
the employer, if a gaikokuho-jimu-bengoshi who has a limited range of practice is permitted to
employ a bengoshi, this would be tantamount to a person who is prohibited form handling a case
because he/she does not have the necessary qualifications, deciding the policies and so on of thebusiness handed by the bengoshi and thus the qualified person would be handling business under the
instructions or orders of the unqualified person.  This would be hard to permit in the present legal
system because it would be an extremely diffic ult problem for our qualification system, and it is
different from the case of a bengoshi who has no limitation on the range of practice employing a
gaikokuho-jimu-bengoshi.  Therefore, at the present time, we believe that it is not possible to permit agaikokuho-jimu-bengoshi to employ a bengoshi.
Furthermore according to an amended law implemented in January 1995 gaikokuho-jimu-
bengoshi are allowed to establish a "specific joint enterprise" with bengoshi.  This system of a
"specific joint enterprise" is institutionally quite similar to a called partnership and it takes the form of
a continuous business enterprise, the purpose of which is to handle legal cases as a collaborationbetween gaikokuho-jimu-bengoshi and bengoshi.
In addition, on 30 October 1997, the "Study Co mmission on the Issue of Foreign Lawyers"
proposed that the system be amended so that limits arising from the purpose of the "specific joint
enterprise" would be abolished in legal cases which had transnational elements thus enabling
gaikokuho-jimu-bengoshi and bengoshi to consistently provide a legal service based on a
comprehensive and integrated relationship in each area of their work leading to a final solution.
Taking this proposal into consideration the Ministry of Justice has decided to take the necessary stepsto amend the law in this Diet session.  Consequently, the Ministry of Justice believes that it will be
able to substantially respond to foreign and domestic demands concerning the issue of the partnership,
but at the present time, it would be difficult to further relax the rules.
(U.S. - 46)  Now that the Ministry of Justice and Nichibenren have submitted their recommendation
and failed to recommend removal of the ban that bars employment of Bengoshi to be foreign legalconsultants in Japan, what steps is Japan planning to take to address serious concern that both
Japanese and foreign parties are able to obtain fully integrated transnational legal services in Japan?
As we stated in No. 35, "employment" in legal terms, means that the employee obeys the
instructions or orders of the employer, if a gaikokuho-jimu-bengoshi who has a limited range of
practice is permitted to employ a bengoshi, this would be tantamount to a person who is prohibitedfrom handling a case because he/she does not have the qualifications, deciding the policies and so on
of the business handled by the bengoshi and thus the qualified person would be handling business
under the instructions or orders of the unqualified person.  This would be hard to permit in the present
legal system because it would cause an extremely difficult problem for our qualification system, and it
is different from the case of a bengoshi who has no limitations on the range of practice employing agaikokuho-jimu-bengoshi.
Therefore, at the present time, we believe that it is not possible to permit a gaikokuho-jimu-
bengoshi to employ a bengoshi.
As we already stated in 33 to 35, the "Study Commission on the Issue of Foreign Lawyers"
proposed a wider relaxation of the practising experience requirement which is one of the acceptancerequirements for a foreign lawyer;  allowance of the third country law under certain requirementsWT/TPR/M/32/Add.1
Page 21
thereby expanding the range of practice of accepted foreign lawyers and wider relaxation of
regulations related to the purpose of the "specific joint enterprise".  Referring to this proposal, theMinistry of Justice has decided to take the necessary steps to amend the law in this Diet session and
believes consequently that it will be able to substantially respond to foreign and domestic demands
including the points of this question.WT/TPR/M/32/Add.1
Page 22
ANNEX 1
The Government of Japan revised its Three-Year Programme for Promoting Deregulation for
fiscal 1999.  This translation is for information only and only the original Japanese text is definitive.
This translation is prepared by the Ministry of Foreign Affairs and may be subject to further revision .
THE THREE-YEAR PROGRAMME FOR PROMOTING DEREGULATION AS REVISED
(Provisional and unofficial translation) - Revised by a Cabinet Decision on March 30, 1999
1. Aims and Purposes
The basic aims of deregulation are outlined as follows:
(a) through a drastic structural reform pertaining to Japan's society and economy, to
create a free and fair socio-economic system that is fully opened to the international
community and based on the rules of self-responsibility and market principles;  and,
(b) to shift emphasis in public administration from ex ante facto  regulations to ex post
facto  monitoring of compliance with general rules.
To achieve these aims, deregulation shall be promoted along this Programme during
the three-year period between fiscal 1998 and fiscal 2000, while emphasizing the following
points:
(1) regulations shall be abolished or otherwise relaxed under the principle that economic
regulations shall be lifted and social regulations minimized;
(2) regulatory arrangements shall be rationalized by, for example, the introduction of
inspection by the private sector;
(3) regulations shall be made simpler and clearer;
(4) international harmonization of regulations;
(5) speeding up of regulatory procedures;
(6) transparency in procedures for formulating regulations.
2. Cross-Sector Approached of Review
(1) Review of Regulations related to entry into businesses
Regulations related to entry into businesses shall be reviewed in order to ease and abolish
barriers to entry, keeping an eye on international harmonization.  Emphasis shall be placed on the
removal of entry barriers affecting foreign companies and foreign products into the Japanese markets.Notably those measures related to supply-and-demand balancing regulations that are itemized in the
latter part of this Programme shall be steadily im plemented in compliance with the basis policy that
supply-and-demand-balancing regulations should be reviewed for repealing them.  Regulations
affecting plant and equipment and fares and other charges shall be reviewed as well so that they will
not function as substantial impediments to entry.
Areas where private business corporations have been strictly excluded shall be reviewed from
the viewpoint of "freedom in principle and prohibit ion only as an exception" to allow and encourageWT/TPR/M/32/Add.1
Page 23
business corporations to enter into those areas and to stimulate improvements in services and cost
reductions through competition.  With this regard, due attention shall be paid to the reviewing of thesystems of standards/specifications and inspection/certification.
(2) Review of Government Approv al and Notification Requirements
Permission and approval requirements, even when their retention is deemed necessary, shall
be reviewed for relaxation:  i.e., from chartering to permission or approval procedures, and from
permission and approval to notification procedures.  Concerning regulatory requirements related tomatters that are similar or deemed to belong the same category, the review shall be carried out in the
direction of applying the lowest regulatory requirement to all other regulations of the group as far as
possible.
Furthermore, notification procedures shall be reviewed for changing from advance
notification to ex post facto  notification in order to allow greater freedom to the notifying party as
originally intended in notification procedures.
(3) Review of Certified Qualification System
Ministries and Agencies concerned shall review, in accordance with the principles set forth in
Attachment 1, certified qualification system with fu nctional monopoly etc.  This review shall focus on
reviewing the provisions of functional monopoly, qualification standards, and functional boundarieswith a view to achieving greater convenience for the public and for stimulating competition in the
services concerned.  Based on the results of these reviews, the responsible Ministries and Agencies
shall implement pertinent measures within the period of this Programme.
(4) Review of Standards/Specifications and Inspection/Certification
With regard to standards/specifications and in spection/certification (hereinafter referred to
alternatively as "standards/certification"), Ministries and Agencies concerned shall, in accordance
with the principles set forth in Attachment 2, review standards and procedures while aiming atreducing direct government intervention to necessary minimum levels.  The responsible Ministries
and Agencies shall endeavour to complete their reviews within the period of this Programme and shall
promote the following:  revisiting the scope of standards/certification involving the state;  switching
over the new systems based on self-confirmation and self-maintenance;  achieving greater
international harmonization of standards;  changing over to performance-based standards; acceptingforeign data and adopting mutual recognition arrangements;  and eliminating duplicate inspections.
In this process, competitive market principles shall be introduced in those inspection and
certification systems utilizing such private sector entities as trade associations and non-profit
organizations.
In achieving greater conformity with international standards, the Government shall actively
make proposals to the international community in order to participate more fully in the formulation of
international systems and standards.  Further, in order to reduce regulatory burdens on the public
while promoting technological development and efficient equipment management, Ministries and
Agencies concerned shall consider introducing, in principle, performance-based standards instead of
specification-based ones.
Furthermore, the Government shall utilize the function of Administrative Inspection as a
means to promote deregulation and improve standards/inspection systems, based upon the
fact-findings of actual public administration.WT/TPR/M/32/Add.1
Page 24
(5) Simplifying and speeding up of the Proce ss of Reviewing Applications for Licenses,
Permission and Approvals.
In order to ensure the steady implementation of the "Measures to Halve or Shorten the
Current Processing Time for Reviewing Applications for Licenses, Permissions and Approvals"
(September 29, 1998), a follow-up review shall be undertaken and the findings published around the
end of September 1999.
In support of the above, continued efforts shall be made to take specific actions with relation
to the "Measure for Reducing Burdens of Application Procedures" (Cabinet Decision on
February 10, 1997) that aim to achieve further simp lification, computerization and "paper-less" filing
and networking of procedures.
(6) Revisiting Review Standards for Applicati ons for Licenses, Permissions and Approvals
Review standards for issuing licenses, permissions and approvals shall be revisited in order to
clarify, specify and quantify them and thereby minimize discretionary elements as far as possible.
The review shall also aim to simplify documentation and data needed for application.
Notice shall be taken of that this review w ould contribute to simplifying and speeding up of
the processes for reviewing applications for licenses, permissions and approvals under paragraph (5)
above.
Management and Coordination Agency shall, in cooperation with other Ministries and
Agencies, continue its on-going cross-sector study as to the types of legal framework most suited for
stipulating respective regulations in view of specific  characteristics of each regulation:  such as law;
cabinet order;  ministerial ordinance;  official notice,  and so on.  An interim report of the findings of
this review shall be published within this calendar year as a goal date.
(7) Strict enforcement and Public Education on Administrative Procedure Law
In accordance with the Administrative Procedures Law, efforts shall be made to secure
clarification and transparency in administrative dispositions such as licenses, permissions and
approvals as well as administrative guidance.  Steps shall be taken to further educate the public and
businesses in the Administrative Procedure Law in order to encourage its full utilization.
Furthermore, in order to promote greater transparency and predictability in regulatory
processes, efforts shall be made to specify typical  process time frame for such licenses, permissions
and approvals as are lacking for such a time frame;  by the same token, review standards shall be
established as soon as possible for those lacking such standards.
(8) Public Comment Procedure for Formulating, Amending and Repealing a Regulation
In order to improve transparency and secure fairness in the decisions-making process related
to introducing, amending or repealing regulati ons, the Government shall enforce the "Public
Comment Procedure for Formulating, Amending or Repealing a Regulation" (Cabinet Decision on
23 March 1999).  Proposed statements and other information shall be notified to the public in the
process of formulating such Cabinet Orders and Ministerial Ordinances as are related to formulating,
amending or repealing a regulation, and consider relevant comments and information submitted by the
general public and businesses thereto in making final decisions.WT/TPR/M/32/Add.1
Page 25
In order to ensure that the said Procedure is properly implemented in the introduction,
amendment and abolition of regulations, the Management and Coordination Agency shall follow upthe status of implementation and publish its findings.
(9) Examination of Forthcoming Regulations
As a rule, forthcoming regulations shall be reviewed with a possibility of abolishment after a
certain period of time.  When drafting a law including new systems and related regulations, Ministries
and Agencies shall incorporate in the draft a clause requiring a review of relevant regulations after thepassage of a specified period of time (hereinafter referred to as "review clause"), except in such cases
where review is deemed inappropriate in view of the purpose and objectives of respective regulations.
When the conclusion of such reviews is to maintain existing regulations, the Ministry or Agency shall
make clear explanations for the need and justifications.
Minister's Secretariat and/or other competent coordinating sections of individual Ministries
and Agencies shall scrutinize forthcoming regulations under a basic principle that regulations shall be
kept to minimum necessary levels.  Necessity of a regulation, its expected effects and forecasted
burden on the public shall be analysed on each of forthcoming regulations.  Findings of these analyses
shall be published in a easily understandable manner promptly after the closing of each ordinary
session of the Diet, together with a list of bills with review clauses and the results of reviews madepursuant to the review clauses.
The Cabinet Legislation Bureau, the Administrative Management Bureau of the Management
and Coordination Agency, and the Budget Bureau of the Ministry of Finance shall undertake rigorous
examinations of forthcoming regulations based upon each organization's jurisdictions.
Furthermore, Ministries and Agencies shall work toward the creation of a new system
whereby they are held accountable to the public  for the effects and burdens of existing and
forthcoming regulations falling under their respective jurisdictions.  For this purpose, the Ministriesand Agencies shall make a further study on how to reinforce their policy evaluation capabilities
respectively.
3. Measures Relevant to Respective Fields
(1) Measures Relevant to Respective Fields
Measures relevant to respective fields are listed up in Attachment 3.
(2) Expediting Conclusions by Councils
Conclusions of councils deliberating matters relevant to the measures shall be expedited;  as a
rule, conclusions shall be submitted before the end of September 1999.  Incase councils are unable to
submit their conclusions prior to the said date, they  shall release interim reports outlining the progress
of their deliberations and, as a rule, shall submit their final conclusions prior to the end ofFebruary 2000.
4. Methods for promoting the Deregulation Programme
(1) Revising the Programme
This Deregulation Programme shall be revised toward the end of fiscal 1999 after taking into
consideration comments and requests received both at home and abroad between 1 November 1998and 31 October 1999, as well as the surveillance results of the Deregulation Committee of theWT/TPR/M/32/Add.1
Page 26
Headquarters for Promoting Administrative Reform.  In the process of revision, Ministries and
Agencies release interim reports on the progress of the revision work in early 2000.
With regard to the comments and requests received at home and abroad, responsible
Ministries and Agencies shall clarify the need and the justifications if they draw conclusions to
continue existing regulations.  The Management and Coordination Agency shall get together and
release these clarifications.
In order to promote deregulatory measures that would contribute to improving market access,
functions of OTO (Office of Trade and Invest ment Ombudsman) shall be actively utilized.
(2) Monitoring of the Programme
Measures prescribed in this Deregulation Programme shall be promoted actively and the
progress in the implementation of the Programme sh all be monitored.  The results of the monitoring
shall be reported to the Deregulation Committee of the Headquarters for Promoting AdministrativeReform and made public.
(3) Quantitative analysis of the Impact of Deregulation
The Economic Planning Agency shall actively undertake and publish quantitative analyses of
such economic impact of deregulation as the impact on demand stimulation, improvement in
productivity and price stabilization in order to deepen the understanding of the public in deregulation.
(4) White Paper on Deregulation
The Management and Coordination Agency shall, in cooperation with other Ministries and
Agencies, produce and publish a White Paper on Deregulation without delay in order to provide
information with the general public in a easily understandable way on the current state of government
regulations, progress of deregulation, outlines of the Deregulation Programme, impact and effects of
deregulation on the general public, etc.
(5) Surveillance activities of the Deregulation Committee of the Headquarters for Promoting
Administrative Reform
The Deregulation Committee of the headquarters for Promoting Administrative Reform shall
promote deregulation through its surveillance activities on the implementation of the measures
incorporated in the Programme and by addressing new issues and challenges.
The administrative offices concerned shall cooperate with the Deregulation Committee.  The
function of Administrative Inspection shall be actively utilized.
(6) International perspectives
Ministries and Agencies shall seek to gain international perspectives by actively and
continuously gathering information through the Internet and other means regarding how the
government agencies of other countries are administering matters corresponding to their respectivejurisdictions.  Efforts shall be made to make available to the public the information thus gathered.
The Ministry of Foreign Affairs shall endeavour to utilize its overseas missions to gather and analyse
a wide range of information concerning government regulations in other countries.WT/TPR/M/32/Add.1
Page 27
5. Measures related to the Promotion of Deregulation
(1) Promoting Fair and Free Competition
Competition Policy as well as deregulation shall be actively enforced as prescribed below in
order to promote fair and free competition.
(a) Continued efforts shall be made to strengthen the enforcement of the Anti-monopoly
Law, including the reinforcement of the Fair Trade Commission's investigative
functions.  Strict and vigorous measures shall be taken against price cartels, bidrigging and other types of violations of the Anti-monopoly Law, including accusing
for criminal prosecution.
In order to maintain a fair competitive market  environment following deregulation, strict and
prompt action shall be taken against unfair business practices, such as practices imposing an unjust
disadvantage on small and medium-sized enterprises.  Similarly, strict and prompt action shall betaken against misleading, advertising and representations leading consumers to misunderstand the
quality or contents of goods or services offered, and thereby preventing consumers from making
proper choices.
(b) In order to promote fair and free competition among businesses both at home and
abroad and thereby maintain consumers' in terests from the viewpoint of competition
policy and promoting deregulation, the Fair Trade Commission (FTC) shall actively
advocate competition policy by:  (i) conducting surveys and making necessary
proposals regarding the business areas where entry is restricted by supply-and-
demand balancing regulations and other regulations;  (ii) conducting surveys on the
post-deregulation conditions, raising necessary proposals;  and (iii) supporting
voluntary compliance with the Anti-monopoly Law on the part of businesses
regarding the business areas where entry regulations have been relaxed.  In addition,exemptions of the Anti-monopoly Law shall be reduced to a necessary minimum.
The FTC shall also conduct surveys from the viewpoint of competition policy, on the entry
regulations instituted by local governments, make proposals and undertake appropriate coordination
with administrative agencies concerned, as necessary.
(c) In accordance with the purport of the "Anti-monopoly Law Guidelines regarding
Administrative Guidance", Ministries and Agencies concerned shall make necessary
consultations in advance with the Fair Trade Commission to ensure that government
regulations are not replaced by anti-competitive administrative guidance after
deregulation.
(2) Dealing with non-Governmental restrictions in the Private Sector
With regard to non-governmental restrictions in the private sector, the Fair Trade commission
(FTC) shall take strict measures against the violations of the Anti-monopoly Law in accordance with
the provisions of the law.  The FTC shall also conduct fact-finding surveys on such restrictions and
seek to correct private practices that restrict competition.  In cases where such business practices are
employed based on competition-restricting administrative guidance, the FTC and the Ministries andAgencies concerned shall promptly undertake a review of such guidance.  Where there is no
administrative intervention, the ministries and Agencies concerned shall make widely known the fact
of their non-intervention and endeavour to clarify the source of the restriction.WT/TPR/M/32/Add.1
Page 28
(3) Perspective of "Regulatory Reform"
In addition to the active implementation of competition policy for more use of market
mechanism, in accordance with the progress of deregulation, as outlined under paragraphs (1) and (2)
above, due attention shall be paid to the importance of integrated approaches to deregulation, namely:
introducing new general rules in accordance with the transition from ex ante  approvals to ex post
monitoring, instituting principles of information disclosure new systems of consumer policy that
would contribute to establishing the principles of self-responsibility.
(4) Expectations of active roles by local Governments
It is essential that deregulation be promoted at local levels as well as at the national level:
local governments shall be expected to play activ e roles in promoting deregulation in accordance with
the purport of the Programme.  Where necessary, the national government shall study and review
regulations that are independently enforced by local governments as well as those based on nationallaws and ordinances, while paying due respect to the principles of local autonomy and
decentralisation.
(5) Promoting computerization of Public Administration
In accordance with the accelerated pace of computerisation and use of information
technology, both domestically and internationally, such as the rapid spread of Internet users,development of electronic commerce etc., it is essential to reduce the burdens on the public arising
from administrative procedures and to improve the efficiency of clerical works.  In pursuit of these
objectives, continued efforts shall be made to promote computerization of filings and application
procedures, wider adoption of "paper-less" filing and preservation of documents in electronic form,
based upon the "Basic Plan for the computerization of Government Administration" (Revised Plan:
Cabinet Decision on 20 December 1997) and the "Basic Policies for the Promotion of an Advanced
Information and Telecommunications Based soci ety" (approved by the Headquarters for the
Promotion of an Advanced Information and Telecommunications Based Society, as revised on
9 November 1998).
Prompt steps shall be taken toward realising "one-stop services" by utilizing the Internet for
providing explanations and guidance on administrative procedures, access to application forms, and
on-line filings.
Ministries and Agencies shall, while working to create comprehensive and trans-sector
networks encompassing the whole public sector including Ministries and Agencies and local
governments, promote integration of procedur es and improve efficiency in processing.
(6) Moving to a system emphasising ex post  monitoring and a more active role for the Judiciary
As the government moves toward a system of ex post facto  monitoring, efforts shall be made
to slim down systems pertaining to direct government regulations such as licensing, permissions and
approvals.  Efforts shall be made also to change over to a system focusing on the establishing of
explicit and clear rules and surveillance of compliance with these rules.
In accordance with growing expectations of the roles of the judiciary, it is highly expected
that the judiciary will actively study, and review its current arrangements in order to take appropriateaction.WT/TPR/M/32/Add.1
Page 29
ATTACHMENT 1
Review of Certified Qualification Systems with a focus on qualifications with Functional
Monopoly
1. Implementation of Reviews
Government certified qualification systems exist to safeguard the rights, safety and sanitary
standards of the public, to ensure fairness in transactions, to improve the standards, ethical or
otherwise, of qualified persons, and to assure the quality of services rendered to the public by
qualified persons certified under rigorous discipline based on law.  On the other hand, these systems
restrict the entry of individuals into certain markets through functional monopolies, restrictions on the
number of newly certified persons, and rules of eligibility for taking examinations.  These system
could have a major negative impact if the restriction of new entrants and exclusion of non-certified
persons from the market serve to eliminate competition from the services being rendered.
In light of this fact and based on the Deregulation Committee's First Report on Deregulation
(15 December 1998), the Ministries and Agencies co ncerned shall, in the course of the Three-Year
Programme for Promoting Deregulation, undertake to review and examine the issues mentioned under
Section 2 below and to implement appropriate measures based on the conclusions of these studies.
Particular attention shall be paid to systems in which non-certified persons are barred by laws
and ordinances from rendering certain services and activities (hereafter referred to as "functional
monopoly qualifications, etc.").
In undertaking these reviews, Ministries and Agencies shall pay due attention to the fact that
the Deregulation Committee of the Headquarters for Promoting Administrative Reform will be
conducting, parallel to the reviews undertaken by th e Ministries and Agencies, its own reviews that
also cover requirements for compulsory placement of certified personnel and monopoly use of
functional titles.  Whenever necessary, the Ministries and Agencies shall cooperate in full with theDeregulation Committee.
2. Standards and Viewpoints of Reviews
To provide for greater convenience of the publi c and to stimulate competition in the services
rendered, the Ministries and Agencies concerned shall review functional monopoly qualifications, etc.
coming under their respective jurisdictions in accord ance with the standards and viewpoints indicated
below.  These reviews shall cover the current ru les of functional monopolies, qualification standards
and functional boundaries, and shall examine the possibility of the abolition of functional monopolies
or replacement by requirements for compulsory placement of certified personnel or monopoly use of
functional titles.
(1) Functional boundaries defined excessively narrow shall he reviewed, and the
possibility of cross-entry among various qualifications shall be examined.
- With regard to activities of certified persons which can be properly handled
by persons certified in adjoining professions etc., the possibility of allowing
the entry into the services by other professions shall he examined as a means
to lowering the barriers of the boundaries.
(2) The following qualification systems shall be  reviewed with the possibility of their
abolition:WT/TPR/M/32/Add.1
Page 30
- Qualifications for activities not requiring expert knowledge that could be
conducted by non-certified persons;
- Qualifications that can be acquired without examination or other specific
requirements;
- Qualifications with extremely high examination success ratios or course
completion ratios;
- Qualifications with a very small number of annually certified persons as a
result, for example, of their social utility having been exhausted;
- Qualifications which in principle require success in examination, but which
are almost exclusively granted to persons acquiring the qualifications by
means other than examination as allowed under special provisions;  and
- Qualifications for which similar private-sector qualifications exist.
(3) Examinations shall be administered for all qualifications required by law to be based
on success in examinations.
(4) The abolition of such requirements of e ligibility for taking examinations as lacking
clear or rational justification shall he examined.
(5) Previous experience as a prerequisite for examination eligibility, and compulsory
training and course work after success in ex amination shall be reviewed so that these
requirements do not function as barriers to entry without justifiable reasons.
(6) Justifications of physical handicaps as cause for unconditional ineligibility shall be
examined.
(7) Special provisions and standards of certification pertaining to eligibility for taking
examinations and acquisition of certification shall be put in writing and published.
(8) Restrictions on the number of successful candidates shall be reviewed to ensure that
this practice does not function as a barrier to entry.
(9) The possibility of integrating various related or similar qualifications shall be
examined.  Additionally, the possibility of combining or exempting their
examinations and course work, or exempting their course requirements shall be
examined.
(10) Standards for success in examination shall be published.
(11) Various methods, such as those indicated below, shall be examined as a means to
facilitating the acquisition of certification.
- Promoting an examination system in which candidates are allowed to
accumulate subjects they have passed.
- Exempting candidates from taking examinations in subjects for which they
have previously achieved passing scores.WT/TPR/M/32/Add.1
Page 31
- Promoting the publication of examination questions and allowing candidates
to take home their examination questions.
(12) The grounds for estimating examination fees shall be examined.
(13) From the viewpoint of maintaining fair and effective competition, practices
concerning registration and admission to members' association shall be reviewed.
(14) From the viewpoint of maintaining fair and effective competition and rationality,
provisions related to remuneration shall be reviewed.
(15) From the viewpoint of maintaining fair and effective competition and rationality
restrictions on advertising shall be reviewed.
(16) The justification of periods of validity and compulsory participation in periodical
training courses shall be reviewed.
Note:
The above reviews shall be undertaken in accordance with chapter 2 section 2 (3):  "Principles
Pertaining to Standards and Viewpoints of Reviews"  contained in the First Report on Deregulation by
the Deregulation Committee of the Headquarters for Promoting Administrative Reform.WT/TPR/M/32/Add.1
Page 32
ATTACHMENT 2
Review of Systems of Standards/Speci fications and Inspection/Certification
The systems of standards/specifications and inspection/certification consist of various
standards provided by law pertaining to the manufacturing of products and the structure and
installation of equipment and facilities.  Mining and manufactured products and facilities and
equipment must satisfy the pertinent standards for the purpose of safeguarding the life, body and
property of people, as well as for achieving various policy objectives, such as preventing accidents,improving efficiency and rationalization of production and consumption, etc.  In addition, the
standards specify the procedures for certification of compliance.
Given the increasing globalization of economic activities. the current systems of
standards/certification exert a major impact on activities of corporation and consumers by raising
costs and narrowing the range of available choices.  Hence, it is important to pay due attention tominimising the impact, which is arising from the introduction and administration of
standards/certification systems, on these kinds of activities.  However, this must be done without
undermining the original intent of the system to safeguard life, body and property of people and to
achieve various policy objectives.
The Three-Year Programme for Promoting Deregulation decided upon by the Cabinet in
March 1998 states that the current systems of standards/certification must be reviewed in accordance
with the following four basic objectives:
(1) Direct government intervention should be minimized through transition to
self-confirmation and third-party certification;
(2) Competitive market principles should be introduced in the field of certification and
inspection;
(3) Performance-based standards should be introduced where appropriate;  and(4) Mutual recognition arrangements should be promoted.
In undertaking these reviews, the Government sh all pay particular attention to the following
points, and shall promote the review process with the goal of completing the reviews of
standards/certification systems before the end of fiscal 2000, the last year of the current Three-Year
Programme for Promoting Deregulation.
The Ministries and Agencies shall, in undertaking the reviews, take notice that the
Deregulation Committee of the Headquarters for Promoting Administrative Reform is responsible for
monitoring the progress in the implementation of the Three-Year Programme for Promoting
Deregulation, including matters related to standards/ce rtification systems.  In short, the Ministries and
Agencies shall review standards/certification in full cooperation with the Deregulation Committee.
1. Reviewing the scope of Standards/Certification under the Jurisdiction of the National
Government
The policy objectives of the standards/certification systems cover a wide range of areas,
including the securing of safety and the achievement of greater efficiency in transactions.  Taking into
account the socio-economic importance of these objectives in times of a disaster or accidents, some ofthese objectives cannot be achieved without the intervention of the national government.  On the other
hand, partly because of technological developments, other objectives do not necessarily require aWT/TPR/M/32/Add.1
Page 33
government-operated system of standards/certification.  Instead, these objectives could be achieved
through independent efforts of businesses, such as for acquiring the confidence in the market.
Therefore, it is necessary to re-examine standards/certification system to determine whether
or not continued intervention by the national government is truly required.  This calls for a thorough
and comprehensive review to be undertaken with a view to reducing the scope of administrative
intervention to a minimum necessary level.
2. Transition to a system based on Self-Confirmation and Self-Maintenance
A. Self-Confirmation, Self-maintenance  and Third-Party Certification
Even when continued government intervention is justified as necessary in the
above-mentioned reviews, a further round of re-examination should be undertaken in the interest of
promoting greater administrative efficiency and reducing the cost to businesses.  Specifically, thought
should be given to a system in which the role of the government is restricted to the establishment ofstandards, the surveillance of compliance, and the creation of appropriate safety-net mechanisms, and
thereafter allowing the system to operate under the principles of self-confirmation and
self-maintenance.  Next, even in such instances when a system dependent on self-confirmation and
self-maintenance alone may not be appropriate, th e immediate response should not be to institute
compulsory inspection by the government or government-designated inspection/certification
organizations acting in proxy of the government.  Rather, full consideration should be given to the
possibility of introducing a system based on self -confirmation and self-maintenance with provisions
for compulsory inspection by a fair and neutral third part body (third-party certification), in view of
current international rules.
In instances where it is inappropriate to uniformly apply the principles of self-confirmation,
self-maintenance and third-party certification to all of the participants in the business, introduction of
a "merit system" should be positively considered, whereby a system of self-confirmation,self-maintenance or third-party certification are selectively permitted to businesses with outstanding
past records.  Any system based on self-confirmation and self-maintenance is predicated on the
disclosure of adequate information to consumers and other market participants.  For this reason, it is
expected that businesses as well as administrative agencies will undertake efforts to promote the
greater disclosure of information.
B. Government and Government-proxy Organizat ions (Designated Inspection/Certification
Organizations)
Regarding standards/certification for which a system based on self-confirmation and
self-maintenance remains inappropriate notwithstanding the above-mentioned examinations, it would
be unavoidable that direct government intervention and the designation of inspection organizations toact in proxy of the government are in place, although it is necessary to continue to seek the possibility
of introducing a system based on self-confirmation and self-maintenance in the coming future.  In
addition, efforts shall be made to utilize, as far as possible, private organizations for this purpose.
Activities of inspection/certification shall be allowed to private business corporations other than those
non-profit organizations based on civil code etc.WT/TPR/M/32/Add.1
Page 34
3. International Harmonization of Standards, Introducing Performance-based Standards,
and the eliminating the Duplication of Inspection
The contents of standards should be formulated so that they do not bring in such negative
impacts as excess burdens on businesses involved in  international activities and reduction in the scope
of choices available to consumers of foreign products.
The contents of standards shall be determined  not only from the viewpoint of the policy
objectives each standard is designed to achieve, but shall also take into consideration the reduction ofthe burden on businesses and consumers that can be achieved through greater conformity with
international standards.  More specifically, in areas where ISO and other international standards
already exist, efforts shall be made to harmonise Ja panese standards with these existing international
standards after verifying the appropriateness of these standards.  In areas where international
standards do not yet exist, efforts shall be made to promote the adoption of Japanese standards asinternational standards.  Likewise, efforts shall be made to promote the acceptance of overseas data
and international mutual recognition.  The contents of standards must be such as to permit a flexible
response to technological innovation.  In pursuit of this objective, due consideration shall be given to
the possibility of, as a rule, re-defining all standards currently defined in terms of specifications and
replacing these with performance-based standards.
In cases of inspection involving two or more standards, measures shall be taken to eliminate
the duplication of similar inspection items in order to reduce the burden on businesses.WT/TPR/M/32/Add.1
Page 35
ATTACHMENT 3
Principal Deregulation Measures incorporated  in the Three-Year Programme for the
Promotion of Deregulation (category headings only)
1 Competition Policy etc.
2 Housing, Land and Public Works
3 Information and Telecommunications
4 Distribution5 Transportation
6 Standards/Specifications and Inspection/Certification
7 Finance, Securities, and Insurance
8 Energy
9 Employment and Labour10 Pollution, Waste, and Environmental Preservation
11 Explosives and Combustibles, Disaster Prevention and Safety
12 Education
13 Medical Care and Welfare
14 Legal Affairs15 OthersWT/TPR/M/32/Add.1
Page 36
ANNEX 2
The Government of Japan introduced "Public Comment Procedure for Formulating,
Amending or Repealing a Regulation" in a Cabinet Decision on March 23, 1998.  This .translation is
for information only and only the original Japanese text is definitive.
PUBLIC COMMENT PROCEDURE FOR FORMULATING, AMENDING OR REPEALING
A REGULATION
Cabinet Decision March 23, 1998
The Government finds that it is necessary for administrative organs to grasp a variety of
opinions, information, and expertise among the public and to accomplish fairness and improve
transparency in the process of formulating Ca binet Orders, Ministerial Ordinances, and other
statements of general applicability to formulate, amend, and repeal a regulation.
Therefore the government hereby establishes "Public Comment Procedure for Formulating,
Amending or Repealing a Regulation" or "Public Comment Procedure" through which administrative
organs shall formulate, amend, or repeal a regulation after considering comments and information
submitted by the public in response to the public notice of a proposed regulation.
Note:
In this procedure, "the public" shall include both citizens and non-citizens, individuals and
corporations in Japan and abroad.
Section I
Applicability
A statement of an administrative organ of the national government shall be formulated
through the procedure hereby established, so long as the statement is of general applicability and is
related to formulating, amending or repealing a regulation.  An administrative organ need not follow
the procedure hereby established under such circumstances as in need of prompt implementation, incase of emergency or insignificant matters.
Notes:
1. An administrative organ in charge of a statement (in case of a Cabinet Order, the
administrative organ having jurisdiction over the subject matter) shall determine the applicability of
the procedure hereby established in each case in accordance with the purpose of this procedure andshall be accountable to the public for the determination.
2. Statements to be formulated through the procedure hereby established shall include Cabinet
Orders, Ordinances of the Prime Minister's Office,  Ministerial Ordinances, Notifications, and other
statements of general applicability.
"Other statements of general applicability" shall include review standards, disposition
standards, and guidelines uniformly applied in ad ministrative guidance to more than one person, all as
defined in the Administrative Procedure Law, except when those standards and guidelines are not to
be made available to the public.WT/TPR/M/32/Add.1
Page 37
3. A statement "of general applicability" means one that is not directed to any particular person;
therefore, this procedure is not applicable to an  administrative disposition or planning that is of
particular effect.
4. This procedure is not applicable to concluding treaties and other diplomatic documents
(hereinafter referred to as "treaties"), nor to issuing statements to a foreign government or an
international organization related to concluding or implementing those treaties.
5. For the purpose of this procedure, "administrative organ of the national government" means
the Cabinet, the Prime Minister's Office, other Ministries, Independent Administrative Commissions,
Agencies, or subdivisions thereof.  Therefore, this procedure is not applicable to enacting statutes, nor
to ordinances and regulations of local governments since those rules are not statements of an
administrative organ of the national government.
6. This procedure is not applicable to preparing reports of study groups or other informal
gatherings for discussion that assist public administration, since these are not part of administrative
organs.
7. When corporations, such as government corporations, chartered corporations based on special
law, and other legal persons established by the civil code etc., set review standards or disposition
standards related to their authority granted by statutes and ordinances to render dispositions, anadministrative organ having jurisdiction over those statutes and ordinances shall lead those
corporations to take substantially the same procedure as hereby established.
8. Since this procedure is applicable to issuing statements of general applicability that are to be
concluded within the administrative authority, this pro cedure is not applicable to drafting bills that are
to be deliberated by the Diet.
9. Once this procedure is only applicable to issuing statements "related to formulating,
amending or repealing a regulation", it is  not applicable to establishing the following matters:
a. fact findings or factual analysis such as a white paper;
b. statements that are effective only within the administrative authority, such as Cabinet
Orders and Ministerial Ordinances related to administrative organizations or the fixed
number of personnel etc.;
c. guidelines of subsidies and statements related to benefit programmes such as
pensions;  and
d. ministerial statements such as a Cabinet Order prescribing the effective date of a
statute.
10. An administrative organ shall determine in each case whether or not a statement is "related to
formulating, amending, or repealing a regulation", taking account of the definition of "regulationpointed out in chapter 6 of the White Paper on Deregulation edited by the Management and
Coordination Agency in August 1998.
11. "Such circumstances as in need of prom pt implementation, in case of emergency or
insignificant matters" include cases in which an administrative organ has substantially no room for
administrative discretion, as when an administrative organ, adopting specific terms of a treaty,formulates, amends, or repeals a regulation in order to implement the said treaty.WT/TPR/M/32/Add.1
Page 38
12. When statutes or ordinances prescribe some special procedures such as a public hearing or a
prior notice to issue a statement that would otherwise be subject to this procedure, an administrativeorgan must observe such procedures.  Even in th at case, however, the administrative organ shall
endeavour to follow this procedure as much as possible, taking into consideration of the purpose
thereof.
Section II
Public Comment Procedure(1) Authority to Give Notice, Time of Notice
An administrative organ shall notify a proposed statement or other plans (hereinafter referred
to as "a proposed statement") to the public before the final decision-making, when it intends to issue a
statement subject to the procedure hereby established.
An administrative organ having jurisdiction over the subject-matter shall notify a proposed
Cabinet Order, a statement of the Cabinet.
Note:
1. A "proposed statement" to be notified shall not be limited to a draft itself, but may include
anything that clearly explains the substance of the proposed statement.
According to the nature of a case, a proposed statement to be notified may also include
pointing out several alternatives simultaneously, so long as it is an effective method.
(2) Materials to be Notified
In order to assist the public to understand a proposed statement an administrative organ shall
notify the following materials as much as possibl e in addition to the text itself of the proposed
statement:
a. an explanation of basis, purpose or background of the proposed statement;
b. materials relevant to the proposed statement including the legal provision under
which the statement is proposed and regulatory analysis on the degree and scope of
probable impact arising from formulating, amending or repealing the regulation;  and
c. the status of the proposed statement on how it is going to be dealt with.
(3) Methods of Public Notice
An administrative organ shall inform the public of a proposed statement as far as possible
using the following methods of public notice:
a. Publishing on the Internet;b. distribution at the counter concerned;
c. advertising in newspapers or magazines;
d. publishing in PR magazines affiliated with the administrative organ;WT/TPR/M/32/Add.1
Page 39
e. publishing in the official Gazette;  and
f. releasing to the press.When utilizing several methods of public notice an administrative organ notifies a proposed
statement whose volume amounts to a large extent, it  is enough for the organ to clarify the outline of
the proposed statement and the methods of obtaining all the materials notified.  In this case all the
methods of public notice need not include the whole materials to be notified.
If necessary, an administrative organ shall endeav our to inform experts, and interested parties
of the proposed statement in a suitable way.
Note:
1. Since it is necessary to ensure that the interest ed public can obtain the notified materials, it is
desirable to make widely known notified materials by various methods.
(4) Time-period of receiving Comments and Information
At the time of notifying the proposed statement an administrative organ shall specify the
time-period of receiving comments and information that shall be determined with about one month as
a guide, taking account of the time span considered to be necessary for the public to submit commentsand information.
Note:
1. "About one month" is only a guide calculated form the previous experience, so that an
administrative organ shall appropriately determine the time-period according to the nature of a case.
(5) Methods of submitting Comments and Information
At the time of notifying the proposed statemen t an administrative organ shall specify methods
of submitting comments and information such as sending a letter, a facsimile or an e-mail.
Otherwise an administrative organ may hear comments and information by holding a public
hearing.  Even in this case an administrative organ shall accept written comments and information,
when they are submitted.  At the time of notifying the proposed statement, and administrative organ
shall specify the procedure related to holding a public hearing and submitting written comments and
information.
(6) Dealing with Comments and Information
The administrative organ that notified a proposed statement to the public shall make a
decision after considering comments and information submitted form a view thereon, and notify to the
public the views as well as the comments and information submitted.WT/TPR/M/32/Add.1
Page 40
Notes:
1. In principle and administrative organ shall give the above-mentioned notice of the views by
the time of issuing the final statement.  And at that time an administrative organ shall specifically
indicate where it changed the proposed statement.
2. An administrative organ may properly compile and notify to the public comments and
information submitted and its views thereon.  In this case those comments and information submitted
shall be made available to the public for a certain period at a document reading room concerned.However, if disclosing those comments and information submitted threaten to injure the right of a
person or a corporation, a competitive power in the market, or there legitimate interests, an
administrative organ may at its discretion withhold the whole or a part of them.
3. An administrative organ may notify or make available to the pubic the names and other
characteristics of a person or a corporation that submitted comments and information, only if theadministrative organ indicated such handling at the time of notifying the proposed statement.
4. When an administrative organ hears comments in a public hearing, it shall put those
comments into written form.
5. An administrative organ shall give the above- mentioned notice following the subsection 2 (3).
Section III
Miscellaneous
(1) Exemption for a Special Decision-Making Process
When an administrative organ issues a fina l statement after adopting the substance of a
statement that another administrative organ has issued through substantially the same procedure as
hereby established, the former administrative organ itse lf need not follow this procedure, even if the
final statement would normally be subject to this procedure.
Notes:
1. There are many cases where an administrative organ of the national government makes a
decision after receiving a report of another administrative organ.  In these cases, so long as an
administrative organ issues a final statement adopting the substance of a statement made by anotheradministrative organ through substantially the same procedure as hereby established, in which the
latter administrative organ notified a proposed statement to the public and considered the comments
and information submitted, the former administrative organ itself need not follow the procedure
hereby  established.  Examples include the following:
a. a Cabinet Order, a Ministerial Ordinance, or Notifications established in accordance
with a report issued by an advisory counc il through substantially the same procedure as
hereby established;  and
b. a review standard enacted by a chief of a local branch office in accordance with a
circular issued by a Minister through substantially the same procedure as hereby established.
2. When a proposed statement is notified by an administrative organ other than the one in charge
of issuing a statement, the former administrative organ shall form a view on the comments and
information submitted.WT/TPR/M/32/Add.1
Page 41
(2) Public Comment Docket
Each Ministry of Agency shall make a public comment docket containing each pending
public comment procedure, publish it on the Internet, and keep its copy in a document reading room
concerned.
Note:
1. A public comment docket shall list at least the following:
a. the name of a case;
b. the date of public notice, and the deadline of submitting comments and information;
c. the methods of obtaining materials notified;  and
d. the name and address of personnel with whom the public may communicate with
respect to the matter.
(3) Grasp of the Actual Situation
For the time being each Ministry or Agency shall provide the Management and Coordination
Agency with reports that explain how each Ministry or Agency has implemented this Cabinet
Decision concerning the public comment procedure for formulating, amending, and repealing aregulation.
The Management and Coordination Agency shall work up and publish a government-wide
report.
(4) Revision
If necessary, this procedure shall be subject to revision.
Section IV
Effective Date and Interim Measures
The Cabinet decision hereby made shall come into force as from 1 April 1999.  However, a
statement of an administrative organ of the national government, that has already been under
formulation on that effective date, shall be exempt from the procedure hereby established.  Even in
that case, such statement shall be formulated, as far as possible, through substantially the same
procedure as hereby established.
(This provisional translation may be subject to further revision.)
Edited by Professor Takayoshi Tsuneoka, Gakushuin University.
Native language check and advice received from Dr. Michael Marcus.
Original translation work by Shuichi O. Takano.
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