Japan WT/TPR/S/76
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II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES
(1) INTRODUCTION
1. Since its previous Trade Policy Review in 1998, Japan has made no major changes to its trade
policy regime except those pertaining to its regulatory framework on financial services.  Japan's trade
policy priorities include strengthening the multilateral trading system, as embodied in the WTO.
According to the authorities, recent initiativ es by the Government and government-affiliated
institutions to study the possibility of establishing bilateral free-trade agreements will not undermine
Japan's commitment to the multilateral trading system.
2. The Government remains committed to the promotion of deregulation and transparency.  Its
commitment to further deregulation is demonstrated by the Cabinet's adoption, in April 2000, of a
revised Three-Year Program for Promoting Deregulation, which is intended to implement furtherderegulation in various sectors (Chapter III(5)(vi)).
1  Another cabinet decision on Ideal Socio-
economy and Policies for Economic Rebirth, adopted in July 1999, calls for the establishment of fair
markets and consumer sovereignty in a transparent manner.  Recently, steps have also been taken by a
few ministries, notably the Ministry of Industry and Trade (MITI), to evaluate trade and trade-related
measures;  by improving the transparency of such measures, these evaluations would improve publicaccountability, insofar as evaluations are published, and thereby contribute to more informed policy-
making.
3. During the period under review, Japan has been a major participant in WTO activities;  it also
actively participated in the WTO's Third Ministerial Conference in Seattle in 1999.  Japan has used
extensively the WTO dispute settlement mechanism, having been a party to four disputes, three as
plaintiff and one as defendant.
2  Japan participates in the Working Groups on Competition Policy and
Investment, as well as that on Transparency on Government Procurement.
4. Although Japan has traditionally eschewed regional free-trade agreements on the grounds that
they could lead to exclusive, discriminatory tr ading blocs, and thereby undermine the multilateral
trading system, such agreements now seem to be attracting greater interest in Japan;  more
specifically, an agreement with Singapore is being studied jointly by the two Governments concerned
as well as business representatives and academics, and government-affiliated institutes in Japan andKorea are exploring the possibility of a free-trade agreement between the two countries.  Japan has
long had a strong bilateral relationship with the United States;  arrangements between the two
countries currently cover several trade and trade-related areas.  Japan also has bilateral treaties with
several countries in the areas of investment, taxation, and social security;  six were concluded between
1998 and first half of 2000.
5. Japan grants unilateral preferential market access to products from certain developing
countries under its Generalized System of Preference (GSP) scheme (section (4)(iv)).  Japan renewed
its GSP scheme for ten years in 1991, up to 31 March 2001.  The list of beneficiaries and items
covered by GSP is reviewed annually.  On 1 April 2000, the West Bank and the Gaza Strip was added
to the list of beneficiaries, while countries classified in the World Bank Atlas as high incomeeconomies for the previous three years were removed.
                                                     
1 The original Plan was adopted in April 1998 and first revised in April 1999.
2 The disputes included are those where action began between 1 January 1998 and 1 May 2000.WT/TPR/S/76 Trade Policy Review
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(2) DEVELOPMENT AND ADMINISTRATION OF TRADE POLICY
(i) Main trade law and regulations
6. As reported in its previous Trade Policy Reviews, Japan has no general trade laws that set out
general objectives and modalities of trade policies.  Rather, within the framework of existing laws
(Table II.1), the Cabinet, in close cooperation with the ruling political parties, decides upon major
trade policy objectives relevant to specific trade problems.  The Japanese Constitution stipulates thattreaties concluded by Japan should be faithfully observed.
3  The WTO Agreements are deemed by the
authorities to be treaties under the Constitution and, as such, have domestic effect.  Obligations under
the WTO Agreements supersede those under domestic laws or ordinances to the extent that the latter
are in conflict with the former.
Table II.1
Japan's major trade-related laws and regulations
(Date of most recent amendment in square brackets)
Foreign trade and exchange restrictions
Foreign Exchange and Foreign Trade Law (1949 Law No. 228) [1998]
Export and Import Transaction Law (1952 Law No. 299) [1997]
Foreign Exchange Order (1980 Order No. 260) [1998]
Cabinet Order on Inward Direct Investment (1980 Order No. 261) [1996]
Export Trade Control Order (1949 Order No. 378) [1999]
Import Trade Control Order (1949 Order No. 414) [2000]
Customs- and tariff-related regulations
Customs Law (1954 Law No. 61) [2000]
Customs Tariff Law (1910 Law No. 54) [2000]
Temporary Tariff Measures Law (1960 Law No. 36) [2000]
Cabinet Order Relating to Countervailing Duties (1994 Order No. 415)
Cabinet Order Relating to Anti-Dumping Duties (1994 Order No. 416) [1996]
Cabinet Order Relating to Emergency Duties (1994 Order No. 417)
Cabinet Order Relating to Retaliatory Duties (1994 Order No. 418)
Cabinet Order on Tariff Quotas (1961 Order No. 153) [2000]
Trade promotion
International Trade Insurance Law (1993 Law No. 36) [1998]
Law on Extraordinary Measures for the Promotion of Imports and the Facilitation of Foreign Direct Investment in Japan
(1992 Law No. 22) [1996]
Services and energy
Construction Business Law (1949 Law No. 100) [1996]
Banking Law (1981 Law No. 59) [1999]
Insurance Business Law (1995 Law No. 105) [1 999]
Securities and Exchange Law (1948 Law No. 25) [1999]
Telecommunications Business Law (1984 Law No. 86) [1998]
Law Concerning the Measures by Large-Scale Retail Stores for Preservation of Living Environment (1998 Law No. 91)
Employee's Pension Insurance Law (1954 Law No. 115)
Civil Aeronautics Law (1952 Law No. 231) [1999]
Marine Transportation Law (1949 Law No. 187) [1999]
Special Measures Law Concerning the Handling of Legal Business by Foreign Lawyers (1986) Law No. 66) [1998]
Table II.1 (cont'd)
                                                     
3 Article 98 of the Constitution.Japan WT/TPR/S/76
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Services and energy (cont'd)
Certified Public Accountants Law (1948 Law No. 103) [1999]
Certified Tax Accountant Law (1951 Law No. 237) [1993]
Law for Improvement of International Tourist Hotels (1949 Law No. 279) [1999]
Travel Agency Law (1952 Law No. 239) [1999]
Electricity Utilities Industry Law (1964 Law No. 170) [2000]
Gas Utility Industry Law (1954 Law No. 51) [1999]
Provisional Measures Law on the Importation of Specific Petroleum Refined Products (1985 Law No. 95) [expired in March 1996]
Petroleum Reserve Law (1975 Law No. 96) [1999]
Petroleum Industry Law (1962 Law No. 128) [1995]
Law on the Quality Control of Gasoline and Other Fuels (1976 Law No. 88) [2000]
Standards and technical regulations
Industrial Standardization Law (1949 Law No. 185) [1997]
Law Concerning Standardization and Proper Labelling of Agricultural and Forestry Products (JAS Law) (1950 Law No. 175) [1999]
Pharmaceutical Affairs Law (1960 Law No. 145) [1999]
Food Sanitation Law (1947 Law No. 233)
Quarantine Law (1951 Law No. 201) [ 1998]
Plant Protection Law (1950 Law No. 151) [1996]
Domestic Animal Infectious Diseases Control Law (1951 Law No. 166) [1997]
Construction Business Law (1949 Law No. 100) [1996]
Building Standard Law (1950 Law No. 201)
Electrical Appliance and Material Control Law (1961 Law No. 234)
Consumer Product Safety Law (1973 Law No. 31) [1996]
High Pressure Gas Safety Law (1996 Law No. 14)
Intellectual property rights
Patent Law (1959 Law No. 121) [2000]
Customs Tariff Law (1910 Law No. 54) [2000]
Act Against Unjustifiable Premiums and Misleading Representations (1962 Law No. 134) [1993]
Unfair Competition Prevention Law (1934 Law No. 47) [1993]
Utility Model Law (1959 Law No. 123) [2 000]
Design Law (1959 Law No. 125) [2000]
Trademark Law (1959 Law No. 127) [2000]
Copyright Law (1970 Law No. 48) [2000]
Civil Code (1896 Law No. 89) [1999]
Penal Code (1907 Law No. 45) [1995]
Agriculture
The Basic Law on Food, Agriculture and Rural Areas (1999 Law No. 106)
Manufacturing Milk Producer Compensation Temporary Law (1965 Law No. 112) [1999]
Cocoon and Raw Silk Price Stabilization Law (1951 Law No. 310) [1997]
Others
Law Concerning the Organization of Small and Medium Enterprises Organizations (1957 Law No. 185) [1997]
Administrative Procedure Law (1993 Law No. 88)
Act Concerning Prohibition of Private Monopolization and Maintenance of Fair Trade (Anti-Monopoly Act) (1947 Law No. 54)
[1999]
Law on Temporary Measures to Facilitate Industrial Structural Adjustment (1987 Law No. 24)
Source: Information provided by the Japanese authorities.WT/TPR/S/76 Trade Policy Review
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7. The Government of Japan considers administrative guidance to be an effective tool to
implement various policies, including trade policies.  The Administrative Procedure Law of 1993
states that administrative guidance is not legally enforceable, that its purpose and contents must be
made clear, and that the officials responsible must be clearly identified.  Administrative guidance to
more than one person and with the same objective must be made public in advance, unless there is
special reason not to do so.
8. Under a cabinet decision of 23 March 1999, public comment procedures have been officially
incorporated into the process of policy formulation.  This has the aim of improving transparency and
securing fairness in the decision-making process with regard to introducing, amending or repealing
regulations.  Under the procedures, proposed statements and other information must generally be
notified to the public in the process of formulating cabinet orders and ministerial ordinances that arerelated to regulations.  The purpose is to ensure that comments and information of relevance are
submitted by the general public before final decisions are made.  The Management and Coordination
Agency reviews the status of implementation and publishes its findings.  Since its inception, various
trade-related measures have been subject to the public comment procedures, including the
introduction of labelling on fresh food and on genetically modified organisms and the rules forinterconnection charges based on a Long-Run Incremental Cost methodology.
(ii) Trade policy formulation and implementation
9. There has been little change in the basic in stitutional framework governing the formulation
and implementation of Japan's trade and investment policies, except for the regulatory regime
concerning financial services.  Responsibility for trade-related issues remains with several ministries,
particularly Foreign Affairs (MOFA), International Trade and Industry (MITI), Finance (MOF),
Agriculture, Forestry and Fisheries (MAFF), Construction (MOC), Transport (MOT), Health andWelfare (MHW), and Posts and Telecommunications (MPT), as well as with the Economic Planning
Agency (EPA), and the Japan Fair Trade Commission (JFTC).  The financial services sector is
regulated by the Financial Supervisory Agency, established in June 1998 as a result of a regulatory
reform in MOF (Chapter IV(5)(ii)).
10. Under the Japanese Constitution, the Cabinet has the authority to conclude treaties, including
trade agreements, subject to Diet approval, while MOFA proposes and coordinates trade policies and
represents the Japanese Government in negotiations with foreign governments.  MITI proposes trade
policies and is responsible for implementing trade-related agreements falling under its jurisdiction.
Customs and tariff administration is under the jurisdiction of the Customs and Tariff Bureau of MOF.
Issues related to services are under the jurisdiction of various ministries, including MOF, MITI, MPT,MOT, MOC, MHW, and the Ministry of Justice.  MITI and the Ministry of Education (MOE) are
mainly in charge of intellectual property rights.  MITI is in charge of setting standards for a variety of
industrial and mineral products and coordinates Japan's work in international standard-setting bodies
such as ISO and IEC.  The MAFF plays a key role in the formulation and implementation of trade
policy for food and agricultural products, and is responsible for plant and animal quarantine;  MAFFand MHW are in charge of setting standards for food and agricultural products and coordinating
Japan's work in international standard setting bodies such as Codex Alimentarius.  On government
procurement, each ministry and agency is responsible for its own and its affiliated or related agencies'
procurement policies and practices;  the Ministry of Foreign Affairs seeks to assure consistency of
procurement policies and practices with the WTO Agreement on Government Procurement, to which
Japan is a party.  The Councillor's Office on External Affairs in the Cabinet Secretariat has been
taking initiatives to draft various voluntary measures related to government procurement.Japan WT/TPR/S/76
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11. MITI, MOF, and ministries in charge of the industries concerned, are also responsible for
conducting investigations into alleged dumping in the Japanese market.
12. Consistency in domestic and external policies is sought at Cabinet level;  this process is
assisted by a number of organizations under the Prim e Minister or Cabinet, including the Councillor's
Offices on Internal and on External Affairs, the Ministerial Conference for Economic Measures, the
Trade Conference, the Office of the Trade and Investment Ombudsman (OTO) and the JapanInvestment Council.
13. Various advisory councils, committees and study groups established under the relevant
trade related ministries and agencies play a role in forging consensus on trade policy issues.  They
include the Economic Council, the Customs Tariff  Council, and the Industrial Structure Council.
These bodies often provide advice on matters arising in connection with the development,implementation, and administration of Japan's trade policy.
14. The Regulatory Reform Committee, which was originally established by the Prime Minister
in January 1998 as the Deregulation Committee, thereby effectively replacing the Administrative
Reform Committee, is mandated to promote regulatory reform, inter alia , by studying the feasibility
of regulatory reform measures, and promoting dialogue with ministries and agencies concerned withparticular regulations.
15. The authorities state that non-governmental organizations (NGOs) and non-profit
organizations (NPOs) may influence Japan's trad e policy through government advisory councils,
committees, and study groups as well as through public hearings and questionnaire surveys.
16. The ministries and agencies in the Government are to undergo major restructuring in
January 2001;  thus, the existing Prime Minister's  Office and 22 ministries and agencies will be
reorganized into the Cabinet office and 12 ministries and agencies, each of which will be establishedunder a new law.
(iii) Evaluation of trade and trade-related policies
17. Apart from regular auditing by the Board of Audit, an official independent body, ministries
normally evaluate their own trade and trade-related measures and programmes to some extent.  For
example, the Ministry of International Trade and Industry recently established a specific division tobegin evaluation of its own policy measures.  Furthermore, in an effort to improve the management of
public works projects, and to cut costs, the Ministry of Construction is currently introducing a scheme
to evaluate projects on the basis of the bid price and the quality of the proposed project.  The Ministry
of Home Affairs decided recently to allow municipalities to adopt an evaluation method that employs
quality and technology standards as well as prices;  this method has been used by the centralgovernment ministries and agencies for items in cluding computers, electronic-communication gear,
and medical equipment.
4
18. A cabinet decision on Ideal Socio-economy and Policies for Economic Rebirth5, adopted in
July 1999, called for the establishment of fair markets and consumer sovereignty in a transparent
manner.  To achieve this objective, the Government will, inter alia , introduce cost-benefit and
regulatory impact analyses, rationalize systems related to government regulations, and establish fair
                                                     
4 OECD (1999a), p. 121.
5 The document, which is a report by the Economic Council to the Prime Minister, may be regarded as
a new Economic Plan, a term no longer officially used by the authorities.WT/TPR/S/76 Trade Policy Review
Page 24
and clear rules to promote economic activities based on self-responsibility thereby shifting to a system
that stresses ex-post facto  monitoring instead of ex ante  regulations.
(3) TRADE POLICY OBJECTIVES
19. The authorities state that the general objective of Japan's trade policy, which has remained
unchanged since the previous Trade Policy Review, is to ensure Japan's prosperity and growth in the
long term by promoting business activities in and outside Japan;  in order to achieve this objective,Japan wishes to further strengthen the multilateral trading system under the WTO and promote Japan's
linkage with other countries and regions in Asia and other parts of the world.
20. Traditionally, Japan has been sceptical of preferential regional trade agreements on the
grounds that they might lead to exclusive, discriminatory trading blocs, and that, if the WTO
consistency of the regional agreements is not clearly assured, they might weaken credibility in therules and procedures of a liberal, non-discriminatory, multilateral trading system under the WTO.
6
However, Japan is considering regional or bilateral trade agreements and arrangements to complementthe multilateral trading regime.
7  The authorities state that the objective of Japan's regional and
bilateral trade policy is to promote Japan's linkage with other countries and regions in Asia and other
parts of the world to supplement the WTO system.  In this regard, a free-trade agreement withSingapore is being explored by a joint study group (consisting of government officials, business
representatives, and academics from both countries), while the idea of a Japan-Korea free-trade area
has been under discussion between government-affiliated institutes of Japan and Korea.
21. With regard to Japan's relationship with the Asia-Pacific Economic Cooperation (APEC) and
Asia-Europe Meeting (ASEM), the authorities indicate that Japan will maintain the frameworks for
"open regionalism", which assures MFN treatment regarding measures decided within the regional
frameworks.  The authorities state that Japan intends to emphasize economic and technicalcooperation in the APEC as well as seeking to promote the liberalization and facilitation of trade and
investment.
(4) T
RADE AGREEMENTS AND ARRANGEMENTS
(i) WTO
22. Japan applies its MFN tariffs to all trading partners, except for some countries or customs
territories, i.e. Albania, Andorra, Eritrea, Lebano n, Lithuania, Nepal, North Korea, and Republic of
Equatorial Guinea, which together accounted for less than 0.2% of Japan's imports in 1998.
(a) Participation in the WTO
23. Japan has played an active role in the WTO since its inception in 1995, and continues to do so
through its participation in the various committees and councils.  For example, in the Council forTrade in Services, Japan made proposals concerning preparations for the services negotiations and the
review of MFN exemptions in services trade, both to take place in 2000.
8  Japan ratified the Fourth
and Fifth Protocols of the GATS concerning tele communications and financial services, in July 1997
and June 1998, respectively.  Japan actively participated in the Third Ministerial Conference of the
WTO in Seattle in November 1999.
                                                     
6 See GATT (1995), Vol. 1, p. 19 and WTO (1998), p. 24.
7 See, for example, statements made on 7 December 1999 by the Minister of International Trade and
Industry [Online].  Available at:  http://www.miti.go.jp/topic-j/e500001j.html.
8 WTO documents S/C/W/116 and 117, 16 and 26 July 1999.Japan WT/TPR/S/76
Page 25
24. Table II.2 lists Japan's notifications under the WTO Agreements as at 25 April 2000.
Table II.2
Principal notifications under WTO Agreements, as at 25 April 2000
Agreement Document reference and date Requirement/Contents/Comments
General Agreement on Trade in Services GATS/SC/46 Suppl.3, 26.02.1998 Submission of Japan's Schedule of Specific
Commitments.
IP/N/1/JPN/C/1, Rev.1/Add.1,
25.02.1998 and 07.08.1998Japan has notified a number of amendments
to its Copyright Law, under Article 63.2 of
the Agreement.Agreement on Trade-Related Aspects of
Intellectual Property Rights (TRIPS)
IP/C/W/154/Add.1, 14.10.1999 Updated information on Japan's technical
and financial cooperation activities relevant
to the implementation of the TRIPS
Agreement.
G/AG/N/JPN/25, 15.12.1997G/AG/N/JPN/28, 06.05.1998
G/AG/N/JPN/30, 17.06.1998
G/AG/N/JPN/32, 16.11.1998G/AG/N/JPN/39, 29.06.1999
G/AG/N/JPN/44, 16.11.1999Notification under Article 5 of the
Agreement:  special safeguard:
volume-based.
G/AG/N/JPN/37, 10.05.1999 Notification concerning the use of the special
safeguard provisions (annual summary
FY1998).
G/AG/N/JPN/26, 08.01.1998 Export subsidy commitments (total volume
of food aid).
G/AG/N/JPN/27, 14.01.1998
G/AG/N/JPN/33, 08.12.1998
G/AG/N/JPN/46, 03.03.2000Notification under Article 16:2 of the
Agreement in the context of action takenwithin the framework of the decision on
measures concerning the possible negative
effects of the reform programme onleast-developed and net food-importing
countries.
G/AG/N/JPN/34, 02.03.1999
G/AG/N/JPN/47, 21.02.2000Domestic support commitments
G/AG/N/JPN/29, 06.05.1998
G/AG/N/JPN/36, 10.05.1999Export subsidy commitments
G/AG/N/JPN/31, 28.10.1998
G/AG/N/JPN/43, 22.09.1999Tariff and other quota commitment
G/AG/N/JPN/35, 29.04.1999
G/AG/N/JPN/38, 11.06.1999
G/AG/N/JPN/40, 12.08.1999
G/AG/N/JPN/41, 25.08.1999G/AG/N/JPN/45, 27.01.2000
G/AG/N/JPN/48, 09.03.2000
G/AG/N/JPN/49, 30.03.2000
G/AG/N/JPN/50, 05.04.2000Price-based special safeguard.Agreement on Agriculture
G/AG/N/JPN/42, 22.09.1999 Notification concerning administration of
tariff quota
Agreement on Textiles and Clothing G/TMB/N/39/Add.1, 15.09.1997
G/TMB/N/39/Add.2, 17.09.1997Notification of Japan's first stage integration
programme of textiles and clothing productsunder Article 2, paragraphs 6 and 7(b) of the
Agreement.
Agreement on Trade-Related Investment
Measures (TRIMs)No notification.
G/ADP/N/1/JPN/2/Suppl.2, 21.11.1997 Notification of laws and regulations under
Article 18.5 and 32.6 of the agreements.Agreement on Anti-Dumping Practices
G/ADP/N/53/JPN, 15.09.1999
G/ADP/N/59/JPN, 29.03.2000Semi-annual report under Article 16.4 of the
Agreement.
Agreement on Customs Valuation No notification.
Table II.2 (cont'd)WT/TPR/S/76 Trade Policy Review
Page 26
Agreement Document reference and date Requirement/Contents/Comments
Agreement on Rules of Origin No notification.
Agreement on Subsidies and
Countervailing MeasuresG/SCM/N/25/JPN, 17.11.1997
G/SCM/N/25/JPN/Suppl.1, 04.12.1997Updating notifications pursuant to
Article XVI.1 of the GATT 1994 and
Article 25 of the Agreement.
G/SCM/N/38/JPN, 17.08.1998G/SCM/N/38/JPN/Suppl.1, 23.09.1998
G/SCM/N/48/JPN, 07.09.1999New and full notifications pursuant to
Article XVI.1 of the GATT 1994 and
Article 25 of the Agreement.
Agreement on Safeguards No notification.
Agreement on Sanitary and Phytosanitary
measuresG/SPS/N/JPN/29, 12.03.1998
G/SPS/N/JPN/30, 12.03.1998
G/SPS/N/JPN/30/Corr.1, 20.03.1998
G/SPS/N/JPN/31, 12.03.1998G/SPS/N/JPN/32, 25.03.1998
G/SPS/N/JPN/33, 01.04.1998
G/SPS/N/JPN/34, 01.04.1998G/SPS/N/JPN/35, 08.05.1998
G/SPS/N/JPN/36, 09.06.1998
G/SPS/N/JPN/37, 23.07.1998G/SPS/N/JPN/38, 02.09.1998
G/SPS/N/JPN/39, 19.10.1998
G/SPS/N/JPN/40, 03.02.1999G/SPS/N/JPN/41, 03.02.1999
G/SPS/N/JPN/42, 15.02.1999
G/SPS/N/JPN/43, 15.02.1999G/SPS/N/JPN/44, 28.05.1999
G/SPS/N/JPN/44/Corr.1, 04.06.1999
G/SPS/N/JPN/45, 29.07.1999G/SPS/N/JPN/46, 30.07.1999
G/SPS/N/JPN/47, 25.10.1999
G/SPS/N/JPN/48, 25.10.1999G/SPS/N/JPN/49, 06.12.1999
G/SPS/N/JPN/50, 08.02.2000
G/SPS/N/JPN/51, 08.02.2000
G/SPS/N/JPN/52, 08.02.2000Notification pursuant to Article 7 and the
provisions of Annex B.
Agreement on Import
Licensing ProceduresG/LIC/N/2/JPN/2 04.09.1998 Notification pursuant to paragraphs 1 and 3,
Article 5 of the Agreement.
G/LIC/N/3/JPN/1/Corr.1, 02.04.1998 Reply to Questionnaire pursuant to
Article 7.3.
Agreement on TechnicalBarriers to TradeG/TBT/CS/N/94, 24.03.1998
G/TBT/CS/N/99, 22.04.1998
G/TBT/CS/N/106, 18.02.1999
G/TBT/CS/N/107, 01.03.1999Notification under paragraph C of the WTO
TBT code of good practice.
G/TBT/Notif.97.734-736, 03.12.1997G/TBT/Notif.97.764, 12.12.1997
G/TBT/Notif.97 776-781, 794, 30.12.1997G/TBT/Notif.98.62-64, 06.02.1998
G/TBT/Notif.98.81, 24.02.1998
G/TBT/Notif.98.107, 05.03.1998G/TBT/Notif.98.128, 09.03.1998
G/TBT/Notif.98.150, 25.03.1998
G/TBT/Notif.98.159, 25.03.1998G/TBT/Notif.98.291, 30.06.1998
G/TBT/Notif.98.292, and 293, 02.07.1998
G/TBT/Notif.98.294, 25.06.1998G/TBT/Notif.98.322, 03.07.1998
G/TBT/Notif.98.328, 06.07.1998
G/TBT/Notif.98.340-342, 06.07.1998G/TBT/Notif.98.348, 08.07.1998
G/TBT/Notif.98.376 and 377, 04.08.1998
G/TBT/Notif.98.449, 02.09.1998G/TBT/Notif.98.450, 01.09.1998
G/TBT/Notif.98.465, 21.09.1998Notification under Article 2.9.2, 2.10.1,
5.6.2, 5.7.1 and other.
Table II.2 (cont'd)Japan WT/TPR/S/76
Page 27
Agreement Document reference and date Requirement/Contents/Comments
Agreement on Technical
Barriers to Trade (cont'd)G/TBT/Notif.98.565-568, 16.11.1998
G/TBT/Notif.98.619, 11.12.1998G/TBT/Notif.98.619/Corr.1, 23.12.1998
G/TBT/Notif.99.3, 11.01.1999
G/TBT/Notif.99.38, 05.02.1999G/TBT/Notif.99.44 and 45, 11.02.1999
G/TBT/Notif.99.112-116, 23.03.1999
G/TBT/Notif.141, 30.03.1999G/TBT/Notif.141/Corr.1, 12.05.1999
G/TBT/Notif.99.159 and 174, 19.04.1999
G/TBT/Notif.99/314, 28.06.1999G/TBT/Notif.99/314/Rev.1, 14.07.1999
G/TBT/Notif.99/335, 16.07.1999
G/TBT/Notif.99/359, 30.07.1999G/TBT/Notif.99/364, 05.08.1999
G/TBT/Notif.99/443, 01.09.1999
G/TBT/Notif.99/492 and 493, 06.10.1999G/TBT/Notif.99/539-542, 22.10.1999
G/TBT/Notif.99/553 and 554, 05.11.1999
G/TBT/Notif.99/555, 10.11.1999G/TBT/Notif.99/565, 19.11.1999
G/TBT/Notif.99/667-669, 23.12.1999
G/TBT/Notif.00/21, 13.01.2000
G/TBT/Notif.00/39, 31.01.2000
G/TBT/Notif.00/56, 07.02.2000G/TBT/Notif.00/57, 07.02.2000
G/TBT/Notif.00/63, 09.02.2000
G/TBT/Notif.00/109, 02.03.2000G/TBT/Notif.00/135-140, 14.03.2000
G/TBT/Notif.00/147, 22.03.2000
G/TBT/Notif.00/158-161, 24.03.2000G/TBT/Notif.00/169, 07.04.2000
G/TBT/Notif.00/193, 14.04.2000
G/TBT/Notif.00/203, 19.04.2000
Understanding on the Interpretation of
Article XVII of the GATTG/STR/N/3/JPN, 13.11.1997 Notification of Laws and regulations under
Article XVII:4(a) of the GATT and
Paragraph 1 of the Understanding on the
Interpretation of Article XVII.
G/STR/N/4/JPN, 24.03.1999 Notification of products traded by
state-trading entities.
Agreement on Government Procurement GPA/W/88, 09.07.1999
GPA/W/91, 06.09.1999GPA/W/93, 29.09.1999
GPA/W/94, 30.09.1999
GPA/W/98, 04.10.1999Notification under Article XXIV:6(a)
Source: WTO Notifications.
(b) Involvement in WTO dispute settlement
25. Between January 1998 and April 2000, Japan was involved in four disputes.  Japan requested
consultations with WTO Members with regard to Canadian measures affecting the automobileindustry;  US Anti-Dumping Act of 1916;  and US anti-dumping measures on certain hot-rolled steel
products imported from Japan;  while consultations were requested by the European Union with
regard to Japanese tariff quotas and subsidies affecting leather.
9
                                                     
9 For details of each, see WTO documents WT/DS/139, 162, 184, and 147, respectively.WT/TPR/S/76 Trade Policy Review
Page 28
(ii) Other multilateral agreements
26. Japan is a member of the international commodity agreements on coffee, cocoa, grain, sugar,
and tropical timber.  Japan has also signed and ratified the Agreement on the Common Fund for
Commodities.
(iii) Regional and inter-regional agreements
27. Japan does not belong to any customs unions, free-trade areas or other preferential regional
agreements.  However, in the context of the Asia-Pacific Economic Cooperation (APEC) and the
Asia-Europe Meeting (ASEM), Japan promotes close regional and inter-regional cooperation.
(a) APEC
28. More than 70% of Japan's external trade is with fellow APEC members.10  Japan participates
fully in the work of the APEC Forum.11  At the November 1998 APEC Ministerial Meeting in
Malaysia, APEC members agreed that each member should:  voluntarily implement tariff reductions
in the nine sectors selected at the APEC Lead ers Meeting in Vancouver in November 1997 for the
Early Voluntary Sectoral Liberalization (EVSL) market opening action12;  make efforts to include the
tariff measures for the nine sectors to be negotiated in the WTO;  and to work to achieve the critical
mass of support in the WTO that would be necessary for the successful completion of such anagreement.  Japan did not make tariff reduction commitments in forestry and fisheries.  Its position
was that APEC measures should be of a voluntary nature;  it fully participated in trade facilitation and
economic and technical cooperation measures in the two sectors, but would discuss these sectors in
the WTO as part of a sufficiently broad-based new round.
13
29. At the September 1999 APEC Economic Leaders Meeting in Auckland, New Zealand, leaders
endorsed a Declaration, which confirmed members' support for strengthening the functioning of
markets, their commitment to a leadership role in multilateral trading system, and their responsibilitiesto ensure full and successful participation by all the population of APEC members in the modern
economy.  APEC Principles to Enhance Competition and Regulatory Reform was endorsed by
ministers and leaders;  they also agreed to a "road map" that sets out future work by APEC to
strengthen markets within the APEC region.
30. Over the last two years, Japan's initiatives within APEC concerned, inter alia , a mutual
recognition arrangement for conformity asse ssment of telecommunication equipment and the
alignment of members' standards with international sta ndards in the four priority areas:  electrical and
electronic appliances;  food labelling;  rubber products;  and machinery.  Japan has been the convenor
of the Intellectual Property Rights Experts' Group that discusses the implementation of the TRIPS
Agreement.
                                                     
10 Based on the 1998 trade data.
11 The members, besides Japan, are:  Australia;  Brun ei Darussalam;  Canada;  Chile;  China;  Chinese
Taipei;  Hong Kong, China;  Indonesia;  Korea;  Malays ia;  Mexico;  New Zealand;  Papua New Guinea;  Peru,
the Philippines;  Russia;  Singapore;  Thailand;  the United States;  and Viet Nam.
12 The nine sectors are:  chemicals;  energy;  environmental goods and services;  fish and fish products;
forest products;  gems and jewellery;  medical equipment;  toys;  and conclusion of a mutual recognitionagreement on telecommunications.
13 Ministry of Foreign Affairs, "On-the-Record Briefing 13 November 1998" [Online].  Available at
http://www.mofa.go.jp/policy/economy/apec/1998/brief13.html.Japan WT/TPR/S/76
Page 29
(b) ASEM
31. The Asia-Europe Meeting (ASEM) first convened its Summit Meeting in March 1996, in
Thailand, with ten countries from Asia, including Japan, China, Korea and seven ASEAN members,
the 15 members of the European Union, and the Eu ropean Commission.  ASEM was established as a
forum through which Asia and Europe may promote dialogue in the political, economic, cultural and
other areas on an equal partnership and in a spirit of cooperation, in order to help enhance mutualunderstanding between the two regions and contribute to further expansion of trade and investment
and to foster economic development.
32. The second ASEM Summit Meeting was held in April 1998 in London and the second ASEM
Economic Ministers' Meeting was held in Berlin in October 1999.  Through these meetings, ASEM
partners agreed to voluntarily report to the Senior Officials' Meeting on Trade and Investment eachyear on progress made in the nine categories of investment promotion and policy measures that have
been found to be most effective in attracting foreign direct investment.
33. In the Trade Facilitation Action Plan (TFAP), which is aimed at reducing non-tariff barriers
and promoting trade opportunities between Asia and Europe, Japan has served as facilitator in the
priority areas of public procurement and customs procedures, and has been participating in themeetings and seminars of TFAP priority areas.
(c) Cooperation with East Asian countries
34. Japan is also pursuing cooperation with other East Asian countries in a broad range of areas,
including trade and investment.  This cooperation involves an annual dialogue among the leaders of
the Association of South-East Asian Nations (ASEAN), China, Japan, and the Republic of Korea (the
so-called ASEAN+3).
14
(iv) Preferential arrangements
Generalized System of Preferences (GSP)
35. Japan's GSP scheme began on 1 August 1971, and was authorized by the Temporary Tariff
Measures Law to grant preferences for ten years init ially.  The authorization to grant GSP treatment
was renewed twice, in FY1981, for ten years, a nd in FY1991, to be valid until 31 March 2001.  In
FY2000, the scheme grants preferential duty-free entry on 74 agricultural products (on HS 4-digitbasis) and all manufactured products, except for the 27 items listed in a negative list
15, from
162 designated beneficiary countries and territories (Box II.1).  Under the current programme, about
4.7% of Japan's global imports or about 8.5% of imports from the GSP beneficiary countries and
territories received GSP benefits in FY1999.
36. The ten major beneficiaries of Japan's GSP are listed in Table II.3.  Under its GSP scheme,
Japan grants unilateral preferential market access for products from the countries requesting
preferential treatment, subject to the following conditions:
- the economy of the country or the territory must be at the stage of development;
                                                     
14 See the Joint Press Statement from the First Meeting of the ASEAN Economics Ministers and the
Ministers of the People's Republic of China, Japan, and the Republic of Korea, 2 May 2000, Yangon, Myanmar(ASEAN Secretariat [Online].  Available at:  http://www.asean.or.id/asecjk01.htm.)
15 These items include crude petroleum, certain textiles, plywood, and certain furskins and footwear.WT/TPR/S/76 Trade Policy Review
Page 30
- the country must be a member of the United Nations Conference on Trade and
Development (UNCTAD);
- the territory must have its own tariff and trade system;
- the country or territory desires to receive a special benefit as to customs duties;  and
- the country or territory must be prescribed by a Cabinet Order as a country or a
territory to which such benefit may appropriately be extended.
Box II.1:  Countries granted GSP treatment as of 1 April 2000
Afghanistan;  Albania;  Algeria;  American Samoa;  Angola;  Antigua and Barbuda;  Argentina;  Armenia;
Azerbaijan;  Bahrain;  Bangladesh;  Barbados;  Belarus;  Belize;  Benin;  Bhutan;  Bolivia;  Botswana;
Brazil;  British Anguilla;  British Virgin Islands;  Bulgaria;  Burkina Faso;  Burundi;  Cambodia;Cameroon;  Canary Islands;  Cape Verde;  Centra l African Republic;  Ceuta and Melilla;  Chad;  Chile;
China (except Hong Kong, China; and Macau, China);  Colombia;  Congo Republic;  Democratic Republic
of Congo;  Cook Islands;  Costa Rica;  Côte d'Ivoire;  Croatia;  Cuba;  Czech Republic;  Dominica;  theDominican Republic;  Ecuador;  Egypt;  El Salvador;  Equatorial Guinea;  Eritrea;  Estonia;  Ethiopia;
Falkland Islands and Dependencies;  Fiji;  French Polynesia;  Gabon;  the Gambia;  Georgia;  Ghana;
Gibraltar;  Gilbert and Ellice Islands;  Grenada;  Guatemala;  Guinea;  Guinea-Bissau;  Guyana;  Haiti;
Honduras;  Hungary;  India;  Indonesia;  Iran;  Iraq;   Jamaica;  Jordan;  Kazakhstan;  Kenya;  Kyrgyz
Republic;  Laos;  Latvia;  Lebanon;  Lesotho;  Liberia;  Libya;  Lithuania;  Former Yugoslav Republic ofMacedonia;  Madagascar;  Malawi;  Malaysia;  Maldiv es;  Mali;  Malta;  Marshall Islands;  Mauritania;
Mauritius;  Mexico;  Micronesia;  Moldova;  Mongolia;  Montserrat;  Morocco;  Mozambique;  Myanmar;
Namibia;  Nepal;  Nicaragua;  Niger;  Nigeria;  Niue;  Oman;  Pakistan;  Palau;  Panama;  Papua New
Guinea;  Paraguay;  Peru;  the Philippines;  Poland;  Romania;  Rwanda;  Samoa;  St. Kitts and Nevis;  St.Lucia;  St. Vincent and the Grenadines;  Sao Tome and Principe;  Saudi Arabia;  Senegal;  Seychelles;Sierra Leone;  Slovak Republic;  Slovenia;  Solomon Islands;  Somalia;  South Africa;  Sri Lanka;  St.Helena and Dependencies;  Sudan;  Suriname;  Swaziland;  Syria;  Tadzhikistan;  Tanzania;  Thailand;Togo;  Tokelau Islands;  Tonga;  Trinidad and Tobago;  Tunisia;  Turkey;  Turkmenistan;  Turks and
Caicos Islands;  Uganda;  Ukraine;  Uruguay;  Uzbekistan;  Vanuatu;  Venezuela;  Viet Nam;  the West
Bank and Gaza Strip;  Yemen Arab Republic (Sanaa);  Federal Republic of Yugoslavia;  Zambia;Zimbabwe.
Beneficiary countries designated as least developed countries
Afghanistan;  Angola;  Bangladesh;  Benin;  Bhutan;  Burkina Faso;  Burundi;  Cambodia;  Cape Verde;
Central African Republic;  Chad;  Equatorial Guinea;  Eritrea;  Ethiopia;  The Gambia;  Guinea;
Guinea-Bissau;  Haiti;  Laos;  Lesotho;  Liberia;  Madagascar;  Malawi;  Maldives;  Mali;  Mauritania;Mozambique;  Myanmar;  Nepal;  Niger;  Rwanda;  Samoa;  Sao Tome and Principe;  Sierra Leone;Solomon Islands;  Somalia;  Sudan;  Tanzania;  Togo;  Uganda;  Vanuatu;  Yemen Arab Republic (Sanaa).
Source:  Information provided by the Japanese authorities.
37. Forty-two countries considered to be least developed countries (LDCs) are eligible for
preferential tariffs;  these are chosen by the Japanese Government from LDCs designated by the
United Nations.16  Imports from LDCs accounted for about 1.3% of total imports receiving GSP
treatment in FY1999.
                                                     
16 The special treatment for the LDCs began on 1 April, 1980.Japan WT/TPR/S/76
Page 31
Table II.3
Main beneficiaries of Japan's GSP scheme, 1997-98
(¥ million and per cent)
FY1997 FY1998
Country Imports under GSP Country Imports under GSP
Total GSP imports ( ¥million) 2,058,392 Total GSP imports ( ¥ million) 1,691,726
China 32.8 China 38.2
Korea 16.4 Chinese Taipei 10.4
Chinese Taipei 12.3 Korea 9.4
Thailand 7.3 Thailand 9.0
Malaysia 5.3 Malaysia 6.0
Indonesia 4.8 Indonesia 5.2
Philippines 3.5 Philippines 4.5
Brazil 1.9 Morocco 1.6
Chile 1.7 Chile 1.4
Singapore 1.3 Brazil 1.3
Source: Japan Tariff Association (1999).
38. The items covered by the programme are chosen in consideration of the GSP's effects on
domestic industries, as well as for budgetary reasons.17  Under the Temporary Tariff Measures Law,
the Government ( inter alia , the Ministry of Finance) has the authority to designate, withdraw,
suspend, or limit countries and products to which GSP treatment is granted.  The MFN tariff is
applied when imports of certain items have exceeded each ceiling.
39. In April 1998, Japan introduced a process of "partial graduation", whereby products of
beneficiary countries or territories that were classified as high income economies in the World Bank
Atlas in the previous year and whose export products to Japan had strong competitiveness were
excluded from the GSP.18  In April 2000, high income economies that had been listed in the World
Bank Atlas in three consecutive years were excluded from Japan's GSP scheme.
40. As a result, the Bahamas;  Bermuda;  Brunei;  Cayman Islands;  China;  Chinese Taipei;
Cyprus;  Greenland;  Guam;  Hong Kong, China;  Israel;  Republic of Korea;  Kuwait;  Macau, China;
Netherlands Antilles;  New Caledonia;  Qatar;  Singapore;  the United Arab Emirates;  and the U.S.
Virgin Islands were removed from Japan's list of GSP beneficiaries on 1 April 2000.  The West Bank
and the Gaza Strip was added to the list on 1 April 2000.
(v) Bilateral agreements
(a) Japan–U.S. bilateral relationship
41. The Japan-U.S. Framework for a new Economic Partnership (Framework), established in
July 1993, continues to serve as a mechanism for consultations regarding economic cooperation
between the two countries.  According to the authorities, the results of Framework talks are extended
on an MFN basis to third countries
                                                     
17 MOF (1998), October, p. 6.
18 When the product imported from the country or territory exceeded 25% of Japan's global imports of
the product, and the imported value exceeded ¥1 billion, in the previous year.WT/TPR/S/76 Trade Policy Review
Page 32
42. Since the previous Trade Policy Review of Japan, new measures regarding procurement by
the Nippon Telegraph and Telephone Corporation (NTT) have been concluded, and others such as in
the area of civil aviation have been concluded outside the aegis of the Framework (Table II.4).
Table II.4
Major arrangements between Japan and the United States
Date of initiation Product/Service Arrangement Measures taken
I. Arrangements and measures affecting exports
1998 Aviation (Cargo) New Arrangement based on the
Civil Air Transport AgreementEqualization of opportunities between Japanese
and U.S. airlines
II. Arrangements and measures affecting imports
(1) Trade liberalization and deregulation
1986 Medical equip. and
pharmaceutical prod.The Report on Talks on
Medical Equipment and
PharmaceuticalsRelaxation of legal approval system and tariff
revision
1988 Beef and oranges .. Abolition of import quotas and tariffication
1990 (June) Wood products Measures to be taken by the
Government of Japan Relating
to Wood ProductsRelaxation of standards and revision of tariff
category
1994 (Oct.) Insurance Measures by the Government of
Japan and the Government of
the United States RegardingInsuranceMeasures by both governments to increase
market access of foreign insurance suppliers and
intermediaries
1995 (Feb.) Financial services .. Measures by the Government of Japan and the
Government of the United States regarding
financial services
1995 (June) Autos and auto parts Joint announcement Measures by the Government of Japan and the
Government of the United States regarding autos
and auto parts
Measures by both Governments to increase
access and sales opportunities of competitiveforeign autos and auto parts, efforts by
manufacturers to export to Japan
1996 (Dec.) Insurance Supplementary Measures by the
Government of the UnitedStates and the Government of
Japan Regarding InsuranceFurther deregulation in the non-life insurance
sectors and mitigation measures in the "third
sectors" to medium-sized and foreign insurers
(2) Public procurement procedures
1990 (June) Supercomputers Procedures to Introduce
SupercomputersStreamlining of procedures and improvement in
transparency
1990 (June) Satellites .. Streamlining of procedures and improvement in
transparency
1992 (Jan.) Computer products and
servicesMeasures Related to Japanese
Public Sector Procurement of
Computer Products and
ServicesStreamlining of procedures and improvement in
transparency
1994 (Jan.) Public works Action Plan on Reform of the
Bidding and Contracting
Procedures for Public WorksStreamlining of procedures and improvement of
transparency
1994 (Nov.) Telecommunications
products and servicesMeasures on Japanese Public
Sector Procurement of
TelecommunicationsStreamlining of procedures and improvement in
transparency
1994 (Nov.) Medical technology
products and servicesMeasures Related to Japanese
Public Sector Procurement of
Medical Technology Products
and ServicesStreamlining of procedures and improvement in
transparency
Table II.4 (cont'd)Japan WT/TPR/S/76
Page 33
Date of initiation Product/Service Arrangement Measures taken
1996 (June) Public works Operational Guidelines with Respect to the
Action Plan on Reform of the Bidding andContracting Procedures for Public Works.
Measures by the Japanese Government to further
promote the Action Plan
(3) Other procurement
1997 (Sept.)
(terminated July 1999)Telecommunications
equipmentImprovement Arrangement on
NTT Procurement ProceduresStreamlining of procedures and improvement in
transparency
1999 (July) Telecommunications
equipmentNew measures on NTT
ProcurementAccepting new procurement policy
(4) Import facilitation
1990 (Sept.) Amorphous metals Joint announcement Establishment of evaluation method on
economic efficiency and encouragement of
purchase of amorphous metal transformers by
Japanese utilities
1992 (Jan.) Automobile parts Global Partnership Plan of
ActionAnnouncements by Japanese auto manufacturers
to increase parts imports, government support
for promoting design-ins and receiving sales
missions
1992 (Jan.) Automobiles Global Partnership Plan of
ActionAnnouncements by Japanese auto manufacturers
to help expand U.S. car imports, government
assistance to car imports, support for securing
show space and arranging import car fairs
1992 (Jan.) Glass products Global Partnership Plan of
ActionGovernment encouragement for establishing
internal Anti-Monopoly Act compliance
programmes by the private sector, and forestablishing buyer-supplier relationship with
foreign producers
1995
(terminated Dec. 1999)Flat glass Measures by the Government of
Japan and the Government ofthe United States Regarding
Flat GlassMeasures by both governments to increase
market access for competitive foreign flat glass,
efforts by manufacturers to export to Japan
1996(terminated July 1999)Semiconductors Joint Statement by the
Government of the United
States and the Government of
Japan concerning
semiconductorsMeasures by both governments to support
cooperative efforts of private sectors to face
challenges posed by structural changes in the
semiconductor industry
1992 (Jan.) Structural issues Structural Impediments
Initiative (SII) Talks(Japanese measures)
Amendments of Large-scale Retail Store Law,
Anti-Monopoly Act and Corporate Law;enactment of Administrative Procedures Law
(U.S. measures)
Commitment to budget deficit reduction, etc.
1993 (July) Sectoral and structural
issuesFramework for a New
Economic PartnershipSectoral and structural consultations and
negotiations.
Common Agenda for Cooperation in Global
Perspective
.. Not available.
Source: Information provided by the Japanese authorities;  and WTO Secretariat.
43. The U.S.-Japan Enhanced Initiative on Deregulation and Competition Policy, under the
Framework, was introduced in June 1997 to "str engthen the dialogue between and reinforce the
efforts of their governments with regard to deregulation and competition policy".  In May 1998 andMay 1999, the Governments of Japan and the United States issued joint status reports on deregulation
and competition policy.  The reports outline deregulation and other measures implemented by each
Government;  measures by the Japanese Govern ment include telecommunications, housing, medical
devices and pharmaceuticals, financial services, energy, distribution, antimonopoly act andWT/TPR/S/76 Trade Policy Review
Page 34
competition policy, legal services, motorcycles, as well as transparency and other government
practices.  As of May 2000, the two governments have been working on a third joint status report.
44. On 7 October 1999, the Government of Japan and the Government of the United States signed
an agreement concerning cooperation on the prevention of anti-competitive activities
(Chapter III(5)(v)).
(b) Japan–EU bilateral relationship
45. Since the previous Trade Policy Review, Japan's bilateral trade relationship with the European
Union has continued in the form of cooperative dialogue.  Bilateral talks between Japan and the EU
have been held mainly within the framework of the 1991 Joint Declaration on relations between Japan
and the European Community and its member countries.
46. Further strengthening of the Japan-EU relationship was agreed through the eighth Japan-EU
Summit meeting in June 1999 and the ninth Japan-EU Ministerial Meeting in January 2000.  The
issues raised by the EU in the 1999 Japan-EU regu latory reform dialogue mainly related to the
improvement of systems concerning trade and investment barriers in Japan.19  Regarding the Japan-
EU Mutual Recognition Agreement, both sides reached an agreement on main elements of the draft
agreement in June 1999.  Japan and the EU are also scheduled to begin negotiations for a cooperationagreement in the field of competition during the year 2000.  The monitoring of the EU-Japan
arrangement limiting EU imports of Japanese cars was terminated by 31 December 1999.
(c) Other bilateral agreements
47. During the period under review, Japan has extended its network of bilateral investment
agreements and tax treaties.  Bilateral investment treaties were concluded with Bangladesh and
Russia, while tax treaties were concluded with the Republic of Korea, Sweden, and Malaysia.  In
addition, a social security agreement was signed with Germany.
                                                     
19 Japan also made requests to the European Commission, and to each Member State, in such areas as
telecommunications, legal services, environment and construction.