Japan WT/TPR/S/32
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II. TRADE POLICY OBJECTIVES AND INITIATIVES
(1) General Policy Direction
1. Since Japan'slastTrade Policy Review in1995, itseconomic andtradepolicies havegenerally
remained thesame, aimed atredirecting itseconomy towards greater reliance ondomestic rather than
external demand. Increased emphasis hasbeenplaced onstructural reforms, totransform theJapanese
economy intoonewhich is"open, free,fairandfounded bothupon themarket mechanism andupon
theindividual 'sself-responsibility"; thistransformation isseenasessential notonlytoimproving the
Japanese standard ofliving butalsotoexpanding domestic demand, including forimports.1
2. Thus, theFive-Year Social andEconomic PlanforStructural Reforms (SEP), adopted in
November 1995, callsforradical reform ofJapan'ssocial andeconomic structure; inthePlan'sview,
thepresent structure hasbeenunable tocopewiththe"tidal shifts" represented byglobalization, an
agingpopulationandprogressininformationandcommunicationtechnologies.2SEPaimsatrevitalizing
Japan'seconomy byrectifying high-cost structures, supporting thedevelopment ofnewindustries,
restructuring ofexisting industries, andbuilding asound anddynamic financial system. Other avowed
policy objectives include:
- theestablishment ofaprosperous economy inasociety withsecurity andwider opportunities
forindividuals,includingareductionofworkinghours,betterhousingstandards,furtherconcern
forenvironmentalconservation,andbuildingofasocialsecuritysystemwithanadequatebalance
ofself-help andmutual help; and
- participation inthemanagement oftheglobal community, bybuilding systems opentoboth
domestic andforeign concerns, actively participating inthecreation ofworld economic
frameworks, andcontributing totackling global-scale issues suchasfoodshortage andpoverty.
3. Asshown bytheSEP, many government initiatives ofthelastfewyears fallintothecategories
of"deregulation"and"structuralreform".Thus,themainobjectivesoftheOutlineofExternalEconomic
Reform Measures, approved bytheCabinet inMarch 1994, included deregulation andtheharmonization
ofstandards, withimport promotion alsoagoal. InJuly1994, theinitiative "Regarding thePolicy
forPromoting Deregulation intheFuture" wasapproved bytheCabinet; market access improvement
anddistribution wereamong priority areas, withimport promotion again onthelist.InMarch 1995,
theDeregulation Action Program (DAP) wasintroduced; itheldthatthrough deregulation, "Japanese
systems andregulations willbebrought intolinewithinternational norms andthere willbesmoother
access tothedomestic market".3
4. Further measures forderegulation andstructural reform, including trade related measures,
havebeentaken inlinewiththeobjectives oftheSEP. Taking account ofthe"First Opinions onFurther
Promotion ofDeregulation" bytheAdministrative Reform Committee (ARC) inDecember 1995, the
firstrevision oftheDAP added 569newitems in11sectors, including financial services and
1Government ofJapan (1997).
2Economic andSocial Plans areestablished toindicate andexplain thefundamental direction ofJapan 's
economic andtrade policies inamedium term.
3ThePlanwasfirstintroduced asafive-year plan. InApril 1995, asapartofEmergency Economic Measures,
itwasdecided toimplement thePlaninthree years.WT/TPR/S/32 Trade Policy Review
Page 18
telecommunications, inMarch 1996. Further deregulation initiatives include theEconomic Council 's
recommendation for"Structural Reform inSixAreas" ofNovember 1996, the"Second Opinions" by
ARC ofDecember 1996, formulation ofthe"Program forEconomic Structural Reform" of
December 1996, andthesecond revision ofDAPofMarch 1997. Eachplanandsetofrecommendations
contains various deregulation initiatives, varying fromsimplification inapplication forms tocomplete
deregulation ofentry requirements.
5. Themultiplicity ofprogrammes hasmeant thattheexact scope ofderegulation, asapplied to
particular sectors, hasnotalways beeneasyforoutsiders tofollow. Thus, Japan'strading partners
havebeeninvited, aspartoftheannual DAP revisions, tocomment onJapan'sderegulation plans,
bothonmatters directly related tomarket access andondomestic issues. Accordingly, anumber,
includingtheEuropeanUnion(EU)andtheUnitedStates,havemaderequestsandcomments4;according
totheauthorities, ithasbeendifficult toincorporate allthese suggestions intotheDAP astheywere
notalways clear tounderstand orwere based onmisunderstandings.
6. Aspartofadministrative reform, Japan hasaninitiative toreview therôleofstatecorporations.
On24February 1995, theCabinet authorized apaper "onConsolidation ofStateCorporations", under
which 14corporations weretobeconsolidated into7and3tobeprivatized, inprinciple within three
years5;inaddition, theSocial Development Research Institute wasabolished with effect from
1December 1996. On31March 1995, theCabinet decided toinclude twomore statecorporations,
including theExport-Import Bank ofJapan, intheconsolidation plans. Inconsequence ofthesereform
plans, eightstatecorporations havebeeneither consolidated orprivatized. Asof1April 1997, 87state
corporations remain. According totheauthorities, further consolidation willtakeplace asplanned
intheAdministrative Reform Program authorized bytheCabinet inDecember 1996.6
(2) Multilateral Policies
7. Japan'stradepolicy priority, according totheauthorities, istofurther strengthen themultilateral
trading system, inparticular, bypromoting continued liberalization oftrade andinvestment andthe
enhancement offairandtransparent rulesinbothareas. Thus, steadfast implementation oftheWTO
Agreement isseenasintegral totheSEP. ThePlanalsocallsforstrict monitoring ofother countries '
implementation oftheAgreement, withresort totheWTO dispute settlement procedures ifnecessary.
8. Japan signed andratified theMarrakesh Declaration tobecome afounding Member oftheWTO,
from 1January 1995. Previously, Japan wasasignatory toallTokyo Round Agreements and
Arrangements aswellastotheArrangement Regarding International Trade inTextiles (theMultifibre
Arrangement). Japan isalsoparty totheWTO Agreement onGovernment Procurement andthe
1979 Agreement onTrade inCivilAircraft. Japan applies itsMFN tariffs toalltrading partners, except
4Inarecentstatement,theUnitedStatesdescribedtheprocessofcommen tingonJapan'sderegulationproposals
as"frustrating",andsaidthatitwouldinsteadfocusonsector-by-sectorderegulationtalks(Kyodo,14March1997).
TheUnitedStatesisreportedtohavetargetedJapan'stelecommunications,housing,pharmaceu ticalsandfinancial
sectors forfurther deregulation (AFP, 12June 1997).
5Thedecision alsoincludes measures suchasstreamlining ofallstatecorporations anddisclosure ofbalance
sheets.
6Major objectives oftheAdministrative Reform Program include: "creating asimple andeffective public
administration, which isopen andtrustworthy, andproviding high-quality administrative services".Japan WT/TPR/S/32
Page 19
forsome countries orcustoms territories which together account forlessthan0.7percentofJapan's
totalimports.7Japan accords atleastMFN treatment toallWTO Members.
9. AllUruguay Round Agreements8,aswellasnecessary amendments totherelevant Japanese
laws, werediscussed andapproved bytheDietbytheendof1994.9Among themain legalchanges
thathavebeenmade since thelastTrade Policy Review ofJapan, were therevisions totheSpecial
MeasuresLawconcerningtheHandlingofLegalBusinessbyForeignLawyersandtheInsuranceBusiness
Lawin1996; andtheTelecommunications Business Law, andForeign Exchange andTrade Control
Lawin1997. These changes reflect thedevelopment oftheGovernment 'sderegulation policies as
wellasmultilateral andbilateral trade negotiations.
BoxII.1: Japan 'smajor trade-related laws andregulations
Foreign trade andexchange restrictions
-Foreign Exchange andForeign Trade Control Law(1949 LawNo.228) (revision toenter intoforce
on1April 1998);
-Export andImport Transaction Law(1952 LawNo.299); [1997]
-LawforStabilization ofSupply-Demand andthePrice ofStaple Food (1994 LawNo.113);
-Foreign Exchange Control Order (1980 Order No.260)(revision toenter intoforce on1April 1998);
-Cabinet Order onInward Direct Investment (1980 Order No.261); [1996]
-Export Trade Control Order (1949 Order No.378); [1997]
-Import Trade Control Order (1949 Order No.414). [1996]
Customs- andtariff-related regulations
-Customs Law(1954 LawNo.61);[1997]
-Customs Tariff Law(1910 LawNo.54);[1997]
-Temporary Tariff Measures Law(1960 LawNo.36);[1997]
-Cabinet Order Relating toCountervailing Duties (1994 Order No.415);
-Cabinet Order Relating toAnti-Dumping Duties (1994 Order No.416); [1996]
-Cabinet Order Relating toEmergency Duties (1995 Order No.417);
-Cabinet Order Relating toRetaliatory Duties (1995 Order No.418);
-Cabinet Order onTariff Quotas (1961 Order No.153). [1996]
Trade promotion
-International Trade Insurance Law(1993 LawNo.36);
-Law onExtraordinary Measures forthePromotion ofImports andtheFacilitation ofForeign Direct
Investment inJapan (1992 LawNo.22). [1995]
BoxII.1(cont'd)
7Thecountries andcustoms territories include Albania, Equatorial Guinea, Lebanon, Nepal, theDemocratic
People 'sRepublic ofKorea, andVietNam.
8AdetaileddescriptionofJapan'sspecificcommitmentsintheUruguayRoundistobefoundinGATT(1995),
p.p.15-16.
9Other major lawsrevised orintroduced include theCustoms Tariff Law, Temporary Tariff Measures Law,
Staple Food Law, Temporary LawforCompensation forProducers ofMilk ofManufacturing Use,Cocoon and
RawSilkPrice Stabilization Law, Special Measures Lawconcerning theHandling ofLegal Business byForeign
Lawyer, Employees 'Pension Insurance Law, Patent Law, Trademark Law, andtheCopyright Law.WT/TPR/S/32 Trade Policy Review
Page 20
Services andenergy
-Construction Business Law(1949 LawNo.100); [1996]
-Banking Law(1981 LawNo.59); [1997]
-Insurance Business Law(1995 LawNo.105); [1997]
-Securities andExchange Law(1948 LawNo.25); [1995]
-Telecommunications Business Law(1984 LawNo.86); [1997]
-TheLaw Concerning theAdjustment ofRetail Business Operations atLarge-Scale Retail Stores
(1973 LawNo.109); [1992]
-Employee 'sPension Insurance Law(1954 LawNo.115);
-Civil Aeronautics Law(1952 LawNo.231); [1996]
-Marine Transportation Law(1949 LawNo.187); [1996]
-Special Measures LawConcerning theHandling ofLegal Business byForeign Lawyers (1986)
LawNo.66); [1996]
-Certified Public Accountants Law(1948 LawNo.103); [1995]
-Certified TaxAccountant Law(1951 LawNo.237); [1993]
-LawforImprovement ofInternational Tourist Hotels (1949 LawNo.279); [1993]
-Travel Agency Law(1952 LawNo.239); [1995]
-Electric Utilities Industrial Law(1964 LawNo.170); [1995]
-GasUtility Industrial Law(1954 LawNo.51);[1994]
-Provisional Measures Law onthe Importation ofSpecific Petroleum Refined Products
(1985 LawNo.95);[expired inMarch 1996]
-Petroleum Reserve Law(1975 LawNo.96);
-Petroleum Industry Law(1962 LawNo.128); [1983]
-LawontheQuality Control ofGasoline andOther Fuels (1976 LawNo.88).
Standards andtechnical regulations
-Industrial Standardization Law(1949 LawNo.185); [1997]
-Law Concerning theStandardization andProper Labelling ofAgricultural andForestry Products
(JAS Law) (1950 LawNo.175); [1993]
-Pharmaceutical Affairs Law(1960 LawNo.145);
-Food Sanitation Law(1947 LawNo.233);
-Quarantine Law(1951 Law201);
-Plant Protection Law(1950 LawNo.151); [1996]
-Domestic Animal Infections Diseases Control Law(1951 LawNo.166); [1997]
-Construction Business Law(1949 LawNo.100); [1996]
-Building Standard Law(1950 LawNo.201);
-Electrical Appliance andMaterial Control Law(1961 LawNo.234);
-Consumer Product Safety Law(1973 LawNo.31); [1996]
-High Pressure GasSafety Law(1996 LawNo.14).
Intellectual property rights
-Patent Law(1959 LawNo.121); [1995]
-Customs Law(1954 LawNo.61); [1997]
-ActAgainst Unjustifiable Premiums andMisleading Representations (1962 LawNo.134); [1972]
-Unfair Competition Prevention Law(1934 LawNo.47); [1993]
-Utility Model Law(1959 LawNo.123); [1995]
-Design Law(1959 LawNo.125); [1996]
BoxII.1(cont'd)Japan WT/TPR/S/32
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-Trademark Law(1959 LawNo.127); [1996]
-Copyright Law(1970 LawNo.48);[1997]
-Civil Code (1896 LawNo.89);[1996]
-Penal Code (1907 LawNo.45).[1995]
Agriculture
-Agricultural Basic Law(1961 LawNo.127); [1983]
-Manufacturing Milk Producer Compensation Temporary Law(1965 LawNo.112); [1994]
-Cocoon andRaw SilkPrice Stabilization Law(1951 LawNo.310). [1996]
Others
-Law Concerning the Organization ofSmall and Medium Enterprises Organizations
(1957 LawNo.185); [1997]
-Administrative Procedures Law(1993 LawNo.88);
-ActConcerning Prohibition ofPrivate Monopolization andMaintenance ofFairTrade (Anti-Monopoly
Act)(1947 LawNo.54); [1997]
-LawonTemporary Measures toFacilitate Industrial Structural Adjustment (1987 LawNo.24).
*Date ofthemost recent revision isindicated insquare brackets.
Source: Information provided bytheJapanese authorities.
10. Since thecompletion oftheUruguay Round, Japan hasactively participated inthesubsequent
multilateral negotiations, including onfinancial andmaritime services andbasic telecommunications.
Asaresult ofthe1995Financial Services negotiations, Japan revised itsApril 1994Schedule ofSpecific
Commitments, committing tothefurther liberalization ofbanking andinsurance sectors, suchasthe
elimination oflimitations oncommercial presence offoreign financial service suppliers (excluding
insurance) andinsurance brokers. Japan submitted arevised offerinthefinancial services agreement
concludedinDecember1997.IntheNegotiatingGrouponMaritimeTransportServices,Japansubmitted
aconditional offer on18July1995.10IntheNegotiations onBasic Telecommunications Services,
Japan offered apartial elimination offoreign ownership restrictions andnationality restrictions on
corporate directors. AttheWTO Singapore Ministerial Conference inearly December 1996, Japan
waspartytotheMinisterial Declaration onTrade inInformation Technology Products (the"Information
Technology Agreement" (ITA)), which willeliminate mosttariffs intheinformation technology sector
bytheyear2000.
11. According totheauthorities, Japan places priority onprogress inthedevelopment offurther
multilateral disciplines under theWTO, asthefollow-up totheWTO Singapore Ministerial Conference.
Thus, forexample, Japan participates intheWTO Working Groups onTrade andInvestment, and
Trade andCompetition Policy. Bothinthecontext ofimplementing itsUruguay Round commitments,
andinsupport ofstrengthening multilateral disciplines, Japan hasmade notifications under anumber
ofWTO Agreements (Table II.1). Starting withtheview thatdifferences indomestic systems are
increasingly recognized aspossible barriers toafreerflowofinternational tradeandinvestment, Japan
participates inregulatory reform initiatives, seeking topromote aninternational congruence inthetrade
andinvestment environment, atmultilateral forasuchastheWTO andtheOECD.11
10WTO document S/NGMTS/W/6. Thenegotiations havebeensuspended, toberesumed nolaterthan2000.
11Inaddition totheWTO negotiations, Japan hasactively participated inthediscussions onregulatory reform
andtheMultilateral Agreement onInvestment attheOECD.WT/TPR/S/32 Trade Policy Review
Page 22
Table II.1
Principal notifications under WTO Agreements asatOctober 1997
Agreement Document Reference Requirement/Contents
General Agreement onTrade
inServicesGATS/SC/46, Suppl.1, Suppl.1/Rev.1
andSuppl.2, 15April 1994, 28July1995,
4October 1995 and11April 1997Submission ofJapan 'sSchedule ofSpecific
Commitments.
Agreement onTrade-Related
Aspects ofIntellectual Property
Rights (TRIPS)IP/N/1/JPN/1, Add.1 andAdd.2,
1March 1996, 12July1996,
4October 1996).Notification under Article 63.2oftheAgreement on
Trade-Related Aspects ofIntellectual Property
Rights.
IP/N/2/JPN/1, 10July1995 Articles 1.3and3.1: Notification thatJapan will
notapply thecriterion ofpublication forthe
protection oftheproducers ofphonograms as
provided forinArticle 5oftheRome Convention.
IP/N/4/JPN/1, 29February 1996 Notification, under Article 4(d)oftheAgreement,
oftheprovisions ofArticle 15(c) oftheTreaty of
Peace with Japan, which entered intoforce on
28April 1952.
Agreement onAgriculture G/AG/N/JPN/1 and8,22May1995
and28June1996
G/AG/N/JPN/10 andAdd.1, 4September
1996 and21April 1997
G/AG/N/JPN/11, 13,16,17and18and9,
22October 1996, 18November 1996,
17January 1997, 17January 1997,
11March 1997 and24June1996
G/AG/N/JPN/7 and19,8May1996
and27May1997
G/AG/N/JPN/20, 28May1997
G/AG/N/JPN/12 and6,28October 1996
and6May1996
G/AG/N/JPN/14, 2,3and4,
18December 1996, 31May1995,
7July1995 and7July1995)
G/AG/N/JPN/15, 13January 1997Japan hasnotified theadministration ofitstariff
quotas.
Notification concerning imports under tariff quotas.
Other agricultural notifications include the
volume-based special safeguard.
Theuseofthespecial safeguard provisions.
Export subsidy commitments.
Thetotal quantity offood aidinthecontext of
export subsidy commitments.
Price-based special safeguard.
Japan hasalso notified action taken within the
framework oftheDecision onMeasures Concerning
thePossible Negative Effects oftheReform
ProgrammeonLeast-DevelopedandNet
Food-Importing Developing Countries.
Agreement onTextiles and
ClothingG/TMB/N/39, 28April 1995
G/TMB/N/6, 1March 1995
G/TMB/N/175, 82and82/Add.1,
13June1996, 28April 1995 and
15February 1996Submission ofthelistofproducts tobeintegrated
intoGATT 1994 onentry intoforce oftheWTO
Agreement.
Japan reserved theright tousetheprovisions of
Article 6(transitional safeguard mechanism).
Notifications under Article 3.2(b) ofMeasures on
theimport ofsilkyarnandsilkfabric andMeasures
ontheexports ofsome textile products andofthe
Custom 'sConfirmation and/or Prior Confirmation
System applied onimport ofsilkyarn andsilk
fabrics.
Agreement onTrade-Related
Investment Measures (TRIMs)Nonotification.
Agreement onAnti-Dumping
PracticesG/ADP/N/1/JPN/1 and2,7April 1995
and30June1995Notification oflaws and regulations under
Article 18.5oftheAgreement, i.e.Customs Tariff
Law andCabinet Order relating toAnti-Dumping
Duty.
Agreement onCustoms
ValuationG/VAL/N/1/JPN/1, 22November 1995 Notification ofsome technical changes tothe
relevant lawsandregulations thathadbeennotified
under theTokyo Round Customs Valuation
Agreement.
Table II.1(cont'd)Japan WT/TPR/S/32
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Agreement Document Reference Requirement/Contents
Agreement onRules ofOrigin G/RO/N/1/Add.1, 22June1995
G/RO/N/6 and8,19December 1995 and
5March 1996Notification ofnon-preferential rules oforigin
under Article 5.1.
Notification ofJapan 'sRules ofOrigin for
Application ofGSP.
Agreement onSubsidies and
Countervailing MeasuresG/SCM/N/1/JPN/1 and2,7April 1995
and30June1995
G/SCM/N/JPN/3/Rev.1, 11August 1995Notification oflaws and regulations under
Article 32.6oftheAgreement, i.e.Customs Tariff
LawandCabinet Order relating toCountervailing
Duty.
Notification ofsubsidies fortheyears 1992-94 in
theareas ofmining, petroleum refinery, textile and
apparel industry, agriculture and fishery,
high-technology industries, SMEs, research and
development andtheuseofrecycled sources.
Agreement onSafeguards G/SG/N/1/JPN/1 and2,11April 1995
and17July1995Notification oflaws, regulations andorders, i.e.
Customs Tariff Law, Order concerning Emergency
Duties, Foreign Exchange and Foreign Trade
Control Law, Import Trade Control Order, and
regulations concerning emergency measures in
response toanincrease inimports.
Agreement onImport
Licensing ProceduresG/LIC/N/1/JPN/1, 27February 1996 Notification under Articles 1.4(a)and8.2(b)of
theAgreement.
G/LIC/N/3/JPN/1, 20November 1996 Notification ofproducts under Article 7.3ofthe
Agreement.
G/LIC/N/1/JPN/2 andRev.1,
30January 1997 and26February 1997Notification under Article 8.2(b)oftheAgreement.
Agreement onTechnical
Barriers toTradeG/TBT/2/Add.10, 11June1996 Notification ofimplementation andadministration
under Article 15.2oftheAgreement.
Understanding onthe
Interpretation ofArticle XVII
oftheGATTG/STR/N/1/JPN, 22August 1995 Notification ofproducts traded bystate-trading
entities.
Source: WTO documents.
(i) TheGeneralized System ofPreferences (GSP)
12. Since thelastTrade Policy Review, Japan'sGSPscheme, extended fortenyears in1991,
hasnotchanged initsoverall framework. About 5percentofJapan'stotalimports andabout
10percentofimportsfromdevelopingcountriesenterunderGSPbenefits;forleastdevelopedcountries
theshare isintheorder ofonefifth. Alltheformer Soviet republics butRussia hadbeenadded to
Japan'slistofGSPbeneficiaries byApril, 1997.12Inaddition, Albania, Macedonia andSouth Africa
wereadded tothelistin1995, andFrench Polynesia, Eritrea, Palau, Mashall Islands andMicronesia
were added in1997. Japan'sGSPbeneficiaries currently comprise 155countries and25regions.
Thetopfivebeneficiaries (inorder, China, Republic ofKorea, Chinese Taipei, Thailand andMalaysia)
accounted forabout threequarters ofimports under theGSPinfiscal year1996(Table II.2). Although
theoverall impact ofJapan'sGSPprogramme mayberegarded astrade-creating, thescaleofnetbenefits
islimited, partly asaresult ofthenumber ofproducts ofinterest todeveloping countries thatarenot
eligible forGSPbenefits, including meat, dairy products, vegetables (except some mushrooms and
other dried vegetables), cereals, some silkandcotton yarns, some woven fabrics ofcotton, andthe
presence ofbinding ceiling quotas onother goods, including wood andarticles thereof, leather articles,
12Armenia, Ukraine, Estonia, Kazakhstan, Georgia, Turkmenistan, Belarus, Moldova, Latvia, andLithuania
were added tothelistinApril 1995. Uzbekistan, Tajikistan andKyrgyz inApril 1996, andAzerbaidjan in
April 1997.WT/TPR/S/32 Trade Policy Review
Page 24
footwear, electrical machinery andequipment (Table AII.1).13According totheauthorities,
product-coverage andceiling levels ofJapan'sGSParedetermined byconsidering boththeinterests
ofdeveloping countries andtheimpact ondomestic industries.
Table II.2
Main beneficiaries ofJapan 'sGSPscheme, 1995-96
(¥million)
CountryImports under GSP
FY1995 Share
Total GSPimports 1,670,840 100.0
China 473,666 28.3
Korea 340,800 20.4
Chinese Taipei 226,005 13.5
Thailand 113,947 6.8
Malaysia 92,511 5.5
Indonesia 69,861 4.2
Philippines 59,650 3.6
Brazil 29,931 1.8
Morocco 28,543 1.7
Chile 27,106 1.6
CountryImports under GSP
FY1996 Share
Total GSPimports 1,981,866 100.0
China 610,912 30.8
Korea 363,290 18.3
Chinese Taipei 253,691 12.8
Thailand 138,513 7.0
Malaysia 102,498 5.2
Indonesia 84,262 4.3
Phillippines 73,059 3.7
Brazil 43,096 2.2
Morocco 33,168 1.7
Singapore 26,444 1.3
Source: Information provided bytheJapanese authorities.
(3) Regional dimensions
13. Japan doesnotbelong toanycustoms unions, free-trade areas orother preferential regional
agreements. Theauthorities remain somewhat sceptical oftherecent increase inthenumber and
expansion inthescope ofregional arrangements onthegrounds that,iftheirWTO consistency isnot
evidently assured, they might weaken credibility intherules andprocedures ofaliberal,
non-discriminatory multilateral trading system under theWTO.14Japan isclear thatregional
arrangements mustfullycomply withtheletter andspirit oftheWTO andthattheyshould contribute
tofurther multilateral liberalization ofthetrading system. Japan haspresented proposals fortheWTO
13For125groups ofindustrial products, administration ofceilings takes place bymonitoring import volume,
daily for35product groups (including outerwear andtoys) andmonthly for67product groups (including sheets
ofplywood, blankets andcopper). For23product groups, including leather ofbovine orequine animals and
woven fabrics ofsynthetic filament yarn, thepreferential ceiling isallocated each fiscal yeartoimporters.
14MITI (1997).Japan WT/TPR/S/32
Page 25
toimprove itscapacity toreview regional arrangements toensure thattheycomplement andreinforce
theWTO.15Ontheother hand, Japan promotes close regional co-operation intheAsiaandPacific
areaandisaleading member oftheForum forAsia-Pacific Economic Cooperation (APEC). Amore
recent regional cooperation initiative istheAsia-Europe Meeting (ASEM).
(i) APEC
14. Morethan70percentofJapan'sexternaltradeiswithfellowAPECmembers.Japanparticipates
fullyinthework oftheAPEC Forum, which waslaunched in1989inCanberra.16ItisJapan'sview
thatinpursuing "open regional co-operation", theresults ofAPEC talkswillbeapplied onanMFN
basis tonon-members, thusmaintaining consistency withWTO principles. Arguing forapolicy of
"open regionalism", Japan views APEC 'sroleassupplementary toandsupportive ofthemultilateral
trading system.
15. InNovember 1995, Japan chaired theAPEC Ministerial Meeting inOsaka, fromwhich came
theOsaka Action Agenda; theAgenda indicated principles andmeasures toimplement theBogor
Declaration which announced thecommitment ofachieving afreeandopen trade andinvestment
environment by2010and2020, respectively, fordeveloped anddeveloping members.17TheAgenda
identified 15concrete workareasincluding tariffs, non-tariff measures, services, investment, standards
andconformance,customsprocedures,intellectualpropertyrights,deregulationandcompetitionpolicies.
TheAPEC initiative agreed inOsaka includes Partners forProgress (PFP), which isamechanism to
further promote economic andtechnical cooperation inAPEC onthebasis ofmutual assistance and
voluntarism, inthefields ofstandards andconformance, industrial property rights andcompetition
policy. Japan alsoannounced attheOsaka Meeting itsintention toprovide upto¥10billion overseveral
years onprojects toassist developing economies inimplementing trade andinvestment liberalization
andfacilitation (TILF).
16. IntheManila Ministerial Meeting ofNovember 1996, theManila Declaration onaFramework
onStrengthening Economic Cooperation andDevelopment inAsiaPacific, andtheManila Action Plan
forAPEC (MAPA) wereadopted. MAPA consists ofindividual action plans (IAPs) submitted byeach
member inlinewiththepolicy directions stated intheOsaka Action Agenda, collective action plans
forallmembers, andeconomic andtechnical cooperation measures. Japan'sIAPincludes deregulatory
andrationalizing measures fortrade andinvestment facilitation, e.g.aligning standards andtechnical
regulations more closely withinternational standards, promotion ofinward foreign investment, and
acceleration ofJapan'sUruguay Round tariff reduction commitment byapproximately twoyears on
697items, including textiles, chemicals, steelandnon-ferrous metals.
15WTO document WT/MIN(96)/ST/34, 10December 1996.
16Themembers, besides Japan, areAustralia, Brunei Darussalam, Canada, Chile, China, Chinese Taipei,
Hong Kong China, Indonesia, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, thePhilippines,
Singapore, Thailand, andtheUnited States.
17Thegoalofafreeandopentrade andinvestment environment within theAPEC region inaWTO-consistent
manner wassetinaDeclaration ofCommon Resolve ("the Bogor Declaration"), adopted on15November 1994
atanAPEC Ministerial Meeting inBogor, Indonesia.WT/TPR/S/32 Trade Policy Review
Page 26
(ii) ASEM
17. ASEM firstconvened inMarch 1996inThailand, withtencountries fromAsia, including Japan,
China, Korea andASEAN members, andthe15EUmembers andtheEuropean Commission. ASEM
wasestablished asaforum through which AsiaandEurope canfoster dialogue onanequal footing
andinaspirit ofcooperation, inorder tohelpenhance mutual understanding between thetworegions
andcontribute tofurther expansion oftrade, investment andeconomic development. Major topics
fordiscussion include: fostering political dialogue; reinforcing economic cooperation; promoting
cooperation inareas suchasscience andtechnology, environmental issues andcultural links; andthe
future course ofASEM.18ThefirstASEM Economic Ministers Meeting washeldinJapan in
September 1997.
(4) Bilateral Issues
18. According totheauthorities, onereason whyJapan sought tostrengthen theWTO andrelated
multilateral rules wastofacilitate theresolution oftrade-related disputes (Annex II.2).19Japan has
expressed acertain scepticism regarding bilateral negotiations, particularly inthattheymight leadto
outcomes infavour ofalarger country, managed trade byrequesting direct intervention inthe
counterpart 'seconomy, anddifficulty inthemaintenance ofneutrality andfairness.20Since thelast
Trade Policy Review ofJapan, several bilateral negotiations havebeenconducted withtheUnited States
andwiththeEuropean Union, among others. According totheJapanese authorities, theresults of
theirbilateral agreements areapplied onanMFN basis. Bycontrast, some ofJapan'strading partners
haveexpressed concern thatsome bilateral talksinpractice haveresulted inerosion intheobservance
ofMFN.21
(i) Japan-U.S. bilateral relationship
19. TheJapan-U.S. Framework foranewEconomic Partnership (Framework), established in
July1993, continues toserve asamechanism forconsultations regarding economic cooperation. Major
principles oftheFramework include "thebasicprinciple oftwo-way dialogue" and"limitation tomatters
within thescope andresponsibility ofGovernment". Contribution toa"significant reduction inboth
countries 'external imbalances" isexpected from efforts under theFramework. According tothe
authorities, theresults ofFramework talkswillbeshared onanMFN basis withthethirdcountries.
TheFramework covers acomprehensive setofbilateral andglobal issues. Fiveareas fornegotiations
were specifically mentioned intheFramework:
- governmentprocurement,particularlyinareassuchastelecommunications,medicaltechnology,
computers, supercomputers andsatellites;
18ASEM (1996).
19MITI (1997).
20MITI (1997).
21GATT (1995), Vol.II,p.71,andEU(1997), "theU.S./Japan agreements oncarsandcarparts concluded
inJune 1995 donotappear tobediscriminatory andshould offer equal opportunities toEUindustry. This
assessment, however, mayhave tobereviewed inthelight oftheactual implementation oftheagreement".Japan WT/TPR/S/32
Page 27
- regulatory reform, including infinancial services, insurance, competition policy, distribution,
andexport promotion bytheUnited States;
- economic harmonization, inmatters suchasforeign direct investment, intellectual property
rights, access totechnology andbuyer-supplier relationships;
- compliance withexisting measures andarrangements; and
- other major sectors, including autos andautoparts.
20. Since thelastReview, bilateral conclusions intheareas ofautomobiles andautoparts have
beenconcluded under theFramework Agreement22,while others suchasintheareaofcivilaviation,
havebeenconcluded outside theaegis oftheFramework (Table II.3). ThetwoGovernments agreed
inAugust 1996 thattheJapan-U.S. Semiconductor Agreement should bereplaced byreview and
discussion ofcooperative activities between private associations andmultilateral discussions. Adetailed
description ofmajor sectoral negotiations isinChapter IV(4), and(5).
Table II.3
Major arrangements between Japan andtheUnited States
Date ofinitiation Product/service Arrangement Measures taken
I.Arrangements andmeasures affecting exports
1962
(terminated Dec. 1994)Metal flatware ... Restriction ofexports toU.S. market
1964
(terminated Dec. 1994)Pottery andchinaware ... Restriction ofexports toU.S. market
1981
(terminated Mar. 1994)Passenger cars ... Restriction ofexports toU.S. market
1986
(terminated Dec. 1993)Machine tools Arrangement Concerning
Trade inCertain Machine
ToolsRestriction ofexports toU.S. market
...
(terminated 1993 July)Ballbearings ... Restriction ofexports toU.S. market
1992
(terminated Dec. 1996)Fibre ... Restriction ofexports toU.S. market
II.Arrangements andmeasures affecting imports
(1)Trade liberalization andderegulation
1986 Medical equip. and
pharmaceutical prod.TheReport onTalks on
Medical Equipment and
PharmaceuticalsRelaxation oflegal approval system andtariff
revision
1988 Beefandoranges ... Abolition ofimport quotas andtariffication
1990 (June) Wood products Measures tobetaken bythe
Government ofJapan Relating
toWood ProductsRelaxation ofstandards andrevision oftariff
category
1994 (Oct.) Insurance Measures bytheGovernment
ofJapan andtheGovernment
oftheUnited States Regarding
InsuranceMeasures bybothGovernments toincrease
market access offoreign insurance suppliers
andintermediaries
Table II.3(cont'd)
22E.g.anagreement onthePolicies andMeasures Regarding Inward Direct Investment andBuyer-Supplier
Relationships, signed inJuly1995 andSupplementary Measures bytheGovernment oftheUnited States and
theGovernment ofJapan Regarding Insurance inDecember 1996.WT/TPR/S/32 Trade Policy Review
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Date ofinitiation Product/service Arrangement Measures taken
1995 (Feb.) Financial services Measures bytheGovernment ofJapan andthe
Government oftheUnited States regarding
financial services
1995 (June) Autos andautoparts Joint announcement Measures bytheGovernment ofJapan andthe
Government oftheUnited States regarding
autos andautoparts
Measures bybothGovernments toincrease
access andsales opportunities ofcompetitive
foreign autos andautoparts, efforts by
manufacturers toexport toJapan
1996 (Dec). Insurance Supplementary Measures by
theGovernment oftheUnited
States andtheGovernment of
Japan Regarding InsuranceFurther deregulation inthenon-life insurance
sectors andmitigation measures inthethird
sectors tomedium-sized andforeign insurers
(2)Public procurement procedures
1990 (June) Supercomputers Procedures toIntroduce
SupercomputersStreamlining ofprocedures andimprovement
intransparency
1990 (June) Satellites ... Streamlining ofprocedures andimprovement
intransparency
1992 (Jan.) Computer products
andservicesMeasures Related toJapanese
Public Sector Procurement of
Computer Products and
ServicesStreamlining ofprocedures andimprovement
intransparency
1992 (Dec.) Telecommunications
equipmentImprovement Measures on
NTT Procurement ProceduresStreamlining ofprocedures andimprovement
intransparency
1994 (Jan.) Public works Action PlanonReform ofthe
Bidding andContracting
Procedures forPublic WorksStreamlining ofprocedures andimprovement
oftransparency
1994 (Nov.) Telecommunications
products andservicesMeasures onJapanese Public
Sector Procurement of
TelecommunicationsStreamlining ofprocedures andimprovement
intransparency
1994 (Nov.) Medical technology
products andservicesMeasures Related toJapanese
Public Sector Procurement of
Medical Technology Products
andServicesStreamlining ofprocedures andimprovement
intransparency
1996 (June) Public works Operational Guidelines withRespect tothe
Action PlanonReform oftheBidding and
Contracting Procedures forPublic Works,
Measures bytheJapanese Government to
further promote theAction Plan.
(3)Import facilitation
1990 (Sept.) Amorphous metals Joint announcement Establishment ofevaluation method on
economic efficiency andencouragement of
purchase ofamorphous metal transformers by
Japanese utilities
1991 (June) Semiconductor
productsSemiconductor Products
ArrangementImprovement ofmarket access, interalia,
through development offoreign semiconductor
design-ins, avoidance ofinjurious dumping
through anti-dumping measures
1992 (Jan.) Automobile parts Global Partnership Planof
ActionAnnouncements byJapanese auto
manufacturers toincrease parts imports,
government support forpromoting design-ins
andreceiving sales missions
Table II.3(cont'd)Japan WT/TPR/S/32
Page 29
Date ofinitiation Product/service Arrangement Measures taken
1992 (Jan.) Automobiles Global Partnership Planof
ActionAnnouncements byJapanese auto
manufacturers tohelpexpand U.S. car
imports, government assistance tocarimports,
support forsecuring show space andarranging
import carfairs
1992 (Jan.) Glass products Global Partnership Planof
ActionGovernment encouragement forestablishing
internal Antimonopoly Actcompliance
programmes bytheprivate sector, andfor
establishing buyer-supplier relationship with
foreign producers
1992 (Apr.)
[terminated Apr.1997]Paper products Measures toIncrease Market
Access inJapan forForeign
Paper ProductsGovernment encouragement forestablishing
internal Antimonopoly Actcompliance
programmes bytheprivate sector, andfor
establishing buyer-supplier relationship with
foreign producers
1995 Flatglass Measures bytheGovernment
ofJapan andtheGovernment
oftheUnited States Regarding
FlatGlassMeasures bybothGovernments toincrease
market access forcompetitive foreign flat
glass, efforts bymanufacturers toexport to
Japan
1996 Semiconductors Joint Statement bythe
Government oftheUnited
States andtheGovernment of
Japan concerning
semiconductorsMeasures bybothGovernments tosupport
cooperative efforts ofprivate sectors toface
challenges posed bystructural changes inthe
semiconductor industry
1992 (Jan.) Structural issues Structural Impediments
Initiative (SII)Talks(Japanese measures)
Amendments ofLarge-scale Retail Store Law,
Antimonopoly ActandCorporate Law;
enactment ofAdministrative Procedures Law
(U.S. measures)
Commitment tobudget deficit reduction, etc.
1993 July Sectoral andstructural
issuesFramework foraNew
Economic PartnershipSectoral andstructural consultations and
negotiations
Common Agenda forCooperation inGlobal
Perspective
... Notavailable.
Source: Information provided bytheJapanese authorities; andWTO Secretariat.
(ii) Japan-European Union bilateral relationship
21. Since Japan'slastTrade Policy Review, itsbilateral trade relationship withtheEuropean
Union (EU) hascontinued intheformofcooperative dialogue. Bilateral talkswiththeEU,including
cross-sectoral review oftheJapan-EU economic relationship onvarious levels, havetaken placemainly
within theframework ofthe1991 Joint Declaration onrelations between Japan andtheEuropean
Community anditsmember States.WT/TPR/S/32 Trade Policy Review
Page 30
22. Japan-EU high-level consultations tookplace inNovember 1995 andinApril 1997. In
the1995 meeting theEUsubmitted requests forderegulation, including 189items in17sectors, such
astransport, financial services, automobiles, andtelecommunications; Japan requested theimprovement
ofEUmarket access on42items in17sectors. Other topics ofdiscussion included facilitation ofEU's
exports toJapan andofJapan'seconomic reforms, sectoral issues suchastaxonliquor andgovernment
procurement, andmutual recognition issues intheareaofstandards andcertification. Inthe1997
meeting, Japan andtheEUalsodiscussed some additional sectoral issues, suchasJapan'sharbour
practices, leather, film, theimport quota system onfishery products, EUsubsidies onEuropean
shipyards, andthequarantine onJapanese cherry treeimports. InApril 1996aJapan-EU Ministerial
Meeting tookplace. Major issues discussed included Japan'stariffs onpork; insurance services and
theparallel review ofthemeasures taken under theJapan-U.S. Framework talks; theEUcustoms
tariff classification forCD-ROM drives; andtheimprovement ofthe"CE" marking system. The
regular Japan-EU summit meetings wereheldinSeptember 1996andinJune1997; atthe1997meeting,
theimportance wasrecognized ofaccelerating andintensifying workwithaviewtoconcluding aMutual
Recognition Agreement ontesting andcertification.Japan WT/TPR/S/32
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Annex II.1: Decision-making process inJapan intrade-related policy areas
23. Since Japan'slastTrade Policy Review, there hasbeenlittlechange inthebasic institutional
frameworkgoverningtheformulationandimplementationoftradeandinvestmentpolicies(ChartAII.1).23
Responsibilityfortrade-relatedissuescontinuestobewithseveralministries,particularlythoseofForeign
Affairs (MOFA), International Trade andIndustry (MITI), Finance (MOF), andAgriculture, Forestry
andFisheries (MAFF), aswellaswiththeEconomic Planning Agency (EPA) andtheJapan FairTrade
Commission(JFTC).Issuesrelatedtoservicestradeareunderthejurisdictionofsomeoftheseministries
aswellassectoral ministries, including Posts andTelecommunications (MPT), Transport (MOT),
Construction (MOC) andJustice (MOJ).24MITI andtheMinistry ofEducation (MOE) aremainly
incharge oftrade-related intellectual property rights.
24. Consistency ofdomestic andexternal policies issought bothattheCabinet levelandthrough
anumber oforganizations under thePrime Minister orCabinet, including regular Cabinet meetings,
theCabinet Secretariat Council 'sOffices onInternal andExternal Affairs, theMinisterial Conference
forEconomic Measures, theTrade Conference, theOffice ofTrade andInvestment Ombudsman (OTO),
andtheJapan Investment Council.
25. Anarrayofgovernment-affiliatedadvisory"deliberation"councilsplayaroleinforgingconsensus
forgovernment policies. Major permanent councils dealing withtrade-related issues include the
EconomicCouncil,theCustomsTariffCouncil,andtheIndustrialStructureCouncil.InSeptember1995
andDecember 1996, Japan announced Cabinet Decisions regarding theReview ofGreater Transparency
inDeliberative Councils andsimilar Bodies, andtheAdministrative Reform Program, respectively,
mainly topromote transparency oftheCouncils.
26. Anindependent Administrative Reform Committee wasestablished on19December 1994 to
beincharge ofsuchissues asderegulation, appropriate demarcation ofpublic andprivate sector activities
andinformation disclosure. TheARC istocease itsfunction bytheendof1997.
23SeeGATT(1995), Vol. I,p.p.13-14 foradetailed description oftheprevious policy structure.
24Alawpassed through theDietin1997 toreform MOF 'sbureaux related tofinancial services, andestablish
theAgency forInspection andSupervision ofFinancial Sector, under thePrime Minister 'sOffice.Japan WT/TPR/S/32
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Annex II.2: Trade Disputes andConsultations: cases under GATT orWTO Provisions,
January 1995 -July1997
I. Complaints against Japan
(1) Alcoholic beverages
27. InSeptember 1995, theDispute Settlement Body established aPanel toexamine Japan'stax
onalcoholic beverages. Complainants: Canada, theEuropean Communities andtheUnited States
heldthatspirits exported toJapan were discriminated against under theJapanese liquor taxsystem
which, intheirview, levied asubstantially lower taxon"shochu" thanonwhisky, cognac andother
distilled liquors. ThePanel found theJapanese taxtobeinconsistent withGATT Article IIIonnational
treatment. Thecasewasbrought totheAppellate Body, which affirmed thePanel'sconclusion. The
Appellate Body report andthePanel report asmodified bytheAppelate Body report were adopted
on1November 1996. On24December 1996, theUnited States asked forbinding arbitration to
determine thereasonable timeperiod forJapanese implementation ofthePanel'srecommendation to
bringthetaxintoconformitywithJapan'sobligationsundertheWTO.On14February1997,arbitration
found 15months tobeareasonable period forimplementation.
(2) Telecommunications equipment
28. On18August 1995 theEUasked forconsultations withJapan, stating thata1994 agreement
reached between theUnited States andJapan concerning telecommunications equipment wasinconsistent
withGATT provisions, including onMFN, national treatment andstateenterprises, andnullified or
impaired benefits accruing totheEU.TheUnited States hasjoined theconsultations. Thecasewas
settled bilaterally, according totheauthorities, on18September 1995.
(3) Sound recording
29. On9February 1996, theUnited States requested consultations withJapan stating thatJapan's
copyright regime fortheprotection ofintellectual property insound recordings wasinconsistent with,
interalia,theTRIPS Agreement Article 14(protection ofperformers, producers ofphonograms and
broadcasting organizations). On24January 1997, bothparties informed theDispute Settlement Body
thattheyhadreached amutually satisfactory solution tothedispute. On24May1996, theEUrequested
consultations onthesame issue. According totheJapanese Government, thecasehasbeenbilaterally
settled.
(4) Photographic film
30. On13June1996, theUnited States requested consultations withJapan concerning Japan'slaws,
regulations andrequirements affecting thedistribution, offering forsaleandinternal saleofimported
consumer photographic filmandpaper. TheUnited States alleged thattheJapanese Government treated
imported filmandpaper lessfavourably thanlikedomestic products, inviolation ofGATT provisions.
TheUnited States alsoheldthatthese measures nullified orimpaired benefits accruing totheUnited
States (anon-violation claim). TheUnited States requested theestablishment ofapanel on
20September 1996; itwasestablished on16October 1996.WT/TPR/S/32 Trade Policy Review
Page 34
(5) Distribution services
31. TheUnited States, on13June1996, requested consultations withJapan concerning measures
affecting distribution services through theoperation oftheLarge-Scale Retail StoreLaw,which regulates
retail space, business hours andholidays ofsupermarkets anddepartment stores. Alleged violations
include those related totheprovisions under theGeneral Agreement onTrade inServices (GATS)
ontransparency andmarket access, andthenullification andimpairment ofU.S.benefits. Further
consultations withJapan were requested bytheUnited States on20September 1996.
(6) Pork
32. On15January 1997 theEUrequested consultations withJapan regarding certain Japanese
measures affecting imports ofporkanditsprocessed products. TheEUheldthatthesemeasures appear
tobeinconsistent withJapan'sGATT obligations, including withrespect toMFN andtransparency,
andthattheyalsonullify orimpair benefits accruing totheEUunder theGATT.
(7) Government procurement
33. TheEUon26March 1997requested consultations withJapan concerning aprocurement tender
published bytheMinistry ofTransport ofJapan topurchase aMulti-Functional Satellite-based
Augmentation System forAirTraffic Management. TheEUcontended thatthespecifications inthe
tender werenotneutral butreferred explicitly toU.S.specifications. Thismeant, theEUheld, that
European bidders could effectively notparticipate inthetender. TheEUalleged inconsistency ofthis
tender withAnnex 1ofAppendix IofJapan'scommitments under theGovernment Procurement
Agreement (GPA), andwiththeprovisions ofArticles III,VI:3andXII:2 oftheGPA, ontechnical
specifications andtendering procedures. Thecasehasbeensettled bilaterally, asnotified totheDispute
Settlement Body on31July1997.
(8) Quarantine
34. On7April 1997theUnited States requested consultations withJapan inrespect oftheprohibition
byJapan, under quarantine measures, ofimports ofcertain agricultural products. TheUnited States
alleged thatJapan prohibits theimportation ofeachvariety ofaproduct requiring quarantine treatment
untilthequarantine treatment hasbeentested forthatvariety, evenifthetreatment hasproved tobe
effective forother varieties ofthesame product, andthatJapan'smeasures appear tobeinconsistent
withitsobligations under theAgreements onAgriculture andontheApplication ofSanitary and
Phytosanitary Measures andofGATT Article XI(onquantitative restrictions). Inaddition, theUnited
States claimed anullification orimpairment ofbenefits.
II. Complaints initiated byJapan
(1) TheUnited States -Imposition ofImport Duties
35. On17May 1995, Japan requested consultations with theUnited States, stating thatthe
U.S.unilateral actions andmeasures, including theproposed import duties onautomobiles fromJapan,
violated certain U.S.obligations under GATT, including those withrespect toMFN. On19July1995,
theparties notified theDispute Settlement Body thattheyhadsettled theissue.Japan WT/TPR/S/32
Page 35
(2) Brazil -Certain Automotive Investment Measures
36. On30July1996, Japan requested consultations withBrazil concerning certain investment
measures taken byBrazil. Japan heldthatthese measures violated Brazil 'sobligations under GATT,
including onMFN andnational treatment, under theTRIMs Agreement, onnational treatment, and
undertheWTOAgreementonSubsidiesandCountervailingMeasures,includingonprohibitedsubsidies.
(3) Indonesia -Automobiles
37. On4October 1996, Japan requested consultations withIndonesia, stating thattheexemption
fromcustomsdutiesandluxurytaxes,andrelatedmeasures,grantedbyIndonesiaonimportsof"national
vehicles" andcomponents thereof, wereinviolation ofIndonesia 'sobligations under GATT, including
onMFN andnational treatment, andunder theTRIMs Agreement, including withrespect tonational
treatment. On29November 1996, Japan requested additional consultations onthematter alleging
violations ofIndonesia 'sobligations under theWTO Agreement onSubsidies andCountervailing
Measures, including onprohibited subsidies. On17April 1997, intheabsence ofamutually satisfactory
solution, Japan requested theestablishment ofaPanel; theDispute Settlement Body established the
Panel on12June1997.
(4) United States -Measure Affecting Government Procurement
38. On18July1997, Japan requested consultations withtheUnited States concerning legislation
oftheCommonwealth ofMassachusetts thatprovides thatpublic authorities oftheCommonwealth
arenotallowed toprocure goods orservices fromanypersons whodobusiness withBurma. Japan
stated that,asMassachusetts isacovered entity under theU.S.Schedule totheGovernment Procurement
Agreement(GPA),thisviolatesU.S.obligationsundertheGPA,includingonqualificationsandselection
procedures; Japan alsoheldthatthemeasure nullified orimpaired benefits accruing toitunder the
GPA andthatitimpeded theattainment oftheobjectives oftheGPA, including thatofmaintaining
balance ofrights andobligations.
III. Participation inthepanel process byJapan asathirdparty
(1) European Union -Trade Description ofScallops (Panel established inJuly1995)
39. Consultations were requested byCanada on24May1995; Japan requested on2June1995
tojointheconsultations andsubsequently made awritten communication tothePanel.
(2) EuropeanUnion-RegimefortheImportation,SaleandDistributionofBananas(Panelestablished
inFebruary 1996)
40. Consultations wererequested byEcuador, Guatemala, Honduras, Mexico andtheUnited States
on12February 1996; Japan, afterhaving reserved itsrights inthematter attheDispute Settlement
Body meeting on8May1996, made awritten submission tothePanel.WT/TPR/S/32 Trade Policy Review
Page 36
(3) European Union -Customs Classification ofCertain Computer Equipment (Panel established
inFebruary 1997)
41. Consultations wererequested bytheUnited States on8November 1996; Japan reserved its
rights on25February 1997 attheDispute Settlement Body.
(4) TheUnited States -Import Prohibition ofCertain Shrimp andShrimp Products (Panel established
inFebruary 1997)
42. Consultations wererequested byIndia, Malaysia, Pakistan andThailand on8October 1996;
Japan requested tojointheconsultation on24October 1996. After having reserved itsrights atthe
Dispute Settlement Body meeting of25February 1997, Japan made awritten submission tothePanel.
Japan "reserved" itsthird-party rights inthefollowing cases
(1) TheUnited States -theCuban Liberty andDemocratic Solidarity Act(Helms-Burton Act),
complaint bytheEuropean Union.
(2) Hungary -Export Subsidies inRespect ofAgricultural Products, complaint byArgentina,
Australia, Canada, NewZealand andtheUnited States.