WORLD TRADE  
ORGANIZATION  RESTRICTED 
WT/TPR/G/276 
15 January 2013  
 
(13-0072) 
Trade Policy Review Body Original:  English 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by 
 
JAPAN 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Japan is attached. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Japan. Japan WT/TPR/G/276 
 Page 3 
 
 
CONTENTS 
 
 Page 
I.  TRADE AND ECONOMIC DEVELOPMENT 5  
 (1) J APAN ECONOMIC ENVIRONMENT – RECOVERY FROM THE GREAT EAST JAPAN  
  E ARTHQUAKE  5  
 (2)   TRENDS IN FOREIGN TRADE  5 
 (3)   TRENDS IN FOREIGN DIRECT INVESTMENT  5 
II.  TRADE AND INVESTMENT POLICY 6  
 (1)   OVERVIEW  6 
 (2)   WTO  7 
  (i) Rule setting 7 
  (ii) Dispute Settlement 8   (iii) Development 8 
 (3) FTA/EPA
S 8 
 (4) O THER REGIONAL /BILATERAL ARRANGEMENTS      1 1  
  (i)   Asia-Pacific Economic Cooperation (APEC)     11 
 (ii)   Asia-Europe Meeting (ASEM) 11 
 (iii) Japan's Bilateral Activities outside of FTAs 12  
 (5)   INVESTMENT POLICY  15 
  (i) Program for Promoting Japan as an Asian Business Centre and Direct    I n v e s t m e n t  i n t o  J a p a n        1 5  
  (ii) Act on Special Measures for the Promotion of Research and Development by 
   Certified Multinational Enterprises      15   (iii) Investment Agreements       16 
III.  TRADE AND DEVELOPMENT 16  
 (1) A
ID FOR TRADE  16 
 (2) G ENERALIZED SYSTEM OF PREFERENCES (GSP) 17 
IV.  JAPAN'S DOMESTIC POLICIES 18  
 (1)   REGULATORY REFORM  18  
 (2)   GROWTH AND FISCAL CONSOLIDATION  19  
 (3)   INTELLECTUAL PROPERTY RIGHTS  20  
 (4)   FINANCIAL REFORM  21 
 (5)   AGRICULTURAL REFORM  22 
 (6)   COMPETITION POLICY  23  
 (7)   SERVICES -RELATED POLICIES  23 
  Japan WT/TPR/G/276 
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I. TRADE AND ECONOMIC ENVIRONMENT 
(1) JAPAN 'S ECONOMIC ENVIRONMENT – RECOVERY FROM THE GREAT EAST JAPAN 
EARTHQUAKE  
1. The Japanese economy, which had been in an  expansionary phase since March 2009, was 
temporarily stagnated by the Great East Japan Earthquake in March 2011, mainly due to a sharp 
decline in production and private consumption.  After that, the economy picked up as the supply chains of production activities were gradually re-est ablished.  In the first half of 2012, the Japanese 
economy was on the way to recovery at a moderate pace mainly driven by domestic demand including 
reconstruction demand, although it has sounded a weak tone recently due to the deceleration of the 
world economy.  Regarding prices, the Japanese econom y is in a mild deflationary phase, although 
the tempo of deflation has been slower.  
(2) T
RENDS IN FOREIGN TRADE  
2. In 2010, the amount of Japanese trade was str ongly recovering from the great decrease due to 
the world economic crisis.  In 2011, however, Japan’ s exports decreased due to the Great East Japan 
Earthquake, an appreciation of the yen, Thai flood s, and weak global demand.  At the same time, 
imports continued to rise, driven by high crude oil prices and increasing demand for fuel for thermal 
power plants.  As a result, the annual trade balance moved into deficit in 2011(¥2.56 trillion deficit). 
3. The total value of exports from Japan in 2011  amounted to ¥65.54 trillion (a decrease of 2.7% 
from 2010) 
- Regional trends in the total value of exports in 2011 (compared to 2010) 
China down by   1.4% 
NIEs (inc. Korea; Singapore; Hong Kong, Ch ina; and Chinese Taipei) down by   6.6% 
Association of South East Asian Nations down by   0.8% 
United States down by   3.4% European Union (EU) up by   0.0% Middle East down by 11.8% 
4. The total value of imports to Japan in 2011 am ounted to ¥68.11 trillion (an increase of 12.1% 
from 2010) 
- Regional trends in the total value of  imports in 2011 (compared to 2010)  
 China up by   9.2% 
 NIEs (inc. Korea; Singapore; Hong Kong, China; and Chinese Taipei) up by   8.5% 
 Association of South East Asian Nations up by 12.5%  United States up by   0.3%  European Union (EU) up by 10.1%  Middle East up by 23.5% 
(3) T
RENDS IN FOREIGN DIRECT INVESTMENT  
5. The amount of FDI stocks steadily increased until 2008, with a total of ¥18.5 trillion (3.6% of 
GDP) in CY2008 and ¥17.5 trillion (3.7% of GDP) in CY 2011.  As the Ministry of Internal Affairs 
and Communications reports, the situ ation of employment in foreign companies in Japan, according to 
the "2006 Establishment and Enterprise Census",  approximately 750,000 regular employees were 
employed by companies which have more than 1/3 of foreign equity. WT/TPR/G/276 Trade Policy Review 
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2011 Outward FDI1 
6. According to a Ministry of Finance report, Japan 's outflow of foreign direct investment (FDI) 
(Outward FDI) increased to ¥9,126.2 billion in CY20 11, which represents an increase of 84.8% from 
CY2010 (an increase of ¥4,187.4 billion).  The ma jor characteristics of Japan's Outward FDI in 
CY2011 were as follows: 
- By Industry:  In CY2011, Outward FDI in manufacturing industries increased to 
¥4,559.9 billion (i.e. by 194.1%).  The chem ical & pharmaceutical, food, and electric 
machinery sectors increased sharply mainly due to large M&A deals.  Outward FDI in 
non-manufacturing industries also increased to  ¥4,566.3 billion (i.e. by 34.8%).  The 
mining, wholesale & retail, and finance & in surance sectors increased sharply, and all 
other sectors increased slightly. 
- By Region:  In CY2011, Outward FDI to North America increased by 52.1% to 
¥1,187.9 billion, to Asia by 64.0% to ¥3,120.9 billion, to Europe by 146.0% to 
¥3,143.7 billion, and to Central & Sout h America by 83.3% to ¥878.6 billion. 
2011 Inward FDI2 
7. In CY2011, the FDI flow to Japan (Inward FDI) decreased to minus ¥140.3 billion (the 
outflow of capital), which represents a decrease of 27.7% from CY2010 (a decrease of ¥30.4 billion).  
The major characteristics of inward FDI fl ow to Japan in CY2011 were as follows: 
- By Industry:  In CY2011, the inward FDI flow in the manufacturing industries 
slightly increased (from ¥167.2 billion in CY2010 to ¥198.1 billion), but in the non-
manufacturing industries it decreased slightly (from minus ¥277.1 billion in CY2010 to minus ¥338.4 billion).  The chemical & pharmaceutical, electr ic machinery, and 
wholesale and retail sectors increased sharply, but many sectors decreased. 
- By Region:  In CY2011, the amount of inward FDI from Asia and North America 
decreased sharply;  on the other hand, that from EU increased. 
II. TRADE AND INVESTMENT POLICY 
(1) O
VERVIEW  
8. Since Japan's trade policy review in 2011, Japan has taken various measures to further 
promote liberalization of international trade.  T ogether with continuing efforts to advance the ongoing 
Doha Development Agenda negotia tions, Japan has also moved forward bilateral negotiations on 
Economic Partnership Agreements (EPAs), which have made positive steps and complemented the 
multilateral trading system. 
9. As one of the largest trading economies in th e world, Japan maintains its strong support for 
the non-discriminatory and rule-based multilateral trading system under the WTO for the growth of the world economy and the benefit of developing c ountries.  Japan has long made efforts to lower 
trade barriers under that system, which has created opportunities for all countries to enjoy the fruits of 
international trade.  
                                                      
1 Source:  Balance of Payments. 
2 Source:  Balance of Payments.  http://www .boj.or.jp/en/statistics/br/bop/index.htm/. Japan WT/TPR/G/276 
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10. In the face of rising instances of protectionism around the world, Japan welcomes the strong 
statement coming from the G20 Los Cabos Summit on  the standstill and rollback commitment.  Given 
the uncertainty and the downside risks of the wo rld economy, trade should lead the world economy.  
Japan will continue to abide by th e leaders’ commitment and fully engage itself in the strengthening 
of the monitoring exercises of the WTO. 
11. Japan is currently a party to 13 Economic Pa rtnership Agreements (EPAs).  EPAs include 
elements of Free Trade Agreements and institutio n-building which cover such areas as investment, 
competition, intellectual property rights and human r esources development.  Japan is also engaged in 
several on-going negotiations for EPAs.  Japan belie ves that these agreements will serve as building 
blocks to achieve higher trade liberalization at the multilateral level.  
12. On 9 November 2010, the Government of Jap an adopted a "Basic Policy on Comprehensive 
Economic Partnerships"3 by Cabinet decision. 
13. The Asia-Pacific region in particular is of importance for Japan, politically, economically, and 
with regard to security, and Japan has a vital inter est in its being stable and prosperous.  The Free 
Trade Area of the Asia-Pacific (FTAAP) is an impo rtant initiative that would enable Japan to help 
create a seamless Asia-Pacific region.   Japan will play a leading role  in actively promoting bilateral 
Economic Partnership Agreements (EPAs) within the Asia-Pacific region, broader regional economic 
partnerships, and sectoral approaches in the APEC , and will take initiatives to formulate trade and 
investment rules designed for the 21st century in the Asia-Pacific region. 
(2) WTO 
14. Maintaining and strengthening the multilatera l trading system under the WTO remains a 
fundamental basis of Japan’s trade policy.  Since th e last review, despite the impasse reached in the 
Doha Development Agenda negotiations, Japan has play ed an important role in pursuing progress.  In 
line with the outcome of the Eighth Ministerial C onference in December 2011, Japan is continuously 
committed to exploring different negotiating approaches while respecting the principles of transparency and inclusiveness.  
(i) Rule setting 
15. Japan welcomes the recent progress in specific ar eas such as trade facilitation, expansion of 
ITA product coverage and membership and further libe ralization of trade in services.  Regarding trade 
facilitation, Japan continues to play a constructiv e role in advancing the negotiations for more 
simplified and reasonable trade procedures as well as more transparent, predictable and consistent 
administration of trade regulations.  At the same  time, Japan actively supports efforts made by 
developing countries and least developed countries on trade facilitation through technical assistance, 
in collaboration with relevant international organizations including the WCO (World Customs 
Organization) and the ADB (Asian Development Bank).  Japan has dedicated itself to the ongoing discussions on the expansion of ITA product coverage and membership, a nd also been participating in 
the plurilateral initiative over the past several months with other voluntary WTO members for a 
possible services agreement.  
16. Japan actively engaged in the further ne gotiations on the Government Procurement 
Agreement, which were successfully concluded in Dece mber 2011.  With the entry into force of the 
revised GPA, foreign suppliers would be able to participate in the expande d government procurement 
market of Japan in terms of the threshold of th e central government entities,  entities of sub-central 
                                                      
3 http://www.mofa.go.j p/policy/economy/fta/ policy20101106 .html. WT/TPR/G/276 Trade Policy Review 
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level, as well as services.  Japan will seek prompt  acceptance and implementation of the revised GPA 
within Japan as was decided in D ecember 2011 for the prompt entry into force of the Agreement. 
17. Meanwhile, in addition to bilateral EPAs w ith non-GPA parties such as Chile and Mexico, 
Japan negotiated government procurement chapters in  its EPA with Peru, which became effective on 
1 April 2012, based on the GPA text.  Japan believes these efforts will help to promote the principles 
of the GPA among non-GPA parties.  
(ii) Dispute Settlement 
18. Dispute Settlement is one of the main pillars and strengths of the WTO.  Japan has actively 
utilized the WTO dispute settlement mechanism to resolve disputes as both a party and a third party to 
a dispute.  Japan continues to seek improvements and clarifications of the Dispute Settlement 
Understanding (DSU) which will serv e Members’ shared interests by enhancing compliance with 
trade rules and ensuring the integr ity and credibility of the rule-based  trade system.  Japan attaches 
importance to the DSU revision negotiations and has actively contributed to the negotiations with a 
view to achieving a successful outcome.  
(iii) Development 
19. Japan has been actively particip ating in the discussions related to various development agenda 
such as Aid for Trade, recognizing that integrati ng developing and least-developed countries in the 
multilateral trading system is one of the essential rol es of the WTO.  In particular, Japan has actively 
supported LDC accessions through technical assistance to accession applicants to build their trade 
capacity like the support for the Lao People’ s Democratic Republic in 2010 and 2011 and 
implementation of the WTO rules by new Members. 
(3) FTA/EPA S 
20. Maintaining and strengthening the multilatera l trading system under the WTO has been a 
main pillar of Japan's external economic policy.  At the same time, Japan has also promoted its 
regional and bilateral trade policies as means of  complementing the multilateral trading system, 
particularly through Economic Partnership Agreements which include elements of Free Trade 
Agreements and in stitution-building. 
21. The data concerning the Economic Partnership Ag reements is summarized in the table below. 
Table 
Economic Partnership Agreements to which Japan is a party 
Country Date of the entry into force Additional information 
Singapore 
(The Japan-Singapore 
Agreement for a New Age 
Economic Partnership) 30 November 2002 - From 2001 to 2011, the trade volume between the 
two countries increased by 17%. 
- From 2001 to 2009, investment by Japanese companies in 
Singapore also increased by 203%. 
- The third Supervisory Committe e was held in January 2007. 
- Joint Committees on Customs Procedures, Paperless 
Trading, Mutual Recognition, Mutual Recognition of 
Professional Qualifications, In tellectual Property, Financial 
Services Cooperation, ICT, Science and Technology, Trade and Investment Promotion,  SMEs, Broadcasting, and 
Tourism have been held to date. 
 
Table (cont'd) Japan WT/TPR/G/276 
 Page 9 
 
 
Country Date of the entry into force Additional information 
  - The amended Agreement came into effect in 
September 2007. 
- The partial amendment of the Annex (IIA "Product-Specific 
Rules" and IIB "Minimum Data Requirement for 
Certificate of Origin") came into effect in January 2008. 
Mexico 
(The Agreement be tween Japan and 
the United Mexican States for the 
Strengthening of the Economic 
Partnership) 1 April 2005 - From 2004 to 2011, the annual trade volume between the 
two countries increased by 42%.  (source:  Japanese 
Customs) 
- From 2004 to 2010, annual i nvestment flows (assets) of 
Japanese companies in Mexico also increased by 245%. 
(source: Bank of Japan) 
- The Seventh Joint Committee was held in February 2012.  - The Protocol Amending the Agreement between Japan and 
the United Mexican States for the Strengthening of the 
Economic Partnership was si gned in September 2011 and 
entered into force in April 2012. 
- Sub-Committees on Trade in Goods, SPS Measures, 
Technical Regulations, St andards and Conformity 
Assessment Procedures, Rules of Origin, Certificate of 
Origin and Customs Procedur es, Cross-Border Trade in 
Services, Entry and Temporary Stay, Government 
Procurement, Cooperation in the Field of Trade and 
Investment Promotion, Cooperation in the Field of Agriculture, Cooperation in the Field of Tourism, and also the Special Sub-Committee on Steel Products and the Committees for the Improvement of the Business Environment have been held to date. 
Malaysia 
(The Agreement between the 
Government of Japan and the 
Government of Malaysia for an 
Economic Partnership) 13 July 2006 - From 2005 to 2010, the trade volume between the two 
countries increased by 18%. 
- From 2005 to 2010, investment of Japanese companies in 
Malaysia also increased by 35%.   
- The second Joint Committee was held in December 2008. 
- Sub-Committees on Trade in Services, Improvement of 
Business Environment, Cooperation, Rules of Origin, Intellectual Property, Sanitary and Phytosanitary, 
Investment, Trade in Goods, and Technical Regulations, 
Standards and Conformity A ssessment Procedures have 
been held to date. 
Chile 
(The Agreement be tween Japan and 
the Republic of Chile for a Strategic Economic Partnership) 3 September 2007 - From 2006 to2010, inve stment of Japanese companies in 
Chile increased by 455%. 
- The second Commission was held in April 2009. 
- Committees on Trade in Goods and Improvement of 
Business Environment and a Working Group on Fish and 
Fishery Products have been held to date. 
Thailand 
(The Agreement be tween Japan and 
the Kingdom of Thailand for an 
Economic Partnership) 1 November 2007  - From2006 to 2011, the trade volume between the two 
countries increased by 7%. 
- The third Joint Committee was held in September 2011. - Sub-Committees on Trade in Services, Rules of Origin, 
Small and Medium Enterpri ses, Paperless Trading, 
Enhancement of Business Environment, Customs 
Procedures, Tourism, Agriculture, Forestry and Fisheries, Trade in Goods, and Movement of Natural Persons have 
been held to date. 
Indonesia 
(The Agreement be tween Japan and 
the Republic of Indonesia for an Economic Partnership) 1 July 2008  - From 2007 to 2011, the trade volume between the two 
countries increased by 76%. 
- The first Joint Committee was held in July 2008. 
- Sub-Committees on Rules of Origin, Trade in Goods, Trade 
in Services, Movement of Natural Persons, Cooperation, 
and Investment have been held to date. 
  Table (cont'd)  WT/TPR/G/276 Trade Policy Review 
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Country Date of the entry into force Additional information 
Brunei 
(The Agreement be tween Japan and 
Brunei Darussalam for an 
Economic Partnership) 31 July 2008 - From 2007 to 2011, the trade volume between the two 
countries increased by 51%. 
- The first Joint Committee was held in July 2008. 
- Sub-Committees on Trade in Services and Cooperation 
have been held to date. 
ASEAN 
(The Agreement on Comprehensive 
Economic Partnership among Japan 
and Member States of the Association of Southeast Asian Nations) 1 December 2008 
(Lao People's Democratic 
Republic, Myanmar, 
Singapore, Viet Nam) 
1 January 2009 (Brunei) 1 February 2009 (Malaysia) 
1 June 2009 (Thailand) 
1 December 2009 
(Cambodia) 
1 July 2010 (The Philippines) 
 - The 7th Joint Committee was held in March 2012. 
- Sub-Committees on Rules of Origin, Trade in Services, 
Investment and Economic Cooperation have been held to 
date. 
- The Agreement is a legally  independent agreement in 
relation to the bilateral EPAs between Japan and individual 
ASEAN Member States and thus the entry into force of the Agreement will neither nullify nor  integrate those bilateral 
EPAs. 
The Philippines 
(The Agreement be tween Japan and 
the Republic of the Philippines) 11 December 2008 - The third Joint Committee was held in February 2011. 
- Sub-Committees on Trade in Goods, Trade in Services, 
Rules of Origin, Investment, M ovement of Natural Persons, 
Improvement of Business Environment, and Cooperation 
have been held to date. 
Switzerland 
(The Agreement on Free Trade and 
Economic Partnership between 
Japan and the Swiss Confederation) 1 September 2009 - From 2009 to 2011, the total amount of export and import 
 increased by 16%. 
- In 2011, the second Joint Committee and the first Sub 
 Committee on Rules of Origin, Customs Procedures and  Trade Facilitation of the Agreement were held. 
 
Viet Nam  
(The Agreement between Japan  
and  the Socialist Republic of Viet 
Nam for an Economic Partnership) 1 October 2009 - From 2009 to 2011, the total amount of export and import 
increased by 34%. 
- Sub-Committees on Movement of Natural Persons have 
been held to date. 
India 
(Comprehensive Economic 
Partnership Agreement between 
Japan  and  the Republic of India)  1 August 2011 -The first Joint Committee was held in August 2011. 
- The sub-committee on TBT/SPS was held in October 2011. 
Peru 
(The Agreement between Japan  
and  the Republic of Peru for an 
Economic Partnership)  1 March 2012  
Under negotiation   
The Republic of Korea  Under negotiation (The 
negotiations commenced in 
December 2003.) - Six rounds of negotiations were held. 
- Although no negotiations have been held since the end of 
the sixth round held in November 2004, four rounds of the 
working-level consultation were held by December 2009 to 
consider the resumption of negotiations.  Director-general 
level consultations for the EPA were held in September 
2010 and in May 2011. 
GCC  (Gulf Cooperation Council)  Under negotiation (Formal 
negotiations commenced in 
September 2006.) - Two rounds of negotiations and four rounds of informal 
intermediate meetings were held.  The latest meeting was 
held in March 2009. 
Australia  Under negotiation (The 
negotiations commenced in 
April 2007.)  - Sixteen rounds of negotiations we re held.  The latest meeting 
was held in Tokyo in June 2012. 
 
Mongolia  Under negotiation (The 
negotiations commenced in 
June 2012.) -The first round of negotiations was held in June 2012 in 
Ulan Bator, Mongolia. 
 
Canada Under negotiation (The 
negotiations commenced in 
November 2012) - The first round of negotiations was held in November 2012 
in Tokyo, Japan. 
 Japan WT/TPR/G/276 
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(4) OTHER REGIONAL /BILATERAL ARRANGEMENTS  
(i) Asia-Pacific Economic Cooperation (APEC) 
22. Japan remains committed to APEC’s mission of regional economic integration and to the 
Bogor Goals of free and open trade and investment .  In 2010, APEC Leaders set forth the Yokohama 
Vision, which is a comprehensive, forward-looking framework for achieving growth and prosperity in 
the Asia-Pacific region in the 21st Century.  Japan has continued and will continue to take a leading 
role in realizing this vision in close cooperation with other Member economies. 
23. Japan believes that further trade liberalization is essential to achieving a sustainable global 
recovery in a time when economic growth and job creation have weakened in many economies in the 
aftermath of the global recession and natural disasters in the Asia-Pacific region.  In this light, following the pledge against protectionism agreed  upon at the APEC Economic Leaders’ Meeting and 
Ministerial Meeting in Honolulu in 2011, APEC economic leaders met in Vladivostok in 2012 and 
reaffirmed  the following three points:  (i) to ex tend their standstill commitment through the end of 
2015 to refrain from introducing new protectionist me asures, (ii) to rollback existing protectionist 
measures and (iii) to continue maximum restraint in implementing WTO-consistent measures with a 
significant protectionist effect. 
24. APEC’s core mission continues to be further regional economic integra tion and expansion of 
trade in the Asia-Pacific region.  APEC has pursued these objectives in 2011 by addressing next-
generation trade and investment issues, including through our trade agreements and a Free Trade Area 
of the Asia-Pacific (FTAAP), which is a major in strument to further APEC’s regional economic 
integration agenda.  In this rega rd, Japan took the lead in identifying and promoting effective, non-
discriminatory, and market-driven innovation pol icy as one of the next generation trade and 
investment issues.  In additio n, Japan has been committed to  advancing APEC green growth 
objectives.  In 2012, following the Honolulu Decl aration, APEC Leaders reached a groundbreaking 
agreement on the APEC List of Environmental Goods (54 items) that directly and positively 
contributes to APEC green growth and sustainabl e development objectives, on which we will reduce 
applied tariff rates to 5% or less by the end of 2015, taking into account each economy’s economic 
circumstances, without prejudice to APEC economies’ positions in the WTO. 
(ii) Asia-Europe Meeting (ASEM) 
25. Japan believes that the economic dialogue and co operation between Asia and Europe through 
ASEM will promote enhanced mutual understandi ng between the two regi ons on various economic 
issues, which could lead to increased trade and investment between Asia and Europe, as well as to the 
improved coordination of world economic issues of  mutual concern relating to the WTO, RTA/FTA, 
IPR, etc, thereby contributing to the development of the global economy.  
26. Japan has contributed to setting up the Author ized Economic Operator (AEO) programme and 
enhancing Combating Counterfeiting IPR enforcemen t as the Asian Coordinator at the ninth ASEM 
Customs Directors General-Commissioners Meeting in  Hua Hin, Thailand in October 2011.  Japan 
developed reports and recomme ndations, and endorsed the follow-up action on these areas.  
Furthermore, Japan led the follow-up on the impl ementation of the AEO recommendations at the 
sixth meeting of the ASEM Working Group on Custom s Matters, held in Chiang Mai, Thailand in 
September 2012. WT/TPR/G/276 Trade Policy Review 
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(iii) Japan's Bilateral Activities outside of FTAs 
The United States 
27. As long-time allies and major trade partners, Jap an and the United States continue to engage 
in a wide range of bilateral economic dialogues. 
28. On the occasion of the Japan-U .S. Summit Meeting on 13 November 2010, the leaders issued 
the "Fact Sheet on New Japan-U.S. Initiatives" to launch a number of  new initiatives, among 
others, the Japan-U.S. Economic Harmonization In itiative; the Japan-U.S. Dialogue to Promote 
Innovation, Entrepreneurship and Job Creation; and the Japan-U.S. Policy Cooperation Dialogue on 
the Internet Economy, with the intention to furt her strengthen economic ties between Japan and the 
United States.  
29. The Economic Harmonization Initiative aims to contribute to the two countries’ economic 
growth by promoting cooperation to harmonize appr oaches that facilitate trade, address the business 
climate and individual issues, and advance coordi nation on regional issues of common interest.  
Under this Initiative, the two Governments held a series of constructive discussions which covered a 
wide range of topics under the following four th emes:  (1) exchanging information on trade and 
economic-related policies of Japan and the U.S.;  (2 ) promoting further Japan-U.S. cooperation in the 
economic field;  (3) collaborati ng on common regional and global cha llenges; and 4) taking new steps 
to facilitate trade and to address the business clim ate and other issues.  On 27 January 2012, the 
Japanese and the U.S. Governments publicized a “R ecord of Discussion” that summarized the general 
scope of bilateral discussions and exchanges as well as identified key outcomes of this work that took 
place over the period of February 2011-January 2012. 
30. The Dialogue to Promote Innovation, Entrepre neurship and Job Creation, and the Policy 
Cooperation Dialogue on the Internet Economy, ar e policy-level dialogues intended to deepen 
bilateral policy coordination a nd lay the groundwork for greater Japan-U.S. cooperation in 
international fora. 
31. Furthermore, on the occasion of the Japan- U.S. Summit Meeting on 30 April 2012, the two 
countries issued the “U.S.-Japan Joint Statement on Global Supply Chain Security.” Recognizing the 
importance of the two economies to supply chains th at power the global economy, Japan and the U.S. 
outlined ways to cooperate more cl osely to strengthen the security a nd resiliency of the global supply 
chain and promote the timely, efficient flow of legitimate commerce.  The two countries seek to 
ensure that regional and global supply chains are pr epared for, and can withstand, evolving threats 
and hazards, and can recover rapidly from possible di sruptions such as terrorism and natural disasters. 
European Union 
32. With regard to the economic relati ons between Japan and the EU, the 20th Japan-EU Summit 
Meetings was held on 28 May 2011.  At the 20th Summit, based on the result of the joint examination 
conducted by the Joint High Level Group, the leaders agreed to start the process for a negotiation for 
a deep and comprehensive Free Trade Agreement (FTA)/Economic Partners hip agreement (EPA), 
addressing all issues of shared interest to both si des including tariffs, non-tariff measures, services, 
investment, intellectual property rights, competition and government procurement.  With a view to 
defining the scope and level of ambition of the EPA /FTA negotiations, Japan and the EU had worked 
on a “scoping exercise”.  Following the successful c onclusion of the scoping exercise, in July 2012, 
the European Commission submitted draft negotiating directives to the Council.  Negotiations are 
expected to start once a mandate  is obtained by the Commission.  On 29 November 2012, the Council Japan WT/TPR/G/276 
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approved a mandate for the Commission to negotia te the EPA and authorised the opening of 
negotiations with Japan.  Negotiations are to start in due course. 
Russian Federation 
33. The trade and economic relationship between Japan and Russia has been growing steadily in 
recent years.  The trade turnover between the two co untries reached a record high level of 30.7 billion 
USD in 2011.  Japanese companies invest into the Russian market  in such areas as automobile, 
machinery and energy industries.  Automobiles o ccupy more than 60% of Japanese exports to Russia 
and three-quarters of Japanese imports from Russia ar e oil, gas and other mineral-related materials. 
34. The “Japan-Russia Intergovern mental Committee on Trade an d Economic Issues” at the 
ministerial level has been held since 1996 and contributes to the promotion of concrete projects and the solution of business problems in Russia.  The most recent meeting was held on 20 November 
2012 in Tokyo.  In addition, the “Japan-Russia Advisory Council on Modernization of Russian 
Economy” was convened with the pa rticipation of private companies from both countries in 2010 and 
2011.  Japan expects that Russian  accession to the WTO will improve the environment of trade and 
investment in Russia. 
35. The Japanese Government establis hed Japan Centres in six Russian cities, through which it 
offers technical assistan ce aimed at cultivating and training pe rsonnel who are expected to play an 
important role in the Russian economy and Jap an-Russia business and economic relations.  The 
Centres also proactively support business activiti es by providing institutional and corporate 
information, offering consulting services, etc. in order to promote business relations between 
companies of the two countries. 
China 
36. The economic interdependence between Japan and China is growing deeper.  China has been 
Japan's largest trading partner since 2007.  The mu tual trade amount in 2011 reached US$345 billion.  
According to China's statistical data, Japan was China's second largest trading partner in 2011 and 
regarding foreign direct investment in China, Jap an invested US$6.4 billion in 2011.  According to 
China's data, 22,307 Japanese enterprises were conduc ting business in China as of the end of 2010. 
Japan has bilateral economic agr eements and arrangements with China in the areas of trade, air 
transportation, maritime transporta tion, trademark protection, tax, investment, fisheries and mutual 
customs cooperation. 
37. In December 2011, Prime Minister Noda e xpressed “Six Initiatives to further deepen a 
‘Mutually Beneficial Relationship based on Comm on Strategic Interests’ on the occasion of the 40
th 
anniversary of the normalization of  diplomatic relations between Ja pan and China” during his visit to 
China.  In line with the initiatives above, in May 2012,  both leaders shared the view to further develop 
mutually beneficial economic relations in the fiel ds of Finance, Energy-Saving and Environment, 
Tourism, Intellectual Property Rights, Agriculture a nd air transportation, etc.  Regarding financial 
cooperation, direct exchange markets between ye n and renminbi started on 1 June 2012 in the Tokyo 
and Shanghai Markets. 
38. In 2007, for strategic economic dialogue at the mi nisterial level, Japan and China decided to 
establish the Japan-China High-Level Economic Dialogue .  The first meeting was held in Beijing in 
December 2007, the second meeting was held in Tokyo in June 2009 and the third meeting was held 
in Beijing in August 2010, in which both leaders expressed views to strengthen exchanges and 
cooperation in the fields of trade, investment, and protection of intellectual property rights, among WT/TPR/G/276 Trade Policy Review 
Page 14 
  
other areas.  The fourth meeting of the Dialogue is  expected to be held as soon as the schedule is 
coordinated.  
Korea 
39. Economic interdependence between  Japan and Korea is growing steadily.  The mutual trade 
amount in 2011 reached US$105.6 billion.  Japan was Korea’s second largest trading partner after 
China, and for Japan Kor ea was the third largest trading partne r after China and the U.S. in 2011. 
Regarding foreign direct investment in Korea, Ja pan was the second largest investor with US$2,280 
million in 2011.  Foreign direct investment from Korea to Japan amounted to US$30 million. 
40. In order to strengthen the economic rela tionship between Japan and Korea, the 10th Japan-
Korea High-Level Economic Consultation was held on 24 November 2011.  Both sides exchanged 
views to promote bilateral trade and investment and reaffirmed the importance of cooperation on 
global issues such as energy security  and the environment.  In addition, both sides confirmed the 
recent development of the cooperation between Japanese and Korean enterprises in third countries on 
projects of resource development and infrastructure,  and reaffirmed the importance to support their 
activities.  The 11th Japan-Korea High-Level Economic Consu ltation was held on 22 November 2012. 
India 
41. Under the “Japan-India Global Strategic Partne rship”, established by then-Prime Minister 
Abe and Prime Minister Singh in 2006, economic  activities between two countries have been 
increased.  The mutual trade amount in 2011 reached US$17.8 billion.  This figure is fourfold of that 
in 2001.  
42. To further strengthen the bilateral economic part nership, Japan and India have been engaged 
in wide-ranging dialogues on trade, investment  promotion and improvement of the business 
environment.  The Fifth Japan-India Strategic Di alogue on Economic Issues was held in June 2011 in 
New Delhi.  At the ministerial level, the first India-Japan Ministerial-Level Economic Dialogue was 
held in April 2012. 
Africa 
43. Japan attaches importance to the acceleration of  the economic growth of Africa through the 
expansion of trade and investment  and pledged a range of measures to promote trade and investment 
in Africa at the Fourth Tokyo International Conference on African Development in 2008, including 
the following: 
44. First, in line with the pledge to assist in doubling Japanese private investment in Africa by 
2012, Japan set up the JBIC (Japan Bank for In ternational Cooperation) Facility for African 
Investment in April 2009 for financial assistan ce to Japanese private companies.  In total, 
US$2.5 billion will be and almost have been provi ded as financial support by JBIC over five years 
from TICAD IV. Second, Japan dispatched a Public  and Private sector Joint Mission to African 
countries (the Republic of Zimbabwe and th e Democratic Republic of Congo) from 18 to 
25 August 2012.  Efforts have also been made to raise the interest of Jap anese private sector in 
business in Africa through such ways as holding a sy mposium on this issue.  Third, Japan has been 
promoting the "One Village, One Product (OVOP)"  movement on the African continent through 
capacity building for the purpose of expanding the volume of trade between Japan and Africa.  
Fourth, trade and investment insurance is to be extended more flexibly. Japan WT/TPR/G/276 
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45. In addition, Japan finds it important to prom ote intra-regional trade in Africa.  Japan has 
pledged at TICAD IV to develop regional road ne tworks and to introduce One Stop Border Posts 
(OSBP) at 14 crossing points of key regional road s to facilitate cross border procedures in close 
coordination with AU/NEPAD and Regional Economi c Communities (RECs).  As of the end of 
September 2012, Japan has completed the introduction of OSBP in 13 locations.  The latest among 
them is the Rusmo International Bridge to be c onstructed between Tanzania  and Rwanda, which will 
accommodate OSBP facilities. 
46. Private sector development is also important to achieve sustainable development in Africa.  In 
this context, Japan provided approximately US$1 billion to implement comprehensive assistance to 
the African private sector under the Enhanced Privat e Sector Assistance (EPSA) jointly launched by 
Japan and AfDB (African Development Bank) Group in 2005.  In 2012, Japan newly pledged another 
US$1 billion over the next 5 years under the so-ca lled EPSA-II to support further African efforts to 
develop its private sector.  
MERCOSUR 
47. In June 2011, Mr. Takeaki Matsumoto, Minister for Foreign Affairs at the time, participated 
in the 41st Summit Meeting of MERCOSUR in Paraguay for the first time as Japanese Minister for 
Foreign Affairs.  He stressed, in his speech, the importance of strengthening economic ties between 
Japan and MERCOSUR, and proposed launching a di alogue as a forum for exploring possibilities to 
promote bilateral relations across a wide range of  economic fields, including trade and investment. 
(5) INVESTMENT POLICY  
(i) Program for Promoting Japan as an Asian Business Centre and Direct Investment into 
Japan 
48. On 16 December 2011, the Japanese government formulated a Program for Promoting Japan 
as an Asian Business Centre and Direct Invest ment into Japan, which summarized the policy 
measures concerning the creation of an attractiv e, world-class business and living environment to 
boost the competitiveness of Japan as a business  location by leveraging its business location 
environment and to promote direct investment into Japan, foremost by building Japan into an business 
centre in Asia. 
49. On 22 June 2012, the Japanese government pe rformed follow-up on the program, and the 
government decided to undertake the following  initiatives, among others: 1) “Double Direct 
Investment into Japan” which refers to expanding th e FDI inward stock to ¥35 trillion by the end of 
2020; and 2) “Open Reconstruction” by promoting FDI in Japan. 
(ii) Act on Special Measures for the Promotion of Research and Development by Certified 
Multinational Enterprises 
50. The Asian Business Location Bill (Bill on Special Measures for the Promotion of Research 
and Development by Certified Multinational Enterprises)  was approved by the Diet in July 2012.  The 
Act is to attract global companies establishing ne w R&D facilities and Asian regional headquarters in 
Japan;  and global companies certified by the comp etent Minister will be granted corporate tax 
breaks, reduced patent fees and other incentives. WT/TPR/G/276 Trade Policy Review 
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(iii) Investment Agreements 
51. Japan has actively promoted the conclusion of investment agreements as they create stable, 
equitable, favourable and transparent conditions for greater investment through the removal of 
barriers to investment and provision of investor protections.  Japan has so  far conclude d bilateral 
investment agreements with 19 countries and regions , and a trilateral investment agreement as well as 
EPAs which contain investment chapters with 10 countries. 
52. From the viewpoint of harnessing global demand a nd making the most of the benefits of yen 
appreciation, Japan places a greater emphasis on the enhancement of foreign investment.  Against this 
backdrop, Japan will proactively conclude investme nt agreements, taking into consideration the 
investment track record, the prospect for invest ment as well as the need to improve investment 
environment, and thus play a leading role in establishing new international investment rules. 
III. TRADE AND DEVELOPMENT 
(1) AID FOR TRADE  
53. In order for developing countries including LDCs  to reap further benefit from the multilateral 
trading system, trade liberalisation alone is not sufficient.  Enhancing capacities on the supply side 
and encouraging assistance for this purpose is indi spensable.  Since Aid fo r Trade (AfT) initiatives 
contribute to enhancing the trade capacities of developing countries, Japan continues to provide 
various measures for AfT to this end, as well as promoting the "One Village, One Product" 
movement. 
Japan's Development Initiatives for Trade 
54. Japan announced the "Development Initiative fo r Trade", prior to the WTO Ministerial 
Conference in Hong Kong in December 2005.  This Initiative contained: (a) implementation of Duty-
Free and Quota Free Market Access for essentially all products originating from LDCs, (b) provision 
of US$10 billion of financial assistance including trade, production and distribution infrastructure for three years (2006-2008), and (c) as part of (b), the exchange of a total of 10,000 trainees and experts 
in trade-related fields over the same period, ta rgets of which were fully achieved.  During the 
designated period (2006-2008) of the Initiative, th e total sum of financial assistance amounted to 
US$17.66 billion, which reached 177% of the target.  The total sum of techni cal assistance consisting 
of dispatching experts and receiving trainees fo r the period (2006-2008) amounted to close to 
50,000 persons, nearly five times as much as the targets. 
55. Given the successful results of the above-me ntioned first initiative, Japan announced a new 
AfT strategy, 'Development Initiative for Trade 2009' in July 2009.  Its main pillar was US$12 billion 
of financial assistance for trade-related project s including technical assistance for 40,000 persons in 
total for 3 years from 2009 to 2011.  The 2009 initiativ e also consisted of reviewing the Generalized 
System of Preference (GSP) as a whole, improving AfT implementation and achieving the 
commitments made at the G20 London Summit in April 2009 in the area of trade finance. 
Aid for Trade Asia-Pacific Regional Technical Group 
56. Japan is executing not only a quantitativ e commitment but also a qualitative commitment 
under the Initiative 2009 which aims for improvement in  efficiency of AfT.  For instance, Japan has 
been fully involved in the AfT Asia-Pacific RTG (Regional Technical Group) since its inception in 
March 2009.  The purpose of the RTG is to disc uss the successful and rich experiences of aid 
activities in the Asia-Pacific region, to extract some elements of the effective aid and to share them Japan WT/TPR/G/276 
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with other regions, particularly Africa.  Japan hosted the Third RTG meeting in Tokyo in 2010 and 
submitted the first report to the Third Global Review  of AfT, an opportunity for the WTO members to 
survey what has been achieved through AfT.  In  March 2013, Japan will host the Sixth RTG meeting 
in Tokyo to complete the second report which will be  submitted to the Fourth Global Review in July 
2013. 
Tokyo International Conference on African development 
57. In June 2013, Japan will host TICAD V, the Fi fth Tokyo International Conference on African 
Development.  TICAD has evolved into a major a nd unique global framework for promoting African 
development and has attracted high-level par ticipants both from African countries and their 
development partners.  Under the TICAD process,  Japan has placed importance on trade facilitation 
in terms of promoting regional integr ation.  In this regard, Japan has engaged in the “One Stop Border 
Post” (OSBP) project to facilitate smooth and effici ent cross-border procedures, and it has contributed 
to promoting transport and trade in the region. 
Assistance to the One Village, One Product Movement 
58. The One Village, One Product (OVOP) is one of the typical approaches under these 
initiatives.  OVOP is a movement which supports  local economies through the development, 
improvement and promotion of local products (foods, beverages, textiles & garments, etc.) with the 
participation of local people.  This movement was first initiated in a southern prefecture in Japan in 
the late 1970s and later spread to the other prefectur es.  It has been introduced and has contributed to 
the development of local economies in other Asian countries. 
59. Japan supports this movement, especially the exports of developing countries and least 
developed countries through technical cooperation such  as the dispatch of experts, educational and 
training programs to create competitive products, and support through internationa l organizations.  In 
addition, Japan has held exhibitions and trade fair s inviting buyers and has also opened shops (OVOP 
markets) since 2006 in some of Japan's internati onal airports in order to introduce products and 
encourage shopping.  
Standards and Trade Development Facility (STDF) 
60. Japan has also been contributing to the Sta ndards and Trade Development Facility (STDF) 
since 2009, with donations of approximately US$864, 000.  The STDF is a joint initiative of WTO, 
World Bank, OIE and FAO in order to help devel oping countries improve their expertise and their 
capacity to analyze and implement internationa l standards on sanitary and phytosanitary (SPS) 
measures, and works closely with the Enhanced Integrated Framework for Least-Developed Countries 
and Aid for Trade.  Japan believes that enhanc ing food safety and controlling plant and animal 
diseases in developing countries will benefit developi ng countries and eventually the whole world; 
therefore, cooperation among donors and relevant in ternational organizations is highly important. 
(2) GENERALIZED SYSTEM OF PREFERENCES (GSP) 
61. In order to improve market access for developi ng countries, Japan introduced a preferential 
tariff treatment under the GSP scheme on 1 August 1971, and has re-examined it several times since 
then.  Furthermore, under the scheme, Japan has gran ted special preferential treatment to LDCs since 
1980, including additional products for which preferences are granted only to LDCs.  Currently, 
138 developing countries and 7 territories, including a ll LDCs, enjoy the benefits of the GSP scheme. 
This scheme has been vastly improved over the last several years, especially in 2007 and 2011.  In the 
comprehensive "Development Initiative for Trade"  launched on 9 December 2005, Japan announced WT/TPR/G/276 Trade Policy Review 
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its commitment to providing duty-free and quota-fr ee (DFQF) market access for essentially all 
products originating from LDCs.  Japan is fully committed to impl ementing the above initiative thus 
complying with the decision adopted in the Hong Kong Ministerial Declaration.  In realization of the 
above-mentioned commitment, on 1 April 2007 Japan started improved DFQF treatment for LDCs by 
adding a variety of items to the treatment.  As a r esult, the number of agricultural and fishery products 
originating from LDCs which receive DFQF pr eferential treatment increased from 497 to 1,523 and 
that of industrial products increased from 4,185 to 4,2444.  Consequently, treatment coverage which 
was previously approximately 86% has risen to appr oximately 98% as defined at the tariff line level. 
On 1 April 2011, Japan extended the effective pe riod of the GSP scheme to 31 March 2021.  Japan 
abolished all ceiling-based schemes for certain in dustrial products and revised the criteria for 
application of competitiveness-focused, product-by-e xclusion measures.  The revision was made to 
make the criteria more objective and transparent and to allow less competitive developing countries to 
benefit more from the GSP scheme. 
IV. JAPAN'S DOMESTIC POLICIES 
(1) REGULATORY REFORM  
62. The Council for the Promotion of Regulatory Reform (CPRR) was established in 
January 2007 as an advisory body to the Prime Minister for the purpose of accelerating regulatory 
reforms.  The CPRR investigated and deliberated on reform issues and reported the outcomes to the 
Prime Minister while keeping close ties with the Headquarters for the Promotion of Regulatory 
Reform.  The Cabinet authorized and revised "T he Three-Year Program for Promoting Regulatory 
Reform" in line with the reports delivered by the CPRR, and each ministry took measures in 
accordance with the program.  The CP RR was terminated in March 2010. 
63. In March 2010, the Subcommittee on Regulator y and Institutional Reform was established 
under the Government Revitalization Unit.  It ha s three working groups which are the (1) green 
innovation working group (environment and energy), (2) life innovation working group (medical and 
elderly care services), and (3) agriculture workin g group.  The subcommittee and three working 
groups review existing regulations and systems main ly in those areas.  Based on the proposals made 
by the subcommittee and working groups, the subc ommittee delivered "the First Report by the 
Subcommittee on Regulatory and Institutional Reform" to the Government Revitalization Unit in June 
2010.  The Cabinet identified and decided on 61 items to be reformed based on the report. 
64. The next series of the subcommittee and work ing groups were held from September 2010 to 
March 2011.  The agriculture, forestry and regi onal development working group replaced the 
agriculture working group.  The subcommittee an d its working groups reviewed regulations and 
systems relevant to the "New Growth Strategy" (Cabinet decision in June 2010) and others.  The 
subcommittee compiled the second report and the Cabine t identified and decided on 191 items to be 
reformed in total in April and July  2011 based on the report.  By the same token, the third session of 
the subcommittee was launched in September 2011.   The subcommittee established three working 
groups which are (1) the revitalization and recons truction working group, (2) the energy working 
group, and (3) the agriculture working group.  Th e subcommittee was upgraded  to “The Committee 
on Regulatory and Institutional Reform” in May 2012 in order to reinforce the regulatory and 
institutional reform.  In the same way as the pr evious sessions, the Cabinet identified and decided on 
142 items to be reformed in total in April and July 2012. 
65. The fourth series of the review on existing regul ations and systems by the committee began in 
August 2012 and will cont inue until June 2013. 
                                                      
4 Figures are as of 2007. Japan WT/TPR/G/276 
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(2) GROWTH AND FISCAL CONSOLIDATION  
66. In order to achieve sustainable growth, the Government will simultaneously push ahead with 
economic growth and fiscal consolid ation in a compatible manner. 
67. In August 2012, Japan enacted “Comprehensive Refo rm of Social Security  and Tax” bills that 
include a staged increase of the consumption tax ra te (from 5% to 8% in April 2014, and to 10% in 
October 2015).  This reform is the first step to  achieving two important and urgent goals – (1) 
securing stable financial resources for social securi ty and (2) fiscal consolidation – simultaneously.  
Japan will continue to steadily implement measu res for fiscal consolidation, including the 
“Comprehensive Reform of Social Security and Tax”  bills, to achieve its goal of halving the ratio of 
the primary budget deficit to GDP from the FY2010 level by FY2015. 
68. Securing stable financial resources for social security and establishing a sustainable social 
security system will provide a foundation for renewe d growth by lessening anxiety about the future 
and expanding consumpti on and economic activities. 
69. Under prudent economic assumptions, the aver age annual growth rate for the FY2013-
FY2016 period is projected to reach over 1% in real  terms.  The average growth rate does not differ 
much from that for the case in which “Comprehensive  Reform of Social Security and Tax” is not 
considered or that in the medium to long term  (i.e. average growth rate for the FY2011-FY2020 
period). 
70. The average annual growth rate for the FY 2013-FY2016 period, on the basis of the prudent 
economic assumptions: 
 Considering the “Comprehensive Reform”: the average annual growth rate is 1.1%. 
 Not considering the “Comprehensive Reform”:  the average annual growth rate is 1.2%.5 
71. On the other hand, toward achieving sustaina ble economic growth, ove rcoming deflation has 
been one of the major challenges fo r more than 10 years.  Behind such long-term deflation lie three 
major factors:  (i) a negative output gap;  (ii) declining growth expectations by business sectors and 
consumers; and (iii) persistent deflationary expectations.  Those are derived from the structural 
problems in Japan that hamper a virtuous cycl e of economy among output, income and expenditure 
during a long-term deflation period.  Thus far,  while the Japanese economy is still in a mild 
deflationary phase, the pace of price decline is b ecoming moderate, and the output gap is expected to 
be reduced.  Therefore, it could be said that the curr ent state presents an opportunity to get Japan out 
of longstanding deflation. 
72. The Japanese government and the Bank of Japan  share the recognition that the critical 
challenge for Japan's economy is to overcome defl ation as early as possible and to return to a 
sustainable growth path with price stability.  Th e government and the Bank will work together and 
make their utmost efforts to address this challenge.  In order to state clearly the shared understanding 
concerning the roles of the government and the Ba nk, they decided to release "Measures Aimed at 
Overcoming Deflation" in October 2012.  
73. In order to overcome deflation, the Governme nt will reform the economic structure which 
tends toward deflation, together  with managing macroeconomic po licies appropriately.  From the 
standpoint above, the Government will steadily prom ote economic growth policy items based on “The 
                                                      
5 Cabinet Office, Economic and Fiscal Projections for Medium to Long Term Analysis (24 Jan 2012). WT/TPR/G/276 Trade Policy Review 
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Strategy for Rebirth of Japan” (Cabinet Decision on 31 July 2012).  In particular, from the viewpoint 
of mobilizing “goods,” “people,” and “money”, it will make its utmost efforts to overcome deflation 
by utilizing policy resources such as regulatory a nd institutional reform, budget and taxes, focusing 
on fiscal year 2013 and an even earlier period. 
74. As for monetary policy, the Bank of Japan judges "the price stability goal in the medium to 
long term" to be within a positive range of 2 per cent or lower in terms of the year-on-year rate of 
change in the CPI.  The Bank aims to achieve its goa l of 1 per cent for the time being in terms of the 
year-on-year rate of increase in the CPI through the pursuit of powerful monetary easing, conducting 
its virtually zero interest rate policy and implem enting the Asset Purchase Program mainly through 
the purchase of financial assets.  The Bank will con tinue with this powerful easing until it judges the 
1 per cent goal to be in sight.  In doing so, it will ascertain whether there is any significant risk to the 
sustainability of economic growth, including from the accumulation of financial imbalances. 
75. It is also important for the Government to pr omote innovation in the fields of “green (energy 
& environment)”, “life (health & life sciences)” a nd “agriculture, forestry and fisheries” and develop 
an environment devoted to cultivating new i ndustries along with increasing competitiveness of 
companies operating in Japan and creating jobs in a compatible manner. 
76. For this reason, the Government prioritizes the above three policy areas and SMEs as four 
policy packages for the rebirth of Japan in the “Rebirth of Japan: A Comprehensive Strategy” decided 
by the Cabinet on 31 July 2012.  The Government will work to: (1) draw up "Green Policy Outline” 
by the end of 2012 as a more concrete package of regulatory and system ic reform, and budgetary 
reform in order to establish world-leading technolog y innovation in the energy field and to create new 
industries and jobs; (2) push ahead with regulatory an d systemic reform so as to revitalize the medical 
sector as a growth industry, and implement steadily the “Five-year Strategy for Medical Innovation” 
decided by the “Medical Innovation Council” in June 2012. 
77. In addition, the Government aims to e xpand foreign demand by harnessing the world’s 
growth potential.  Therefore, the Government  has implemented policy measures such as the 
promotion of economic partnerships, enhanc ement of overseas deployment of integrated 
infrastructure systems and the acceleration of exports of agriculture, forestry, and fisheries products.  
78. Moreover, the Government will put into for ce measures to prevent industrial hollowing-out 
and promote inward investment, such as enha ncing competitiveness through location subsidies; 
implement the subsidy program for projects promoti ng Asian site location in Japan and encouraging 
inward investment; and utilize "Comprehensive Sp ecial Zones for International Competitiveness 
Development". 
(3) INTELLECTUAL PROPERTY RIGHTS  
Amendments to the Customs Law 79. In line with the amendment of the Unfair Competition Prevention Act in 2011 in which the 
devices and programs that circumvent technological restriction measures were regulated, the Customs 
Law has been amended and the devices and program s that circumvent technological restriction 
measures have been newly added to goods prohibited from being imported or exported. Japan WT/TPR/G/276 
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Amendments to the Unfair Competition Prevention Act 
80. Japan amended its Unfair Competiti on Prevention Act in 2011 as follows; 
 (1) In order to protect trade secrets appropriate ly, regulations which prevent the disclosure of 
 trade secrets were added in the criminal procedure of the Act, 
 (2) In order to prevent infringements by devices and programs that circumvent technological 
 restriction measures, the Act has been amende d to apply criminal charges to acts such as 
 offering such devices and programs. 
Amendments to the Patent Act 
81. In order to promote innovation by the appropria te protection and utilization of intellectual 
property, Japan amended the Patent Act in 2011 in cluding a review of the system for improving non-
exclusive licenses, reviewing the patent fee reduc tion for small and medium sized enterprises, the 
development of remedial measures for misappr opriated applications, and revising the trial 
examination system. 
Amendments to the Copyright Act 
82. With the development of digitization and netw orking, Japan amended its Copyright Act in 
2012.  The following are the major amendments: 
- In order to facilitate exploitation of copyrighted  works, provisions relating to limitations on 
copyright including so-called “inc idental use” have been amended. 
- Aiming at more appropriate protection of copy right, provisions relating to technological 
protection measures have been amended. 
(4) FINANCIAL REFORM  
Banking and securities sector 
83. The Financial Services Agency (FSA) took va rious measures, such as the Act concerning 
Temporary Measures to Facilitate Financing for Sm all and Medium-sized Enterprises (SMEs), etc., 
for facilitation of financing because SMEs began to suffer financial troubles due to the global 
financial crisis in the fall of 2008.  The FSA anal yzed each type of data regarding the economic and 
financial circumstances and SMEs’ financing, and paid particular  attention to the status of 
implementation of the Act concerning Temporary Measu res to Facilitate Financing for SMEs, etc. and 
the effects as well as the influence.  As a result, it is considered that the use of the Act is well-
accepted by financial institutions.  On the other ha nd, problems are pointed out, such as an increase in 
loan condition changes.  Considering these points, it  is necessary to implement policies to ensure 
financial discipline (ensuring soundness and preven ting moral hazards), while encouraging financial 
institutions to wield their consulting functions mo re, and strongly providing support which leads to 
true business improvement at SMEs, etc.  To do this smoothly, it was decided that it is appropriate to 
only extend the Act concerning Temporary Measures to Facilitate Financing for SMEs, etc. until 
31 March 2013, and to take focused actions to pr ovide business revitalization support for SMEs, etc. WT/TPR/G/276 Trade Policy Review 
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84. “The Act for Amendment of the Financial Instruments and Exchange Act, etc. for 
Strengthening the Foundations of Capital Markets and the Financial Industry” was enacted in May 
2011.  It comprehensively includes the necessar y development of institutional frameworks for 
strengthening the foundations of national capital mark ets and the financial industry.  This amendment 
focuses on the following aspects:  (1) achievement of the diverse and smooth provision of financing 
measures, (2) provision of asset investment opportu nities for an effective use of Japanese national 
assets and (3) ensuring the reliability of markets.  In  terms of achievement of the diverse and smooth 
provision of financing measures, the following three were implemented:  (a) development of the legal 
system regarding disclosure for rights offerings (capital increase by allotment of share options without 
contribution), (b) expansion of scope of borrowers  for commitment lines, and (c) lifting the ban on 
finance leases by main financial institutions, such  as banks and insurance companies.  For the purpose 
of the provision of asset investment opportunities for an effective use of Japan ese national assets, the 
following three aspects were amended: (a) rela xing the regulation of investment management 
businesses with limited types of clients, such as prof essional investors, (b) more flexible regulation 
for asset securitization schemes, and (c ) expansion of the scope of disclos ure in English.  In order to 
ensure the reliability of markets, (a) response to sal es of unlisted stocks, etc. by unregistered financial 
instruments business operators was strengthened, and (b) reasons for refusing registration of 
investment advisories and agencies were expanded. 
Insurance sector 
85. "The Act for Amendment of the Insurance Busi ness Act, etc." was enacted in March 2012. 
The main points of this act are to enhance the international competitiveness  of Japanese insurance 
companies and improve the environment which contri butes to business restructuring.  Specifically, the 
amendment of the act includes (1) special measu res for regulation of business areas concerning 
subsidiary companies, (2) review of the regulatio n concerning transfer of insurance contracts, (3) 
introduction of the re-entrustment system of insuran ce solicitation, (4) extension for five years of the 
period for government subsidies to Life Insurance Policyholders Protection Co rporation of Japan and 
(5) extension of transitional measures concerning the insurance amount that the Small Amount and 
Short Term Insurance Providers can underwrite as  a necessary development of the institutional 
framework for the protection of insurance policyholders, etc. 
(5) AGRICULTURAL REFORM  
86. In March 2010, the new Food, Agriculture and Rural Areas Basic Plan was introduced.  This 
plan aims to raise the food self-sufficiency ratio to 50 % by FY2020 (41 % in FY2008) and revitalize 
rural areas through the efforts of farmers, food processors and consumers.  Toward these goals, the plan set out new policies including (i) an income s upport direct payment scheme, (ii) establishment of 
a production system which suites consumer's needs regarding food quality, safety and reliance, and 
(iii) revitalization of rural areas through promoting collaborations of primary, secondary and tertiary 
industries.  
87. Furthermore, in order to contribute to the rea lization of the Basic Plan, the Basic Policy and 
Action Plan for the Revitalization of Japan's Food, Agriculture, Forestry and Fisheries was introduced 
in October 2011.  The action plan states that the Go vernment needs to work in tensively over the next 
five years on strategies such as (i) realization of sustainable and rigorous agriculture by accelerating the consolidation of scattered farmlands and by in creasing the number of youths newly entering into 
farming, (ii) promoting collaboration of primary,  secondary and tertiary industries, and making 
agriculture a growing industry, and (iii)  promotion of renewable energy supply.  Japan WT/TPR/G/276 
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(6) COMPETITION POLICY  
88. The bill to amend the Antimonopoly Act (AMA) was submitted to the 174th ordinary session 
of the Diet on 12 March 2010.  It contains the a bolition of hearing procedure of the Japan Fair Trade 
Commission (JFTC) for administrative appeal and necessary revisions to develop procedures for hearings prior to the issue of the JFTC's administra tive orders, such as cease and desist orders, and so 
forth.  The above bill was under deliberation in th e 180th ordinary session of the Diet as of July 2012. 
89. The JFTC reviewed the M&A regulations (inves tigation procedures and criteria) to further 
improve the swiftness, transparency, and predic tability of M&A investig ation while enhancing 
international conformity.  The JFTC, on 1 July 20 11, abolished the prior consultation system and 
amended the related Fair Trade Commission Rules, etc. 
90. The JFTC issued “Guidelines Concerning Abu se of Superior Bargaining Position under the 
Antimonopoly Act” on 30 November 2010, following th e introduction of surcharges against the abuse 
of superior bargaining position, and thereby, th e predictability for foreign companies has been 
enhanced.  
91. The JFTC has been taking rigorous legal actions against violations of the AMA.  The number 
of legal cases against such violations amounted to  20 in 2010 and 15 in 2011.  Details of these cases 
can be found below. 
 2010 2011 
Private monopolization 0 0 
Bid-rigging 12 7 
Cartels (excluding bid-rigging) 6 5 
Unfair trade practices 2 3 
Others 0 0 
Total cases 22 15 
 
92. The amount of surcharge payment orders issued by the JFTC was estimated at a total of 
approximately ¥69,507.65 million in 2010 and ¥33,497.93 million in 2011. 
93. The JFTC has adopted a proactive policy on fili ng criminal complaints to seek penalties for 
violations of the AMA.  In June 2012, the JFTC filed complaints in one case. 
94. In order to reinforce the JFTC's role as a gua rdian of the market, the JFTC increased the 
number of their personnel to 799 in 2012, with most of them assigned to the investigation section. 
(7) SERVICES -RELATED POLICIES  
95. Japan has promoted reforms in several service-related sectors. 
96. In telecommunications sector, for example, a “basic policy” and “progress schedule” were 
established for the purpose of the diffusion of broadband (the “New Br oadband Super Highway” 
initiative) in December 2010.  Based on them, va rious measures, including the launch of the Fair 
Competition Review System which verifies the conf ormity with rules for ensuring fair competition 
and the status of the diffusion of broadband in Japan, have been taken. WT/TPR/G/276 Trade Policy Review 
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97. In the tourism sector, the “Tourism Nation Promotion Basic Plan” was approved by the 
Cabinet in March 2012.  “Broadening of the base of  tourism” and “Improvement of tourism quality” 
are the main approaches of this plan. 
98. Regarding the movement of natural persons, a new policy measure on preferential treatment 
in the immigration procedure for foreign professiona ls was introduced in May 2012 for the purpose of 
promoting the acceptance more highly skilled foreign nationals, with the aim of helping to contribute 
to economic growth, creation of new demand and em ployment in Japan.  Through this measure, 
evaluation is made by assigning points to such items as “educational attainment”, “period of professional experience”, “annual salary” and “resear ch performance”.  Foreign nationals with a 
certain number of points are recognized as “highly skilled foreign professionals” and are given 
preferential treatment in the immigration procedure. 
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