WORLD  TRADE  
ORGANIZATION  RESTRICTED 
WT/TPR/S/276 
15 January 2013  
 
(13-0136) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
JAPAN 
 
 
 
 
This report, prepared for the eleventh Trade Policy Review of Japan, has been 
drawn up by the WTO Secretariat on its own responsibility.  The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Ja pan on its trade policies and practices. 
 Any technical questions arising from this report may be addressed to 
Mr. Masahiro Hayafuji (tel:  022 739 5 873), Mr. Pierre Latrille (tel:  022 739 
5266) and Mr. Usman Ali Kh ilji (tel:  022 739 6936). 
 
Document WT/TPR/G/276 contains the policy statement submitted by Japan. 
 
 
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/S/276 
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__________________________________________________________________________________  CONTENTS 
    Page 
SUMMARY   vii 
I.  ECONOMIC ENVIRONMENT 1  
 (1)   MAIN ECONOMIC DEVELOPMENTS  1  
 (2)   MACROECONOMIC POLICIES  2  
 (3)   STRUCTURAL POLICIES  4  
 (4)   DEVELOPMENTS IN TRADE AND FOREIGN DIRECT INVESTMENT  4  
 (i)   Composition of merchandise trade 6  
 (ii)   Direction of merchandise trade 6  
 (iii)   Foreign direct investment 8  
II.  TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 10  
 (1)   TRADE POLICY OBJECTIVES  10  
 (i)   Trade policy formulation and implementation 10  
 (ii)   Transparency and policy evaluation 13  
 (2)   TRADE AGREEMENTS AND ARRANGEMENTS  14  
 (i)   WTO 14  
 (ii)   Regional trade agreements 14  
 (iii)   Generalized System of Preferences and other preferential arrangements 
adopted unilaterally by Japan 15  
 (iv)   Other bilateral/regional arrangements 16  
 (3)   FOREIGN INVESTMENT REGIME  19  
 (i)   Regulatory regime 19  
 (ii)   Investment promotion measures 20  
III.  TRADE POLICIES AND PRACTICES BY MEASURE 22  
 (1)   MEASURES DIRECTLY AFFECTING IMPORTS  22  
 (i)   Customs clearance procedures and valuation 22  
 (ii)   Tariffs 23  
 (iii)   Rules of origin 30  
 (iv)   Non-tariff border measures 30  
 (v)   State trading 32  
 (vi)   Contingency measures 32  
 (vii)  Government procurement 33  
 (viii)  Standards, technical regulations, and sanitary and phytosanitary measures 37  
 (ix)   Import promotion measures 45  
 (2)   MEASURES DIRECTLY AFFECTING EXPORTS  45  
 (i)   Procedures 45  
 (ii)   Export taxes, charges, and levies 46  
 (iii)   Border adjustment in respect of internal taxes and import duties (relating 
  to exports) 46  
 (iv)   Export prohibitions, restrictions, and licensing 47  
 (v)   Export cartels and voluntary export restraints 48  
 (vi)   Export promotion schemes 48  
 WT/TPR/S/276 Trade Policy Review 
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 (3)   MEASURES AFFECTING PRODUCTION AND TRADE  48  
 (i)   Taxation and tax-related assistance 48  
 (ii)   Subsidies and other financial assistance 50  
 (iii)   State-owned enterprises, corpor atization, and privatization 51  
 (iv)   Intellectual property rights 52  
 (v)   Competition policy 69  
IV.  TRADE POLICIES BY SECTOR 73  
 (1)   AGRICULTURE  73  
 (i)   Structure 73  
 (ii)   Border measures 74  
 (iii)   Domestic measures 78  
 (2)   FISHERIES  79  
 (i)   Profile and recent developments 79  
 (3)   MANUFACTURING  84  
 (4)   ENERGY AND UTILITIES  85 
 (5) S ERVICES          8 6  
  (i) Financial services 86 
  (ii) Telecommunications 95 
  (iii) Transport 98 
  (iv) Construction 105   (v) Distribution 107 
  (vi) Tourism 108
 
REFERENCES   111 
APPENDIX TABLES  113 
CHARTS 
I. ECONOMIC ENVIRONMENT 
 
I.1 Composition of merchandise trade, 2009 and 2011 7 
I.2 Direction of merchandise trade, 2009 and 2011 9  
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 III.1 Share of non- ad valorem duties, by HS section, FY2012 26 
III.2 Simple average applied MFN tariff rates, by HS section, FY2010 and FY2012 27 
III.3 Import control system, 2012 31 III.4 JIS development process 40 
III.5 Structure of IPR administration and enforcement 53 
III.6 Japanese patent applications (unexamined patent publications) by fields of electrical 
 engineering, 2000-10 55 
III.7 Japanese patent applications (unexamine d patent publications), overall vs. electrical 
 engineering, 2000-10      
   55 
III.8 PCT applications received by  the JPO, by fields of electri cal engineering, 2000-11  56 
III.9 PCT applications in electrical engineering, by leading countries, 2000-11   56  
III.10 PCT applications in environmental technology by leading countries, 2000-11 58 
III.11 Japanese national patent applications and PCT applications in environmental  
 technology, 2000-11 59 Japan WT/TPR/S/276 
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__________________________________________________________________________________      Page 
 
III.12 Patent applications, granted patents,  and PCT filings in the JPO, 2000-11 60 
III.13 Applications for utility  models and designs received by the JPO, 2000-11 62 
III.14 Trademark applications r eceived by the JPO, 2000-10 63 
III.15 IP5 patent applications and patents granted, 2010 69 
TABLES 
I. ECONOMIC ENVIRONMENT 
 
I.1 Selected macroeconomi c indicators, 2007-11 1 
I.2 Balance of payments, 2007-11 5 
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  
II.1 Major trade-related laws and regulations, October 2012 11 
II.2 Ten largest GSP beneficiaries, FY2011 16  
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
III.1 Structure of the MFN tariff, various years 24 
III.2 Reduction in applied MFN tariffs, FY2010 and FY2012 25 III.3 Preferential tariff rates, FY2012 28 
III.4 Procurement by product and by origin, 2009 and 2010 36 
III.5 Main standards and technical regulations in Japan, 2011     38 III.6 National government tax revenue, FY2011 and FY2012 49 
III.7 Amendments of main substantive IP legislations, November 2012 54 
III.8 Amendments to provisions on examina tion procedures and licensing practices 60 
III.9 Seizure of imports, 2009-11 65 
III.10 Membership of WIPO conventions, 2012 67 
III.11 Enforcement of competition policy, 2007-11 71  
IV. TRADE POLICIES BY SECTOR 
 IV.1 Applied MFN tariff protection in agriculture, FY2012 75 
IV.2 Special safeguards in agriculture, FY2010 to FY2012, November 2012 76 
IV.3 Japan's fisheries production, 2001-10 81 IV.4 Trade in fisheries products, 2006-11 82 
IV.5 Imports of fish and fish products, by principal source, 2010-11 82 
IV.6 Japan's market and regulatory regime for financial services, 2012 86 
IV.7 Japan's market and regulatory regime for banking      89 
IV.8 Japan's market and regulatory regime for insurance, 2012     90 IV.9 Japan's market and regulatory regime for securities, 2012     92 
IV.10 Japan's market and regulatory regime for pension funds and mutual funds, 2012 93 
IV.11 Market structure and regulatory framework of Japan's telecommunications sector, 2012 95 
IV.12 Maritime transport, main economic indicators, March 2012 99 
IV.13 Trade related mariti me transport policies 100 
IV.14 Japan's market and regulatory regime for air transport subsectors, 2012 102 IV.15 Japan's air transport agreements, 2012 103 
IV.16 Railway transport in Japan, 2012 104 WT/TPR/S/276 Trade Policy Review 
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IV.17 Regulatory framework for railway transport in Japan, 2012 104 
IV.18 Construction market and regulatory regime in Japan, 2012 106 
IV.19 Japan's market and regulatory framework for distribution services, 2012 107 IV.20 Japan's market and regulatory framework for tourism 109 
 
APPENDIX TABLES 
 
I. ECONOMIC ENVIRONMENT 
 AI.1 Merchandise exports by group of products, 2007-11 115 
AI.2 Merchandise imports by group of products, 2007-11 117 
AI.3 Merchandise
 exports by destination, 2007-11 119 
AI.4 Merchandise imports by origin, 2007-11 120 
 
II. TRADE AND INVESTMENT REGIME  
AII.1 Status of selected notifications to the WTO, 27 September 2012 121 
AII.2 Disputes to which Japan has been a party, 2011 to September 2012 124 
AII.3 Overview of Japan's Fr ee-Trade Agreements, 2011 128 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
AIII.1 Japan's MFN tariff summary, FY2012 132 AIII.2 Exemptions from the Anti-monopoly Act, September 2012 134 
 
IV. TRADE POLICIES BY SECTOR  
AIV.1 Tariff quota quantity and in-quota imports, FY2007-10 135 
AIV.2 Japan's trade regimes for financial services, 2012 136 AIV.3 Japan's trade regimes for telecommunications services, 2012 140 
AIV4 Summarized trade regimes of maritime transport services 142 
AIV.5 Summarized trade regimes of air transport services 149 
AIV.6 Summarized trade regi mes for rail transport 151 
AIV.7 Summarized trade regimes for pipelines transport services 153 
AIV.8 Japan's trade regimes for construction services, 2012 154 AIV.9 Japan's trade regimes for distribution services 158 
AIV.10 Japan' trade regimes in tourism 167 
 Japan WT/TPR/S/276 
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__________________________________________________________________________________  SUMMARY 
1. Since Japan’s previous Trade Policy Review in 2011, there has been little change in its trade 
and related policies.  Nonetheless, the simple av erage MFN applied tariff rate has increased, due 
partly to a rise in the average ad valorem  equivalents of non- ad valorem  duties.  Also, Japan has 
adopted more international standards. 
2. The Japanese economy contracted in 2011.  Its tr ade account recorded a deficit for the first 
time since 1980, and its current account surplus narrowed to 2% of GDP (from 2.9% in 2009). 
3. In response to the earthquake and tsunami, the national and local governments implemented 
supplementary budgets amounting to about 3.6% of GDP.  Reconstruction is expected to be around 
4% of GDP and continue till the end of March 2016.  Consequently, the fiscal deficit was in excess of 
10% and gross government debt rose to nearly 230% of GDP in 2011. 
4. The supplementary budgets were compleme nted by accommodative monetary policy, 
including a move towards "inflation targeting", adopted against the backdrop of a persistent 
deflationary environment in Japan.  In addition, the yen continued to appreciate against all major 
currencies.  If sustained, this will tend to furt her reduce the internationa l competitiveness of Japan's 
exporters, unless their productivity can  be substantially improved. 
5. These more expansionary macroeconomic polic ies have supported Japan's economy.  A 
rebound in GDP growth is expected in 2012, ma inly due to construction spending, consumer 
spending, and inventory building in the wake of supply chain disruptions.  However, these policies do 
not address Japan's long-standing structural problem s (including the rapid aging of its population), 
which have resulted in Japan's sluggish growth dur ing the past decade or so.  These problems can be 
addressed more effectively by far-reaching structural  reforms, of which trade liberalization (and the 
resulting stimulus to competition) is an integral part. 
6. The authorities recognize the need for structural reform and have made some changes.  For 
example, in April 2012, the Government cut the stat utory corporation tax rate to improve incentives to 
invest, including inward foreign direct investment (FDI), which is a much smaller percentage of GDP 
than in other large OECD economies. 
7. Japan grants at least MFN treatment to all countries and economies except Andorra, the 
Republic of Equatorial Guinea, Eritrea, Lebanon, North Korea, the Republic of South Sudan, and 
Timor-Leste. 
8. Since 2011, Japan has notified the entry into fo rce of two economic partnership agreements 
(EPAs), with India and Peru;  currently Japan has 12 bilateral agreements a nd one regional agreement 
in force.  Japan considers that its regional and b ilateral trade agreements complement the multilateral 
system, while acknowledging that the level of co mplication increases as entry into force of such 
agreements progresses.  The EPAs that Japan has adopted also involve, inter alia,  trade facilitation, 
investment, movement of natural persons, and comp etition policy.  However, the agreements with 
countries that are significant exporters of agricu ltural products tend to exclude many of these 
products.  They also exclude certain industrial good s, such as leather products and footwear, which 
the authorities consider to be particularly sensitive. 
9. These products are also largely excluded from the Generalized System of Preferences (GSP) 
scheme, under which Japan grants preferential treatme nt to products from certain developing and least WT/TPR/S/276 Trade Policy Review 
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__________________________________________________________________________________ developed countries.  In 2011, Japan abolished all ce iling-based schemes in its GSP.  There has been 
no change to Japan's duty-free and quota-free treat ment for LDCs since its previous Review. 
10. The tariff continues to be Japan's main border rest riction.  In fiscal year (FY) 2012, the simple 
average applied MFN tariff rate was 6.3%, up slight ly from 5.8% in FY2010, reflecting a change in 
nomenclature (to the HS 2012 edition), and an increase in the average ad valorem  equivalents (AVEs) 
of non- ad valorem  duties.  Non- ad valorem  duties, which account for 6.6% of Japan's tariff lines, tend 
to involve high AVEs, and are an important feature of Japan's tariff, particularly for agricultural products.  The simple average tariff rate is 5.3%  under the GSP (up from 4.6% in FY2010), and 0.5% 
for LDCs (the same as in FY2010).  Japan's simple  average tariff rates under RTAs range from 2.3% 
to 3.9%. 
11. Japan's non-tariff border measures include im port prohibitions as well as quantitative import 
restrictions (for example, import quotas on some fish).   State trading covers leaf tobacco, opium, rice, 
wheat and barley, and milk products (unchanged since 2011). 
12. In October 2011, the Authorized Economic Oper ator (AEO) programme was amended so that 
import cargo declared by AEO customs brokers or produced by AEO manufacturers may be released 
before the customs duty declaration is filed. 
13. Japan makes little use of contingency measures.   It has continued to apply anti-dumping 
measures on electrolytic manganese dioxide originati ng from the Republic of South Africa, Australia, 
China, and Spain.  In June 2012, Japan terminated anti-dumping duties imposed on certain polyester staple fibre from the Republic of Korea and Ch inese Taipei.  Japan has not applied either 
countervailing or safeguard measures since its previous Review.  
14. Japan maintains export controls on grounds of  national security and public safety and to 
preserve natural resources in accordance with in ternational agreements (such as CITES).  Export 
finance, insurance, and guarantees are available.  Duty drawback schemes are available on selected 
inputs for certain manufacturing, but they do not necessarily refund 100% of duties paid. 
15. About 54% of Japanese Industrial Standards (JIS) were aligned to international standards in 
2011 (up from 46% in 2009).  Although Japan mainta ins that its SPS measures are based on scientific 
assessment of risks, it has apparently not conduc ted cost-benefit analyses in this connection. 
16. Various laws on intellectual property rights (IP Rs) have been amended since Japan's previous 
Review with a view to, inter alia,  improving the convenience and effectiveness of patent and design 
systems.  Japan remains an active participant in multinational and regional discussions on agreements 
to promote international harmoniza tion of regimes protecting IPRs. 
17. The authorities intend to continue to strengthen competition policy.  In this regard, a bill to 
amend the Anti-monopoly Act has been submitted to the Diet.   
18. With regard to agriculture, the Government h as continued to move away from price support 
toward income support.  However, the changes have  been relatively minor and the sector continues to 
receive substantial govern ment support involving, inter alia,  a relatively higher average applied MFN 
tariff rate compared with other sectors, tariff quot as, income support, and, in some subsectors, 
production controls.  
19. Japan is a big net importer of fisheries products  and the Government has historically provided 
a range of support to the fisheries sector, as set out in its annual budgets.  In its 2011 subsidy Japan WT/TPR/S/276 
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__________________________________________________________________________________  notification to the WTO, Japan notified subsidi es for advanced equipment and modernization of 
management of fisheries and related sectors, and subsidies for comprehensive programmes, 
implemented by non-governmental organizations, ai med at the stable, safe, and efficient supply of 
food.  
20. The Electricity Business Act and the Gas Business  Law were amended in 2012 with a view to 
relaxing regulation on tariffs in order to, inter alia , incorporate a feed-in-tariff system for certain 
renewable energy.  Against the background of th e severe accidents at nuclear power plants in 
north-eastern Japan in March 2011, the Government is reviewing whether to adopt any regulatory 
reform in the energy and utilities sector. 
21. The major regulatory change regarding financial services since Japan's last TPR is the revised 
Postal Service Privatization Act (passed by the Diet in April 2012).  Under the revised Act, Japan Post 
Group will have to provide universal postal servi ces and fair access all over Japan to savings and 
insurance services.  Also, the sale by Japan Post Holdings of all of its shares in its two financial 
subsidiaries is to be conducted "as soon as po ssible", instead of "between 2007 and 2017" as 
stipulated prior to the revision.  On insurance, the main recent changes relate to the relaxation of the 
regulation of insurance solicitation by banks. 
22. In June 2011, Japan announced that the mariti me antitrust exemption under the Maritime 
Transportation Act would be maintained, with its sc ope unchanged, and that Japan planned to review 
the maritime exemption in FY2015. 
23. Japan's policy on international air trans portation has moved significantly towards 
liberalization and open skies, through, inter alia,  the relaxation of pricing clauses (towards free 
pricing) and capacity clauses (towards free determ ination) in its recently concluded bilateral 
arrangements, subject to qualification regarding reciprocity and congestion.