WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/142/Add.1 
12 April 2005 
 (05-1499) 
Trade Policy Review Body 
25 and 27 January 2005 Original:  English/ 
                 anglais/                  inglés 
  
TRADE POLICY REVIEW 
JAPAN 
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Mrs. Puangrat Asavapisit (Thailand) 
 This document contains the advance writte n questions, and replies provided by Japan.1 
__________________________________________________________________________________  
Organe d'examen des politiques commerciales 
25 et 27 janvier 2005  
EXAMEN DES POLITIQUES COMMERCIALES 
JAPON 
Compte rendu de la réunion
 
Addendum  
Présidente:  S.E. Mme Puangrat Asavapisit (Thaïlande) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par le Japon.1 
__________________________________________________________________________________ 
 
Órgano de Examen de las Políticas Comerciales 
25 y 27 de enero de 2005  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
JAPÓN 
Acta de la reunión
 
Addendum  
Presidente:  Excma. Sra. Puangrat Asavapisit (Tailandia) 
 
 En el presente documento figuran las pr eguntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por el Japón.1
                                                      
1 In English only./En anglais seulement./En inglés solamente.  WT/TPR/M/142/Add.1 
 Page 3 
 
 
ADVANCE WRITTEN QUESTIONS BY MEMBERS AND 
REPLIES PROVIDED BY JAPAN 
 
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND 
MATSU  
Q1. As indicated in the report, Japan will redu ce impediments to business activities by eliminating 
various regulations and government interventions. Furthermore, in their Basic Policies issued in June 
2004 the Japanese authorities emphasize labour market reform as a policy objective for the fiscal 
years 2005 and 2006. Could Japan please elaborate further on the measures it plans to take to reform the labour market. 
A. In order to reform the labour market, Japan will make efforts for fundamental enhancement of 
"human resources" wherein special emphasis will be placed on the elimination of employment mismatches. For this purpose, efforts will be ma de on intensive capacity building among the younger 
generation, which currently has a high rate of une mployment at approximately 10%; development of 
employment policies based on the situation of each region; and restructuring employment-related 
policies and introducing one-stop services from the standpoint of the users. 
Q2. We welcome the Japanese government’s decision to allow foreign researchers to stay in Japan 
for up to five years instead of the previous limit of three years. It would be appreciated if Japan could 
please indicate whether foreign researchers can extend their permits after the expiration of their five-
year permits. 
A. At present, foreign nationals who research in  institutes which are in the specific districts 
authorized by the Prime Minister will specially obtain permission for a period of stay of five years.  If 
he/she intends to stay beyond the pe rmitted period of five years, he/she  can apply for an extension of 
the period of stay, and will obtain permission where appropriate. 
For your information, a decision has been taken for th is measure to prevail in all parts of Japan during 
fiscal year 2005. 
Q3． As far as we know, Japan is the only develope d country that applies import quotas to fishery 
products, such as seaweed. We would like to know if Japan has any plans to liberalize the quota 
restriction in this sector and, if so, what is the timetable? 
A. The import quota system plays an important role in the conservation and management of fish 
resources in Japanese territorial seas and waters adja cent to Japan. Therefore, from the viewpoint of 
ensuring sustainable use of the resources, Japan has no plan to liberalize the quota restriction in the 
fisheries sector. 
Q4. According to Article 18 of the "Japan-Singapore Economic Agreement for a New Age 
Partnership" (JSEPA) signed in November 2002, "only during the transition period, and to the 
minimum extent necessary to prevent or remedy inju ry and to facilitate adjustment, may each Party of 
JSEPA take emergency measures, such as suspen ding the further reduction of customs duties or 
increasing of customs duties." 
We would like to know if any emergency measures have been considered since the JSEPA entered 
into force. 
A. We have never conducted i nvestigation required to take  emergency measures under the 
JSEPA. WT/TPR/M/142/Add.1 
Page 4  
 
Q5. As indicated in the report, Japan bans the imports of beef from some areas where BSE has occurred. We are interested in knowing what methods  of risk assessment of BSE are currently in use, 
as well as what relevant laws have been implemented in Japan. 
A. The Food Safety Commission (FSC) publishe d the interim report on BSE measures in Japan 
to contribute to evaluating the status of BSE in  Japan. Hereafter, when MHLW and MAFF consult 
FSC about measures on the import of beef meat from countries where BSE has occurred, FSC will 
evaluate these measures. 
The relevant laws are as follows: i) Tentative translation of the Food Safety Basic Law (see Attachment 1) ii) Measures against BSE in Japan (Interim repor t; tentative translation) (see Attachment 2) 
iii) The Food Sanitation Law is available on the JETRO web site. 
 http://www3.jetro.go.jp/se/j/jousa/ki kaku/file/newguide/food2004nov-e.pdf 
iv) Domestic Animal Infectious Disease Control Law (available on the web site below)  
(Japanese only) http://www.law.e-gov.go.jp/cgi-bin/idxsel ect.cgi?IDX_OPT=1&H_NAME=%89%c6%92%7
b%93%60%90%f5%95%61&H_NAME_YOMI=%82%a0&H_NO_GENGO=H&H_NO_YE
AR=&H_NO_TYPE=2&H_NO_NO=&H_FI LE_NAME=S26HO166&H_RYAKU=1&H_C
TG=1&H_YOMI_GUN=1&H_CTG_GUN=1 
Q6. As indicated in the report, food labelled as "organic" needs accreditation from an authorized 
body that the food meets certain JAS requirements. We are wondering if the verification procedures 
for imported organic products are the same as those for domestic organic products? We would also 
like to know: whether the labelling of food as "organic" is mandatory in Japan? Furthermore, how 
does Japan verify that imported food is organic? And finally, is there any overlap between "organic" 
food and genetically modified food (G MOs) regarding labelling regulations? 
A. Registered certification bodies do not inspect products, but certify organic producers, such as 
farmers and processors. Certified producers can labe l their organic products as "Organic" using the 
JAS mark. Labelling of organic food as "Organic" is  not mandatory, but if organic foods sold in 
Japan, including imported ones, are intended to be la belled as "Organic", they must be verified to 
meet JAS requirements following this procedure. 
Foreign producers can be certified by registered cer tification bodies or registered foreign certification 
bodies through the same verification procedures as do mestic producers. Please refer to the details on 
the website of MAFF at: 
  http://www.maff.go.jp/soshiki/syo kuhin/hinshitu/e _label/index.htm 
Genetical engineering techniques are prohibited fo r organic production in Japan, and there is no 
overlap between them. This is the same as the Codex Guideline, "Guidelines for the production, 
processing, labelling and marketing of organically  produced foods (GL 32-1999, Rev. 1-2001)". 
Q7. Japan’s plant quarantine authority requests that  the exporting countries provide experimental 
results of quarantine treatment for different varieties of the same fru it when it is applying to export 
fruit to Japan.  In addition, according to the In ternational Standards for Phytosanitary Measures 
(ISPM), the audit conducted by the importing country’s inspector for the validation of the quarantine  WT/TPR/M/142/Add.1 
 Page 5 
 
 
treatment in the exporting country should not be applied as a perman ent measure. Japan’s requirement 
for the auditing of the quarantine treatment procedur e by its officials in the exporting countries has 
placed a very heavy burden on the industry of the exporting countries. 
Would Japan consider relaxing these quarantine requirements? A. Experimental results of quarantine treatment and an audit by Japanese quarantine officials of 
phytosanitary measures such as disinfection treat ments and inspections are important measures 
necessary to prevent a possible invasion of pests and host plants such as the Bactrocera dolsalis 
species complex into Japan. 
These measures are applied to all countries who intend to  export plants to Japan.  Therefore, Japan is 
not considering the immediate abolishmen t of these necessary quarantine measures. 
Q8. As indicated in the report, Jap an continues to restrict foreign direct investment in industries 
such as agriculture, forestry and fisheries, petroleum, investment management, air and maritime transport, cable television and broadcasting by requ iring prior notification. Besides the notification 
requirements, various other laws stipulate specific rest rictions on inward FDI in certain sector, such as 
real estate, fisheries, financial services, telecommunications, and transport. Would Japan please 
indicate whether it has any plans to loosen restrictions on the said industries? 
A. [Real estate ]  Although there are no restrictions on FDI in the real estate industry, in regard to 
land property itself, there is the Japanese Alien Land Law. It stipulates, in terms of reciprocity, that 
with respect to rights on land properties in Japan, prohibitions or restrictions may be imposed by 
Cabinet Ordinances on nationals or entities of the country where Japanese nationals or entities are 
placed under identical or similar prohibitions or restrictions in that country. However, at present 
Cabinet Ordinances which prohibit or restrict rights of foreign nationals or entities have never been 
enacted , and foreign nationals or entities can en joy rights on land properties as Japanese ones do. The 
Japanese Alien Land Law is based on the principle of  reciprocity, so there is no room for Japan to 
prohibit or restrict the rights of nationals or entities of Chinese Taipei on land properties by enacting 
Cabinet Ordinances, unless Chinese Taipei places identi cal or similar prohibitions or restrictions on 
Japanese nationals or entities. Consequently, there exists no actual restrictions on land property. 
[Fisheries ]  Japan restricts the fishing operations of fore ign nationals within its territorial waters and 
exclusive economic zones in order to achieve prope r conservation and management of living marine 
resources based on the Law Concerning the Exercise of Sovereign Rights concerning Fisheries in Exclusive Economic Zones and the Law for Regulati on for Fishing Operation of Foreign Nationals 
and has no plan to loosen the rest rictions in the fisheries sector. 
[Financial Services ]  While Article 4 of the Banking Law stipulates "reciprocity" with regard to 
licensing, the provision does not apply to WTO Member s. (Please refer to footnote 28 on page 69 of 
the Report by the Secretariat.) 
[Telecommunications ]  The restriction on foreign investment in the telecommunications sector 
pertains only to Nippon Telegr aph and Telephone Corporation (NTT).  Nippon Telegraph and 
Telephone East Corporation (NTT East) and Ni ppon Telegraph and Telephone  West Corporation 
(NTT West) play a major role as the essential telecommunications carriers that underpin the livelihood of the people and socioeconomic activ ity by constructing essential telecommunications 
networks throughout Japan.  For that reason, the r estriction on foreign investment imposed on NTT, 
which owns all NTT East and NTT West shares, is  necessary to ensure its management autonomy and 
to prevent excessive influence of any foreign countries. WT/TPR/M/142/Add.1 
Page 6  
 
The issue of abolishment or relaxation of the said restriction on foreign investment should be studied 
cautiously in terms of points such as ensuring public order and essential security interests as well as in 
view of other countries’ situations. 
[Transport ]  Japan believes the current restrictions on FDI are already limited to a minimum level, 
public policy wise, and thus has no plans to loosen them. 
Q9. The privatization of Japan Post will start from April 2007 and be completed by 2017.  What 
kind of difficulties does Japan expect to encounter in the course of this privatization, so that it will 
take 10 years to accomplish? 
A. According to the Basic Policy on the Privati zation of the Japan Post, the "transitional period 
should end by 31 March of 2017, at the latest" a nd "the postal savings and the postal life insurance 
companies are to move to a fina l framework by the abovementioned date at the latest" from the 
perspective of the promotion of privatization.  On  the other hand, as for the sales of the stocks of 
postal savings and postal insurance, the Basic Polic y specifies that "the government shall conduct a 
review of the management situation at the new co mpanies as a whole and of the trends in the global 
financial situation."  It is necessary for new priv atized companies to take about 10 years to be 
absorbed and integrated into the market smoot hly, and to become independent under market 
mechanisms, considering trends in  the global financial situation. 
Q10. As indicated in the Report, Japan has con tinued to promote international harmonization of 
application and examination procedures related to IPRs. We understand that Japan is working on the 
harmonization of the IPR system with China and Korea, particularly in the area of patents and design, and a trilateral consultation has been proposed. 
It would be appreciated if Japan could explain this  initiative in more detail and the measures that it 
plans to take in the future. 
A. Although Japan has been working closely with Ch ina and Korea in the field of IPR, including 
patents and design, it does not have  any concrete plan to establish a fully harmonized IPR system for 
patents and design with those members at this moment. 
Q11. As indicated in the Report, Japan has adopted the new TPPRR (Three-year Program for 
Promoting Regulatory Reform) comprising concrete measures to further accelerate structural reform 
of the Japanese economy and society. 
The main sectors and issues covered in the TPPRR include education services, agriculture and the 
movement of natural persons. 
Please could Japan elaborate further on the measures being taken to liberalize the movement of 
natural persons. 
A. As for the sector of movement of natu ral persons, the new TPPRR includes the following 
measures: 
(i) The Government of Japan will review its im migration control measures, including concrete 
 measures of accepting those who have special knowledge and skills. 
(ii) The Government of Japan will review the existing system for the expansion of entry of 
 foreign IT engineers,   WT/TPR/M/142/Add.1 
 Page 7 
 
 
(iii) The Government of Japan will clarify the status of residence of "Investors/Business 
Managers" and make even more accessible the information on the status of residence of 
"Intra-company Transferees", and 
(iv) The Government of Japan will make guidelin es on the requirements for the status of residence 
of "Permanent Resident". 
Q12. As indicated in the Report, the Japanese gove rnment will revise the B asic Plan on agriculture 
in March 2005. Could we please be given an outline  of the planned revisions and, specifically, the 
details of any planned changes on subsidies? 
A. As is shown in the report by Japan, the C ouncil of Food, Agriculture and Rural Area Policies 
is currently reviewing the Basic Plan.  The Council is to submit the draft of the revised Plan in March, 
which in turn will be decided by the Cabinet.  The details of policy measu res will be subsequently 
decided by the Government, based on the di rection described in the new Basic Plan. 
Q13. Please could Japan provide further clarification of what it considers to be "national security" 
in this case. Furthermore, is there any ceiling appl ied to foreign ownership in electric and gas in 
Japan? 
A. According to Article 27 of the Foreign Excha nge and Foreign Trade Law, the Government of 
Japan is to make an inquiry on whether the i nvestment under the notice falls under either of the 
following direct domestic investment categories: 
(i) Direct Domestic Investment which might  imperil the national security, disturb the 
maintenance of public order, or hamper the protection of the general public; or 
(ii) Direct Domestic Investment might adversel y and seriously affect activities of our economy. 
Additionally, there is no ceiling applied to fo reign ownership in electric and gas in Japan. 
Q14. In Japan’s last Trade Policy Review in  October 2002, on pages 84 -86 of the Secretariat 
Report S/107, Table AIII.4 listed domestic measures and support progr ams, and subsidies in the 
energy sector. However, updated, comparative inform ation is missing in the current 2005 Japan TPR 
Secretariat Report S/142.  
Could Japan please provide updated information on any changes to the programs and subsidies since 
2002? 
A. Please refer to Attachment 3. Q15. As indicated, amendments to the Ordinan ce of the Insurance Business Law in October 2002 
enlarged the scope of insurance products that ba nks can sell over-the-counter. We are interested in 
knowing whether banks can sell securities products ove r-the-counter in Japan. If not, are there any 
plans for Japan to lift rest rictions in this respect? 
A. Banks are able to sell certain securities produc ts over-the-counter. Although under Article 65 
of the Securities and Exchange Law, banks are prohibited in principle from operating securities 
business, they have been allowed to sell government bonds.  In 1998, the ban on sales of investment trusts by banks was lifted.  Additionally, with  the December 2004 amendment to the Securities and 
Exchange Law, banks are able to act as an interm ediary agent for securities transactions for brokerage 
houses ("Shoken-chukaigyo") provided that prudentially necessary measures are taken. WT/TPR/M/142/Add.1 
Page 8  
 
Q16. Interest rates in Japan have been deregulated  gradually since 1979. Currently no interest rate 
regulations exist, except on current accounts. Could Japan please explain the contents of these 
regulations and the reasons for regulating interest  rates on current accounts? Is there any possibility 
that Japan will consider deregulation in this specific area? 
A. The "Interim Interest Rates Adjustment Law"  has been effective since 1947 to avoid adverse 
effects due to inflation and to en sure price stability. Article 2 of the Law stipulates that "The Prime 
Minister and the Minister of Finance may cap inte rest rates through the Policy Board of the Bank of 
Japan when they deem it necessary from the economic point of view." 
In accordance with the Law, the Government of Ja pan regulates interest rates on current, ordinary 
deposits and other misce llaneous deposits in order to avoid the moral hazards of deposit taking 
institutions. By regulating interest rates, the gove rnment can discourage deposit taking institutions 
from collecting deposits by setting unsustaina bly high interest rates on these deposits. 
Current, ordinary deposits and ot her miscellaneous liquid deposits ar e fully protected in accordance 
with the deposit insurance system. However, fro m April 2005, only deposits for the purpose of 
payment and settlement bearing no interest and re deemable on demand are to be fully protected. 
Because current, ordinary deposits and other miscella neous liquid deposits will not be fully protected 
starting in April 2005, the Government of Japan plan s to eliminate the regulation on interest rates by 
the above mentioned date. 
Q17. The 2003 amendment also allowed insurance co mpanies to work as agen ts for companies that 
engage in other financ ial businesses. Please could Japan describ e the criteria applied in deciding 
whether insurance companies may work as such agents. 
A. Insurance companies which have authorizati on from the Prime Minister are allowed to work 
as agents for financial institutions in money lendi ng or loan processing. (Articles 98-1-1 and 98-2 of 
the Insurance Business Law, Article 51-3 of the Ordinance of Insurance Business Law) 
The criteria for authorization are as follows: 
(i) The company ensures that directors or em ployees have enough knowle dge and experience in 
agency business; and  
(ii) The company is able to work as an agent ad equately, fairly and efficiently, in light of the 
system to conduct businesses as an agent. 
(Article 51-2-2 of the Ordinance of Insurance Business Law) Q18. The TBDSC (Telecommunications Busin esses Dispute Settlement Commission) has settled 
35 cases since November 2001, including disputes ov er access charges between IP telephones and 
PSTN. (page 72, paragraph 45). 
Please could Japan explain in detail how the TBDS C settled the dispute over access charges between 
IP telephones and PSTN. Please also indicate which or dinances were applicable  to the cases, which 
carriers were involved, what positions were take n by each side in each case and what criteria were 
adopted by the TBDSC in ruling on the cases. 
A. The dispute over access charg es between the IP telephone ne twork and PSTN is one between 
NTT East and West and HEISEI DENDEN.  WT/TPR/M/142/Add.1 
 Page 9 
 
 
NTT East and West have made possible number portability from the existing number of their PSTN service to the IP telephony service which was newl y provided by them, so that a call from another 
carrier’s PSTN network first reaches the existing P STN network and is then transferred to the IP 
network.  As a result, a dispute has arisen be tween NTT East and West and HEISEI DENDEN over 
issues such as standardization of prot ocol and appropriate access charges. 
NTT East and West then applied to the TBDSC for arbitration in April 2004.  Nonetheless, at that 
time, HEISEI DENDEN did not accept the arbitration procedure, and the procedure therefore did not take place. 
Subsequently, a "study group on number portabilit y" was held between NTT East and West and 
HEISEI DENDEN, including other carriers, and NTT East and West applied to the TBDSC for 
mediation again.  Currently, the mediation procedure by the TBDSC is ongoing.   
Q19. We are pleased to note that, as a result of cor poratization, foreigners who could not previously 
be appointed to certain posts, such as principals of public schools, may now be appointed to any post 
in national university corporations.  
We would appreciate having details of  the relevant regulations that apply to these persons, such as the 
requirements for visa application and the period they  are allowed to stay in Japan. We are also 
interested in knowing whether Japan has any plans to relax these requirements in order to facilitate the 
movement of natural persons in the educational services sector. 
A. There is no discriminatory treatment concerning employment of foreigners as principals of 
national schools since national universities were turned  into corporations in April 2004. Hence, each 
national university can employ foreigners in any position in the same way it employs Japanese 
citizens. 
The requirements and procedures for visa application a nd the period they are allowed to stay in Japan 
are as follows. 
First, a foreigner should obtain a work authorisa tion from the school which would employ him/her as 
well as a passport and visa before he/she immigr ates into Japan to work as a principal. 
Especially when applying for a visa for work or l ong-term stay, a foreigner can also apply in Japan 
beforehand for a Certificate of Eligibility. Generally , if a foreigner submits a visa application to an 
embassy or consulate together with a Certificate of Eligibility, he or she will be able to obtain a visa 
in a shorter time than applican ts without such a certificate. 
Foreigners can also apply for a visa  without such a certificate at an embassy or consulate in the case 
of long-term stays. But if the purpose of the st ay is work, the application documents might be 
forwarded to a regional immigration authority in Jap an for screening. In such cases, applicants are 
advised to leave plenty of time fo r their application to be processed. 
A Certificate of Eligibility is issued by a regional immigration authority under the jurisdiction of the 
Ministry of Justice as proof that the applicant meets the conditions for landing under the Immigration Control Act before a visa application is submitted.  These conditions include those certifying that the 
activity in which the foreigner intends to engage in Japan is valid and is eligible for the status of 
residence. 
Japan presently has no plans to revise these procedures. WT/TPR/M/142/Add.1 
Page 10  
 
Second, with respect to immigration into Japan, ‘the status of residence’ and ‘the period of stay’ are 
stipulated in the Immigration Control and Refug ee Recognition Act (hereinafter referred to as 
‘Immigration Control Act’) according to the purpose of immigration of each foreigner. 
In cases where foreign nationals assume the preside ncy of a college, or engage in activities for 
research, or direct of research or education at a colle ge, they are eligible for the status of residence of 
"Professor". If they do not engage in such activiti es, the status of residence of "Engineer" or 
"Specialist in Humanities/International Services" wi ll be applicable according to his/her skills or 
knowledge. 
The status of residence of "Engineer" and "Sp ecialist in Humanities/International Services", 
respectively, is given to persons that will enga ge in services which require technology and/or 
knowledge pertinent to physical science, engineering or other natural science fields or which require 
knowledge pertinent to human science fields or requ ire specific ways of thought or sensitivity based 
on a contract with public or private organizations  in Japan. He/she must have graduated from or 
completed a course of study at a college or acqui red equivalent education majoring in the subject 
relevant to the skills and/or knowledge necessary fo r performing the job concerned, or he/she must 
have at least 10 years' working experience. He/she  should also receive a salary no less than what a 
Japanese national would receive for comparable work. 
There are no such regulations for the status of resi dence of "Professor" as there are for "Engineer" or 
"Specialist in Humanities/International Services". 
The statuses of residence mentioned above are dete rmined with the period of stay for 3 years or 
1 year. Every status may be extended, and there is no limitation on the total duration of stay. 
Q20. In May 2004, the Intellectual Property Polic y Headquarters, which was established in the 
Cabinet Secretariat of the Japanese government, adde d new measures and challe nges to their strategic 
programs on IPR protection. These included an ame ndment to the Customs Tariff Law to strengthen 
measures against counterfeits and pi rated copies. With a view to having a better understanding of the 
new measures, can we look forward to receiving more  detailed information from Japan in this regard? 
A. Japan is currently examining the Custom s Tariff Law from the viewpoint of conducting 
necessary amendments to include the following point s in accordance with the "Intellectual Property 
Strategic Program 2004". 
Japan will introduce a verification procedure related to goods which may infri nge intellectual property 
rights.  In cases where the right-holder cannot submit evidence or opinions to support his/her claims by checking the goods in question, Customs, taki ng into account the benefit of the importer, can 
provide a sample of the goods in question to the right-holder in response to a request from the right-
holder so that the right-holder can conduc t the overhaul inspection of the sample. 
The Unfair Competition Prevention Law prohibits  the importation of products which imitate 
configuration, products which br ing about confusion of a well known  indication and products which 
abuse a famous indication.  Japan will consider th e possible amendment of the Customs Tariff Law in 
order to regard these products as "import-prohibited products" under Article 21 of the Custom Tariff 
Law. This consideration will be premised the deve lopment of a system in which Customs can judge, 
in a prompt and proper manner, the existence of infringement at the border.  WT/TPR/M/142/Add.1 
 Page 11 
 
 
Attachment 1 
The Food Safety Basic Law (Tentative Translation) 
Contents 
 Chapter I General Provisions (Articles 1-10)  Chapter II Basic Direction for Policy Formulation (Articles 11-21) 
 Chapter III Food Safety Commission (Articles 22-38) 
 
Chapter I General Provisions 
(Purpose) 
Article 1 
In consideration of the vital importance of pr ecise response to the development of science and 
technology, the progress of internationalization a nd other changes in the environment surrounding 
nationals’ dietary habits, the purpose of this Law is  to comprehensively promote policies to ensure 
food safety by establishing basic principles, clar ifying the responsibilities of the state, local 
governments and food-related business operators and th e roles of consumers, and establishing a basic 
direction for policy formulation in regards to ensuring food safety. 
(Definition) 
Article 2 "Food" as used in this Law shall mean all food a nd drink (excluding drugs and quasi-drugs provided 
by the Pharmaceutical Affairs Law (Law No. 145 of 1960)). 
(Basic recognition in taking measures for ensuring food safety) 
Article 3 
Food safety shall be ensured by taking necessar y measures based on a basic recognition that the 
protection of nationals’ health  is of ultimate priority. 
(Appropriate measures at each stage of the food supply process) 
Article 4 
In consideration that food safety may be affected by every element in a series of internal and external 
food supply processes from the production of agricultural,  forestry and fishery products to food sales 
(hereinafter referred to as "food supply process"), f ood safety shall be ensured by taking the necessary 
measures appropriately at each stage of the food supply process. 
(Prevention of adverse effect on nationals’ health) 
Article 5 
Food safety shall be ensured by taking necessary meas ures on the basis of scientific knowledge and in 
sufficient consideration of international trends a nd nationals’ opinions in respect of ensuring food 
safety, for the purpose of preventing an adverse e ffect on nationals’ health due to food ingestion. 
(Responsibilities of the state) 
Article 6 
The state shall be responsible for comprehensivel y formulating and implementing policies to ensure 
food safety on the code of basic principles for ensuring of food safety provided in the preceding three articles (hereinafter referred to as the "basic principles"). WT/TPR/M/142/Add.1 
Page 12  
 
(Responsibilities of the local governments) Article 7 The local governments shall be responsible for fo rmulating and implementing policies to ensure food 
safety that corresponds to the natural, economic  and social conditions of the area under their 
jurisdiction, on the code of the b asic principles and on the basis of an appropriate sharing of roles with 
the state. 
(Responsibility of food-related business operators) 
Article 8 Business operators that produce, import, sell or conduct other business for fertilizers, agricultural 
chemicals, feed, feed additives, veterinary medi cines and other production materials for agriculture, 
forestry or fishery that may have an effect on f ood safety, food (including agricultural, forestry and 
fishery products used as raw materials or mate rials), additives (those provided in Article 2, 
paragraph 2 of the Food Sanitation Law (Law No . 233 of 1947)), apparatuses (those provided in 
Article 2, paragraph 4 of the said Law) or cont ainers and packages (those provided in Article 2, 
paragraph 5 of the said Law) (hereinafter referr ed to as "food-related business operators") shall be 
responsible for appropriately taking necessary measur es to ensure food safety at each stage of the food 
supply process on the code of the basic principles and on the basis of the recognition that they bear the 
primary responsibility for ensuring food saf ety when conducting their business activities. 
2. In addition to the provisions of the preceding pa ragraph, food-related busin ess operators shall, in 
conducting their business activities, make efforts to  provide accurate and appropriate information 
concerning food and other articles related to their own business activities on the code of the basic 
principles. 
3. In addition to the provisions of the preceding two paragraphs, food-relate d business operators shall 
be responsible for cooperating in policies to ensure  food safety which are implemented by the state or 
the local governments in respect of their business activities, on the code of the basic principles. 
(Roles of consumers) 
Article 9 
Consumers shall play an active role in ensuring  food safety by endeavor to improve their own 
knowledge and understa nding of the ensuring of food safety and by making efforts to express their 
opinions about policies to ensure food safety. 
(Legislative measures, etc.) 
Article 10 
The government shall take legislative or financia l measures and other measures that are necessary to 
implement policies to ensure food safety. 
Chapter II Basic Directions for Policy Formulation 
(Implementation of assessment of the effect of food on health) 
Article 11 
In formulating policies to ensure food safety, assessme nt shall be made for each policy on the effects 
that potentially harmful biological, chemical or physi cal agents in food or the condition of food have 
on human health, through the ingestion of the food (h ereinafter referred to as the "assessment of the 
effect of food on health), provided that this shall not apply to the following cases:  (1) where the assessment of the effect of  food on health is explicitly unnecessary in 
consideration of the contents of the measure; 
 (2) where the contents and degree of adverse effect on human health is clear; 
 (3) where there is no time to conduct the assessm ent of the effect of food on health in 
advance in cases where the measure is urge ntly necessary to prevent or control an 
adverse effect on human health.  WT/TPR/M/142/Add.1 
 Page 13 
 
 
2. In cases as cited in (3) of the preceding paragra ph, the assessment of the effect of food on health 
shall be conducted subseque ntly and without delay. 
3. The assessment of the effect of food on health provided in the preceding two paragraphs shall be 
conducted in an objective, neutral and fair manner on the basis of the state-of-the-art scientific 
knowledge of the time. 
(Formulation of policies on the basis of the results of the assessment of the effect of food on health 
and in consideration of the c onditions of nationals’ dietary ha bits and other circumstances ) 
Article 12 In formulating policies to ensure food safety, it shall be conducted for the purpose of preventing and 
restraining the adverse effect of food ingestion on human health in considera tion of the conditions of 
nationals’ dietary habits and other circumstances and on the basis of the results of the assessment of 
effect of food on health if conducted in accordance with the provisions of paragraph 1 or 2 of the 
preceding article. 
(Promotion of exchanges of information and opinions) 
Article 13 
In formulating policies to ensure food safety, n ecessary measures for promoting the mutual exchanges 
of information and opinions among persons or parties concerned, such as provision of information 
concerning the policies and grant of opportunities to comment on the policies, shall be taken in order to reflect public opinions in the formulation of the policies and ensure the fairness and transparency of 
the process. 
(Establishment of a system to cope with emergency situations, etc.) 
Article 14 
In formulating policies to ensure food safety, n ecessary measures, such as establishment of a system 
to cope with or prevent emergency situations th at cause or are liable to cause serious damage to 
human health by food ingestion, shall be taken in order to prevent such damage. 
(Close and mutual cooperation among related administrative bodies) 
Article 15 In formulating policies to ensure food safet y, close and mutual cooperation among related 
administrative bodies shall be made in order to ma ke necessary measures for ensuring food safety to 
be appropriately taken at each stage of the food supply process. 
(Establishment of research systems, etc.) 
Article 16 In formulating policies to ensure food safety, n ecessary measures, such as establishment of research 
systems, promotion of research and development, dissemination of results thereof and training of 
researchers, shall be taken in cons ideration that efforts to improve scientific knowledge are important 
for ensuring food safety. 
(Collection, arrangement and utilization of internal and external information, etc.) 
Article 17 In formulating policies to ensure food safety, necessa ry measures, such as the collection, arrangement 
and utilization of internal and external information about ensuring food safety, shall be taken in order 
to appropriately and effectively implement necessar y measures for ensuring food safety in response to 
changes in the environment surrounding nationals’ dietary habits. WT/TPR/M/142/Add.1 
Page 14  
 
(Ensuring the appropriate operation of a labeling system, etc) Article 18 In formulating policies to ensure food safety,  necessary measures for accurately conveying the 
information on food, such as ensuring the appropriate  operation of a food labeling system, shall be 
taken in consideration that the food labeling play s an important role in ensuring food safety. 
(Education and learning regarding ensuring food safety, etc) 
Article 19 In formulating policies to ensure food safety, n ecessary measures for improving nationals’ knowledge 
and understanding of ensuring food safety shall be taken by promoting education and learning and 
improving public relations activities on ensuring food safety. 
(Consideration for effects on the environment) 
Article 20 In formulating policies to ensure food safety, th e effects of policies on the environment shall be 
considered. 
(Determination and publication of Basic Matte rs concerning implementation of measures) 
Article 21 
The government shall determine basic matters conc erning implementation of measures (hereinafter 
referred to as "Basic Matters") that are to be ta ken in accordance with the provisions of Articles 11 
to 20. 2. The Prime Minister shall formulate a draft of Basic Matters after hearing the opinions of the Food Safety Commission and shall ask the Cabinet for its decision. 
3. The Prime Minister shall promulgate the Basic Matters without delay when the Cabinet has made 
its decision in accordance with the pr ovision of the preceding Paragraph. 
4. The provisions of the preceding two paragraphs shall apply mutatis  mutandis to the changes of the 
Basic Matters. 
Chapter III Food Safety Commission 
(Establishment) 
Article 22 The Food Safety Commission (hereina fter referred to as the "Commissi on") shall be established in the 
Cabinet Office. 
(Office duties under the jurisdiction of the Commission) 
Article 23 
The Commission shall take charge of the following office duties: 
 (1) to offer opinions to the Prime Mini ster in accordance with the provisions of 
Article 21, paragraph 2; 
 (2) to conduct the assessment of the effect of food on health in accordance with the 
provisions of the following article or at its direction; 
 (3) to make recommendations to related ministers though the Prime Minister about 
policies to be implemented for ensuring food safety on the basis of the results of the 
assessment of the effect of food on health , which was conducted in accordance with 
the provisions of the preceding item; 
 (4) to monitor the implementation conditions  of policies that are implemented on the 
basis of the results of the assessment of  the effect of food on health, which was 
conducted in accordance with the provisions of item (2), and to make 
recommendations to related ministers through the Prime Minister if necessary;  WT/TPR/M/142/Add.1 
 Page 15 
 
 
 (5) to examine and deliberate on important matters regarding policies to be implemented 
for ensuring food safety, and to give opinions to the heads of related administrative bodies if necessary; 
 (6) to conduct scientific research and study necessary to perform office duties cited in 
items (2) to (5); 
 (7) to plan and implement the mutual exchange of information and opinions among 
persons or parties concerned in respect of office duties cited in items (2) to (6); and 
 (8) to coordinate office duties conducted by  related administrative bodies regarding the 
mutual exchange of information and opinions  among persons or parties concerned in 
respect to ensuring food safety. 
2. When the Commission conducted the assessment of th e effect of food on health in accordance with 
the provisions of (2) of the preceding paragraph, it sh all notify related ministers of the results of the 
assessment without delay. 3. When the Commission has given notification in  accordance with the provisions of the preceding 
paragraph or made a recommendation in accordance with the provisions of (3) or (4) of paragraph 1, it 
shall publish the contents of the notifica tion or the recommendation without delay. 
4. Related ministers shall report to the Commission on policies that they have implemented on the basis of a recommendation in accordance with the provisions of (3) or (4) of paragraph 1. 
(Hearing of the Commission’s opinions) 
Article 24 In any of the following cases, related ministers sh all hear the Commission’s opi nions, provided that 
this shall not apply to cases which the Commission recognizes as falling under Article 11, paragraph 1 
(1) or which the related minister recognizes as falling under (3) of the same paragraph: 
 (1) when intending to prescribe cases that ar e not injurious to human health as provided 
in the provison of Article 4 (2) of the Food Sanitation Law (inc luding cases where it 
applies mutatis mutandis in Article 29, para graph 2 of the said Law), when intending 
to prohibit sales in accordance with the pr ovisions of Article 4-2 of the said Law, 
when intending to enact, amend or abolis h the Ministry of Health, Labour and 
Welfare Ordinance provided in Article 5,  paragraph 1 of the said Law, when 
intending to prescribe cases that are not in jurious to human health as provided in 
Article 6 of the said Law, when intending to establish standards or specifications in accordance with the provisions of Article 7, paragraph 1 of the said Law (including 
cases where it applies mutatis mutandis in Article 29, paragraph 2 of the said Law) or 
Article 10, paragraph 1 of the said Law (including cases where it applies mutatis mutandis in Article 29, paragraph 3 of th e said Law), or when intending to establish 
standards in accordance with the provisions of Article 19-18, paragraph 1 of the said 
Law; 
 (2) when intending to set, cha nge or abolish official specifi cations in accordance with the 
provisions of Article 1-3 of the Agricultu ral Chemicals Regulation Law (Law No. 82 
of 1948), when intending to designate or  change the designation of specified 
agricultural chemicals in acco rdance with the provisions of Article 2, paragraph 1 of 
the said Law, or when intending to establish or change the standards (excluding standards for determining whether falling under cases cited in Article 3, paragraph 1 
(6) or (7) of the said Law) provided in Article 3, paragraph 2 of the said Law 
(including cases where it applies mutatis mutandis in Article 15-2, paragraph 6 of the said Law); 
 (3) when intending to set, cha nge or abolish official specifi cations in accordance with the 
provisions of Article 3 of the Fertilizer  Control Law (Law No. 127 of 1950); 
 (4) when intending to form a plan for en actment, amendment or abolishment of the 
Cabinet Order provided in Article 2, paragr aph 1 of the Domestic Animal Infectious 
Disease Control Law (Law No. 166 of 1951), when intending to enact, amend or WT/TPR/M/142/Add.1 
Page 16  
 
abolish the Ministry of Agriculture, Fo restry and Fisheries Ordinance, which 
prescribes reported communicable diseases referred to in Article 4, paragraph 1 of the said Law, or when intending to form a plan  for enactment, amendment or abolishment 
of the Cabinet Order provided in Article 62 of the said Law; 
 (5) when intending to designate feed add itives in accordance with the provisions of 
Article 2, paragraph 3 of the Law C oncerning Safety Assurance and Quality 
Improvement of Feed (Law No. 35 of 1953), when intending to establish, amend or 
abolish standards or specifications in acco rdance with the provisions of Article 2-2, 
paragraph 1 of the said Law, or when inte nding to prohibit sales in accordance with 
the provisions of Article 2-6 of the said Law; 
 (6) when intending to enact, amend or a bolish the Ministry of Health, Labour and 
Welfare Ordinance provided in Article 9, pa ragraph 1 (3) of the Abattoirs Law (Law 
No. 114 of 1953), or when intending to form a plan for enactment, amendment or abolishment of the Cabinet Order provided in  Article 10, paragraph 5 of the said Law; 
 (7) when intending to enact, amend or a bolish the Ministry of Health, Labour and 
Welfare Ordinance provided in Article 4, pa ragraph 2 (limited to the part pertaining 
to the provisions of paragraph 1 (1) to (3) of the said article) of the Waterworks Law 
(Law No. 177 of 1957); 
 (8) when intending to give approval for dr ugs, quasi-drugs or medical devices for the 
purpose of use for animals (hereinafter referred to as "veterinary medicine, etc.") in accordance with the provisions of Article 14, paragraph 1 of the Pharmaceutical 
Affairs Law (including cases where it applies mutatis mutandis in Article 23 of the 
said Law; the same shall apply hereunder) or the provisions of the said paragraph applied in accordance with the provisions of Article 83 of the said Law, when intending to conduct a re-examination of veterinary medicine, etc. in accordance with the provisions of Article 14-4, paragraph 1 of the said Law (including cases where it 
applies mutatis mutandis in Article 19-4 and Article 23; the same shall apply 
hereunder) or the provisions of the said paragraph applied in accordance with the provisions of Article 83 of the said Law, wh en intending to conduct re-assessment of 
veterinary medicine, etc. in accordance with the provisions of Article 14-5, paragraph 1 of the said Law (including cases where it applies mutatis mutandis in Article 19-4 and Article 23 of the said Law;  the same shall apply hereunder) or the 
provisions of the said paragraph applie d in accordance with the provisions of 
Article 83 of the said Law, when intending to  give approval for veterinary medicine, 
etc. in accordance with the provisions of Ar ticle 19-2, paragraph 1 of the said Law or 
the provisions of the said paragraph applie d in accordance with the provisions of 
Article 83 of the said Law, or when intendi ng to enact, amend or abolish the Ministry 
of Agriculture, Forestry and Fisheries Ordinance provided in Article 83-2, 
paragraph 1 of the said Law; 
 (9) when intending to form a plan for the enactment, amendment or abolishment of the 
Cabinet Order (limited to those that desi gnate substances contained in agricultural 
land soil, which are feared to become the source of the production of agricultural crops, and livestock that are feared to be harmful to human health) provided in 
Article 2, paragraph 3 of the Agricultu ral Land Soil Pollution Prevention Law (Law 
No. 139 of 1970) or the Cabinet Order provide d in Article 3, paragraph 1 of the said 
Law (limited to those that prescribe conditi ons for areas where the agricultural lands 
are understood to be used for the producti on of agricultural crops and livestock that 
are feared to be harmful to human health or  where the fear thereof is understood to be 
conspicuous);  
 (10) when intending to enact, amend or a bolish the Ministry of Health, Labour and 
Welfare Ordinance provided in Article 11, Ar ticle 15, paragraph 5 or Article 19 of the  WT/TPR/M/142/Add.1 
 Page 17 
 
 
Poultry Slaughtering Business Control and Poultry Meat Inspection Law (Law No. 70 
of 1990); 
 (11) when intending to form a plan for enactment, amendment or abolishment of the 
Cabinet Order provided in Article 6, pa ragraph 1 of the Law Concerning Special 
Measures against Dioxins (Law No. 105 of 1999); 
 (12) when intending to enact, amend or a bolish the Ministry of Health, Labour and 
Welfare Ordinance provided in Article 7, paragraph 1 or 2 of the Law concerning 
Special Measures against Bovine Spongifo rm Encephalopathy (Law No. 70 of 2002); 
and 
 (13) in addition to those c ited in the preceding items, cases provided by the Cabinet Order. 
2. In cases falling under the proviso of the precedi ng paragraph (limited to cases recognized by the 
related ministers as falling under Article 11, paragraph 1 (3)), related ministers shall report such fact 
to the Commission and hear its opinions within a certain period of time after the formulation of 
policies to ensure the safety of the food,. 3. In addition to cases provided in paragraph 1, related ministers may hear the Commission’s opinions 
if they are recognized as necessary for form ulating policies to ensure food safety. 
(Request for submission of materials, etc.) 
Article 25 The Commission may request that the heads of related administrative bodies submit materials, 
opinions, and explanations and provide other necessar y cooperation, if it is recognized to be necessary 
for performing office duties under its jurisdiction. 
(Entrustment of investigation) 
Article 26 The Commission may entrust necessary investigations to  incorporated administrative agencies, juristic 
persons incorporated in accordance with the provision s of Article 34 of the Civil Code of Japan (Law 
No. 89 of 1896), enterprises and other private bodies, prefectural experiment and research institutes, 
or persons of learning and experience, if it is r ecognized to be necessary for performing office duties 
under its jurisdiction. 
(Request in an emergency) 
Article 27 The Commission may request that the research institutes of related national administrative bodies 
conduct an investigation, analysis or examination necessary for the assessment of the effect of food on 
health if it is recognized to be necessary for coping with emergency situations that cause or are liable 
to cause serious damage concerning ensuring food safety. 2. If the research institutes of related nationa l administrative bodies receive a request from the 
Commission in accordance with the provisions of the preceding paragraph, they shall promptly 
implement the requested research, analysis or examination. 
3. The Commission may request that related mini sters make a demand in accordance with the 
provisions of Article 12, paragraph 1 of the Incor porated Administrative Agency, National Institute of 
Health and Nutrition Law (Law No. 180 of 1999) or a request in accordance with the provisions of 
Article 12, paragraph 1 of the Incorporated Admini strative Agency, Center for Food Quality, Labeling 
and Consumer Services Law (Law No. 183 of 1999) , Article 12, paragraph 1 of the Incorporated 
Administrative Agency, National Agricultural Research Organization Law (Law No. 192 of 1999), 
Article 12, paragraph 1 of the Incorporated Ad ministrative Agency, National Institute for Agro-
Environmental Sciences Law (Law No. 194 of 1999),   Article 12, paragraph 1 of the Incorporated 
Administrative Agency, National Food Research Institute Law (Law No. 196 of 1999I), or Article 12, paragraph 1 of the Incorporated Administrative Ag ency, Fisheries Research Agency Law (Law No. 
199 of 1999), if it is recognized to be necessary for coping with emergency situations that cause or are 
liable to cause serious damage to the ensuring of food safety. WT/TPR/M/142/Add.1 
Page 18  
 
(Organization) Article 28 The Commission shall be organized  by seven commission members. 
2. Three out of the seven Commission Members shall be part-time members. 
(Appointment of Commission Members) 
Article 29 
With approval from both Houses, the Prime Minister  shall appoint Commission Members out of those 
who have superior insight into ensuring food safety. 2. In spite of the provisions of the preceding paragraph, the Prime Minister may appoint Commission Members out of those who have qualifications as provided in the preceding paragraph, if he/she 
cannot obtain approval on the appointment from both Houses due to the Diet’s closing or the 
dissolution of the House of Representatives in case s where the term of the Commission Members has 
expired or there arises a vacancy for a Commission Member.   3. In cases falling under the preceding paragraph, the Prime Minister shall obtain subsequent approval 
from both Houses at the first Diet session after the relevant appointment. If the Prime Minister cannot 
obtain subsequent approval from both Houses in such case, the Prime Minister shall immediately 
dismiss the Commission Member. 
(Term of the Commission Member) 
Article 30 The term of the Commission Member shall be three years, provided that the term of a substitute 
Commission Member shall be the remaining term of his/her predecessor. 
2. The Commission Member may be reappointed. 
3. If the term of the Commission Member has expired, the relevant Commission Member shall 
perform his/her duties until his/her successor is appointed. 
(Dismissal of the Commission Member) 
Article 31 
With approval from both Houses, the Prime Minist er may dismiss the Commission Member if the 
Commission member is recognized as being incapable of performing his/her duties due to physical or 
mental disability or if recognized as constituting a vi olation of his/her official obligations or other 
delinquency inappropriate for a Commission Member. 
(Service of the Commission Member) 
Article 32 
The Commission Member shall not disclose secrets that he/she has come to know through his/her 
duties. The same shall apply even after he/she leaves the office. 
2. The Commission Member, while in office, shall not serve as an officer of a political party or other 
political association or actively take  part in political movements. 
3. The full-time Commission Member, while in office, shall not engage in another job for 
remuneration, run a commercial enterprise, or  conduct any other business for the purpose of 
financially gain except where they have received the Prime Minister’s permission. 
(Allowance of the Commission Member) 
Article 33 The salary of the Commission Member shall be provided by separate law. 
(Chairperson) 
Article 34 
The position of Chairperson shall be established in  the Commission and the Chairperson shall be 
appointed from full-time Committee Members by  a mutual vote among the Commission Members.  WT/TPR/M/142/Add.1 
 Page 19 
 
 
2. The Chairman shall administrate the duties of  the Commission and shall represent the Commission. 
3. In the event that the Chairp erson has an accident, the full-time Commission Member who has been 
designated in advance by the Chairperson sha ll perform the duties of the Chairperson. 
(Meeting) 
Article 35 
The Commission shall be assembled by the Chairperson. 
2. The Commission shall not hold a meeting and make a decision without the attendance of the 
Chairperson and at least three Commission Members. 3. The proceedings of the Commission shall be dete rmined by the majority of attendees, and in cases 
in which the Commission is evenly divided, it shall be as determined by the Chairperson. 
4. In respect of the application of the provisions of paragraph 2 about cases where the Chairperson is 
in an accident, the Committee Member provided in paragraph 3 of the preceding article shall be 
deemed to be the Chairperson. 
(Expert Commission Member) 
Article 36 
The Commission may have the Expert Commission Member examine and deliberate on specialized 
matters. 2. The Prime Minister shall appoint the Expert Commission Member from persons of learning and experience. 3. The Expert Commission Member shall be dismissed at the completion of the examination and deliberation of the relevant specialized matters. 
4. The Expert Commission Member shall be on part-time basis. 
(Secretariat) 
Article 37 The Commission shall establish the Secret ariat to deal with clerical work. 
2. The Secretariat shall have the necessary officials as well as the Secretary-General. 
3. The Secretary-General shall administer the du ties of the Secretariat at the behest of the 
Chairperson. 
(Delegation to Cabinet Order) 
Article 38 In addition to matters provided in this Chapter, necessary matters regarding the Commission shall be provided by Cabinet Order. 
 WT/TPR/M/142/Add.1 
Page 20  
 
Organization of the Food Safety Commission
 
 
1.  Academic Background of Commission Members  (Commission Members: 7, including 4 full-
time members and 3 part-time members) 
.  Expert in toxicology, etc. 
.  Expert in microbiology, etc. 
.  Expert in organic chemistr y (chemical substance), etc. 
.  Expert in public health, etc. 
.  Expert in food production and distribution system, etc. 
.  Expert in consumer interest, behavior, etc. 
.  Expert in information exchange 
 
2.  Organization of the Food Safety Commission  (Expert Commission Member: around 200 in 
total) 
Food Safety Commission 
Planning 
Risk communication Emergency Response (food accidents, etc.) (Assessment team) Chemical substance assessment group 
Food additives  Pesticides  
Veterinary Medicines Apparatu s/containers and packages  
Chemical substances Contaminants, etc. 
Biological assessment group 
Microorganisms   Virus  
Natural toxin / mycotoxin, etc. Prions (BSE, etc.) 
Emerging food assessment group 
Genetically modified organi sms Newly developed foods 
Feed/fertilizer, etc.  
3. Organization of the Secretariat
 (Secretariat personnel: 54 
Technical counselors (part-time): 25) 
Secretariat (Director-General, Deputy Director-General, and four divisions and one director) 
.  General Affairs Division 
.  Risk assessment Division 
.  Recommendation and Public Relations Division 
.  Information and Emergency Response Division 
.  Director for risk communication 
  
  WT/TPR/M/142/Add.1
 Page 21 
 Outline of the Food Safety Basic Law 
To comprehensively promote policies to ensu re food safety by establishing basic prin ciples, clarifying the responsibilities and  roles of persons concerned, and es tablishing basic direction for policy 
formulation regarding ensuring food safety. Purpose (Article 1) 
(1) Necessary measures for ensuring food safety shall be taken on the basis of the basic recognition that the protection of nat ionals’ health is the ultimate priority. 
(2) Necessary measures for ensuring food safety shall be appropriately taken at each stage of the food supply process. 
(3) Necessary measures for ensuring food safety shall be taken on  the basis of scientific knowledge and in consideration of int ernational trends and nationals’ opinions. Basic principles (Articles 3-5) 
○Responsibilities of the state 
To comprehensively formulate and implement 
policies to ensure food sa fety on the code of the 
basic principles ○Responsibilities of the local authorities 
To formulate and implement policies on the code 
of the basic principles and on the basis of 
appropriate sharing of roles with the state ○Responsibilities of food-related business operators  
On the code of the basic principles, 
. to recognize that they have the pr imary responsibility for ensuring food 
safety and to appropriately take necessary measures;  
. to make efforts to provide accurate  and appropriate information; and 
. to cooperate in policies impl emented by the state, etc. ○Roles of consumers 
To play an active role in  ensuring food safety by 
endeavoring to improve the knowledge and 
understanding of ensuring food safety and by 
making efforts to express opinions about policies Responsibilities and roles of persons concerned (Articles 6-9) 
(1) Implementation of the "assessment of the effect of food on health*" (risk 
assessment) 
・To conduct, in principle, the assessment of the effect of food on health in 
formulating policies 
・To tentatively formulate measures in matters of urgency  and to subsequently 
conduct the assessment of the effect of food on health without delay 
・To conduct the assessment in an objective, neutral and fair manner on the basis of 
the state-of-the-art scientific knowledge of the time  
*To assess the effect of biological, chemical or physical agents in food or the 
condition of   food on human health due to the ingestion of the food 
(2) Formulation of policies on the basis of the results of the assessment of the 
effect of food on health and in consideration of conditions of nationals’ dietary 
habits (risk management) 
(3) Promotion of the exchanges of information and opinions among persons or parties concerned, including the provision of information and grant of 
opportunities to express opinions (risk communication) (1) Establishment of a system to cope with 
emergency situations  
(2) Formulation of policies based on the close and 
mutual cooperation among related administrative 
bodies, etc. (3) Establishment of research systems, promotion of research and development, training of 
researchers, etc. 
(4) Collection, arrangement and utilization of internal and external information, etc. (5) Ensuring the appropriate operation of a 
labeling system, etc. 
(6) Promotion of education and learning, and improvement of public relations, etc. 
(7) Formulation of measures in consideration of 
the effect on the environment 
○The government shall formulate Basic Matters* concerning implementation of measures taken based on the above. 
○The Prime Minister shall formulate the draft on Basis Matters after hearing the opinions of the Food Safety Commission. 
*Matters concerning the implementation of the asse ssment of the effect of food on health and responses to emergency situations, 
t(1) Official duties under the jurisdiction of the Commission, etc. 
. To conduct the assessment of the effect of food on health in response to the 
related minister’s consultation or on its discretion (risk assessment) 
. To make recommendations to related mi nisters on the basis of the results of 
the assessment of the effect of food on health . To monitor the implementation conditi ons of policies implemented according 
to the results of the assessment of the effect of food on health and to make 
recommendations to related ministers . To conduct examination and deliberati ons and to express opinions to the 
heads of related administrative bodies (in an emergency, etc.) 
. To conduct scientific research and study 
. To coordinate activities that the Commission and related administrative 
bodies conduct, in relation to a mutual  exchange of information and opinions 
among persons or parties concerned (risk communication) . To request the submission of materials and to investigation in an emergency, 
etc. 
(2) Organization, etc. 
. Consisting of seven Commission Members (including three part-time 
members) 
. The Prime Minister appoints Committee Members out of persons of learning 
and experience with the approval of both Houses (three-year term). . The Chairperson is selected from fu ll-time Committee Members by mutual 
vote. 
. The Expert Commission Members and the Secretariat are placed. Establishment of the Food Safety Commission (Articles 22-38) 
Basic Matters concerning implementation of measures (Article 21) Basic Direction for Policy Formulation (Articles 11-21)  
 WT/TPR/M/142/Add.1 
Page 22 22 
 Activities for Ensuring Food Safety 
Existing measures 
. Regulations of sale and use of agricultural 
chemicals (Agricultural Chemicals Regulation Law) 
. Regulations of manufacturing and use of 
veterinary medicine (Pharmaceutical Affairs Law) . Regulations of manufacturing and use of feed 
(Law Concerning the Safety Assurance and 
Quality Improvement of Feed) . Prevention of zoonosis (Domestic Animal 
Infectious Disease Control Law) 
. Establishment of specifications and standards 
for food, additives, etc. 
. Permission for food-related business, and 
monitoring of and guidance on business facilities . Monitoring of and guidance on imported food at 
quarantine stations (Food Sanitation Law) 
. Inspection of abattoirs/poultry meat, etc. 
(Abattoirs Law/Poultry Slaughtering Business 
Control and Poultry Meat Inspection Law) 
. Establishment of labeling standards, and 
monitoring and guidance (Food Sanitation Law, JAS 
Law, etc.) Changes of conditions surrounding food administration 
. Diversification and increasing complication of hazard accompanying the 
pursuit of convenience (development of new agricultural 
chemicals/additives, globalization of food, etc.) . Finding of new hazard (O-157, prion, etc.) 
. Improvement of analytical technique (It became difficult to achieve "zero 
remnants" due to the lowering of the detection limit.) 
International trends regarding food safety 
. It has become the general idea that ther e is no "absolute" safety of food and 
that food safety is controlled on the a ssumption of the existence of risks. 
→Establishment of risk assessment institutions 
. French Food Safety Agency (1999)  
. European Food Safety Authority (2002)   
. Federal Institute for Risk Assessment in Germany (2002) 
Occurrence of various  domestic problems 
. Large-scale food poisoning due to processed milk 
. Occurrence of BSE in Japan 
. Residual agricultural chemi cals in imported vegetables 
. Use of unregistered agricultural ch emicals and undesignated additives 
Report of the Investigation Committee 
Regarding BSE Problem 
. Administration that gives priority  to producers but thinks little of 
protection of consumers 
. Administration that does not approp riately reflect experts’ opinions 
. Lack of systems to prevent hazards and minimize risks 
. Insufficiency in the provision of accurate information and the ensuring 
of transparency Enactment of the Food Safety Basic Law 
Amendment to individual laws related to ensuring food 
safety, etc. 
In relation to the Ministry of Health, Labour and 
Welfare . Bills of laws for par tial amendment to the Food 
Sanitation Law and other laws 
. Bill of the Law for Partial Amendment to the Health 
Promotion Law 
 
In relation to the Ministry of Agriculture, Forestry and Fisheries  
. Bill of the Law for Partial Amendment to the Law on 
the Establishment of the Ministry of Agriculture, 
Forestry and Fisheries 
. Bill of the Law for the Enact ment of Laws Related to 
the Ministry of Agriculture, Forestry and Fisheries for Ensuring Food Safety 
. Bill of the Law for Par tial Amendment to the Law 
Concerning Safety A ssurance and Quality 
Improvement of Feed 
. Bill of the Law concerning Special Measures for 
Information Management and Communication for Identification of Individual Cow  
. Bill of the Law for Par tial Amendment to the Law 
concerning Temporary Measures for Sophistication of 
Management of Food Manufacturing Process 
Stage of production of agricultural, forestry 
and fishery products Stage of food manufacturing and 
distribution  Food labeling Diversification and increasing comp lication of hazard included in food  
  WT/TPR/M/142/Add.1
 Page 23 
 
Risk communication General Diagram of New Food Safety Administrative Organization 
Food Safety Commission  
 
 Collection/exchange of 
information International 
bodies/developed 
countries, etc. 
*Establishment of a mech anism that enables the 
entire Cabinet to give a unified response to 
emergency situations 
 
Risk management relating to food sanitation  (Review of the risk management structure) Recommendation 
Report 
Direction, etc
. 
Stronger cooperation  
Local authority Local branch, 
substation and 
division Secretariat 
Assessment team 
Research institute, etc. 
*Establishment of a new mechanism for 
communication in which wide-ranging 
persons concerned are brought together  Instruction, etc. 
Report Recommendation Cooperation and conclusion of agreements  
 
Risk management relating to agricultural production, 
animal husbandry and fishery (Review of the risk 
management structure) 
Stronger cooperation  
Local authority . Risk assessment (while ensuring transparency)  
. Recommendations to related administrative bodi es on the basis of the results of the risk 
assessment 
. Monitoring of the implementation conditions of the recommendations 
. Unified collection/arrangement of internal and external information  on hazards   
Ministry of Health, Labour and Welfare 
Experiment and research institute, etc. Ministry of Agriculture, Forestry and Fisheries 
Local branch, 
substation and 
division Minister in charge Cabinet Office 
Consumer, etc. WT/TPR/M/142/Add.1 
Page 24  
 
 Attachment 2 
Tentative translation  
   
 
 
Measures against Bovine Spongiform Encephalopathy (BSE) in Japan 
(Interim report) 
 
 
    
 
   
September 2004 
Food Safety Commission  
 
     WT/TPR/M/142/Add.1 
 Page 25 
 
 
 Contents 
1. Introduction 2. Background 
2-1.  BSE 
2-1-1.  The number of BSE-cattle 
2-1-2.  Incubation period of BSE 
2-1-3.  In vivo prion distribution and infectivity  2-1-4.  Mechanisms of BSE development 
2-2.  vCJD 
2-2-1.  The number of vCJD patients 
2-2-2.  Incubation period of vCJD and mini mum amount required for vCJD development 
2-2-3.  Interspecies barrier between cattle and humans 2-2-4.  Genetic factors involved in vCJD infection 
3. Risk evaluation 
3-1.  Basic principles for risk evaluation 3-2.  A case of risk evaluation in the UK (Estimati on of the number of infected patients and prediction 
of vCJD occurrence) 3-3.  Risk evaluation in Japan 3-3-1.  Estimation of the number of vCJD occurrence by risk evaluation of the past  3-3-1-1.  The number of BSE-cattle  involved in the human food chain and predicted number of BSE-
cattle in the future. 
3-3-1-2.  Evaluation of vCJD risk in Japan based on the estimation of vCJD patients in the UK simply 
on a pro-rata basis. 3-3-2.  Risk reduction through control measures 3-3-2-1.  Countermeasures against BSE occurrence 
・Management and regulation of animal feed 
・Implementation of traceability program 
・Testing risk cattle  
3-3-2-2. Risk reduction through BSE test, its detection limit and significance 
・Detection limit of BSE prions by rapid test 
・Detectable age by rapid test 
・Prospects of test 
3-3-2-3. Risk reduction by SRM (sp ecified risk materials) removal 
・SRM removal 
・Contamination during slaughtering 
3-3-3. Current risks 
3-3-4. Increase and decrease of the risk in accord ance with the selection of management measures  
4. Conclusions 
5. Closing remarks 
(Abbreviations) 
(References) WT/TPR/M/142/Add.1 
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 1. Introduction 
In Japan, September 10th 2001, identification of  suspected Bovine Spongiform Encephalopathy 
(BSE) cows was reported. This news stunned the people involved in the livestock industry. In 
addition, an effective cure is not yet available for variant Creutzfeldt - Jakob disease (vCJD), which is 
supposedly caused by transmission of the BSE agent (BSE prion) to humans, thus all infected people 
will succumb to the disease. These facts and others th rew the whole nation into a panic. In response to 
the situation, on October 18th, a month after the detection, the Ministry of Health, Labour and 
Welfare and the Ministry of Agriculture, Forestry a nd Fisheries of Japan have implemented a range of 
measures including testing all the cattle and removal of specified risk materials (SRM), which were 
deemed stricter than those implemented in European countries.  
In 1986, BSE was identified in the UK and, in 1988, reported as a new disease by the British 
Government at the 56th annual general meeting of Office International des Epizooties (OIE). After 
that, almost all the BSE-cases in the 1990s were discovered in the UK. Since 2001, BSE tests have 
started in slaughterhouses in the EU by using a rapi d diagnostic method introduced at the end of the 
1990s. Following this, the number of countries, wh ere additional BSE-cattle were discovered, has 
increased to 23 countries worldwide but mainly Eu ropean countries (the United States was excluded 
from the statistics, so one case discovered there was added to the counting of Canada) and more than 
180,000 cattle infected with BSE prion (hereina fter called BSE-cattle) have been confirmed. 
According to the epidemiological investigati on performed in the UK, the cause of the global 
spreading of BSE was due to Meat and Bone Meal  (MBM) derived from BSE-cattle that was used to 
feed cows. 
In Japan, three years have passed si nce the first discovery of BSE-cattle. Results of testing of all the 
beef cows discovered 9 BSE-cattle, moreover, fully  implemented tests of all the dead cattle at 
24-month-old and above, which was initiated in Ap ril 2004, discovered one  additional BSE-cow. 
These results have given us a r ough understanding of the situation of BSE infection over a short 
duration. Although limited research achievements on the BSE mechanisms have been obtained, the 
mechanisms of the vCJD development after a BSE infection remained unsolved. As described above, 
scientific findings obtained so far are limited, however this report was finalized based on these findings to review the effects of decreasing the risks of cattle-to-human BSE infection and the 
measures against BSE (management and measures) in Japan and to utilize the findings for measures in 
the future. 
BSE-related risks are relevant to transmissions as follows: ① cow-to-cow, ② cow-to-human, 
③ human-to-human. With recognition of these three vi ewpoints, the committee has reviewed the risk 
of ② cow-to-human transmission of BSE pr ions under ordinary eating habits.  
2. Background 
2-1.  BSE 
2-1-1.  The number of BSE-cattle 
OIE reports say that there are 188,760 BSE-cattle in 23 countries across the globe (as of 
July 2
nd 2004), the number by country is 183,880 in the UK, which makes up the vast majority, and 
the rest are as follows: in Ireland (1426 heads), in France (914 heads), in Portugal (904 heads), in 
Switzerland (454 heads) (Table.1)  WT/TPR/M/142/Add.1 
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 Meanwhile, in Japan, 11 BSE-cattle have been confir med up to now. In Sept ember 2001, discovery of 
the first case of BSE-cattle was the trigger for te sting all the cattle in slaughterhouses on October 18th 
in the same year. After testing 3,451,152 cattle , 9 BSE-cattle have be en confirmed until now. 
(Statistics of the Ministry of Health, Labour and Welfare; as of July 31st 2004) (Table.2) So far, 
surveillance of dead cattle has t ested 69,218 cattle, although the numbe r is insufficient, and one of 
them was diagnosed as a BSE-cow. (Statistics of the Ministry of Agriculture, Forestry and Fisheries 
of Japan; between October 18th 200 1 and May 31st 2004) (Table.3) 
In 11 BSE-cattle cases confirmed in Japan, no typical c linical signs that are an index of suspicion of 
BSE infection were observed, but 6 cattle showed some clinical signs such as dysstasia and sepsis. 
(Table.4) 
Birthplaces of infected cattle by prefecture are as fo llows: 6 cases out of 11 are in Hokkaido, 2 cases 
in Kanagawa, one case in Gunma, Toch igi, and Hyogo, respectively.  
Breakdown by the period of birth is as follows: 9 cases concentrate on the period between December 
1995 and April 1996; 2 young cases are between October 2001 and Ja nuary 2002. (Table.4, Fig. 1) 
Grouping by category is as follows: 2 young cases are male dairy breed (Holstein-Friesian 
castrated）; the other 9 cases are female dairy breed (Holstein-Friesian).  
Among these, the 8th case of BSE-cattle (23- month old) was diagnosed as negative by 
immunohistochemical and histopat hological diagnosis, however, a positive reading was obtained by 
Western Blotting (hereinafter called "WB method"). Considering the low resistance to proteinase and 
the different pattern of electrophoresis from those observed in abnormal prion protein by the WB 
method, this case was diagnosed as being "atypical B SE" by "The Prion Expert Committee for testing 
bovine spongiform encephalopathy (BSE)" held by the Ministry of Health, Labour and Welfare.  
In addition, the 9th case of BSE-cattle (21- month old) was diagnosed as negative by 
immunohistochemical and histopathol ogical diagnosis, but as positive by the WB method as with the 
8th case and showed the same characteristics of thos e observed in up to the 7th case of BSE-cattle by 
the WB method.  
With respect to the 8th and 9th cases from the result of the WB method, in comparison with the other 
9 cases, the amount of abnormal prion protein accumula ted in the medulla oblongata is small, which 
is estimated at 1/500th to 1/1,000th less than those in the other cases1). In order to characterize the 
BSE prions of these 2 cases, brain homogenates were inoculated into bovine transgenic mice, and 
experiments are now being continue d to determine the amplification of the BSE prions, whose results 
are expected to reveal the tr ansmissibility of the 2 cases.  
For additional up-to-date information regarding th e number of BSE-cattle worldwide, visit the OIE 
site (http://www.oie.int/eng/info/en_esb.htm) 
2-1-2.  Incubation period of BSE 
The incubation period of BSE is presumed to be an average of 5 years (60 months) and 4~6 years 
(48~72 months) in most cases, based on the data of  natural BSE-cattle observed in the UK. However, 
the incubation period is believed to vary with individual diffe rences or amount of exposure. 
In the UK, the youngest reported and the oldest BSE-case were at 20- month-old and 19-year-old, 
respectively2).  WT/TPR/M/142/Add.1 
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 And concerning the ages of the 11 BSE-cattle confirmed in Japan at the time of slaughter, 2 young 
cases were at 21 to 23-month-old and the mean ag e of the other 9 cases was at 78.3±10.7-month-old, 
and none of them showed typical BSE-symptoms. (Table.4) 
2-1-3.  In vivo prion distribution and infectivity 
The BSE prion amplifies itself over the long term in the living bodies of infected cattle. Infectivity of 
a cow depends on the number of years after in fection and on the passage of years during the 
incubation period, but the temporal profile of th e prion accumulation is unclear for all practical 
purposes. We can only guess as to the period of in fection, even if we follow the preexisting 
presumptions that BSE-cattle were infected soon afte r birth. In this regard, the accumulation level of 
abnormal prion protein in younger BSE- cattle is presumed to be much lo wer than that in BSE-cattle at 
the last stage of the incubation period
3). 
In respect to BSE prion distribution in the living bodies of BSE-cattle, data of infection experiments 
performed by the UK Central Veteri nary Laboratory are available4). In this experiment, 40 calves at 
4-month-old were gathered from the farms which had no history of BSE infection, and 100g of brain 
tissue collected from 75 BSE-cattle was orally administ ered to 30 calves, the other 10 calves, used as 
a control group, were not administered brain tissu e. Between 6 and 22 months after administration, 
every 4 months, 3 calves from the administered group and one control calf were slaughtered. After the 
period, up to 40 months after administration, calves were slaughtered if necessary. The infectivity of the collected tissues was t ested by inoculation into the brain and abdominal cavity of mice (mouse 
bioassay) and by inoculation into the brain of cattle (cattle bioassay). In the mouse bioassay, 
44 tissues were collected (mainly lymphoreticular sy stem, peripheral nervous system, central nervous 
system, gastrointestinal tract, striated muscle, and major organs) the tissue samples were suspended in 
saline to prepare 10% solution. This solution was admi nistered into the brain (amount of inoculation: 
20μl) or abdominal cavity  (amount of inoculation: 100 μl) of inbred mice. In the cattle bioassay, 
several tissues were selected based upon the results of the mouse bioassay.  
The results revealed infectivity of the cattle brain (50% infectivity after inoculating into the brain: 
≦10
3.2～105.6C.i.c.ID 50/g: ID 50 indicates the amount of inoculum required for the establishment of 
infection or BSE development of 50% of cattle) and of the spinal cord, dorsal root ganglion, 
trigeminal ganglion ( ≦103.2C.i.c.ID 50/g) removed at 32~40 months after administration, and distal 
part of ileum ( ≦103.3～105.6C.i.c.ID 50/g) at 6~18 months after administration. No infectivity, 
however, was confirmed in all the tested tissues at 22 or 26 months after administration. (Table.5) In 
addition, only one case showed extremely low levels  of infectivity in the bone marrow (breast bone) 
at 38 months after administration revealed by the mouse bioassay5). Moreover, the cattle bioassay 
showed infectivity in the tonsils at 10 months after administration6). Clinical signs were observed after 
35 months. However, only a small number of cattle we re used for the test, and the results obtained 
were based on the observations of one or a few cattle. Moreover, the inspection method cannot detect 
the infectivity below its detection threshold. Consid ering these facts, there remained uncertainty that 
the possibility of the presence of infection under the detection threshold cannot be excluded, even if 
infection could not be confirmed in certain tissue3).  
At the medulla oblongata (obex), the spinal tract nuc leus of the trigeminal ganglion, the nuclei of 
solitary tract and the dorsal nucleus of the vagus nerve are gathered, and it’s noted that spongy 
degeneration is frequently observe d in the neuropile and nerve cells in these tissues of BSE-cattle7),8).  
Therefore, the medulla oblongata (obex) carries th e largest amount of abnormal prion proteins among 
all the tissues with infectivity confirmed9).  WT/TPR/M/142/Add.1 
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 In addition, from the results of the infection e xperiment performed by the UK Central Veterinary 
Laboratory, the total infective dose of a cow whic h developed BSE symptoms was estimated to be 
approximately 8,000 infective dose cattle oral ID 50s (C.o.ID 50), and it is estimated that SRM accounts 
for more than 99% of the infective dose3). (Table 6) However, this is an estimation extrapolated with 
results obtained by testing scrapie, sheep prion disease.  
Currently, experiments are in progress as follows: At  the UK Central Veterinary Laboratory, oral 
administration of 100g or 1g of BSE brain tissue to 100 cattle each, and also in Germany, oral administration of BSE brain tissue to 56 cattle. In Japan, experiments of the same kind have been 
started. These experiments or more sensitive dia gnostic methods, if developed, are expected to 
produce results to yield new findings. 
In addition, in regard to the minimum amount of  BSE prions (threshold dose) required to develop 
BSE, experiments of oral administration of sm aller amounts of BSE brain tissue (0.1, 0.01, and 
0.001g) are now in progress at the UK Central Veteri nary Laboratory. Results obtained to date are as 
follows: 3 out of 15 cattle in the 0.1g administra tion group, 1 out of 15 cattle in the 0.01g 
administration group, 1 out of 15 cattle in the 0.001 administration grou p developed BSE. Since 
experiments of oral administration using sma ller amounts of brain tissue were not performed, 
however, the threshold dose cannot be determined by this study. 
2-1-4.  Mechanisms of BSE development 
Mechanisms of BSE development in cattle are unc lear. Experiments on the scrapie development using 
sheep or rodents by oral administration of scrapie prions revealed the accumulation of scrapie prions 
at the Peyer patches of the ileum, lymphatic tissues attached to the intestine,  and at the intestinal 
visceral nerves distributed through the intestine. These results lead to the hypothesis that scrapie 
prions spread to the central nervous system via intestinal, visceral, or vagus nerve
10). It remains 
unclear how the scrapie prion reaches the peripheral nerve terminal from the follicular dendritic cells. 
In fact, it takes a prolonged period for the BSE prions  to accumulate in the central nervous system and 
results in spongy degeneration in the brain followe d by the development of BSE symptoms. Thus, any 
test using samples extracted from the medulla obl ongata (obex) can detect BSE-cattle only in the 
latter stage of the incubation period. Whether other organs are infective or  not is unclear at present. At 
the Federal Institute for Risk Assessment (BfR German), in vivo pathological studies are being 
continued regarding the temporal and spatial tran smission profiles of BSE prion after the infection11). 
As observed above, a range of basic studies are in  progress in regards to the in vivo manners of 
transmission, distribution, and amplification, but la rge parts of them remain to be answered. Further 
support and progress in the future are being awaited.  
2-2.  vCJD 
2-2-1.  The number of vCJD patients 
There are a total of 157 vCJD cases worldwide.  Among them, 147 cases were found in the UK, and 
have the same tendency as observed in BSE-cases. Other vCJD cases were confirmed in other 
countries as follows: {France (6 cases), Italy (1 case), Ireland (1 case), Canada (1 case), and the 
U.S.A. (1 case)} All the patients except 5 French patien ts and 1 Italian patient have a history of stay in 
the UK. (Table 1) 
In the meantime, not a solitary patient has been re ported in Japan. (as of the end of June 2004)  WT/TPR/M/142/Add.1 
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 2-2-2.  Incubation period of vCJD and minimum amount required for vCJD development 
The mechanisms for the BSE prions to spread to the central nervous system after infection in humans 
and its temporal progression are unknown
12). 
Also, the length of the incubation period is uncl ear; it ranges from a few to more than 25 years 
according to one hypothesis3). Although no patients have been found in Japan so far, this does not 
necessarily mean that patients will not be identified in the future3). 
Furthermore, the relationship between the inf ective dose and vCJD development in humans, 
especially the minimum amount for vCJD devel opment and cumulative effects by repeated 
administration are still unknown. 
2-2-3.Interspecies barrier between cattle and humans 
The degree of an interspecies barrier  in the transmission of BSE pri ons from cattle to humans is under 
consideration by the Task Force of the Scie nce Steering Committee (SSC) in the European 
Commission. According to the report12), evaluation of BSE prions, vCJD prions, and scrapie prions by 
the experiments using different animal species, sp ecially developed transgenic mice, and cultured 
cells have led to the assumption that an inte rspecies barrier between cattle and humans exists. 
However, based on current knowle dge, quantification of its strength is deemed impossible.  
Based on the prior acknowledgement, the Task Force considers it desirable to assume a worst-case 
scenario; that the barrier does not exist until new scien tific data concerning the interspecies barrier is 
available to evaluate the risks of human e xposure to potentially BSE-contaminated products. 
Meanwhile, the interspecies barrier is estimated to  be 10~10,000 times higher, if the range of the 
minimum infectious dose estimated among a variety of animal species is applied to humans. But, in 
parallel, recommendations have been  made to develop an appropriate  model based on the interspecies 
barrier for risk assessment on an in ternational collaboration basis. 
Therefore, the following 2 approaches are considered possible: ① Quantitative evaluation of BSE 
prions required to cause vCJD in humans by cro ssing the interspecies barrier between cattle and 
humans ② Evaluation of vCJD risks in Japan based on epidemiological data such as correlation 
between the numbers of BSE cases and vCJD cases in UK. The risk assessment by approach ① is 
deemed extremely difficult because of the wide va riety of estimated values concerning the degree of 
interspecies barrier between cattle and humans, a nd the lack of an appropriate international 
assessment model. 
2-2-4.  Genetic factors involved in vCJD infection 
All vCJD patients reported to date in the UK , have a gene encoding prion protein with 
codon129 methionine (methionine/methionine; M/M)  homozygotes, except for the 2nd case infected 
via blood transfusion. It has been pointed out that vCJD patients with this genotype present a shorter incubation period of vCJD, more susceptibility to in fection than other genotypes or either one of 
them
3). 
It is reported that approximately 40% of Cauc asians in Europe including the UK share M/M 
homozyotes, 13% of Valine homozyotes (Valine/Vali ne; V/V), and 47% share heterozygous genotype 
(Methionine/Valine; MV) 13,14).  WT/TPR/M/142/Add.1 
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 In this regard, in Japan, the ratio of the popula tion with M/M genotype is assumed to be higher than 
the UK15,16), for example 91.6% in one report17). 
In the UK, a second case of predicted human-to- human transmission of vCJD through blood 
transfusion was confirmed. This patient succumb ed to a non-related disease without any vCJD 
symptoms, but the following examination result was found upon confirming his infection. The 
genotype was reported as M/V in this case, whic h differs from those of other vCJD patients18). 
3. Risk evaluation 
3-1.  Basic principles for risk evaluation 
In this document, measures against BSE in Japan will be evaluated based on the following principles: 
 (1) Measures against BSE which transmit from cattle to humans should be evaluated by 
the human risk of BSE infection in Japan as an indicator, which were made based on 
the estimations of risk determined in the UK, considering the lack of any appropriate 
international models.  
 (2) Human risks of BSE infection in Ja pan will be evaluated before and after 
implementing measures against BSE of the past, or in case alterations are made in the 
future.  
 (3) Measures for risk management implemen ted in Japan are as follows: testing all the 
cattle in slaughterhouses, SRM removal, improving the methods of slaughtering and processing, measurements and regulations of feed, testing dead cattle, and traceability. While monitoring the implementati on of these measures, effects of these 
measures will be evaluated. 
 (4) Findings obtained to date, for example di agnostic data of BSE, will be analyzed and 
assembled for the evaluation of human risks of BSE infection in Japan. 
 (5) With respect to BSE itself, risk assessm ent will be performed considering the limits 
of scientific and biological findings and a large number of issues which remain 
scientifically uncertain. 
 (6) Specific measures for risk management should be laid down by risk-management 
ministries based on these risk  assessments and deep mutual understanding of BSE-
risks through intensive risk communications. 
3-2.  A case of risk evaluation in the UK (E stimation of the number of infected patients and 
prediction of vCJD occurrence) 
As has been mentioned previously the greatest numb er of BSE-cattle have been identified in the UK. 
Although 147 cases of human vCJD have  been reported to date, no pr ediction can be made concerning 
the number of infected patients in the future. In the UK, examination of abnormal prion proteins was 
performed in 12,647 samples of appendices remove d from patients who received appendectomies, and 
3 samples turned out positive. When this number is  applied to the population of the UK, the total 
number of infected patients in the incubation peri od are estimated to be up to approximately 3,800
19). 
Furthermore, in December 2003 and July 2004, potential vCJD-cases infected via blood transfusion 
were reported18, 20). 
In the UK, P. Smith (chairman of Spongiform Encephalopathy Advisory Committee and a professor 
of London University) et al proposed a hypothesis which can explain the relationship between the numbers of BSE-cattle of the past and the occurrences of vCJD patients to date, and they predicted the 
number of occurrences of vCJD patients according to this hypothesis
21). WT/TPR/M/142/Add.1 
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 This prediction is based on a number of assumptions as follows: ① The number of vCJD-patients 
correlates with that of BSE-cattle at the time when measures were inadequate. ② Considerable 
individual variation can exist with respect to the in cubation period, but it follows a specific statistical 
distribution. ③ No correlation is assumed between the inc ubation period and the ages of infection. 
④ vCJD only occurs among those whose genotype is M/M at amino-acid residue 129 in the prion 
protein gene. ⑤ Patients during the incubation period are excluded. ⑥ The relationship between the 
quantity of prions and the incidence rate is not take n into consideration. Following this prediction, the 
total sum of vCJD patients is estimated  from a few hundred to a few thousand. 
In addition, in the UK, cows at 30-month-old or ol der are not used for food, but in case this regulation 
is lifted, Smith et al proposed a prediction concer ning the increase of risks. Their most pessimistic 
estimation is based on the prediction that th e total sum of patient s would be 5,000. 
Other predictions have also been  reported regarding the number of vCJD patients in the UK. Thomas 
and Newby estimated numbers less than several hundred  based on the clinical data of 23 patients who 
died between 1995 and 1997. Moreover, J.N. Huillard et al. estimated a number of several thousands 
at most based on the data obtained from 82 vCJD patients who developed sy mptoms before 2000, but 
they concluded that the number of infected people was unpredictable
23). 
Meanwhile, since the genotype of the suspected ca se after blood transfusion found in 2004 was M/V, 
the past predictions of vCJD occurrences need reviewing18). 
3-3.  Risk evaluation in Japan 
As mentioned above, in order to evaluate the ri sk of vCJD in Japan, the following methods are 
possible: ① Risk evaluation of each step toward human consumption of BSE prions: How much BSE 
prion is contaminated in the food chain? How mu ch of it will cross the interspecies barrier? How 
many people will be at risk of vCJD? Based on the risk evaluation at each step toward human 
consumption of BSE prions, conclusive evaluation of the risk will be made. ② Epidemiological 
method: Based on the hypothesis in the previous s ection proposed by P. Smith that the number of 
vCJD patients correlate with that of BSE-cattle in  the UK, epidemiological data including the number 
of BSE-cattle of the past and the number of vCJD -p atients reported to date ca n be applied to predict 
the number of vCJD patients in the future.  
However, with respect to method ①, implementation is difficult for the following reasons: There is a 
wide variability of values obtained regarding the interspecies barrier as described previously. 
Causative food products involved in consumption of  BSE prions in the UK and in Japan are not 
known. Causative differences in eating habits be tween these two nations are unclear, the minimum 
quantity required for vCJD development in human  is unknown, and cumulative effects are unclear. 
Thus, implementation of an epidemiological method is possible if several assumptions are made, and 
examples of its estimation are described below.  WT/TPR/M/142/Add.1 
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 3-3-1.  Estimation of the number of vCJD occurrence by risk evaluation of the past  
3-3-1-1.  The number of BSE-cattle involved in the human food chain and predicted occurrence 
of BSE-cattle in the future. 
Assume that the progression of BSE prion accumulation in living bodies of cattle will follow a regular 
process. 
(Estimation 1) 
Earlier than October 2001, before the implementation of measures ag ainst BSE, vCJD risks derived 
from the exposure to BSE prions can be traced to th ose derived from contamination of BSE-cattle into 
the food chain caused by the lack of SRM removal and BSE test. Based on the estimation obtained by 
applying the age distribution of BSE-cattle detected in EU countries in 2001 to the month-ages of 
BSE-cattle in Japan at the time they were sla ughtered, these BSE-cattle consisted of up to 5 cows 
whose estimated slaughter ages were as follows: th ree 5-year-old BSE-cattle and two 4-year-old BSE-
cattle at the time they were slaughtered by October 200124). 
In addition, according to the prediction in the report published in September 2003 by the 
Epidemiological Surveillance team of the Ministry of  Agriculture, Forestry and Fisheries of Japan, the 
number of BSE-cattle in the future is estimated to be less than 30; the causes of infections are 
imported live cattle, cattle MBM, and animal fat25).  Moreover, taking into acc ount the rendering of an 
additional four BSE-cattle including young two cows (21-, 23-month-old) foun d after the publication 
of the report of the Ministry of Agriculture, Forestry and Fisheries of Japan, there is a possibility that 
up to 60 BSE-cattle will be confirmed after 2005-626). 
(Estimation 2) 
The vCJD risk in Japan is deri ved from the contamination of B SE prions into the food chain. 
Estimation of BSE-cattle contaminate in the human food chain was based on the hypotheses as 
follows: 1) According to the birth periods of 11 BSE-cattle confirmed to date, BSE caused by 
exposure to BSE prions occurred in the following cohorts （group of herd with the same period of 
birth）: ①1995-96 ②2001-02. (Table.4, Fig. 1) 2).  A wors t-case scenario assumed that the number 
of detected BSE-cattle in the future would correlate with that of slaughtered cattle of every age on the 
grounds that all the cattle in both cohorts established by period of birth were contaminated at the same 
rate. The grounds for concluding that the detected BSE-cattle belonged to the cohorts described above 
were that BSE-cattle should have been  discovered at higher rates at this time, after a lapse of 8 years, 
if BSE risks were higher in the cohorts before 1995~96. Moreover, after October 2001, the use of 
MBM as feed that derived from livestock as well as cattle was prohibited and BSE tests of all cattle 
and SRM removal were implemente d, BSE prions were considered  to be excluded from the human 
food chain. As a result, vCJD risks were presumed to become a thing of the past. Therefore, vCJD 
risks in Japan derive from the contamination of undetected BSE-cattle into the feed chain, which 
belong to the cohort of 1995~96 birth period and were slaughtered before October 2001. 
①  Steers which belong to 1995~96 birth period cohort  
Considering the usual slaughtering ages of steers (T able.7, Fig.2), a large percentage of them were 
considered to have been slaughtered within 3 years (1996~99). In the meantime, how many BSE-
cattle were contaminated into the human food chain is unclear. 
②  Cows which belong to 1995~96 birth period cohort 
9 BSE-cattle have been confirmed. The brea kdown is as follows: three 5- year-old cows 
December 2000 ~March 2002, four 6-year-old cows December 2001 ~March 2003, two 7-year-old 
cows December 2002 ~March 2004. Based on these fact s, BSE infection rates can be calculated from WT/TPR/M/142/Add.1 
Page 34  
 
 this cohort. The estimated number of BSE-cattle is  obtained as follows: Multiply the BSE infection 
rate by the number of slaughtered cattle for every slaughtering age. 
｛Estimated number of BSE-cattle ｝=｛BSE infection rate of the cohort ｝×｛The number of 
slaughtered cattle in one year ｝・・・（①）  
                                           A 
In this regard, ｛BSE infection rate of the cohort ｝ = ―――   
                                        B 
｛A = 3+4+2 ＝ ９： The number of BSE-cattle at 5~7-year-old ｝ 
｛B =30,391+28,994+24,219=83,604 ：The number of slaughtered cattle at 5~7-year-old ｝ 
・ Dec.1995~Mar.1997, 0-year-old: slaughtering age 0~11-month-old: 0 head 
・ Dec.1996~Mar.1998, 1-year-old: slaughtering age 12~23                : 2 
・ Dec.1997~Mar.1999, 2-year-old: slaughtering age 24~35                : 27 
・ Dec.1998~Mar.2000, 3-year-old: slaughtering age 36~47                : 3 
・ Dec.1999~Mar.2001, 4-year-old: slaughtering age 48~59                : 3 
                         A total of 35 heads 
In addition, the number of BSE-cattle which will br eak out in the future was calculated based on the 
same assumption described above.  
① 1995~96 birth period-cohort 
・ Considering that 8 years have elapsed since the date of birth (April 1996) of the last detected 
cattle and the general slaughtering ages (Table.7, Figure.2), most of the steers of this cohort 
are considered to have already been slaught ered. There is little possibility that other BSE-
cattle will be detected in the future.  
・ Using calculating formula ①, in terms of cows, an additi onal 10 BSE-cattle (9 BSE-cattle 
have been detected since 2001) are estim ated to be detected between 2004~2011. 
② 2001~02 birth period-cohort 
・ Considering that 30 months have elapsed since the date of birth (January 2002) of the last 
detected cattle as of July 2004 and the general slaughtering ages of steers (Table.7, Figure.2), 
75% of the steers of this cohort are considered  to have already been slaughtered, moreover, 
99% of the steers of this cohort are predicted to  be slaughtered by January 2005, after a lapse 
of 36 months. Since investigation of the past has detected two 2-year-old BSE-cattle in this 
cohort, the BSE infection rate of this cohort can be calculated. By multiplying this rate by the 
number of slaughtered cattle for every slaught ering age(Table.7), the estimated number of 
BSE-cattle which will be detected in the herd to  be slaughtered in the future can be obtained 
as follows: 
｛
Estimated number of BSE-cattle ｝=｛BSE infection rate of the cohort ｝×｛The number of 
slaughtered cattle in one year ｝・・・（②）  
                                           C   
In this regard, ｛BSE infection rate of the cohort ｝ = ―――   
                                        D 
｛C = 2 ＝： The number of BSE-cattle at 2-year-old ｝  WT/TPR/M/142/Add.1 
 Page 35 
 
 
 ｛D =231,502 ：The number of slaughtered cattle at 2-year-old ｝ 
 An additional 3 BSE-cattle are estimated to be detected by the end of 2004. 
・ Since no BSE-cattle have been detected in co ws in this cohort, estimation of BSE-cattle 
which will be detected in the future is difficult.  In this regard, there is a possibility that BSE-
cattle will be detected as the number of slaughter ed cattle increase with the passage of time 
according to the number of slaughtered cattle cl assified by slaughtered ages (Table. 7).  
 Meanwhile, this estimation hypothesized that BSE-cattle will be detected among ①1995~96, 
②2001~02 birth period-cohort. However, the possi bilities that BSE-cattle contaminated into 
the human food chain earlier remains obscure. Some reports speculated that BSE prion 
intruded in Japan through the use of imported live cattle from the UK as meal after rendering 
since the late 1980s27). 
3-3-1-2.  Evaluation of vCJD risk in Japan based on the estimation of vCJD patients in the UK 
simply on a pro-rata basis. 
Risk evaluation of vCJD in Japan was carried out  based on the presumption (3-2) used for Smith’s 
theory as follows: ① The number of vCJD-patients correlates with that of BSE-cattle at the time 
when measures were inadequate. ② Considerable individual variation can exist in the incubation 
period, but it follows a specific statistical distribution. ③ No correlation is assumed between the 
incubation period and the ages of infection. ④ vCJD only occurs among those whose genotype is 
M/M at amino-acid residue 129 in the prion protein gene. ⑤ Patients during the incubation period are 
excluded. ⑥ The relationship between the quantity of prio n and the incidence rate is not taken into 
consideration. 
(Estimation 1) 
The possible number of vCJD patients in Japan was estimated based on the estimations of BSE-cattle 
and vCJD patients in the UK. The following hypotheses were proposed: ① An estimated 1 million 
BSE-cattle were contaminated into the human food chain before the feed ban of MBM on 
August 1st 1996 in the UK28),29). ②  The number of vCJD patients in the UK is estimated at 5000, this 
is the most pessimistic calculation by Smith et al. In this regard, several reports suggest the number of 
BSE-cattle in the UK as follows: 2~2.5million, 3.5 million and 4.2million. In this estimation, 
1 million, the smallest number, was adopted to maximize the estimated risks. Meanwhile, vCJD 
patients in Japan can be estimated on a pro-ra ta basis by applying the correlation between the 
estimated number of BSE-cattle contaminated into the human food chain in the UK (1 million) and that of vCJD patients (5,000) caused by this. Give n 5 BSE-cattle were contaminated into the feed 
chain in Japan as described pr eviously, the estimation on a pro-rata basis is as follows: 
               5 BSE-cattle 
       5,000 patients × ―――――――  ・・・（③）  
                1,000,000 cattle  
In addition, considering the ratio of people carryin g M/M at codon 129 in the prion protein gene (UK; 
40%, Japan; 90%) in the national population of both countries (UK; 50million, Japan; 120million).  
          （120 million  × 90％）  
      ③  × ――――――――――――――  
          （ 50 million  × 40％）  WT/TPR/M/142/Add.1 
Page 36  
 
 As a result, 0.1 is the estimated number of vCJD  patients of the whole population in Japan by BSE 
prion uptake before the implem entation of testing all cattle. 
In addition, in the UK, mechanically recovered me at (MRM) is considered as one of the major causes 
since it raises the possibilities of contamination of the brain and spinal cord. Given the fact that MRM 
has never been used in Japan, however, the in fection risks will be estimated much lower. 
(Estimation 2) 
In the same manner, the number of vCJD patients in Japan is predicted at 0.9 by applying 35, as the 
number of BSE-cattle having entered the human food chain without detection in the past, to the 
formula③ described above and calculate on a pro-ra ta basis followed by correction by the 
composition ratios of population and genotype. 
However, the actual value would be predicted to be lower considering the facts that infectivity 
becomes higher in a host with age, and BSE-cattle which are supposed to be contaminated into the 
human food chain in estimation 2 are made largely of  younger cattle in the 2nd year after infection. 
3-3-2.  Risk reduction through control measures 
In Japan, as countermeasures against BSE, SRM rem oval in slaughterhouses and BSE test have been 
performed to protect consumers’ health since Se ptember-October 2001, and im port of beef materials 
as various ingredients in medicines have been banned from countries where BSE occurred, at the 
same time, its use for commercia l products have been prohibited.  Meanwhile, as measures against 
BSE occurrence, management of feed production, re gulations imposed on usage of feed, introduction 
of traceability, and testing cattle with neurologi cal symptoms, dead cattle, and cohort cattle 
(hereinafter called risk cattle) for surveillance have been introduced. Among them, SRM removal in 
slaughterhouses and BSE tests are considered to have gr eatly contributed to directly lower the risk of 
BSE infection to humans.   
3-3-2-1.  Countermeasures against BSE occurrence 
This document aims to estimate the infection risk of BSE prions from cattle to humans in ordinary 
eating habits. At the same time, in order to er adicate BSE, the following measures are required: 
management and regulation of feed , introduction of traceability, and testing risk cattle. Especially, the 
regulation of animal feed is regarded as a funda mentally essential measure to prevent BSE infection 
and to guarantee the reduction of risk of BSE infection from cattle to humans.  WT/TPR/M/142/Add.1 
 Page 37 
 
 
 ・ Management and regulation of animal feed 
In September 2001, when the first BSE-cattle wa s discovered in Japan, in order to implement 
measures based on "Legislation for securing feed safety and improving feed quality", feeding 
ruminant animals by MBM derived from ruminant an imals was prohibited. In October 2001, usage of 
MBM for feed has been totally prohibited. By th ese prohibitions, in theory, transmission of BSE 
prions from cattle to cattle is presumed to have been completely blocked off. However, securing 
effectiveness of feed regulations is requi red from now on since the possibilities of cross-
contamination in the process of feed production in feed mixture factories and during transportation of 
materials have been pointed out, regarding up to  the 7th BSE-cattle detected in Japan, by the 
Epidemiological Surveillance Team of the Ministry of Agriculture, Forestry and Fisheries of Japan, 
and since causes are still unidentified by epidem iological studies and the possibility of cross-
contamination of BSE prions can not be denied re garding the 8th and 9th BSE-cattle which were born 
after October 2001. 
・ Implementation of the traceability system 
In Japan, since December of last year, based on the "Special measures law on management and 
transmission of information for individual recogn ition of cattle", the traceability system has been 
made compulsory to document information incl uding birth record, which allows individual 
recognition at the production and slaughtering stages and determination of accurate ages. This allows 
separate investigation of the degree of risk of BSE infections before or after implementation of the 
various regulations. 
In addition, this regulation has also been implemente d at the distribution level since December of this 
year. Taking into account its significance to create transparency for consumers to directly obtain 
information of beef, securing and verification of the traceability system ar e deemed essential from 
now on. 
・ Testing risk cattle 
With regards to testing risk cattle, to comprehend the extent of BSE infection in Japan and validate 
the effectiveness of measures against BSE, the firs t surveillance covering cattle at 24-month-old or 
older was implemented before the 1st BSE-case was identified in Japan. Moreover, since October 2001, dead cattle were added to the surve illance and, since April 2004, screening of all dead 
cattle at 24-month-old or older has been implem ented. Until now, 69218 cattle have been examined 
and one BSE-cow was detected. (Statistics of the Mini stry of Agriculture, Forestry and Fisheries of 
Japan; October 18th 2001~May 31st 2004)  
Testing risk cattle should be continued in the future. 
3-3-2-2.  Risk reduction through BSE test, its detection limit and significance  
The BSE test is carried out by slaughtering insp ectors, who own veterinarian’s licenses and civil 
servants in slaughterhouses of prefectural and city governments based on "Legislation for 
slaughterhouses" and "Special Measures Law on B ovine Spongiform Encephalopathy". And BSE 
tests are significant in the following two ways: ① Exclusion of BSE-cattle from the human food chain 
② Comprehension of the extent of BSE contamin ation and verification of the effectiveness of 
measures against BSE in Japan.  WT/TPR/M/142/Add.1 
Page 38  
 
 Exclusion of BSE-cattle from the human food chain means reduction of risk of BSE infection by 
consuming BSE prion-contaminated be ef and internal organs and dir ectly contributes to the protection 
of consumers’ health. Based upon results of the BSE test, 9 BSE-cattle have b een identified and were 
eliminated from consumption. Among them, 21 to 23-month-old cattle were involved, of which the 
detection was lead by testing all cattle. Thus, this suggested the effective contribution of BSE test to 
protect the consumers’ health. 
In Japan, as a result of the introduction of tes ting of all cattle implemented as the cattle were 
processed for consumption soon after occurrence of BSE, valuable data regarding these cattle were 
obtained to help speculate on the BSE infection stat us within a short time. With respect to the BSE 
contamination status in the field, accumulation of data obtained from testing dead cattle at 24-month-
old or older, which has been fully implemented in  farms since April of this year, will improve the 
accuracy of epidemiological information based on the condition of BSE contamination in Japan.  
・ Detection limit of BSE prions by rapid test 
The accuracy of BSE test methods employed as a primary test in Japan, "Prateria BSE"(Biolad) 
and"Dinabot Enfar BSE"(Dinabot), is being evalua ted by Scientific Steering Committee in European 
Comission30). "Prateria BSE" possesses virtually equa l reliability compared with the mouse-bioassay 
and its detection limit is 2M.i.c.ID
50/g (M.i.c.ID 50: 50% infectivity after inoculating into the mouse 
brain). Therefore, accumulation of abnormal prion proteins greater than the detection 
limit（≧ 2M.i.c.ID 50/g）will not be tested negative but defi nitely positive. And in cases where the 
amount of abnormal prion proteins is below the det ection limit, it will be tested negative. In other 
words, BSE-cattle in the incubation pe riod with infectivity below 2M.i.c.ID 50/g in the medulla 
oblongata (obex) will be tested negative. 
"Dinabot Enfar BSE" as well as "Prateria BSE" we re reviewed by the Pharmaceutical Affairs and 
Food Sanitation Council and their import as veteri nary diagnostic products was approved by the 
Minister of Agriculture, Forestry, and Fishery. Mo reover, it was reviewed under the evaluation result 
of  the European Commission by the "Expert Co mmittee for Bovine Spongiform Encephalopathy 
(BSE) Diagnosis" held by the Ministry of Hea lth, Labour and Welfare a nd approved its sensitivity 
equal to that of "Prateria BSE." 
These facts prove the contribution of BSE test at sl aughterhouses to risk reduction of BSE infection in 
humans caused by consuming beef and internal orga ns, but it cannot be concluded that present testing 
methods can detect and exclude all the BSE-ca ttle during the incubation period because of their 
technical limits. 
・ Detectable age by rapid test 
No experiments for this purpose have ever been pe rformed, just the fragmentary facts described below 
are known.  
In the experiment in the UK described above, infectivity was first confirmed 
（≦ 103.2～105.6C.i.c.ID 50/g）in the cattle brains at 32 months after oral administration and no 
infectivity was confirmed in the experimentally inf ected cattle at 22~26 months after administration in 
4-month-old cattle. These results mean that the accu mulation of abnormal prion protein at the medulla 
oblongata (obex) greater than the detection limit fi rst occurs at 32 months after administration.  
Meanwhile, in Japan, 21 to 23-month-old BSE-cattle  were identified among 9 BSE-cattle confirmed 
by testing of approximately 3.5million cattle at slaughterhouses. Notably, results of the WB method  WT/TPR/M/142/Add.1 
 Page 39 
 
 
 demonstrated the amount of abnormal prion protein contained in the medulla oblongata (obex) was 
small, presumably from 500 to 1000 times less than in other BSE-cattle found in Japan1). Therefore, 
detection of BSE-cattle at 20-month-old and below by  the current sensitivity of the testing method is 
deemed difficult. 
In addition, the youngest BSE-case on the present r ecord is 20-month-old cattle found in the UK in 
1992.  A scientific report prepared by the TSE/BS E ad hoc group of the European Commission 
speculated that infectivity can be detected as ear ly as 17-month-old in the case in which BSE disease 
onset is confirmed at 20-month. This was based on the data obtained by an infection experiment 
carried out in the UK which demonstrated that infectivity was detected in the 32nd month after 
administration and BSE development was confirmed in the 3rd month after detection of infectivity. In 
this regard, this British case cannot  immediately be applied to meas ures against BSE in Japan because 
of the enormous difference regarding BSE contamin ation status and the amount of exposure of cattle 
to BSE prions in the UK comp ared with those in Japan.  
・ Prospects of test 
Investigations for improvement and development of  rapid BSE test methods are being performed in 
European countries, the U.S., and Japan and rapid testing methods with greater sensitivity are expected to become available. It is considered th at the lower the detection limit is, the younger the 
detectable BSE-cattle will be. Moreover, demonstrati on of the presence or absence of infection before 
slaughtering can be expected if testing using tissues or blood samples re moved from live cattle 
becomes available. This will allow the detection and exclusion of BSE-cattle without bringing them 
into slaughterhouses and incurring the risk of SRM cro ss-contamination, and lead us close to the goal 
described in the report
3) by the Scientific Steering Commission in Europe: Exclude infected animals 
from the human food chain to protect consumers from the risk of BSE infection.  
Studies to improve the BSE testing method should be continued including improving the detection 
limit, and further investigation is required for qua ntitative evaluation of the risk originating from 
cattle at 20-month-old or younger. 
3-3-2-3.  Risk reduction by SRM (specified risk materials) removal 
・ SRM removal 
In Japan, use of cattle heads (excluding the tongue and cheek flesh), spinal cord, distal part of ileum, 
spinal column including dorsal root ganglion for food products is prohibited for all cattle by law. Since current findings indicate that more than 99% of abnormal prion protein concentrate in these tissues, complete exclusion of these tissues from th e human food chain is expected to practically 
reduce the vCJD risk in humans. 
However, it is not practical to consider th at complete SRM removal is implemented in 
slaughterhouses because of the residual spinal cord left behind during spinal cord removal, possible 
contamination of dressed carcasses, and contamination of central nervous tissue by pithing. 
The results of surveillance concerning the removal rates of spinal cord before back-spreading in 
7 Meat Hygiene Inspection Offices directed by the Ministry of Health, Labour and Welfare are as 
follows: 5 offices employing the spinal cord aspiration method indicated average 80.6±17.1% (52.5~99.1%), and 2 offices employing the spinal  cord extrusion method indicated average 75% 
(72.0, 78.0%). In addition, the residual spinal co rd after back-spreading was disposed of manually
32).  WT/TPR/M/142/Add.1 
Page 40  
 
 Absence or presence of tissues other than SRM in  which abnormal prion protein accumulates cannot 
be determined at this point because of the detecti on limit of the infection experiments by which SRM 
was identified and uncertainty derived from inco mplete understanding of mechanisms underlying 
BSE infection. These ideas are supposed to be the gr ounds on which the World Health Organization is 
recommending exclusion of any BSE-cattle tissue from the human food chain.  
・ Contamination during slaughtering 
Surveillance by the Ministry of Health, Labour an d Welfare described above, to examine the presence 
or absence of contamination of spinal cord tissues in the dressed carcasses by wiping using a detection 
kit, showed no significant differences according to  the spinal cord removal methods: spinal cord 
aspiration method, spinal cord extrusion method,  and spinal cord removal method after back-
spreading
32). 
So-called pithing, the destruction of brain and sp inal cord with wire in slaughtering, has been 
prohibited in the EU since 2000 in response to repor ts which demonstrated the migration of central 
nervous tissue to other tissues via the blood stream with some slaughtering methods34). 
Meanwhile, in Japan, the Ministry of Health, La bour and Welfare is guiding industry officials 
involved to prohibit pithing because of concerns a bout contamination by leaks of brain and spinal 
cord tissues and difficulties of effective sterilization of metal-wire used for each cattle, but pithing is 
not prohibited based on the situation that forces its use from the viewpoints of work safety. In 
addition, according to the examination concerning th e leakage of central nervous tissues into blood 
performed by the Ministry of Health, Labour and Welfare, it cannot be concluded that pithing 
contaminates blood with brain and spinal cord ti ssues, but there is a possibility that employment of 
pithing contaminates meat and slaughterhouse facil ities through leakage of brain and spinal cord 
tissues from the stunning hole35). Given these results, in the future, further review is required 
concerning the management of pithing including it s prohibition. In addition, these days, possible 
contamination of carcasses is pointed out by the use of stun guns.  
BSE test in slaughterhouses is considered to be playing a major role to reduce the risk of SRM 
contamination in slaughtering.  
3-3-3.  Current risks 
(Estimation 1) 
In the future, with regard to the scale of BSE o ccurrence in Japan, there is a possibility that a 
maximum 60 BSE-cattle will be confirmed by 2005, 6.  
However, the risk of humans being infected with  vCJD by BSE-cattle through the human food chain 
is presumed to be mostly eliminated by the curre nt SRM removal and BSE test as long as they are 
implemented appropriately. 
(Estimation 2) 
The predicted number of occurrence of B SE-cattle in the future is as follows: ① From 2004~11, 
10 BSE-cattle will be confirmed in cows of 1995~ 96 birth period cohort (At present, 9 BSE-cattle 
have been confirmed since 2001. ) ② By the end of 2004, an additiona l 3 BSE-cattle, a total of 13, are 
presumed to be confirmed in cattle of 2001~02 birt h period cohort. But the risk of humans being 
infected by BSE-cattle through the human food chain is  presumed to have been mostly eliminated as 
far as the current SRM removal and BSE tests are appropriately implemented.   WT/TPR/M/142/Add.1 
 Page 41 
 
 
 3-3-4.  Increase and decrease of the risk in accordance with the selection of management 
measures 
Among measures against BSE implemented in Japan , SRM removal at slaughterhouses and BSE tests 
contribute greatly to the reduction of BSE infection to human beings through consumption of beef and 
the internal organs of cattle. 
Above all, SRM removal covering al l cattle is considered as an e ffective management measure at 
present, so the system should be continued. 
In addition, with regard to BSE test at slaughter houses, even if cattle infe cted below the level of 
detection threshold are excluded from BSE test, it wi ll not affect the detection of BSE-cattle by the 
test and the risk of BSE infection to humans will not increase by entering BSE-cattle into the human 
food chain. 
However, there is only fragmentary  data available to date concer ning when those cattle which carry 
abnormal prion proteins at around the detection limit become detectable, that is, at what stage of incubation period or at what age. From the fact that two 21-and 23-month-old cases have been identified among 9 cases discovered by testing approxi mately 3.5 million cattle in Japan, there is a 
possibility that the presence of BSE prions may be de tected by current diagnosis in cattle at the age of 
21-months and over. 
Studies to improve the BSE testing methods should be continued, taking in to account the possibility 
that the detection limit will be improved. 
Based on the studies, experiments for quantitative risk  evaluation should be continued, and in addition 
efforts aimed at collecting and reviewing informa tion such as data obtained from oral administration 
experiments which are in progress in Japan and other foreign countries should be promoted.   
4. Conclusions 
 (1) In the future, additional BSE cases are like ly to be found in Japan. However, the risk 
of humans being infected by BSE-cattle th rough the human food chain is presumed to 
be effectively eliminated by the current SRM removal and BSE test. 
 (2) As long as the current measure of SRM removal from cattle of all ages remains 
unaltered, the risk of vCJD infection should  not increase, even if cattle infected below 
the level of the detection limit are excluded from BSE test. However, there is not sufficient information available to date re garding when those cattle which accumulate 
abnormal prion protein at around the detecti on limit in the medulla oblongata (obex) 
become detectable, at what stage of incubation period, or at what age. From the fact 
that two 21-and 23-month-old cases have been identified among 9 cases discovered 
by testing approximately 3.5 million cattle in Japan, there is a possibility that the presence of BSE prions may be detected by current diagnosis in cattle at the age of 
21-months and over. 
  However, the amount of abnormal prion proteins detected by the WB method in the 
21-and 23-month-old cases was 500 to 1000 times less than in the other cases. 
Moreover, no case at the age of 20-months  or younger has been found by testing 
approximately 3.5 million cattle in Japan. These facts should be fully taken into 
account in considering the future  measures against BSE in Japan. WT/TPR/M/142/Add.1 
Page 42  
 
  (3) Studies to improve the BSE testing met hod should be continued, including improving 
the detection limit and developing an an te-mortem testing method using tissues or 
blood from live cattle. Further investiga tion is also required for quantitative 
evaluation of the risk originating from cattle at 20 month-old and below. 
 (4) Since current data suggest that more than 99% of abnormal prion protein in cattle 
developing BSE were found in SRM, SRM removal is considered as an extremely 
effective measure to reduce the risk of B SE infection to humans. In addition, with 
regard to prevention of cross-contamina tion, because brain tissue of as little as 
0.001~1g from infected cattle, reportedly b ecomes a possible source of infection, 
prevention of cross-contamination through appropriate slaughtering and processing in 
slaughterhouses is important to reduce the risk of BSE infection to humans. For this 
reason, adequate schemes should be estab lished to ensure the implementation of 
thorough SRM removal, and prevention of cross-contamination, as well as periodical 
monitoring of their implementation. 
 (5) The risk of a BSE epidemic is cons idered extremely low because of the current 
regulations imposed on animal feed stu ff as a countermeasure. However, inspection 
by the authorities to ensure their effectiven ess must be continued, considering the fact 
that young BSE cases have been detected. In  addition, securing and verification of the 
traceability system and continued implementation of BSE test of risk animals are essential. 
5. Closing remarks 
The BSE issue is one which is attracting the most  attention from people and has a great impact on 
society in issues of food safety  and security. Meanwhile, it’s a f act that BSE is a disease of which 
many parts remain scientifically unsolved. Measu res against the BSE issue which shows manifold 
aspects and uncertainties are expected to be dete rmined through thorough risk communication with 
people by risk regulating agencies; risk regula tion and risk communication should be based on the 
recognition that protection of public health has a top priority.  
In addition, more surveillance studi es by the Ministry of Health, Labour and Welfare and the Ministry 
of Agriculture, Forestry and Fisheries of Japan should be promoted to clarify uncertainties which 
remain to be elucidated scientifically, and quantita tive risk evaluation must be performed based on the 
data and findings obtained from these efforts.    
(Abbreviations) 
BSE  牛海綿状脳症  （ Bovine Spongiform Encephalopathy ） 
vCJD  変異型ｸﾛｲﾂﾌｪﾙﾄ･ﾔｺﾌﾞ病  （ variant Creutzfeldt-Jakob Disease ） 
OIE  国際獣疫事務局  （ Office International des Epizooties ） 
ID
50  50% 感染価  （ 50％ infective Dose ） 
C.i.c.  牛脳内接種   (intracerebral inoculation in the cattle brain) 
C.o.  牛経口摂取   (oral administration in the cattle) 
M.i.c.  マウス脳内接種   (intracerebral inoculation in the mouse brain) 
SRM  特定危険部位  S pecified Risk Materials ） 
WHO  世界保健機関  (W orld Health Organization ） 
(References)  WT/TPR/M/142/Add.1 
 Page 43 
 
 
 1 Yamakawa Y, Hagiwara K, Nohtomi K, Nakamu ra Y, Nishijima M, Higuchi Y, Sato Y, Sata 
T and the Expert Committee for BSE Diagnosis, Ministry of Health, Labour and Welfare of 
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2 Scientific Steering Committee. Listing of Specified Risk Materials: a scheme for assessing 
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5 Wells GA, Hawkins SA, Green RB, Spencer YI, Dexter I, Dawson M. Limited detection of 
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6 Spongiform Encephalopathy Advisory Committee. Statement on Infectivity in Bovine Tonsil. 
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7 Wells GA and Wilesmith JW. The neuropathy and epidemiology of bovine spongiform 
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8 Office International des Epizooties: Bovine spongiform encephalopathy,  Manual of standards 
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infection/development mechanisms of Bovine  Spongiform Encephalopathy", Chief Scientist 
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82:2307-2318 
11 Federal Institute of Risk Assessment （BfR）： Expression of the opinions relevant to raising 
the age of BSE inspection of slaughtered cattle  from 24-month-old or older to 30-month-old 
or older. December 22 , 2003 
12 Scientific Steering Committee. Opinion Oral Exposure of Human to The BSE Agent: 
Infective Dose and Species Barrier Adopted by SSC at its Meeting of 13-14 April 2000 Following a Public Consultation via Internet between 6 and 27 March 2000 
13 Collinge J, Palmer MS, Dryden AJ. Genetic  predisposition to iatrogenic Creutzfeldt-Jacob 
disease. Lancet  1991; 337: 1441-1442. 
14 Owen F, Poulter M, Collinge J, Crow TJ. C odon 129 changes in the prion protein gene in 
Caucasians. Am J Hum Genet . 1990; 46(6):1215-1216. WT/TPR/M/142/Add.1 
Page 44  
 
 15 Windl O, Dempster M, Estibei ro JP, Lathe R, de Silva R, Esmonde T, Will R, Springbett A, 
Campbell TA, Sidle KC, PalmerMS, Collinge J. Genetic basis of Creutzfeldt-Jacob disease in the United Kingdom: a systematic analysis of pr edisposing mutations and allelic variation in 
the PRNP gene. Hum Genet.  1996; 98(3):259-264. 
16 Soldevila M, Calafell F, Andres AM, Yague J, Helgason A, Stefansson K, Bertranpetit J. 
Prion susceptibility and protective alleles exhibit marked geographic differences. Hum Mutat.  
2003; 22(1):104-105. 
17 Doh-ura K, Kitamoto T, Sakaki Y, Tateishi J. CJD discrepancy. Nature.  1991; 353 
(6347):801-802. 
18 Peden AH, Head MW, Ritchie DL, Bell JE, Ironside JW. Preclinical vCJD after blood 
transfusion in a PRNP codon 129 heterozygous patient. Lancet  2004;364:527-529 
19 Hilton DA , Ghani AC, Conyers L, Edwards P, McCardle L, Ritchie D, Penney M, Hegazy D, 
Ironside JW. Prevalence of lymphoreticular prion protein accumulation in UK tissue samples. J Pathol.  2004; 203(3):733-739. 
20 Llewelyn CA, Hewitt PE, Knight RSG, Amar  K, Cousens S, Mackenzie J, Will RG. Possible 
transmission of variant Creutzfeldt-Jakob disease by blood transfusion. Lancet  2004;363: 
417-421. 
21 'Aignaux JN, Cousens SN, Smith PG. Predictab ility of the epidemic of variant Creutzfeldt-
Jacob disease by back-calculation methods. Stat Meth Med Res  2003; 12:203-220. 
22 P Smith. The epidemics of BSE and vCJD in the UK （6th Prion Expert Committee 
Document, Presentation-slide by Mr. Peter Smith ） 
23 'Aignaux JN, Cousens SN, Smith PG. Predic tability of the UK variant Creutzfeldt- Jacob 
disease epidemic. Science.  2001; 294(5547):1729-1731. 
24 Yoshikawa. Unpublished data 
25 Ministry of Agriculture, Fi shery, and Forestry in Japan ：Reports on results of 
epidemiological survey by BSE Epidemiological Investigation Team. September 2003 
26 Yoshikawa. 9
th Report 2004 Prion Expert Committee 
27 Sugiura K. Risk of introduction of BSE into Japan by the historical importation of cattle from 
the United Kingdom and Germany. Preventive Vet Med  2004; 64:191-200. 
28 Donnelly C.A. and Ferguson N.M. Statisti cal aspects of BSE and vCJD: models for 
epidemics. Monographs on Statistics and Applied Pr obability No.84. Chapman & Hall/CRC, 
Boca Ratonm Floroda.  1999: 256pp 
29 Ferguson N.M., Donnelly C.A., Woolhouse M.E. J, Anderson R.M. The epidemiology of BSE 
in Cattle herds in Great UK. II. Model constr uction and analysis of transmission dynamics. 
Philos. Trans. Roy. Soc. Lomd., B, Biol. Sci.  1997; 352(1355): 803-838)  WT/TPR/M/142/Add.1 
 Page 45 
 
 
 30 Scientific Steering Committee. The Evaluation of Tests for The Diagnosis of Transmissible 
Spongiform Encephalopathy in Bovines, 8 July 1999 
31 Scientific Steering Committee. Scientific  Report on Stunning Methods and BSE risks (The 
risk of dissemination of brain particles into the blood and carcass when applying certain stunning methods.) prepared by the TSE BSE ad hoc Group at its meeting of 
13 December 2001 and including the outcome of a public consultation via Internet between 
10 September and 26 October 2001. 
32 2001 Health Science Research Grants （Special Research Project for Health 
Science）Review of Research Reports "Studies of Bovine Spongiform Encephalopathy 
(BSE)"  Chief Scientist Morikazu Shinagawa Laboratory of Veterinary Public Health, 
Department of Veterinary Medicine, Obihiro University of Agriculture and Veterinary 
medicine. 
33 World Health Organization: Report of a WHO C onsultation on Public Health Issues related to 
Human and Animal Transmissible Spongiform Encephalopathies. WHO/EMC/DIS/97.147 Genva, Switzelarland, 2-3 April 1996. 
34 Anil MH, Love S, Williams S, Shand A, McKinstry JL, Helps CR, Waterman-Pearson A, 
Seghatchian J, Harbour DA. Potential contamin ation of beef carcasses with brain tissue at 
slaughter. Vet Rec.  1999; 145(16):460-462. 
35 2001 Health Science Research Grants for Health Science 2002, Multidisciplinary study for 
Securing of Health and Safety, Research for Emergency Plan to Overcome Hepatitis 
etc.（Bovine Spongiform Encephalopathy ）"Studies for Improvement of Prion Detection 
Methods and infection/development mechanisms  of Bovine Spongiform Encephalopathy"  
Chief Scientist Sata Tetsutaro, Director of In fectious Disease Pathology of National Institute 
of Infectious Disease Reports on shared research "Research to Prevent Contamination by Beef 
that Contains Nerve tissue" 
36 Prendergast DM, Sheridan JJ, Daly DJ, McDo well DA, Blair IS. The use of a marked strain 
of Pseudomonas fluorescens to model the spread of brain tissue to the musculature of cattle 
after shooting with a captive bolt gun. J Appl Microbiol.  2004; 96(3):437-446. WT/TPR/M/142/Add.1 
Page 46  
 
 Attachment 3 
Table [Subsidies] 
Subsidies in the Energy Sector noti fied under WTO provisions, FY 1998-02  
(¥ million) 
 1998 1999 2000 2001 2002 
Coal and other natural resources-related       
Subsidy for Research on Tec hnologies for Exploring Deep 
Seafloor Mineral Resources 25 .. .. .. .. 
Subsidy for Basic Research on Technologies for Offshore 
Oil Field Development 571 .. .. ..  
Contract for Technology Development of Mineral 
Resource Exploration 131 127 111 103 .. 
System Development for Energy Saving in Mines 267 273 228 204 .. 
Subsidy for Exploration of  Underground Non-Ferrous 
Metal Resources 694 .. .. .. .. 
Subsidy for Promotion of Mine Enterprises 796 .. 512 347 347 
Support to Structural Adjustment of the Coal Mining 
Industry 3,941 3,092 3,056 7,358 .. 
Subsidy for Overseas Coal Developmen t Feasibility Survey 22.3 36.2 50.8 50.4 .. 
Contract for Research and St udy to Promote Coal Supply 
from Foreign Countries 807 740 659 58.1 .. 
Subsidy for Promotion of Co al Production and Utilization 
Technology 7,312 7,385 7,204 4,852 .. 
Subsidy for Exploration of Natural Gas 1,667 2997 2,848 2,202 .. 
Subsidy for the Drilling Cost of  an Exploratory Well for a 
Geothermal Power Plant 0a .. .. .. .. 
Subsidy for Loans to the Pollution Prevention Fund (in 
relation to the Law on the Metal Mining Agency of Japan) 56 49 40 34 .. 
Special Deduction for Expenditure on Prospecting for 
Domestic or Overseas Mineral Deposit n.a.b n.a.b n.a.b n.a.b n.a.b 
Special Depreciation on the Drift for the Mining Industry n.a.b n.a.b n.a.b n.a.b n.a.b 
Reserve for Prevention of Mineral Pollution of Metal 
Mining n.a.b n.a.b n.a.b n.a.b n.a.b 
Provision for the Disposal of the Offshore Oil and Natural 
Gas Field n.a.b n.a.b n.a.b n.a.b n.a.b 
Reserve for Preventing Specific Disasters (disasters from 
quarrying) n.a.b n.a.b n.a.b n.a.b n.a.b 
Reserve for Searching out New Mineral Beds in and out of 
Japan n.a.b n.a.b n.a.b n.a.b n.a.b 
Power generation       
Subsidy for the Cost of De velopment of Waste Power 
Generation 137 862 512 147 .. 
Subsidies for Small and Medium-Scale Hydropower 
Development 2,512 3,153 3,886 2,000 .. 
Interest Subsidies for Small and Medium-Scale 
Hydropower 134 359 646 260 .. 
Committee Verification Tests for Coal Fired Power 
Generation 2,290 .. .. .. .. 
Geothermal Energy Programme 3,945 3,826 3,510 .. .. 
Subsidy for Technology Development of Coal Fired Power 
Generation 267 124 68 .. .. 
Subsidy for Power Application Technology Development 
of Superconducting Magnetic Technology, etc.  
Development on Interconnection Reinforcement of Remote 
Located and Varied Generation 717 .. .. .. .. 
Subsidy for  Development of Power Generation 
Technology using new RDF (Refuse Derived Fuel) 1,237 1,299 821 860 .. 
Table (cont'd)  WT/TPR/M/142/Add.1 
 Page 47 
 
 
  1998 1999 2000 2001 2002 
Subsidy for Research on Technology to Introduce Waste-
Fired Power Generation 221 112 88 88 .. 
Subsidy for Technology Development of High-Efficiency 
Waste Power Generation Technology 1,117 1,196 450 321 .. 
Contract for Investigation of Promoting the Development 
and Introduction of Hydro Power 1,211 1236 1,928 1,241 ..  
Contract for Verification Test for Establishing a 
Centralized Load Control System Verification Test for 
Establishing a Centralized Load Control System 386 .. .. .. .. 
Subsidy for Technology Development of Integrated Coal 
Gasification Combined Cycle Power Generation Plant 802 176 559 218 .. 
Subsidy for the Geothermal Development Promotion 
Survey .. 3,210 2,505 2,512 .. 
Subsidy for the Cost of Development of Geothermal Power 
Generation .. 616 1,005 1,003 .. 
Contract for Verification Tests on Decommissioning 
Technology for Commercial  Power Facilities .. 2,629 1,887 1,210 .. 
Contract for Verification Tests for Spent Fuel Storage .. 731 882 766 .. 
Subsidy for Technology Development of High Efficiency 
Gas Turbine, etc. Budget for the Control of the Generation 
of Higher Harmonic Currents 171 .. .. .. .. 
Subsidy for Development of Load Levelling Technology, 
etc. Verification Tests for Establishment of Photovoltaic 
Generation Load Levelling T echnologies for Residences 0 .. .. .. .. 
Contract for Demonstration Test for New-Type Power-
Generation Reactor Technologies 472 276 384 416 .. 
Contract for New Power Reactor Research and 
Investigation 238 .. .. .. .. 
Contract for Verification Tests on Decommissioning 
Technology for Commercial  Power Facilities 2,912 3,058 2,350 .. .. 
Contract for the Advancement of the Light Water Reactor 
Technology Confirmation Test and Others 7,678 11,506 924 760 .. 
Grant for the Technical Development of a Full MOX-
ABWR Plant System 855 935 1,359 930 .. 
Contract for Improvement of Safety Analysis Codes 
Technologies 2,761 2,423 2,057 1,609 .. 
Subsidy for Technology Development of Solar Power 
Generation, etc. 36,965 .. .. .. .. 
Subsidy for the Development of Support Systems for  
Electric Power Generation 423 .. .. .. .. 
Subsidy for Development of Fuel Cell Power Generation 
(Verification tests for establis hment of the next-generation 
dispersed power supply system) 0a .. .. .. .. 
Subsidy for Development of Fuel Cell Power Generation 
(Development of fuel cell power generation technology 
urban energy centre) 0a .. .. .. .. 
 
Subsidy for the Innovative and Viable Nuclear Energy Technology  Development Project    2,113  
Entrusted Contract for Principal Structure Safety 
Assessments    100  
The Investigation on Optimal Methods to Recover 
Environment Influence around Hydropower Stations    38  
Petroleum      
Subsidy for the Rationalization of Petroleum Refinery 4,270 10,635 260 208 .. 
Subsidy for the Promotion of Gas Oil Desulphurization 400 282 94 57 .. 
Subsidy for the Promotion of Petroleum Industrial Point of 
Sales System 54 23 11 9 .. 
Table (cont'd) WT/TPR/M/142/Add.1 
Page 48  
 
  1998 1999 2000 2001 2002 
Interest Rate Subsidy for the Promotion of Petroleum 
Industrial Facilities 15 .. .. .. .. 
Subsidy for Restructuring the Retailing Business of 
Petroleum Products 1,360 1,235 2,020 2,121 .. 
Subsidy for Ensuring Petroleum Pr oduct Quality 1,944 2,214 1,974 1,933 .. 
Subsidy for Promoting Introduction of Drastic High-
Efficiency Energy Use Equipment for Civil Use (Promoting Task for LP Gas High-Efficiency Use, 
Promoting Task for Increasing LP Gas Engine Heat Pump 
Type Air-Conditioner) 153 73 31 8 .. 
Subsidy for Loans to Construct Petroleum Storage 
Facilities 41 35 33 31 .. 
Subsidy for Loans to Purchase Petroleum and LPG to be 
Stored 3,354 3,110 2,844 4,381 .. 
Subsidy for the Cost of Projects for Improving Refining 
Technology of Oil Purchasing Countries and for Related 
Purposes 4,362 7,258 6,070 6,833 .. 
Subsidy for Major Oil-Spill Re sponse Programme 1,395 979 663 733 .. 
Commission Fees Concerning R&D for New Fuel Oil 394 256 50 .. .. 
Contract for Verification Tests for Coal Fired Power 
Generation 4,737a .. .. .. .. 
Energy       
Research for the Promotion of Natural Gas in Regional 
Areas 814 955 1,068 1,178 .. 
Subsidy for the Unused Energy Use District Heating and 
Cooling  934 0 47 0 .. 
Subsidies for Measures Taken for Promoting the 
Conversion to Natural Gas Consumption by Local City-Gas 
Suppliers 1,854 1,828 1,913 1,855 .. 
Subsidies for Interest on Loans to Introduce Specific 
Facilities suitable for Alternative Energy to Oil 40 43 60 420 .. 
Subsidy for Technology Development of Oil-Alternative 
Energy 25,620 .. .. .. .. 
Contract for Technology and System Development for 
Rationalization of Energy Use 7,533 .. .. .. .. 
Subsidy for Promotion of Facilities for the Rationalization 
of Energy Use 27,178 .. .. .. .. 
Subsidy for Technology Develo pment of Rationalization of 
Energy Use 51,542 .. .. .. .. 
Subsidy for Facilities of Oil- Alternative Energy 682 .. .. .. .. 
Housing       
Project for High-Quality Living 1,381 .. .. .. .. 
Subsidy for the Installation of Solar Houses for Exhibition 61 58a 55 49 .. 
Subsidy for the Promotion of Utilization of Solar System 36 25a 10 2 .. 
.. Not available. 
n.a. Not applicable. 
a Budgeted amount. 
b Tax credit and/or tax deferral. c The most recent notification concerning Japan's subsidies in  the agriculture sector made  to the Subsidy Committee is 
 WTO document G/SCM/N/95/JPN, 4 September 2003. 
Source:  WTO document G/ SCM/N/95/JPN.  WT/TPR/M/142/Add.1 
 Page 49 
 
 
 SWITZERLAND  
Q1. Since spring 2004, the Japanese economy has been slowing down considerably. Recent 
indicators have come out mixed at best and the stronger yen is hampering exports. Furthermore, 
deflation has eased but is still not overcome. Is there an increasing risk that the economic recovery in 
Japan will falter once again? 
A. The Japanese economy is expected to continue its moderate recovery led by domestic private 
demand. As the world economy continues to recover, net exports are expected to continue growing. 
With regard to prices, through the joint efforts of the government and the Bank of Japan, steady progress towards overcoming deflati on is expected to be made. On the other hand, the Japanese 
government recognizes that attenti on should continue to be given to inventory adjustment in IT-
related areas and to de velopments in exchange rates, crude oil prices and other factors. 
Q2. As the external environment is expected to be less supportive in 2005, robust internal demand 
is crucial to sustain growth. In that respect, has restructuring in the corporate and the financial sector progressed enough to cope with a cyclical slowdown? 
A. The economy has been recovering at a modera te pace recently, while some weak movements 
are seen. The background to this point is that, bot h exports and industrial production mainly in IT-
related areas are weakening, and private consump tion has been decelerating recently because of the 
temporary factor of a mild winter at the end of the last year. On the other hand, corporate profits are improving sharply, the corporate sector is in good condition, and business investment is also increasing. The background to this point is that  restructuring by companies has progressed, and 
excessive debt, employment and capital equipment have been eliminated. Moreover, as for the 
financial sector, the disposal of non-performing loan s is progressing steadily; therefore, the conditions 
of companies are stronger than in the past. 
(i) The ratio of non-performing loans of major banks declined from 8.4% in March 2002 to 4.7% 
in September 2004. 
(ii) The balance of corporate debts has decr eased from an amount 12.1 times as much as the cash 
flows for a year in the peak of the 1990s (1993)  to an amount of 7.7 times the cash flows in 
the third quarter of 2004. 
(iii) ROA increased from the bottom of 2.8% in  1998 to 4.2% in the third quarter of 2004. 
Furthermore, the employment situation continues to  improve, and the improvement of the corporate 
sector is gradually influencing on the household sector. As observed above, the economy has been 
recovering at a moderate pace recently, but, generall y judging, there is no change in the assessment 
that the economy is continuing to recover. As fo r short term prospects, the economic recovery is 
expected to remain solid with steady recovery in the world economy, as domestic private demand 
continues to increase. On the other hand, attention should be given to the inventory adjustment in IT-related areas and to the developments exchange  rates, crude oil prices and other factors. 
Q3. The Japanese government needs to address the high public deficit in the coming years. Does a 
realistic medium-term fiscal consolidation plan exist?  On the other hand, is there a risk that ambitious 
consolidation efforts together with a cyclical  weakness could seriously damage the economy in 
2005(similar to the 90s) WT/TPR/M/142/Add.1 
Page 50  
 
 A. "Structural Reform and Medium-Term Econom ic and Fiscal Perspectives", which shows the 
basic policy for an approximately five-year medi um-term economic and fiscal management and the 
future economic and fiscal outlook, is revised every fiscal year in the way that corresponds 
appropriately to ec onomic conditions.  
The Japanese government takes into consideration compatibility between economic growth and fiscal 
consolidation. Regarding economic and fiscal policie s in FY2005, tax reform deliberations on raising 
income tax, i.e., halving temporary income tax de duction, have given extra consideration to economic 
impacts such as the influence of income tax rai ses on private consumption. In FY2005, the Japanese 
economy is expected to continue the modera te recovery led by private demand.   
Q4. Switzerland would greatly appreciate an update from the delegation of Japan with regard to 
Japan’s experiences in the field of FTAs so far. What are Japan’s priorities with regard to the 
selection of potential bilateral or regional free-trad e partners? What sectoral coverage does Japan aim 
at in the case of free trade negotiations? What is Jap an’s approach to services, investment and public 
procurement in this regard? 
A. Japan is currently negotiating with the Repub lic of Korea, the Philippines, Thailand, and 
Malaysia for Economic Partners hip Agreements, and negotiations with ASEAN as a whole will 
commence in April 2005. 
Japan will do its utmost to conclude these on- going EPA negotiations as soon as possible, while 
studying the possibility of initiating negotiations with other countries/regions, considering the 
progress of on-going negotiations as well as the importance of EPAs to our economy and society. The details of criteria for identifying which countries/re gions to negotiate FTAs/EPAs with are stated in 
the "Basic Policy towards Further Promotion of  Economic Partnership Agreement," which was 
approved by the Council of Ministers on the Promotion of Economic Partnership on 
December 21, 2004. This document is available on th e website of the Ministry of Foreign Affairs. 
Please access the following: 
 http://www.mofa.go.jp/policy/economy/fta/policy0412.html 
The EPAs which Japan is negotiating cover a wide ra nge of areas that include not only trade in goods 
and services, but also investment, movement of natu ral persons, government procurement, intellectual 
property, competition, mutual recognition, improve ment of business environment, and cooperation. 
This reflects our intention to aim at concluding comp rehensive agreements of high quality. As for the 
sectoral coverage in the case of free trade negotiatio ns, Japan fully recognizes necessity of and aims at 
concluding EPAs which are consiste nt with the WTO rules. With resp ect to services, investment and 
government procurement, attaining further liberali zation and enhancement of transparency is our 
basic approach. 
Q5. According to the report of the Secretariat certain goods are not eligible for simplified 
declaration and they require physical verificati on (i.e. goods subject to preferential duty, goods 
imported in cases of emergency and goods being re-i mported after assembly and qualifying for duty 
reduction).  
a) Could Japan indicate if it is only in these three cases that simplified declaration is not 
applicable? If not, please indicate all the cases where goods are not eligible for simplified declaration. 
b) Are all goods subject to preferential duty not eligible for simplified declaration?  WT/TPR/M/142/Add.1 
 Page 51 
 
 
 c) Does Japan verify physically all goods mentioned in footnote 5?  
d) What are the criteria applicable to decide if a good is subject to physical verification? A.  
a) In addition to these three cases, petroleum, spirits and whiskies which are subject to the 
special treatment of consumer tax in accordan ce with Article 80, paragraph 1(3) and Article 
80 paragraph 3 of the Law of Special Measures Related to the Reintegration of Okinawa are 
not eligible for simplified declaration.  
b) Among all goods subject to preferential duty, only the goods for which the application of 
preferential duty is controlled by the amount or the price (a so-called "ceiling control") are not eligible for simplified declaration.  
c) Taking into consideration the type of goods  and country of departure, etc., Customs 
selectively conducts physical verification of goods that are considered to be at high risk of 
inappropriate declaration. 
d) Goods are subject to physical verification when reduction or exemption of tariff duty is 
applied to the goods according to the provisions of the Customs Law, Customs Tariff Law 
and other tariff related regulations; such as; 
 (i) Goods which are exempted from tariff  duty under the condition that they were 
exported from and then imported into Japan without any changes to their nature or 
their form at the time of exportation from Japan,  
 (ii) Goods whose tariff duty is reduced or exempted under the condition that they were 
made of materials which we re exported from Japan,  
 (iii) Goods which were exported in order to be repaired and then re-imported after being 
repaired, etc. 
Q6. The Report of the Secretariat indicates in §16 that 11 appeals were made in 2002 and only 3 
in 2003. Could Japan indicate what was the subj ect and which decision has been taken on these 
appeals? 
A. The following are the details of the appeals:  
(i) A case where an importer called for the repeal of a correction of a deficient import declaration 
and an imposition of additional duty by Customs. The decision repealed a part of the correction, but rejected part of the appeal. 
(ii) A case where a holder of a trademark right called for the repeal of a notification from 
Customs that it refused the holder’s request  for import suspension in accordance with 
paragraph 2 of Article 21bis of the Customs Tariff  Law (the notification is in accordance with 
paragraph 3 of Article 21bis of the Customs Tariff Law).  The decision rejected the appeal. 
(iii) A case where an importer called for the repeal  of a notification from Customs that the good to 
be imported fell under the category of "obscene material" in accordance with paragraph 3 of 
Article 21 of the Customs Tariff Law. The decision rejected the appeal. WT/TPR/M/142/Add.1 
Page 52  
 
 Q7. Footnote 6 indicates that in instances where the temporary, general or preferential rate is 
above the WTO bound rate, the latter rate appli es to WTO Members. Could Japan indicate which 
control mechanisms ensure that the duties levi ed will not be higher than the bound rate ? 
A. In Japan, under the principle that the applicati on of international treaties prevails over that of 
domestic laws, tariff rates stipulated in domestic la ws that are above the WTO bound rate shall not be 
applied, in line with Article 2 of the GATT.  Th e WTO bound rate, along with tariff rates stipulated in 
domestic laws, are all published in the government gaze tte and also on the Ministry of Finance official 
website.  In addition, in the Customs Tariff Schedules of Japan, by putting brackets on non-applied tariff rates, applied tariff rates ar e made simple to distinguish.  Un der such an arrangement, no major 
problems have arisen in the application of tariff rates to date. 
Furthermore, while the general rate is generally above the WTO bound rate, temporary rates are set at 
a level lower than the WTO bound rate with the exce ption of certain cases.  There is no preferential 
rate above the WTO bound rate. 
Q8. a) What specific measures will be introduced in the Amendment of the Patent Law for the 
Promotion of Expeditious Patent Exam ination to improve the situation? 
b) Please give detailed information about the func tioning of the new patent registration Agency. 
c) According to information from Swiss companie s active in Japan, trademark applications are 
examined very restrictively so that a high pe rcentage of applications are objected by the 
Japanese registration Agency on the grounds of insufficient designation of the list of goods 
and services claimed. Please indicate the reasons for the high rate of objections of trademark 
applications in Japan. 
A. 
a) In order to respond to public demand for pr ompt and appropriate protection of intellectual 
property (IP), Japan has made necessary amendm ents to the Patent Law and other relevant 
intellectual property laws (the "Bill to Pate nt Law Amendment Reducing Patent Pendency" 
was submitted to the ordinary session of the Diet  in 2004) to expedite patent examination 
processes, from the viewpoint of optimizing the ratio of requests for examination to patent 
filings, and reinforcing infrastructure necessary for expeditious patent examination.  
 In addition to those measures concerning exped itious patent examination, Japan concurrently 
revised the stipulation on employee-inventions in its Patent Law so that remuneration for 
employee-inventions could be  determined appropriately. 
 (i) Review of the Designated Searching Organization System (Section 37 and others in 
the Law Concerning the Special Provisions to the Procedures Relating to an Industrial 
Property Right) (hereafter referred to as "the Special Provisions Law") 
 (ii) Instituting a Specified Re gistered Searching Organization System (Section 39-2, etc., 
Special Provisions Law) 
 (iii) Publication of Official Gazettes via the Internet (Section 13, Special Provisions Law) 
 (iv) Addition to Estimated Deposit as Refund (Section 15, etc., Special Provisions Law)  WT/TPR/M/142/Add.1 
 Page 53 
 
 
  (v) Revision of the Utility Model System 
 (vi) Expansion of the Business of the Nati onal Center for Industrial Property Information 
(Section 3, 10, etc., Law on Independent Ad ministrative Agency, National Center for 
Industrial Property Information and Training) 
 (vii) Revision of the stipulation on the Em ployee-Invention (Section 35, Patent Law) 
b) First of all, Japan understands  "the new patent registration Agency" as referring to either "the 
Designated Searching Organization" or "the Sp ecified Registered Searching Organization," 
which was introduced by the amendmen ts to the Patent Law in 2004. 
 In 2004, Japan amended the Patent Law and other relevant intellectual property laws as 
required to expedite patent examination processe s, from the viewpoint of optimizing the ratio 
of requests for examination to patent fili ngs and reinforcing infrastructure necessary for 
expeditious patent examination.  
 The amendments are as follows:  (i) Review of the Designated Searching Organization System (Section 37 and others in 
the Law Concerning the Special Provisions to the Procedures Relating to an Industrial 
Property Right) (hereafter referred to as "the Special Provisions Law") 
  The eligibility requirement of being a pub lic interest corporation in order to be 
designated as a search organization, whic h is entrusted with prior art searches 
necessary for patent examination, was elim inated.  The system was changed to a 
registration system in which any organizati on could be registered if it complies with 
the requirements stipulated in the Special Provisions Law. 
  The registration class system was newly ins tituted to permit registrations with respect 
to each specific technical field. 
  Additionally, a similar amendment was made with respect to the system of the 
Designated Information Processing Organizati on, which enters data electronically 
with respect to application documents subm itted to the Japan Patent Office (JPO) in 
paper format. 
 (ii) Instituting a Specified Re gistered Searching Organization System (Section 39-2, etc., 
Special Provisions Law) 
  A system will be instituted wherein the fee for the request for examination can be 
reduced in cases that patent applicants, at the time of their request for examinations, 
present a search report issued by any speci fied registered search organizations 
authorized by the JPO. 
(Effective Date of Amendments to the Law) Amendments in (i) were enacted on October 1, 2004. Amendments in (ii) will be enacted on April 1, 2005. WT/TPR/M/142/Add.1 
Page 54  
 
 c) The Japanese Trademark Law complies with th e obligations required by treaties regarding 
intellectual property such as the Paris Conve ntion and the TRIPS Agreement.  In the 
examination process Japan also checks the re lative reasons for refusal for trademark 
registrations.  In this connection, the indica tions of goods and services must be definite in 
order to make the scope claimed by the applicant clear and to allow the right to be stable.  
Japan examines trademark applications appropriate ly in accordance with applicable laws and 
regulations in order to achieve the above me ntioned purposes.  Acceptable indications of 
goods and services are open to the public, for example, in the Intellectual Property Digital 
Library(IPDL), which is accessible via the Japan Patent Office(JPO) website. 
 http://www.jpo.go.jp/index.htm 
Q9. Could Japan explain the procedure and explai n the criteria which are applied to a) grant a 
work permit for one or three years and b) extend a work permit beyond the duration of the initial stay. 
Could Japan provide a percentage of refusals fo r extension and give examples of real cases? 
A. There are 27 statuses of residence prescrib ed in the Immigration Control Act, and among 
them 14 statuses are prescribed for work. With regard to ten work statuses, "Investor/Business 
Manager", "Legal/Accounting Services", "Medical Se rvices", "Researcher", "Instructor", "Engineer", 
"Specialist in Humanities/International Services", "Intra-company Transferee", "Entertainer" and 
"Skilled Labor", the criteria for landing permission ar e prescribed by a ministerial ordinance that takes 
into account the potential impact on Japanese industry and welfare and other social factors.  
Each work status is accompanied by a prescribed period of stay of no more than three years. If a 
foreign worker intends to stay beyond the perm itted period, he/she must obtain permission from the 
Minister of Justice (authority is delegated to the chief of the regional immigration bureaus) for 
extension of the period of stay. 
The length of the period of stay (1 year or 3 years)  is decided through the examination into details and 
all the aspects of applications.  
Around 210 cases were not permitted to extend the peri od of stay in 2004, which forms 0.37% of the 
total of around 56,300 processed cases for the status of residence for working excluding "Entertainer". 
Most of the unpermitted cases are those which involve  falsehood in the applications, for example, a 
case where the required document to certify activities in Japan contained false facts or a case where 
the presented document itself was fake. 
Japan admits the entry and residence of foreign na tionals whose employment requires special skills or 
knowledge. However, Japan does not admit so-ca lled manual or unskilled laborers of foreign 
nationality. Therefore, in the case that an applican t is not engaged in activities such as those of a 
specialist, he/she is not permitted to extend the period of stay. 
Q10. a) Please explain in more detail how your legislati on ensures that undisclosed test or other data 
submitted by an applicant to the responsible State agency in the procedure for market 
authorisation of a pharmaceutical or of an ag ricultural chemical product is protected against 
disclosure and unfair commercial use by a competitor. Does your legislation for example prohibit a second applicant from relying on, or from referring to the original data of the first applicant, when applying subsequently fo r market authorisation for his own product?  WT/TPR/M/142/Add.1 
 Page 55 
 
 
  If this is the case, does your legislation provide for exceptions to this? If yes, under what 
conditions would such exceptions apply? 
 Does the Japanese legislation provide for a sp ecific term of protection for such undisclosed 
test data? 
b) Please give detailed information on how this pa rticular obligation of the TRIPS Agreement is 
implemented in your law? 
A. From the viewpoint of ensuring the quality, effectiveness, and safety of a new pharmaceutical 
after it has been placed on the market, the test data  to be submitted for obtaining approval for a new 
drug from the Ministry of Health, Labor and Welfare is  subject to a re-examina tion period of six years 
(ten years for orphan drugs), which effectively prot ects the data from being used later on for filing an 
application for equivalent drugs (generics) in a simplified manner.  Unless a second applicant formed 
a co-development group with the first applicant,  the second applicant cannot use data in the 
application submitted by the first applicant. 
As for agricultural chemicals, an applicant, who wishes to register an agricultural chemical product 
with data which is obtained from the original data  holder, must attach a document which states that 
the said data holder has no objection to the data submission. 
The test data submitted for obtaining approval for a new drug and the test data submitted at the time 
of application for the registration of agricultural chemicals or fertili zers are under strict administrative 
control according to the relevant laws such as the National Public Service Law.  The National Public 
Service Law stipulates that all government offici als are obligated to protect official secrets. 
Furthermore, those pieces of information will be appropriately handled according to the Act for the 
Protection of Personal Information Held by Admini strative Organs and the Act for the Protection of 
Personal Information Held by Incorporated Admi nistrative Agencies, which will be enforced in 
April 2005.  In this regard, such informati on is protected from being unlawfully disclosed. 
The obligations under the TRIPS Agreement are thus fulfilled. WT/TPR/M/142/Add.1 
Page 56  
 
 REPUBLIC OF KOREA
 
Q1. According to the Secretar iat’s report, Japan applies duty-free and quota-free treatment on 
LDCs agricultural and fishery products. Does Japan apply this system also for tariff quota items such 
as rice, barley, wheat, dairy products, and peanut listed under page 96 of the Secretariat’s report 
(Table AIV.1)? 
If so, does Japan apply duty-free system for high out-quota tariff for such items? Also, will Japan be 
allowing LDCs to export unlimited tariff quota quantitiy through duty-free system? 
If Japan does not apply this system for certain ite ms, please elaborate why Japan does not apply this 
system for such items. 
A. Japan applies the duty-free and quota-free sy stem on roughly 500 agricultural and fishery 
products originating in LDCs, but the system does not  cover items handled by state trading enterprises 
for products such as rice, barley and wheat, or ta riff quota items such as dairy products and peanuts. 
At present, Japan cannot apply duty-free and quota-free treatment for some products because the 
impact on domestic industries has to be carefully considered. However, Japan has been implementing 
what it can in good faith. We wish to  stress that, as a result, 93% of  the products originating in LDCs 
by value are imported under this treatment. Needless  to say, Japan continues to be committed, while 
paying attention to the impact on domestic industri es, to moving towards the further expansion of 
duty-free and quota-free market access for LDC products. 
Q2. It is related with the case in which a fo reign manufacturer should receive "Statement of 
Conformity Assessment" instead of "Certification of  Conformity", which is for nationals, based on the 
Electrical Appliance and Materials Safety Act of Japan.  Also, foreign manufacturers can attach the 
PSE mark only in the case when they contract a Japan ese importer.  In this situation, if there happens 
to be a change of Japanese importer, the foreign manufacturer must carry out the conformity 
assessment procedure again on the same goods th rough the new Japanese importer, which would 
bring about unnecessary and additional burden to a fo reign manufacturer.  The reason is that the 
foreign manufacturer shall hand in several relevant documents including the copy of the "Statement of 
Conformity Assessment" of his goods, which is to be issued through Japanese relevant authorities, to 
a newly changed Japanese importer and shall pay the additional cost and endure time-consumption for 
the modification inscribed on the previous PSE mark  of the goods including name and title of new 
importer. 
Thus, Korean government hopes that once a product p asses the test for conformity, the product can be 
attached PSE mark regardless of changing a Japanese importer.  
A. It should be noted that the Electrical Applia nces and Materials Safety Law regulates suppliers 
of electrical products based in Japan, i.e., impor ters and manufacturers based in Japan. Foreign 
manufacturers are not regulated by the Law. Theref ore, for imported electrical products, it is the 
importers who have the obligation to ensure th e conformity of products to Japanese technical 
requirements and have the right to attach the PSE ma rks including the name of the importer once their 
conformity to technical requirements are confirmed.  Particularly, for "specified electrical products", 
importers should undergo conformity assessment pr ocedures conducted by registered CABs. (The 
scope of the ones who are regulated is limited to importers and manufacturers based in Japan in order 
to ensure law enforcement, taking into account na tional jurisdiction, in cases where hazardous electric 
products are distributed in the Japanese market, etc.)  WT/TPR/M/142/Add.1 
 Page 57 
 
 
 On the other hand, it is often difficult for importe rs themselves to go through conformity assessment 
procedures by registered CABs for electrical produc ts they import. Accordingly, the Law stipulates 
that, in a case where a foreign manufacturer unde rgoes a conformity assessment procedure conducted 
by a registered CAB for its electrical products and obtains a document certifying that the product 
meets Japanese technical requirements （hereinafter referred to as "certificate of equivalence" ）, the 
importer of the product based in Japan is regarded as having fulfilled its obligations under the Law if 
it obtains and possesses a legal copy of the said certificate of equivalence. 
If a new importer starts a business to import the same electrical products manufactured by the foreign 
manufacturer as those previously imported by other Japanese importers, the new importer has to fulfill  obligations under the Electrical Appliances and Materials Safety Law (undergoing conformity 
assessment and attaching the PSE mark when selli ng in the Japanese market). However, as noted 
above, the new importer is regarded  as having fulfilled the obligati on when it obtains and keeps a 
legal copy of the certificate of equivalence provide d to the foreign manufacturer. In this case, since 
the certificate of equivale nce for the said electrical product has already been issued to the foreign 
manufacturer and is valid for a certain period of time (3 to 7 years, depending on the specific 
product), the only necessary procedure that the new importer needs to take is to obtain a legal copy of 
the certificate of equivalence from the foreign manufacturer.  
In other words, there is no need for the fore ign manufacturer to undergo conformity assessment 
procedures again on the same product as long as the certificate is valid, even if the importer of the 
product has changed. 
It should be noted that the above procedure, i.e., the re-issuing and obtaining of a legal copy of the 
certificate, does not require substantial costs in terms of time and fina ncial expenditure, when 
compared with the re-conducting of conformity assessment procedures. 
Q3. Korean side understands that Japan Li ght Alloy Wheel Association (JAWA), a non-
governmental organization, composed of manufactu rers and merchandisers of light alloy in Japan, 
issues quality certification mark on light alloy. 
In the case of products marketed without the certif ication mark, JAWA entrusts the Japan Vehicle 
Inspection Association to perform sample test at i rregular intervals. In this situation, if certain 
products do not meet the relevant criteria, JAWA colludes with me rchandisers to have the products 
not be marketed.  Also, it may cause severe burden to  acquire the certification mark of JAWA because 
the procedure is complicated and the cost is too high.  
In this regard, Korean government hopes that Jap an will discontinue unfair bans on selling foreign 
products without the certification mark throug h collusion between car wheel manufacturers and 
distributors.  
In addition to the PSE mark for the certification of electrical appliances safety, the S-mark for private 
certification is required by most importers for th e circulations and sales of relevant goods in the 
market, which gives redundant burdens to  manufacturers from other countries.  
A. para. 1-3 
With regard to the JAWA certification system which Korea mentions in these paragraphs, the 
Government of Japan recognizes it as a voluntary certification system used by private-sector 
organizations. Moreover, the Government of Japan al so recognizes that this certification procedure WT/TPR/M/142/Add.1 
Page 58  
 
 ensures National Treatment, and it is consistent with the WTO/TBT Agreement, because there is no 
differece between the treatments given to domestic and foreign manufacturers in the process. Therefore, the Government of Japan considers the system to be fully consistent with the WTO/TBT 
agreement. 
(para. 4) 
As for the situation which Korea pointed out in this paragraph, we would like to stress that the S mark 
is a private certification system of a purely volun tary nature, and therefore the acquisition of the 
S mark does not constitute a requirement for the marketing of electrical products.  
Q4. In case of the legal measuring instruments in cluding gas meters, the additional requirements 
asked by the quasi-public organizations should be met independently with the requirements set up by 
the Japanese central government.  Ho wever, since such additional requirements asked by the quasi-
public organizations are not likely to be informed  and notified clearly, foreign manufacturers have 
difficulties to enter into  the Japanese market.  
Thus, Korean government hopes that Japan will in form and notify transparently not only legal 
requirements but also such additional requirements. 
A. Since the technical requirements of type approval and verification for legal measuring 
instruments are completely regulated by the Mi nisterial Ordinance under the Measurement Law in 
Japan, there are no additional requirements asked by implementation organizations. 
In addition, the regular bilateral meeting between Japan and Korea on the field of metrology has been 
held every year for a long time, and the two count ries have also concluded an MOU on certain legal 
instruments. Therefore, both countries are making an effort to exchange information closely and 
ensure transparency on legal metrology systems. 
Q5. According to the Secretariat's report, Japan implements export controls  to ensure adequate 
domestic supplies of certain agricu ltural and other primary products. 
List the detailed items to which Japan applies this system. 
A. The items are as follows: (i) Wheat bran, rice bran, barley bran and fishmeal (ii) Formula feed (iii) Mint seed root and seeding and shiitake mushroom spawn 
(iv) Japanese larch seed 
(v) Castor alaria, monarch birch and oak log (vi) Juvenile eel Q6. rticle 21(4) of the Customs and Tariff Law( "CTL") of Japan, which was revised in 2003 and 
is in effect, is not consistent w ith Article 50(2),(8) of the TRIPs Ag reement, and hope that the relevant 
article of the CTL of Japan will conform to the principles of Article 50(2),(8) of the TRIPs 
Agreement. Article 50(2) authorizes the judicial authorities to  adopt provisional measures when either of the 
following conditions is met: (i) any de lay is likely to cause irreparable harm to the right holder; or  WT/TPR/M/142/Add.1 
 Page 59 
 
 
 (ii) there is a demonstrable risk of evidence be ing destroyed.  Article 50(8) provides that the 
equivalent conditions would apply when any pr ovisional measure was ordered as a result of 
administrative procedures. Iimported products alle gedly infringing any intellectual property right.  
A comparative look at other countries' comparable legi slation also shows that Japan's CTL is deficient 
in this respect. 
For instance, The United States Section 337, in  particular, Section 1337(e)(3) authorizes the 
International Trade Commission to grant preliminary relief for border measures to the same extent as 
preliminary relief may be granted under the Fede ral Rules of Civil Procedure, which requires 
satisfaction of at least one of the above conditions. 
 * See Fed. R. Civ. P. 65(b), which reads in relevant part:   
 b) Temporary Restraining Order; Notice; Hear ing; Duration. A temporary restraining order 
may be granted without written or oral notice to th e adverse party or that party's attorney only if (1) it 
clearly appears from specific facts shown by affidavit  or by the verified complaint that immediate and 
irreparable injury, loss, or damage will result to the applicant before the adverse party or that party's 
attorney can be heard in opposition, and (2) the applicant's attorney certifies to the court in writing 
the efforts, if any, which have been made to give  the notice and the reasons supporting the claim that 
notice should not be required. Every temporary rest raining order granted without notice shall be 
indorsed with the date and hour of issuance; shall be filed forthwith in the clerk's office and entered 
of record; shall define the injury and state why it is irreparable and why the order was granted 
without notice; …  
Korea's comparable legislation also goes to the sa me direction. Article 7 of the Industry Injury 
Remedy Act of Korea also authorizes the Trade Commission to take provisional measures only when 
there is or is likely to be an irreparable harm to  the right holder as a result of importations infringing 
any intellectual property right. Act on the Investig ation of Unfair International Trade Practices and 
Remedy Against Injury to Industry(2004) (full text of the act is available at http://www.ktc.go.kr/eng/lnd/injury_act.html)  
 * Article 7 (Provisional Measures)   
 (1) Any party who has applied to the Trade Commission for an investigation, or who is 
injured or threatened with irreparable injury by reason of unfair international trade practices under 
an ex officio investigation, may apply to the Trade  Commission for an injunction or other measures 
preventing injuries from unfair international trade practices (hereinafter referred to as "Provisional 
Measures").   
 (2) Where provisional measures are applied for, the Trade Commission shall promptly 
complete the investigation and decide whether to take provisional measures. Where the Trade 
Commission opts to implement provisional measu res, it shall order an injunction or take other 
necessary measures, without delay to deal with  related unfair international Trade practices.   
 (3) The Trade Commission may request assist ance from the head of administrative authorities 
concerned where the Trade Commission considers such action necessary for the enforcement of 
provisional measures.  
This suggests that the Article 21(4) of the Customs and Tariff Law ("CTL") of Japan did not comply 
with the Article 50(2) & (8) of the TRIPs Agreement. 
A. The provisions of border enforcement measures against goods infringing on intellectual 
property rights in Japan in Article 21 and other ar ticles of the Customs Tariff Law stipulates Customs 
as the competent authority in charge of enforcemen t measures in accordance with Article 51 and other WT/TPR/M/142/Add.1 
Page 60  
 
 relevant provisions in S ection 4, Part III of the TRIPs Agreement and is not based on Article 50 of the 
TRIPs Agreement.  
Q7. The Secretariat Report states that The Basic Telecommunications Law was revised in 
July 2003 to eliminate classification of Type-I an d Type-II categories and regulations on prices for 
certain services. Could the government of Japan expl ain clearly and specifically the legal meaning and 
effect to the regulatory regime of the 'elimination of the classification.  What is the 'certain services'? 
(page 58~59, para. 5) 
A. Before April 2004, the former Telecommunication Business Law required Type I 
telecommunication carriers to comply with inte rconnection rules and the technical conditions 
associated with telecommunications circuit facilities. In addition, the Law uniformly applied different 
regulations depending on whether the carriers have telecommunications circuit facilities, including the 
requirements for entry permission, change, suspensi on and discontinuation of business, regulations on 
tariffs and the obligation of  putting accounts in order. 
In April 2004, the amended Telecommunication Bu siness Law became effective. In the amended 
Law, the distinction between Type I / Type II telecommunications business was abolished. In the 
amended Law, regulations on entry, change, suspen sion and discontinuation are stipulated only when 
each regulation is truly necessary. The amended Law newly formulates universal telecommunications services or designated telecommunications services to which regulations on tariffs and the obligation 
of putting accounts apply, and abolishes su ch regulations and obligations on other 
telecommunications services. 
As a result, each telecommunications carrier is able to operate and provide telecommunications 
services flexibly and efficiently regardless of whet her it has telecommunications circuit facilities. The 
abolition of the distinction between Type I and Ty pe II telecommunications business, therefore, is 
considered to be significantly meaningful to carriers. 
For your reference, "certain services" indicates services other than designated telecommunications 
service and universal telecommunication services. (e.g. Cellular phone service). 
Q8. According to the Secretariat’s report, Japan’s ad valorem  equivalent(AVE) of rice is 407 
percent. State the reference of the base price( e. g. domestic and world price) that was used when 
calculating the AVEs. 
If it was calculating based on the actual import price of rice, on what basis did Japan calculate AVEs 
for those rice items that were not imported? 
State the reason why, if such case is true, Japan di d not calculate AVEs for those items that were not 
imported in the past. 
A. The figure of ad valorem equivalent(AVE) of rice referred to in the Secretariat’s report was 
calculated by the Secretariat on its own responsibility.  Therefore, Japan is not in a position to answer 
the questions. 
Q8. (contd.)  List the rate of rice out-quota a nd SBS (simultaneous buy-and-sell system) imports 
in 2004 (including SBS imports in 2001). Also, state the reason why SBS imports increased 
significantly in 2003.  WT/TPR/M/142/Add.1 
 Page 61 
 
 
 A. 
(1) The data on rice imports in FY2004 is not av ailable yet. The SBS rice imports in FY2001 was 
100,000 tonnes.  
(2) We consider that SBS impor ts in FY2002 decreased temporar ily due to weak demands for 
imported rice, which can be attributed to declin e in domestic rice prices and pesticide residue 
in Chinese agricultural products. However, SBS im ports recovered to the previous level in 
FY2003.   
Q9. Does the Japanese Government think the afor ementioned measures adopted by the Industrial 
Revitalization Law have specificity as defined in  Article 2 of the ASCM? If not, on what grounds 
does the Japanese Government think so? 
A. Under the Industrial Revitaliza tion Law, amended in 2003, if an applicant (s) submits his or 
her plan for a managing strategy, the plan is re viewed pursuant to economic numerical conditions 
provided under the "Guidelines for Industrial Revita lization." Then, if the plan is approved, the 
approved applicant(s) can use tax cuts such as the registration and license taxes reduction.  
The Government of Japan considers that some  of the measures provided under the Industrial 
Revitalization Law may be regarded as subsidies as defined in Article 1 of the WTO Agreement on 
Subsidies and Countervailing Measures (ASCM). 
However, we believe that those measures do not have  any specificity as defined in Article 2 of the 
ASCM because those criteria and conditions pr ovided under the guidelines of the Industrial 
Revitalization Law are economic in nature, nu merical and objective, and also because any 
enterprise(s) can apply  and be approved under those objective criteria and conditions. 
Q10. The WTO Secretariat's report describes th at Japan's public and private sectors jointly 
established the Industrial Revitalization Corporati on of Japan (IRCJ) in April 2003 in order to 
revitalize Japanese companies with "excessive" debt . Although Japan's public and private sectors 
jointly founded the IRCJ as the report describes, it seems that the Law on the Industrial Revitalization 
Corporation of Japan (hereinafter the "IRCJ Law"),  an establishing act for the IRCJ, has many articles 
that in effect subordinate the IRCJ to the Mini sters in Charge of the Japanese Government. Does the 
Japanese Government regard the IRCJ as a government or a public body as mentioned in Article 1 of 
the ASCM? If not, on what grounds does the Japanese Government think so?  
Is the IRCJ a profit organization or a non-profit orga nization? What characteristics of the IRCJ make 
it a profit or non-profit organization?  
Does the Japanese Government regard measures taken by the IRCJ to revitalize Japanese companies 
with excessive debt as subsidy as defined in Article  1 of the A ASCM? If not, on what grounds does 
the Japanese Government think so?  
In addition, does the Japanese Government think the aforementioned measures taken by the IRCJ 
have specificity as defined in Article 2 of the ASCM? If not, on what grounds does the Japanese Government think so?  
A. Regarding the question whether the IRCJ is a "public body" or not, the answer has to be 
withheld since it depends on the definition of "public body".  Similarly, the answer to the question on WT/TPR/M/142/Add.1 
Page 62  
 
 whether the IRCJ is considered to be a profit orga nization has to be withheld since it depends on the 
definition. 
Even if the support measures of the IRCJ would corr espond to the subsidy, it has been regarded that 
the measures do not have any specificity as defined in Article 2 of the ASCM  due to the following reasons; 
 (i) Entrepreneurs for support are not limited to certain enterprises. 
 (ii) The "IRCJ Support Standard" (standard of  eligibility for the support) has been settled 
 on and made  public as an objective standard. 
Q11. Korea noticed that the JFTC continues to  maintain that the Jap anese market for telecom 
services is oligopolistic. Could the Government of Japan explain in more de tail the reason why the 
JFTC continues to maintain that the Japanese market for telecom servi ces is oligopolistic.  Is there any 
plan for Government of Japan to make Japan ese market for telecom services more competitive? 
A. For appropriate implementation of Section 8-4 of the Anti-monopoly Act (AMA) concerning 
measures against a monopolistic situation, the JFTC has been monitoring industries that are characterized by the following market structure as oligopolistic markets. 
 (i) The aggregated total value of goods and services that are supplied within Japan 
during the past year exceeds 95 billion yen. 
 (ii) The market share of the top firm exceed s 45% of the market or the combined market 
share of the top two firms exceeds 70% of the market. 
According to research by the JFTC, domestic basi c telecommunications and international basic 
telecommunications met the market conditions. (Ref. With the revision of the monitored industries in 
December 2004, the market classification of domestic basic telecommunications and international 
basic telecommunications was changed into  fixed telecommunications and mobile 
telecommunications. Both mark ets are still under monitoring) 
On the other hand, the MIC has been taking a seri es of regulatory reforms such as the introduction of 
rules on interconnections with essential facilities a nd asymmetric regulation on major suppliers, and 
has developed rules for fair competition among tele communications carriers. As a result, competition 
among telecommunications carriers has been promoted. In Japan, broadband services such as DSL services are provided at the lowest cost in the world and FTTH services for mass users have been 
expanding. Japan enjoys a variety of telecommunications services at reasonable price and speed. 
To facilitate further competition in the telecommuni cations sector, the JFTC established the "IT and 
Public Utility Task Force " in order to efficiently and quickly collect information on violations of the 
AMA in this sector and has thereby been addressi ng AMA violations quickly and stringently. The 
JFTC and the MIC also established joint guidelines on promotion of competition in the telecommunications sector. 
As ex ante regulations have been  relaxed and transformed into ex post ones, in order to prevent 
anticompetitive practices, the MIC undertakes an alyses and evaluations on the condition of 
competition in the telecommunications business sector with transparency and objectivity in mind. The 
MIC tries to improve the regulatory framework sp eedily and flexibly in response to the changing  WT/TPR/M/142/Add.1 
 Page 63 
 
 
 market environment as a way of eliminating unfair competitive conditions and appropriately 
reflecting the findings of these analyses and evaluations in policy. 
Q12. The Secretariat Report states that recent regulatory reform initiatives, associated with the 
amendment of the TBL in 2003, include the abo lition of Type-I and Type-II classifications of 
telecommunications services. The permission requi rement on Type-I businesses for entry into and exit 
from the market was replaced by a notification and registration requirement. Please provide more detailed information on notification and regi stration requirement. (page 72, para. 43). 
A. In the amended TBL, which entered into fo rce in April 2004, the permission requirement for 
Type I businesses for market entry and exit was replaced with a notification and registration 
requirement. More specifically, registration is onl y required when the scale of telecommunications 
circuit facilities installed by the carrier and th e scope of the areas where the telecommunications 
circuit facilities are installed exceed certain levels . In other cases, notification is required. In the 
amended law, the permission requirement for exit from the market was replaced with a notification 
for all cases. 
Q13. The Secretariat Report states that contract terms, which define end-user charges, no longer 
require prior notification except for certain specifi ed services that are regarded as having significant 
influence on consumers, and universal telecommunications services. Please explain what services are certain specified services. (page 72, para. 43). 
A. Certain specified services are referred to as "designated telecommunications services", which 
are provided by a telecommunications carrier in stalling Category I designated telecommunications 
facilities through the use of Category I designated te lecommunications facilities, and are specified as 
telecommunications services especially necessary for protecting the users' benefit. These telecommunication services are specified in cons ideration of circumstances in which other 
telecommunications services substituting for the tel ecommunications services are not sufficiently 
provided by other telecommunications carriers. Provision of telecommunications services is secured 
based on proper terms and conditions including char ges through the use of the Category I designated 
telecommunications facilities of the telecommuni cations carrier installing Category I designated 
telecommunications facilities. In particular, th ese services include telephone service, ISDN service 
and leased line service, provided by NTT East and West. 
Q14. The Secretariat Report states that, since July 2003, manufacturers of telecommunications 
equipment have been allowed to self-confirm thei r products' conformity with  technical regulations, 
provided that notification is submitted to the MIC;  previously, only certain  designated agencies were 
allowed to provide conformity assessment.  Please expl ain in more detail whether this change equally 
applies to Foreign manufacturers and whether there is any post-notification assessment system. (page 72, para. 44). 
A. Foreign manufacturers are eligible to self-conf irm if they are registered under the Commercial 
Law and Commercial Registration Law. Domestic  manufacturers are also required to have 
commercial registration to be able to self-confirm; therefore, foreign manufacturers are treated equally 
in terms of the application of this procedure.  After the notification of self-confirmation by manufacturers, MIC purchases the self-confirmed equipment from the market and examines its conform ity in the same way for equipment certified by a 
third party.  
The amendments to the relevant law introducing the self-confirmation system were passed the Diet in 
July 2003 and became eff ective in January 2004. WT/TPR/M/142/Add.1 
Page 64  
 
 Q15. The Secretariat Report states that Ownership  restrictions on Nippon  Telegraph and Telephone 
(NTT) Corporation's shares are stipulated in the N TT Law; foreign ownership is limited so that the 
aggregate of the ratios of the voting rights must be less than one third. Japan established NTT 
Corporation, a holding company, and divided NTT into two regional companies of which the all 
shares must be owned by NTT. Therefore foreigne rs are allowed to control the Regional Companies 
only by indirect investment through the holding company. According to the Japan's WTO schedule 
which was committed before the division of NTT, Korea understands that fore ign participation should 
be allowed directly to the Regional Companies in stead of through the holding company. In this 
regard, please provide the view of the Gove rnment of Japan. Please explain the reason and 
background of maintaining the holding company system on NTT group.(page 72, para. 44). 
A. In July 1999, the former Nippon Telegraph and Telephone Corporation was reorganized into 
a holding company (Nippon Telegraph and Telephone  Corporation), the regional companies (Nippon 
Telegraph and Telephone East Cor poration and Nippon Telegraph a nd Telephone West Corporation) 
and the long-distance telephone company (NTT Communi cations Corporation).  The purpose of this 
reorganization is (1) to ensure fair competition by separating the regional communication sector and 
the long-distance communication sector, (2) to introduce competition between the regional companies 
by dividing them and (3) to properly and smoothly implement the universal service obligation and research and development obligation. 
The holding company is obliged to own all shares of  the issued stock of the regional companies and, 
foreign participation in the regional companies is  therefore prohibited. Japan makes no commitment 
to foreign participation in the regional comp anies in the specific commitment of WTO/GATS. 
Q16. The Secretariat Report states that the Telecommunications Business Dispute Settlement 
Commission was established under the MIC for the purpose of settling disputes between telecommunications carriers. Please explain in more detail the function and procedure of the commission and legal status of the settlement of  the commission. Please provide detailed information 
on the legal jurisdiction of the Commission. Could the commission settle the dispute between foreign 
and domestic service provider? (page 72, para. 45). 
A. (1) On November 30, 2001, the Telecommunica tions Business Dispute Settlement Commission 
was established as an ADR (alternative dispute r esolution) body in order to expeditiously and 
effectively settle disputes over issues such as interconnection between telecommunications 
carriers. 
(2) Organization 
 - The Commission is independent of the depa rtments in charge of issuing permits and 
approvals. 
 - The Commission consists of five commissioners (neutral outside specialists in law, 
economics, accounting, communication engineering) appointed by the Minister of 
Internal Affairs and Communications with the consent of both the Houses of 
Representatives and Councilors. 
 - A secretariat under the Commission’s direct control is established to assist the 
Commission in its activities.  WT/TPR/M/142/Add.1 
 Page 65 
 
 
 (3) Function 
 (i) Mediation (assen) and Arbitration (chusai)    Both mediation (assen) and arbitration (chusai) are newly introduced systems as a 
result of establishment of the Commission. They are useful in settling disputes between telecommunications carriers fairly, simply and expeditiously. 
 (ii) Inquiry and Report 
  The Minister of Internal Affairs and Communications shall confer with the 
Commission before making administrative di spositions, such as orders or rulings 
(saitei) concerning the interconnection of telecommunications facilities. The 
Commission will deliberate matters and submit a report to the Minister.  
 (iii) Recommendation 
  The Commission is able to make recommendations on new competition rules to the 
Minister of Internal Affairs and Comm unications based on knowledge gained in 
dealing with actual disputes. 
The Commission settles disputes between "telecommunica tions carriers" as defined in Article 2 of the 
TBL, who have registered under Article 9 or have  submitted notification under the provisions of 
Article 16 paragraph (1). Therefore, the Commission can deal with disputes between 
telecommunications service providers who are "telecommunications carriers" in the TBL, even if one or both of them are foreign service providers. However, it cannot deal with disputes between a domestic service provider and a foreign service provi der who is not a "telecommunications carrier" in 
the TBL.  
Q17. Korea noticed "IT Investment Promotion Tax Incentive." Could the Government of Japan 
explain in more detail on the methodology of the incentive? In which specified situation, is the 
incentive provided? For what benefici ary does this incentive work for?  
A. Under the IT Investment Promotion Tax In centive, when companies acquire IT assets as IT 
investment for their own use, they can choose to r eceive either a 10% tax credit for acquired assets, or 
depreciation corresponding to 50% of the value of assets acquired as IT investment in the corporate 
tax return. IT assets subject to the IT Investment  Promotion Tax Incentive are as follows: computers, 
digital copiers, facsimile, IC card use equipment,  digital broadcasting reception equipment, Internet 
phone equipment, routers or switches, dig ital network connection devices and software. 
Q18. Regarding the cabotage restrictions explaine d in paragraph 48, page 73 of the Secretariat 
report, Korea would like to know the name of the countries and the companies that are allowed to 
participate in the cabotage flying their own flags a nd also the terms and conditions for those cabotage 
services required of those countries or companies.  
A. For example, pursuant to the stipulation in  the Treaty of Commerce and Navigation with the 
U.K., Japan may grant U.K. flag vessels permission to  engage in carriage between inland ports within 
the limits of international cargoes consigned on through bills of landing and transshipped between 
U.K. flag vessels. WT/TPR/M/142/Add.1 
Page 66  
 
 Q19. Regarding the International Ship Regime in  paragraph 50, page 73 of the secretariat report, 
Korea would like to know the details of the regime , including the number of vessels registered as 
international vessel and companies engaged in th e regime, amount of tax exemption or reduction 
provided for those vessels and other forms of support. 
A. The International Ship Register System was introduced in 1996. 
A vessel registered as an "International ship" is required to be: 
(i) A Japanese-flagged vessel (ii) Over 2,000 gross-tons (iii) A vessel used only for international transportation (iv) An LNG tanker, RORO ship, etc.  equipped with advanced facilities 
In 2003, the number of vessels registered as inte rnational vessels was 95, and that of companies 
engaged in the regime was 28. 
Support measures for "International ships" are: (i) Preferential treatment about the registration tax 
 (e.g. as to registration for preservation of  property rights under certain conditions)  
 Price of vessel× 0.2% 
(ii) Preferential treatments about the property tax 
 Tax base× 1/15 
(iii) Recognition system for the holder of a certificate issued by a party to the STCW Convention 
 (introduced in 1999) 
Q20. The WTO Secretariat's report describes that it is common practice in Japan's ports for carriers 
to notify and consult the harbor worker's union  in advance of any changes that may affect 
employment and this practice, according to the Japanese authorities, is based on an agreement among 
private operators, i.e. the Japanese Harbor Trans portation Association, the Japanese Ship-owners' 
Association, and the Japan Foreign Steamship Associ ation. Is it technically and legally possible for 
carriers who do not want to be bound by the agreem ent to operate independently in Japan's ports?  
A. It is technically and legally possible for carriers that do not want to be bound by the agreement to 
operate independently in Japan's ports. The prior consultation system is a system based on agreements among privat e circles in accordance 
with a request from shipping companies, and its revision and abolition should be discussed by the 
parties concerned. 
Significant procedural simplification and transpar ency enhancement was achieved by the agreement 
among the parties concerned in October 1997 (cf. Four-Party Agreement and Three-Party Agreement 
(See note below)). As a result of this agreement,  the number of issues to be consulted through the 
Japanese Harbor Transportation Association (JHTA)  has decreased by more than 95%. Shipping 
companies have also appreciated this improvement . Furthermore, an alternative system under which 
JHTA is not involved in negotiations has been created.  WT/TPR/M/142/Add.1 
 Page 67 
 
 
 At present, the Government of Japan does not recognize any problems concerning the prior 
consultation system. 
(Note) 
Four-Party Agreement: An agreement on impr oving the prior consultation system, reached 
by the Japan Harbor Transport Association, the Japanese Ship-
owners' Association, the Japan Foreign Steamship Association and 
the former Ministry of Transport. 
Three-Party Agreement: An agreement among th e Japanese Ship-owners’  Association, the 
Japan Foreign Steamship Associati on and the former Ministry of 
Transport, on the establishment of a system under which the Japan 
Harbor Transport Association is not involved in facilitating 
employment adjustment. 
Q21. The WTO Secretariat's report also describes th at new entrants to Japan's harbor services are 
required to guarantee minimum employment of 1.5 tim es that of existing operators. What is the legal 
basis of the minimum employment requirement? If there is no legal basis other than a private 
agreement among entities concerned, does the agreem ent constitute an unfair business practice or an 
act of monopoly prohibited by Japan's Anti-monopoly Act? 
A. Not only new entrants but also existing oper ators in Japan's harbor services are required to 
guarantee minimum employment of 1.5 times that of  the former minimum requirement under the law. 
The legal basis of the minimum employment requireme nt is the permission standard under Article 22-
2 of the Port Transportation Business Law. 
This requirement was introduced in order to smoothly implement deregulatory measures, such as the 
relaxation of regulatory system of market entry to  abolish demand and supply adjustment system, and 
that of charges from permission requirements to prior notification in nine large harbors by the revised 
Port Transportation Business Law (2002), while a voiding instability in labor relations due to 
replacement of permanent workers with daily work ers by operators for minimizing cost, and also 
preventing low-quality operators which exploit daily workers from entering the market. 
Q22. An article on page 5 of Japan's Nihon Ke izai Shimbun, dated 31 December 2004, reported 
that the Cabinet Office of Japan h as calculated the economic effects of Japan's current and future Free 
Trade Agreements with other countries; A diagram on the article shows estimated negative effects 
Japan's respective possible FTAs with certain c ountries would cause to Japan's agricultural and 
marine production. Are these calculations based on  the assumption that Japan would eliminate entire 
customs duties on agricultural and marine products imported from each possible FTA partner? If not, 
to what extent does the Japanese Government assume to open up its domestic market for agricultural 
and marine products when the Cabi net Office made the calculations?  
A. This paper is an academic work and does not reflect the view of the Government. Regarding 
the question, we confirmed with the researcher w ho conducted the calculations that these calculations 
were based on the assumption that Japan would en tirely eliminate customs duties on all products, 
including agricultural and fisheries products. You can find the entire research paper at the following: 
http://www.esri.go.jp/jp/workshop/041130/041130kawasaki.pdf  
Q23. Could you inform us whether the Governme nt of Japan plans to present revised offer in 
Telecommunications Sector in this May. If it does, please explain the details of the revised offer.  WT/TPR/M/142/Add.1 
Page 68  
 
 Korea would like to know whether the WTO refere nce paper obligation applies to the IP telephony 
service. In addition, please indicate whether the broadband internet or high-speed/ultra-high-speed 
internet can be presumed to be committed in the initial offer of Japan. 
A. These issues should be discussed over the course of the current WTO trade negotiations . 
Q24. Japan states that the Agreement between  Japan and the United Mexican States for the 
Strengthening of the Economic Partnership (herei nafter the "Japan-Mexico EPA"), which was singed 
by the heads of states of Japan and Mexico on 17 September 2004, will eliminate customs duties on goods representing 96 percent of total trade between  Japan and Mexico. Is the number 96 percent the 
result of a calculation on a tariff line basis or on a trade volume basis? What percentages do the bilateral trade in industrial goods and that in  agricultural and marine products account for, 
respectively, in the upcoming tariff elimination as a result of the Japan-Mexico EPA? 
A. On an import volume basis in 2002, the Japan -Mexico EPA has resulted in tariff elimination 
on approximately 96% of trade in goods. On an im port volume basis,  Japanese imports of industrial 
goods account for approximately 88% and those of ag ricultural, forestry and fishery products account 
for approximately 12%, respectively, out of th e total volume subject to the upcoming tariff 
elimination on Japanese imports.  
Q25. According to Japan's report, the Japanese G overnment is seeking to re-boost its economy 
through deregulation and reform on one hand,  and strengthening competition policy and its 
enforcement on the other. Korea welcomes the Jap anese Government's efforts to amend the Anti-
monopoly Act with a view to introduce a leniency program into the surcharge system, to introduce 
compulsory measures for criminal investigations , to upgrade penal regulations and so on. Many 
Korean businesses doing business within Japan, however , complain that the Japanese Government's 
deregulation effort has led unintentionally to "de facto regulations by private entities" or "market 
access barriers created by private entities" in many  areas and the Japanese Government is lukewarm 
in monitoring and regulating those anti-compe titive, market-distorting conducts. Although the 
Japanese Government in a series of Korea-Japan Non-tariff Measures Consultations has repeatedly 
defended those unfair conducts claimed by Korean businesses as "time-honored commercial 
conducts," which are out of government jurisdiction unless an investigation petition has been made to 
the Fair Trade Commission of Japan (hereinaft er the JFTC) according to Anti-monopoly Act, the 
Korean Government believes that not only the JFTC but also appropriate Japanese governmental 
bodies other than the JFTC, ministries and agencies in charge of supervising the private sector in 
question in other words, should engage in proactiv e day-to-day market policing in order to address 
market failures caused by unbridled business activ ities. Does the Japanese Government have any 
intention to do so in the future?  
A. With regard to anti-competitiv e activities in the private sector, the Government ofJapan is of 
the view that no administrative body should, in prin ciple, intervene in the economic activities of the 
private sector and that it is appropriate to promot e the activities of the JFTC. From the viewpoint of 
ensuring consumer benefit and promoting fair a nd free competition among international and domestic 
companies, the JFTC has been working to elimin ate violations of the Antimonopoly Act such as 
private monopolies, cartels or unfair trade prac tices. When any person, including a foreign 
entrepreneur, considers that a fact in violation of  the Antimonopoly Act exists, he or she may report 
the said fact to the JFTC and ask for the appropriate measures to be taken. 
Q26. Korea noticed that Japan has carried out va rious regulation reforms, including the amendment 
of Telecommunications Business Law, since 200 2. Could the government of Japan present the 
amendment history of Telecommunications Busine ss Law, the Basic Telecommunications Law and  WT/TPR/M/142/Add.1 
 Page 69 
 
 
 NTT Law since last TPR?  Could the government of Japan explain in more detail the important 
changes of the laws? 
A. (1) Amendment of the Telecommunications Business Law (July 2003)  The business classification of Type 1 and Type 2 telecommunications businesses based on 
whether they possess circuit facilities or not  was abolished and the telecommunications 
regulatory framework was further rationalized mainly as follows: 
 (i) Revision regarding market entry 
  The permission system for market entry for Type 1 telecommunications businesses 
based on their performance, etc. was abolished. Registration/notification systems 
were introduced instead and the regul atory level was generally relaxed. 
 (ii) Revision regarding provision of telecommunications services  
  In principle, regulations pertaining to ser vice offerings, tariff settings, etc. which were 
imposed on Type 1 telecommunications carriers and special type 2 telecommunications carriers were abolished except for the "universal service 
obligation". 
 (iii) Rules for protecting consumers 
  The obligation to explain the tariff on the service and service content was imposed on 
telecommunications carriers and agencies. The obligation to process inquiries and complaints swiftly and properly was also imposed on telecommunications carriers. 
(2) Amendment of the NTT Law (July 2003) 
In order to ensure that specific interconnec tion charges of Nippon Tele graph and Telephone East 
Corporation (NTT East) and Nippon Telegraph and Telephone West Corporation (NTT West) shall be 
calculated based on the average value between NTT East and NTT West, NTT East shall grant NTT 
West a fund which is a part of the difference betw een the average value of the specific interconnection 
charges between the NTT East and the NTT W est and the separate value of the specific 
interconnection charge of the NTT East for a certain period of time. WT/TPR/M/142/Add.1 
Page 70  
 
 CANADA
 
Q1. In Paragraph 27, Japan states that the low level of inward FDI has been attributed to "the high 
costs of business and regulatory barriers, wh ich Japan is taking steps to rectify". 
a) In addition to the appreciating trend of the yen, what factors account for the high cost of 
business in Japan and which domes tic regulations has Japan identified as barriers to inward 
FDI? 
b) In what way do these relate to the barriers id entified in the Secretariat Report (Part III. Trade 
Policies and Practices by Measure, (3) Import and Inward Investment Promotion Measures, (ii) Investment regulation and promotion measu res, Paragraph 61), and/or commitments to 
reduce impediments to inward FDI under the March 2003 Japan Investment Council 
"Program for the Promotion of FDI into Japan"? 
A. Based on the "Program for the promotion of  Foreign Direct Investment in Japan," the 
Government of Japan is taking measures to make Japan an attractive investment destination for 
foreign firms. The Government of Japan continu es to follow the progress and implementation of the 
Program. Relevant ministries and agencies will together implement the measures to promote foreign 
direct investment, and make efforts in policy discu ssion to produce further effective measures for this 
purpose. 
For details, please look at the follow-up to the "Program for the promotion of Foreign Direct 
Investment in Japan." 
 http://www.investment-japan.net/statements/files/20040519.pdf Q2. With respect to commitments to "impr ove the business environment" and to "review 
administrative procedures" in order to reduce impedi ments to inward FDI, c ould Japan provide further 
details as to the anticipated changes to existing procedures. In particular, could Japan provide 
information on changes affecting sectors reserved against under the OECD Code of Liberalization of 
Capital Movements, as well as specific restrictions  on inwards FDI in the real estate, fisheries, 
financial services, telecommunications, and transport sectors? 
A. [OECD Code of Liberaliza tion of Capital Movements ] Japan has appropriately revised the 
reservation list under the OECD Code of Liberali zation of Capital Movements in line with any 
revisions of related domestic laws. Recent cases in clude withdrawals of reservations on foreign 
investment in the investment trust management business sector, and sale disposal of stocks by non-residents, in line with the revision of the Forei gn Exchange and Foreign Trade Control Law in 1997. 
[Real estate ] Although there are no restrictions on FDI in th e real estate industry, in regard to land 
property itself, there is the Japanese Alien Land Law. It  stipulates, in terms of reciprocity, that with 
respect to rights on land properties in Japan, prohi bitions or restrictions may be imposed by Cabinet 
Ordinances on nationals or entities of the country  where Japanese nationals or entities are placed 
under identical or similar prohibitions or restrictions in that country. However, at present Cabinet Ordinances which prohibit or restrict rights of fore ign nationals or entities ha ve never been enacted, 
and foreign nationals or entities can enjoy rights on land properties as Japan ese ones do. The Japanese 
Alien Land Law is based on the point of reciprocity , so there is no room for Japan to prohibit or 
restrict the rights of nationals or entities of Chinese Taipei on land properties by enacting Cabinet Ordinances, unless Chinese Taipei pla ces identical or similar prohibitions or restrictions on Japanese 
nationals or entities. Consequently, there exis ts no actual restrictions as to land property.  WT/TPR/M/142/Add.1 
 Page 71 
 
 
 [Fisheries ] Japan restricts the fishing operations of fore ign nationals within its territorial waters and 
exclusive economic zones in order to achieve prope r conservation and management of living marine 
resources based on the Law Concerning the Exercise of Sovereign Rights concerning Fisheries in Exclusive Economic Zones and the Law for Regulati on for Fishing Operation of Foreign Nationals 
and has no plan to loosen the rest rictions in the fisheries sector. 
[Financial Services ] While Article 4 of the Banking Law s tipulates "reciprocity" with regard to 
licensing, the provision does not apply to WTO Member s. (Please refer to footnote 28 on page 69 of 
the Report by the Secretariat.) 
[Telecommunications ] The restriction on foreign investment in the telecommunications sector 
pertains only to Nippon Telegr aph and Telephone Corporation (NTT).  Nippon Telegraph and 
Telephone East Corporation (NTT East) and Ni ppon Telegraph and Telephone  West Corporation 
(NTT West) play a major role as the essential telecommunications carriers that underpin the livelihood of the people and socioeconomic activ ity by constructing essential telecommunications 
networks throughout Japan.  For that reason, the r estriction on foreign investment imposed on NTT, 
which owns all NTT East and NTT West shares, is  necessary to ensure its management autonomy and 
to prevent excessive influence of any foreign countries. 
The issue of abolishment or relaxation of the said restriction on foreign investment should be studied 
cautiously in terms of points such as ensuring public order and essential security interests as well as in 
view of other countries’ situations. 
[Transport ] Japan believes the current restrictions on FDI are already limited to a minimum level, 
public policy wise, and thus has no plans to loosen them. 
Q3. Can Japan please provide the timeline for the implementation of the measures adopted by the 
Japan Investment Council in 2003, which aims at prom oting foreign direct investment and eliminating 
impediments to inward FDI? 
A. The Government of Japan set an objective of doubling the cumulative amount of inward FDI 
in Japan over a five-year period from 2001 to 2006 ; that is, increasing the cumulative amount of 
inward FDI to 13.2 trillion yen by 2006.  
Q4. Could Japan provide more details in regard  to their outsourcing of prior art searches, 
including volume, effect on quality, and e ffect on Japanese Patent Office (JPO) function? 
A. In FY2005, the Japan Patent Office (JPO) pl ans to outsource the prior art searches of around 
200,000 patent applications. 
The JPO evaluates the results provided in each sear ch report made by search organizations.  If the 
quality of the prior art search results is insu fficient, the JPO will guide the prior art search 
organizations to improve it. 
The JPO is striving to accelerate patent examin ations, while maintaining the adequacy of the 
examination through quality control as mentioned above. 
Q5. How will outsourcing affect the current functioning of the JPO? WT/TPR/M/142/Add.1 
Page 72  
 
 A. The JPO intends to further reduce the volume of patent applications waiting for examination 
in the coming middle- to-long-term period, among others, by continuing to outsource prior art 
searches. 
Q6. Could Japan provide more details regardi ng the "Strategic Program for the Creation, 
Protection and Exploitation of Intellectual Property"? 
A. To make Japan an "intellectual propert y-based nation" in which the international 
competitiveness of industry is strengthened by focusing on intellectual property, thereby increasing national wealth, the Policy Headquarters develope d the Strategic Program on July 8, 2003.  
The Strategic Program consists of  about 270 items of measures to be implemented by the ministries 
and agencies concerned in order to promptly creat e an internationally viable system. It promotes 
activities based on collaboration by the ministries and agencies concerned at the initiative of the 
Policy Headquarters. 
The Policy Headquarters recently reviewed the Strategic Program on the basis of the Basic Law on 
Intellectual Property and established the "Int ellectual Property Strategic Program 2004" on 
May 27, 2004. In the review, the Policy Headquarter s made the existing measures even more specific, 
and added measures and incorporated efforts to t ackle problems for which insufficient progress had 
been made, while reviewing the overall intellectua l property strategy. Consequently, the measures to 
be implemented reached about 400 items.  
Q7. Canada notes that three task forces have been established within the IP Strategy Headquarters:  
IP enforcement, patentability of medical treatment  invention and media content business. Could Japan 
provide further details on these three task forces? 
A. Three task forces-"Task Force on Strengtheni ng of the Foundation for Right Protection," 
"Task Force on Contents," and "Task Force on the Protection of Patents of Medical-Related Acts"-were established to discuss important issues in intellectual property policy that were deemed as requiring further study and discussion in order to co mplete the Strategic Program. These three task 
forces started their discussions in the fall of 2003.  
The Task Force on Strengthening of the Foundation fo r Right Protection drew up the "Comprehensive 
Measures for Accelerating Patent Examination" and "Creation of Intellectual Property High Court" in 
December 2003, as well as "Strengthening Measures against Counterfeits and Pirated Copies" in 
May 2004. In addition, the Task Force on Conten ts prepared the "Contents Business Promotion 
Policy" in April 2004. Furthermore, the Task For ce on the Protection of Pate nts of Medical-Related 
Acts drew up "The Desirable Way of Providing  Patent Protection for Medical Treatment" in 
November 2004. These three task forces respectivel y reported their achievements to the Policy 
Headquarters. 
Q8. Canada notes that the Law on Restrictions on the Liability for Damages of Specified 
Telecommunications Service Providers entered into  force in May 2002. Could Japan provide details 
about this law, particularly with respect to the scope of liability of internet services providers? 
Furthermore, could Japan define more precisely th e role and nature of the Credibility Confirmation 
Organization (CCO)? (Para. 80)  WT/TPR/M/142/Add.1 
 Page 73 
 
 
 A. 
1. Details of the Law on Restrictions  on Liability for Damages of Specified 
Telecommunications Service Providers  The Law prescribes the scope of liability for sp ecified telecommunications service providers as 
follows. 
(1) Liability of specified telecommunications servi ce providers who have not  deleted information 
 If some information infringes upon a person’s rights but a service provider leaves the 
information on the Internet, the service provider shall not be held liable for damages of the person infringed upon unless it is technically possible to delete the information and at the 
same time either of the following applies: 
 (i) The service provider concerned is aware of  the infringement due to the distribution of 
the information; or 
 (ii) In a case where the service provider concerned is aware of the distribution of the 
information, there is sufficient ground to believe that the service provider could have 
known that someone’s rights were infringed upon. 
(2) Liability of specified telecommunications ser vice providers who have  deleted information 
 In a case where a service provider deletes information even if the information does not 
infringe upon a person’s rights, the service provider shall not be held liable for damages of the sender, if any of the following items applies and if the deletion was the minimum necessary 
measure which could have been taken: 
 (i) There is sufficient ground for the service provider concerned to believe that the right 
of another person would be wrongfully infringed due to the distribution of 
information; or, 
 (ii) In a case where a.) the service provider concerned has received a notice from a person 
who claims that his or her right was infringed upon due to the distribution of information, indicating the information cl aimed to infringe upon the right, the right 
claimed to be infringed upon, and the b asis for the claim of infringement, and 
requests that the provider should delete the infringing information, and b.) the service provider indicates the infringing information to the sender and asks for the sender's 
consent to delete it, but does not receive fro m the sender a notice to the effect that the 
sender denies consent to said deletion within  seven days of the sender's receipt of the 
inquiry concerned. 
2. Role and nature of CCO 
CCO is an organization which has a certain relati onship with copyright hold ers. When a copyright 
holder makes a request to a service provider to dele te infringing information, CCO confirms that the 
person making the request is the right holder and that  the right is infringed upon in lieu of the service 
provider and notifies the request to the service provi der with documentation that the confirmation is 
properly made.  
CCO is not a governmental organisation, but an or ganization authorized under certain rules based on 
the guidelines established by the study group on the Law on Restrictions on Liability for Damages of WT/TPR/M/142/Add.1 
Page 74  
 
 Specified Telecommunications Service Providers consisting of private institutions such as the 
Telecommunications Carriers Association. 
Q9. a) Paragraph 80 states that the Commissioner of the National Tax Agency designated "iki", 
"kuma" and "ryukyu" as geographical indications (G Is) of wines and spirits to be protected in 
the territory of members of the WTO.  With r espect to the foregoing, we have the following 
questions:  Could Japan elaborate on the expression "to be protected in the territory of members of the WTO"? 
b) Paragraph 80 states that the Commissioner of the National Tax Agency designated "iki", 
"kuma" and "ryukyu" as geographical indications (G Is) of wines and spirits to be protected in 
the territory of members of the WTO.  With r espect to the foregoing, we have the following 
questions:  Could Japan please explain the process leading to the designation of a geographical indication for a wine or spirit by virtue of the Labelling Standard Concerning 
Geographical Indications? 
A. 
a) The expression in question, "to be protected in  the territory of Members of the WTO", simply 
means that WTO Members shall protect "GIs" in accordance with the TRIPS Agreement, and 
in case of Japan, these indications are such "GIs" that are subject to protection under the 
TRIPS Agreement. 
b) The process in question is prescribed in a notice by the Commissioner of NTA, which is 
published.  A liquor association that wishes to register an indication as a GI should submit an 
application in writing to the Regional Commissioner of a Regional Taxation Bureau, NTA.  If 
the indication satisfies necessary criteria, the Commissioner of NTA designates it as a GI to 
be protected and publishes this. 
Q10. Canada notes that legislation protecting in tellectual property rights for GIs falls under the 
jurisdiction of the National Tax Administration, and is governed by the Law concerning Liquor 
Business Associations and Measures fo r Securing Revenue from Liquor Tax .  Could Japan please 
explain why GIs are not protected by the Japanese Pate nt Office, which appears to be responsible for 
most other forms of IP? 
A. Generally, in respect to the protection of GIs, the act of indicating on goods or with respect to 
services, or in an advertisement thereof or in a document or correspondence used for a transaction 
related thereto, in a manner which is likely to be  misleading with respect to the place of origin, is 
prevented by the Unfair Competition Prevention Law. Furthermore, the application or registration of a 
trademark which contains or consists of such GIs is  refused or invalidated according to the stipulation 
of the Trademark Law. 
Concerning additional protection of GIs, the note in  Article 23.1 of the TRIPS Agreement reads that 
"Notwithstanding the first sentence of Article 42,  Members may, with respect to these obligations, 
instead provide for enforcement by administrative action." 
Therefore, regarding Article 23.1 of the TRIPS Ag reement, from the viewpoint of enforcement by 
administrative action mentioned above, GIs on wines or  spirits are protected under the jurisdiction of 
the National Tax Agency (NTA), which is the admini strative authority in charge of the liquor industry 
in Japan.  WT/TPR/M/142/Add.1 
 Page 75 
 
 
 On the other hand, with respect to Article 23.2 of the TRIPS Agreement, GIs on wines or spirits are 
protected in compliance with the TRIPS agreement under the Japanese  Trademark Law (Art. 4-1-17), 
which falls under the jurisdiction of the Japan Patent Office (JPO). 
Q11. The Japanese Fair Trade Commission’s (JFTC) m ove to the Cabinet Office implies a stronger 
role in government-wide reform. Can Japan provide more information about the JFTC perspective on 
its new position in the Cabinet Office and whether it has in fact provided more opportunity to advocate pro-competitive reform across government po licy?  If not, what barriers remain in doing so? 
A. The move of the JFTC to the Cabinet Office shows the significance of competition policy as 
being one of Japan’s major policies and made the po sition of the JFTC more appropriate reflecting its 
independence and neutrality in the government. The JFTC will actively promote competition policy 
over other government policies. 
Q12. We are pleased to hear about potential reforms that could impact cartel enforcement in Japan, 
including increased surcharges and a leniency pr ogram. Does Japan believe the proposed increases 
will be adequate as a deterrent and as an incentive for potential cooperating parties to come to the 
JFTC for leniency? Also, can Japan please indicate  the status of the bill that was adopted on 
October 5
th to revise the Anti-Monopoly Act? 
A. The Government of Japan believes that the increases this time will serve as a considerably 
greater deterrent against violations. The increases of surcharges are based on illegal profits of past 
cases, examples of other acts, international standards,  etc. Enterprises that repeat violations and were 
responsible for a surcharge paymen t within the last 10 years are sl apped with a surcharge rate of 
150% of the normal respective surcharge rate. It is e xpected that it will be easy to resolve violations 
by means of a leniency program. The bill to revise the Anti-Monopoly Act was submitted to the 
161st Session of the Diet on October 15, 2004, but was carried over to the next Diet session which 
started on January 21, 2005. 
Q13. Paragraph 41 notes that the number of telecom carriers has increased from April 2002 to 
April 2004.  Paragraph 41 also mentions that the higher total factor productivity (TFP) growth in 
telecommunication may be attributed to the recent liberalization of Japan’s telecom sector, which intensified competition. However, the JFTC not es that the Japanese market  for telecommunication 
services is oligopolistic. Paragraph 41 
a. Could Japan please clarify the situation? 
b. What measures has Japan taken to restore competition in this sector?  
A. For appropriate implementation of Sec tion 8-4 of the Anti-monopoly Act concerning 
measures against a monopolistic situation, the JFTC has been monitoring industries that are characterized by the following market structure as oligopolistic markets. 
(a) The aggregated total value of goods and ser vices that are supplied within Japan during the 
past year exceeds 95 billion yen. 
(b) The market share of the top firm exceeds 45% of the market or the combined market  
 share of the top two firms exceeds 70% of the market. WT/TPR/M/142/Add.1 
Page 76  
 
 According to research by the JFTC, domestic basi c telecommunications and international basic 
telecommunications met the market conditions. (Ref. With the revision of the monitored industries in 
December 2004, the market classification of domestic basic telecommunications and international basic telecommunications was changed into  fixed telecommunications and mobile 
telecommunications. Both mark ets are still under monitoring) 
On the other hand, the MIC has been taking a seri es of regulatory reforms such as the introduction of 
rules on interconnections with essential facilities a nd asymmetric regulation on major suppliers, and 
has developed rules for fair competition among tele communications carriers. As a result, competition 
among telecommunications carriers has been promoted. In Japan, broadband services such as DSL services are provided at the lowest cost in the world and FTTH services for mass users have been 
expanding. Japan enjoys a variety of telecommunications services at reasonable price and speed. 
To facilitate further competition in the telecommuni cations sector, the JFTC established the "IT and 
Public Utility Task Force" in order to efficiently a nd quickly collect information on violations of the 
AMA in this sector and has thereby been addressi ng AMA violations quickly and stringently. The 
JFTC and the MIC also established joint guidelines on promotion of competition in the 
telecommunications sector. 
As ex ante regulations have been  relaxed and transformed into ex post ones, in order to prevent 
anticompetitive practices, the MIC undertakes an alyses and evaluations on the condition of 
competition in the telecommunications business sector with transparency and objectivity in mind. The 
MIC tries to improve the regulatory framework sp eedily and flexibly in response to the changing 
market environment as a way of eliminating unfair competitive conditions and appropriately 
reflecting the findings of these analyses and evaluations in policy. 
Q14. a) Paragraph 60 makes reference to an amendm ent to the Certified Public Accountants Law 
which entered into force in April 2004. C ould Japan please provide further information 
regarding the description given to the duti es for certified public accountants in this 
amendment? 
b) In addition, further information regarding the number of licenses which are now issued to 
certified public accountants as a result of this  amendment would be much appreciated. 
A. a) The mission and professional responsibilities of  CPAs were added to the Law. Article 1 
provides as follows: 
 (i) The mission of certified public accountants, who are professionals in auditing and 
accounting, is to promote fair corporat e activities and to protect investors and 
creditors by securing, from an independent  position, reliability of financial 
information including financial statements. By so doing, CPAs shall contribute to 
sound development of the national economy; and 
 (ii) CPAs must always (a) maintain their dignity; (b) seek to enhance their knowledge 
and skills; and (c) act with integrit y and fairness in providing service.  WT/TPR/M/142/Add.1 
 Page 77 
 
 
 b) The examination system was simplified to di versify applicants and to increase the number of 
CPAs. The new examination will be introduced in January 2006. The number of CPAs was 
15,518 as of the end of 2004. 
Q15. Paragraphs 84 and 85 of the Government Report note new programs and policies emerging 
since a Prime Ministerial announcement in 2003, ai med at doubling the cumulative amount of foreign 
investment in five years.  Among these initiatives is a Japan Investment Council "Program for the 
Promotion of Foreign Direct Investment into Japan", which includes 74 measures to reduce impediments to inward FDI under five categories.  Canada welcomes these moves.  We note, 
however, that paragraph 61 (page 41) of the Secretariat Report states that since the last TPR, "there has been no change in the regulatory regime con cerning inward and outward FDI".  Can either the 
WTO Secretariat or Japan comment on this discrepancy? 
A. Based on the "Program for the promotion of  Foreign Direct Investment in Japan," the 
Government of Japan is taking measures to make Japan an attractive investment destination for 
foreign firms. The Government of Japan continu es to follow the progress and implementation of the 
Program. Relevant ministries and agencies will together implement the measures to promote foreign 
direct investment, and take efforts in policy discu ssion to produce further effective measures for this 
purpose. 
For details, please look at the follow-up to the "Program for the promotion of Foreign Direct 
Investment in Japan." 
 http://www.investment-japan.net/statements/files/20040519.pdf Q16. 
a) Japan indicates that it has recently stipulated a 60-day maximum approval time for new 
"simple and standardized" insurance products .  Can Japan please indicate what types of 
products this includes?   
b) As well, given that the life insurance industry thrives on competition and innovation, can 
Japan please indicate what effort it is maki ng to expedite the review and approval of 
innovative or more complex life insurance products? 
A. a) "Simple and standardized insurance products" are similar to widely distributed products of 
other insurance companies, and thus are not requi red to be actuarially examined. For example, 
simple term life insurance products and whole life insurance products are considered "simple 
and standardized insurance products." 
b) The Government of Japan intends to expedite  the examination process for insurance products 
by improving the ability of the authority and examination criteria, and also urging insurance companies to enhance robust internal management systems concerning product development. WT/TPR/M/142/Add.1 
Page 78  
 
 INDONESIA
 
Q1. Paragraph 5 of the Secretariat Report briefl y notes about policy evaluation system in Japan. 
Indonesia would be appreciated if Japan could provi de further and detail information on Government 
Policy Evaluation Act (GPEA). This is an excellent  example to create and actualize transparency 
matters. Thus, Indonesia would also like to learn from Japan about function and operationalization of 
the Commission on Policy Evaluation of In corporated Administrative Agencies. 
A. (Government Policy Evaluation Act (GPEA)) 
Refer to Attachment 4 & 5. 
(Commission on Policy Evaluation and Evaluation of Incorporated Administrative Agencies) 
(On policy evaluation) 
The Commission on Policy Evaluation and Evaluati on of Incorporated Administrative Agencies 
investigates and deliberates on the policy evaluation system and policy evaluations conducted by the Administrative Evaluation Bureau. 
(On evaluation of Incorporated Administrative Agencies) 
First, the Evaluation Committee for the Incorporated Administrative Agency established in either the 
Cabinet Office or Ministry in charge evaluates the activities of the Incorporated Administrative 
Agency. The Commission on Policy Evaluation and Evaluation of Incorporated Administrative Agencies in the MIC is to present opinions, when necessary, on the results of evaluations conducted 
by the committee, for the purpose of securing and improving the objectivity and reliability of the 
performance evaluation.  
Q2. Paragraph 61 of the Secretariat Report notes that Japan has signed bilateral investments 
treaties (BIT’s) with ten countries. Indonesia woul d be appreciated if Japan could please provide 
information regarding Japan’s policy on BIT’s. 
A. Japan has entered into BITs with various  countries in order to promote investment 
liberalization as well as to protect Japanese investors and investments abroad. Reflecting this policy, 
in contrast to Japan’s BITs in the pasts which fo cused on the protection of investments, recent BITs 
such as the ones with Korea and Vietnam pursue th e liberalization of investments in addition to 
protection. 
Q3. Government Report notes that Japan has recen tly intensified bilatera l trade relation with 
several countries through economic partnership. On 20th of December 2004, a high level economic 
team of Japanese Delegates visited Jakarta to  sound out an initiative to establish Economic 
Partnership Agreement/EPA between Japan-Indonesia. In  this regard, Indonesia would be interested 
to know the objective to initiate EPA with Ind onesia instead of on going negotiation of Japan-ASEAN 
Comprehensive Economic Partnership/CEP. 
A. Japan believes that both bilateral EPAs w ith each ASEAN country and the ASEAN-Japan 
CEP agreement will contribute equally to deepeni ng economic linkages in the region. Whether to 
initiate negotiations on a bilatera l EPA with Indonesia in parallel with ongoing negotiations of the 
AJCEP agreement will be determined by April this year through discussions at the Joint Study Group, 
which will be set up by Japan and Indonesia.  WT/TPR/M/142/Add.1 
 Page 79 
 
 
 Q4. Based on our data and observation on Secretaria t Report we understand that Japan has applied 
tariff escalation for certain wood based products such  as rattan. We are a ppreciated to know Japan 
View that tariff escalation applied on rattan may l ead to excessive exploitation natural resources. 
A. Japan periodically decides tariff rates, incl uding that on wood products as well as on rattan, 
considering the domestic and intern ational economic situation. At th e same time, Japan  believes that 
the appropriate level of tariffs on wood products shou ld be determined with due consideration to the 
sustainable utilization of exhaustible  but renewable natural resources. 
Q5. Secretariat reports notes that some commodities such as certain fish and silk yarn are subject 
to import quotas. Does Japan have any plan to ease import quota and give greater openness to those 
commodities? 
A. The import quota system in the fisheries sector  plays an important role in the conservation 
and management of fish resources in Japanese territori al seas and waters adjacent to Japan. Therefore, 
from the viewpoint of ensuring sustainable use of th e resources, Japan has no plan to ease the system. 
In addition, the import quota for silk yarn had alr eady abolished consequently the termination of the 
Agreement on Textiles and Clothing at the end of last year. WT/TPR/M/142/Add.1 
Page 80  
 
 Attachment 4 
Framework of the Government Policy Evaluation Act (GPEA) 
1. Purpose of GPEA 
It is the purpose of this Law to promote the objective and rigorous implementation of policy 
evaluation and to reflect the results of this evalua tion in the planning and development of policy, and 
to provide the public with information on policy ev aluation by providing for basic matters regarding 
policy evaluation carried out by administrative organs, with a view to promoting effective and efficient administration, and ensuring the Governme nt's proper discharge of its obligation to remain 
accountable to the public for its operations 
2. Policy evaluations im plementing organizations 
The individual ministries are generally in place as implementing organizations. 
3. Principle of policy evaluations Administrative organizations are required to study an d acquire at the appropriate time information on 
the effects of policy under its jurisdiction, and on th e basis of such study evaluate its policy from the 
standpoints of necessity, efficiency, effectiveness, or other standpoints as special characteristics of the 
said policy may require, and appropriately reflect r esults of such evaluation in the planning and 
development of the said policy. 
For ensuring objective and rigorous policy evaluations, the individual ministries should abide by the 
following two rules  (1) Policy effects shall be st udied employing rational means properly suited to 
the special characteristics of the policy usi ng as quantitative a method as possible; and (2) The 
knowledge of persons of learning a nd experience shall be acquired and utilized in accordance with the 
special characteristics of the policy. 
4. Utilization for the budget preparation The Government shall endeavor to appropriately  utilize the results of policy evaluation for the 
preparation of budgets and the planning and developmen t of policies that pertain to the jurisdiction of 
two or more administrative organs and require their comprehensive promotion. 
5. Adoption and publication of guidelines for policy evaluations 
The Government shall establish and publish basi c guidelines for implementing policy evaluation for 
the systematic and steady implementation of policy evaluation. 
6. Adoption and publication of basic plans for policy evaluations The head of an administrative organ shall draw  up based upon the basic guidelines and publish a basic 
plan for policy evaluation for a term of longer than three years but not longer than five years for 
policies under the jurisdiction of the said administrative organ. 
7. Adoption and publication of the operationa l plans for ex-post evaluation and their 
implementation  WT/TPR/M/142/Add.1 
 Page 81 
 
 
  (1) The head of an administrative organ shall decide on and publish the plan for the 
conduct of ex-post  evaluation ("operational plans") for each year. 
 (2) The operational plan shall stipulate the planning period, policies to be subjected to 
evaluation as defined below and specif ic methods to be applied to the ex-post  
evaluation of the said policies. 
 (3) The head of an administrative organ shall carry out the ex-post  evaluation based on 
the basic plan and the operational plan. 
8. Implementation of ex-ante  evaluation 
The head of an administrative organ shall carry out ex-ante  evaluation when they intend to take a 
decision on policy pertaining to individual project of  research and development, public works, or 
official development assistance, or any other policy and to be specified by Cabinet Order. 
9. Preparation and publication of the evaluation reports The head of each administrative organization sha ll prepare evaluation reports and their summaries 
describing the results of the eval uations, including inform ation on the evaluations process such as the 
background data used. The reports shall be published via the Internet and other means. 
10. Publication on how evaluations have been reflected in policymaking 
The head of an administrative organ shall publish at  least once a year a report on how the results of 
evaluation have been reflected in the policy plan ning and development in the said administrative 
organ. 
11. Evaluation of Policies by the Ministry of Internal Affairs and Communications From the viewpoint of establishing coherence,  comprehensiveness and strict objectivity, GPEA 
provides for evaluations by the Ministry of Inte rnal Affairs and Communications (MIC), covering 
such necessary actions as demands by the Minister of  MIC for submission of materials, investigations, 
announcement of the result of such evaluations , recommendations, and linkage between policy 
evaluations, and administrative evaluations and inspections. 
12. Reports to the Diet 
The Government is required to prepare each year a report on the status of policy evaluations carried 
out by administrative organizations and the evaluations  of policies by the MIC, and their reflection in 
policymaking. The report must be submitte d to the Diet and open to the public. 
13. Other matters GPEA also provides for such measures as studies on evaluation methods, improvement in ability of 
the staff engaged in evaluation work, promotion of  utilization of information on policy evaluations 
among administrative organizations, and provision  of a clearinghouse of information on policy 
evaluations. WT/TPR/M/142/Add.1 
Page 82  
 
 14. Effective Date 
GPEA has been effective since April 1, 2002. 15. Review of GPEA The Government shall review progress in the practi ce of GPEA three years after its enforcement, and 
based on the results, take necessary actions.  WT/TPR/M/142/Add.1 
 Page 83 
 
 
 Attachment 5 
(Provisional Translation)  
Government Policy Evaluations Act (GPEA) 
 
Table of contents  
 
Chapter 1   General rules (Article 1 - Article 4) Chapter 2   Basic guidelines for implementing policy evaluation (Article 5) 
Chapter 3   Evaluation of Policy by administ rative organizations (Article 6 - Article 11) 
Chapter 4   Policy evaluation by the Ministry of Internal Affairs and Communications (Article 12 -
Article 18) 
Chapter 5   Miscellaneous rules (Article 19 - Article 22) 
Supplementary provisions 
Full text 
 
 
Chapter 1 General rules  
 
(Purpose) 
Article 1   
   It is the purpose of this Law to promote th e objective and rigorous implementation of policy 
evaluation and to reflect the results of this evaluation in the planning and development of policy,and to provide the public with information on policy evaluation by providing for basic matters
regarding policy evaluation carried out by administra tive organs, with a view to promoting effective
and efficient administration, and ensuring the G overnment's proper discharge of its obligation to
remain accountable to the public for its operations.  
(Definitions) 
Article 2  
   (1) The term "administrative organ" used in  this Law refers to the following organs:  
   1. Cabinet Office as the organization in charge of the business specified in Article 4, Clause 3 o
f
the Cabinet Office Establishment Law (Law Number  89 of 1999) (excepting organs listed in the
following paragraph) 
2. Imperial Household Agency and organs unde r Article 49, Clause 1 of the Cabinet Office
Establishment Law (for National Public Safety Commission, except National Police Agency) and
National Police Agency 
3. Ministries (for the Ministry of Internal Affairs and Communications, excepting the organs listed
in the following paragraph) 
4. Fair Trade Commission and Environmental Disputes Coordination Commission  
  (2) The term "policy" used in this Law refers to the policies, measures and the like with respect to a 
set of activities planned and developed by an ad ministrative organ to achieve a certain objective
within its duties or jurisdiction.  
(Principles of policy evaluation) 
Article 3  
   (1) An administrative organ shall at the appropriate time study and acquire information on the
effects of policy (i.e. the effect which a set of activ ities it carried out or intends to carry out has or is
expected to have on the lives of people and/or  society and the economy; the same applies 
hereinafter) under its jurisdiction, and on the basi s of such study evaluate its policy from the
standpoints of necessity, efficiency, effectiveness, or other standpoints as special characteristics o f
the said policy may require, and appropriately reflect results of such evaluation in the planning an d 
development of the said policy. WT/TPR/M/142/Add.1 
Page 84  
 
 (2) Evaluation under the provisions of the preceding Clause (hereinafter referred to as "policy 
evaluation") shall be carried out in accordance w ith what is expressed in the following to ensure 
objective and rigorous conduct of evaluation:  
   1. Policy effects shall be studied employin g rational means properly suited to the special
characteristics of the policy using as quantitative a method as possible. 
2. The knowledge of persons of learning a nd experience shall be acquired and utilized i
n
accordance with the special ch aracteristics of the policy.  
(Use made of the results of policy evaluation) 
Article 4  
   (1) The Government shall, aside from what is provided for in Clause 1 of the preceding Article, 
endeavor to appropriately utilize the results of policy evaluation for the preparation of budgets an d
the planning and development of policies that  pertain to the jurisdiction of two or more
administrative organs and require their comprehensive promotion.  
 
Chapter 2 Basic guidelines for implementing policy evaluation  
 
Article 5   
   (1) The Government shall establish basic guidelin es for implementing policy evaluation (hereinafte r
referred to as "basic guidelines") for the systematic  and steady implementation of policy evaluation.
(2) The basic guidelines shall prescribe guidelines for the basic plan under Clause 1 of the nex t
Article covering the following matters: 
   1. Basic policy on the conduct of policy evaluation 
2. Basic matters related to the standpoints of policy evaluation 
3. Basic matters related to studying and acquiring information on policy effects 
4. Basic matters related to the conduct of ex-ante evaluation (defined as policy evaluatio n
conducted prior to taking decisions on th e policy; the same applies hereinafter) 
5. Basic matters related to the conduct of ex-post evaluation (defined as policy evaluatio n
conducted after taking decisions on the policy; the same applies hereinafter) 
6. Basic matters related to the acquisition and u tilization of knowledge of persons of learning an d
experience  
7. Basic matters related to reflecting the results of policy evaluation in policy planning an d
development 
8. Basic matters related to providing the public with information related to policy evaluation vi a
the Internet and other means 
9. Other important matters related to policy evaluation  
  (3) The basic guidelines shall stipulate matters related to measures that have been implemented o r
are going to be implemented under the provision s of Article 20 through Article 22, and othe r
measures required for the smooth and steady implementation of policy evaluation. 
(4) The Minister of Internal Affairs and Commu nications shall prepare a draft of the basic
guidelines after asking the opinions of a council (one  of the organs under Article 8 of the National
Government Organization Law (Law  Number 120 of 1948) and to be determined by Cabinet Order),
and request the decision of the Cabinet. (5) When the decision of the Cabinet under the prec eding clause is made, the Minister of Internal 
Affairs and Communications shall publis h the basic guidelines without delay. 
(6) The provisions of the preceding two Clauses sha ll apply to the revision of the basic guidelines. 
  WT/TPR/M/142/Add.1 
 Page 85 
 
 
 Chapter 3 Policy evaluation by administrative organs  
 
(Basic plan) 
Article 6  
   (1) The head of an administrative organ (when th e organ is National Public Safety Commission, Fai r
Trade Commission or Environmental Dispute Coordination Commission, it is such commission)
shall draw up based upon the basic guidelines a basic plan for policy evaluation (hereinafter referred
to as the "basic plan") for a term of longer than three years but not longer than five years for policies
under the jurisdiction of the said administrative organ. (2) The basic plan shall prescribe the following matters:  
   1. Planning period 
2. Policy on the conduct of policy evaluation 3. Matters related to the st andpoints of policy evaluation 
4. Matters related to studying and ac quiring information on policy effects 
5. Matters related to the conduct of ex-ante evaluation 6. Matters related to the conduct of ex-post ev aluation, including policies to be subjected to
evaluation during the planning period 
7. Matters related to acquisition and utiliza tion of knowledge of persons of learning an
d
experience 
8. Matters related to reflecting results of polic y evaluation in policy planning and development 
9. Matters related to providing the public with information related to policy evaluation via the
Internet and other means 
10. Matters related to the orga nizational framework of implementing policy evaluation within the
organ 
11. Other matters necessary for the conduct of policy evaluation  
  (3) The head of an administrative organ shall prescribe as the policies under Paragraph 6 of the 
preceding Clause those that serve as principal organi zational objectives to be realized in response to
social and economic circumstances,  under its organizational missions. 
(4) When the head of an administrative organ has decided on the basic plan, he/she shall notify the 
Minister of Internal Affairs and Communicati ons of the plan and publish it without delay. 
(5) The provisions of the preceding two Clauses shall apply to revision of the basic plan. 
(Plan for the conduct of ex-post evaluation) 
Article 7  
   (1) The head of an administrative organ sha ll decide on the plan for the conduct of ex-pos t 
evaluation (hereinafter referred to as "operational plan") for each year. 
(2) The operational plan shall stipulate the planning period, policies to be subjected to evaluation as 
defined below and specific methods to be applied to the ex-post evaluation of the said policies. 
   1. Policies under Clause 2, Paragraph 6 of the pr eceding Article, and intended to be subjected to 
ex-post evaluation within the planning period  2. Policies which fall under any of the following categories during the planning period  
   (a) Those with respect to which the activity essen tial for achievement of the intended effects has
not been initiated for a period of more than 5 years but not longer than 10 years and to bespecified by Cabinet Order in accordance with the special characteristics of the policy from the
taking of decisions on the policy 
(b) Those with respect to which the effect the policy is intended to attain  has not been achieved 
when a period equal to the period specified by the Cabinet Order specified in (a) added to a
period of longer than 5 years but not longer than 10 years and to be specified by Cabinet Orde r
in accordance with the characteris tics of the policy has elapsed   
  3. Policies other than those specified in the pr eceding two Paragraphs and in tended to be subjected WT/TPR/M/142/Add.1 
Page 86  
 
 to ex-post evaluation during the planning period   
  (3) When the head of an administrative organ has decided on the operational plan, or revised it, 
he/she shall notify the Minister of Internal A ffairs and Communications of this and publish i
t
without delay. 
(Conduct of ex-post evaluation) 
Article 8  
   The head of an administrative organ shall carry out the ex-post evaluation based on the basic plan 
and the operational plan. 
(Conduct of ex-ante evaluation) 
Article 9  
   The head of an administrative organ shall carry out the ex-ante evaluation when they intend to take 
a decision on policy pertaining to individual project of research and development, public works, o r 
official development assistance, or any other policy that meets the following conditions, and to be
specified by Cabinet Order.  
   1. It is expected that the policy has considerab le impact on the lives of people and/or society an d
the economy, or a large amount of expense is in curred before the aims of the said policy are
achieved. 2. It is an established knowledge that the me thod for acquiring information on policy effects an
d
other methodology required for the conduct of ex-ante evaluation have been developed.   
(Evaluation report) 
Article 10  
   (1) When the head of an administrative organ h as conducted the ex-post evaluation, he/she shall 
prepare a report containing the following items: 
   1. The policy subjected to evaluation 
2. The department or organization that carried out the evaluation and the time 
3. Standpoints adopted of the evaluation 
4. Method employed and results of studyi ng and acquiring information on policy effects 
5. Matters related to acquisition and utiliza tion of knowledge of persons of learning an d
experience 
6. Matters related to materials and other in formation used in the course of conducting the
evaluation 
7. Results of the evaluation  
  (2) When the head of an administrative organ has prepared a report on the evaluation, he/she shall
promptly forward the report to the Minister of In ternal Affairs and Communications and publish the
report and its summary.  
(Notification and publication of reflection of eval uation results in policy planning and development) 
Article 11   
   The head of an administrative organ shall inform at  least once a year the Minister of Internal Affairs
and Communications of how the results of evaluation have been reflected in the policy planning an d
development in the said administrative organ, and make such information public. 
 
  WT/TPR/M/142/Add.1 
 Page 87 
 
 
 Chapter 4 Evaluation of Policy by the Minist ry of Internal Affairs and Communications 
 
(Evaluation by the Ministry of Internal Affairs and Communications) 
Article 12  
   (1) The Ministry of Internal Affairs and Communi cations shall carry out evaluation of a government
policy with a view to ensuring its coherent and/ or comprehensive implemen tation with regard to a
policy commonly adopted by the two or more admi nistrative organs and its evaluation is deemed 
necessary for the purpose of ensuring their government-w ide coherence, or a policy that pertains to 
the jurisdiction of two or more administrative organs and its evaluation is deemed necessary for the
purpose of its comprehensive promotion. 
(2) When the Ministry of Internal Affairs and Communications finds, taking into account the
conduct and progress of policy evaluation of an ad ministrative organ, that the conduct of policy
evaluation is not assured by the said administrative or gan despite the Ministry's findings that the re-
conduct of evaluation is necessary or that policy evaluation needs to be conducted in response to
changes in the social and economic conditions, or th at when it finds it nec essary to carry out policy
evaluation jointly with an administrative organ upon request of the said administrative organ, it shall
conduct evaluation of the policy of the said ad ministrative organ for the purpose of ensuring
objective and rigorous implementation of policy evaluation in the government. (3) The evaluation under the preceding two Clauses shall be conducted by studying and acquiring
information on the effect of the policy to be subj ected to evaluation, and from the standpoints of its
necessity, efficiency, effectiveness or other sta ndpoints as the special characteristics of the said 
policy may require.  
(Plan on evaluation by the Ministry of Internal Affairs and Communications) 
Article 13  
   (1) The Minister of Internal Affairs and Communications shall draw up each year the plan related to 
the evaluation under the provisions of Clauses 1 and 2 of the preceding Article for a term of three
years. 
(2) The plan under the preceding clause shall s tipulate matters prescribed in the following: 
   1. Basic policy on the conduct of evaluation under the provisions of Clauses 1 and 2 of the
preceding Article 
2. Policies to be subjected to the evaluation unde r the provisions of Clause 1 of the preceding
Article during the planning 
3. Policies to be subjected to the evaluation unde r the provisions of Clause 1 of the preceding
Article in the first year 4. Other important matters related to the evalua tion under the provisions of Clauses 1 and 2 of the
preceding Article  
  (3) When the Minister of Internal Affairs and Co mmunications has decided on or revised the plan 
under the provisions of Clause 1, he /she shall publish it without delay. 
Article 14  
   The Ministry of Internal Affairs and Communicatio ns shall carry out evaluation of the policy unde r
the provisions of Article 12, Clauses 1 and 2, in  accordance with the plan in Clause 1 of the 
preceding Article. 
(Demand for submission of materials and investigation) 
Article 15  
   (1) The Minister of Internal Affairs and Communi cations may call on the head of an administrative
organ for the submission of materials as well as explanations, or may inspect operations of an
administrative organ on the spot to the extent th at it is necessary to conduct evaluation under the
provisions of Article 12, Clauses 1 and 2.  WT/TPR/M/142/Add.1 
Page 88  
 
 (2) The Minister of Internal Affairs and Comm unications may investigate the following operations,
through inspecting documents or making on-the-spot  inspection, in connection with the evaluation 
under the provisions of Article 12, Clauses 1 and 2. In this case, those subj ected to investigation 
shall not refuse it. 
   1. Operations of independent administrative institutions (i.e. independent administrative
institutions under the provisions of Article  2, Clause 1 of the Law on General Rules o
f
Independent Administrative Institu tions (Law Number 103 of 1999)) 
2. Operations of the legal pers ons established directly by law, or the legal persons required by
individual law to be established by a special pr ocedure (except the legal persons to whom the
provisions of Article 4, Clause 15 of the Ministry of Internal Affairs and Communications
Establishment Law (Law Number 91 of 1999) do not apply) 
3. Operations of legal persons established by in dividual law and establishment of which requires
approval of administrative authorities (limited to those more than half of whose capital is funde d
by the State and performing operations under subsidy of the State) 
4. Operations under commission or subsidy by the State  
  (3) The Minister of Internal Affairs and Co mmunications may investigate through inspecting
documents or making on-the-spot inspection of operations of local public entities, provided tha t
such operations fall within No.1 legal entrus ted operations under the provisions of Article 2,
Clause 9, Paragraph 1 of the Local Autonomy La w (Law Number 67 of 1947) (limited to those 
which are required to be studied as an integral  part of investigation of the operation of an
administrative organ and excluding those under Paragraph 4 of the preceding Clause), to the
minimum extent necessary for the attainment of  objectives of the evaluation under Article 12, 
Clauses 1 and 2. The Minister of Internal Affa irs and Communications shall ask in advance the
views of the local public entities concerned. (4) The Minister of Internal Affairs and Communications may ask pu
blic or private organizations as 
well as other persons concerned for cooperation in submitting mate rials as he/she may deem it
necessary for the conduct of evaluation under th e provisions of Article 12, Clauses 1 and 2. 
(Evaluation report) 
Article 16  
   (1) The Minister of Internal Affairs and Communi cations shall prepare a report on the evaluation
containing items specified in the provisions of each  Paragraph, Article 10, Clause 1, when he/she
has conducted the evaluation under the provi sions of Article 12, Clauses 1 and 2. 
(2) When the Minister of Internal Affairs and Communications has prepared a report on the
evaluation, the Minister shall forward the report to heads of related administrative organs with
necessary opinions attached, and publish the report and its summary and the opinions. 
(Recommendation) 
Article 17  
   (1) The Minister of Internal Affairs and Comm unications shall recommend that heads of related
administrative organs take necessary measures to re flect the results of the said evaluation in policy 
planning and development when he/she deems it n ecessary as a result of the evaluation under the
provisions of Article 12, Clauses 1 and 2, and shall publish the said recommendations. 
(2) When the Minister of Internal Affairs a nd Communications makes recommendations under the 
provisions of the preceding Clause, he/she may ask the heads of administrative organs to report on
measures taken based upon the recommendations. 
(3) The Minister of Internal Affairs and Communi cations, when he/she ma y deem it particularly 
necessary, shall offer an opinion for the Prime Minister to take necessary measures under the
provision of Article 6 of the Cabinet Law (Law Nu mber 5 of 1947), with regard to reflecting results
of the evaluation under the provisions of Article 12, Clauses 1 and 2 in the policy planning and 
development.   WT/TPR/M/142/Add.1 
 Page 89 
 
 
 (Ensuring linkage between policy evaluation and evaluation and inspection)  
Article 18  
   When the Minister of Internal Affairs and Co mmunications carries out the evaluation under the
provisions of Article 12, Clauses 1 and 2, he/she sh all make efforts to ensure that appropriate links
be maintained between the evaluation and th e evaluation and inspection conducted under the
provisions of Article 4, Clause 18 of the Mini stry of Internal Affairs and Communications 
Establishment Law.  
 
Chapter 5 Miscellaneous rules  
(Report to the Diet) 
Article 19  
   The Government shall prepare each year a report on the status of policy evaluation and the
evaluation under the provisions of Article 12, Clau ses 1 and 2 (hereinafter referred to as "policy 
evaluation, etc") and on how the results of such evaluation have been reflected in policy planning
and development, submit the report to the Diet and publish it.  
(Promoting studies on methods of policy evaluation, etc.) 
Article 20  
   The Government shall promote studies on methods of policy evaluation etc., and take necessary
measures, including training to ensure the acqui sition of capable personnel as policy evaluation
staffs and the enhancement of staff capabilities.  
(Utilization of information related to policy evaluation, etc.) 
Article 21  
   The Minister of Internal Affairs and Communications shall take necessary measures in relation to
sharing of information and data required fo r the conduct of policy evaluation etc. among 
administrative organs to facilitate the efficient a nd smooth implementation of policy evaluation, etc. 
(Provision of guidance on information location) 
Article 22  
   The Minister of Internal Affairs and Communications shall take the necessary measures to provide 
guidance on the location of information related to policy evaluation , etc., including the results o f
evaluation, to assist those persons wi shing to obtain such information. 
 
Supplementary provisions  
 
(Date of enforcement) Article 1  
   The Law shall come into effect on April 1, 2002. The provisions of Article 5, however, shall come
into effect from the date not later than six months  after the date of promulgation and to be specified
by Cabinet Order. 
(Review) 
Article 2  
   The Government shall review the status of enfor cement of this Law when three years have elapsed
from the date of its enforcement, and take a ny necessary measures based upon the results of such
review. WT/TPR/M/142/Add.1 
Page 90  
 
 (Transitional measures for operationa l plan for ex-post evaluation) 
Article 3  
   Regarding application of the provisions of Article  7, Clause 1 to the operational plan established by
the National Public Safety Commission, the Dir ector of the Financial Services Agency or the
Director of the National Police Agency for the firs t time after the Law comes into effect, "for each 
year" in the Clause shall be read as "for a planning period of not exceeding one year and specified
by the National Public Safety Commission, the Di rector of the Financial Services Agency or the 
Director of the National Police Agency".  
(Transitional measures for the operational plan for ex-post evaluation) 
Article 4  
   The provisions of Article 7, Clause 2 (limited to the part related to Paragra ph 2) shall be applied to
the policy on which the decisions have been take n before enforcement of the Law but the period
specified in (a) or (b) of the Paragraph has elapse d after the date on which the Law came into effect. 
(Amendment of the Ministry of Internal A ffairs and Communications Establishment Law)  
Article 5  
   The Ministry of Internal Affairs and Communica tions Establishment Law shall be amended as 
follows: 
   "and this evaluation and inspection" in Article  4, Paragraph 19 is amended as "in the nex
t
paragraph" 
"Paragraph 17" in Article 6, Clause 1 is deleted, and "administrative evaluation, etc." in Clause 2
of the same Article is amended as "evaluation or inspection specified in the provisions of Article
4, Paragraph 18 (hereinafter referred to as 'e valuation or inspection' in this Article)," an d
"administrative evaluation, etc." in provisions fro m Clause 3 to Clause 7 of the same Article are
amended as "evaluation or inspection," and "by the provisions of Article 4, Paragraph 18" in
Clause 8 of the same Article is deleted.  
  WT/TPR/M/142/Add.1 
 Page 91 
 
 
 TURKEY  
Q1. Paragraph 4 states that "on 1 April 2004 , The Cabinet established the Council for the 
Promotion of Regulatory Reform (CPRR), which re placed the Council for Regulatory Reform (CRR), 
whose mandate expired on 31 March 2004". Could Japan  kindly provide us more information on this 
change and the achievements within the cont ext of general regulatory reform in Japan? 
A. In order to accelerate regulatory reform, the Council for the Promotion of Regulatory Reform, 
the succeeding body of the ex-Council for Regulatory Reform and the eminent persons’ group of the 
private sector, was established in April 2003. This  council discusses many difficult themes like the 
opening of government-driven markets for entry into the private sector. Taking the initiative politically is indispensable for the strong promoti on of regulatory reform in cluding negotiations with 
the interested agencies and ministries. Therefore,  in May 2003, the Japanese government established 
the Headquarters for the Promotion of Regulator y Reform, which was composed of all Cabinet 
members. The Headquarters and the Council will keep a close relationship and become so-called "the 
inseparable wheels of a vehicle" so as to strongly promote regulatory reform. 
The Japanese government has created several acti on plans such as the "Three-Year Program for 
Promoting Regulatory Reform’’, and has achieved ma ny regulatory reforms in the fields of "IT", 
"Competition policy", "Legal affairs", "Financial sector", "Agriculture", "Transport", "Energy", 
"Employment and Labor", "Education", "Medical Care", and "Welfare and Childcare". The top 
priority task in FY2004 is the "opening of government-driven markets to the private sector". 
Q2. Paragraph 17 states that "with a view to strengthening Japan’s industrial competitiveness, the 
Law on Special Measures for the Revitalization of  Industrial Dynamism (I ndustrial Revitalization 
Law) was amended in 2003".Turkey would appreciate  if Japan could provide us  some information 
about the early effects of this regulation on manufacturing sector?  
A. The Japanese Government has not yet assessed out  the effects of the recent amendment to the 
Law. 
For a reference, the number of applicants which had been approved under the Law by the end of 
December 2004 was 123. The METI has approved 94 out of 123 applicants. 
Concerning the amendment of Industrial Revita lization Law in 2003, please see Attachment 6. 
  
 WT/TPR/M/142/Add.1 
Page 92 
  WT/TPR/M/142/Add.1 
 Page 93 
 
 
 SINGAPORE  
Q1. With regard to page 65, paragraph 23 of Jap an's Trade Policy Review  could Japan please 
clarify on whether there are any foreign owners hip limits (in %) on the generation companies in 
Japan's electricity industry. 
A. Although the electricity industry in Japan is assumed to be a type of industry that needs prior 
notification based on the provisions of the Foreign Exchange and Foreign Trade Law, there is no 
foreign ownership limit on generation compan ies in  Japan’s electricity industry. WT/TPR/M/142/Add.1 
Page 94  
 
 HONG KONG, CHINA
 
Q1. We note that Japan has not changed its import quota system since 2002.  Import quotas are 
still imposed on various items, including certain fish products, certain organic chemicals, 
pharmaceuticals and rubber adhesives.  We would like to know if Japan has any plans or actions to 
further liberalize its import regime by removing the import quota system. 
A. Japan has no plan to remove the import quota system because it plays an important role in 
complementing resource management, and protecting life, health and essential security interests. Japan notifies the WTO of the import quotas as measures based on the WTO Agreement. 
Q2. It is noted that there are ownership r estrictions on the Nippon Telegraph and Telephone 
Corporation (NTT) in that foreign ownership is limited to one third and at least one third of all shares 
must be held by the Government.  There is no men tion of other ownership r estrictions. However, as 
understood from Japan’s existing GATS schedule, there is nati onality requirement for boards 
members and auditors in NTT in that they are require d to be of Japanese nationality.  Besides, it has 
been included in Japan’s services offer (TN/S/O/JP N) that the same nationality requirement also 
applies to the two NTT regional companies.  Would Japan please clarify whether the above 
nationality requirement is in place and if there is any other national treatment restrictions. (P. 72, 
Para. 44). 
A. As was pointed out, board members and aud itors of NTT and the Regional Companies are 
required to have Japanese nationality. As shown in Japan's conditional initial offer (TN/S/O/JPN), 
there are no other limitations on national tr eatment in the telecommunications sector.  
Q3. We note that since 2003, under the IT Invest ment Promotion Tax Incentive, companies have 
been allowed to receive either a 10% tax credit of  acquired assets as their IT investment for own use, 
or depreciation corresponding to 50% of the value of assets acquired as IT investment. We would like to know whether foreign companies ar e entitled to receive these tax incentives. 
A. Foreign companies can al so use this incentive. 
Q4. It is noted that Japan provides support for Jap anese-flag carriers (i.e. the International Ship 
Regime) to counter the preferential tax treatment provi ded by other countries to their registered ships.  
We would appreciate if Japan could share with us more details about the Regime, in particular the 
types of support provided to Japanese vessels. 
A. The International Ship Register System was introduced in 1996.  A vessel registered as "International ship" is required to be: (i) A Japanese-flagged vessel 
(ii) Over 2,000 gross-tons 
(iii) A vessel used only for international transportation (iv) An LNG tanker, RORO ship, etc.  equipped with advanced facilities  WT/TPR/M/142/Add.1 
 Page 95 
 
 
 Support measures for "International ships" are: 
(i) Preferential treatments about the regi stration tax and about the property tax  (under certain 
conditions) 
(ii) Recognition system for the holder of a certificate issued by a party to the STCW Convention 
(introduced in 1999) WT/TPR/M/142/Add.1 
Page 96  
 
 CHILE
 
Q1. Could Japan specify what has the agricultural adjustment consisted of?  What consequences 
can be foreseen in the long term  as a result of the above-mentione d agricultural adjustment, from an 
internal as well as an international trade point of view? What measures have been implemented in the 
agricultural adjustment process to f acilitate trade access and investment? 
A. The agricultural policy reform is pursued in order to respond to the decline and ageing of the 
farming population and to accelerate structural reform of the agriculture sector which has not progressed as far as envisaged.  The improvement of  market access according to the UR commitments 
during the past years has resulted in more agricultu ral imports, making structural reform ever more 
necessary.  Successful reform of the sector, through improvement of productivity following 
enlargement of farm size, will enable sustainable development of the sector. 
Q2. Could Japan indicate, in detail, what the subsid y programs that help the fisheries sector have 
consisted of, specifying the type of instruments that have been employed to that effect and the amount 
that this economic support has risen to, including the support granted to fishing fleets? 
A. The information requested can be found in  Japan’s Subsidy Notification and related 
documents including G/SCM/N/95/JPN and G/SCM/Q2/JPN/35. 
Q3. In the case of market access for fruit, Japan has a case-by-case authorization system. 
Therefore, for each fruit product that wants to be expo rted to Japan and appear s in their quarantine list 
to be prohibited, the local Ministry of Agriculture  must undertake a technical study that will establish 
the product’s export conditions to Japan: an export protocol subject to a public hearing. 
The process indicated verifies each product and count ry in a separate manner, since there is no 
uniformity in the administrative processes or in  the conclusions, even when it is regarding 
homogeneous varieties of fruit. 
Is the establishment of a clear and homogeneous administrative process, with pre-established 
timeframes for access to their market, part of Japan’s agenda? 
A. The procedure to lift the import prohibition on fruits is standardized and published on the 
website of MAFF. 
Q4. Japan habitually demands the fumigation of products because of the presence of insects in the 
country. This practice is contrary and inconsis tent with international practice and with the 
"International Plant Protection Convention" (IPPC).  Japan claims that th ese pests are under the 
official control of the Ministry of Agriculture, how ever it has been observed that the practice does not 
have official control and local products are not fumigated. 
Will Japan adopt international standards in the near future? Is the elimination of unnecessary fumigations  part of Japan’s agricultural policy? 
A. We submitted a WTO/SPS notification (G/SPS/N/JPN/132) concerning the revision of the 
plant quarantine measures which adds certain  pests to the Non Quarantine Pest List. 
Q5. The government of Japan, through the Ministry  of Agriculture made a list of non-quarantine 
pests. However, this list has excluded pests that  are present in Japan, of which 10 pests can be 
indicated to be present in American fruits and vegetables and that are commonly present in Japan:  WT/TPR/M/142/Add.1 
 Page 97 
 
 
 (i) Frankliniella occidentales (western flower thrips) 
(ii) Pieris rapae (imported cabbageworm) (iii) Brevicoryne brassicae (cabbage aphid) (iv) Aphis fabae (bean aphid) (v) Myzus persicae (green peach aphid) 
(vi) Macrosiphum euphorbiae (potato aphid) 
(vii) Aoidiella aurantii (California red scale) (viii) Chrysomphalus aunidum (Florida red scale) (ix) Aulacorthum solana (glasshouse potato aphid) (x) Aphis gossypii (cotton aphid) 
When will Japan elaborate a complete and transparen t list of quarantine, non-quarantine pests, as well 
as those that are present and under effectiv e official control in their territory ? 
A. We submitted a WTO/SPS notification (G/SPS/N/JPN/132) concerning the revision of the 
plant quarantine measures, including the addition of a certain number of pests to the Non Quarantine 
Pest List (including California red scale and Florida red scale). 
Q6. Eligibility for quota allocations in the agricu ltural sector requires, in many cases, intricate 
approval processes by the MAFF, such as various end-use restrictions, the opinion of other 
organizations, and many documents, such as accounts and business plans. Is Japan contemplating improvements to these procedures in order to facilitate trade? 
A. The procedures of TRQ are appropriate as they are based on the characteristics of each 
product and reviewed annually.  We do not plan to change the current procedures at present. 
Q7. The report points out that safeguards have not  been re-imposed since 2002. But have there 
been investigations about this? What kind of measures are applied, surcharges, tariff duties? 
A: 1. With regard to the safeguard measures re ferred to in the relevant paragraph of the 
Secretariat’s Report, Japan has not imposed an y safeguard measures since 2002 and has also 
not conducted any investigati ons to this end. Japan uses tariff increases or a quantitative 
restriction as safeguard measures.  
2. Furthermore, upon receipt of a request fro m the domestic industries concerned,  Japan 
initiated investigations on towe l products manufactured in foreign countries in April 2001, in 
a manner compatible with the Agreement on Textiles and Clothing, and continued these 
investigations until April 2004 by extending the period of investigations several times. 
Nevertheless, such investigations did not lead to the application of textile safeguard measures 
against these products. WT/TPR/M/142/Add.1 
Page 98  
 
 Q.8 With respect to paragraph 48 of the Secretar iat’s Report, does Japan consider terminating the 
restrictions applied to coastal shipping, especially the restriction with other nationality flag carriers? 
A. Japan is not considering liberalizing the maritime cabotage service. Q9. With respect to paragraph 57 of the Secretaria t’s Reports, does Japan consider the elimination 
or reduction of the requirements, such as belongi ng to a professional association, as well as other 
requirements related to accountancy services, especiall y the requirements pointed out in footnote 53?  
A. The Government of Japan has no plans to elim inate or reduce the requirements because the 
registration requirements with the Japanese Institute of Certified Public Accountants are necessary for 
the following reasons: 
(a) To ensure the integrity of CPAs and the fair implementation of their business; 
(b) To encourage the Institute to implement necessary measures to enhance CPA’s credibility; 
and 
(c) To prevent those who are not certified as "Koninkaikeishi" from conducting business which 
should be supplied by "Koninkaikeishi". 
Also, the Government of Japan has no plans to eliminate or reduce the requirements because the 
requirements described in footnote 53 were introduced in step with the international trend of reform, 
to strengthen the independence of CPAs from their clients and to improve the fairness and credibility 
of auditing by CPAs through the amendment of th e Japanese CPA Law which came into force in 
April 2004.  WT/TPR/M/142/Add.1 
 Page 99 
 
 
 ARGENTINA  
Q1. In item III.2.ii.(b) of the Secretariat’s Report (paragraph 18), it is pointed out that 0.4% of 
tariff lines are subject to "other duties" that consist of differential duties and sliding duties . What are 
the criteria on which sliding duties  are established? In this sense, how are the products that will be 
reached by these duties be defined? 
A. Sliding duties are a form of tariff which aims  at protecting domestic producers of goods that 
compete with imported products by means of applying higher tariffs when import prices are low, while at the same time, stabilizing domestic market  prices by applying zero tariffs when import prices 
are high, thereby coordinating the interests of both domestic producers and consumers. 
Currently, products such as onions, copper and lead , whose international market prices fluctuate 
considerably, are subject to sliding duties. 
Q2. Item III.2.iv.(b) of the Secretariat’s Repor t (paragraph 33) refers to the new legislation 
relating to subsidies, anti-dumping and countervailing measures. What were the motives that impelled 
the legislation to be modified and that determined th e "eligibility" of the local industry to begin to file 
complaints against injury? What do the changes in the definition consist of? 
A. Producers of the subsidized imports or the dumped imports were not included in the 
"domestic industry", except in  cases where the im port was  a small amount, because it was assumed 
that such producers behaved differently from othe r producers and there were no cases in which it was 
proved otherwise. 
The amendment is based on the background that as a result of rapid advancement of international 
division and complementarity of labor especially af ter the late 1990’s, certain cases have emerged in 
which, even if producers had imported the allegedl y subsidized or dumped products etc, the major 
business of some of those producers concerning those products and the like products was the domestic 
production of the like products, and  such producers did not behave differently from other domestic 
producers. 
Regarding this point, the law was amended so that, even if the producers have imported the allegedly 
subsidized or dumped products, etc., when a ma jor business concerning those products or the like 
products is the domestic production of the like produc ts, such producers are included in the "domestic 
industry". 
Q3. Item III.2.vii.(b) of the Secretariat’s Report (paragraph 53 and 54) that refers to "Sanitary and 
Phytosanitary Measures," points out that the "Food Sanitation Law" has been the object of revision 
during the review period and that this includes the prohibition of the use of bovine vertebral column 
from cattle originating in a country affected by BSE as an ingredient of processed foods (Bovine 
Spongiform Encephalopathy). Does Japan foresee maki ng any other kind of modification to this law 
that would affect other products? Could Japan pr ovide more detailed information regarding other 
sanitary and phytosanitary measures with respect to meat products? 
A. At the present time, Japan does not intend to establish/amend of standards for meat products 
under the Japanese Food Sanitation Law. 
When specifications and standards for foods, add itives and other related products under the Food 
Sanitation Law are established or amended, Japan gene rally has an opportunity to explain them to the WT/TPR/M/142/Add.1 
Page 100  
 
 Embassy in Tokyo at the Conference for Promo tion of Food Import Facilitation, in addition to 
following the procedures of SPS notification. 
Q4. Could Japan indicate to what extent are its sanitary and phytosanitary measures based on the 
international standards Codex, OIE, IPPC, its guidelines or recommendations? 
A. Japanese measures are consistent with SPS Agreements. 
Q5. Paragraph 57 of the Secretariat’s Report refers to the labelling of origin of ingredients. Could 
Japan justify the consistency of the labelling oblig ation with WTO agreements? In its answer, could 
Japan take into consideration the obligations with regard to scientific evid ence, risk analysis, and 
proportionality of the measure. Taking into account that a Codex standard does not exist for this 
matter, could Japan justify scientifically the reasons  for which it considers th at such an obligation 
does not constitute an unjustified restrict ive measure for international trade? 
A. It is impossible even to speculate as to wh ich provisions of the WTO Agreements Argentina 
is referring to and on what grounds it presumed non-co mpliance of the Japanese measure.  Therefore, 
Japan is unable to answer this question. 
Q6. In item III.2.vii.(c) of the Secretariat’s Report (paragraph 58) "Labelling and packaging 
requirements" refers to the conditions of accredita tion of a genetically modified products. What are 
the requisites that the competent body establish es to permit the importation of such products? 
A. The Food Safety Commission (FSC) is an or ganization that undertakes risk assessment, and 
evaluates the safety of the genetically modified (GM) food according to  requests from MHLW. 
Concretely, FSC examines the safety assessment of GM food based on " Standards for the Safety 
Assessment of Genetically Modified Foods (Seed Plant) ".  
 http://www.fsc.go.jp/senmon/id enshi/gm_kijyun_english.pdf 
After the safety assessment of the GM product has been completed by FSC, MHLW decides whether 
or not to approve its GM product for sale and import. 
Q7. With respect to the obligatory labelling require ments of GMOs referred to in paragraph 58 of 
the Secretariat’s Report, could Japan describe the asse ssment of risk that such a measure is based 
upon? Could Japan explain if such a measure is b ased on international standards recognized by the 
WTO? Could Japan indicate the objectives and the r easons why a less restrictive alternative measure 
would not reach such objectives? Could Japan explain in what way is such a measure consistent with the principle of non-discriminati on applicable to other products? 
A.  FSC conducts the safety assessment of GM food based on the " Standards for the Safety 
Assessment of Genetically Modified Foods (Seed Plant) ". (It is available at 
www.fsc.go.jp/senmon/idensh i/gm_kijyun_english.pdf)  
And, it is impossible to speculate which internati onal standards recognized by the WTO Argentina is 
referring to.  Therefore, Japan is unable to answer this question. 
Q8. In item III.5.vi.(g), paragraph 99, "Distribution measures", it is mentioned that there has been 
no change in the legal framework pertaining to the distribution sector. Is Japan expecting to establish 
any modifications in the distribution of goods services in its market in order to improve the access of 
products from third countries?  WT/TPR/M/142/Add.1 
 Page 101 
 
 
 A. Japan considers that the current legal framewo rk pertaining to the distribution sector places no 
restrictions on access to imports and Japan has no plan s for any modifications as such at this time.  
Q9. In item IV.2.ii, paragraph 11, the Secretaria t’s Report indicates that the requisites for the 
allocation of tariff quotas are established by MAFF(Mi nistry of Agriculture, Forestry and Fisheries), 
and that certain amounts of all products(except natura l silk) can be imported by private entities. What 
are the criteria used to determine such quantities and what level of participation dose the private 
sector have in this decision? What are the criteria us ed in the allocation of tariff quotas in the case of 
wheat? 
A. The description in the WTO Secretariat’s Report in question seems to be on state trading; the 
state trading products concerned are rice, wh eat, barley, certain dairy products, etc. 
All of these products are imported under the im port state trading schemes, based on the committed 
level of TRQ quantity, taking into acc ount the actual demands of end-users. WT/TPR/M/142/Add.1 
Page 102  
 
 CHINA
 
Q1. As noted in paragraph 11 on page 60 of the Secretariat Report, the procedure of the Tariff 
Quota administration of Japan tends to be intricate.  In China’s view, it is of much complexity and 
lacks transparency. China hopes that Japan will im prove the transparency of its Tariff Quota 
administration. At present, we understand that there are 20 categories of products subject to Tariff Quota administration of Japan, including rice, wheat , maize, ketch-up, dairy products, skimmed milk 
powder, butter, starch and its products, peanuts, edib le oil, etc. To acquire an overall understanding of 
the Tariff Quota system of Japan, Chin a would like to request that Japan 
a) provide a list of all the products subject to Tariff Quota administration in 2004, including both 
the agricultural and industrial products.  
b) clarify whether this list of Tariff Quota produc ts changes on a yearly basis, and comparing the 
2004 list to the list of Tariff Quota products as committed in Japan’s Goods Schedule of the 
Uruguay Round, whether new products are or will be added or eliminated for the 2005 list. 
A. a) In FY 2004 the Tariff Quota products of Japan are as follows:  (i) The Tariff Quota products following conve rsion to ordinary custom duties on the 
basis of WTO Agreement on Agriculture (provided in Section I-B of Japan’s Schedule of Concessions.)( cf. the list AIV.1 on page 96 of the Secretariat Report); 
 (ii) Bovine and equine leather ( dyed ), bovine and equine leather ( other ), sheep and 
goat leather and , leather footwear which ar e Tariff Quota products as committed to in 
Japan’s Schedule of Concessions(provided in section II ); 
 (iii) Natural cheese, maize, malt, molasses fr om sugar, cocoa preparations, tomato puree 
and paste, and preserved pineapples in airtight containers, which are set up as 
voluntary measures of Japan. 
b) Regarding the Tariff Quota products which are introduced as a result of the Uruguay Round 
and specified in Japan’s Schedule of Concessions (a bove-mentioned (i) and (ii)), Japan will continue 
to implement its commitment as promised. The necessity of Tariff Quota other on other products (above-mentioned (iii)) is revewed annually.  Japan has no plan to change the list of Tariff Quota 
products at present in FY2005. 
Q2. China is of great concern over the trade regi me of rice in Japan. As far as we understand, as 
notified in December 1998 to the WTO, a new system for import of rice came into force on 
1 April 1999, according to which the out-of-quota tariff rate of rice was 350 Yen/kg in 1999, which 
would be reduced by 2.5% every year thereafter.  However, the specific duty adopted complicates the 
tariff regime. 
Please provide the applied out-of quota tariff rate of  rice from 1999 to 2004. Is a 2.5% cut executed 
each year after 1999? Does Japan have any plan to reform the current system? 
A. Japan carried out tariffication of rice in 1999, in full conformity with the relevant provisions 
of the Agreement of Agriculture, including the level of the out-of-quota tariff.  .  WT/TPR/M/142/Add.1 
 Page 103 
 
 
 The out-of-quota tariff rate of rice was reduced from 351.17 yen/kg to 341 yen/kg in April 2000, and 
this level has been ma intained since then. 
Q3. Regarding the Tariff Quota administration for import of rice, judging from the information 
acquired, we believe that the detailed administ ration procedure for import of rice under the MMA 
framework reflects virtually little transparency, a nd the quota allocation are not in line with such 
fundamental principles of the WTO as non-discrimina tion. As a matter of fact, this procedure has 
excluded certain other important potential suppliers  from the allocation of the majority of the quota 
under the MMA framework except for the SBS syst em. China strongly requests this practice be 
corrected immediately. China will pursue further this  issue with Japan through bilateral channels. In 
this trade policy review, China hopes that some li ght would be shed on certain aspects of the Tariff 
Quota administration for import of rice in Japan, and China would like to request  Japan to answer the 
following questions: 
a) What are the domestic laws and regulations in Japan to stipulate on or govern the quota 
allocation under the MMA framework, including both the general quota allocation and the 
SBS quota allocation? Please provide the Eng lish version of the laws and regulations. 
b) Under both the general quota allocation and the SBS quota allocation under the MMA 
framework, does Japan apply only global quota?  Or only country-specific quota? Or use 
both? If there is country-specific quota, on what basis are the quota volumes decided? 
c) What is the annual total quota volume of  the general quota and the SBS quota under the 
MMA framework in 2002, 2003 and 2004? Am ong these volumes, what is the country-
specific quota volume respectively in the thr ee years? Among the country-specific quotas, 
what are the proportions of the major suppliers? 
A. a) The Government of Japan buys and sells impor ted rice based on the relevant provisions of " 
Law for Stabilization of Supply, Demand and Prices of Staple Food". 
 There is no English version of the law. In te rms of relevant informa tion of Japan’simportation 
of rice and wheat, please refer to Japan’s notification to WTO for state trading enterprise 
(G/STR/N/10/JPN ）and tariff quota administration (G/AG/N/JPN/91).   
b) Japan does not employ the country-specific quot a system for imports of minimum access rice. 
In ordinary tenders, there are two competitive bi dding schemes; one specifies only the type of 
rice, and the other specifies the type of rice and producing countries. In both schemes, such factors as domestic demand and export countries’ ability to supply rice are taken into account.     
c) As already answered, Japan does not employ th e country-specific quota system for imports of 
minimum access rice. Imports under the ordi nary tender in FY2002 totaled 630,000 tons, 
while imports under the SBS totaled 50,000 t ons. Imports under the ordinary tender in 
FY2003 totaled 580,000 tons, while import s under the SBS totaled 100,000 tons.  
 Data for FY2004 are not available yet. Q4. After the rice is imported under the MMA frame work, the Ministry of Agriculture, Forestry 
and Fisheries will sell it to domestic wholesale dealers at a price with import mark-up included, and WT/TPR/M/142/Add.1 
Page 104  
 
 the mark-up is set according to internal criteria wh ich reportedly treat different varieties of rice from 
different countries differently. 
Please provide the detailed data of import mark-up for the different varieties of rice imported under 
the MMA framework from different co untries in 2004 when they are so ld into the domestic market.  
A. The Government of Japan collects import ma rk-up as a result of each tender in accordance 
with the Schedule, and the figures in each year ar e notified in Japan’s notification to WTO for state 
trading enterprises (G/STR/N/10/JPN) . 
Data concerning import mark-up of rice by the type of rice or by the producing countries are not 
available. 
Q5. As we have noticed, after the rice is imported under the MMA framework, only a limited 
amount of the imported rice enters into the Japanese domestic market, and a quite large amount of the 
imported rice is kept in warehouse.  
Please clarify if any restrictions or conditions ex ist for the imported rice to enter the Japanese 
domestic market. If yes, please elaborate and explai n its consistence with Article 3 of GATT 1994. If 
no, why such a large amount of the imported rice remains in warehouse? 
A. The Government of Japan imports rice unde r the import state trading system, taking into 
account such factors as domestic supply and de mand and the global market situation. 
As is the case for domestic rice, imported rice is sold to end-users through bidding. Rice which is 
unsold as a result of bidding is kept as stock. 
Q6. As noted in paragraph 3 on page 24 of the Se cretariat Report, certain aspects of the import 
quota system in Japan can be intricate. 
(1) Please provide detailed information of the import quota administration system of Japan, 
including the list of all the products under quota administration in year 2004. Does the quota administration vary according to products? How is the quota volume decided for each of the products? For these products subject to quota administration, only global quota applies or there is also country-specific quota applied? Wh at are the detailed procedures to allocate the 
quota? What are the relevant domestic laws  and regulations stipulating on import quota 
administration? 
(2) Please confirm whether Japan has notified its import quota administration system to the 
Committee on Market Access or the Committee on Import Licensing Procedures. If so, please 
provide the reference number of the WTO document.  
A. 
(1) The administration of import quota system, including the quota volume, varies according to 
products. Our laws and regulations re garding this system are as below. 
 (a) Foreign exchange and foreign trade law  (b) Import control order  (c) Import notice (The products under quota administration are listed.)  WT/TPR/M/142/Add.1 
 Page 105 
 
 
 (2) Japan has notified its import quota administration system to the Committee on Import 
Licensing. The reference number of the WTO document is G/LIC/N/3/JPN/3. 
 In addition, Japan notified the item list of th e import quota (as of October 1, 2004) to the 
Committee on Market Access on January 5, 2005. 
Q7. We noticed that Japan is a frequent user of  special safeguard measures in the agriculture 
sector. 
Please explain why Japan has been using special sa feguard measures so frequently in the past few 
years. Is the Japanese government going to refrain from using it? 
A. Japan applies special safeguard measures in full accordance with the relevant provisions in 
the WTO Agreement on Agriculture. 
Q8. China appreciates the progress made by Japan in terms of facilitating customs declaration and 
clearance. However, according to our knowledge, fr esh and live goods are subject to an excessively 
long period for clearance at the Japanese Customs,  which has caused much loss to exporters of 
Members. Therefore, China hopes that Jap an could explain the following issues: 
How long is the average period for clearance of  imported agricultural products at the Japanese 
Customs? Are different time periods for customs cl earance applied to the same agricultural products 
from different origins? With regard to fresh and time-sensitive products, has the Japanese Customs 
adopted any special measures? If yes, please provi de details. If no, please indicate whether Japan 
intends to expedite customs clear ance for special products such as fresh and time-sensitive goods in 
Japan’s further efforts to st reamline customs procedures. 
A. Japan does not conduct surveys on release time for individual products.  Japan primarily 
conducts examination and inspections on what are c onsidered to be high-risk cargoes, taking into 
account their product description, quantity, value, countr y of departure, etc. thus the required time for 
customs procedures differs for each import declarati on even if declared products are the same.  For 
cargoes that are considered to be low-risk, imme diate import permission is given.  Japan does not 
adopt special measures in customs procedures spec ifically for fresh products.  Japan intends to 
continue to adopt appropriate risk control measu res, and thus, ensure a ppropriate and facilitated 
customs procedures overall. 
Q9. Companies located in the Foreign Access Zones may benefit from many policy-based 
incentives and exemptions. 
Please indicate whether the scheme applies to bot h domestic and foreign enterprises equally? How 
would the Japanese Government ensure the c onsistency of the scheme with WTO rules? 
A. The scheme applies to both domestic and fore ign enterprises equally. Some of the incentives 
apply only to foreign enterprises. This sch eme is fully consistent with WTO rules. 
Q10. For financial services providers, membership of the Japanese government bond transaction 
system is a prerequisite for conducting domes tic government bond transaction in Japan. Please 
indicate the relevant qualification re quirements and approval procedure. 
A. The JGB Book-entry System offers the followi ng three types of membership.  Access criteria 
are disclosed to the public in a document entitled "R equirements for Establishing Direct Participants’ WT/TPR/M/142/Add.1 
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 Accounts and Customers’ Accounts and Requirement s for Admission as Indirect Participants and 
Foreign Indirect Participants in the JGB Book-entry System."(See http://www.boj.or.jp/en/about/about_f.htm) 
Direct Participants A direct participant is an entity that maintains a direct participant’s account with the Bank.  To 
become a direct participant that is able to estab lish a customer’s account, an applicant needs to be 
either an entity described in items 1 through 14 of Paragraph 1, Article 44 of the Transfer of 
Corporate Debt Securities Law, such as a bank or  a securities company, or a book-entry transfer 
institution as defined in Paragraph 2, Article 2 of the Transfer of Corporate Debt Securities Law.  
Only a direct participant can submit transfer in structions to the Bank through the BOJ-NET JGB 
Services to effect JGB transfers. 
Indirect Participants An indirect participant is an entity that maintains a customer’s account with a di rect participant, and is 
approved by the Bank as an entity that is able to establish a customer’s account in Japan.  To become 
an indirect participant, an applicant needs to be  either an entity described in items 1 through 14 of 
Paragraph 1, Article 44 of the Transfer of Corp orate Debt Securities Law, such as a bank or a 
securities company, or a book-entry transfer instituti on as defined in Paragraph 2, Article 2 of the 
Transfer of Corporate Debt Securities Law. 
Foreign Indirect Participants A foreign indirect participant is an entity that main tains a customer’s account with a participant, and is 
approved by the Bank as an entity that is able to establish a customer’s account outside Japan.  To 
become a foreign indirect participant, an applican t needs to be an entity described in Item 15 of 
Paragraph 1, Article 44 of the Transfer of Corporate Debt Securities Law. 
Requirements for admission as a participant in the JGB Book-entry System are (i) that the applicant 
meets the requirements of Article 44 of the Transfer of Corporate Debt Securities Law, and (ii) that the participation of the applicant in the JGB Book-en try System does not threaten the credibility of the 
system or hinder its smooth operation and orderly administration.  
More specifically, an applicant that  is not a securities clearing and settlement system shall be deemed 
to satisfy requirement (ii) above if its financia l condition is considered sound and its operational 
capability is adequate.  An applicant that is a securities clearing and settlement system shall be 
deemed to satisfy requirement (ii) above if, in  addition to satisfying the requirements regarding 
financial condition and operational capability, its clearing and/or settlement business is considered 
safe in view of its risk management procedur es, the arrangements regarding allocation of losses 
arising from the clearing and/or settlement process, the operational reliability of computer systems 
provided for its users, and other relevant matters. 
The requirement for a direct participant to access the BOJ-NET JGB Services is that it has sound 
operational capability. 
Q11. With regard to deposit insurance system, Jap an does not allow branches of foreign banks to 
join the system. Would Japan elaborate th e rationale for maintaining this ban?   WT/TPR/M/142/Add.1 
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 A. The deposit insurance system does not cover de posits taken by branches of foreign financial 
institutions. The failure of branches established in Japan by foreign financial institutions results from 
problems of their headquarters located abroad, which are not regulated and supervised by the Japanese 
authorities.  The deposit insurance system is theref ore designed to cover fina ncial institutions whose 
headquarters are located in Japan. 
Q12. At present, medical service providers are not  allowed to establish joint ventures in Japan. 
Is Japan going to consider liberalizing forms of commercial presences of medical  services? If not, 
what’s the policy consideration behind such restriction? 
A. In Japan, the Act revising a part of the Struct ural Reform Act on Special Zone was enacted on 
October 1, 2004. This revision allows a joint-st ock corporation to established medical facilities for 
medical treatment with high technology (not compen sated by the national health insurance) in the 
special zones authorized by the Prime Minister. 
The establishment of medical facilities by a joint-st ock corporation outside the special zones is not 
permitted, based on policy considerations which are listed below, given the essential characteristic of 
a joint-stock corporation that it seeks the maximization of its profit.  
There is a danger that 
(i) Medical treatment which is appropriate for a patient would not be provided if such treatment 
would not maximize profit for a corporation. 
(ii) There would be problems in providing necessary medical services in an area if a corporation 
withdrew from the operation of the medical facility. 
(iii) Potential increases in medical costs under public health insurance would cause problems in 
curbing national medical costs, which is one of the most important tasks in Japanese national 
policy for maintaining public health insurance.   
Q13. To our knowledge, Japan now implements extremely high experiences and performance requirements on executives of locally registered c onstruction enterprises, and also imposes minimum 
turnover requirements on these enterprises. 
Would Japan please advise whether there is consid eration to loosen such requirements? Does 
minimum turnover requirement also apply to Japanese domestic enterprises? 
A. According to the Construction Business Law,  a person who intends to conduct construction 
business is required to obtain a construction business license.  One of the license requirements is that 
one of the full-time members of the board of director s must have five or more years of experience as a 
person responsible for managing a c onstruction company or branch of such a company, or equivalent 
experience. This is a requirement aimed at ensu ring the proper execution of construction work and 
does not discriminate against either domestic or forei gn contractors. We do not think this is extremely 
burdensome. Experience in foreign countries can be recognized in the same way.  
There is no minimum turnover requirement for acquiring a construction business license. Q14. With respect to container ships berthing at Japanese ports for the first time, Japan requires the 
name, tonnage, slot capacity and port to berth be reported to Japan for prior approval through agents 
60 days in advance of arrival of the ship at the Japanese port. Those ships having obtained the WT/TPR/M/142/Add.1 
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 approval but intending to change routes are also subject to these procedures. This has caused great 
loss to foreign services suppliers.  
Please indicate whether Japan will consider changing th is practice. Please also explain the consistency 
of this requirement with Japan’ s commitments on maritime services. 
A. The Government of Japan does not have info rmation on this issue. Please give us more 
specific information such as the name of th e ports and when the difficulties occurred. 
Q15. Please explain the consistenc y of this requirement with Japan’s commitments on maritime 
services.  China would like to request Japan to remove this restriction. 
A. Under the Freight Forwarding Business Law, an ope ration permit or governmental registration for 
maritime freight forwarding services will be grante d to foreign forwarders on a reciprocal basis. 
China does not accord Japanese nationals satisfact ory access to the supply of maritime freight 
forwarding services, so the Government of Japan  restricts Chinese operators from entering into 
maritime freight forwarding services. 
For your reference, we would like to inform y ou that the Government of Japan recognizes that 
NVOCCs are included in maritime freight forwarding services. 
Q16. China hopes to learn more about Japanese telecom regulatory system and legislations. a) Please provide a list of laws and regulations in the telecom sector.  Please provide information relating to the market share held by leading telecom carriers in the 
fix line, mobile, fax and data transmission services in Japan. How have the leading telecom carriers been restructured since the last review? 
b) Please provide information on the regulatory frame work for private investment in the telecom 
sector, and the total number, service scope and market share held by the private telecom 
enterprises. 
c) In case of unfair competition among telecom enterprises, which law is applicable: the law on 
telecom or the law on anti-competition? Ha ve there been any cases in this regard? 
d) Please provide information regarding the following areas: 
 (i) Policies and regulations on callback service and telephone card service;  (ii) Policies and regulations on th e interconnection among telecom networks; 
 (iii) Provisions on telecom standardization and protection policies on the interests of 
telecom service users. 
A. 
a) There are a great number of laws and regulations regarding the telecommunications sector. 
The major ones are as follows. Please see the website for more details. 
 http://www.soumu.go.jp/joho_tsusin/eng/laws.html  WT/TPR/M/142/Add.1 
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 • Telecommunications Business Law  
• Cabinet Order for Enforcement of the Telecommunications Business Law 
• Regulations for Enforcement of the Telecommunications Business Law  
• Law Concerning Nippon Telegraph a nd Telephone Corporation, etc.  
• Cabinet Order for Enforcement of th e Law Concerning Nippon Telegraph and 
Telephone Corporation, etc 
• Rules for Enforcement of the Law Concerning Nippon Telegraph and Telephone 
Corporation, etc. 
• Radio Law 
• Cabinet Order for Enforcement of the Radio Law 
• Regulations for Enforcement of the Radio Law 
In FY2003, NTT East, NTT West, and NTT Communications had a 67.6% share of all traffic in the 
fixed telecommunications sector. NTT DoCoMo had a 62.7% share in mobile telecommunications sector.  
b) Almost all telecommunications carriers in Japan are private companies, and their number 
amounts to more than 10,000. If "private te lecom enterprises" in the question means 
telecommunications carriers other than NTT East and West, which are regulated by the special law (Law Concerning Nippon Telegr aph and Telephone Corporation, etc.), these 
telecommunications carriers are able to provi de all kinds of telecommunications services 
except for telegraph. In FY2003, telecommuni cations carriers other than NTT East, NTT 
West and NTT Communications* had a 32.4% share of all traffic in the fixed 
telecommunications sector. Telecommunications  carriers other than NTT DoCoMo* had a 
37.3% share in the mobile telecommunications sector. There are no restrictions on foreign capital participation in any of the telecommunications carriers, other than the NTT shareholding company, in which foreign capital pa rticipation is limited so that the aggregate 
of the ratios of voting rights must be less than one third. 
 *  NTT Communications and NTT DoCoMo ar e not regulated by the Law Concerning 
Nippon Telegraph and Telephone  Corporation, etc. 
c) The AMA (Anti-monopoly Act) and the TBL (Telecommunications Business Law) each have 
a different purpose and objective.  Any violations  of one law in the telecommunications sector 
are subject to that law only. 
 In addition, the MIC in charge of the TBL a nd the JFTC in charge of the AMA define the 
application of each law by formulating a guideline for the promotion of competition in the 
telecommunications sector. There have been certain numbers of cases in which MIC or JFTC directed or ordered the telecommunications ca rriers who engaged in anticompetitive practices, 
pursuant to each law. 
d) (i) Callback services are not prohibited in Japan. If "telephone card service" in this 
question means International Simple Resale (ISR), Japan lifted a ban on the provision 
of ISR in December 1997. 
 (ii) Telecommunications carriers that install telecommunications circuit facilities shall 
agree to the request for interconnection from other telecommunications carriers, 
except in cases for which they have due reas ons. In addition, the telecommunications 
carriers installing Category I designated telecommunications facilities (NTT East and 
West) shall establish interconnection tari ffs and obtain authorization from the WT/TPR/M/142/Add.1 
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 Minister of Internal Affairs and Comm unications. The telecommunications carriers 
installing Category II designated telecomm unications facilities (NTT DoCoMo, etc.) 
shall establish interconnection tariffs and s ubmit a notification to the Minister of 
Internal Affairs and Communications. 
 (iii) In order to bridge the asymmetr y of information between consumers and 
telecommunications carriers and to encourag e consumers to make properly informed 
selections, the MIC provides information fo r consumers, receives complaints and 
consultations from consumers, and holds semi nars to support consumers. In addition, 
the amended TBL, which entered in to force in April 2004, obliged 
telecommunications carriers, etc. to explain outlines of terms and conditions 
including charges concerning telecommuni cations services pertaining to people's 
daily lives and obliged telecommunications carriers to process complaints. 
Q17. In January 2004, Ministry of Agriculture, Fo restry and Fisheries (MAFF) of Japan completely 
suspended the importation of birds/poultry and th eir products originating from China due to the 
outbreaks of Highly Pathogenic Avian Influenza. The Chinese government has since taken effective 
measures of extermination, control and preemptive prot ection to contain the epidemic situation. It has 
been half a year since the last case of Highly Pa thogenic Avian Influenza was detected in China. 
However, the importation of fresh and frozen poultry products from China has not yet resumed. The period of time of half a year has doubled the 90-day period stated in the bilateral agreement between 
China and Japan on poultry sanitary requirements. 
(1) Please explain the reason for the failure of the Japanese government to lift the import ban on 
fresh and frozen poultry products originating from China. 
(2) Please clarify the consistency of the practice of delay by Japan with Artic le 2.2, 5.4, 5.8 and 
Annex C 1(a) and (b) of the WTO SPS Agreement. 
(3) When will Japan lift the ban on importation of fresh and frozen poultry products? A. Japan is waiting for China to  provide information necessary for confirming that China is free 
from this disease. 
Q18. As to the suspension of importation of cooked poultry products originating from China by 
Japan due to the same reason as mentioned in que stion No.17, the Japanese side sent 5 groups of 
veterinary staff to inspect 35 processing plants  of cooked poultry products recommended by the 
Chinese side in March 2004. As a result, MAFF of  Japan approved and registered the aforesaid 
35 plants on 7 April 2004, which justified that both the hardware conditions and the management 
system of the Chinese enterprises are in line with standards set by Japan.  
The Chinese side then recommended another 122 enterp rises that have also met the criteria set in the 
Sanitary Requirements on Cooked Poultry and Pou ltry Products for Export to Japan, which was 
mutually agreed by China and Japan. Although the Chinese side has requested the Japanese side many 
times to conduct on-spot inspection of those enterpri ses and accelerate their registration. However, up 
to now Japan has not sent any gro ups to inspect those enterprises. 
The same thing is repeated by Japan regarding the inspection of Chinese processing plants of cloven 
hoofed animal products, which has brought negative impact on trade.  WT/TPR/M/142/Add.1 
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 (1) Please explain the reason for the repeated  delay of inspection on Chinese enterprises by 
Japan. 
(2) Please explain the compliance of this practice of Japan with Articles 5.4, 5.8 and 
Annex C 1(a) and (b) of the WTO SPS Agreement. 
A. While Japan asked China’s view on sending Japanese experts for on-site inspection in 
January 2005, the Chinese side responded that th ey would not available until late February. 
Q19. Ministry of Health of Japan has initiated sampling inspection of cyclamate on many import 
foodstuffs. Recently Japan decided to further expa nd the products coverage of this inspection.  
a) Please explain on the grounds of the above -mentioned inspection measures of Japan. Why 
CAC standard can not be accepted as the basis, please provide scientific justification. 
b) Please advise when Japan will abolis h this requirement of inspection. 
A. a)  (i) In Japan, food additives are permitted to be  manufactured or used only when they are 
designated by the Minister of Health, Labour  and Welfare as substances that may not 
pose health hazards based on the Food Sanita tion Law, which is also the practice in 
other developed countries. 
 (ii) Any person who wishes to use un designated food additives may submit an 
application, accompanied with necessary docum ents containing toxicity data, to the 
Minister of Health, Labour and Welfare.  
 (iii) In the discussion for authorization, Jap an evaluates the safety and usefulness of the 
target substance, based on sound science,  taking into account Codex standards and 
public comments.  
 (iv) Cyclamic acid, the substance in question,  is not permitted for use in the United States, 
either. However, if an application is f iled for authorization, Japan will discuss 
whether it should be authorized or not.  
b) Cyclamic acid, an undesignated food additive,  was detected in vari ous products imported 
from China in 2003. Therefore, since April 2004, inspection has been conducted by order of the Minister of Health, Labour and Welfare to the products that were produced by the 
manufacturers whose products were found to contain this substance. 
 The requirement of this inspection will be abolished under the condition that  manufacturers 
whose products are under this inspection notify th e Ministry of Health, Labour and Welfare of 
the cause and measures against recurrence, and th at we have confirmed the effects of these 
measures. Thereafter, Japan will apply the ordi nary inspection to the products of these 
manufacturers.  
Q20. The over strict residue level standard on agricultural products that Japan adopted and the 
quarantine and inspection measures taken in accordan ce with these standards have seriously affected 
the trade between Japan and other WTO members in cluding China. According to its Food Sanitation 
Law, Japan adopted MRLs of 670 different pesticid es, veterinarian drug a nd food additives in 2004, WT/TPR/M/142/Add.1 
Page 112  
 
 which are far stricter than the international standa rds of CAC and those of other developed countries. 
In addition, the required MRLs of the various species of the same kind of product are severely 
different from each other. of the MRLs for the produc ts produced in Japan are different and less strict 
than those of the imported products.  
a) In view of the obvious negative impact on trade when such a large amount of new standards 
are implemented, how does Japan ensure the cons istency of such a practice with the principle 
provided for in Article 5.4 of the WTO SPS Agreement? 
b) Please explain whether national treatment prin ciple and Article 2.2 of the SPS Agreement 
have been observed in this process. 
c) Please explain whether any transitional period has been provided for implementation of these 
new standards. In accordance with the principl e of special and differential treatment, does 
Japan plan to grant any additional transiti onal period for developing Members taking into 
account their practical difficulties? 
d) China provided detailed comments on this i ssue in November 2004. However no substantial 
explanations were received to these comment s in the reply from the Japanese side dated 
17 December 2004. Please indicate whether Japan has taken into consideration of the 
comments from other WTO Members in the process of adopting a standard, and how? 
A. The Ministry of Health, Labour and Welfare (MHLW) of, the Governme nt of Japan, revised 
the Food Sanitation Law in May 2003. Based on th e revised Food Sanitation Law, the MHLW is 
going to implement the positive list system. The system is aimed at prohibiting the distribution of food that contain agricultural chemicals above a certain level unless MRLs for the chemicals on the 
food are established. The agricultural chemicals in clude pesticides, veterinary drugs and feed 
additives. This system will go into effect within three years after the publication of the revised Food 
Sanitation Law take place. 
Before the positive list system enters into force, th e MHLW will establish the "level to be determined 
by the Minister of Health, Labour and Welfare, at the Pharmaceutical Affairs and Food Sanitation 
Council’s advice, as that having no potential to cause da mage to human health", (hereinafter referred 
to as the "default level") and provisional MRLs with reference to the standards of Codex Alimentarius 
and other relevant MRLs based upon scientific evaluati ons in order to ensure maximized protection of 
public health as well as to avoid u nnecessary disruptions in food trade. 
The Japanese MRLs apply indiscriminately to pr oducts produced in Japan and products imported 
from other countries. The Chinese comment which says "the required MRLs of the various species of 
the same kind of product are severely different from each other. of the MRLs for the products 
produced in Japan are different and less strict than  those of the imported products." is incorrect. 
The Government of Japan believes that the est ablishment of the provisional MRLs based upon 
international standards is consistent with the principle of the WTO Agreements, which recommend 
harmonization with the international standards.  
The positive list system will go into effect within three years after the publication of the revised Food 
Sanitation Law, that is, no later than May 2006. A grace period of six months will be set after the 
publication of the finalized MRLs.  WT/TPR/M/142/Add.1 
 Page 113 
 
 
 The Subcommittee on Pesticides and Veterinary Drugs , an advisory body of the Minister, will 
conduct further discussion before the provisional MR Ls are finalized, taking the obtained comments 
into consideration. The MHLW will then no tify the WTO in accordan ce with the necessary 
formalities, and also seek public comments on the final draft of the provisional MRLs. 
Q21. In our point of view, application of tec hnical barriers in Japa n including residue level 
standards etc in many cases lacks rationality and is inconsistent with WTO principles especially the 
national treatment principle that SPS and TBT measu res should observe. China would like to request 
that explanation and clarification be provided by Japan on the following cases: 
a) Japan requests that the Chio rpyifos residue level of the im ported fresh and frozen spinach 
shall be lower than 0.01 ppm, which is not only far stricter than the CAC international 
standard of 0.05 ppm and that of other deve loped countries, but also stricter than the 
Chiorpyifos residue level for vegetables produced in Japan. 
 Please provide scientific evidence to explain why Japan’s requirement is far stricter than the 
existing CAC standard. Please explain the reason why the required Chiorpyifos residue levels 
of the vegetables produced in Japan are 3 ppm while that of the imported vegetable is 0.01 
ppm.  
b) Japan still maintains the requirement to in spect the daminozide residue level in imported 
peanuts from China after 10 years of inspection w ithout finding problems. In terms of roasted 
eel, the Ministry of Health, Labour and Welf are of Japan suddenly adopted a mandatory 
inspection on residue of enrofloxacin from July 2003, which required the enrofloxacin residue level to be below 0.05 ppm. While Japan conducts  this inspection on each and every batch of 
imported roasted eel, it does not conduct su ch inspection on its domestic products. 
 Please explain whether this practice complies with Article 5.4 of the SPS Agreement and the 
national treatment principle? Does Japan have  any plan to eliminate these mandatory 
inspections? 
c) Japan stipulated that, from 1 August 2003 all the plastic toys sold on the market shall not be 
made from the PVC material containing DEHP, a nd the toys for oral contacts of the suckling 
shall not be made from PVC containing DENP. However, Japan’s definition of the suckling 
refers to infants under age of 6. This ban of u sage of DEHP/DIHP contained in PVC is stricter 
than the international common practice, which defined the suckling under age of 3. In addition, the current laboratory result has not shown any negative effects of DEHP or DIHP 
on human beings yet.  
 Please explain whether this ban complies with Article 2.2 of TBT Agreement. If yes, please 
provide the scientific basis of this requirement. WT/TPR/M/142/Add.1 
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 A. 
a) The Chinese comment which says the Japanese MRL for chlorpyrifos in  fresh and frozen spinach "is 
not only far stricter than the CAC international st andard of 0.05 ppm and that of other developed 
countries, but also stricter than the Chlorpyifos residue level for vegetables produced in Japan", is 
incorrect. In addition, the Japanese MRLs apply i ndiscriminately to both prod ucts produced in Japan 
and products imported from other countries. 
b) (1) Application of an inspecti on order related to daminozide 
Although China mentions in Paragraph 21(2) that ther e were no violations over the 10 years, this is 
not true. Japan has confirmed a total of 28 cases of violation on peanuts containing daminozide in the 
past 3 years: 8 cases in 2002, 14 cases in 2003, and 6 cases in 2004. 
(2) Application of an inspection order related to roasted eels Japan has applied an inspection order to Chinese ro asted eels since July 2003. This is  because 
enrofloxacin, which should not remain in livestock meat and seafoods, was detected in eel products 
twice at the time of import in March 2003, and even thereafter eel products violated Japanese 
standards more than 30 times.  
Japanese products do not receive inspection on  every lot for the reason given below.  
 (i) Enrofloxacin is not permitted for use in Japan.  
 (ii) the use of veterinary drugs is under  strict control. 
 (iii) monitoring tests did not find any violation cases in domestic eel products. 
(3) Release of an inspection order The inspection by order is a necessary and minimu m measure to ensure public health. Taking into 
account the causes of violation and the hygienic stat us in exporting countries, the inspection is limited 
to the minimum scope to minimize negative effects on trade. Thus, the measure is justifiable within 
the objectives of the Agreement. 
Japan will abolish the inspection by order when prevention measures for recurrence are established 
including—a) the cause of violation is identified, b) new regulations are set based on the identified 
cause, and c) the inspection system is strengthene d—and when we have confirmed that products in 
violation will not be imported in Japan any more. 
c) 
The regulation of PVC toys established on 1 August  2003 was to ensure the safety of young children. 
It was established based on scientif ic evidence obtained from toxicity and exposure evaluations of 
DEHP and DINP.  WT/TPR/M/142/Add.1 
 Page 115 
 
 
 Because there was no evidence showing that it is ade quate to limit for the application of the regulation 
to young children under age three, Japan applied th e regulation to children under age six, for which 
Japan had targeted regulation on toys for young children. 
This case was handled in alignment with the in ternational framework. We made the WTO SPS/TBT 
notifications on October 2001 and responded to the received comments.       
Q22. With respect to Japan’s patent protection system, China hopes Japan could clarify on matters 
as follows:  
a) As far as Article 103 of current Patent La w of Japan is concerned, would Japan please 
indicate whether Japan enforces rule of fault or ru le of no-fault for infringement determination and 
compensation? 
b) Please advise the number of applications fo r patents, utilities and designs from different WTO 
Members’ applicants as well as application revi ew period (i.e. time from lodging request for 
substantial examination till final approval). Please  also provide corresponding data for Japanese 
applicants.  
c) Please advise the number of patent infringement cases accepted by Japanese courts since last 
review and percentage of cases in which claimants won.  
A. a) In case of an ordinary lawsuit for compensat ory damages in accordance with the provision of 
Article 709 of the Civil Law of Japan ( tort), the claimant usually has to prove the intent or 
negligence of the other party. However, in a patent infringement case, the content of a 
patented invention has been made public, among ot hers, by the patent official gazette and the 
register of patents and only commercial acts sha ll fall under an infringement of a patent right 
or an exclusive license.  Therefore, it shall be presumed that the infringer would have been 
negligent by turning the burden of proof of negligence from the claimant to the respondent. 
 Since negligence is presumed as mentioned above, the infringer has to prove his/her 
impeccability in order to evade the charge for damages.   
 In this connection, if the respondent wishes the provision of Article 102(4) of the Japanese 
Patent Law to be applied to his/her case, he/s he must prove that the infringement occurred 
due to slight negligence. 
b) With regard to the number of applications  for patents, utility models, and designs from 
foreign countries as well as Japanese residents, pl ease refer to the attached tables (Attachment 
7, "Applications by Non-Residents in 2003" and lower side of Attachment 8, "Residents and 
Non-Residents" ), which are extracts from the "Annual Report 2004" of the Japan Patent 
Office (JPO).  This table is downloadabl e from the Japan Patent Office website. 
 http://www.jpo.go.jp/shiryou_e/index.htm 
Concerning the average examination period in 2003, statistics are as follows:  
 (i) patents (from request for examination to final decision:  31.1 months) , 
 (ii) designs (FA period(*1): 7.7 mont hs, SA period(*2): 12.9 months).   WT/TPR/M/142/Add.1 
Page 116  
 
  Although Japan does not have statistics about the average examination period broken down 
by country, Japan is conducting all examinations on a fair and equitable basis irrespective of 
the country of origin. 
(Note) (*1) FA period: Period from the filing date to the date when the first notice of examination (e.g. 
notification of reasons for refusal, decision to grant) is sent 
(*2) SA period: Period from the filing date to the date when the final decision following the first 
notice of examination (e.g. decision of  refusal, decision to grant) is sent 
c) The number of civil lawsuits related to a patent  right (Paragraph 1 of Article 6 of the Code of 
Civil Procedure) lodged before Japanese district courts in 2003 is 189 cases. The percentage 
of cases which plaintiffs won in district courts in 2003 is 20.7% (17 out of 82 cases).  
Q23. Japan began to enforce a new amendment to  the Law of Seedling on 1 July 2003, by which 
Japan conducts DNA test to certain products importe d from China, such as Chinese iris, to determine 
whether such products have offended IPR of Japan an d whether to adopt applicable import restrictive 
measures as deem necessary.  
a) Would Japan please describe the specific pro cedures for adopting import restrictive measures 
under such circumstance? And is it consistent with WTO rules to adopt import restrictive 
measures under such condition? 
b) Would Japan please indicate whether it is rational to maintain the practice of examining by 
opening each and every container under the circumstance that Japan had found no problems at all in all the examinations of the rush impor ted from China? Does such practice comply with 
WTO rules? If yes, please provide the specifics.  
c) Dose Japan import iris from other sources other than China? If yes, does Japan have the same 
practice of examination of those imports with that applied to those from China? 
d) Please explain the consistency of the Law of Seedling with the WTO TRIPS Agreement and 
the International Convention for the Protection of New Varieties of Plants. 
A. There is no "Law of Seedling"; however, the Government of Japan assumes that this is 
referring to the Seeds and Seedlings Law, which w as amended on 18 June 2003.  This law contains 
neither border measures nor DNA testing. 
a) Japan conducts inspections on what are cons idered to be high-risk cargoes, taking into 
account the name of articles of freight, quantity, value, country of departure, etc. from the viewpoint of legitimate policy objectives and is not adopting any import restrictive measures. 
b) Japan does not conduct inspections on each a nd every container of rush.  It conducts 
inspections on what are considered to be high -risk cargoes, taking into account the name of 
articles of freight, quantity, value, country of de parture, etc. from the viewpoint of legitimate 
policy objectives. 
c) Since there are no trade statistics solely for iris, Japan cannot confirm its import statistics.  
Japan does not adopt special measures specifically for iris.  WT/TPR/M/142/Add.1 
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 d) The WTO TRIPS Agreement says WTO Member countries shall provide for the protection of 
plant varieties either by patent or by an effective sui generis system or by any combination thereof.  The Seeds and Seedlings Law is an effective sui generis system to protect plant 
varieties that is consistent with the 1991 UPOV Convention. 
The statistics made by UPOV, C/38/7, show how  well the system works through the number of 
applications and registrations. WT/TPR/M/142/Add.1 
Page 118  
 
 Attachment 7 
Applications by non-residents in 2003 
Country/Organization of Origin Patents Utility models Designs Trademarks 
AE United Arab Emirates 0 0 0 12 
BH Bahrain 0 0 0 1 
CN China 204 35 36 356 
HK Hong Kong 60 18 46 147 
ID Indonesia 0 0 1 21 
IL Israel 311 1 37 55 
IN India 76 0 5 35 
IR Iran 0 0 0 1 
KR Republic of Korea 4,403 72 184 501 
LK Sri Lanka 0 1 0 5 
MO Macao 3 0 0 4 
MY Malaysia 13 0 1 24 
MN Mongolia 0 0 0 4 
PH The Philippines 4 0 1 4 
PK Pakistan 0 0 0 1 
QA Qatar 0 0 0 1 
SA Saudi Arabia 10 0 0 2 
SG Singapore 99 0 3 118 
SY Syria 0 0 0 2 
TH Thailand 9 1 18 76 
TR Turkey 7 0 0 82 
TW Chinese Taipei 1,573 1,568 234 477 
VN Viet Nam 0 0 0 10 A 
S 
I 
A 
 Total in Asia 6,772 1,696 566 1,939 
AT Austria 153 3 9 113 
BE Belgium 177 0 27 107 
BG Bulgaria 1 0 1 8 
BY Belarus 0 0 0 1 
CH Switzerland 726 3 204 1,057 
CY Cyprus 3 0 1 2 
CZ Czech Republic 8 0 0 13 
DE Germany 4,047 8 263 1,869 
DK Denmark 314 0 23 123 
EA Eurasian Patent Organization 1 0 0 0 
EE Estonia 1 0 0 2 
EP European Patent Office 5,835 3 0 0 
ES Spain 113 4 11 225 
FI Finland 334 0 47 93 
FR France 2,368 7 165 1,318 
GB United Kingdom 2,084 5 132 825 
GE Georgia 0 0 0 4 
GR Greece 4 0 0 10 
HR Croatia 3 0 0 0 
HU Hungary 25 0 0 13 
IE Ireland 30 0 3 50 
IS Iceland 6 0 0 2 
IT Italy 410 4 100 846 
LI Liechtenstein 73 0 10 49 
LT Lithuania 1 0 0 2 
LU Luxembourg 14 0 1 46 
LV Latvia 2 0 0 1 E 
U 
R 
O 
P 
E 
MC Monaco 0 0 1 29 
Table (cont'd)  WT/TPR/M/142/Add.1 
 Page 119 
 
 
 Country/Organization of Origin Patents Utility models Designs Trademarks 
MD Moldova 0 0 0 3 
MT Malta 1 0 2 0 
NL Netherlands 665 2 90 404 
NO Norway 114 0 13 44 
PL Poland 9 0 1 14 
PT Portugal 2 0 0 22 
RO Romania 0 0 0 3 
RU Russia Federation 53 0 0 60 
SE Sweden 1,006 2 47 261 
SI Slovenia 2 0 0 5 
SK Slovakia 1 0 0 3 
SM San Marino 1 0 0 3 
UA Ukraine 2 0 0 2 E 
U 
R 
O 
P 
E 
YU Serbia and Montenegro 0 0 0 1 
  Total in Europe 18,589 41 1,151 7,633 
KE Kenya 0 0 0 2 
MA Morocco 0 0 0 6 
MU Mauritius 0 0 0 2 
NG Nigeria 0 0 0 1 
SC Seychelle 0 0 0 0 
TN Tunisia 0 0 0 1 
UG Uganda 1 0 0 0 A 
F 
R 
I 
C 
A 
ZA South Africa 12 0 0 25 
  Total in Africa 13 0 0 37 
AN Antilles 0 0 0 1 
AR Argentina 4 0 0 8 
BB Barbados 1 0 0 15 
BM Bermuda 1 0 3 5 
BR Brazil 49 0 9 33 
BS Bahamas 1 0 2 12 
BZ Belize 0 0 0 1 
CA Canada 599 4 7 206 
CL Chili 1 0 0 71 
CO Colombia 1 0 0 5 
CR Costa Rica 3 0 0 0 
CU Cuba 12 0 0 7 
DM Dominica 0 0 0 1 
HT Haiti 0 0 0 1 
KN Saint Christopher and Navis 0 0 0 2 
MX Mexico 8 0 5 23 
PE Peru 1 0 0 2 
TT Trinidad and Tobago 1 0 0 0 
US United States of America 21,682 38 888 5,874 
UY Uruguay 2 0 0 2 A 
M 
E 
R 
I 
C 
A 
VE Venezuela 2 0 0 3 
  Total in Americas  22,368 42 914 6,272 
AU Australia 548 1 40 247 
FJ Fiji 0 0 0 4 
NZ New Zealand 77 1 2 71 
VU Vanuatu 0 0 0 1 
WS Samoa 1 0 0 0 O 
C E A 
N 
I A  Total In Oceania 626 2 42 323 
  Others 2,013 7 20 164 
  Total 50,381 1,788 2,693 16,368 
 WT/TPR/M/142/Add.1 
Page 120  
 
 Attachment 8 
Period of examination and appeal/trial examination 
1)  Examination - first action period  
 2001  2002  2003  
Patents and Utility models  22 months  24 months  25 months  
Designs  9 months  8 months  8 months  
Trademarks  11 months  9 months  7 months  
(Note) The period of first actions refers to the period from the date of application or request for examination to the date whe n the first 
notice of an examination result (mainly a d ecision to grant a patent, a decision of registration, or a notification of reasons for 
refusal) is sent by the exam iner to the applicant.  
2)  Appeals and trials  
Appeals before the grant of right (Appeal against examiner's decision of refusal) 
- first action period -  
 2001  2002  2003  
Patents and Utility models  18 months  19 months  19 months  
Designs  17 months  15 months  15 months  
Trademarks  20 months  24 months  24 months  
(Note) The period of first action refers to the period from the da te of appeal to the date when  the first notice of an appeal/t rial 
examination result (mainly an appeal/trial decision or notice of re jection) is sent by the appeal  examiner to the applicant. 
Oppositions (Appeal/Trial Examination Period) 
 2001  2002  2003  
Patents and Utility models  12 months  13 months  13 months  
Trademarks  9 months  11 months  11 months  
Appeal After the Grant of Right (Trial fo r Invalidation / Correction / Cancellation) 
 2001  2002  2003  
Patents and Utility models  12 months  10 months  10 months  
Designs  11 months  9 months  8 months  
Trademarks  12 months  11 months  9 months  
 
 
Residents and non-residents 
1)  Patents  
Applications  Registrations  
 Residents Non-Residents Residents Non-Residents 
1994 319,938 33,363 72,757 9,643 
1995 334,612 34,603 94,804 14,296 
1996  340,101  36,514  187,681  27,419  
1997  350,807  40,765  129,937  17,749  
1998  359,381  42,551  125,704  15,744  
1999  360,180  45,475  133,960  16,099  
2000  387,364  49,501  112,269  13,611  
2001  386,767  52,408  109,375  12,367  
2002  369,458  51,586  108,515  11,503  
2003  362,711  50,381  110,835  11,676  
  WT/TPR/M/142/Add.1 
 Page 121 
 
 
 2)  Utility models under New Law  
Applications  Registrations  
 Residents Non-Residents Residents Non-Residents 
1994 15,761  859 8,314 471 
1995 13,065  1,045 12,744 1,022 
1996  12,302  1,152  11,873  1,108  
1997  10,428  1,280  10,106  1,250  
1998  9,450  1,193  9,158  1,248  
1999  8,877  1,301  8,702  1,257  
2000  7,880  1,670  7,429  1,609  
2001  6,979  1,799  6,883  1,879  
2002  6,938  1,649  6,091  1,560  
2003  6,380  1,775  5,914  1,755  
(Note) "Utility Models under New Law" are the numbers of utility model 
3)  Utility models under Old Law  
Applications  Registrations  
 Residents Non-Residents Residents Non-Residents 
1994 738 173 44,772 328 
1995 620 156 49,750 450 
1996  526 102 81,536 964 
1997  289 51 38,285 467 
1998  219 55 24,845 262 
1999  76 29 11,893 134 
2000  17 20 3,453 122 
2001  9 19 668 11 
2002  4 12 125 17 
2003  1 13 18 7 
4)  Designs  
Applications  Registrations  
 Residents Non-Residents Residents Non-Residents 
1994 38,719 1,815 33,599 1,349 
1995 38,257 1,810 33,562 1,325 
1996  38,456 1,736 34,001 1,494 
1997  37,766 2,099 35,844 1,574 
1998  37,340 2,012 34,882 1,382 
1999  35,235 2,133 39,317 2,038 
2000  36,070 2,426 37,939 2,098 
2001  37,176 2,247 30,671 2,263 
2002  34,881 2,349 29,550 1,953 
2003  36,574 2,693 29,284 2,058 
(Note) Registrations include the numb er of similar designs registered. WT/TPR/M/142/Add.1 
Page 122  
 
 5)  Trademarks  
Applications  Registrations  
 Residents Non-Residents Residents Non-Residents 
1994 152,708 20,151 135,902 11,289 
1995 156,790 22,899 136,883 8,028 
1996  163,518 24,642 165,544 12,707 
1997  114,389 18,727 221,830 31,442 
1998  96,845 15,624 114,895 17,171 
1999  104,252 17,609 106,036 17,620 
2000  124,361 21,307 79,462 14,907 
2001  104,655 19,099 78,322 12,864 
2002  100,645 16,761 89,024 11,894 
2003  106,957 16,368 92,891 11,969 
(Note) Registrations includes the numbers of regist ration renewals and defens ive mark registrations.  WT/TPR/M/142/Add.1 
 Page 123 
 
 
 NEW ZEALAND  
Q1. Non-performing loans .  The progress made in disposal of non-performing loans by major 
banks and the strengthening of these financial institutions which has occurred since 2002 is 
commendable.  We would be interested in the Govern ment of Japan’s plans to tackle those issues in 
respect of regional banks?  
A. The Government of Japan plans to end the non-performing loan (NPL) problem at regional 
banks under the Action Program fo r Enhancement of Relationshi p Banking Functions through 
revitalizing and increasing the soundness and profitab ility of financing of small and medium-sized 
enterprises. The NPL ratio of regional banks d eclined from 6.9 percent at end-March 2004 to 
6.3 percent at end-September 2004. Japan therefore considers that the disposal of NPLs at regional 
banks has been steadily carried out. The Government  of Japan continuously strives to achieve the 
overall soundness of regional banks by accurately understanding their financial condition and 
expeditiously encouraging impr oved management through insp ections and supervision.  
Q2. Public Debt. The Secretariat report (WT/TPR/S /142, p.5, para. 9) indicates Japan’s public 
debt to GDP ratio is expected to increase to 163.4% in 2004 – putting it the highest among OECD 
countries. We note, in this regard, that one of th e major tasks in the ‘’consolidation period’’ for 
reform identified in the Government of Japan ’s report (WT/TPR/G/142, p.16, para. 78) is to 
implement a ‘’full –fledged budgetary system refo rm of the government sector’’. We would be 
interested in a further explanation of the Government  of Japan’s plans to address the public debt issue 
and over what timeframe. 
A. The government has reviewed all expenditure items  more strictly than ever before in FY 2005 
based on the policy that the government will mainta in its commitment to its fiscal restructuring 
policy. 
The level of the general expenditures for FY 2005 is  below that of the FY 2004 budget for the first 
time in the past three years. The amount of ne wly issued government bonds has been reduced from 
the previous year for the first time in the past f our years. These all lead to a significant improvement 
of about 3 trillion yen in the primary balance of the central government. 
(Note) 
 1. General expenditures: ¥47.3 trillion (-¥0.3 trillion) 
 2. Government bonds issues: ¥34.4 trillion (-¥2.2 trillion)  3. Primary balance in the central government: ¥15.9 (+¥3.1 trillion) 
For FY 2005, we have de cided to reduce the across-the-board in come tax credit. The ruling coalition 
has agreed to carry out comprehensive reform of  income taxation in FY 2006 and to discuss an 
increase in the consumption tax rate after FY 2007.  The government will carry out tax reform while 
taking these directions given by the ruling parties into account. 
The government will aim to achieve a surplus in the primary balance by implementing revenue and 
expenditure reform toward a sustainable fiscal structure. 
Q3. What policies does the Government of Japan ha ve in place to ensure that the bilateral and 
regional trade agreements it enters into meet its stated objective of being "complementary" to the WT/TPR/M/142/Add.1 
Page 124  
 
 multilateral trading system and do not risk weaken ing impetus to achieve progress in negotiations 
under the WTO’s Doha Development Round? 
A. Maintaining and strengthening the multilateral free trade system under the WTO has 
consistently been the main pillar of Japan’s extern al economic policy. In this regard, Japan continues 
to make efforts toward progress in negotia tions under the WTO’s Doha Development Round. 
While the WTO plays an important role in mainta ining and strengthening the multilateral free trade 
system, Japan is of the view that the bilateral and regional trade agreements offer a means of 
achieving liberalization beyond levels attainable under the WTO as well  as a means for strengthening 
economic relationships with tr ade partners in areas currently not covered by the WTO. 
Q4. Does the specific reference to "elements of free trade agreements" (WT/TPR/G/142, p. 10, 
para. 40) indicate a possible policy shift with regard to the scope of bilateral/regional arrangements by 
Japan, since the response provided at Japan’s last TPR  in 2002 where it indicated that "… with a view 
to ensuring that FTAs are consistent with WTO rul es, Japan does not intend to exclude any specific 
sector, such as agriculture, in negotiating FTAs"? (WT/TPR/M/107/Add.1) 
A. The reference to "elements of free trade ag reements" does not mean any policy shift with 
regard to EPAs/FTAs, but simply means that Japan ’s EPAs encompass a wide range of areas, that 
include not only trade in goods and services, but al so investment, movement of natural persons, 
government procurement, intellectual property, comp etition, mutual recognition, improvement of the 
business environment, and, cooperation. Japan fully recognizes the necessity of and aims at concluding EPAs which are consistent with the WTO rules. 
Q5. Japan’s Council of Ministers approved a Basi c Policy for the further promotion of Economic 
Partnership Agreements (EPAs) on 21 December.  This statement of Basic Policy included criteria to be taken into account when considering countries and regions with which Japan might negotiate 
FTA/EPAs.  We would be interested in more inform ation on how the Government of Japan intends to 
give effect to this Basic Policy and within what time frame? 
A. Japan has already been considering what count ries/regions to commence EPA negotiations with, 
in addition to those with which Japan is in nego tiation or supposed to initia te negotiations.  In the 
course of this consideration, Japan has been taki ng into account a variety of elements. The "Basic 
Policy" was established by rearranging those elements and restating them as criteria.  Therefore, Japan 
will continue this consideration based on  the criteria in the Basic Policy.   
However, it is quite difficult to show the timefram e for identifying countries/regions to negotiate with, 
because Japan will pursue this consideration taki ng into account the progress of on-going negotiations 
and other factors, as stipulated in the Basic Policy.  
Q6. Can Japan provide the tariff quota quantity and in-quota imports for all the quotas on fish and 
fish products for financial years 2001, 2002 and 2003? 
A. Japan has no tariff quota applied to fish and fish products.  Q7. The report refers to tariff quot as, which implies that there are two tariff rates (one for in-quota 
imports and one for over-quota imports).  We would appreciate a listing from Japan of the applicable 
in-quota and over-quota tariff rates for fish and fi sh products, including for squid and cuttlefish? 
A. Japan has no tariff quota applied to fish and fish products.   WT/TPR/M/142/Add.1 
 Page 125 
 
 
 Q8. Can Japan please elaborate on how a country ma y apply to show equivalence of recognition 
of the safety of its products? 
A. Regulatory authorities, in general, evalua te the comparability of conformity assessment 
schemes and equivalence of technical competence when judging the equivalence of recognition.  
However, the specific ways of judging the e quivalence of recognition depend on each regulatory 
authority.  
Q9. Can Japan please elaborate on the status of the activities by the MHLW Food Safety 
Committee in respect to food additives? 
A. The Food Safety Commission (FSC) in Japan  was established in July 2003 in the Cabinet 
Office of the Japanese government. The Commission is responsible fo r risk assessment for food and 
food additives. The Ministry of Health, Labor and Welfare (MHLW) is responsible for risk 
management for food and food additives. FSC has notified MHLW of the results of risk assessments 
of two food additives in the list issued by MHLW and five flavoring agents. 
http://www.fsc.go.jp/english/evaluationreport/foodadditive.html 
FSC will also carry out risk assessments of other substances at the request of MHLW. 
Q10. What specific steps is Japan taking to ensure  that regulators recognize the test results from 
accredited laboratories based overseas? 
A. We are currently working in a committ ee under JISC (Japanese Industrial Standards 
Committee) including members of regulators to ensu re that regulators recognize the test results from 
domestic and overseas accredited laboratories. 
Q11.  If 92% of JIS are aligned to their internationa l counterparts, what is the equivalent percentage 
alignment for Japan Agricu ltural Standards (JAS)? 
A. It is impossible to specify the percentage of  equivalence between international standards and 
JAS standard, because their compositions are different . For example, JAS does not include criteria for 
hygiene, while Codex standards include them.  
However, JAS standards are consistent with interna tional standards because they are revised regularly 
with a view to reflecting the latest international trends. 
Q12. Can Japan confirm that conformity to ISO/ IEC Guide 65 will be the new standard to decide 
whether overseas organizations meet the "country equivalency test", in order for them to apply for Registered Foreign Certifying Organisation (RFCO) accr editation for JAS?  If so, when is this change 
expected to be implemented? 
A. The advisory committee for reviewing the JAS system recommended introducing ISO/ IEC 
Guide 65 to the JAS system as criteria for RC O and RFCO accreditation. The government will 
propose a revision of the JAS Law in the current Diet session, in response to the recommendation of the advisory committee. The schedule of implementation is undecided. 
Q13. Can Japan advice the procedures for review ing JAS, including whether provision exists for 
input by overseas suppliers and governments? 
A. All JAS standards are supposed to be reviewed every 5 years. Draft sta ndards for the revision WT/TPR/M/142/Add.1 
Page 126  
 
 are published and uploaded onto the website of MAFF and JETRO in order to invite comments. The 
JAS Council adopts the final standards after consid ering the submitted comments. The meetings are 
open to overseas suppliers and foreign governments. 
Q14. With respect to the proposed additions to  the existing Non-Quarantine Pest List, can Japan 
advise the timetable for implementation once the pe riod for public comment is completed?  When 
would Japan expect these regulatory changes to be implemented?  Can Japan provide an indicative 
timeline for the work required to review further pests for possible inclusi on on the Non-Quarantine 
Pest List? 
A. A public hearing meeting and procedures fo r public comments are required in advance as 
stipulated in the Plant Protection Law and administ rative rules of the MAFF, respectively. After these 
processes are cleared, we will pro ceed with the procedures necessar y for revising the ministerial 
ordinance for designation of non-quarantine pests.  
We would like to decide the schedule as soon as possible. Q15. In reply to a question from New Zeala nd in Japan’s 2002 Trade Policy Review, Japan 
indicated that it intended to carry out a risk assessme nt on BSE status by coun try and item, including a 
risk assessment of New Zealand. We would appr eciate updated advice on Japan’s plans to implement 
a programme for identifying different levels of B SE risk? If so, when will country specific risk 
assessment be completed, and implemented? 
A. In Japan, the Food Safety Commission (FSC ), the independent risk  assessment organization 
for food safety, was established in 2003. Risk mana gement agencies will consult FSC on the BSE risk 
of products from exporting countries. 
Q16. Can Japan advise when the "temporary" ban on imports of processed animal protein, 
including pet food, and meat and bone meal (e.g. for non-ruminant(pig and poultry) use) will be lifted, 
or when a proper risk-based approach will be instituted to replace the ban ?  
A. Assessment of BSE risk will be made by FSC and currently it is unforeseeable whether or not 
the import suspension of processed animal protein will be lifted. 
Q17. Please clarify the status of the Ministry of Health, Labour and Welfare’s newly introduced 
guideline on imports of specified risk materials, including those from non-BSE countries? 
A. Importing beef and beef products from BSE-in fected countries is prohibited to ensure the 
safety of foods in Japan. 
Even if they are non-BSE countries at the present tim e, once BSE occurs in these countries, it will be 
necessary to take measures such as prohibiting th e imports of beef and beef products from these 
countries immediately and also recalling specified risk materials (SRMs) and foods containing SRMs that are circulating in the Japanese market. Therefor e, in order to avoid confusion in Japan, Japanese 
importers have been given advice not to import SR Ms, such as brain and spinal cord from non-BSE 
countries. 
Q18. In view of the apparent appeal of the Sp ecial Zones for Structural Reform programme (as 
evidenced by the approval of 324 zones in only eighteen months) and the importance placed on it by the Government of Japan, we would be interested to know what steps the Government will be taking  WT/TPR/M/142/Add.1 
 Page 127 
 
 
 to apply the experience of these zones to benefit structural reform nation-wide and the timetable 
expected to apply to these steps? 
A. The exceptions to regulations implemented in Special Zones are to be assessed after about 
1 year. Evaluations must be made by the Evalua tion Committee, which will be established within the 
Headquarters for the Promotion of Special Zones fo r Structural Reform, and will the comprised of 
private-sector personnel, scholars and other third pa rties. The achievements in Special Zones should 
be steadily extended to the whole country.   
Q19. How will Japan define "core farmers" eligible  for direct payments?  Also, will Japan develop 
criteria for recognising village collectives as corporate entities?  
A. As is shown in the report of the Government  of Japan, the Council of Food, Agriculture and 
Rural Area Policies is currently reviewing its Basic Plan.  The Council is to submit the draft of the 
revised Plan in March, which in turn will be deci ded by the Cabinet. The details of policy measures 
will be subsequently decided by the Government, based on the direction described in the new Basic 
Plan. 
Q20. How does Japan intend to implement a direct  payment system in an environment where the 
relative competitiveness of different sectors is so great?  How will Japan respond to calls for special 
treatment for sensitive sectors (rice, beans, dairy produ cts) without entrenching structural distortions? 
A. As is shown in the report of the Government  of Japan, the Council of Food, Agriculture and 
Rural Area Policies is currently reviewing its Basic Plan.  The Council is to submit the draft of the 
revised Plan in March, which in turn will be deci ded by the Cabinet. The details of policy measures 
will be subsequently decided by the Government, based on the direction described in the new Basic 
Plan. 
Q21. As indicated above Japan’s support levels fo r farming exceed the OECD average.  Does Japan 
intend to reduce the total level of financial support that it provides to the farming sector? 
A. The Basic Law of 1999 stipulates that the price of agricultural products should reflect the 
supply and demand situation as well as the quality of  the product.  Since the implementation of the 
Basic Law, price support measures on a number of  agricultural products have been reformed, 
reducing the current AMS level of Japan to less than  20% of the final commitment level.  The policy 
reform debate under way in the Council, which builds on these policy reforms in the past years, 
focuses on the acceleration of the structural reform  in the agriculture sector which has not progressed 
as far as envisaged.  The successful reform will allo w economically sustainable development of the 
sector with less government support. 
Q22. Japan’s energy self-sufficiency ratio was about 20% in 2000, while Japan’s food self-
sufficiency ratio remains around 40% on a calorific basis (WT/TPR/S/142, p.58, para. 2). The Basic Law on Food, Agriculture and Rural Areas is to be revised in March 2005. Can Japan advise what the 
approach to self-sufficiency ta rgets will be in the new Law? 
A. It is not the Basic Law on Food, Agriculture  and Rural Areas, but the Basic Plan drawn up 
based on the Law which will be revised in March 2005. 
The target self-sufficiency ratio and its associated measures under the new Basic Plan are currently 
under consideration.  WT/TPR/M/142/Add.1 
Page 128  
 
 Q23. The Secretariat’s report (WT/TPR/S/142, p.59, para. 10) notes that 15.3% of duties applied to 
agricultural products are non- ad valorem . This tends to conceal relatively high tariffs in ad valorem  
terms. Does Japan have any plans to convert their specific tariffs to  a more transparent ad valorem  
tariff system?   
A. Non- ad valorem  tariffs have merits also; duty amounts can be easily calculated without 
applying Customs valuation rules, to name but one.  Accordingly, we have no plan to convert specific 
tariffs to any other tariff system. 
Q24. As fish and fish products are not part of the Agriculture Agreement, why are they reported as 
being among the agriculture goods tariff chapters, and listed in table IV.1, Applied MFN Tariff 
Protection in Agriculture, FY 2004, unde r section IV (2) Agriculture on p. 61? 
A. Japan understands that fish and fish products are not part of the Agriculture Agreement. The 
document mentioned was made by the Secretariat.  
Q25. Can Japan explain why there has been no e ffect on the quota fill rates for the under filled 
TRQs, despite the introduction of a reallocation mechanism, and despite Japan's view that the 
reallocation mechanism for the ODPGU had led to a high application rate? 
A. While the quantity of applicat ion in "the other dair y products for general use" has increased, 
most of the other TRQs have been under-filled even after reallocation, mainly because their domestic consumption has declined.    
Q26. Can Japan explain the processes and proce dures by which it ensures that unused quota is 
returned by the license holder within a timeframe th at allows reallocation during the same fiscal year? 
A. The license should be returned directly to MA FF after the license holders decide not to use 
their quota. The reallocations of the unused quot a are held on several occasions for applications.    
Q27. Can Japan provide a clear description of the reallocation mechanisms as they apply to each 
dairy TRQ?   Does the reallocation mechanism differ between different TRQs? 
A. The same reallocation mechanism is applied to each dairy TRQ. The reallocation mechanism 
has already been notified to the WTO. Further details are reported in Japan’s notifications 
(G/AG/N/JPN/91). 
Q28. Do the low quota fill rates and the oversub scription for the ODPGU indicate a shift in demand 
patterns for various product categories?  If not, then what are the reasons for the discrepancy in fill 
rates, given that total dairy production in Japan  has been decreasing as dairy farm numbers have 
declined, which would normally indicate a requirement for increased imports. 
A. The variance in fill rates corresponds to the shift in demand patterns. 
Q29. If the low fill rates for seven TRQs and the oversubscription to the ODPGU represent a 
demand pattern shift, would it not be in the overa ll spirit of GATT/WTO for Japan to maintain its 
overall access commitments by increasing the size of the ODPGU?   
A. TRQs on dairy products, introduced with tariffi cation in accordance with the agreement of the 
Uruguay Round, were bound as "current access opportunities" by common agreement among 
Members. Current access opportunities represent the av erage quantity of the products imported during 
the base period (1986 to 1988).  WT/TPR/M/142/Add.1 
 Page 129 
 
 
 Q30. Transport services.  The Secretariat report (W T/TPR/S/142, pp. 73-75, paras 48-56) indicates 
no real change in the regulatory environment fo r transport services, including maritime and air 
transport services.  In light of the importance the Government of Japan recognises such infrastructural 
services have in determining business competitiveness, we would be interested to know what plans 
the Government of Japan has to review the regul atory environment for transport services to seek 
enhanced efficiency and competitiveness? 
A. The Government of Japan has been promoting the review of regulatory environment, 
including that in transport services, based on th e Three-Year Program for Promoting Regulatory 
Reform, as follows: 
(Examples) 
With regard to the port transport business in ports other than the nine major ports, the Government of 
Japan is planning to submit a bill to introduce the sa me regulatory reform as in the nine major ports, 
including the elimination of the supply and demand adjustment regulation, to the Diet session this 
year. 
With regard to administrative procedures to be app lied to port authorities, the Government of Japan is 
promoting the simplification of the procedur es by introducing the One-Stop Service system. 
Q31. We have noted the reforms of April 2003 whic h allowed private sector operators to engage in 
"correspondence delivery business" (WT/TPR/S/42, p.7,  para. 16) and the Basic Policy announced in 
September 2004 envisaging privatisation of Japan  Post over the period 2007-2017.  New Zealand 
welcomes Japan taking steps to introduce competition in postal services.  We would appreciate further 
details on the range of existing postal and courier services already open to competition, as well as 
advice on the timetable with which the Government of Japan expects further details on the planned 
privatisation of Japan Post to be available? 
A. In Japan, the following postal and courie r services are already open to competition. 
1. Delivery of "Correspondence" To ensure universal service of mail delivery and to improve users’ benefit through competition, 
operators in the private sector can  provide the following "postal" services subject to a permit from the 
Minister in charge. 
 (1) Services for delivery of any kind of "correspondence" on condition that the operators 
provide "general correspondence delivery ser vice" throughout the country.  "General 
correspondence delivery service" refers to de livery within 3 days, as a rule, from the 
day of acceptance of correspondence whose lengt h is 40cm or less, width is 30cm or 
less, height is 3cm or less and weight is less than 250g. 
 (2) Services for delivery of "specific corres pondence" only, which are any of following. 
  (i) Correspondence delivered within 3 hours of its receipt 
  (ii) Correspondence charged more than JPY1,000 for its delivery   (iii) Correspondence the sum of length, width and height of which is more than 
90cm or weight of which is more than 4kg WT/TPR/M/142/Add.1 
Page 130  
 
 2. Delivery of any other kind of document or small package 
Services for delivery of these items are widely unde r competition by operators in the private sector, 
subject to approvals or permits from the Ministers in charge. 
The Government of Japan is currently designing institu tions and is planning to submit the bills to the 
162nd Diet session, which started on 21 January, to  privatize Japan Post in April, 2007.  WT/TPR/M/142/Add.1 
 Page 131 
 
 
 UNITED STATES  
Q1. Please relate how real GDP changed after th e implementation of the new model and please 
comment on the new analysis’ implication for Japan’s near-term economic outlook. 
A. In January 2005, the Government of Japan released its new official outlook. With the 
adoption of chain-weighted deflators by the authority,  deflators in this outlook are also estimated as 
chain-weighted deflators, and it is expected th at this will improve the degree of accuracy.   
The outlook says that the Japanese economy is expect ed to continue a moderate recovery led by 
private demand. The growth rate of real GDP is expected to be approximately 2.1% in FY2004 and 
1.6% in FY2005.  
This is a comparison of the data in the original Table 1.1 with the new data. The chain-linking method 
has been applied to Japan’s SNA from the second pr eliminary quarterly estimates of GDP for July – 
September 2004 and the annual revision for FY 2003,  which were released on December 8, 2004. 
  2001 2002 2003 
Real GDP *1 0.2 -0.3 1.3 
 *2 (0.4) (-0.3) (2.4) 
Real domestic demand *1 0.8 -0.9 0.7 
 *2 (1.2) (-1.0) (1.8) 
Private consumption *1 1.1 0.5 0.2 
 *2 (1.7) (0.9) (0.8) 
Government consumption *1 3.0 2.6 1.1 
 *2 (3.0) (2.4) (1.0) 
Gross fixed investment *1 -1.4 -5.7 0.8 
 *2 (-1.1) (-6.2) (3.0) 
Real exports of goods and services *1 -6.0 7.3 9.1 
 *2 (-6.1) (8.0) (10.1) 
Real imports of goods and services *1 -0.7 1.3 3.9 
 *2 (0.1) (2.0) (3.0) 
Exports of goods and services (% of GDP) *1 10.1 10.9 11.7 
 *2 (10.4) (11.2) (11.8) 
Imports of goods and services (% of GDP) *1 9.3 9.4 9.7 
 *2 (9.8) (9.9) (10.2) 
GDP deflator (% change) *1 -1.3 -1.3 -1.4 
 *2 (-1.5) (-1.2) (-2.5) 
Note:*1 indicates the new data compiled with the chain-linking method and *2 indicates the data in the original Table 1.1. 
Q2. Does Japan intend to broaden regulatory reform  in the area of agriculture and food policy? 
For instance, Japan’s system for conducting pest risk  assessments is in need of modernization, its SPS 
measures in many cases are applied more than the ex tent necessary to protect animal, plant, human 
life and health, and its regulatory system on Food Additives makes it extremely difficult to get new 
food additives approved. 
A. On March 19, 2004, the Government of Japan  created the latest "Three-Year Program for 
Promoting Regulatory Reform" decided by the Cabi net. SPS measures of Japan are consistent with 
the WTO/SPS Agreement. WT/TPR/M/142/Add.1 
Page 132  
 
 Q3. With reference to paragraphs 9-15 on pages 17-19 of the Secretariat Report, the United States 
understands that Japan has been active in negotia ting regional agreements since this document was 
prepared. 
a) What new negotiations, if any, have been  initiated since completion of this report? 
b) What negotiations have been concl uded since completion of this report? 
A. 
a) Japan has not initiated any new negotiations on FTAs/EPAs since completion of the Report.  
b) No negotiation has been concluded since comple tion of the report. Japan is still continuing all 
negotiations on EPAs and aims to conclude them expeditiously. 
Q4. Referring to paragraphs 21-31 on pages 20-22 of the Secretariat Report: 
a) Approximately what percentage of bilateral trade in value terms has been liberalized under 
the FTAs/EPAs Japan has concluded to date? What percentage has been exempted? Under 
what timetables will trade barriers be eliminated? 
b) Approximately what percentage of tariff lines have been liberalized under the FTAs/EPAs 
Japan has concluded to date?  What  percentage has been exempted?  
c) Please provide an update of this section on a ll bilateral trade agreements negotiated since 
completion of the Secretariat Report. 
A. a) The EPA which has been concluded to date  is the Japan-Singapore EPA. On a trade volume 
basis in 2000, the Agreement will result in ta riff elimination on over 98% of trade in goods 
between the two countries, which means that  approximately 2% will be subject to the 
exemption. The tariff elimination w ill be completed on 1 January 2010. 
b) On a statistical code 2000 (HS 9 digit level) basis, the tariff elimination by the Japanese side 
covers approximately 77%, which means approximately 23% has been exempted. 
c) The update on all bilateral trade agreem ents negotiated by Japan is the as follows: 
 As for the Agreement for the Strengthening of the Economic Partnership with Mexico , it was 
approved by both houses of the Diet in Nove mber 2004, and will  enter into force on 1
st April 
this year. 
 As for the negotiations with the Philippines, on 29th November 2004, Prime Minister Koizumi 
and President Arroyo confirmed that both sides reached agreement for the most part of the 
primary elements of the Agreement. 
 As for the negotiations with Malaysia, th e sixth round of negotiations was held in 
November 2004. 
 As for the negotiations with Thailand, the fifth round of the negotiations was held in 
December 2004.  WT/TPR/M/142/Add.1 
 Page 133 
 
 
  As for the negotiations with the Republic of Korea, the sixth round of negotiations was held 
in November 2004. 
Q5. The Government Report notes in paragraph 44  on page 11 that Japan has concluded its 
Economic Partnership Agreement (EPA) with Mexi co. While the agreement is Japan’s second EPA, it 
is the first with a nation with significant agricultural exports.  
a) Under the Japan-Mexico EPA, what percenta ge of Japan’s agricultural tariff lines is 
completely excluded from coverage in the Agreement?   
b) Of the agricultural tariff lines that are covere d by the Agreement, what percentage involve the 
imposition of tariffs and what percent involve  the imposition of quotas, including tariff-rate 
quotas (TRQs)? 
c) What will be Japan’s average tariff reduction on agricultural products from Mexico in the 
Agreement’s first, fifth and tenth year of implementation? 
A. a) On a statistical code 2002 (HS 9 digit leve l) basis, approximately 50.0% of Japan’s 
agricultural, forestry and fishery products ar e excluded from coverage in the Agreement. 
b) On a statistical code 2002 (HS 9 digit level) basi s, of Japan’s agricultural, forestry and fishery 
tariff lines covered by the Agreement, approxi mately 7.4% involve th e imposition of tariffs, 
and approximately 6.7% involve the imposition of quotas.  
c) Japan has not yet calculated the figure of average tariff reduction. Q6. The Government Report also states that the Japan-Mexico EPA would eliminate customs 
duties on goods representing 96 percent of total bilateral trade. 
a) To clarify, is that 96 percent of current trade? 
b) What percentage of Japan’s overall tariff lin es will be reduced to zero in the Agreement’s 
first, fifth and tenth years of implementation? What percentage of the agriculture tariffs? 
A. a) The Japan-Mexico EPA has resulted in tariff elimination on approximately 96% of trade in 
goods on a 2002 trade volume basis.  
b) On a statistical code 2002 (HS 9 digit level) basis, 76.8% in the first year, 78.7% in the fifth 
year and 83.7% in the tenth year, respectively, of Japan’s overall tariff lines will be reduced to 
zero. In addition 35.6% in the first year, 38.2% in the fifth year and 46.3% in the tenth year, respectively, of Japan’s agricultural, forestry and fishery tariff lines will be reduced to zero. 
Q7. In the Japan-Mexico EPA, Japan provides Mexi co with a small amount of duty-free market 
access on a few sensitive products through TRQs, which ar e subject to renegotiation in the fifth year. 
Please provide Japan’s plan for fully liberalizing trade in these products.    
A. Given that the treatment of these products is subject to future consultations with Mexico, 
Japan cannot provide any plan at this moment.  WT/TPR/M/142/Add.1 
Page 134  
 
 Q8. 
a) With respect to Japan’s longstanding and prohibitive TRQ on footwear ( in-quote rate of 
21.6 percent/out-of-quota duty rate of ¥4,300 per pair ), which the Secretariat Report does not 
appear to mention, please explain the policy rationale for the high degree of protection of 
Japan’s domestic footwear producers.  
b) Please indicate whether Japan intends to in crease the volume of its footwear quota.  If so, 
when? 
A. a) Leather and leather-related industries have hist orically been concentrat ed in several limited 
regions, and restructuring the industries is very difficult. Therefore, the Government of Japan 
maintains a tariff quota system for leather footwear. 
b) After the conclusion of the Uruguay Round of the GATT negotiations, the number of 
companies in the leather-related industry decreased approximately 40% between 1993 and 
2002.  Given this industry’s severe business situati on, the Government of Japan has no plan to 
consider an increase of the volume of the tariff quota for leather footwear. 
Q9. With reference to paragraph 40 on pages 34 a nd 35 of the Secretariat Report, when Japanese 
entities subject to the WTO/GPA commission or finan ce Private Finance Initiative (PFI) projects or 
other projects using new commissioning or financing mechanisms, are the entities required to use procurement procedures consistent with the WT O/GPA?  Please provide a detailed explanation. 
A. There are many new types of commissioning or  financing mechanisms and furthermore, there 
are various types of PFI.  Thus, it is difficult to ge neralize.  However, in principle, entities subject to 
the WTO/GPA are required to use procedures which are consistent with the GPA as long as they are 
not less than the thresholds. 
Furthermore, the WTO Committee on Government Procurement is planning to discuss during the 
ongoing negotiations on the revision of GPA how the revised GPA should deal with PFI (BOT and 
others). 
Q10. 
a) Please explain why the use of single tendering continues to rise. b) How does Japan ensure that the use of single tendering is consistent with the Agreement on 
Government Procurement? 
c) Has Japan taken any measures to reduce the u se of single tendering?  If so, please describe.  WT/TPR/M/142/Add.1 
 Page 135 
 
 
 A. 
a) The share of single tendering remains at the same level in terms of the number of contracts.  
On a value basis, as the United States of Americ a pointed out, the share of single tendering 
continues to increase. 
The trend in single tendering 
 1998 1999 2000 2001 2002 
Number of Contracts 19.7% 20.3% 20.8% 17.3% 18.9% 
Procurement Value 29.6% 28.3% 30.8% 31.1% 35.4% 
 In 1998-2002, shares of single tendering cases under Article XV: 1 (d) (i.e. interchangeability 
with already existing equipment or services) were on an increasing trend. 
Basis for use of single tendering procedures under the GPA 
 1998 1999 2000 2001 2002 
Article XV:1(a) 41.8% 35.7% 29.7% 18.5% 23.5% 
Article XV:1(b) 22.0% 25.9% 30.7% 30.1% 25.2% 
Article XV:1(d) 31.8% 33.5% 35.3% 45.1% 46.4% 
Others 4.4% 4.9% 4.3% 6.3% 4.9% 
b) Japan is properly implementing the WTO/GPA and together with Japan’s voluntary measures, 
which surpass those stipulated in the GPA, Jap an has been making every possible effort to 
ensure that Japan’s procurement procedures are conducted in a transparent, fair and 
competitive manner.  When entities which are subject to the GPA choose to use limited 
tendering procedures, they only do so in a manner consistent with the GPA.  In addition, in 
cases where those entities which are subject to th e GPA decide to procure goods and services 
valued at above 100,000 SDR by limited tendering procedures, they are required to publish a notice of their intent to use such limited tendering procedures in the official gazette ( Kanpo ) 
at least 20 days in advance of the pl anned date of the award of contract. 
c) At the Inter-Agency meeting on Efficient Administration held on June 2004, which was 
attended by all the Ministries and Agencies, the Promotion of Efficient Administration Plan 
was agreed upon.  The Plan aims to progressi vely expand its share of procurement using an 
open competitive bidding procedure. 
 In December 2000, the Ministry of Finance sent out a memo to other Ministries and Agencies 
which said that using an open competitive biddi ng procedure is the principle rule which is 
duly stipulated in the Accounts Law in order to ensure the proper usage of limited tendering 
by all the other Ministries and Agencies. 
 Furthermore, in the Cabinet meeting which was held in December 2004, the Minister of 
Finance announced that compulsory publication of notices on the occasion of using limited tendering procedures would be e xpanded and the internal audit system within each Ministry 
and Agency on the use of limited tendering woul d be enhanced in order to ensure the 
transparency and efficiency of limited tende ring and to enhance the checking system on 
limited tendering. WT/TPR/M/142/Add.1 
Page 136  
 
 Q11. In the same paragraph, the Secretariat Re port states, "Procurement from foreign suppliers, 
which has always been low, decr eased in 2002, to 4.2 % and 2.1% in value and contract terms, 
compared with 6.9% and 2.7%, respectively, in 20 00.  The shares of foreign suppliers in contracts 
resulting from open, selective, and single tenders were  1.3%, zero, and 5.3 % in 2002 (the 2000 ratios 
were 1.7%, zero, and 3.2%)." 
Please explain why the share of procurement from fore ign suppliers continues to decrease.  Are there 
measures that discourage the purchase of goods and services from foreign suppliers? 
A. Japan has no rules or regulations that discriminate against foreign suppliers, goods, or 
services in government procurement covered by th e Agreement on Government Procurement (GPA). 
As a matter of fact, the Japanese government has b een making efforts to ensure non-discriminatory, 
transparent, and fair procurement procedur es by implementing additional measures beyond the 
obligations under the GPA.  For example, under th e Action Program on Govern ment Procurement, to 
facilitate the participation of foreign suppliers, the 40-day tendering period of the GPA has been 
extended to 50 days when entities in Annexes 1 and 3 of the GPA procure goods and services 
(excluding construction work, architectural, engineering and other technical services). 
As for the share of procurement from foreign supplie rs that the United States of America pointed out, 
according to the statistical data below, the ratio of foreign suppliers’ awards remains at the same level 
both in the number of contracts and in value terms.  
Ratio of foreign suppliers’ awards 
 1998 1999 2000 2001 2002 
Procurement Value 5.6% 4.7% 6.9% 4.4% 4.2% 
Number of Contracts 2.1% 2.4% 2.7% 2.6% 2.1% 
However, referring to next statistical chart, the ratio  of foreign suppliers’ tenders has been lower than 
the ratio of awards to them.  The low procurement ratio seems to result from the low ratio of foreign 
tenders. 
Ratio of foreign suppliers’ tende rs and awards in open tendering 
 1998 1999 2000 2001 2002 
Ratio of tenders 1.6% 1.0% 1.2% 0.8% 0.6% 
Ratio of awards 1.8% 1.6% 1.7% 2.2% 1.3% 
(Note) 
Ratio of tenders: The number of foreig n tenders / The total number of tenders 
Ratio of awards: The number of contracts awarded to  foreign tenders / The total number of contracts 
Q12. a) Please indicate the public works projects valued at or above the WTO GPA threshold that are 
not subject to open competitive bidding, and indi cate the type of procurement method that is 
used for such projects.  WT/TPR/M/142/Add.1 
 Page 137 
 
 
 b) 
(1) Does the absence of data mean that foreign suppliers have not been awarded any public works 
contracts?  If foreign suppliers ha ve been awarded public works cont racts, please provide information 
on such contracts. 
(2) US information suggests that the foreign sh are of public works contracts is well below one 
percent. Why does the foreign share of Japan’s pub lic works sector remain so very low? Does the 
Japanese government have any plan to try to address this situation? 
A. a) As the Secretariat Report states, almost a ll public works projects valued at or above the 
WTO/GPA threshold are procured through open competitive bidding procedures.  There are a 
few projects, however, which require different procedures such as limited tendering due to the 
urgent needs caused by unexpected natural disaster s, for example.  At any rate, all these cases 
of procurement are conducted in a way that is fully consistent with the GPA. 
b) (1) The absence of data does not mean at all that  foreign suppliers have not been awarded any 
public works contracts in Japan.  The statement whic h the Secretariat Report refers to is cited from 
Japan’s Annual Report on Governme nt Procurement, which only c overs procurement on goods and 
services.  This is the simple reason why there are no data available on public works contracts.  In fact, 
foreign suppliers have been awarded a number of  public works contracts in Japan’s procurement 
market.  The statistical data on procurement including public works, which is required by 
Article XIX 5 of the GPA, is under preparation and is  expected to be submitted to the WTO shortly. 
(2) Japan conducts fair, non-discriminatory and tr ansparent procurement in  accordance with the 
WTO’s Government Procurement Agreement and "t he Action Plan on Reform of the Bidding and 
Contracting Procedures for Public Works" (approved by the Cabinet on January 18, 1994) which is a 
voluntary measure.  The relevant sections of govern ment ministries and agencies have been providing 
necessary information and consultation to foreign firms in order to promote foreign construction 
companies to enter the Japanese construction market. 
The foreign share of public works is considered  to be dependent on various factors such as 
construction market trends including the volume of public investment, the competitiveness of foreign 
firms and their willingness to join the market.  
Q13. In paragraph 42 on page 36, the Secretaria t Report notes there have been two cases of bid-
rigging since the Act Concerning Elimination and Pr evention of Involvement in Bid Rigging entered 
into force in January 2003.   
a) In the two cases, please describe the extent, if  any, that the individual officials were held 
responsible. 
b) Does the Act require the Japan Fair Trade Co mmission to direct or order the ministry or 
agency heads and local authorities to take measu res to eliminate official complicity in bid 
rigging activities?  If so, please describe any such measures. WT/TPR/M/142/Add.1 
Page 138  
 
 c) Also, please indicate whether the ministries/local authorities have responded and describe 
their responses. 
d) Are Japanese authorities considering new penalties or other measures against officials found 
to be complicit in rigging bids?  If so, please describe such penalties or measures and indicate 
the likelihood of the establishment of new penalties. 
A. 
a) In the bid-rigging case of the Iwamizawa municipal government in Hokkaido, its officials 
repeatedly and continuously determined the winners of the bidding of construction works 
under the guidance of its high officials in or der to achieve the annual target amount of 
awarding contracts set for individual construction fi rms by the said officials. To that end, the 
said officials informed the pre-determined winne rs of the estimated construction fee for each 
designated bidding. 
 In the bid-rigging case of the Niigata municipal government in Niigata Prefecture, its officials 
repeatedly leaked the ceiling prices of construc tion work, which was confidential information, 
to the pre-determined winners.  These designate d winners were determined by the interested 
bidders themselves before the opening of tende rs upon their request.  Internal confidential 
documents, which are submitted to the Desi gnation Committee on the Contracting Works, 
were repeatedly leaked to the interested bidders. 
 The corrective measures, including sanctions agai nst these individual offenders, are left to the 
respective municipal governors’ discretion. 
b) The Act Concerning Elimination and Preventi on of Involvement in Bid Rigging authorizes 
the JFTC to demand the ministry or agency heads and local authorities to improve their 
administrative measures on bidding and contract s in order to eliminate bid-rigging activities. 
(Note) The local authorities requested to conduct an i nvestigation by the JFTC based on the Act shall 
conduct an investigation on the case by themsel ves and take improvement measures as deemed 
necessary. 
While these measures are considered voluntary and the JFTC is not in a position to direct the 
authorities regarding those measures, the Act author izes the JFTC to make comments with regard to 
the results of investigation and the improvement me asures taken by the local authorities, which shall 
be reported to the JFTC base on the Act. 
c) With regard to the bid rigging case of Iwamizawa city, the municipal government has 
reported to the JFTC that it increased the use of open tendering in bidding, took new measures 
against information leakage by its official s, and improved the way of dealing with 
reemployment in the private sector for its officials. 
d) The related government authorities are not cu rrently considering such new penalties or other 
measures.  In this regard, it is noted that the Liberal Democratic Party is currently reviewing 
the Act Concerning Elimination and Prevention of Involvement in Bid Rigging.  WT/TPR/M/142/Add.1 
 Page 139 
 
 
 Q14. Paragraph 44 on pages 36 and 37 of the Secret ariat Report indicates that Japan’s state trading 
activities involve leaf tobacco, alcohol, rice, wheat and barley, milk products, and raw silk. 
a) What state entities are responsible for trade in each of these products? b) Is the government entity or entities responsible  for regulating trade in these products separate 
from the government entity or entities that  own the state trading enterprises? 
c) What annual reports do Japanese government regulators require State Trading Enterprises to 
file to validate that they are operating on a commercial basis? 
d) If reports are filed, are they available to the public, and other WTO Members?  Are the 
reports reviewed by independent a uditors who publish their findings? 
e) With respect to state trade in barley, now th at the amount set for the feed barley simultaneous 
buy and sell (SBS) system has been increased to 900,000 metric tons in 2003, accounting for 
over 65% of Japan’s minimum access commitment s for barley (1,369,000 mt per year), what 
is the reason/justification for maintaining state trading control over barley imports? 
f) As part of Japan’s current agricultural reform  agenda, does Japan intend to maintain state 
trading of wheat and the so-called "cost-pool system" through which profits from buying and 
reselling imported wheat are used to subsidize domestic wheat production? 
A. a) As is stated in Japan’s notification G/STR/N /10/JPN, the State Trading Enterprises in charge 
for each product are as follows: 
 (i) Japan Tobacco Inc. (JTI) for leaf tobacco;  (ii) New Energy and Industrial Technology  Development Organization (NEDO) for 
alcohol; 
 (iii) The Ministry of Agriculture, Forestry & Fisheries for rice, wheat and barley (MAFF); 
 (iv) Agriculture and Livestock Industries Co rporation (ALIC) for milk products and raw 
silk. 
b) MAFF is engaged in the trading of rice, wheat  and barley, and is also in charge of ALIC, 
which trades milk products and raw silk.  The Mini stry of Finance is in charge of JTI, which 
is responsible for tobacco, and the Ministry of  Economy, Trade and Industry is in charge of 
NEDO, which is responsible for alcohol. 
c) Activities of MAFF on the trading of rice, wh eat and barley are compiled in an annual 
statement of accounts concerning its purchases and selling, which is submitted to the Diet.  
Besides, ALIC, JTI and NEDO submit annual reports to the Ministers in charge.   
d) The above-mentioned documents are available to the public. 
e) Japan’s import state trading for rice, wheat and barley is to secure stable supply and demand 
of these products, since there is a st rong public concern over food security. WT/TPR/M/142/Add.1 
Page 140  
 
  In terms of imports of wheat and barley for feed, the Government of Japan employs the SBS 
system, in addition to the ordinary tender system, in order to provide, under the State Trading system, products with various qualities and prices to meet the diverse needs of end-users. 
f) A discussion is underway in a Government Council in charge, and we have no answer to the 
question at present. 
Q15. 
a) Does Japan expect to fully adopt the IPPC standard on "official control" as approved in 
April, 2001? 
b) If so, please explain how and when this will be fully implemented. A. 
a) Japan considers that the standard regarding the "official control", adopted at the Interim 
Commission for Phytosanitary Measures in 2001, as well as other related international 
standards, form the basis for reviewing th e Japanese plant quarantine system. Therefore, 
Japan submitted a WTO/SPS notification (G/SPS/N/JPN/132) concerning the revision of the plant quarantine measures, including the addition of certain pests to the Non Quarantine Pest 
List, in line with the relevant international guidelines. 
b) As for the amendment for which Japan subm itted a WTO/SPS notification, Japan is planning 
to revise the ministerial ordinance concerned after following the necessary domestic procedures. Japan will continue to review  its current plant quarantine measures. 
Q16. Japan's food safety system regulates chemi cals applied post-harvest as food additives instead 
of pesticides.Given the many years it takes to get food additives approved by the Japanese 
government, this regulatory behavior acts as a significant import barrier. 
Does Japan intend to harmonize its treatment of pos t-harvest pesticides and fungicides according to 
the internationally accepted standard s used by most other countries? 
A. The Food Sanitation Law defines food additive as any substance that is used in or on food in 
the process of the manufacturing of food or for the purpose of the processing or preserving of food, by 
adding, mixing, infiltrating, or other means (parag raph 2 of Article 4). We recognize that a harvested 
crop is a food and a substance applied to the food to  prevent putrescence and to preserve the food is a 
food additive. The post-harvest fungicides register ed in the United States can be defined as food 
additives as well as agricultural chemic al residues under the Japanese law. 
Any person involved in this issue may submit a re quest to MHLW for designation of food additive. 
When receiving the request to designate a post- harvest fungicide as a food additive with the 
supporting documents, the MHLW will quickly initiate the process for its evaluation. 
Q17. While we understand that Japan must set its building codes according to its own 
circumstances, some tests required by Ministry of  Land, Infrastructure, and Transport (MLIT) for 
proving certain wood materials are fire resi stant cannot be reproduced in foreign labs. 
What plans, if any, does Japan have to improve harmonization in these areas?  WT/TPR/M/142/Add.1 
 Page 141 
 
 
 A. Concerning reproducibility of test results, Japan understands there are no significant 
variations in the results of fire-resistance tests operated by Japanese laboratories. However, considering the importance of reproducibility of te st results, Japan is exam ining the difference in 
conditions of the tests conducted in the U.S. a nd Japan based on the discussions in the Building 
Experts Committee (BEC) consisting of Japan, the U.S. and Canada.  
Q18. The Secretariat Report states in paragra ph 45 on page 37 that Japan has moved toward 
increased deregulation and international harmonizati on of its standards and technical regulations, 
including in sanitary and phytosanitary policies.   
Please explain how Japan bases its SPS measures on international standards (e.g., OIE) generally, 
particularly with respect to policies designed to prevent the introduction of bovine spongiform 
encephalopathy (BSE) and avian influenza. 
A. Japan considers its animal quarantine m easures to be consistent with the WTO/SPS 
Agreement. 
Q19. Referring to paragraphs 46,  47, and 50 on page 38 of the Secretariat Report, please explain 
how the conformity assessment system for Japanese Industrial Standards (JIS) will be changed as a 
result of revisions made in May 2004 by the Jap anese Diet to the Industrial Standardization Law. 
A. The Industrial Standardization Law was am ended in June 2004. Main changes to the 
conformity assessment system under the Law are the following:  
(i) Introduction of a third-party product certifica tion scheme, which is based on "System 5" in 
the third party product certification scheme stipulated in ISO/IEC Guide 67.   
(ii) Change in the Government’s role as a JIS Mark certification body to the role of an 
accreditation body of JIS Mark certification bodies. ISO/IEC Guide 65 is applied as a 
requirement for certification bodies.   
(iii) Limitation of the scope of certification is terminated. (iv) The amended Law will be put into effect in October 2005.  
Q20. Referring to food labeling requirements menti oned in paragraphs 57 a nd 58 on page 40 of the 
Secretariat Report: 
a) Are all imported processed foods still exempt ed from mandatory place of origin labeling for 
ingredients? 
b) Please explain the reasoning for mandatory labe ling of certain biotech foods and not others. 
A. a) All imported processed foods are exempted from the requirements. 
b) GMOs labeling is required for genetically modified products which are accredited. Among 
processed foods which include these products, tho se in which modified DNAs or proteins can 
be detected by using the latest widely accepted detecting techniques, are required to use GMO labelling. WT/TPR/M/142/Add.1 
Page 142  
 
 Q21. In paragraph 58 on page 40, the Secretariat Report states that the Ministry of Health, Labor 
and Welfare (MHLW) does not permit importati on of GMO’s that do not meet MHLW’s safety 
requirements. 
a) What are MHLW’s safety requirements? b) What are the procedures to obtain approval for the sale of biotech products in Japan? 
c) Do these procedures reflect the implications of Biosafey Protocol? 
d) Was the new Food Safety Commission involved in the development of the procedures? e) Are the procedures available to the pu blic? If so, how can they be obtained? 
A. a)  Any genetically modified foods (GM foods) that do not undergo examination procedure for 
safety assessment made by the Minister of Health, Labour and Welfare shall be neither 
imported nor sold. The examination for safety asse ssment shall be based on consultation with 
the Food Safety Commission (FSC). 
b) See attached paper. 
c) These procedures are only for the assessment of the food safety of GMO’s. The assessment of 
environmental safety based on Biosafety Protocol is separately enforced by the Ministry of 
Environment and the Ministry of Agriculture, Forestry and Fisheries. 
d) Yes, it was. FSC is an organization that undertakes risk assessment, and evaluates the safety 
of GM foods in the procedures. FSC has establis hed the Standards and Point to Consider with 
Regards to the Safety Assessment of GM foods. (It is available from FSC website. 
 http://www.fsc.go.jp/english/index.html 
e) They are available on the website.  
 http://www.mhlw.go.jp/english/topics/food/index.html Q22. Paragraph 61 on page 41 of the Secretariat Report states that, since the last Trade Policy 
Review, there has been no change  in the regulatory regime in Japan concerning inward and outward 
FDI.  Do Japanese authorities have plans for future regulatory changes, such as in the area of mergers 
and acquisitions, that could further en courage FDI?  Please provide an update. 
A. Based on the "Program for the promotion of  Foreign Direct Investment in Japan," the 
Government of Japan takes measures to make Japan an attractive investment destination for foreign 
firms. The Government of Japan continues to fo llow the progress and implementation of the Program. 
Relevant ministries and agencies will together im plement the measures to promote foreign direct 
investment, and make efforts in policy discussion to produce further effective measures for this 
purpose.  WT/TPR/M/142/Add.1 
 Page 143 
 
 
 For details, please look at the follow-up "Program for the promotion of Foreign Direct Investment in 
Japan." 
 http://www.investment-japan.net/statements/files/20040519.pdf Q23. Referring to paragraph 71 on page 45 of the Secretariat Report, please provide complete 
information on Nippon Export and Investment Insuran ce (NEXI) programs and policies.  In particular, 
please clarify whether NEXI is associated, either direc tly or indirectly, with the Government of Japan.  
Also, please indicate whether there have been changes in the compan ies/entities that are eligible for 
NEXI insurance guarantees since it took ove r operations from the Japanese Government. 
A. NEXI, established in 2001, took over the role  of the Japanese Export Credit Insurance as an 
Independent Administrative Institute, in which the Government of Japan inputs 100% of capital, in 
order to facilitate foreign trade and over seas investment by Japan ese companies/entities. 
The Government of Japan reinsures insurance agreements underwritten by NEXI to enhance the 
creditworthiness of NEXI. 
There have not been any changes in the companie s/entities that are eligible for NEXI insurance 
guarantees since then. 
Q24. Paragraph 5 on page 24 of the Secretaria t Report states, "Export finance, insurance, 
guarantees, and drawback schemes are available."  Ho wever, this section provides no details of such 
programs.   
Please provide complete information for any export finance schemes, insuran ce guarantees (other than 
NEXI), drawback schemes and various other forms of assistance. 
A. Japan has an export finance scheme in the Jap an Bank for International Cooperation, which 
supports Japanese plant and technology exports to de veloping countries. Support take the form of 
supplier’s credits (S/Cs) extended to Japanese exporters , buyer’s credits (B/Cs) to foreign importers in 
developing countries and bank-to-bank loans (B/Ls) to  financial institutions in developing countries. 
Because plant facilities such as power generati on units and communicati ons equipment  embody 
various advanced technology and va rious technical features, their exports will serve to enhance the 
technological base of Japanese industries. Furthermore,  in view of the fact that the domestic plant 
industry encompasses more than 1,000 firms, in cluding small and medium enterprises (SMEs) 
producing parts and components, plant export financ ing will support a broad spectrum of those firms. 
For developing countries, imported plants will bring such economic benefits as industrial 
infrastructure development, increased employment opportunities and the acquisition of skills through 
technical assistance in plant operations, thereby pr omoting sustainable development. However, the 
provision of long-term financing for developing countries involves country risk , which arises from changes in domestic political and ec onomic situations, as well as rather high risks of interest rate and 
currency fluctuation. These risks are often too large to  be dealt with by private financial institutions. It 
is for this reason that JBIC steps in as an official financial ins titution to ensure a well-functioning 
international economy. 
Q25. With reference to paragraph 74 on page 46 of  the Secretariat Report, in previous subsidies 
notifications, Japan has provided information on its Special Taxation Measures Law.  Please provide an update on this law including information relevant  to the research and development tax cuts that 
were introduced in FY 2003. WT/TPR/M/142/Add.1 
Page 144  
 
 A. In 2003, a new R&D tax credit was introduced in addition to the existing incremental R&D 
tax credit.  Under this scheme, for R&D activities conducte d by corporations, a R&D tax credit of 8-
10% (10-12% for FY 2003 to FY2005) of the amount of R&D expenditure is applied.  For R&D 
activities conducted by SMEs, a tax credit of 12% (15% for FY 2003 to FY 2005) is applied.  For 
R&D activities conducted jointly by academic, business and government circles, or R&D 
commissioned by the government, a tax credit of 12% (15% for FY 2003 to 2005) is applied. 
Q26. Among numerous other programs for the fishing industry, it appears that Japan has fishery 
subsidy programs that (i) stabilize the price of fish  and fishery products; (ii) purchase gear; (iii) assist 
fisherman in purchasing fishing vessels; and (iv) reduce or reimburse fuel taxes for the fishing 
industry.  Please provide the names of these programs and explain how they operate. 
A. Japan does not have any programs to stabilize prices of fish and fishery products by which 
fishermens could get any type of compensation.  
The "Fisheries Modernization Fund Interest Subsidy"  can be used for the purpose of (ii) and (iii) 
above. This program does not lead us to have ove r fishing capacity because Japan limits the number 
of its fishing vessels and their size.  
Japan has measures to make exemptions for or refund petroleum and coal taxes for heavy fuel oil A to 
be used in the fishery. The measures for heavy fu el oil A to be used in fishery industry are not 
provided directly to fishermen, but to those w ho withdraw heavy fuel oil A from bonded areas or 
those who ship heavy fuel oil A from refineries. 
Q27. Referring to paragraph 76 on page 47 of the Secretariat Report, Japanese prefectural 
governments offer a number of subsidies and fina ncial incentives for manufacturers, some of which 
appear to be targeted to high-tech industries, fo r example, the High-Tech Industrial Zone Promotion 
Act (Technopolis Act) and the Knowledge-Intensive Industry Location Act.  Please describe these 
two programs. 
A. The purpose of the High-Tech Industrial Zone Promotion Act (Technopolis Act) was to 
promote both economic development in the less in dustrialized regions of Japan and industrial 
relocation in Japan by having enterprises with high- technology accumulate in such regions. However, 
enterprises with high-techno logy were not limited to certain industries.   
The purpose of the Knowledge-Intensive Industry Location Act was also to promote regional 
economic development and industrial relocation in  Japan by having research institutes and service 
industries such as software and design fields accumulate in  the less industrialized regions of Japan.      
These Acts were abolished in 1999. 
Q28. Referring to paragraph 76 on page 47 of the Secretariat Report, a number of laws or 
regulations not listed in Japan’s la test subsidies notification appear to offer a number of financial 
incentives for manufacturers.  Some of these programs al so appear to be regionally based.  We request 
that Japan provide details about th ese programs, which are listed below:  WT/TPR/M/142/Add.1 
 Page 145 
 
 
 A 
a) Peninsula Development Act The purpose of the Peninsula Development Act is to encourage the development of peninsular areas, 
contribute to the improvement of the quality of lif e there and promote the balanced development of 
national land. However, this law is not designed to provide an economic incentive specifically for 
certain industries or certain manufacturers. 
b) Underdeveloped Area Industrialization Act The Underdeveloped Area Industrialization Act is an institution which aims to contribute to 
increasing employment by promoting  development of the industry in underdeveloped areas, and to 
reduce the economic gap among regions, resulting in  a balanced development of the nation's 
economy. However, this law is not designed to prov ide an economic incentive specifically for certain 
industries or certain manufacturers. 
c) New Industrial Cities Promotion 
This Act contributes to the well-balanced developm ent of land and the development of the national 
economy. It aims to prevent the extreme concentrati on of population and industr ies in the large cities, 
correct the disparity among regionsand stabilize empl oyment. This Act promotes the establishment of 
the New Industrial Cities which will be the center of  the region by constructing  infrastructure. 
However, this law is not designed to provide an economic incentive specifical ly for certain industries 
or certain manufacturers. (This Act was abolished in 2001)  
d) Chubu Regional Development Act The main purpose of this Act is to promote we ll-balanced development in the Chubu region by 
obliging the Japanese Government to formulate a regiona l plan and to carry it out. However, this law 
is not designed to provide an economic incentive specifically for certain industries or certain 
manufacturers. 
e) Law on Special Measures of Tax, Article 65-7 Under the special taxation in the case of repurchase or  exchange of specified properties (Article 65-7 
of the Law on Special Measures of Tax), in cases where a corporation has replaced properties by 
purchasing specified properties for the business of the corporation, an amount equivalent to 80 percent 
of the gain from the property transfer shall be c ounted as expenses in the computation of incomes in 
the accounting period by reducing the book value of the replaced property (tax deferral).  However, 
this law is not designed to provide an economic ince ntive specifically for certain industries or certain 
manufacturers. 
f) Industrial Relocation Promotion Grants 
The Industrial Relocation Promotion Law was establis hed in 1972 with the  purpose of promoting a 
balanced development of the national land by tr ansferring factories from areas of high industrial 
accumulation to areas of low accumulation, and promoting the increase in the number of new factories in such low industrial accumulation areas.  However, this law is not designed to provide an 
economic incentive specifically for certain industries or certain manufacturers. WT/TPR/M/142/Add.1 
Page 146  
 
 g) Electric Power Resource Area Relocation Promotion Grants 
The Industrial Relocation Promotion Project in th e power supply regions is based on the Industrial 
Relocation Promotion Law.  As explained in the part (f), the Industrial Relocation Promotion Law 
was established in 1972 with the following purposes: to promote a balanced development of the 
national land by transferring factories from areas of high industrial accumulation to areas of low 
accumulation, and to promote the increase in the num ber of new factories in such low industrial 
accumulation areas.  
There is continuous need for the Government of Jap an to promote economic revitalization in the areas 
where  power plants are located, for the reason that the economic conditions in these areas are 
generally underdeveloped compared with other areas.  Therefore, the purpose of the project is to 
promote the development of the power supply regions by establishing factories in the regions that are 
targeted areas under the Industrial Relocation Promo tion Law. However, this law is not designed to 
provide an economic incentive specifically for certain industries or certain manufacturers. 
h) Grants for Industrial Location Support 
Since Japan is not clear what the  grants referre d to in the question are and cannot identify them, 
Japan is not ready to respond to this question. 
i) Regional Employment Development Grants To improve the employment structure in the regions  which are contended by the Ministry of Health, 
Labour and Welfare of Japan as the regions faced w ith a shortage of employment opportunities, Japan 
provides subsidies named Regional Employment De velopment Grants to employers who are doing 
business or hiring job seekers in those regions. Howe ver, this law is not designed to provide an 
economic incentive specifically for certa in industries or certain manufacturers.  
Q29. With reference to paragra ph 76 on page 47 of the Secretariat Report, several research and 
development (R&D) programs not listed in Japan’s la test subsidies notification appear to promote 
R&D in certain industries or sectors by providing fina ncial incentives or other subsidies.  We request 
that Japan provide details about the following R&D programs. 
A a) Focus 21 Program The Focus 21 program encourages research and deve lopment which contributes to the stimulation of 
the national economy.  For that purpose, the Gove rnment of Japan supports a wide variety of 
challenges which will lead to a significant growth and a wide range of economic effects.  This 
program is not designed to promote R&D in certain industries or sectors. 
b) Local Industrial Cluster Program The purpose of the Industrial Cluster Projects promoted by the Ministry of Economy, Trade and 
Industry is to activate Japan’s regional ec onomies by forming industry-academic-government 
networks in each region of the country.  In order to  promote the Industrial Cluster Projects, assistance 
is provided to the industry-supporting organizatio ns that form the industry-academic-government 
networks, but the project does not give economic in centives for the promotion of R&D only to certain 
industries or certain enterprises.  WT/TPR/M/142/Add.1 
 Page 147 
 
 
 Q30. Referring again to the same section of the Secretariat Report, we understand that Japan has 
programs at the national level that potentially prov ide targeted assistance to manufacturers, including 
financing available through the Fiscal Investment  Loan Program (FILP).  We understand that a 
portion of the aid offered under FILP is offered to pr ivate manufacturers or producers and that this aid 
is used to support and promote private R&D activities.   In that regard, we request that Japan provide 
details about FILP aid provided to private manufacturers and producers. 
A. Every fiscal year, the Financial Bureau of the Ministry of Finance coordinates how much 
financing is used for which projects after inv estigating all the projects of each FILP agency. 
When undertaking the formulation of the FY2004 FILP pl an, further prioritization of eligible projects 
was promoted taking into account the intent of  FILP reform, while responding appropriately to 
funding requirements actually necessary for the development of the safety net including measures for 
small and medium-size enterprises. 
Safety Net The project scale was determined during the peri od of concentrated disposal of nonperforming 
liabilities by private sector financial institutions with the aim of taking every possible measure to 
ensure the development of the safety net. 
<Project scale> 
(unit: billion yen) 
 FY2003 FY2004 
Development Bank of Japan 1,178.0 1,178.0 
National Life Finance Co rporation 3,680.5 3,680.5 
Japan Finance Corporation for Small and Medium Enterprise 1,900.0 1,900.0 
Measures for small and medium-size enterprises 
Securitization support projects were established to promote non-collateral financing by private sector 
financial institutions to sma ll and medium-size enterprises. 
<Japan Finance Corporation for Sm all and Medium-size Enterprise> 
(unit: billion yen) 
 FY2003 FY2004 
Project scale 1,900.0 1,900.0 
Including securitization support projects - 150.3 
Q31. Please explain why the following programs were not notified to the Committee on Subsidies 
and Countervailing Measures WT/TPR/M/142/Add.1 
Page 148  
 
 A. 
(1) Industrial Revitalization Law/Law on Speci al Measures for Industrial Revitalization 
Under the Industrial Revitalization La w, amended in 2003, if an applicant(s) submits his or her plan 
for a managing strategy, the plan is reviewed pursuant to economic numerical conditions provided 
under the "Guidelines for Industrial Revitalization."  Then if the plan is approved, the approved 
applicant(s) can use tax cuts such as the registration and license tax reductions.  
However, the Government of Japan believes that  those measures do not have any specificity as 
defined in Article 2 of the ASCM because those criteria and conditions provided under the guidelines 
of the Industrial Revitalization Law are economic in nature, numerical and objective, and also because 
any enterprise(s) can apply and be approved under those objective criteria and conditions. Therefore, 
we believe that there is no need to notify th e Committee on Subsidies and Countervailing Measures of 
the measures. 
(2) Industrial Structural Improvement Fund   The Industrial Structural Improvement Fund (ISIF) was established to assist enterprises in obtaining 
financial support.  The Government of Japan consider s it   had no specificity because the ISIF was not 
designed to provide support only to certain enterpri ses or certain industries. Therefore, we believe 
there was no need to notify the Committee on Subs idies and Countervailing Measures.  The ISIF was 
dissolved on July 1
st 2004. 
(3) Provision of low cost loans by the Development Bank of Japan Low cost loans by the Development Bank of Japan are not designed to provide support only to certain 
enterprises or certain industries. Therefore, we believe there was no need to notify the Committee on 
Subsidies and Countervailing Measures.  
(4) Foreign Access Zones  Foreign Access Zones -- areas for promoting importation -- are established for the purpose of 
integrating import-related businesses within Forei gn Access Zones.  Since this assistance is not 
provided to certain enterprises or certain industri es, we believe there is no need to notify the 
Committee on Subsidies and Countervailing Measures.  
Q32. Paragraph 77 of page 47 of the Secretar iat Report comments that Japan retains a stake in 
major companies listed in Table III.8 through which it  could directly affect production and trade.  
a) Is the government entity responsible for regul ating trade in these industries separate from the 
government entity that owns the State-Owned Enterprise(s)? 
b) What annual reports does the Japanese government require these SOEs to file? 
c) If reports are filed, are they available to sh areholders of partially private SOEs, the public, 
and other WTO Members?  Are the reports re viewed by independent auditors who publish 
their findings?  WT/TPR/M/142/Add.1 
 Page 149 
 
 
 * Correction of stockholding by the Government of Japan listed in Table III.8  
       ( s t o c k s )    ( % )  wrong:  Kansai International Airport Co. Ltd. 13,788,000  100 correct:  Kansai International Airport Co. Ltd.   9,192,000  66.7 A. 
a) 
 NTT:  As for Nippon Telegraph and Telephone Corporation (NTT), the Minister of Finance 
owns its shares, and the Minister of Internal  Affairs and Communicati ons, who is responsible 
for regulatory issues, does not. The separation is ensured because the jurisdiction of Ministers 
is defined by the Law Concerning National Ad ministrative Organization and the Laws for 
Establishment of Ministries.  
 JT:  The Government owns JT shares and the Mi nister of Finance is responsible for regulatory 
issues .  
 Kansai Airport:  Based on the "Law of Kansai In ternational Airport Co. Ltd.", at any time, the 
Government of Japan shall hold half or more of the total issued stocks of Kansai International 
Airport Co., Ltd.  Also, Kansai Internationa l Airport Co., Ltd. shall get approval from the 
Minister of Land, Infrastructure and Transport in order to issue new stocks.   
 Railway companies:  The government entity responsible for regulating trade is separate from 
the government entity that owns the State-Own ed Enterprises. The government entity which 
regulates trade is the Ministry of Land, Infrastructure and Transport, and the government entity which owns the State-Owned Enterprises is  the Japan Railway Construction, Transport 
and Technology Agency (JRTT). JRTT is inv ested in by the government, among others. 
b)  NTT:  NTT, Nippon Telegraph and Telephone  East Corporation (NTT East) and Nippon 
Telegraph and Telephone Cor poration (NTT West) are required by the Law Concerning 
Nippon Telegraph and Telephone Co rporation, etc. (NTT Law) to submit their business plan, 
balance sheet, profit and loss statement and bu siness report for the current business year.  
 JT:  Japan Tobacco Inc. (JTI) is required by the Law of Japan Tobacco Inc. to submit its 
balance sheet, profit and loss statement and busi ness report, etc. for th e current business year . 
 Kansai Airport:  Based on the "Law of Kansai International Airport Co. Ltd.", Kansai 
International Airport Co., Ltd. has to file Profit and Loss Statement (P/L), Balance Sheet 
(B/S) and annual business report of the fiscal year to the Minister of Land, Infrastructure and 
Transport within three months after every fiscal year. 
 Railway companies:  Based on the "Law of Passenger Railway Companies and Japan Freight 
Railway Company", Hokkaido Railway Company, Shikoku Railway Company, Kyushu Railway Company, and Japan Freight Railway  Company have to file profit and loss 
Statement (P/L), balance sheet (B/S) and annual business report for the fiscal year with the 
Ministry of Land, Infrastructure and Transport within three months after every fiscal year. WT/TPR/M/142/Add.1 
Page 150  
 
 c) 
 NTT:  NTT, NTT East and NTT West have put their business plan, balance sheet, profit and 
loss statement and business report on a website so that they are available to everyone. 
 JT:  JT has put its balance sheet, profit and loss statement etc. on a website so that they are 
available to everyone. Moreover, JT is  audited by independent auditors. 
 Kansai Airport, railway companies:  The report is placed on the homepage so that it is 
available to everyone. Moreover, the report is reviewed by independent auditors. 
Q33. The Secretariat Report indicated in paragr aph 78 on page 47 that 163 public corporations 
were to be structurally reformed under the Reorga nization and Rationalization Plan for Special Public 
Institutions.  Of those institutions, "17 were to  be abolished or merged with other entities, 
45 privatized, and 38 reformed into 36 incorporated administrative agencies." 
a) What does the plan intend for the remaining 27 institutions?  b) Of the 133 institutions reportedly reformed, how many were abolished; how many were 
merged with other entities; how many were pr ivatized; and how many were reformed into 
incorporated administrative agencies? 
c) Please define "incorporated administrativ e agency" and describe its responsibilities. 
d) Please describe the privatization procedures used under this reform plan. e) Were foreign firms allowed to participate in the privatization process? f) If so, did any foreign firms invest in the newly privatized institutions? g) Of the 30 institutions still awaiting reform under this plan, how many remain to be abolished; 
how many await merger with other entities; how many are slated for privatization; and how 
many are to be reformed into inco rporated administrative agencies? 
A. a) Among 163 institutions, 133 have already comp leted the plan. The number of remaining 
institutions is not 27, but 30 as you mentioned in question g). See question g) for details. 
 (To date, 2 institutions were finally decided to be merged and reformed into an incorporated 
administrative agency.) 
b) Among 133 institutions, 15 were abolished or me rged with other entities, 36 were privatized 
and 37 were reformed into incor porated administrative agencies. 
 (To date, 2 institutions were finally decided to be merged and reformed into an incorporated 
administrative agency.) 
c) "Incorporated administrative agency" means a corporation that conducts business that cannot 
be abolished or privatized, that has a great need for government participation and has low 
profitability, and that is conducted at the discretion of the said corporation.  WT/TPR/M/142/Add.1 
 Page 151 
 
 
 d) As for the forms of those institutions that n eed to be reviewed, the plan only indicates clear 
directions of the reforms. In other words,  the plan does not outline any detailed reform 
procedures. According to the direction and s ituation, each ministry in charge of those 
institutions has to amend, for example, re levant laws within a fixed time limit.  
e) The definition of "the process of privatization"  is not clear, but as far as the establishment or 
elimination of regulations is concerned, each  ministry should follow the public comment 
procedure in implementing the reform. 
f) Foreign companies are able to purchase the share sold by the government or relevant 
organizations. 
g) Of the 30 institutions, 5 were decided to main tain existing forms, 14 are still being studied to 
find out the final conclusion, 3 should be ab olished or reformed into incorporated 
administrative agencies, and 8 should be priv atized at an appropriate time. (To date, 
2 institutions were finally decided to be me rged and reformed into an incorporated 
administrative agency). 
Q34. Table III.9 on page 48 of the Secretariat Re port lists wines and spirits as the only products 
that may be protected as geographical indications (GIs).    
a) Are foreign GIs allowed access to the Japanese GI registration system?   
b) What measures are available fo r interested parties or owners of third country geographical 
indications for products that are not wines or  spirits to prevent the use of misleading 
geographical indications? 
A. a) Announcement No.4, dated December 28, 1994,  by the Commissioner of the National Tax 
Agency states that "Any geographical indication that identifies the place of origin of grape 
wine or distilled spirits in Japan designated by the Commissioner of the National Tax Administration Agency, or any geographical indication of the place of origin of grape wine or distilled spirits in any of the Members of the World Trade Organization, the use of which is 
prohibited in such Members with respect to grape wine or dis tilled spirits produced in areas 
other than those indicated, shall not be used with  respect to any grape wine or distilled spirits 
produced in areas other than those indicated."  
 Accordingly, foreign GIs are protected in Jap an as well, in cases where the foreign GIs in 
question are protected in respective WTO Members.   
b) The Unfair Competition Preventi on Law stipulates these measures.  
 The Unfair Competition Prevention Law prevents, inter alia, the act of indicating on goods or 
with respect to services, or in an advertisem ent thereof or in a document or correspondence 
used for a transaction related thereto, in a manner which is likely to be misleading with 
respect to the place of origin. 
Q35. According to paragraph 80 on pages 48 and 49 of the Secretariat Report, Japan has announced 
that it has three new Japanese terms which have been  designated as geographical indications for wines 
and spirits by the Commissioner of the Nationa l Tax Agency through its Labeling Standard 
Concerning Geographical Indications, "to be protected in the territories of WTO members."   WT/TPR/M/142/Add.1 
Page 152  
 
 a) Why is the Japanese Tax Commissioner designating geographical indications under the 
TRIPS Agreement - an intellectual property agreement, not a tax agreement? 
b) According to paragraph 80 on pages 48 and 49 of the Secretariat Report, Japan has announced 
that it has three new Japanese terms which have  been designated as geographical indications 
for wines and spirits by the Commissioner of the National Tax Agency through its Labeling 
Standard Concerning Geographical Indications, "to be protected in the territories of WTO 
members."  Does the Government of Japan have a system for foreign GIs to be registered 
directly by the right holders?  If so, please describe this system. 
c) Does that system have a means for opposition and cancellation of the geographical 
indications, both for foreign and domestic opposers?  
d) If so, does that system allow for challenge on the basis of prior valid trademark rights as 
guaranteed under Article 16.1 of the TRIPS Agreement?  
A. 
a) The note in Article 23 of the TRIPS Agreement states that "Notwithstanding the first sentence 
of Article 42, Members may, with respect  to these obligations, instead provide for 
enforcement by administrative action." 
 In Japan, the NTA is the administrative author ity in charge of liquor industry.  For that 
reason, GIs on wine and spirits are additionally protected under the jurisdiction of the NTA in 
response to Article 23 of the TRIPS Agreement and the note.  
b)  As mentioned in the answer to Q34A, any ge ographical indication that identifies the place of 
origin of grape wine or distilled spirits in  Japan designated by the Commissioner of the 
National Tax Administration Agency, or any geographical indication of the place of origin of grape wine or distilled spirits in any of the Members  of the World Trade Organization, the 
use of which is prohibited in such Members w ith respect to grape wine or distilled spirits 
produced in areas other than those indicated, sha ll not be used with respect to any grape wine 
or distilled spirits produced in areas other than those indicated. 
 Accordingly, foreign GIs are protected in Jap an as well, in cases where the foreign GIs in 
question are protected in respective WTO Member s.  Due to such a system, the NTA does not 
assume that the overseas right holders dir ectly apply foreign GIs to the NTA. 
c) d) With regard to the additional protection of  GIs on wine and spirits, there exists no specific 
means for opposition.  However, according to the notification by the Commissioner of the 
NTA, the Commissioner may cancel the GIs in cases where they are cons idered inappropriate 
as GIs to be protected. 
Q36. The statement in the Secretariat Report that the GIs listed in the Labeling Standard will "be 
protected in the territories of WTO members" s uggests that the Japanese Government is expecting 
WTO Member enforcement of these GIs without any action taken by the GI right holders to obtain protection in those WTO Members or to take enforcement action in those WTO Members where 
misuse might occur.  Please clarify Japan’s mean ing of the Labeling St andard’s phraseology 
regarding expectations of GI protection in the territories of other WTO members.   WT/TPR/M/142/Add.1 
 Page 153 
 
 
 A. The expression in question, "to be protected in the territory of  Members of the WTO" simply 
means that WTO Members shall protect "GIs" in acco rdance with the TRIPS Agreement, and in the 
case of Japan, these indications are those "GIs" that are subject to protection under the TRIPS Agreement. 
Q37. Referring to paragraphs 19 on page 9 and to paragraphs  84 and 85 on page 50 of the 
Secretariat Report, we applaud the Three-Year Program for Promoting Regulatory Reform (TPPRR)’s 
goal of creating a "free and fair socio-economic syst em fully open to the international community."  
a) How much authority does the Headquarters for the Promotion of Special Zones have to make 
changes to regulations in the zones if these regul ations are unpopular in the various ministries?  
b) Regarding the Special Zones for Structural Re forms Act mentioned in paragraph 86 on page 51, 
how many applications for regulatory exemption have  been made and how many have been rejected?  
c) Do ministries have real or virtual veto power over proposed relaxation of their regulations in these 
zones?  d) Please describe any special zone applicati ons related to agricultural reform that have been 
submitted, and please indicate those that have been approved (if any).  e) Please explain the timeline 
for the 26 deregulation measures approved for application nationwide by the Cabinet in 
September 2004.  f) Are there plans to put a comp rehensive list of current zones, progress on zone 
applications, and updated zone info rmation on the Internet in English?  Please provide an update on 
the status of this project. 
A. a)  Cabinet Secretariat Office for the Promotion of Special Zones for Structure Reform should 
coordinate between the related ministries. 
b)  475 cases have been confirmed overall in Japan. (No case has been rejected.) 
c) Cabinet Secretariat Office for the Promotion of Special Zones for Structure Reform  should 
coordinate between the related ministries. 
d) An appropriate example, "Approval of the en try of legal persons other than agricultural 
production legal persons into the agricultural sector ‘’. 
e) It should be in accordance with the schedul e that was decided by the Headquarters last 
September. 
f)  As one of the PR activities, Japan will provide  information to foreigners as much as possible. 
Q38. Referring to paragraph 89 on Pages 51-52 of the Secretariat Report we understand that the 
Japanese Government bill to increase administrativ e surcharges for Antimonopoly Act violations and 
introduce a leniency program for cartel whis tleblowers was transmitted to the autumn 2004 
extraordinary session of the Diet but was held over for consid eration in 2005. 
a) What are the prospects for the Diet passing this amendment during its 2005 regular session? 
b) If it passes during the regular session, when w ould the measures in the amendment enter into 
force? 
A. 
a) The Government of Japan will make efforts to enact the bill during the regular session of the 
Diet. WT/TPR/M/142/Add.1 
Page 154  
 
 b) The date of enforcement of the amende d law will be a day established by government 
ordinance within 1 year after its publication. Therefore, the date of enforcement of the 
amended law will be in January 2006 at the earliest. 
Q39. With reference to paragraph 90 on page 52 of the Secretariat Report, what plans, if any,  does 
the Government of Japan have to review th e remaining exemptions to the Antimonopoly Act 
prohibition of cartels, with a view to their possible elimination? 
A. Japan has reviewed all exemptions of the Antimonopoly Act, and reached certain conclusions, 
as a result of which exemptions decreased from 89 sy stems in 30 laws in March 1996 to 21 systems in 
15 laws as of March 2004. Therefore, the JFTC con tinues to monitor the operation of the remaining 
exemptions. 
(Note) 
With regard to the exemption of the Antimonopoly Act on the resale price maintenance system of 
copyrighted work, the JFTC considers that, from th e viewpoint of competition policy, the exemption 
of the Antimonopoly Act should be abolished to facilitate competition on the distribution of 
copyrighted work. National consensus has not been attained yet, however, on the abolition of the 
exemption. The JFTC has therefore concluded so fa r that the exemption should not be abolished at 
this stage and that it should be main tained for a certain period of time. 
Q40. We understand that the single criminal accu sation for an Antimonopoly Act violation filed in 
2003, mentioned in paragraph 97 on page 55 of the S ecretariat Report, is the first criminal accusation 
in four years, and it resulted in suspended pris on sentences for all of the accused individuals, 
including one individual repeat offender.  Ar e any measures under consideration to increase the 
prospects for repeat offenders of the Antimonopoly Act actually serving prison sentences? 
A. In Japan, a high level of judicial indepe ndence is  guaranteed under the Constitution. The 
Government of Japan is not in a position to get in volved in a process of determining the appropriate 
punishment to be delivered by the Court. With rega rd to the repeat offender, it is noted that the 
amendment bill of the Antimonopoly Act includes impos ing a special surcharge rate of 150% of the 
respective normal surcharge rate on enterprises that repeat violations of the Act subject to the 
surcharge payment order to be carried out within 10 years. 
Q41. The Secretariat Report relates in paragraph 8 on page 59 that "according to the OECD, total 
transfers to agriculture amounted to 1.4% of GDP  in 2002, while the sector's share of GDP was 
1.0%." Recognizing the Japanese authorities’ commitment to regulatory reform and sound competition policy, is Japan considering any meas ures to address the obvious distortions in the 
agricultural sector highlighted by the OECD statistics? 
A. The Basic Law of 1999 stipulates that the price of agricultural products should reflect the 
supply and demand situation as well as the quality of  the product.  Since the implementation of the 
Basic Law, price support measures on a number of  agricultural products have been reformed, 
reducing the current AMS level of Japan to less than  20% of the final commitment level.  The policy 
reform debate under way in the Council, which builds on these policy reforms in the past years, 
focuses on the acceleration of the structural reform  in the agriculture sector which has not progressed 
as far as envisaged.  The successful reform will allo w economically sustainable development of the 
sector with less government support.  WT/TPR/M/142/Add.1 
 Page 155 
 
 
 Q42. With reference to paragra ph 8 on page 59 of the Secretariat Report, Japan’s self-sufficiency 
ratio has remained at 40% (calorie basis) for th e last years despite Japan ’ s efforts to increase it. 
a) What are Japan’s current self-sufficiency goals and their justification? b) Has Japan been considering changes in the calcu lation of the self-sufficiency ratio to take into 
account such factors as regional differences and food waste? 
c) Please describe these concepts and their justification. 
A. a) Although the Government of Japan set the targ et self-sufficiency ratio at 45% by FY2010, 
Japan’s self-sufficiency ratio has b een at 40% for the past 6 years. 
 The responsibility to take measures to provide a stable supply of food to it nation falls on the 
Government, and it is important for Japan to ra ise is currently low self-sufficiency ratio. 
b) c) Japan has no plan to change the present cal culation method of the self-sufficiency ratio.   
Q43. Paragraph 11 on page 60 of the Secretaria t Report touches upon Japan’s extremely complex 
agricultural import quota system. 
Given Japan’s commitment to regulatory reform, do es Japan intend to simplify any of its import quota 
procedures in the near future?  If so, how and when? 
A. The procedures of TRQ are appropriate based  on the characteristics of each product and are 
reviewed annually. We do not plan to ch ange the current procedures at present. 
Q44. Referring to Paragraph 12 on page 60 of the Secretariat Report, we understand that Japan is 
playing a leading role in creating a joint rice stoc k system in the Asian re gion (i.e. 10 ASEAN nations 
plus Japan, Korea and China). 
a) Please give an update on the status of this in itiative, including a timetable of future steps. 
b) Does Japan intend to use this system as an outlet for accumulated Minimum Market Access 
(MMA) rice stocks? 
c) What exactly is the current amount of MMA rice stocks? A. 
a) A pilot project of the East Asia Emergenc y Rice Reserve (EAERR) is being implemented for 
the purpose of poverty alleviati on and strengthening food security  in the East Asia region, 
following a conclusion of meetings of the ASEA N Agriculture and Forestry Ministers and the 
Ministers of the People’s Republic of China, Japan and the Republic of Korea. 
 The period of implementation of the pilot project is three years, and it started in April 2004.  At present, the pilot project is in the phase of  asking for contributions of earmark stockpiles 
and drawing up guidelines of the pilot project re garding reserve and release; therefore, it is 
not clear how much quantity of food-aid will be in demand. WT/TPR/M/142/Add.1 
Page 156  
 
 b) Japan’s participation in this pilot project r esponds to genuine needs of the region, and is not 
for self-serving purposes. 
c) The current amount of MMA rice stocks is 1.48 million tons as of the end of October 2004. 
Q45. Referring to Paragraph 13 on page 61 of the Secretariat Report, once Japan’s current ban of 
U.S. beef is lifted, there may be a surge of U.S. fresh and frozen beef imports as U.S. products begin 
rising to their pre-ban market share.   
Is Japan likely to interpret a rise in imports of  U.S. beef after the lifting of a ban as cause for 
implementing safeguard measures? 
A. At present, it is difficult to estimate precisely when the beef trade with the U.S. and Canada 
will resume, and to what extent the volume of beef imports will increase from these countries and/or 
will decrease from the rest of the exporting countries. Therefore, we are currently not in a position to 
argue hypothetically the implementation of the measure in the future.  
The emergency tariff measure was introduced in acco rdance with the result of consultations with 
interested Members including the U.S. during the Ur uguay Round. Japan agreed to a voluntary tariff 
reduction for beef beyond the bound rate together  with the introduction of the emergency tariff 
measure which is set so that the tariff is automati cally returned when beef imports exceed a certain 
level. 
It is an indispensable tool in order to ease the negative impact on domestic production. As all 
interested Members agreed, the measure and voluntary tariff reduction constitute a package. 
In addition, assessments of impact on domestic indus try are not required to trigger the measure, unlike 
the Safeguard system stipulated under Artic le 19 of GATT 1994 and the WTO Agreement on 
Safeguards. 
Q46. Paragraph 14 on page 63 and Table IV.3 on pages 63 and 64 of the Secretariat Report 
graphically summarize the OECD’s analysis of the extensive and distorting domestic support system 
maintained by Japan’s authorities.  We understand that Japan is in the process of reforming its 
domestic support system in an effort to redu ce farmer dependence on government subsidies, to 
promote more competitive and efficient farms, and to decouple produ cer subsidy payments. 
a) Please describe any progress on these reforms including details on potential program designs 
and implementation timeframes. 
b) Does any planned decoupled producer subsidy scheme include reform of the state trading of 
wheat and the so-called cost-pool system?  
A. As is shown in the report of the Government  of Japan, the Council of Food, Agriculture and 
Rural Area Policies is currently reviewing its Basic Plan.  The Council is to submit the draft of the 
revised Plan in March, which in turn will be deci ded by the Cabinet.  The details of policy measures 
will be subsequently decided by the Government, based on the direction described in the new Basic 
Plan. 
Q47. Please confirm that the Japanese authorities ha ve no plans to allow Japan Post to introduce 
new or altered Kampo  products.  WT/TPR/M/142/Add.1 
 Page 157 
 
 
 A. The Government of Japan confirms that Jap an Post currently has no plans to introduce any 
new or altered Kampo  products. 
Q48. We understand that Japan Post’s Life Insurance business ( Kampo ) is scheduled to be 
privatized in 2007. 
a) Is there any further update on the privatization plans? 
b) What are the plans for ending Kampo ’s government guarantee, having Kampo  pay into the 
Policy Holder Protection Corporation and having Kampo  paying corporate taxes? 
c) Are Kampo ’s privatization plans available for public comment? 
d) Since Kampo  accounts for 40% of all life insurance a ssets, does the privatization plan intend 
to divide Kampo ’s business into smaller companies? 
A. 
a) There has been no official update since the Cabinet decided the "Basic Policy on the 
Privatization of the Japan Post" on September 10, 2004. 
b) The basic policy stipulates, as a means of ensuring equal footing, "From the beginning of the 
transitional period, the new companies shall conduct business in accordan ce with prescribed 
legal frameworks just like any other privat e companies. Government guarantees will be 
abolished, and they will be subject to tax oblig ations and will be obliged to join the Deposit 
Insurance Corporation of Japan or the Life In surance Policyholders Protection Corporation of 
Japan." 
c) The Bill on the Privatization of Japan Post is not scheduled to be refe rred to through public 
comment procedures, since it shall be examined by the Diet. 
d) The basic policy stipulates, as the modality of each business company at the time of final 
privatization, "Whether the over-the-counter  services network company, postal savings 
company or the postal life insurance company divi des its business by region shall be left to 
the management of the new companies to decide." 
Q49. We understand that the FSA ’s Financial System Council h as begun deliberations regarding 
the proper regulation of unregulated kyosai .  In October 2004, a working group under the Second 
Subcommittee of the Financial System Council released a report regarding its deliberations.  
a) Are there any plans for the FSA to fully regulate cooperatives ( kyosai )?   
b) Are there any plans to require the kyosai  to pay into the Policy Holder Protection Corporation 
or another safety net and pay the same level of corporate taxes as private insurance companies? 
c) What are the plans to take measures to ensure a level playing field between kyosai  and their 
private sector competitors, by subjecting unregulated kyosai  to the same laws, level of 
taxation, safety net contribution requirements, reserve requirements, and regulatory oversight 
as their private sector counterparts? 
d) Are there plans to tighten the membership criteria for many kyosai ?   WT/TPR/M/142/Add.1 
Page 158  
 
 A. 
a) In light of policy holders’ protection against unregulated kyosai , the Government of Japan 
plans to submit a bill to amend the Insurance Bu siness Law to the Diet in accordance with the 
December 2004 report completed by the Sec ond Subcommittee of the Financial System 
Council. Specifically, the amended Insurance Business Law will subject unregulated kyosai  
business to the Law in principle by revising th e provision concerning the scope and definition 
of "insurance business".  The Government of  Japan also considers the easing of entry 
restrictions (e.g., introducing a lower minimu m capital requirement fo r insurance companies 
to be allowed to operate under the Law) on s uppliers who provide only small sums and short 
term insurance within a certain limited size. It is planned that regulated kyosai  such as the 
Agricultural Cooperative Society (JA) and Na tional Federation of Workers and Consumers 
Insurance Cooperatives ( Zenrosai ) will remain exempted from the Insurance Business Law.  
It is also planned that the  kyosai whose members are genuinely specified (e.g., those of a 
small size or those whose participants are the employees of one company) will be exempted from the Law. 
b) The above-mentioned Report recommends that "it is not necessary to establish a safety net 
provided that the restrictions on choice of products and asset mana gement substantially 
reduce risks associated with busin ess activities and that unregulated kyosai  are obliged to 
deposit security in proportion with the scale of their operations." Based on this Report, the 
Government of Japan does not plan to establish a safety net for kyosai  provided that the 
kyosai  disclose to policyholders that there is no safety net upon solicitation of the product. 
The issue of corporate taxes is under review.  
c) The Government of Japan not only plans to subject unregulated kyosai  to the Insurance 
Business Law as mentioned above, but is also reviewing other specific regulatory measures toward unregulated kyosai  in accordance with the Report. 
d) Not only does the Government of Japan plan to subject unregulated kyosai  to the Insurance 
Business Law as mentioned above, but it also is  reviewing other specific regulatory actions 
toward unregulated kyosai  in accordance with the Report. 
Q50. What is the current status of the govern ment review of the Policy Holder Protection 
Corporation system and recommendations of reforms as current measures expire in 2006?  Are any of 
the plans available for public comment?  
A. The Government of Japan will take the n ecessary steps by seeking an amendment to the 
Insurance Business Law in accordance with the December 2004 Report completed by the Second 
Subcommittee of the Financial System Council in  order to reform the Policy Holder Protection 
Cooperation System. The measures under consideration are as follows:  
A measure that enables policyholders to cancel su ch contracts as a fire insurance contract or 
automobile insurance contract with a view to encouraging them to switch to other insurance 
companies if and when the orig inal insurance company fails; 
A measure that exempts life insurance products th at are recorded in the special account from the 
safety net requirement; and  WT/TPR/M/142/Add.1 
 Page 159 
 
 
 A possible measure that offers government assistan ce to the Policy Holder Protection Cooperation 
System in order to take all necessary measures for policyholders, given the unfavorable business 
conditions faced by insurance companies.  
The Government of Japan will continue to excha nge opinions with insurance companies and industry 
organizations, both domestic and foreign. 
Q51. What is the status of the implementation of the recommendations of the Financial System 
Council to further liberalize bank sales of insurance products?  Is full liberalization still on schedule 
for no later than April 2007? 
A. The Government of Japan is coordinating views on bank sales of insurance products with 
industry organizations in accordance with th e March 2004 report completed by the Second 
Subcommittee of the Financial System Council. The main issues are as follows: 
(i)  The scope of borrowers who are exposed to "sales under pressure"; and 
(ii)  The scope of insurance products that banks are allowed to sell ahead of the original schedule 
of removing the remaining prohibition on bank sales. 
The Government of Japan will expeditiously r each a conclusion on the abovementioned issues. 
Q52. Are there any plans for the liberalization of the bank sales channel for insurance products that 
are available for public comment? 
A. In revising and abolishing Cabinet Orders a nd Ministerial Ordinances, public comments must 
be solicited. The Government of Japan continues to  cooperate with insurance companies and industry 
organizations on this matter. 
Q53. Please provide information on its current regime for insurance intermediation, both for 
commercial presence and cross-border supply, a nd what rights exist for foreign suppliers? 
A. Commercial presence is required for insurance intermediation services. Also, such services 
may be supplied only for insurance contr acts allowed to be supplied in Japan. 
Q54. Referring to paragraph 43 on page 72, the Secretariat Report notes the easing of regulations 
for competitive carriers by abolishing Type I and II categories. However, in April 2004, the Ministry 
of Internal Affairs and Communications (MIC) a pproved an increase in the interconnection rate 
charged by NTT to its competitors. 
a) Please explain how this rate increase is consiste nt with Japan’s goal of regulatory reform of 
its economy and discuss the impact of the rate increase on competition in Japan’s telecommunications sector. 
b) Please also explain why MIC allows NTT East and West to charge the same interconnection 
rate despite the significant difference (around 20%) in operating costs in each region. 
A. a) The result of the current interconnection charges review was attained through careful 
consideration on interconnection charge policy that aims at maintaining competitions in the WT/TPR/M/142/Add.1 
Page 160  
 
 fixed telephone services market (including local  call that is universal telecommunications 
services) and ensuring the availability  of these services at low rates. 
 The increase of interconnection charges is attr ibuted to the rapid decrease of PSTN traffic 
triggered by remarkable transition from traditi onal telephone traffic to IP traffic that is 
unprecedented in any other part of the world.  
b) Fixed telephone services are widely recognized  as universal telecommunications services and 
their availability at nationally uniform rates is indispensable for end users. 
 The regulatory authority has maintained uni form interconnection charges and avoided any 
disparity of interconnection charges between NTT East and NTT West, which may trigger 
that of local call (as a universal service) rat es among regions and subse quently would not be 
acceptable for end users.  
 In the course of the recent interconnection charges review also, the MIC has decided to 
maintain uniform interconnection charges betw een NTT East and NTT West because it is not 
perceived that national consensus has been r eached on different interconnection charges 
within the country. 
Q55. With reference to the same paragraph on regulatory reform, please explain steps that the 
regulator, MIC, is taking to promote competition in  the wireless market. How is Japan upholding its 
WTO commitment (Reference Paper) to allocate sp ectrum in a transparent, objective, and timely 
manner? 
A. In order to create the world's highest level of wireless broadband environment, the MIC is 
conducting thorough review of the radio spectrum al location in accordance with the "Guidelines for 
Reorganization of Radio Spectrum Use" published in Oc tober 2003. As part of the review of the radio 
spectrum allocation, the MIC is undertaking to create and expand opportunities for new entry into the mobile telecommunications market by alloca ting new radio spectra for cellular phones by 
reorganizing radio spectrum use. 
Regarding the transparency of the radio spectrum al location, the MIC clearly formulates an allocation 
plan to be publicized, and shall consult and seek recommendations from the Radio Regulatory 
Council when changing the allocation plan and licensi ng radio stations. Therefore, the allocation of 
radio spectrum is implemented in a transparent, objective, and timely manner. 
Q56. The Secretariat Report indicates in Paragraph 44 on page 72 that the NTT law specifies that 
the Japanese government must own at least one-third of all NTT shares.  Currently, the government is 
the largest holder of NTT shares.  The law also limi ts foreign acquisition of NTT shares so that the 
aggregate of the ratios of the voting ri ghts must be less than one third. 
a) Please confirm Japanese government plans to re duce its ownership of NTT to the legal limit 
of one-third in 2005?   
b) Are there any plans for Japan to revise the NTT law to completely eliminate its government 
ownership requirements? 
c) Does Japan have any plans to increase the per centage of shares that foreign firms may own?  WT/TPR/M/142/Add.1 
 Page 161 
 
 
 A. 
a) The FY 2005 budget will allow the Government of Japan to sell the state-owned shares of the 
portion that exceed one-third of all shares. It  is, however, necessary to fully take into 
consideration various factors including impa cts upon the stock market caused by share 
release.  It is not therefore determined ye t whether the Government of Japan will sell all 
portion of the state-owned shares that exceed one -third of all shares within the coming fiscal 
year.. 
b) The Government of Japan has no plan to  relax or abolish th e government ownership 
requirement at this stage. 
c) NTT East and NTT West are telecommunications carriers essential for people's daily life and 
indispensable in terms of national security, and are also obliged to provide universal 
telecommunications services. Accordingly, the foreign capital restrictions are essential to prevent the NTT holding company, which owns all NTT East and NTT West shares, from being dominated by a foreign investor. The Government of Japan therefore has no plan to relax the foreign capital restrictions at this stage. 
Q57. 
a) What other authorities are involved in regulating maritime services in Japan? b) What countries does Japan accord limited acc ess to maritime cabotage services based on 
reciprocal treatment pursuant to treaties of friendship, commerce and navigation? 
A. a) here are no authorities other than the Minist ry of Land, Infrastructure and Transport that 
regulate maritime services in Japan.   
b) or example, pursuant to the stipulation in  the Treaty of Commerce and Navigation with the 
U.K., Japan may grant U.K. flag vessels to enga ge in the carriage between inland ports within 
the limits of international cargoes consigned on through bills of landing and transshipped 
between U.K. flag vessels. 
Q58. apan describes its bilateral maritime agreem ents mentioned in Paragr aph 49 on page 73 of the 
Secretariat Report as non-discriminatory. For purposes of transparency, are these agreements publicly 
available? 
A. These agreements have already b een made publicly available. 
Q59. Paragraph 50 on page 73 of the Secretariat Report states that Japan's International Ship 
Regime "provides support for Japanes e-flag carriers" and that "thi s support has been unchanged since 
Japan’s previous Review."  The regime "aims to increase the competitiven ess of Japanese vessels 
against those of other countries that provide preferen tial tax treatment for their registered ships."   
a) What tax measures in which countries does this regime target?   WT/TPR/M/142/Add.1 
Page 162  
 
 b) In addition to the tax provisions, are there other types of subsidies or aid provided to 
Japanese-flag carriers registered under the regime?   
c) Does any of this aid provide an indirect benefit to companies which use Japanese flag 
carriers? 
A. 
a) The International Ship Register System do es not target any particular regimes in other 
countries. 
b) In addition to the tax measures, a recognition sy stem for the holder of a certificate issued by a 
party to the STCW Convention was introduced in 1999. 
c) The meaning of ‘an indirect benefit’ is not clear, but the Government of Japan does not 
recognize any such benefit for Japanese flag carriers. 
Q60. a) Please provide information as to any new license s or permissions that have been granted to 
foreign companies wishing to enter the port ser vices sector since the Port Transportation 
Business Law was changed. 
b) Do the "close ties"/joint venture requirement s till apply to foreign companies seeking to enter 
the Japanese port services market?   
c) Have any measures been adopted to limit the Japanese Harbor Transportation Association 
(JHTA)'s control of port services?   
d) What is the justification for new entrants to harbor services operations being required to 
guarantee minimum employment of 1.5 times that of existing operators?   
e) Why does the Japanese government mandate employment and equipment levels, rather than 
permitting market forces to make these decisions? 
A. a) Foreign companies have not applied for any new licenses or permission since the Port 
Transportation Business Law was changed. 
b) Article 16 of the Port Transportation Busin ess Law (Restriction on Subcontracting) shall be 
non-discriminatorily applied to Japanese as well as foreign companies. 
c) While the meaning of 'control' is not clear, we recognize that JHTA is an association of 
private companies and is not a regulatory body. 
d) e) In the past, ports in Japan were thrown into confusion due to the presence of low-quality 
operators without enough capacity (labor and e quipment) for terminal operation, which acted 
as brokers and exploited unlawful margins from th eir subcontractors. Therefore, in order to 
establish order at ports and harbors by preventing this kind of operator from entering into markets, the Port Transportation Business La w prescribes employment and equipment levels.  WT/TPR/M/142/Add.1 
 Page 163 
 
 
  New entrants as well as incumbent operators are required to fulfill the minimum employment 
standard of 1.5 times that of the former requi rement under Article 22-2 of Port Transportation 
Business Law. This revision was introduced to  smoothly implement deregulatory measures, 
such as the relaxation of regulatory system of  market entry to abolish demand and supply 
adjustment system, and that of charges from pe rmission requirements to prior notification in 
nine large harbors by the revised Port Tran sportation Business Law (2002), while avoiding 
instability in labor relations caused by low-qualit y operators (brokers) that had existed in the 
past. 
Q61. Please explain how "open skies" agreements "may entail oligopoly." 
A. Japan believes that it is important to deve lop a more competitive market environment with 
fair and equal opportunities in order to enhanc e passengers’ convenience. On the other hand, 
considering different levels of economic devel opment and the diverse social environment, each 
country should be able to flexibly and voluntaril y choose the means to facilitate more competitive air 
transport services. Therefore, we are concerned about  the negative effect of a radical and uniform way 
of liberalization that might lead to decreasi ng the number of competitors by overlooking such 
circumstances or even entail oligopoly. 
Q62. a) Are there plans to privatize Narita Interna tional Airport Corporation through an initial public 
offering (IPO) slated for fiscal year 2007? 
b) Does the Japanese government intend to divest it self completely of all shares of NIAC at the 
time of the IPO? 
A.  
a) The Government of Japan considers it desira ble to make an IPO for Narita International 
Airport Corporation as early as possible, taking account its business condition and stock market situation at the time of the IPO. 
b) As the timing and scale of the stock rel ease are subject to the business condition of the 
corporation and the stock market situation, a d ecision has not been made so far on whether the 
Government of Japan will release all shares at the time of the IPO.  
Q63. Please provide details on any steps the Japan ese government will take to ensure that the 
implementing ordinances by Nichibenren  (Japan Federation of Bar Associations) will not limit the 
liberalizing intent of the new law by adding discr iminatory rules and regulations aimed at foreign 
lawyers. 
A. The Nichibenren  (Japan Federation of Bar Associations) exclusively conducts the drafting of 
such rules and regulations that apply to  Bengoshi (Japanese lawyers hereinafter referred to as 
"Bengoshi ") under the principle of the autonomy of  Bengoshi. Therefore, the Government of Japan 
does not have any right to oversee Nichibenren . However, the Government of Japan has been acting 
to seek Nichibenren’s  correct understanding of the amended law through consultations so that 
Nichibenren  will make its rules and regulations c onsistent with the fundamental idea and 
interpretation of the amended Gaiben  Law.  
It is possible to consult further with Nichibenren  about this issue, if necessary. WT/TPR/M/142/Add.1 
Page 164  
 
 Q64. In paragraph 63 on page 76, the Secretaria t Report states that "according to the authorities, 
there are no restrictions on FDI in Japan’s educati on sector; domestic and foreign educational service 
suppliers face the same approval requirements."   
Please provide details on any new or prospective regulatory changes that aim to provide foreign 
branch campuses with rights more equivalent to Japanese institutions of higher education.  
A. Based on the amendments of the relevant re gulations in December 2004 , a branch school of a 
foreign university in Japan which is formally rec ognized as an educational institution offering courses 
of a foreign university in the school education syst em of the home country is treated as equivalent to 
the main campus of the foreign university. The Mini ster for Education, Culture, Sports, Science and 
Technology (hereafter referred to as MEXT) will d esignate such a branch school of a foreign 
university through official confirmation by a foreign embassy or other diplomatic representatives in 
Japan. As a result, a graduate of a designated bran ch school of a foreign university is qualified for 
admission to Japanese graduate schools, a graduate as  well as a student of a designated branch school 
of a foreign university is qualified for admission to Japanese universities as a transfer student, and the 
transfer of credits to a Japanese university can also be recognized. 
The MEXT has already explained about the abovemen tioned regulatory reform to the Embassy of the 
United States in Japan.  WT/TPR/M/142/Add.1 
 Page 165 
 
 
 AUSTRALIA  
Q1. 
(1) Can Japan confirm that its FTAs with Singapore and Mexico are WTO consistent, including 
by providing information on the percentage of tariff lines on which tariffs will be eliminated 
(overall and by sector) and the volume of trade on which tariffs will be eliminated. (It is noted 
that page 20, para. 21, of the Secretariat report provides some information about trade 
volumes covered in the FTA with Singapore.) 
(2) Can Japan advise of the approach it will ta ke to ensuring that the FTAs it is currently 
negotiating are WTO-consistent? How will forei gn investment and services be dealt with in 
these negotiations? 
A. 
(1) Japan is of the view that the economic part nership agreements with Singapore and Mexico are 
WTO consistent, as both agreemen ts cover all sectors in goods. 
As for the agreement with Singapore, on a tr ade volume basis in 2000, it resulted in tariff 
elimination on over 98% of trade in goods between the two countries. On a statistical code 
2000 (HS 9 digit level) basis, the tariff elimin ation by the Japanese side covers approximately 
77%, which consists of the tariff elimina tion accounting for approximately 21% of all 
agricultural, forestry, and fisheries products a nd approximately 96% of all industrial products. 
As for the agreement with Mexico, on a trad e volume basis in 2002, it resulted in tariff 
elimination on approximately 96% of trade in goods between the two countries. On a 
statistical code 2002 (HS 9 digit level) basis, th e tariff elimination on the Japanese side covers 
approximately 86%, which consists of the ta riff elimination accounting for approximately 
46% of all agricultural, forestry and fish eries products and appr oximately 99% of all 
industrial products. 
(2) Japan is currently negotiating EPAs with several countries, while fully recognizing the 
necessity of and aiming at concluding agreements  which are consistent with the WTO rules. 
In this regard, with a view to ensuring the consistency with the WTO, Japan does not intend 
to exclude any specific sectors w ith respect to trade in goods, for example. Japan also believes 
that EPAs facilitate the promotion of structural  reforms of Japan and its partner countries. 
 The EPAs which have been concluded or are currently being negotiated encompass a wide 
range of areas including investment as well as se rvices, in light of the aim for comprehensive 
agreements of high quality. Our basic appr oach in addressing investment and services in 
EPAs is to attain further liberalization and e nhance transparency and legal stability, as well as 
to ensure consistency with Article V of GATS. 
Q2. Australia would appreciate some elaboration from Japan on the status of the bill adopted by 
the Government in October 2004 to revise the Anti-monopoly Act (page 59, para. 89) and whether 
any of the amendments, including the proposed  "leniency program", have been passed and 
implemented. 
 WT/TPR/M/142/Add.1 
Page 166  
 
 A. The bill was submitted to the 161st session of the Diet on October 15, 2004, but it has been 
carried over to the next Diet session which started on January 21. 
Q3. Does Japan expect to make further chang es to the Anti-monopoly Act in 2005 and 2006 and, 
if so, what are the nature and scope of these intended changes? 
A. The Government of Japan plans to review sanctions, hearing procedures etc. of the AMA, 
considering the status of enforcement of the ame nded law and the economic situation in Japan within 
2 years after its enforcement, and plans to implement necessary measures. 
Q4. The Japanese Fair Trade Commi ssion’s (JFTC) move to the Cabinet Office implies a stronger 
role in government-wide reform.  Can Japan provide more informati on about the JFTC perspective on 
its new position in the Cabinet Office and whether it has in fact provided more opportunity to 
advocate pro-competitive reform across government po licy?  If not, what barriers remain in doing so? 
A. The movement of the JFTC to the Cabine t Office shows the significance of competition 
policy as being one of the Japanese major policies and provides more appr opriate position to the 
JFTC, reflecting its independence and neutrality in  the government.,The JFTC will actively promote 
competition policy over the other government polic ies. (the same answer for Canada Q11.) 
Q5. In 2004 a Competition Policy Research Centre (CPRC) was established within the FTC.  On 
what areas of research and policy has the CPRC been focusing?  
A. The CPRC aims at strengthening the theo retical foundation for planning and implementing 
competition law and policy. Economists, jurists an d JFTC staff are collaborating in CRPC research 
with that in mind. The subjects of the research conducted in FY2004 are as below: 
(i) Economic analysis on network externality and switching cost 
(ii) Quantitative analysis on compe tition, innovation and productivity  
(iii) Process of enacting the AMA and its s uggestions to the current legislation  
(iv) Merger review and economic analysis (v) Technical standards and competition policy (vi) Economic analysis on bid rigging 
Q6. What steps have been taken to strengthe n consumer protection a nd its relationship to 
competition policy? 
A. The competition policy which JFTC implements  through  the  enforcement of AMA aims at 
promoting fair and free competition in the market  and at ensuring consumer profits increasing 
efficiency in the economic activity as a whole thr ough  competition. An entrepreneur competes with 
others for the purpose of making consumers choo se his goods and services. Proper information about 
the content of goods or services and the trade c ondition is essential for fair and free competition to 
effectively function. 
JFTC implements consumer policy by enforcing the Premiums and Representations Act in order to 
ensure consumer benefits by creating and mainta ining an environment where consumers can make 
independent and reasonable decisions. In this rega rd, JFTC vigorously enforces the Act to eliminate  WT/TPR/M/142/Add.1 
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 false or misleading representation which prevents  consumers from making proper choices. Such 
consumer policy is closely related to competition policy in the sense that both policies play an 
important role in making the market mechanism function more effectively. The recent JFTC’s 
activities on consumer protection are as follows. 
(i) Amended the Premiums and Representations Act in May 2003 to introduce an effective 
regulation on unjustified representations claiming re markable superiority that is not based on 
any reasonable grounds and applied this new regulation to two cases of misleading 
representations about dietetic foods. 
(ii) Strict and speedy elimination of misleading representations (made 23 desist orders in 2004.). 
(iii) Regular surveillance of misleading representati ons on the Internet by use of the system of 
monitoring electronic commerce. 
Q7. Can Japan indicate to what extent the revisi ons to the Basic Plan will shift Japan’s support 
measures away from trade-distorting instruments such as market price support to non-trade distorting forms? 
A. The Basic Law in 1999 stipulates that the pri ce of agricultural products should reflect the 
supply and demand situation as well as the quality of  the product.  Since the implementation of the 
Basic Law, price support measures on a number of  agricultural products have been reformed, 
achieving the current AMS level of less than 20% of  the final commitment level.  The policy reform 
debate under way in the Council, which builds on th ese policy reforms of the past years, focuses on 
the acceleration of the structural reform in the agriculture sector which has not progressed as far as 
envisaged.  New policy measures should be non-trade distorting as much as possible, but as the details 
of new policy measures are to be decided after the decision of the new Basic Plan by the Cabinet in 
March, quantitative analysis of the effects of these policy measures is not yet available. 
Q8. How will these revisions comply with the Doha Mandate? A. The agricultural policy reform is pursued in order to respond to the decline and ageing of the 
farming population and to accelerate structural reform of the agriculture sector which has not 
progressed as far as envisaged. In this sense, the revision of the Basic Plan is required regardless of 
the WTO and other international ne gotiations, but the successful struct ural reform will also help the 
agricultural sector adapt the ne w international environment. 
Q9. Could Japan please detail the criteria on which it will make direct payments to farmers?  
What effect is such a policy shift likely to have on the total level of support provided to the domestic 
agriculture sector and the level of Amber, Blue and Green Box support it provides? To what extent 
will Japan’s new support arrangements meet WTO agr eed criteria for Amber, Blue or Green Box 
support? 
A. As is shown in the report of the Government  of Japan, the Council of Food, Agriculture and 
Rural Area Policies is currently reviewing its Basi c Plan. The Council is to submit the draft of the 
revised Plan in March, which in turn will be deci ded by the Cabinet. The details of policy measures 
will be subsequently decided by the Government, based on the direction described in the new Basic 
Plan. 
Q10. In moving to a system of direct payments with a stronger focus on core farmers, is Japan 
expecting an increase in productivity of individual fa rms and an increase in the efficiency of farming WT/TPR/M/142/Add.1 
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 at an aggregate level? Has Japan undertaken any analytical work to  assess these likely changes? Does 
Japan expect the implementation of the Review of the Basic Plan to result in a lowering of retail 
prices for domestic agricultural goods? If so, would Japan consider a commensurate reduction in 
corresponding trade barriers to encour age competition with imported products? 
A. Improvement in productivity to allow economica lly sustainable development of agriculture is 
one of the main objectives of the agricultural policy reform.  As the details of new policy measures 
are to be decided after the decision of the new B asic Plan by the Cabinet in March, the quantitative 
analysis of the effects of these policy measures is not yet available. 
Q11. What were the findings of the review a nd subsequent actions arising from those findings? 
Does Japan expect the outcomes of the review to le ad to significant change in the way agricultural 
policies and programs are implemented in Japan? W ill this lead to lower price for agriculture 
commodities and more efficient production and distribution? 
What effects will the implementation of the re view finding have on Japan’s trade policies? 
A. The Japan Agricultural Co-ope rative has worked on the establis hment of a basic guideline to 
envisage the future reform of the Agricultural Co -operative system based on the 2004 revised Law of 
Agricultural Co-operative. This basic guideline is assumed to advance the reform across the whole 
organization, including reform of economic acti vities, improvement of its management and 
development of its original capacity. 
The reform of economic activities, which includes cost reduction through price cutting of production 
input materials and expansion of business areas, is  expected to reduce production costs of agricultural 
products and improve its productivity. 
As the Agricultural Co-operative reform is an import ant issue, the Ministry of Agriculture, Forestry 
and Fisheries encourages the reform to be implemented as soon as possible. 
Q12. How do these STEs (MAFF’s Food Department  and ALIC) determine and set resale prices 
for centrally purchased agricultural commodities?  How are the interests of Japanese domestic 
businesses and consumers taken into account? In what way is the margin or profit from the purchase 
and re-sale of commodities used to  support domestic agriculture?  
A. 1. MAFF’s Food Department (Rice, Wheat and Barley) Selling prices of imported rice are determined in a wa y that reflects the market situation, which is 
based on the evaluation of minimum access rice by users. 
Selling prices of imported wheat and barley are determined by a Council commissioned by the 
government, composed of representatives of user s, consumers and people with experience or 
academic standing under "Law for Stabilization of  Supply, Demand and Prices of Staple Food". A 
certain part of mark up revenue from imports of wh eat and barley is used for programs aimed at 
stabilization of producers’ farm management.   WT/TPR/M/142/Add.1 
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 2. ALIC 
 (1) Dairy products   Among dairy products, the quota established at the Uruguay Round for "designated 
dairy products for general use" (skimmed milk powder, butter, etc.) is imported by 
ALIC (as state trading). ALIC imports a nd resells designated dairy products taking 
into account the domestic supply and demand situations through a competitive tender.  
Further details are reported in Japan's no tifications on state trading and on market 
access (G/STR/N/10/JPN). The funds raised  by these import STEs are used to fund 
projects such as promotion of the dairy industry . 
 (2) Raw silk   Domestic sales prices of raw silk import ed by the ALIC are determined on the basis 
of such factors as import prices, management costs, domestic prices of raw silk and 
other economic conditions. 
  The stabilization of the market price th rough purchase and re-sale of silk by ALIC 
coincides with the interests of consum ers as well as the domestic businesses.   
  The margin from the purchase and re-sal e is not used for supporting domestic 
agriculture but used for the ad ministrative cost of the ALIC. 
Q13. Can Japan provide a summary of the findings of the review and the subsequent changes to 
government agricultural policies that will result fro m implementation of the review’s findings? What 
effect will the review outcomes have on Japan’s sel f sufficiency for wheat production over the next 
5 to 10 years? Will the outcomes of the review have an impact on the volumes of wheat and other 
grains imported by Japan over the next 5 to 10 years? 
A. The discussion concerning this question is curre ntly underway in the Council. Therefore, we 
cannot provide any answer at present.   
Q14. What objectives or targets have been set for an increase in the volume or value of agricultural 
exports; are any particular products or countries ta rgeted for export; and what policies and programs 
for encouraging and supporting increased ag ricultural exports are being considered?  
A. The Government of Japan has supported the e fforts of farmers and regions motivated in terms 
of export .  All such measures are "widely availa ble export promotion and advisory services", which 
are not subject to reduction commitments under 9. 1(d) in the Agreement on Agriculture. 
Q15. Will Japan provide assurances that whatever  policies, regulations, guidelines or specific 
requirements that may be imposed on domestic beef or beef imports from BSE-infected countries are based on a full risk assessment a nd follow international guidelines?  Furthermore will Japan provide 
assurances that they will not apply measures to count ries such as Australia which remain free of BSE? 
A. In Japan, the Food Safety Commission (FSC ), the independent risk  assessment organization 
for food safety, was established in 2003. Risk mana gement agencies will consult FSC on the BSE risk 
of products from exporting countries. 
Q16. Japan last provided the WTO Committee on Agriculture in May 2004 with a WTO domestic 
support notification that covered the year 2000. Give n that Japan can provide agricultural producers a WT/TPR/M/142/Add.1 
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 maximum of 3,972 billion yen per annum of produc tion and trade distorting support, or Aggregate 
Measure of Support, (the second highest of  all WTO Members and equivalent to around 
US$37.8 billion), when will Japan provide other WT O Members with an opportunity to review its 
domestic support notifications for the years since 2000? 
A. Japan is eagerly preparing for the domestic support notification for FY 2001. 
Q17. Could Japan please provide estimates of the level of support provided to its agriculture sector 
in each of the boxes: Amber, Blue and Green from the year 2001 onwards? 
A. The level of support Japan provides to its agri culture sector in each of the boxes Amber, Blue 
and Greens from FY 2001 onward are under calculation. 
Q18. The WTO Secretariat (WT/TPR/S/142, page 28, footnote 8) notes that Japan did not provide 
ad valorem  equivalents for around 22 per cent of its non– ad valorem  tariff lines (which accounted for 
93 of the top 100 tariffs) on the basis that unit import  values were not availabl e. Did Japan consider 
using other methods to calculate the ad valorem  equivalents?  For example, world indicator prices, 
unit import values sourced from COMTRADE, major e xporters’ export unit values or an alternative 
approach could be drawn upon. Can Japan provide some examples of non- ad valorem  tariff lines 
(including details of the applicable tariffs and any conditions) for which ad valorem  equivalents could 
not be derived using alternative refere nce prices to establish unit import values? 
A. The calculation of AVEs was conducted using a uniform methodology. For the tariff lines that 
did not suit the methodology, Japan did not explore th e use of alternative reference prices. Therefore, 
we cannot provide any examples of non- ad valorem  tariff lines for which AVEs could not be derived 
using alternative reference prices. 
Q19. In light of low fill rates for some product s and tariff quota administration issues, does Japan 
intend to modify its tariff quota regime, or move to  a tariff-only regime, for those products during the 
Doha round? 
A. TRQs on dairy products, introduced with tariffi cation in accordance with the agreement of the 
Uruguay Round, were bound as "current access opportunities" by common agreement among 
Members. Current access opportunities represent the av erage quantity of the products imported during 
the base period (1986 to 1988). 
Q20. How effective was the safeguard in restricti ng imports of chilled beef over that period?  What 
other steps did Japan take to protect domestic pr oducers?  Was the additional revenue raised by the 
tariff increase used by Japan to support domestic production? If not, how were the additional tariff 
revenues used? 
A. After the emergency tariff measure on chilled beef imports was implemented on 
August 1, 2003, the volume of the imports fell compar ed to the previous level. Japan has implemented 
some measures, including enhancing the rationaliza tion of beef cattle production as one example of 
domestic support.  This is implemented according to  the budget approved by the Diet for every fiscal 
year. While an estimate of the tariff revenue is u sed in drafting for the budget , there is no further 
linkage between the tariff revenue and the amount of budget once the budget is approved; 
accordingly, an increase in tariff revenue during a fi scal year does not lead to an increase in the 
expenditure for the above-mentioned measures.  WT/TPR/M/142/Add.1 
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 Q21. To what extent did Japan take account of the interests of domestic businesses and consumers 
in its decision to implement the beef safeguard? Did Japan undertake modelling or other economic analysis of the likely impacts of a tariff increase on beef on domestic businesses and consumers before increasing the tariff? Has Japan measured the overall impact on its economy of the decision to 
increase the tariff on beef? 
A. The emergency tariff measure was introduced in  accordance with the result of consultations 
with interested Members including Australia during the Uruguay Round. Japan accepted a voluntary 
tariff reduction for beef beyond the bound rate in spite  of the difficult situation of the domestic beef 
sector together with the introduction of the emergency tariff measure which is set so that the tariff is 
automatically returned to the bound rate when beef im ports exceed a certain level. As all interested 
Member countries agreed, the measure and voluntary  tariff reduction constitute a package. The beef 
tariff system in its entirety strikes a good balan ce between domestic producers and users/consumers.  
In addition, assessments of impact on domestic indus try are not required to trigger the measure, unlike 
the Safeguard system, stipulated under Article  19 of GATT 1994 and the WTO Agreement on 
Safeguards. 
Q22. The recent ban on US and Canadian beef im ports has resulted in a decrease in total beef 
imports into Japan. When the Japanese government takes a decision to resume beef imports from 
Canada and the US, it is likely total imports will re vert to previous levels and result in the beef 
safeguard being triggered. 
Would such a decision by the Japanese government meet the objective of the safeguard mechanism 
which is to respond to an import surge that threatens domestic producers? 
Q23. Has the Japanese Government undertaken any anal ysis of the likely effects of a tariff increase 
on domestic prices?   Can the Government provide  outcomes of modelling which demonstrate these 
impacts?  
Q24. Given that the domestic beef producers now have a larger market share than before the 
discovery of BSE in Japan, what agricultural trade policy objectives would be served by higher beef 
tariffs?  Is Japan concerned about imposing me asures that may disrupt beef consumption? 
 
(From Q22 to Q24)  
A. At present, it is difficult to estimate exactly when  the beef trade with the U.S. and Canada will 
resume, and to what extent the volume of beef imports will increase from these countries and will decrease from the rest of the exporting countries, in cluding Australia. Therefore, we are currently not 
in a position to argue about hypothetical im plementation of the measure in the future. 
In addition, assessments of impact on domestic indus try are not required to trigger the measure, unlike 
for the Safeguards, as stipulated in Article 19 of  GATT 1994 and the WTO Agreement on Safeguards.  
Q25. Given that the pork safeguard has been trigge red in each of the last three years, does Japan 
continue to believe that the pork safeguard mechan ism is still effective in meeting its original 
objectives? Has Japan modelled the impacts of the di stortionary import flow caused by the safeguard 
arrangements, particularly on domestic prices faced by Japanese consumers? WT/TPR/M/142/Add.1 
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 A. The emergency tariff measures have been introduced in accordan ce with the result of 
consultations with interested Members in conj unction with the conclusion of the Uruguay Round. 
Japan accepted a voluntary tariff reduction for pork beyond the bound level together with the introduction of the emergency tariff measures, which are set to be automatically triggered to bring 
back the Gate Price to the levels set forth in its Schedule annexed to GATT 1994 when pork imports 
exceed a certain level. 
These measures are indispensable in order to ease the negative impact on domestic production, and 
the Government of Japan believed that the past impl ementation was effective in light of its purpose. 
In addition, since various changing factors including  local prices in exporting countries, exchange rate 
and distribution cost, also influence domestic retail prices, an increase in tariff after the 
implementation of the measures is not directly reflected in the prices. (Consequently, modeling the 
influence on the market by a factor of the implemen tation of the measures is impracticable and has not 
been in place. However, retail prices have cha nged little, in spite of the implementations of the 
measure in the past.) 
Japan recently notified an amendment to the En forcement Ordinance under the Plant Protection Law 
(G/SPS/N/PN/132 – 4 January 2005).  The Enforcemen t Ordinance is subordinate to the Japanese 
Plant Protection Law (Law No.151 of 4 May 1950 – see WT/TPR/S/142 table II.1).  The proposed amendment, inter alia, intends to add further orga nisms potentially associated with imports of plants 
and plant products to the list of non-quarantine p ests specified under Article 5-2 of the Enforcement 
Ordinance. 
Q26. Does Japan intend to designate the pests lis ted in Article 40 of th e Enforcement Ordinance 
under the Plant Protection Law also as non-quaranti ne pests under Article 5-2 of the Enforcement 
Ordinance with respect to phyto sanitary measures taken against orga nisms potentially associated with 
imports of plants and plant products?    
Q27. If not, what technical justification can Japan  provide for the application of a nil tolerance 
during inspection at the border for pests on impor ted products, when domestically those pests are 
widespread in Japan and control action agains t them is only taken once economically damaging 
populations levels are experienced? It needs to be kept in mind that control action in these situation 
constitutes ‘suppression’ and not atte mpted ‘eradication’ and therefore does not meet the disciplines 
under the International Plant Protection Conventi on International Standards for Phytosanitary 
00Measures that apply to the definitions of ‘official control’ and ‘quarantine pests’. 
(From Q26 and Q27) 
A. Yes. 
Q28. Could Japan please provide details of which fish products (including species) are controlled 
by import quotas?  Could Japan please explain in detail how the import quota application and 
allocation system for fish products operates? 
A. Detailed information on the operation of the import quota system including which species are 
controlled shall be published in the Ministry of Economy, Trade an d Industry Official Bulletin, among 
others.  
Q29. Could Japan indicate when it expects to extend duty-free and quota-free treatment to all 
products from LDCs?  WT/TPR/M/142/Add.1 
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 A. Given that some products need domestic adju stment, Japan cannot commit a specific date at 
present but regards it as an issue to be solved. Ne edless to say, Japan con tinues to be committed, 
while paying attention to the impact on domestic i ndustries, to moving towards the further expansion 
of duty-free and quota-free market access for LDC products. 
Q30. Could Japan indicate whether it is still the case that no other tariffs on non-agricultural 
products are for a purpose other than to protect a sensitive industry? If not, could Japan indicate which 
other non-agricultural products attract a tariff for purposes other than to protect a sensitive industry? 
What is the purpose of maintaining such tariffs? 
A. As for the functions of tariffs, a "financi al tariff’’ is imposed on raised revenue and a 
"protective tariff" is imposed to protect domestic  industries. For non-agricultural products, financial 
tariffs are only imposed on crude oil and oil product s, and all other tariffs are imposed to protect 
domestic industries. 
Q31. Could Japan elaborate on the reason(s) for such a reduction in the prevalence of nuisance 
tariffs? For example, as 5.5% of non- ad valorem  tariffs have an AVE, is su ch an apparent reduction in 
nuisance tariffs due to an increase in those AVEs above 2% (i.e. the threshold above which it is no 
longer defined as a nuisance tariff)?  
A. Japan decides tariff rates periodically, cons idering the domestic and international economic 
situation as a whole. 
Q32. As nuisance tariffs are defined as those not having a protective effect, for which industries do 
nuisance tariffs apply?  
A. It is difficult to generalize relevant cases. 
Q33. Would Japan be considering the removal of  remaining nuisance tariffs , either autonomously 
or as part of its commitments in the current Doha round? 
A. Tariff rates stipulated by our domestic law have  been changed on a yearly basis in the course 
of due procedure so that Japan can cope with ongoing economic affairs. Accordingly, Japan will 
decide what sort of products will be covered in  reducing tariff rates, c onsidering the domestic and 
international economic situation as a whole. 
Q34. What progress has Japan made in accelera ting its efforts towards global harmonisation to 
enable approval process for clinical trials and fo r pharmaceutical and medical product manufacturers 
outside Japan, and to align with internationally r ecognised standards such as the British or European 
Pharmacopoeia. 
A. Japan has participated in th e ICH as a party of tripartite work among Japan, the USA and the 
EU, which has contributed to the harmonization of  technical requirements for the registration of 
pharmaceuticals for human use, with the mission "t o deliver new medicines to patients who need 
these as quickly as possible."  Japan has inco rporated the ICH harmonized guidelines and 
recommendations in the domestic registration. In a ddition, under the framework of ICH, work to 
harmonize tests on Pharmacopoeia is now underway. 
Q35. How does Japan reconcile the requirements in  the new Pharmaceutical Affairs Law (expected 
in Q2, 2005) related to auditing of overseas manuf acturing sites by the Japanese regulatory agency 
prior to product approval and produc t licence renewals with the move  towards mutual recognition of WT/TPR/M/142/Add.1 
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 GMP inspections by countries with equivalent regu latory standards such as Australia, the European 
Medicines Agency  
(EMEA) and United States Food and Drug Administration (FDA)? 
A. It is required that the manufacturers outside  Japan that will export pharmaceuticals to Japan 
should conform to Japanese regulations (GMP) in the same way as manufacturers in Japan do. If a 
country which a manufacture is signs the MRA wi th Japan, Japan accepts the result of the GMP 
inspection according to the MRA. 
Q36. Can Japan explain the reasoning behind non-  recognition of online education services where 
institutions can demonstrate that on line services are of the same standard as those delivered via the 
face-to-face medium, and are subject to the same quality assurance standards as those for face-to-face 
learning? 
A. Since March 2001, Japanese universities have th e authority to give credits through various 
media such as the Internet and to certify credits  from foreign universities that are acquired through 
correspondence education, such as education via the Internet. 
In order to further develop on-line education servi ces across the border, Japan  recognises the necessity 
of considering effective measures to assure the quality of on-line education, taking into account 
students’ difficulty in accessing appropriate informat ion on universities that provide on-line services.  
In this connection, Japan has made a commitmen t to discussions in related fora such as 
UNESCO/OECD and intends to consider necess ary measures based on the outcome of these 
discussions. 
Q37. Australia would welcome further clarifica tion of Japan’s Investment Trust Management 
Association regulations and policies on the investment of funds in other funds. 
A. The Investment Trust Association of Japan is a self-regulatory organization.  Please contact 
the Association about the rules set by the Association. 
 http://www.toushin.or.j p/english/index.html 
Q38. Can Japan provide a status report on progress toward reform of its postal services?  Is it 
intended that the new entities be subject to anti monop oly laws and regulation by the Japan Fair Trade 
Commission?  From Australia’s perspective this would be essential to the success of the reforms and 
to ensuring a level playing field vis-à-vis foreign competitors. 
A. The Government of Japan is currently desi gning institutions and is planning to submit the 
bills to the 162nd Diet session which started on 21 January, to privatize in April 2007. 
Japan Post is currently subject to "the Anti-monopoly Act and regulation by the Japan Fair Trade 
Commission, and so will the new entities be after privatization.  
Q39. We would welcome Japan’s comments on the following:  
a) the long and administratively cumbersome  process of obtaining Gaikokuho-Jimubengoshi 
Jimusho (GJB) – registration as a foreign lawyer. 
b) a three year minimum period of professional experience after being admitted to practise  WT/TPR/M/142/Add.1 
 Page 175 
 
 
 c) a minimum period of 180 days residence in Japan each year 
A. a) The Minister of Justice makes a decision on applications for recoginition as a Gaikokuho-
Jimu-Bengoshi (a foreign lawyer qualified under Japanese law, hereinafter referred to as GJB) 
within approximately two months, unless any ex ceptional circumstances exist.  We believe 
that this is not too long. 
b) The system of GJB in Japan means that foreign lawyers are able to provide legal services 
pertaining to their own country's laws without taking any special examinations provided that 
the foreign lawyers meet the requirement for appr ovals which calls for at least three years of 
experience of practice in the country of acquisition of qualifications. 
 This system is intended to ensure that fore ign lawyers have sufficient ability and competence 
and that there are no ethical problems. 
 Japan believes that the three years experience requirement for practicing foreign law is 
appropriate from the viewpoint of protecting clients. 
 Therefore, no consideration is being given to removing the abovementioned requirement. 
c) Japan believes that GJB should be required to st ay in Japan for no less than 180 days a year 
from the viewpoint of protecting clients and to pr event clerks or others from engaging in legal 
business without GJB. 
Q40. Why are foreign legal consultants require d to have written advice from a foreign lawyer 
qualified in a third country before  being permitted to advise on the law of that country, while Japanese 
lawyers are not subject to the same restriction? 
A. GJB are allowed to practice the law of th e jurisdiction where the person is qualified as a 
lawyer even if it is not the GJB’s home country law or host country law, provided the Minister of 
Justice designate the law of a specified foreign c ountry for the person. Concerning the handling of so 
called "third country law" of the jurisdiction wher e he or she is not qualified as a lawyer, a GJB is 
allowed to practice according to a written advice on each issue from a competent person who is a foreign lawyer in such specified foreign country law. 
Ordinarily, a GJB can only engage in  legal business in Japan which is limited to the laws concerning 
the laws of the country where qualification was ac quired, and therefore when a GJB handles legal 
services in third country law, the GJB must do so only after having received written advice from a 
lawyer in the third country. On the other hand, Bengoshi can engage in legal business without any 
restrictions. 
If a GJB were able to practice third country law without written advice, there would be a possibility 
that such a system of GJB would go against the pu rpose of the system of GJB, and therefore Japan 
believes that the requirement for third country law is appropriate. 
Further, Japan believes that there are no problem s under the GATS Agreement concerning National 
Treatment. WT/TPR/M/142/Add.1 
Page 176  
 
 Q41. How does Japan justify imposing additional experience and minimum residency requirements 
on foreign lawyers (GJB) providing advice on the law of their home country which the competent authority in their home country itself would not impose on such practitioners? 
A. See the answer for Q39 b and c. above Q42. We understand considerable progress has b een made in the unbundling of services over the 
last two years.  For which network func tions and services is unbundling now available? 
A. Many network functions are available with unb undling.  For example, network functions such 
as transmitted band subscriber line transmission f unction (dry copper), divided band subscriber line 
transmission function (line sharing), optical subscriber line transmission function (dark fiber for subscriber line transmission), the optical signal interoffice transmission function (dark fiber for 
interoffice transmission), and the routing transmissi on function (local IP network) are unbundled as 
network functions with regard to IP services. 
Q43. Interconnection charges in Japan have been the focus of concerns of new carriers in the 
Japanese market.  We appreciate that Japan has put c onsiderable effort in recent years into reducing 
interconnection fees.  What measures does the government have in place to ensure that 
interconnection fees are as low as possible?  Ho w do Japan’s interconnection rates compare with 
those of other OECD nations? 
A. Japan worked to eliminate NTS (Non-Tra ffic Sensitive) costs from the interconnection 
charges in order to decrease interconnection charges.  
Although NTS costs are currently included in cost s for interconnection charges in Japan from the 
viewpoint of tariff policy, the MIC is now amending relevant ministerial ordinances in order to phase 
out NTS costs from the costs of interconnection charges over a five-year period, regarding the 
calculation of interconnection charges to be app lied from FY2005 onward, with respect for a report 
from the Information and Communications Council in October 2004. 
In Japan, traffic through PSTN has dramatically  decreased as broadband services including DSL have 
replaced dial-up service. Therefore, Japan does not consider that international comparisons of the 
level of interconnection charges have much meaning. 
Q44. The Secretariat report notes that the Minist ry of Internal Affairs and Communications (MIC) 
is the main authority regulating Japan’s telecommu nications (page 72, para. 43). Australia believes 
that an institutionally separate regulatory authority that does not have responsibility for policy-making 
promotes competition and protects users’ interests.  Has Japan given any reconsideration to this? 
A. The structure of the administrative authority should be determined from the viewpoint of 
establishing an organization which can carry out admi nistrative work most effectively and efficiently, 
depending on each country’s own situation. 
In Japan’s telecommunications sector, where a nationa l strategy is necessary in order to respond to 
intensive technological innovation, Japan considers that the most desirable administrative framework 
is one that can implement its policy planning and regulatory monitoring functions flexibly, 
strategically, and comprehensively by utilizing a feedback effect between those functions. 
Focusing on the current situation of the telecomm unications sector in Jap an, Japan has achieved 
substantial outcomes in terms of the spread of br oadband and the reduction of charges by realizing a  WT/TPR/M/142/Add.1 
 Page 177 
 
 
 competitive situation in the telecommunications sec tor under the current administrative structure. 
Therefore, there is no reason to change the current organization. 
Q45. Australia notes the reforms that have been  occurring in the telecommunications sector of 
Japan and that the distinction between Type 1 and Type 2 Carriers has been recently abolished. Has 
this reform lead to increased competition in the Telecommunications market, and if so how is this 
measured? Has this reform lead to industry consolidation among the former Type1 and Type2 
Carriers? Has this reform impacted on the viability of participants in the telecommunications market 
in Japan? 
A. By abolishing the distinction between T ype I and Type II telecommunications businesses and 
replacing the permission requirement with a notifi cation or registration requirement, the amended 
Telecommunications Business Law, which entered into  force in April 2004, aims at encouraging new 
entry into the market, enabling telecommunications  business carriers to operate business speedily, and 
promoting competition among carriers. It is prematur e to evaluate the impact of the amended law 
when less than one year has passed since its enforcement. 
Q46. Part of the recent reforms to the telecommuni cations sector in Japan involved the removal of 
the need for NTT East and West to file service tari ffs, an administrative measure designed to prevent 
anti-competitive activity. Since the removal of this filing requirement how many incidents of 
anticompetitive activity by NTT have been filed with the Fair Trade Commission? 
A. There have been no cases in which the JFTC  took measures against NTT since the amended 
TBL came into force in April 2004.    
The regulations for tariffs on NTT East and West ha ve not been abolished. NTT East and West shall 
establish tariffs for universal telecommunications services and security tariffs for designated 
telecommunications services, and submit them to the MIC. If these tariffs impair the users' benefit because the tariffs lead to illicit competition with other telecommunications carriers, the MIC may 
order NTT East and West to change the tariffs. 
In addition, if the problems stated above happen with regard to telecommunications services other 
than universal telecommunications services and designated telecommunications services, the MIC 
may order NTT East and West to take actions to improve business activities.  
For your information, there have been no cases of giving those orders to NTT East and West since 
April 2004. 
Q47. MIC recently undertook a review of the Univ ersal Service Fund System where it examined a 
concept of Universal Access inst ead of Universal Service in light of the growth of mobile phone, 
Internet and VOIP use.  How does Japan believe this concept of Universal Access would be reflected 
in: 
a) changes to the calculation of th e former Universal Service charges 
b) Interconnection Charges c) International Settlement Arrangements. 
A. As mentioned in the question, the MIC su bmitted an inquiry to the Information and 
Communications Council on the Universal Service Fund System in November 2004. A discussion is WT/TPR/M/142/Add.1 
Page 178  
 
 underway at the Council. However, the purpose of the review of the Universal Service Fund System is 
not the examination of "a concept of Universal Acce ss instead of Universal Service" as stated in the 
question.  
Q48. The advent of broadband and VoIP services has seen non-incumbent Internet service 
providers come to hold significant market shares.  What regulatory and pro-competitive measures are 
being considered to regulate these new services and their providers, particularly where those providers 
have market power as a consequence of their large market share? 
A. Japan considers that this question presents a very important regulatory challenge in the 
current telecommunications sector, where, with the sp read of the Internet, the IP network has been 
replacing the existing PSTN network and the tr end toward broadband has been accelerated.  
The MIC plans to understand th e progress of competition exactly by constantly monitoring the 
situation of each service market for end users a nd appropriately reflect the findings in policy.  
Q49. When does Japan plan to introduce num ber portability for 3G mobile services? 
A. The MIC formulated and published the guidelines on the introduction of number portability 
for mobile services. The guidelines state that number portability for mobile services will be 
introduced by FY2006. 
Q50. Could Japan indicate the status of the mutu al exploitation project undertaken with the United 
States and the European Patent Offices?  Has Ja pan undertaken discussions with other countries to 
jointly exploit patent search and examination results? 
A. Japan carried out the evaluation project of mutual exploitation of search results with the 
United States and the European Patent Office (EPO),  and found that exploitation of search results of 
other patent offices was effective for the purpo se of improving examination quality and reducing 
workload. Based on this finding, Japan has deve loped and put into operation the system called 
Advanced Industrial Property Network (AIPN) , through which foreign patent offices can access 
search/examination results of Japan with the aid of m achine translation.  Patent offices other than the 
USPTO and the EPO can also have access to the sy stem upon registration. Currently, AIPN is utilized 
at patent offices in thirteen countries/region /international organization including Australia. 
Q51. Is Japan contemplating any changes to thei r patent application examination process to more 
closely align with that of the other trilateral members (USPTO and EPO)?   If so, what are the 
changes and when are they likely to be implemented? 
A. No. However, in this connection, Japan is  encouraging Japanese applicants to utilize the 
accelerated examination system and/or PCT route more vigorously.  In order for other patent offices 
to exploit the search results of Japan, it is necessary to provide the search results of Japan in a timely 
manner.  
Q52. It is understood that Japanese and US IP offi ces are developing an agreed catalogue of terms 
for the classification of goods and services that are th e subject of trade mark applications. Australia is 
interested to know how this work is proceeding. To  what extent is it an exercise in identifying the 
terms already accepted in both offices and to what extent is there an attempt to amend the terms 
accepted by each office with a view to harmonisati on?   Have there been discussions with other 
countries in relation to these terms?  WT/TPR/M/142/Add.1 
 Page 179 
 
 
 A. The Japan Patent Office (JPO), the United St ates Patent and Trademark Office (USPTO), and 
the Office for Harmonization in the Internal Mark et (Trade Marks and Designs) (OHIM) have been 
carrying out the "Trilateral Identification Manual Proj ect" to review acceptable English identifications 
of goods and services for the three offices in or der to decrease the burden of applicants seeking 
trademark registration.  Currently, the offices have agreed on approximately 7,000 acceptable English 
identifications and made a list of those acceptable id entifications. This list is available to the public on 
each Office’s website. We are further reviewing other identifications in order to add them to the list. 
Q53. Australia notes that, like Australia, Japan is  a party to the Nice Agreement Concerning the 
International Classification of Goods and Services fo r the Purposes of the Registration of Marks. 
There are some industry concerns in Australia that it is Japanese trade mark practice to use a modified 
version of the Nice Classification system.  This h as led to concerns that the system is reasonably 
inflexible, tends to lead to uncerta inty as to the coverage of a particular trade mark and it increases the 
cost of trade mark examination in Japan. Could Jap an explain how its use of the Nice Classification 
system may differ from that of other countries and on what basis they modify the classification system? 
A. The point of the question is not necessarily clear  to us, but Japan has indeed adopted the Nice 
Classification as a principle classification syst em since 1992 and it is currently based on the 
8
th edition. 
Q54. Can Japan elaborate on whether it is undertak ing any IP initiatives with other countries (apart 
from those identified above) which will facilitate trade? 
A. With regard to mutual exploitation of sear ch / examination results, Japan is not undertaking 
any specific initiatives with countries other than those mentioned above at present. 
Q55. Can Japan provide details of the proposed changes to the company code concerning mergers 
and acquisitions that have been recommended by th e Legislative Council of the Justice Ministry?' 
A. For information on details of the proposed changes to the Companies Law you mentioned, 
please refer to the following (excerpt fro m the "Proposed Recommendations Concerning 
Modernization of the Companies Law ".) 
Proposed Recommendations Concerning Modernization of the Companies Law (Excerpt) Part II. Kabushiki Kaisha VII. Mergers and Other Forms of Company Reorganization  1 Flexibility in Merger Currency In the case of the merger ( Kyushu-gappei ), the company split ( Kyushu-bunkatsu ) and the share 
exchange ( Kabushiki-kokan ), it should be allowed to give to the shareholders of the disappearing 
company and other similar companies, not only the shares of the surviving company and other similar 
companies, but also cash and other assets. WT/TPR/M/142/Add.1 
Page 180  
 
  3 Short-form Merger 
a Short-form Merger 
In the case of the merger and other forms of company reorganization between the controlling 
company and the controlled company (the term "c ontrol" meaning a relationship whereby a company 
owns 90% or more of the voting rights in another company), it should be allowed to dispense with the 
resolution of the shareholders’ meeting of the controlled company. 
Q56. What efforts are being made to incorporate the suggestions made by the Cabinet Office study 
group on mergers and acquisitions into the new legisl ation or other measures associated with the new 
legislation? 
A. The ESRI (Economic and Social Research Ins titute, Cabinet Office) organized a study group 
on M&A (mergers and acquisitions) in December  2003. We had the study group investigate the 
activity and the actual situation of M&A in Japa n because we think that the increasing number of 
M&A in Japan recently, is effective for Japan’s sustainable growth and will play an important role in 
promoting economic and industrial activity in coming new age. 
The study group consists of three t ask forces. The first one is "M&A kenkyukai ", the main task force 
of this study group, organized for the purpose of discussing about overall M&A issues. The second 
one is "M&A benkyokai ", organized for the purpose of understand ing how and what is going on in the 
latest M&A market by inviting guests who are enga ged in real M&A deals (such as bankers, security 
firm workers, and so on). The third one is "M&A houseido-kentoukai ", organized for the purpose of 
discussing specially about legal issues concerning M&A. 
The study group on M&A has officially announced two research papers to date.  
"Current Trend and Challenges on M&A activities in Japan -an interim report-" (March 2004) 
"For A Smooth Expansion of M&A Activities by Japanese Companies- A Report by the M&A Study 
Group -" (September 2004) 
The study group also built a web page called "M&A salon (Japanese only)" on ESRI’s Website. 
 http://www.esri.go.jp/jp/mer/index.html 
On the website, we show the status of every session and officially announced research paper, 
information and news concerning M&A and so on. (Now in Japanese only, but we are planning to 
disclose information in English soon.) 
The study group will continue to discuss issues th at have not yet been argued about but were 
discovered in past arguments to be worthy of further discussion. 
Q57. Could Japan outline the tax changes that will be needed to facilitate mergers and acquisitions 
and indicate a probable timeframe for their implementation? 
A. There are no tax changes that will be needed to facilitate mergers and acquisitions in Japan. 
Therefore, we cannot answer this question.  WT/TPR/M/142/Add.1 
 Page 181 
 
 
 Q58. Can Japan identify what major reforms have  occurred in the areas of medical care and 
welfare, including long term care services for an ag eing population?  What impact have these reforms 
had on trade in goods and service? 
A. In order that the long-term care insurance sy stem can secure the lives of people in the future, 
even when the population is aging rapidly, we th ink it is necessary to revise the following areas from 
the basic viewpoint of maintaining a sustainable system, establishing a "bright and active rapidly-
aging society", and synthesizing the social security system: "conversion to a prevention-oriented 
system", "review of the supply of facilities", "review of a new service system", "securing and improving the quality of service", and "review of p ublic burdens and system administration. A bill 
regarding the above points will be present ed to the Diet in February 2005. 
Regarding the medical insurance system, it is assu med that a bill, including the foundation of a new 
medical care system for the elderly, which is based on the basic policy decided by the Cabinet 
Council in March 2003, will be presented to the regular session of the Diet in 2006. WT/TPR/M/142/Add.1 
Page 182  
 
 INDIA
 
Q1. We would request Japan to provide details with regard to the following: 
a) How are the prices of hot rolled and cold rolled steel products determined in Japan? b) What is the monetary support provided by METI and/or by Japanese administration to 
Japanese steel producers? 
c) What are the relationships between Japanese steel trading firms and Japanese steel producers? 
d) What are the conditions set in by Japan ese Administration for establishment of steel 
companies in Japan? 
e) Please list the technical standards that need to be complied by exporters before accessing 
markets in Japan? 
A. 
a) In Japan, the prices of hot rolled and cold  rolled steel products are decided only through 
market mechanism; this means no one controls  the prices with any rules or regulations.
 
b) No governmental subsidies are available. 
c) Japanese steel trading firms and steel producers are in ordinary business relationships. Some 
trading firms are affiliated companies of steel producers. 
d) No steel-specific corporate laws and re gulations have been established in Japan. 
e) Japan does not require any exporters to comply with technical standards under law or 
governmental regulations. Meanwhile, Japan h as voluntary national standards, known as the 
Japan Industrial Standard (JIS). 
Q2. The customs duty on Indian green tea in bulk is  5% more than the black  tea. Will the Japanese 
authorities kindly explain the reason for maintaining differential tariff rates for imported green tea and 
black tea. 
A. Before the UR negotiation, concessional tariff rates for green tea (excluding waste) and black 
tea (in immediate packings of a content no t exceeding 3kg) were the same, i.e. 20%. 
As a result of the UR negotiation, tariff rates were  reduced, resulting in different tariff rates of 17% 
for green tea and 12% for black tea respectively, ta king into account the situation of domestic tea leaf 
production. 
Q3. We would request Japan to provide informa tion regarding its current system for permitting 
imports of rice and wheat? We would like to know the procedural details relevant for interested 
exporters with regard to imports of rice and wheat into Japan, especially the name and the coordinates 
of the agency regulating the imports of rice and wheat.  
A. The Food Department of the Government of  Japan buys and sells imported rice based on the 
relevant provisions of the "Law for Stabilization of Supply, Demand and Prices of Staple Food". In 
terms of relevant information on Japan’s importation of rice and wheat, please refer to Japan’s  WT/TPR/M/142/Add.1 
 Page 183 
 
 
 notification to the WTO for state trading enterpri ses (G/STR/N/10/JPN and tariff quota administration 
(G/AG/N/JPN/91).   
Q4. Ban on import of Grapes  
Japan has banned export of Indian grapes due to orie ntal fruit fly infestation based on the finding of 
Chinese Taipei that oriental fly infest grapes. 
To assess the infestation of Indian grapes by orient al fruit fly, a survey h as been carried out by 
National Research Centre for Grape, Pune, Indi a, for the last three cropping seasons i.e 2001-03. 
Analysis of the survey data has re vealed that fruit flies reported from India are not infesting the grapes 
under field conditions. 
The data of 3 cropping season has already been subm itted to MAFF, Govt. of Japan. In view of this, 
whether Japan will consider lifting the ban on import of Indian grapes which is free from infestation 
by oriental fly? 
A. Japan prohibits import of fresh grapes fro m India based on scientific knowledge indicating 
that fresh grapes are the host plants of the Bactrocera dorsalis  species complex that exists in India.  
Japan acknowledges that the Indian si de claims to have already subm itted the survey data to Japan, 
but the Japanese side is still waiting for the aforementioned document to arrive.   
Japan will be ready to examine sci entific data which demonstrates that fresh grapes are not the host 
plants of the Bactrocera dorsalis  species complex, once India submits it.  
Q5. Poultry meat and Poultry Meat Products 
India has been receiving requests from the Japanese importers for the import of poultry meat and 
poultry meat products. India is one of the few c ountries in the world, which is free from highly 
pathogenic avian influenza(bird flu). 
The Indian authorities have been communicati ng with relevant Japanese authorities regarding 
fulfillment of animal health requirements and estab lishing equivalence in terms of food safety and 
SPS measures It is the understanding of the Indian au thorities that they fulfill all requirements to be 
eligible to export poultry meat a nd its products to Japan but they are still awaiting a response from the 
Japanese authorities. We would request Japan to respond to this outstanding issue. 
Also to obviate such problems of delay, could Jap an consider establishing reasonable timelines for 
responding to requests from exporting members seeking recognition of equivalence of its SPS 
measures. We would request Japan to offer its views. 
A. We received a letter from India on 24 December 2004 regarding the animal health 
requirements, and we will reply in February 2005. 
Q6. Difficulty in Sale of Tea: Obtaining JAS certification in order to sell tea as or ganic in Japan, is a very slow and cumbersome 
process. The applicant is required to fill up and submit a 34 page questionnaire. Thereafter, 
considerable time is spent in answering several queries. Could the Japanese authorities consider 
streamlining the process of JAS certification through simplification of documentation requirement and 
also setting up reasonable time limits for the processing of the applications? WT/TPR/M/142/Add.1 
Page 184  
 
 A. Japan believes that it is necessary to conduc t appropriate examination to protect Japanese 
consumers from possible illegal la beling of organic products. Regist ered certification organizations 
(RCOs) thus strictly apply the technical criteria for certification set by MAFF.  
In the event that an applicant perceives that th ere are unnecessary or unclear points, applicants are 
suggested to initially discuss them with the RCO to which they have applied. If no solution is found, 
applicants are recommended to inform the name of the RCO and the details of discussion to the Food 
Labeling and Standard Division of MAFF.  
Q7. The rules for pesticides and the chemical residue in tea are being constantly changed by the 
Japanese authorities. This creates uncertainty for  e xporters  and acts as a market access barrier. Is a 
stable regime of pesticide & chem ical residue aligned to internati onal standard under consideration? 
A. The Ministry of Health, Labour and Welfare (MHLW) of the Government of Japan revised 
the Food Sanitation Law in May 2003. Based on th e revised Food Sanitation Law, the MHLW is 
going to introduce the positive list system. The system  is aimed at prohibiting the distribution of foods 
that contain agricultural chemicals, veterinary me dicines or feed additives over a certain level for 
which MRLs in food are not established. This system  will go into effect within three years after the 
publication of the revised Food Sanitation Law. 
Before the positive list system enters into for ce, the MHLW will establish provisional MRLs based on 
the standards of Codex Alimentari us and other relevant MRLs based upon the scientific evaluations in 
order to ensure the protection of public health as well as to avoid unnecessary disruptions in the food 
trade.  
Q8. Tax burden on software exporters: 
Japanese authorities classify offshore income as roya lty and withhold tax in Japan under Article 12 of 
the tax treaty. As the withholding tax is as high as 20 % and is on a gross basis, the ultimate tax impact 
on net margins is very steep and works out to be  more than 40%. Whether Japan is contemplating 
reducing tax burden on software exporters so that  developing countries could get an opportunity to 
compete in the Japanese I.T market? 
A. The issue India mentioned is related to th e provision of "Fees for Technical Services" (not 
"royalty") in Article 12 of the Japan-India Income  Tax Treaty. Needless to say, this provision is 
applicable to both of the Contracting States in  accordance with the principle of reciprocity. 
The formal negotiation process of the revision of th e Treaty commences in February 2005. This issue 
could be one of the points of discussion during the negotiation.  WT/TPR/M/142/Add.1 
 Page 185 
 
 
 COLOMBIA  
Q1. Given Colombia’s interest in the pharmaceutical sector, we would like to ask Japan to 
elaborate on the information relating to this reform  in order to know what is its objective, what 
products are covered, the validity, effect over other imported pharmaceutical products, and other 
detailed information regarding this issue. 
A. Under the framework of this regulatory refo rm, over-the-counter products whose effects are 
moderate and for which it is not necessary to prov ide product information from experts such as 
pharmacists when the products are sold  in the end-market were moved to the category "quasi-drugs".  
As a result of reviewing the products, 15 categori es (371 products) were newly moved to "quasi-
drugs" as follows: 
(i) Stomachic 
(ii) Intestinal regulators 
(iii) Digestant 
(iv) Products that falls into two or more categori es among stomachic, intestinal regulators, and 
digestant 
(v) Laxatives 
(vi) Tonics and nutrients 
(vii) Calcium-based products 
(viii) Health products containing herbal ingredients 
(ix) Cold remedies 
(x) Antiseptics 
(xi) Products to alleviate chilblain and chapped skin 
(xii) Gargle 
(xiii) Contact lens solution 
(xiv) Snore prevention products 
(xv) Products to alleviate sore throat 
Q2. With regard to regional and political policies,  Japan states that from 2002, greater attention 
has been given to economic partnership agreements that include elements of free trade agreements 
with Singapore and Mexico. Japan is currently in ne gotiations with Korea, Malaysia, the Philippines, 
Thailand, and is studying other possibilities like Chin a, Mercosur, the United States, and the European 
Union. WT/TPR/M/142/Add.1 
Page 186  
 
 Taking into account this recent open regionalism policy,  we would like to know if Japan is expecting, 
in the mid-term, to study and subscribe trade agreem ents of this kind with ot her countries or groups of 
other countries other than the previously mentioned. 
A. Japan has already b een considering what countries/regions to commence EPA negotiations 
with, in addition to those with which Japan is unde r negotiation or supposed to  initiate negotiations.  
For the purpose of providing guidelines for this consideration, the Government of Japan decided in December 2004 the "Basic Policy towards further pr omotion of Economic Pa rtnership Agreements 
(EPAs)" that includes criteria for identifying co untries/regions with which to negotiate the 
FTAs/EPAs.  English version of the entire document is available at  
http://www.mofa.go.jp/policy/economy/fta/policy0412.html  
Japan will continue this consideration based  on the criteria in the Basic Policy.   
However, it is quite difficult to show the specifi c names of the countries/regions with which Japan 
will initiate negotiations in the mid-term, because deci sions to be made based on the criteria in the 
Basic Policy will differ depending on when those deci sions are made and what kind of international 
environment surrounds Japan at the time of the consideration.  
Q3. In paragraph 74 of this section, the Secretar iat comments that "In order to achieve various 
policy objectives, including investment in certain equipment to address environmental concerns and 
stimulate demand, Japan has a complex system of  tax breaks. These are described in the Special 
Taxation Measures Law, which has been amended annually." 
What are the main measures that Japan is for eseeing applying in the next few years? Are they 
compatible with the obligations derived from the a pplication of WTO Agreements, in particular with 
TRIMS?  
A. Such measures are, for example, the Huma n Investment tax credit and the measures for 
restructuring corporations, etc. (For further information, please refer to http://www.mof.go.jp/english/tax/tax2005/tax2005a.h tm). These measures (whether they are 
investment measures or not) have no adverse effects on trade.  
Q4. Paragraph 86 mentions the Special Zone for St ructural Reform Act and its entering into force 
in April 2003. Such Zones are considered an im portant component of the plan of economic and 
investment revitalization in Japan, and it is point ed out that 320 were established during a financial 
exercise in 2003.  We would like Japan to explain what  is the objective of such Zones, their structure, 
the type of infrastructure they po ssess, the type of companies that can  establish themselves there, what 
the customs treatment is like for the goods that are imported there, what are exactly the tax incentives 
granted in these zones and their accordance with WTO st andards.  It is also mentioned that exceptions 
are granted in these zones with respect to certain regulations, and we would like to know what kind of 
regulations in particular are these referring to and who benefits from such extensions. 
A. By setting up specified zones where regulator y exceptions are established in accordance with 
the zones’ specific circumstances, based on volunt ary plans proposed by municipal bodies, private-
sector enterprises, etc., we promote structural refo rms in the area, and by publicizing successful case 
examples of structural reforms in specified areas,  regulatory reforms can be  extended to the whole 
country, and we can stimulate the economy of Japan  as a whole. Conventional financial measures are 
not carried out. If a plan for Special Zones fo r Structural Reform drawn up by a municipality  WT/TPR/M/142/Add.1 
 Page 187 
 
 
 conforms to the subject provided by the "Basic polic ies on Special Zones for Structural Reform," then 
the plan must be approved.  No restriction must  be laid down on the number of plans approved.   
Q5. The secretariat’s report describes the tariff treatment in Japan. Ad valorem  duties are applied 
on a large percentage of tariff lines. However, other kinds of duties are used such as, specific tariffs, 
alternative tariffs, composite tariffs, and other ta riffs that are catalogued as differential duties and 
sliding duties for a reduced percentage of MFN tariff lines. 
Within the special customs treatment reform progr ams for facilitation of merchandise dispatch, have 
the Japanese authorities thought of eliminating th e different types of duties and unite them in ad 
valorem ? 
A. Japan has no concrete plan to uniformly convert non- ad valorem  duties to ad-valorem duties 
to date. 
Each tariff type has a reason to be chosen; for exampl e, sliding duties exist in order to coordinate the 
interests of both domestic producers and consumer s on goods whose international market prices 
fluctuate considerably. 
Q6. In its document, the Secretariat illustrates each tariff.  It calls attention in particular to the 
definitions of differential tari ffs and sliding tariffs in the use of official import prices. 
How are the official import prices calculated?  Who fixes them?  Are such official prices notified by 
the WTO?  Could the sliding duties be assimilated to  a pricing system?  What kind of products are 
they applied to?  What is the methodology that is applied to determine the minimum and maximum 
values? 
A. Differential duties and sliding duties are forms of tariff rates which are aimed at protecting 
domestic producers of goods that compete with im ported products by means of applying a higher 
tariff rate when the import price is lower than the standard value, while at the same time, stabilizing 
the domestic market price by applying a zero or lowe r tariff rate when the import price is higher than 
that value, thereby coordinating the interests of both domestic producers and consumers. The standard 
value of imports, which forms the basis of appli cation of those duties, is decided taking into 
consideration the balance between the level of the value and the le vel of the domestic production price 
and such. 
The standard value is stipulated in relevant la ws which have been passed in the National Diet 
following their deliberation. 
The rates of those duties are within the WTO bound rate. Currently, products such as onion, copper and lead  whose international market prices fluctuate 
considerably are subject to differential or sliding duties. 
Q7. In the investment area, the Report indicates th at the Japanese authorities have decided to take 
measures to make their country an attractive invest ment destination, in order to double the foreign 
direct investment within the next 5 years. 
In spite of the enumerated policies in the Report, the next questions come up: WT/TPR/M/142/Add.1 
Page 188  
 
 Are there other stimuli for foreign investors to i nvest in Japan? In which sectors are these stimuli 
applied? What are the 74 measures that paragraph 63 is referring to? Until when will these measures 
be implemented? What is the protection level of foreign investment in Japan? 
A. Based on the "Program for the promotion of  Foreign Direct Investment in Japan," the 
Government of Japan is taking 74 measures, se tting an objective of doubling the cumulative amount 
of inward FDI in Japan over a five-year period from 2001 to 2006. For deta ils about the Program, 
please look at the following URL. 
http://www.investment-japan.net/statements/files/20040519.pdf 
The Government of Japan continues to implemen t concrete measures in the Program, and makes 
efforts in policy discussion to produce furt her effective measures for this purpose. 
Q8. In the section on financial services, paragra ph 31 regarding to banks, indicates that foreign 
banks can access the Japanese market through the estab lishment of branches, agencies or subsidiaries, 
once the appropriate license has been obtained. 
a) What are the requisites in terms of capital for the establishment of a branch in Japan, that is, 
through the capital of the owner or of the head office?  
b) In this same line of thought, if a bank or an insurance company is established in Tokyo and 
later wants to open a new branch, in the case of a bank, or a subsidiary in the case of insurance, in another city, does it have to follow all the procedure as if it were the for the first 
time gaining access to the Japanese market? 
A. a) 
(Bank) 
The Banking Law does not require minimum capital re quirements to the branch of foreign banks. 
(Insurance Company) The Insurance Business Law does not require minimum capital requirements to the branch of foreign 
insurance companies. However, th e branch of foreign insurance companies is required to deposit 
200 million yen in order to protect policy holders. 
b) (Bank) When foreign banks establish sub- branches in Japan, they are require d to obtain authorization by the 
Prime Minister. The requirements are the same  as those for the issuance of banking licenses. 
(Insurance Company) 
Once establishing a commercial presence in Japan, fore ign insurance companies are not required to 
obtain authorization for the establishment of sub-branches in Japan.  WT/TPR/M/142/Add.1 
 Page 189 
 
 
 Q9. In the case of insurance, paragraph 35 of the document remarks that ordinarily, Japan 
demands commercial presence to be able to offer in surance services in the co untry, except for the case 
of cross-border contracts for reinsurance, commerc ial aviation insurance, and international marine 
hull insurance. 
Are these cross-border providers subject to regul atory and registry requirements, as well as tax 
payment? 
A. The Insurance Business Law does not require  any regulatory and registry requirements for 
cross-border service suppliers to supply insurance se rvices that are allowed to supply in accordance 
with the Law. 
Q10. In paragraph 57 relating to professional Services, it is indicated that in addition to obtaining 
the appropriate license, a membership to a professional association, for certain professions, is 
required.  
Apart from said professions, what other professions require a license? Who is in charge of issuing the 
licenses- a public authority or a professional as sociation? Who fixes the procedure and the 
requirements to obtain such licenses? 
A. Some examples of professions that require  licenses or qualifications apart from the said 
professions are as follows. 
Profession The issuer of the license/qualification The body concerned in deciding the 
procedures and the requirements to 
obtain the license 
Maritime Procedure Agents 
("Kaijidairishi" ) Minister of  Land, Infrastructure and 
Transport Ministry of Land, Infrastructure and 
Transport 
Kenchikushi :  
Licensed to conduct such services as 
designing buildings and superintending construction work, etc. 1st-class Kenchikushi :  
Minister of  Land, Infrastructure and 
Transport  Ministry of Land, Infrastructure and 
Transport   
 2nd-class and  Mokuzo  (wooden buildings) 
Kenchikushi :  
Prefectural governors  
Doctor Minister of Health, Labour and Welfar e Ministry of  Health, Labour and Welfare  
Nurse Minister of  Health, Labour and Welfar e Ministry of  Health, Labour and Welfare 
Pharmacist Minister of  Health, Labour and We lfare Ministry of  Health, Labour and Welfare 
Veterinarian Minister of Agriculture, Forestry and 
Fisheries Veterinary Affairs Council 
Administrator of "johkasoh" 
(sewage treatment tank) Minister of Environment Ministry of Environment 
Hunter (with designated hunting gear) Pr efectural governors Prefectural governments 
Certified Public Measurer Minister of Economy, Trade a nd Industry  Ministry of Economy, Trade and Industry 
Small and Medium Enterprise 
Management Consultant Minister of  Economy, Trade and Industry Ministry of Economy, Trade and Industry 
Q11. In paragraph 62 regardin g construction services, it is poin ted out that the construction 
industry deteriorated in 2002. In this sense, the Mi nistry of Land, Infrastructure and Transport (MLIT) 
announced in December 2002 its basic criteria to revitalize the industry. 
What are these criteria and how do they affect the service providers in this sector? WT/TPR/M/142/Add.1 
Page 190  
 
 A. The purpose of the Basic Guid elines for Revitalizing the Cons truction Industry is to support 
business restructuring of individual companies who se revitalization appears feasible in order to 
revitalize the construction industry which is in an oversupply structure while promoting selection 
through the market mechanism.  The main contents of the guidelines are as follows: 
(i) Promotion of Selection through the Market Mechanism 
  Improving the business environment in orde r to promote selection through the market 
mechanism 
(ii) Promotion of Firms’ Efforts to Reinforce Their Management Base   Creating an environment in which compani es can conduct rational reorganization such as a 
management coalition between two or more companies 
(iii) Support for Business Restructuring    
  Supporting individual companies whose revitalization appears feasible on the basis of 
profitability, capital safety and soundness  
Q12. According to what was established in para graph 63 relating to Education services, "(…) all 
national universities were corporatized to become  national university corporations on 1 April 2004" 
What aspects does the centralized  university corporation concep t involve? Does Japan grant any 
subsidies in the case of education services be it for students or universities? If it is so, can foreign 
students or foreign universities that establish themselves in Japan access such subsidies?  
A. (Incorporation of National Universities) Based on the National University Corporation Bill en acted in July 2003 and brought into force in 
October of that year, national universities have been turned into national university corporations since 
April 1, 2004. This change of their status inte nds to remove national universities, which were 
previously part of the government administra tion, from the national government organizational 
structure. By receiving independent corporate st atus, each national university should be able to 
actively carry out outstanding education and distin ctive research and build an appealing national 
university with salient features in an autonomous  environment. The government provides financial 
support to national university corporations by mean s of administrative expense subsidies and other 
forms of financial measures. 
(Financial Support to Private Universities) A private university can be established by a school juridical person authorized by the Minister of 
Education, Culture, Sports, Science and Technology  in accordance with provisions of the School 
Education Law and the Private School Law. The Mini stry of Education, Culture, Sports, Science and 
Technology provides financial support to those who establish private universities with a certain level 
of public nature mainly in the fo rm of subsidy on their current expenditures in accordance with the 
Law on Promotion and Subsidy of Private School.  
In case a foreign university intends to be establis hed as a university in Japan  in accordance with the 
School Education Law of Japan, the same proce dure based on the above-mentioned provisions is open  WT/TPR/M/142/Add.1 
 Page 191 
 
 
 on a nondiscriminatory basis regardless of their nationa lity and they will be treated in the same way as 
anyone who has the same intention.  In case su ch establishment is approved accordingly, it can 
receive the aforementioned subsidy. 
On the other hand, if they are not established as a university in accordance with the School Education 
Law of Japan, they have no access to such subsidy . 
(Financial Support to Student) 
As for Japanese students, in addition to student loans provided by the Japan Student Services 
Organization which is operated by government funding, public service corporations, local 
governments and schools also provide financial support. 
As for foreign students studying in Japanese uni versities, the government has financial support 
systems such as the Japanese Government (Ministr y of Education, Culture, Sports, Science and 
Technology) Scholarship student system and the Honors Scholarships for privately financed international students. WT/TPR/M/142/Add.1 
Page 192  
 
 EUROPEAN COMMUNITIES
 
Q1. Would Japan please indicate whether it considers th is legislation to be in compliance with the 
GATT 1994 and if so, further justify the gr ounds on which it considers it compliant? 
A. The principle of self-sufficiency of bl ood products through domestic blood donation is 
stipulated in the Blood Law of Japan.  However,  the supply-demand plan regulation is reasonably 
deemed to be compliant with the GATT1994 in terms of the restriction against less favorable 
treatment for imports (Article ' 4) and restri ctions other than duties, etc (Article XI). 
The supply-demand plan does not stipulate any pa rtial treatment for imports, as it respects the 
notification of the estimated amounts from both domestic and overseas manufacturers to prepare/establish the plan through a transparent pr ocedure taken by  the Pharmaceuticals and Food 
Sanitation Council. Therefore, the supply-demand plan is not intended to restrict the supply of blood 
products, but to secure their stable supply. Sin ce the Blood Law only requires the manufacturers to 
notify the estimated amount of production or import, it seems to be a serious misinterpretation that the 
European Commission perceives that the Blood La w allows MHLW to withdraw import permission 
of foreign products. 
Q2. The EC would be pleased to receive any deta iled analysis of list prices and reimbursement 
rates comparing domestically-sourced blood products  with blood products imported from the EU 
which confirms the Japanese position.  
A. Under the Japanese health in surance system, reimbursement prices of pharmaceuticals are 
decided based on the written pricing rule, regardless of the country of manufacture. 
Q3. According to the information of the EC, Japan  applies a safeguard system for imports of pork 
meat which greatly disadvantages EC exporters. Th e EC would hope that a mutually acceptable 
solution could be found through which existing volatilit y of import volumes could be avoided. While 
ongoing bilateral contacts on this matter at technical  level aim to maintain good cooperation, the EC 
requests Japan to once again to review the app lication of the safeguard at short notice.  
What are Japans plans with respect to how to proceed on this issue? 
A. The emergency tariff measures have been introduced in accordan ce with the result of 
consultations with interested Members in conj unction with the conclusion of the Uruguay Round. 
Japan accepted a voluntary tariff reduction for pork beyond the bound level together with the 
introduction of the emergency tariff measures, which are set to be automatically triggered to bring 
back the Gate Price to the levels set forth in its Schedule annexed to GATT 1994 when pork imports 
exceed a certain level. 
The revision of the measures is difficult without c onsidering the revision of the current tariff levelof 
pork, given that while the Doha Round negotiations are  underway.  
Japan would like to continue to work together a nd cooperate with the EC for  conducting stable pork 
trade between the two economies. 
Q4. How does Japan assess the possibilities and wh ich approaches would Japan consider for 
reducing such obstacles, promoting trade while ensuring respect for the environment, human health and safety?  WT/TPR/M/142/Add.1 
 Page 193 
 
 
 A. The Building Standard Law of Japan h as introduced performance-based requirements 
effective since 2000. Concerning building material s such as fire preventive materials, overseas 
building materials including those from the EU regi on can be used, as long as those materials are 
confirmed to comply with the performance-based requirements.  
In establishing and implementing technical regula tions and conformity assessment systems, the 
Government of Japan makes sure that they are c onsistent with the WTO/TBT and takes into account 
such elements as protection of human health, nationa l security requirements an d the environment. The 
Government of Japan is also undertaking a review  of current technical regulations based on the 
following perspectives in the Three-Year Programme  for Promoting Deregulation and its follow-up 
process: 
(i) Direct government intervention should be minimized through transition to self-conformity 
and third-party certification;  
(ii) The principle of competition should be introdu ced in the field of certification and inspection;  
(iii) Performance-based regulations should be in troduced wherever appropriate, and so on.  
Q5. How does Japan assess the European ecologi cal labels ECOLABEL and ECOAUDIT, if these 
are not considered applicable why.   
A. The GOJ regards that measures such as th e "ECOLABEL" scheme established under the 
European Community are useful in encouragi ng the spread of environmentally favorable 
merchandise.   The GOJ has also established a similar system, namely the "ECO MARK" system, which was introduced by the Japan Environmental Association (JEA) in 1989. The "ECO MARK" is 
approved on products which are e nvironmentally-friendly compared with other products, or which 
reduce detrimental effects on the environment. More  than 5,000 brands were approved to bear the 
ECO MARK as of the end of year 2004. 
Q6. The EC would however like to know from Japan  whether the PMDA intends to further speed 
up its streamlining of the drug evaluation and approval process in Japan to further reduce the time needed for processing NDA applications? 
A. Japan believes that PMDA has endeavored to  streamline the evaluation and review process 
for drug approval under the new system, in which one review team deals with the consultation on 
clinical trials and the evaluation and review process. 
Q7. Noting the need to use foreign data, are steps ta ken to ensure that such data is more widely 
accepted by the Japanese authorities? 
A. Japan has continued to make efforts to a pply the ICH E5 Guideline in a transparent and 
consistent manner.  For this purpose, the GOJ has frequently exchanged opinions with foreign 
industries including those in Europe.  The Q&As regarding the operation of the ICH E5 Guideline 
were adopted as the Step 4 document at the O saka Conference in November 2003 and have been 
issued and implemented in Japan since February 2004. 
Q8. The EU would like to know whether Japan intends to proceed further in harmonising its 
regulatory requirements with those of its majo r trading partners (ISO and IEC standards)? WT/TPR/M/142/Add.1 
Page 194  
 
 A. The GHTF and ISO/IEC have been proceeding with the harmonisation of regulations and 
Product Standards/Quality Standards, and Japan has been contributing positively to these activities as 
well as acceptance of these results. 
Q9. The EC would like to know whether Japan intends  to consult further with foreign countries in 
order to harmonise regulatory approaches and/or requirements in the field of cosmetics? 
A. Japan has taken part in the CHIC, Cosmetic s Harmonization and International Co-operation, 
which consists of four government representatives (i.e. EU, MHLW, FDA and Health Canada), since 
1999 and has continued to make efforts to ha rmonize regulatory issues concerining cosmetics. 
Q10. In view of the ongoing process of progressi vely replacing animal testing by scientifically-
validated alternative methods, the EC would like to know if Japan’s will recognise safety data 
generated from non-animal alternative testing me thods in accordance with the OECD guidelines? 
A. Japan recognizes that with regard to the saf ety data prepared by companies in their own 
responsibility, there are no regulations yet on the u se of non-animal testing data on cosmetic products. 
Q11. The EC would be grateful for information about progress made so far and how many foreign 
bodies have applied and which ones have been approved, and whether there are any problems 
regarding the co-operation with  EU testing organizations? 
A. Overseas organizations including those in th e EU region may be recognized as a performance 
evaluation organization based on the Building Standa rd Law of Japan if they comply with the 
recognition criteria. (Website of MLIT:  
 http://www.mlit.go.jp/english/hous ing_bureau/recognition/01-1.pdf  ) 
A German organization submitted its  application, and has already been recognized as a performance 
evaluation organization. 
http://www.mlit.go.jp/english/housing_bur eau/kensetu.files/ehyokakikan.pdf 
Concerning performance evaluation of formaldehy de-emitting building materials utilizing overseas 
test data, a Swedish testing organization has alre ady concluded a subcontract for testing with a 
Japanese designated performance evaluation organization.  
http://www.mlit.go.jp/english/housing_bur eau/kensetu.files/ehyokakikan.pdf 
Q12. Furthermore, can Japan explain the differen ces encountered between the CE marking system 
and corresponding Japanese regulation in order to ex plore possibilities for acceptance of CE marked 
products? 
A. MLIT understands that there is, for example,  a difference in the requirements regarding the 
temperature of measurement for formaldehyde emission rate between the Japanese regulation and CE 
mark system. MLIT is ready to ha ve continuous exchanges of info rmation on the requirements of both 
sides at the expert level.  
Q13. The EC would like to know whether the Jap anese government intends to modernise Japan’s 
Food Sanitation Law in order to accept packages for food which comply with the current safety and 
health requirements, but which use other techniques to achieve the same result?  WT/TPR/M/142/Add.1 
 Page 195 
 
 
 A. The regulations for containers and packages for food are established based on the Japanese 
Food Sanitation Law. The Government of Japan r ecognizes that these regulations should be modified 
in step with advancements in science and technology.  
If EC and any interested parties have any request  to modify the current Japanese regulations, the 
Government of Japan would like them to s ubmit the scientific evidence required for such 
modifications to the Ministry of Health, Labor and Welfare (MHLW). The MHLW will consult with 
the Japanese Food Safety Commission to conduct ri sk assessment based on the submitted data and 
consider the modification of the regulations. 
Q14. Considering the above, the European Commi ssion would like to know whether Japan intends 
to take steps to progressively reduce tariffs rates in the leather sector and dismantle its tariff quota 
system so as to see it ended in a reasonable timeframe. 
A. After the conclusion of the Uruguay Round of the GATT negotiations, the number of 
companies in the leather-related industry decreased approximately 40% between 1993 and 2002. Given this industry’s severe business situation, the Gove rnment of Japan has no plan to consider tariff 
reduction nor dismantlement of tariff quota systems. 
Q15. The EC notes that Japan has maintained a sy stem of import quotas on various items. As far as 
the import quotas relating to certain fish products ar e concerned, the EC would appreciate clarification 
from Japan on the following points: 
a) the objective of the quotas b) their compatibility with Japan’s obligat ions under the multilateral trading system 
c) the manner in which they are implemented  
d) their intended duration 
A. a) The import quota system plays an important role in the conservation and management of fish 
resources in Japanese territorial seas and waters adjacent to Japan. 
b) The import quota system is cons istent with the WTO Agreements. 
c) Detailed information on the operation of th e import quota system shall be published in the 
Ministry of Economy, Trade and Indust ry Official Bulletin, among others. 
d) From the viewpoint of ensuring sustainable use of the resources, Japan has no plan to 
liberalize the quota restriction in the fisheries sector. 
Q16. The EC would be grateful to Japan for clar ification of the use of Article 52 of the Foreign 
Exchange and Foreign Trade Law in this contex t and whether these additional measures are intended 
to complement ICCAT recommendations.   
A. The import quota scheme does not apply to t unas regulated in accordance with the ICCAT 
recommendations, and, therefore, it is not related to ICCAT.   Both measures are implemented in 
accordance with Article 52 of the Foreig n Exchange and Foreign Trade Law.  WT/TPR/M/142/Add.1 
Page 196  
 
 Q17. Why does Japan not mention refo rms to the Plant Quarantine Law? 
A. apan submitted a WTO/SPS notification (G/SPS/N/JPN/132) concerning the revision of the 
plant quarantine measures, including the addition of  certain pests to the Non Quarantine Pest List. 
Q18. apan’s commitment set out in the dere gulation package of 31 March 1998 provides that 
regulations should be modified to conform to th e principles of the WTO SPS Agreement. What will 
the GOJ do to speed up this process in relation to thei r plant health regulations that at present are in 
violation with SPS agreement? 
A. apan submitted a WTO/SPS notification (G/SPS/N/JPN/132) concerning the revision of the 
plant quarantine measures, including the addition of  certain pests to the Non Quarantine Pest List. 
Q19. hat measures are considered by the GOJ to  speed up the process of authorisation of Food 
additives undertaken by the Investigation Comm ittee under the Pharmaceu tical Affairs and Food 
Sanitation Council of MHLW? 
A. (1) In Japan, food additives are permitted to be manufactured or used only when they are 
designated as substances that could not pose health  hazards by the Minister of Health, Labour 
and Welfare, after hearing the opinion of the Pharmaceutical Affairs  and Food Sanitation 
Council.. The system of this regulation and th e scope of documents required for designation 
are in line with those used in other coun tries, including the EU member states.  
(2) The GOJ is taking actions to speed up the process of authorisation. For example, the 
Committee on Food Additives under the Pharmaceu tical Affairs and Food Sanitation Council 
will start discussion when the Food Safety Commi ssion has drawn up the draft result of the 
risk assessment, even before the MHLW is no tified of the final result. Also, the committee 
sessions are held regularly on a monthly basis to shorten the time required for administrative procedures between the receipt of an application and the first committee session. 
Q20. Under its revised, basic food law, Japan h as established a Food Safety Commission to provide 
risk assessments. Has Japan allocated adequate res ources to the Commission to ensure that it can do 
its work within a reasonable time frame? 
A. FSC conducts risk assessments based on scien tific information, and is endowed with the 
budgetary and human resources necessary  for conducting risk assessments. 
Q21. If this is not possible, due to budgetary r estrictions, does Japan endor se agreed standards from 
other evaluation bodies, such as CODE X, U.S. FDA, EU-EFSA, in order to create synergies and gain 
time? 
A. FSC conducts risk assessments based on scien tific information, and is endowed with the 
budgetary and human resources necessary for conduc ting risk assessments. FSC conducts risk 
assessments based on scientific information in cluding that from such bodies as CODEX etc. 
Q22. Which initiatives has Japan undertaken to est ablish cooperation / coordination with those risk 
assessment bodies to achieve harmonised standard s and practices and make efficiency gains?  WT/TPR/M/142/Add.1 
 Page 197 
 
 
 A. The Government of Japan regularly pa rticipates in the CODEX, OECD and other 
international meetings. The inform ation acquired in those meetings such as scientific information is 
used for FSC’s risk assessments. 
Q23. Can the GOJ indicate how the Food Safety Commission will speed up the process of Risk 
management decisions in case that more than one Mi nistry is involved, such as BSE risk management 
decision? 
A. Under the framework of risk analysis, FSC  conducts risk assessment in an objective, 
independent, and fair manner. Risk management  organizations (MHLW and MAFF) consider the 
establishment and amendment of regulations and polic ies based on the result of the risk assessment. 
Furthermore, FSC and risk management organizatio ns cooperatively carry out risk communication in 
order to take necessary measures. 
Q24. Japan has banned poultry imports from Cambodia; China;  Indonesia;  Italy;  Lao People's 
Democratic Republic;  Malaysia;  Pakistan;  South A frica;  Thailand;  Viet Nam;  Hong Kong, China;  
Macao, China;  and from two states of the United States since January 2004 because of the outbreak of avian influenza. 
Has Japan considered adopting "the principle of regionalisation", so as to limit the possible restrictive 
measures exclusively to the areas di rectly involved by the epidemic  disease in case of a break out of 
deceases? 
A. The animal quarantine measures of Japan are consistent with the SPS Agreement.  
Q25. The EC noted that there have also been  certain changes in Japans SPS measures since its 
previous Trade Policy Review include the entry into  force of amendments to:  the Animal Quarantine 
Measures for BSE on 4 February 2002;  the Pharm aceutical Affair Law on 30 July 2003;  the Law 
concerning Safety Assurance and Quality Improveme nt of Feed on 1 July 2003;  the Enforcement 
Ordinance of the Standards of Feed and Feed A dditives on 1 July 2003 and 1 January 2004;  and the 
Agricultural Chemicals Regulation Law on 10 March 2003. In continuation the EC should like to ask: 
Is Japan using a risk-based analysis in accordan ce with recommendations of the OIE? In case of 
deviations from OIE recommendations, can a justification be provided?  
A.The animal quarantine measures of Japan are consistent with the SPS Agreement.  
Q26. Are there differences in the treatment of dom estic beef versus meat from other countries with 
a similar BSE disease status and similar policies as re gards laboratory testing and removal of specified 
risk material? 
A. Importing beef and beef products from BSE-in fected countries are prohibited to ensure the 
safety of foods in Japan. 
Regarding the countries which are non-BSE countries at the present time, if BSE occurs in these 
countries, it will be necessary to take measures su ch as prohibiting the imports of beef and beef 
products from the countries immediately and also r ecalling SRMs and foods co ntaining SRMs that are 
circulating in the Japanese market., Therefore, in order to avoid confusion in Japan, Japanese 
importers have been given advice not to import spec ified risk materials (SRMs), such as brain and 
spinal cord from non-BSE countries. WT/TPR/M/142/Add.1 
Page 198  
 
 Q27. Rather strict phytosanitary barriers exist in  Japan on vegetables and fruit import in order to 
protect the agricultural environment and the local cultivation from hangers-on such as the Mediterrean 
fly (Ceratitis Capitata ). The scheduled phase of testing of the "cold treatment" for the elimination of 
the Mediterranean fly has been re cently completed successfully. The EC has understood that Japan is 
current in compliance with national law in a phase of  "public hearings" during which the opinions of 
producers, distributors and Japanese consumers associa tions are gathered. This procedure is provided 
by law in any case concerning the future adoption of a liberalization act. 
When will this hearing be finalised and can it be expected that it will lead  to increased openness for 
vegetable and fruit imports cond itioned with "cold treatment"? 
A. Regarding the "cold treatment", the impor t of lemons, clementin es, and sweet oranges 
(Valencia and salsutyana) from Spain has already b een approved. Japan is now considering whether 
or not to lift the ban on Italian sweet oranges (Taroc co) disinfested by "cold treatment", and the public 
hearing is scheduled for 10
th February 2005.  
Q28. Why is the notion of dominant operator di fferent in the fixed and mobile markets? 
A. The local fixed-line telecommunications market has a single operator controlling an 
overwhelming share exceeding 90 percent; whereas th ree or four operators in each service area are 
competing in the mobile telecommunications market , although new entrants are physically restricted. 
Therefore, Japan considers the characteristics of e ach market to be quite different in terms of 
environment and preconditions for competition. 
Q29. Why is Japan not assessing market power, pur suant to the notion of major supplier under the 
reference paper? 
A. The MIC undertakes analyses and evaluations on the condition of competition in each service 
market in order to appropriately reflect in policy the changing market environment in the 
telecommunications sector.  
Q30. Why are notifications, approvals, conditions, etc imposed on all operators and not only on 
dominant operators? 
A. If the question concerns tariffs and interconn ection tariffs, the regulations on authorization 
and notification of tariffs and in terconnection tariffs were drastica lly deregulated in the amended 
Telecommunications Business Law, which entered into force in April 2004. 
The obligations of notification of tariffs are only applied to telecommunications carriers which 
provide universal telecommunications services or  designated telecommunications services.  
The obligations of authorization or notification of interconnection tariffs are only applied to 
telecommunications carriers which install categor y I designated telecommunications facilities or 
category II designated telecommunications facilities.  
Q31. Why is the NTT law mandating that NTT provide universal service now that the TBL 
foresees the non-discriminatory selection of the universal service provider (to which NTT may 
apply)? 
A. Recognizing that telephone services are indispensable for people's daily life and 
socioeconomic activities, the NTT Law oblige the NTT holding company, NTT East and West, which  WT/TPR/M/142/Add.1 
 Page 199 
 
 
 have succeeded the nationwide network that w as owned by a public corporation, to provide 
nationwide telephone services in an appr opriate, fair, and stable manner. 
On the other hand, the TBL does not oblige telecommunications carriers to provide universal 
telecommunications service, while the TBL stipulates various rules to be applied in cases where telecommunications carriers provide universal te lecommunications services such as local telephone 
service.  
Therefore, the NTT Law needs to mandate that NTT holding company, NTT East and West provide 
universal telecommunications services.  
Q32. In paragraph in the report of the WTO Secret ariat, Postal Life Insurance is exempted from 
corporate taxes and deposit insurance premiums. 
Would Japan explain how in this context it intends to  ensure a level playing field between the Postal 
Life Insurance and private life insurance providers? 
A. Japan Post provides Kampo under many obliga tions and restrictions which are not imposed 
on private life insurers, for example: 
(i)  Japan Post is obliged to provide universal service, which means that there must be post 
offices all over Japan including every rural ar ea such as distant islands and mountainous 
areas, even if it is not profitable; 
(ii)  The investment of insurance funds is strictly limited by law; 
(iii) Items of insurance service are also strictly limited to life insurance and private pension for 
individuals, and maximum coverage  of insured amounts is also limited to ten million yen, or 
about seventy thousand euros, which is costly for Japan Post. 
As a result of these limitations, Kampo’s average insurance amount per pe rson is 2,700,000 yen, 
while that of private life insurers is 10,540,000 yen, nearly four times more than Kampo. 
As for the evaluation of equal footing with the pr ivate sector, it is necessary to consider many aspects 
including these numerous obligations and restrictions on Kampo. 
Q33. Would Japan identify the legal basis (in its national laws) for the possibility of granting the 
right to foreigners to engage in cabotage, and in par ticular what type of agreem ent is required, if any?  
A. Article 3 of the Ship Law (Law No.46 of 1899) prohibits foreign flag vessels from engaging 
in carriage between inland ports, except in cases ot herwise provided for by laws or treaties. 
Q34. Would Japan also inform whether the gove rnment can grant waiver s that allow foreign 
maritime operators to engage in transport between ports of Japan?  
A. For example, pursuant to the stipulation in  the Treaty of Commerce and Navigation with the 
U.K., Japan may allow U.K. flag vessels to engage in carriage between inland ports within the limits 
of international cargoes consigned on through bills  of landing and transshipped between U.K. flag 
vessels upon individual application. 
Q35. Would Japan clarify on which conditions fo reign ground-handling operators can establish and 
engage in third pa rty ground-handling in  Japanese airports? WT/TPR/M/142/Add.1 
Page 200  
 
 A. Ground-handling services include various services at  airports, and their definition is not clear. 
Therefore, the issues on ground-handling services, such as those on what services are included in these services, should be addressed in the framework of the second Air Annex Review. 
Q36. Would Japan inform the EC on how many pe ople work in the tourism sector and what has 
been the evolution in the last years? 
A. The number of the workers who are engaged in  the tourism sector increased from 1.87 million 
in 2001 to 2.10 million in 2002. Th is is an increase by 12 percent. 
Q37. Would Japan inform the EC on how much of the FDI attracted by the country in the last years 
has been in the tourism sector? 
A. There is no information available regarding question 37 at this time. 
Q38. Would Japan inform the EC about their conc rete plans to promote the tourism sector, and 
what measures the government is taking to ensure  non-discrimination of foreign services suppliers? 
A. The Government is promoting inbound touris m to Japan through the "Visit Japan Campaign". 
There is no discriminatory treatment toward foreign service suppliers with regard to this campaign or 
laws and regulations related to tourism. 
Q39. Would Japan inform the EC about thei r plans for improving professional education and 
training related to the tourism sector? 
A. The GOJ is promoting human resource developm ent in the field of tourism. For example, the 
GOJ has designated leading figures in the promo tion of tourism as "Tourism Charismas" and has 
organized the "Tourism Charisma School" so that others can learn their success stories in tourism 
promotion from them. Moreover, the GOJ is cons idering promoting the establishment of Tourism 
Departments in higher education organizations including universities. 
Q40. What is the approach of Japan to the regula tion of tourism-related aspects of general interests 
such as environment, wildlife, urban planning, etc? 
A. The GOJ is promoting regional tourism is promoted under the catchphrase of "One Attraction 
for One Region" so that each region will discover,  upscale, and compete th eir attractiveness. For 
example, the protection of the traditional landscap e is enhanced by new legislative measures to 
preserve landscapes. 
Q41. The EC would like to know about Japan’s assess ment of the effect of the tourism sector in 
overall economic growth and empl oyment, and in particular in other economic sectors like 
construction, transport, computer serv ices, education and professional training. 
A. There is not any data on the effect of th e tourism sector from the supply side. For your 
information, tourism consumption in Japan was 21.3 trillion yen in 2002. The economic ripple effect 
was 49.4 trillion yen which is 5.4% of total domestic products, which was 920 trillion yen. Job 
creation was 3.98 million jobs which was 6.0% of  gross job creation, which were 66 million jobs. 
Spillover effects were 550 billion yen to the construc tion industry, 10.2 trillion yen in the transport 
industry, 1.08 trillion yen in the telecom industry, and 701 billion yen in the education and 
professional training industry.  WT/TPR/M/142/Add.1 
 Page 201 
 
 
 Q42. Would Japan inform the EC on how much of the FDI attracted by the country in the last years 
has been in the distribution sector? 
A. The Japanese Government has not yet figured out the data of 2004 as of this moment. For 
your reference, in 2003, the amount of FDI in th e distribution sector was 369.1 billion yen or a 43% 
increase from 2002 levels.   
Q43. The EC would like to know about Japan’s assessme nt of the effect of the distribution sector in 
overall economic growth, employment and social de velopment, and also in other economic sectors 
like construction, transport, computer se rvices, education and professional training. 
A. There is no analysis on the effect of the distribution sector in overall economic growth. For 
your reference, annual sales of the wholesale and retail sector in 2002 were  548,582.5 billion yen or a 
14.2% decrease from the 1999 level. The number of  employees was 12.6million or a 4.5% drop from 
1999. 
Q44. Reference is made to paragraph of th e report by the Government of Japan.  In 
September 2003 the limitation on the number of li quor retail licenses based on population of a 
particular area was abolished, however currently th e issuance of licenses is restricted (or suspended) 
temporarily based on a law that expires in Au gust 2005.  Would Japan confirm that as of 
September 2005 no further restrictions will be app lied to the issuance of liquor retail licenses?  
A. The emergency measures law in question is sche duled to be discussed by the Diet in the near 
future. 
Q45. Since June 2000 about 2260 entities have notif ied the intention to establish large-scale retail 
stores.  
Would Japan provide information about how many  of these large-scale retail stores are operational 
currently, and how many under construction? 
A. Since the enforcement of "Law Concerning th e Measures by Large-Scale Retail Stores for the 
Preservation of the Living Environment" in Novemb er 2004, the latest number of notifications on 
both establishing new large-scale retail stores and re modeling existing buildings  is 2,521. In these 
notifications, the number of large-scale retail st ores which are planned to open by the end of 
January 2005 is 2,231. (It is unc onfirmed whether these stores have actually opened.) On the other 
hand, the number of large-scale retail stores whic h are planned to open after January 2005 is 290. 
Q46. Would Japan provide more details on the provisions in the Japan-Mexico FTA which deal 
with movement of natural persons  (mode 4) and how they will be implemented in practice in Japan? 
A. The Japan-Mexico EPA has a chapter on cross- border trade in services (chapter 8), which 
covers measures affecting cross-border supply of services, including supply of a service by a national of a party in the area of the other Party (i.e. mode  4).  The chapter on services under the Japan-Mexico 
EPA does not apply to the measures pursuant to i mmigration laws.  Instead, the Japan-Mexico EPA 
sets out an independent chapter on the movement of natural persons titled "Chapter 10 Entry and 
Temporary Stay of Nationals for Business Purposes ", which applies to measures affecting the entry 
and temporary stay of nationals of a party who enter into the other part y for business purposes. In 
Chapter 10, Japan makes commitments to grant Me xicans who fall under certain categories entry and 
temporary stay in Japan, in accordance with its immigration laws and regu lations of Japan (i.e. 
"Immigration Control and Refugee Recognition Act" ).  For details, please refer to the following: WT/TPR/M/142/Add.1 
Page 202  
 
 http://www.mofa.go.jp/region/latin/mexico/agreement/index.html 
Q47. How and when does Japan plan to differ entiate between open procedures under which all 
interested suppliers may submit a tender and real selective tendering? 
A. It is not clear what "real selective tendering" refers to; however, Japan is properly 
implementing the WTO/GPA and all the procedur es for procurement covered under the GPA are 
conducted in a GPA-consistent manner. 
Q48. Could the Government of Japan explain the re asons for such situation?  Has the Government 
compared these figures to the import share for the same products purchased by private bodies? 
A. Japan has not analyzed the data that EC refe rs to.  Thus, Japan is not able to provide the 
reasons for this situation.  Also, there is no analys is available which compares the situation with that 
of the private sector. 
Q49.  How many cases of bid-rigging have been notified to the JFTC?  A. Japan has not gathered statistics concerning the number of bid-rigging cases that have been 
notified to the JFTC. For this reason, there is no available figure.  
Q50. How many have been investigated and how many lead to formal action to eliminate bid-
rigging?  
A. The JFTC took 14 legal measures agains t bid-rigging cases in FY2003 and took 22 legal 
measures between April and December 2004.  W ith regard to the number of cases for which 
investigation has begun, the number has not been disc losed to the public so far. Japan would like to 
withhold the answer on this point. 
Q51. Under what circumstances would the JFTC pe nalize offenders with more than disqualification 
from the bid? When offenders are penalized, are the employers (the bidding company) disqualified 
from future procurements? 
A. The JFTC may take measures to eliminate offenders and order them to pay surcharges. 
Whether offenders will be disqualified from future pr ocurement is determined not by the JFTC, but by 
procuring entities. 
Q52. Does the Government of Japan agree on th e linkage between increasing bid-rigging cases and 
the price-ceiling system? 
A. Japan has not analyzed the sai d linkage that EC has raised. 
Q53. How many times the bidding price match es exactly the minimum or the maximum price 
ceiling? 
A. Japan does not have any data on this matter. Q54. How the price ceilings are estimated? A. Since the government concludes various types of contracts, the Accounts Law stipulates only 
the basic requirements for calculating the estimated value of a contract, and Article 80 of the Cabinet 
Order of Budget, Settlement of A ccounts and Accounting stipulates that  the estimated value should be  WT/TPR/M/142/Add.1 
 Page 203 
 
 
 the total amount of the items brought to competitiv e bidding and that products and services which are 
covered by the intended procurem ent should be determined taking into account the actual value of 
similar contracts, level of difficulty of implementa tion, the volume of the contract, and the length of 
the contract implementation period, etc.  In addition, since the Accounts Law stipulates that 
government expenditure should be conducted in acco rdance with the government budget, officials in 
charge of expenditure should estimate the value w ithin the price range for which officials have a 
mandate to conclude a contract b ased on the order given by the chief of each Ministry or agency.  In 
accordance with Article 80 of the Cabinet Order of  Budget, Settlement of Accounts and Accounting, 
Ministry or agency actually concluding a contract should calculate the estimated value.  For example, 
the Ministry of Land, Infrastructure and Transport decides the technical standard and quantity survey 
standard for contracts of construction works that are directly procured by the MLIT. 
Q55. Do procuring entities usually follow the recommendations of the independent examining 
body, known as the Government Procurement Review Board in the consideration of complaints against the former? 
A. To date, the Government Procurement Review Board has not received protests from 
procuring entities concerning its recommendations for the complaints formally filed. (In fact, the 
Board has not found any breaches of procedures in a ny of the cases, and has therefore never asked the 
entities to take corrective action so far.)  
Q56. How does Japan ensure fair procur ement when entities do NOT follow these 
recommendations? 
A. The "Review Procedures for Complaints Con cerning Government Procurement" stipulates 
that "if the Procuring Entity has decided not to comply with the recommendations, it shall report to 
the Government Procurement Review Board with th e reasons and the Board shall send a copy of the 
reasons to the Office of Government Procurement Review (OGPR) immediately upon receiving such 
report." Since the OGPR is comprised of the Chief Cabinet Secretary as its head, and Vice-Ministers 
of relevant ministries as its memb ers, with this provision, entities are supposed to follow the Board’s 
recommendation unless there is a justifiable reason. 
Q57. Could Japan explain which measures are taken to ensure uniformisation in approach of prior 
art searches outsourced to the private sector? 
With regard to searches performed by the applicants  them selves could Japan explain how they ensure 
the legal certainty and independence of prior art searches?  
Is there any checking by the Japanese Patent Office? 
A. With regard to the first question, we understand that it concern with the Registered Searching 
Organization .  The Japan Patent Office (JPO) evaluat es the search results provided in each search 
report made by search organizations.  The JPO will guide the prior art search organizations if the quality of the prior art search results is insufficient, in order to improve it. 
With regard to the second question, Japan introdu ced the new system of "Specified Registered 
Searching Organization (Section 39-2, etc., Special Pr ovisions Law)".  This new system allows the fee 
for the request for examination to be reduced in cases where patent applicants, at the time of their 
request for examination, present a search report issued by any Specified Registered Search 
Organizations which JPO authorizes. The search re port submitted by the applicants will constitute 
part of the reference for the subs tantive examination by the JPO.  WT/TPR/M/142/Add.1 
Page 204  
 
 The JPO is striving to accelerate patent examination, while maintaining the adequacy of the 
examination through quality control as explained above. 
Q58. Paragraph 83 of the WTO Secretariat Re port (WT/TPR/S/142) provides statistics detailing 
Japan's efforts to combat violations of intellectua l property rights at the border. Since there is an 
increasingly important flow of counterfeit and pirate d goods using complex ch annels of distribution 
and crossing several territories before reaching their final destination. 
Could Japan explain which measures are taken in Ja pan to control and stem the flow of counterfeit 
and pirated goods in transit or in transhipme nt on the Japanese territory, or exported from the 
Japanese territory? 
A. Japan Customs can investigate goods in trans it or in transshipment on the Japanese territory, 
if there are the grounds for suspecting that the im portation of counterfeit or pirated goods may take 
place.  In accordance with Article 70 of the Cust oms and Tariff Law, Japan Customs suspend the 
release of infringing goods destined for exportation from the Japanese territory if the exportation has 
not been permitted by the Minister of Economy, Trad e and Industry, as stipulated in Article 48-3 of 
the Foreign Exchange and Foreign Trade Law. 
Q59. Could Japan please clarify the purpose of th e Japan Fair Trade Commission in more detail? 
A. The Japan Fair Trade Commission was est ablished to achieve the purpose of the Anti-
monopoly Act, which aims to promote free and fair co mpetition, to stimulate the creative initiative of 
entrepreneurs, to encourage business activities of en terprises, to increase the level of employment and 
people's real income, and to thereby promote th e democratic and wholesome development of the 
national economy as well as to protect the interests of consumers in general.  
Q60. Would Japan please communicate the plan of activities to be performed by JFTC? 
A. To establish competition policies that are appr opriate for the 21st century, the Government of 
Japan will revise the Anti-monopoly Act, and will conti nue working on reinforcing the function of the 
Japan Fair Trade Commission.   
Q61. Could Japan please inform the EC what meas ures have been implemented so far and what 
measures are seen, by the Government of Japan, to be the most important? 
A. The progress in foreign direct investment promotion measures is shown in the "Follow-up 
‘Program for the Promotion of Foreign Direct Inv estment in Japan.’" For details, please refer to the 
following URL. 
http://www.investment-japan.net/statements/files/20040519.pdf 
All measures of the Program are important. The Government of Japan continues to implement 
concrete measures in the Program and make efforts in policy discussion to establish further effective 
measures for this purpose. 
Q62. What timeframe is Japan working on  in order to implement these measures? 
A. The Government of Japan set the objective of doubling the cumulative amount of inward FDI 
in Japan over a five-year period from 2001 to 2006, and has been taking measures to make Japan an 
attractive investment destination for foreign fi rms based on the "Program for the Promotion of 
Foreign Direct Investment in Japan."  WT/TPR/M/142/Add.1 
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 Q63. How does Japan judge the relative importan ce and weight of bilateral/FTA policies and 
further development of the WTO system in terms of  creating a global and level playing-field for all 
Members of the WTO? 
A. Maintaining and strengthening the multilateral free trade system under the WTO has 
consistently been the main pillar of Japan’s extern al economic policy. In this regard, Japan continues 
to make efforts to achieve progress in negotiations under the WTO.  
While the WTO plays an important role in main taining and strengthening the multilateral free trade 
system, Japan is of the view that bilateral and re gional trade agreements offer a means of achieving 
liberalization beyond levels a ttainable under the WTO as well as strengthening economic 
relationships with trade partners in areas currently not covered by the WTO. 
Q64. How does Japan seek to ensure coherence between her trading arrangements? And does she 
see any risks of reduced coherence arising from the ma in part of her preferential arrangements being 
bilateral ones? 
A. Japan seeks to ensure coherence among its trading arrangements by making sure that all 
arrangements are WTO consistent. Of course, each preferential arrangement could not be identical, 
given the different trade structures and economic re lations between Japan and its partners; however, 
we believe that we can attain necessary cohere nce among those arrangements by ensuring that each 
arrangement is WTO consistent. 
Q65. Which instruments and approaches is Japan appl ying with a view to promote the creation of a 
"level playing field" in global trade? Has Japan  adopted a strategy? In case what are the main 
elements? 
A. Japan believes that liberalization through mu ltilateral trade negotiations is the best way to 
promote the creation of a "level playing field."  In  this regard, Japan continues to make efforts to 
achieve progress in negotiations under the WTO.  
Q66. The EC relies on Sustainability impact assessme nts in its trade policy formulation in order to 
gain better knowledge about the effect of trade pol icy, thereby seeking to improve the basis for the 
decision-making with a view to ensure that sustainable development is duly taken into account.  
Does Japan rely on such assessments and in case how are they used in the policy making process?  
A. We would appreciate it if the EC could conc retely explain what the "Sustainability impact 
assessments" which the EC relies on, are. However,  in general, Japan has given consideration to 
"sustainable development" in our  policymaking process, both at the multilateral and bilateral level. 
Q67. The EC considers that the protection of co re labor rights, far from being a possible hindrance 
to the full development of the competitive advantag e in low labor costs that may be enjoyed by a 
number of developing countries, can actually benef it the productivity of the national industry and 
hence its competitiveness in the international market . This is often the direct result of creating a 
dedicated labor force that has a st ake in the future of a firm; a process that is facilitated by the 
recognition of minimum social standards.  Does  Japan share this approach, based on its own 
experience?  Are there concrete exam ples Japan would wish to share? WT/TPR/M/142/Add.1 
Page 206  
 
 A. Japan shares with EC the viewpoint that the pr otection of core labor rights is important. Japan 
has enacted labor-related laws and regulations and ensured their proper implementation to protect the 
basic right of workers within Japan. 
Q68. How does Japan see the relationship between th e promotion of social policy and the conduct 
of trade policy both at bilateral and multilateral level? 
A. It is not quite clear what EC specifically imp lies by the word "social policy", but generally, a 
certain level of consideration needs to be given to "social policy" in conducting trade policy both at 
the multilateral and bilateral level. 
Q69.  Apart from the regulatory exemptions menti oned, are there any other exemptions from national 
legislation in the Special Zones, for ex ample, as concerns labour legislation? 
A. There are no cases where labor legislations  are loosened in the Special Zones.  
Q70. Could more information on this point be provided? 
A. The "Program for the Promotion of Foreign Di rect Investment in Japan" consists of five 
categories, and to create a favorable employment and living environment is one of these categories. 
For details, please look at the follow-up "Program for the Promotion of Foreign Direct Investment in 
Japan." 
http://www.investment-japan.net/statements/files/20040519.pdf  WT/TPR/M/142/Add.1 
 Page 207 
 
 
 MALAYSIA  
Q1. Japan’s economic growth has seen an improvement in the last two years. 
a) How could growth be further sustained wit hout further exacerbating the fiscal deficit and 
public debt?  
b) Could the large foreign reserves assume a role in sustaining growth? A. 
a) The Japanese government aims to achieve a surp lus in the primary balance in the early 2010s 
by steadily promoting fiscal consolidation and realizing sustainable economic growth led by 
private-sector demand.  
 Following this basic policy, Japan has redu ced public works by over 3% and has reduced 
almost all discretionary expenditures. As a result of these efforts, the primary balance has steadily improved. While Japan is undergoing these expenditure reforms, the economy is 
recovering led by the private sector, and the Japanese government expects this economic 
recovery to continue. 
b) It is difficult to say definitely to what exte nt the current level of foreign reserves in Japan 
contributes to sustainable growth, since the level of foreign reserves can change according to 
the balance of payments, domestic and interna tional financial market conditions and other 
factor. 
Q2. Japan has concluded two FTAs and other FTAs are being negotiated. What are the prospects 
of Japan concluding these FTAs soon? 
A. Japan reached agreements in principle on th e major elements of the Economic Partnership 
Agreement with the Philippines in November 2004, and is currently engaged in negotiations with 
Malaysia, Thailand, and the Republic  of Korea, aiming at an early conclusion of these negotiations. 
Q3. Japan’s tariffs are at low levels but are characterized by a large proportion of tariffs between 
0 and 5% as well as high tariffs on goods of export interest to developing countries eg. footwear, 
prepared foods, and textiles and clothing. Does Japan see them as areas for further improvement in the 
NAMA negotiations? 
A. Japan recognizes that a further tariff reduction will be decided through the ongoing NAMA 
negotiations. 
Q4. The Secretariat report noted that Japan has few non-tariff barriers. However, some of these 
are SPS barriers which impact on expor ts of developing countries, partic ularly in relation to the need 
for import approvals for certain agricultural products and the use of strict quarantine laws on certain 
tropical fruits.  How would Japan ensure that such  rules meet its appropriate level of protection 
requirements and yet not be too trade restrictive? 
A. Japan considers its animal and plant quaran tine measures to be consistent with the WTO/SPS 
Agreement. WT/TPR/M/142/Add.1 
Page 208  
 
 MEXICO
 
Q1. Regarding the voluntary standa rds described in paragraph 46, could Japan confirm if foreign 
nationals could obtain the right to participate in the elaboration of such standards?   
A. (JIS) 
The process of establishment and revision of JIS (Japan  Industrial Standards) provides the public (not 
only Japanese but also foreigners) with three chan ces to submit comments as follows. Directions are 
provided on the JISC’s (Japan Industr ial Standards Committee) homepage. 
(1) At the time of preparation of the draft pr oposal (supplying information on JIS draft proposal 
making). 
 http://www.jisc.go.jp/eng/jis-act/drafts-preparation.html 
(2) At the time of deliberation in JISC (the JIS wo rking plan is open to the public at this point). 
 http://www.jisc.go.jp/jis-act/discussion-plan.html (3) At the time of establishment and revisi on of JIS in accordance with the WTO/TBT 
Agreement obligations (notification of receivi ng comments on the draft industrial standards). 
 http://www.jisc.go.jp/eng/jis-act/index.html 
('Please select "Comment reception public announ cement to Industrial draft standards") 
(JAS) Interested persons including foreign nationals have  chances to participate in the elaboration of JAS 
standards at the following stages. 
(1) Comments on the start of work  
 MAFFUPDATE announces the start of work and invites comments. 
 http://www.maff.go.jp/maffud.html (2) Drafting standards  The public is invited to participate in dr afting meetings. The schedule of meetings is 
publicized in MAFFUPDATE.   
(3) Inviting comments on the draft 
 Comments are invited on the website of MAFF and JETRO  http://www.maff.go.jp/www/public/public.html  http://www5.jetro.go.jp/jet-bin/pro1.cgi/jizenitokoukoku.html  WT/TPR/M/142/Add.1 
 Page 209 
 
 
 Q2. Regarding paragraph 47, could Japan give  a detailed account of the procedure for a 
certification organization established abroad to be able to obtain a registration or acknowledgment JIS 
or JAS? 
A. (JIS) 
Organizations wishing to apply for designation as a JIS Mark Certification Body must submit the 
original and one copy of the form  inaccordance with the Industrial St andardization Law in Japanese to 
the Minister of Economy, Trade and Industry together with the documents. 
(JAS) Detailed information on the registration of RFCOs (R egistered Foreign Certific ation Organizations) is 
available from the following website of MAFF: 
 http://www.maff.go.jp/soshiki/syok uhin/hinshitu/e_l abel/index.htm 
Q3. What is the procedure for the elaboration,  modification and cancellation of the technical 
regulations and how is Article 2.9.1 of the Agre ement on Technical Barriers to Trade (ATBT) upheld? 
A. In general, technical regulations are estab lished, amended or abo lished through procedures 
that consist of deliberation at the Councils concer ned; consultation with the industries concerned, 
including foreign ones, and the public, based on th e "Public Comment Procedure for Establishing, 
Amending or Abolishing a Regulation" which the Go vernment of Japan established; examination of 
the technical regulations in terms of their necessi ty and appropriateness from the perspective of 
improving market access; TBT notifications for co mments or questions by WTO Member countries; 
among others. The adopted technical regulations are promptly made public in "KANPO", the official 
gazettes, etc. 
Publication of a notice, which is provided for in Ar ticle 2.9.1 of the ATBT, is conducted by the Japan 
External Trade Organization (JETRO). 
Q4. Are there annual programs or newspapers wh ich list the topics that will be subject to 
regulation from the part of the various government Mi nistries and ,if this is the case ,where could they 
be consulted ? 
A. Japan has no annual and/or periodical general pr ogramme with regard to technical regulations 
and standards. Japan implements governmental action for deregulation which is not limited to the area 
of standards and conformity but also covers other areas.  
Q5. If the development of technical regulations in volves the elaboration of an analysis or an 
evaluation of regulatory impact like a prior requireme nt, and if this be the case, could this document 
be consulted by nationals of WTO Member countries? 
A. The Government of Japan has started the el aboration of an analysis and evaluation of 
regulatory impact on a trial basis. However, there is  no document that can be c onsulted by nationals of 
WTO Members at the moment. 
Q6. Is there any legal ordinance that obligat es the government and/or certification bodies to 
periodically revise the content of the technical regulations? WT/TPR/M/142/Add.1 
Page 210  
 
 A. Japan has no laws/ministerial ordinances that  stipulate a periodical review for all technical 
regulations and standards. For each technical regul ation/standard, if necessary, Japan develops new 
technical regulations/standards or revises present technical regulations/sta ndards by taking into 
consideration the objective of the WTO/TBT or SPS Agreements, public comments and other 
important factors.  
Q7. Can nationals (individuals and companies) of Member countries of the WTO participate in the 
elaboration, modification, or cancellation of technical regulations at a national level? 
A. The Government of Japan implements WTO/TBT notifications in order to receive any 
comments from WTO Members. Additionally, as a process of establishing or amending technical regulations, the Government of Japan uses the pu blic comment procedure for the foreign parties 
concerned and Japanese nationals. 
Q8. What percentage of the total tariff fractions included in the harmonized system is regulated 
through standards or technical regulations? 
A. There is no information regardi ng question 3 (vi) at this time. 
Q9. What procedure is followed to justify the departure from the technical regulations with 
respect to international standards, and wh ere could this information be consulted? 
A. When establishing new standards and certification systems (including expansion and 
reinforcement of existing systems) based on nationa l laws and regulations, the Government of Japan 
has been strictly examining them in terms of th eir necessity and appropriateness from the perspective 
of improving market access in Japan. This is based on "The Outline of the Action Program for 
Improved Market Access" that the Government of Japan – Ruling Parties Jo int Headquarters for the 
Promotion of External Economic Measures determ ined on 30 July 1985 and "Treatment on 
Establishing Standards, Certification Systems a nd Others" that the Committee for Drawing up and 
Promoting the Action Program including Standards a nd Certification Systems and Others determined 
on 30 September 1985. Information on standards and certification systems can be consulted on with 
the Ministries in charge, while the examination can  be consulted on with the Assistant Chief Cabinet 
Secretary Office. 
Q10. What is the procedure for the recognition of  a foreign standard, or the conformity assessment 
procedure equivalent, and in this case, how many standards or procedures of conformity assessment 
has Japan recognized as such in the terms laid out by Article 2.7 of the ATBT? 
A. Assuming that the question from Mexico intent s to ask whether there are any procedures in 
Japanese regulations to:  
a)  Accept foreign standards as being in confor mity with Japan’s technical regulations; or, 
b)  Accept the result of conformity assessment procedures undertaken outside the territory of 
Japan, the answers are as follows. 
 As for a), Japan has no formal procedure fo r accepting foreign standards as equivalent, but 
Japan fully recognizes and fulfils the obligati ons under Article 2 of the TBT Agreement. 
 As for b), most of Japan’s regulations u se the third party certification scheme and permit 
necessary conformity assessment procedures, which are stipulated in the relevant regulations, 
to be carry out outside Japan. In such cases, foreign conformity assessment bodies are  WT/TPR/M/142/Add.1 
 Page 211 
 
 
 required to be recognized by the relevant Japanese regulatory authorities as meeting the 
criteria stipulated in the relevant regulations. 
Q11. What measures is Japan taking to guarantee th e fulfillment of Article 3 of the ATBT on the 
side of its sub-national level authorities? 
A. In Japan, all of the technical regulations are established by central government bodies. 
Therefore, the Government of Japan does not have a procedure for fulfilling the obligation in Article 3 
of the ATBT. 
Q12. What measures have been adopted to grant special and differential treatment to developing 
Member countries, in terms of Article 12 of the ATBT? 
A. Japan has provided group training courses and held technical seminars in developing Member 
countries upon their request, especially for neighboring Asian countries, with a view to supporting developing country Members’ efforts to implement the ATBT. 
Q13. How many conformity assessment procedures are in force in your territory, how many 
products do they encompass and in which legal ordinance(s) are they established? 
A. There is no general procedure on conformity assessment for all technical 
regulations/standards. It is decided in each  mandatory or voluntary scheme for technical 
regulations/standards.  
When introducing the procedures, Jap an follows the WTO/TBT Agreement. 
Q14. What is the procedure for the accreditati on of organizations that undergo the conformity 
assessment of standards and technical regulations? 
A. Basically, when appropriate, each authority accredits conformity assessment bodies in 
accordance with laws. However, in some cases, th e result of accreditation by  private accreditation 
bodies is used or the investigati on conducted by designated accreditati on bodies is used in accordance 
with laws. Each authority makes sure that th e relevant internationa l standards, guides, 
recommendations, or their relevant parts are u sed, as a basis for the accreditation procedures. 
Q15. What measures has Japan adopted to grant sp ecial and differential treatment to developing 
Member countries according to the terms of Article 10 of the Agreement on the Application of Sanitary and Phytosanitary Measures(SPS)? 
A. Japan has provided technical assistance thr ough contributions to the Global Trust Fund and 
international organizations such as WHO and OIE. 
Q16. How is (a) paragraph 5,  Annex B of the SPS Agreement upheld and when is the 
corresponding announcement published?   
A. Publication of a notice, which is provided for in (a) paragraph 5, Annex B of the SPS 
Agreement, is conducted by the Japan External Trade Organization (JETRO). Usually the notice is 
published when a SPS notification is submitted to the WTO Secretariat. 
Q17. Is there a database or another mechanism which groups together all the SPS regulations in 
force, as well as the risk analysis elaborated with respect to each one? WT/TPR/M/142/Add.1 
Page 212  
 
 A. Information regarding SPS regulations is availa ble on the websites of JETRO, the Ministry of 
Agriculture, Forestry and Fisheries (MAFF) a nd the Ministry of Health, Labour and Welfare 
(MHLW). 
 JETRO:  http://www.jetro.go.jp/  MAFF:  http://www.maff.go.jp/ 
 MHLW:  http://www.mhlw.go.jp/ 
Q18. What procedure is followed for the elabora tion of SPS regulations, where can it be consulted 
and what is the normal public cons ultation period of said regulations. 
A. In general, regulations are established, ame nded or abolished through procedures that consist 
of consultation with the enterprises concerned, including foreign ones, and the public, based on the 
"Public Comment Procedure for Establishing, Am ending or Abolishing a Regulation under Cabinet 
Orders, etc." which the Government of Japan establis hed; examination of the regulations in terms of 
their necessity and appropriateness from the perspective of improving market access; SPS 
notifications for comments or questions by WT O Member countries; deliberation at Councils 
concerned; among others. The adopted regulations  are promptly made public in "KANPO", the 
official gazettes, etc.  
The normal time limit for comments is under 30 days.  Q19. What is the procedure that observations from WTO Members and their nationals undergo and 
how are the responses to these communicated? 
A. When receiving comments on regulations that  have already been adopted, the relevant 
authorities respond to them. 
Q20. Can nationals of WTO Member countries (i ndividuals or companies) participate in the 
elaboration, modification, cancellation of SPS regulation. 
A. The Government of Japan implements the WTO/SPS notifications in order to receive 
comments from WTO Members. Additionally, as a process of establishing or amending technical regulations, the Government of Japan uses the pu blic comment procedure for the foreign parties 
concerned and Japanese nationals. 
Q21. What ordinance governs the elaboration, m odification, or cancellation of SPS measures on the 
part of state authorities, what principles must th ese authorities observe in the elaboration of said 
regulations, and in that case, could Japan  briefly describe such a procedure? 
A. On March 19, 2004, the Government of Japan  created the latest "Three-Year Program for 
Promoting Regulatory Reform" decided by the Cabi net. The SPS measures of Japan are consistent 
with the WTO/SPS Agreement. 
Q22. Paragraph 24 mentions that the services sector contributed 71.1% to Japan’s GDP in 2002 and 
that it is a great source of employment. Mexico ob serves that the tourism sector is not mentioned in 
the diverse documents presented by Japan and we woul d like to know the participation of this sector 
in the economy ...  WT/TPR/M/142/Add.1 
 Page 213 
 
 
 A. We are not sure about the coverage of th e "tourism sector". In any case, regarding Japan’s 
GDP estimates, the tourism sector is included in  the transport sector, and we do not have a sub-
category for the tourism sector. 
Q23. Foreign banks may enter the Japanese mark et by establishing branches, agencies, or 
subsidiaries once the license has been obtained and they are subject to standards no less favorable 
than those applied to national banks (paragraph 31). Footnote number 28 cites that, "While the 
Banking Law (Article 4) includes ‘reciprocity’ provi sions with regard to licensing, the authorities 
maintain that these do not apply to WTO Members, given that Japan has made no MFN exemptions in 
its GATS Schedule of Commitments". In this sense, is  Japan considering recording exemptions to the 
MFN treatment in the short term in order to  make the grant of licenses less restrictive?  
A. The Government of Japan has no plans to register MFN exemptions on the issuance of 
banking licenses. 
Q24. Paragraph 36 mentions that in March 2002,  an amendment was made to the Insurance 
Business Law to include the establishment of a sta ndard timeframe for the approval of simple and 
standardized insurance products, as well as the enlargement in scope of insurance products that banks 
are allowed to sell over the counter. In 2003, anot her amendment was made to, among other things, 
allow insurance companies to work  as agents for companies that engage in other financial businesses. 
Mexico is interested in knowing if these amendmen ts consider a greater opening with respect to life 
insurances, pension plans and funds, illness and accide nt insurance, car insurance, air and maritime 
transport insurance, and insurance of risks. 
A. In October 2002, the Ordinance of the Insu rance Business Law was amended, and pension 
insurance, property accumulation insurance, pens ion payable accumulation casualty insurance and 
property accumulation casualty insurance were added to  the coverage of insurance products that banks 
can sell over the counter. 
Q25. Japan Post coordinates the functions of the Postal Life Insurance providing basic life 
insurance services to private policyholders with in expensive insurance premiums at postal offices. 
What kind of functions does Japan Po st coordinate and what is the structure that must be considered 
in the postal offices to order these services? 
A. Japan Post provides the Post al Life Insurance (Kampo) in accordance with the Postal Life 
Insurance Law. 
The policy goal of Kampo is to enhance the conveni ence of people’s lives by providing them with life 
insurance service as cheaply, simply, and convenientl y as possible through post offices placed all over 
the country.  In this context, Kampo is different  from private life insurers in philosophy and in 
management policy. 
In order to achieve the above policy goal, Japan  Post provides Kampo under many obligations and 
restrictions which are not imposed on private life insurers, for example: 
(i)  Japan Post is obliged to provide universal service, which means that there must be post 
offices all over Japan including all rural areas su ch as distant islands and mountainous areas, 
even if it is not profitable; 
(ii)  The investment of insurance funds is strictly limited by law; WT/TPR/M/142/Add.1 
Page 214  
 
 (iii) Items of insurance service are also strictly limited to life insurance and private pension for 
individuals, and maximum coverage of insure d amounts is also limited to only ten million 
yen, or about seventy thousand euros,  which is costly for Japan Post; 
As a result of those limitations , Kampo’s average insurance amount per person is 2,700,000 yen, 
while that of private life insurers is 10,540,000 yen, nearly four times that of Kampo. 
If you need further information, please refer to following website: 
 http://www.japanpost.jp/top/disclosure/e2003/hoken/index.html 
Q26. In the framework of WTO negotiations, w ill Japan present a revised offer with a greater 
opening in financial services? 
A. This issue should be discussed over the course of the current WTO trade negotiations . 
Q27. Paragraph 43 remarks that since July 2003,  manufacturers of telecommunications equipment 
have been allowed to self-confirm their products’ conf ormity with technical regulations, provided that 
notification is submitted to the Ministry of Intern al Affairs and Communications (MIC). Could Japan 
elaborate on the procedure and applicable legislati on to the conformity assessment of the provider and 
state what verification procedures the MIC has establis hed in order to avoid customers being tricked? 
A. The procedures for self-confirmation are as follows: 
(i) Verify type of telecommunications equipmen t (including conducting characteristic tests); 
(ii) Prepare and retain records of the verification; 
(iii) Conduct self-confirmation of conform ity on the type of equipment; 
(iv) Notify the self-confirmation to the MIC; 
(v) Receive notification number from the MIC; 
(vi) Conduct examination of equipment based on the notified type and retain the records of 
examination; and 
(vi) Affix mark. 
The following laws and administrative ordi nances are applied to the self-confirmation: 
(For telecommunications terminal equipment)  - Telecommunications Business Law: Articles 63, 64, 65, 66, 67, 68, 166, 167, 181, 
188, 190, etc. 
 - Ordinance Concerning Technical Conditions  Compliance Approval etc. of Terminal 
Equipment: Chapters 1, 4 and 5. 
 - Notifications referred by the ordinance. (For radio equipment)  WT/TPR/M/142/Add.1 
 Page 215 
 
 
  - Radio Law: Chapter 3-2 Section 2 and Chapter 9, etc. 
 - Ordinance concerning Technical Regulations Conformity Certification, etc. of 
Specified Radio Equipment: Chapters 1, 4, and 5 
 - Notification referred by the ordinance. These laws and administrative ordinances are available on the website. 
http://www.soumu.go.jp/joho_tsusin/eng/Resources/Legislation/MRA/index.html 
After the notification of self-confirmation by manufacturers, MIC purchases the self-confirmed 
equipment from the market and examines its conformity in the same way as the equipment certified by a third party.  
The amendments to the relevant law introduci ng the self-confirmation system were passed in 
July 2003 and entered into force in January 2004. 
Q28. Japanese authorities affirm that there ar e no discriminatory measures affecting foreign 
participation in international maritime services and that Japan’s bilateral agreements on passenger or 
cargo shipping provide national treatment to partners  on a reciprocal basis. We would like to know if 
Japan will open the transport of passengers and cargo,  for market access as well as national treatment, 
given that its opening is only partial.  
A.  With regard to MA and NT of Internati onal maritime transport service, Japan aims to 
liberalize it in accordance with the scope of the GATS. 
Q29. The Special Measures Law concerning the Handling of Legal Business by Foreign Lawyers 
was modified in 2003 and came into force on 1 Janua ry 2005. This Law will enable a foreign lawyer 
qualified under Japanese law to employ a lawyer qualified under Japanese law and organize a joint 
enterprise involving the two. Could Japan explain th is process and the requirements that the foreign 
lawyer will have to fulfill? 
A. In 2003, the Special Measures Law concerni ng the Handling of Legal Business by Foreign 
Lawyers (hereinafter referred to as the "Gaiben Law") was modified, and it will be enforced on 
1 April 2005. 
An outline of the points amending the Gaiben Law is as follows:  
(1) The provisions for prohibiting a gaikokuho- jimu-bengoshi (hereinafter referred to as 
"gaiben") from employing a bengoshi are to be deleted. Therefore, em ployment of bengoshi 
by a gaiben will be permitted.  
(2) The provisions for prohibiting the running of a joint enterprise between a gaiben and a 
bengoshi or legal profession cooperation (hereinafter  referred to as "bengoshi, etc.") and the 
sharing of profits gained between them are to be deleted, and the specific joint enterprise 
system is to be abolished. 
 Therefore, restrictions will be lifted on the r unning of a joint enterprise between them and on 
the sharing of profits gained from the joint enterprise.  WT/TPR/M/142/Add.1 
Page 216  
 
  A gaiben who employs a bengoshi or runs a jo int enterprise with a bengoshi, etc. is required 
to give notification to the Japan Federation of Ba r Associations and is also required to add to 
the title of his or her office words indicating th at he or she runs the joint enterprise and the 
title of the office of the bengoshi, etc. who r uns the joint enterprise concerned except in 
specific cases. 
(3) A gaiben is to be prohibited from the following: 
(i) Business orders, based on employment relati ons, for the handling of legal business which is 
outside the scope of competence. 
(ii) Improper intervention in a joint enterprise. Q30. Paragraph 60 indicates that a foreign public  accountant, not qualified in Japan, may provide 
certain accounting-related services other than the prov ision of audit services. Mexico is interested in 
knowing the scope of the term "certain accounting-related services". 
A. Article 47-2 of the Certified Public Accountants Law stipulates that the supply of auditing 
services is prohibited except by an accountant qualified as "Koninkaikeishi" under Japanese law.  
Accounting-related services (excluding taxation se rvices) include the preparation of financial 
statements and surveying, planning and consulting on financial affairs. 
Q31. From April 2004, when national universities were corporatized, foreigners could now be 
appointed to posts such as directors in national unive rsity corporations (paragraph 63). Furthermore, it 
also indicates that no restrictions are applied to foreigners in Japan’s education sector, as long as they 
fulfill the same requirements that apply to nationals  for their approval. In its offer presented in 
March 2003, Japan reflects an education services sector  without consolidation, in particular in the 
primary and secondary schools. Could Japan confirm that  it will reflect this modification in its next 
revised offer during May this year?  
A. This issue should be discussed over the course of the current WTO trade negotiations .  WT/TPR/M/142/Add.1 
 Page 217 
 
 
 BRAZIL  
Q1. Although Japan's tariffs are relatively low, ag riculture remains the most important exception. 
Not only agricultural tariffs average (17.3%) is hi gher than that prevailing in the industrial sector 
(6.6%), but also dispersion is very high, as can be  seen by the high coefficient of variation. Tariff 
peaks are frequent, non- ad valorem  duties (15.3% of all tariff lines) are common and TRQs are also 
part of the landscape. As a result, Japanese food pri ces are higher than in most cities of the world. In 
such circumstances, how can Japan  expect to fulfill the Doha mandate regarding "substantial 
improvement in market access"? 
A. It is expected that "substantial improveme nt in market access" will be achieved when the 
Doha Development Agenda negotia tions conclude. Japan has been fully committed to the Doha 
mandate, and has contributed positively to the negotiation. We will continue to do so. 
Q2. Japan frequently resorts to th e Agricultural Special Safeguard (SSM) triggered either by price 
or volume. In accordance with Japan ese notifications, such actions de pend on very low thresholds in 
terms of quantities imported. In such circumstances, does Japan consider that th e resort to the Special 
Safeguard is warranted? 
A. Japan applies special safeguard measures in full accordance with the relevant provisions in 
the WTO Agreement on Agriculture. 
Q3. The Secretariat report indicates that overall le vels of trade-distorting support in Japan are 
higher than the agricultural sector’s contribu tion to the GDP, Furthermore, Japan’s PSE is 
considerably higher than other OECD countries (58% against an average of 32%). Is Japan 
considering further reform measures with a view to decreasing the trade distorting nature of its 
agricultural policy? Is Japan prepar ed to undertake "substantial cuts in trade-distorting support", as 
required by the Doha mandate? 
A. The Basic Law of 1999 stipulates that the price of agricultural products should reflect the 
supply and demand situation as well as the quality of  the product.  Since the implementation of the 
Basic Law, price support measures on a number of  agricultural products have been reformed, 
reducing the current AMS level of Japan to less than  20% of the final commitment level.  The policy 
reform debate under way in the Council, which builds on these policy reforms in the past years, 
focuses on the acceleration of the structural reform  in the agriculture sector which has not progressed 
as far as envisaged.  The successful reform will allo w economically sustainable development of the 
sector with less government support. 
Q4. Japan’s submission points out that in its FTAs th ere is a wide coverage of bilateral trade with 
countries involved. Is agriculture a major impedime nt for Japan to engage in regional negotiations 
with major agricultural exporters? 
A. As the "Basic Policy" adopted in Decembe r 2004 clearly points out, Japan will identify the 
countries/regions with which to negotiate FTA/EPAs by  taking a range of factors into consideration. 
Therefore, Japan has no intention to exclude agricultural exporters from its possible FTA/EPA 
partners. The factors related to the sectors of agricultu re, forestry and fisheries that will be taken into 
account include reinforcing Japan’s position at multilateral negotiations including WTO talks, and 
whether or not there will be adverse effects on Japan’s food security as well as its on-going efforts towards structural reforms in these sectors.  WT/TPR/M/142/Add.1 
Page 218  
 
 Q5. Is Japan willing to reconsider its position in  relation to the question of recognizing regional 
free zones of pests and diseases? What is the rationa l for not adhering to the regionalization principle 
as set out in the SPS agreement? 
A. Japan considers its animal and plant quarantin e measures to be consistent with the WTO/SPS 
Agreement. 
Q6. Which are the 74 measures implemented by the Japanese Government to promote foreign 
direct investment and eliminate impediment s to inward FDI (WT/TPR/S/142, Chapter III, 
paragraph 63)? Are they availa ble in English in a website? 
A. For details about the "Program for the promo tion of Foreign Direct Investment in Japan," 
please look at the following URL. 
 http://www.investment-japan.net/statements/files/20040519.pdf 
Q7. In WT/TPR/G/142, page 6, paragraph 10, it is  stated that "Japan re gards trade in services 
negotiations as one of the main pillars of DDA. Same  level of substantial liberalization is sought as 
NAMA and agriculture. Japan submitted a comprehe nsive and highly liberalised initial offer in 
March 2003 and has also contributed to negotiations through many proposals including those in the 
area of maritime, domestic regulations, and the MF N exemption review." In which sectors of the list 
of offers presented in March 2003 can Japan id entify the highest degrees of liberalization? 
A. Although it is difficult to compare the degrees of liberalisation between sectors because the 
character of each sector are not the same, Japan regards that it has subm itted a comprehensive and 
highly liberalised initial offer as a whole in comparison to offers of other members. 
Q8. In WT/TPR/S/142, page 3, paragraph 3, it is stated that "The Government has continued to 
place emphasis on structural reforms. In this connec tion, progress has been made, inter alia, in the 
financial and corporate sectors (notably disposal of non-performing loans (NPLs)), corporatization of 
state-owned enterprises (such as universities and posta l services), and deregulation (particularly in 
telecommunications and some professional services); Speci al Structural Reform Zones have also been 
established, within which exceptions to particul ar regulations are granted." What are those 
professional services under deregulation? And what me asures on deregulation can be excepted? What 
are those professional services under deregulation?  And what measures on deregulation can be 
excepted? 
A. The professional services concerning sectors such as legal services, and medical care and 
social services are subject to the plans of dere gulation under the "Three-Year Program for Promoting 
Regulatory Reform ". Please refer to 
 http://www8.cao.go.jp/kisei/en/031222report/brochure.pdf  
for further details. Q9. a) What are the advances reached for Japan in the search of better quantifying the participation 
of the services in the GDP? 
b) What is the level of available disaggregati on of the headings that compose this sector?  WT/TPR/M/142/Add.1 
 Page 219 
 
 
 c) What are the governmental agencies in charge of those findings? 
A. a) Data on services in the GDP statistics are compiled, making the most of currently available 
data. For your information, we are now consid ering how to improve the accuracy of Japan’s 
GDP statistics, including the data on services, in a meeting of the ministries concerned. (The 
Ministry of Internal Affairs and Communi cations is the organizer of the meeting.) 
b) The estimates for services in the GDP consist of 17 classifications for economic activities.  <Industries>   Electricity supply, gas and water supply, wholesal e trade, retail trade, finance and insurance, 
renting of dwellings, other real estate, tran sport, community and social service activities, 
business activities, personal service activities 
 <Producers of government services>  Electricity, gas and water supply, service activities, public administration  <Producers of private non-profit services for households>  Education, others 
c) The Cabinet Office is in charge of the GDP estimates. 
Q10.  Which government-affiliate d financial institutions were privatized, as mentioned in 
paragraph 26, page 66 (WT/TPR/S/142)? How was the participation of the foreign companies in this 
process? Were the foreign companies allowed to  participate in the privatization process? 
A. None of the government-affiliated financial in stitutions have been privatized as of this 
moment. 
Q11. Which criteria are applied by the Prime Minister to grant the required licence to foreign banks 
and/or insurance companies to operate in Japan (WT/TPR/S/142)? Are these criteria established by 
the Banking Law and/or Insurance Business Law? 
A. (Bank) 
It is the Banking Law that provides licensing require ments for banks for prudential reasons. Article 4 
provides licensing requirements for banks incorporat ed in Japan, including subsidiaries of foreign 
banks. Article 47 provides licensing requirements for branches of foreign banks. Both articles provide 
that, in issuing banking licenses, the Financial Services Agency shall examine whether (1) the 
applicant has the adequate financial capacity to  carry out sound and efficient banking business, and 
the prospective income and expense of its business oper ations will be satisfactory, (2) the applicant, in 
respect of its personnel composition, etc., has sufficient knowledge and experience to carry out 
banking business appropriately, fairly and efficiently , and commands adequate social credibility.  WT/TPR/M/142/Add.1 
Page 220  
 
 (Insurance Company) 
It is the Insurance Business Law that provides licensing requirements for insurance companies for 
prudential reasons. Articles 3 to 5 provide li censing requirements for insurance companies 
incorporated in Japan, including subsidiaries of foreign insurance companies. Articles 185 to 188 
provide licensing requirements for branches of fore ign insurance companies. These articles provide 
that, in issuing insurance licenses, the Financia l Services Agency shall examine whether, among 
other, (1) the applicant has the adequate financia l capacity to carry out s ound and efficient insurance 
business, and the prospective income and expense of its business operations will be satisfactory, 
(2) the applicant, in respect of its personne l composition, etc., has sufficient knowledge and 
experience to carry out insurance business appr opriately, fairly and efficiently, and commands 
adequate social credibility, and (3) insurance contr acts are likely to operate without regard to the 
protection of policyholder and the like. 
Q12. Can a established foreign bank offer a ne w financial service already provided in its own 
country to the Japanese market? If so, which governme ntal agencies are involved in the authorization 
process (WT/TPR/S/142)? 
A. The Government of Japan shall permit fina ncial service suppliers of any other Member 
established in the territory of Japan to provide any new financial service in accordance with the 
Understanding on Commitments in Financial Services.  However, the Government of Japan shall not 
be prevented from taking measures for prudential r easons in the process of authorization of new 
financial services. The Financial Services Agency is in principle responsible for the authorization of 
the supply of new financial services. 
Q13. Is the Postal Life Insurance a monopoly of  the Japan Post or is it possible for a foreign 
company to commercialise a similar product exem pted from corporate taxes and deposit insurance 
premiums? 
A. Japan Post provides the Postal Life Insuran ce (Kampo) by the Postal Life Insurance Law. 
The policy goal of Kampo is to enhance the conveni ence of people’s lives by providing them with life 
insurance service as cheaply, simply, and convenientl y as possible through post offices placed all over 
the country.  In this context, Kampo is different  from private life insurers in philosophy and in 
management policy. 
Corporate taxes are not imposed on Japan Post. On the other hand, in order to achieve the above  policy goal, Japan Post provides Kampo under many 
obligations and restrictions which are not imposed on private life insurers, for example: 
(i)  Japan Post is obliged to universal service, wh ich means that there must be post offices all over 
Japan including all rural areas such as distant is lands and mountainous areas, even if it is not 
profitable; 
(ii)  The investment of insurance funds is strictly limited by law; 
(iii) Items of insurance service are also strictly limited to life insurance and private pension for 
individuals, and maximum coverage of insure d amounts is also limited to only ten million 
yen, or about seventy thousand euros,  which is costly for Japan Post;  WT/TPR/M/142/Add.1 
 Page 221 
 
 
 As a result of those limitations , Kampo’s average insurance amount per person is 2,700,000 yen, 
while that of private life insurers is 10,540,000 yen, nearly four times that of Kampo. 
Q14. On page 69, paragraph 31 of WT/TPR/S/ 142, it is stated that the Banking Law is the 
centrepiece of legislation to obtain a license to ope rate a bank in Japan. Nevertheless, the footnote #28 
states that "while the Banking Law (Article 4) in cludes "reciprocity" provisions with regard to 
licensing, the authorities maintain that these do not apply to WTO Members, given that Japan has made no MFN exemptions in its GATS Schedule of Co mmitments". Is there a possibility that foreign 
countries (WTO members) be demanded on a reci procity basis to obtain the licence? Are the 
commitment in the WTO and the internal legi slation (Banking Law) thoroughly compatible? 
A. While Article 4-3 of the Banking Law provides for "reciprocity" with regard to licensing, the 
same Article stipulates that the provision is not ef fective if and when it prevents the execution of 
international commitments. Therefore, the pr ovision does not apply to the WTO Members.  
Q15. In WT/TPR/S/142, page 75, paragraph 57, it is  stated that "In addition to obtaining relevant 
licences, membership of a professional association is compulsory for: certified public accountants, 
administrative scriveners, lawyers, judicial scr iveners, land and house surveyors, licensed tax 
accountants, public consultants on social and labour insurance, and patent attorneys." Thus, the 
technical responsibility in civil construction is unde r the "land house surveyor s". Besides membership 
in the relevant professional association, which ar e the other requirements for a foreigner to be 
responsible technician in projects elaborated and constructed in Japan when: a) The company 
responsible is a Japanese firm?, b) The company responsible is a foreign firm? 
A. The land and house surveyors are engaged in th e surveying or measuring of land or houses for 
registration, which clarify the actual condition of i mmovable properties, and they have no technical 
responsibility for construction work. 
In general, there are no particular requirements,  including membership in the relevant professional 
association, for a foreigner to be a technician in the construction sector.  
Q16. In WT/TPR/S/142, page 75, paragraph 60, it is stated that "To qualify as a certified public 
accountant (CPA) in Japan, accountants must pass th e national examination and finish a specified 
number of years of practical training. A foreign accountant not qualified as a CPA in Japan may provide certain accounting-related services other than  the provision of audit services supplied by a 
CPA qualified in Japan. 
(1) "How does Japan classify the various accounting services and for which ones of them is the 
CPA not required?  
(2) How much time, in average, is it necessary to  conclude the practical training? As regards the 
amendment to the Certified Public Accountants Law that entered into force in April 2004,  
(3) what are the duties referred to and what  is the nature of the licenses required? 
A. 
(1) Japan classifies accounting-rela ted services into the categories of auditing services and "other 
accounting-related services" (e.g., the prepara tion of financial statements, and survey, 
planning and consultation for financial affair s). Article 47-2 of the Certified Public 
Accountants Law stipulates that the supply of  auditing services is prohibited except by an WT/TPR/M/142/Add.1 
Page 222  
 
 accountant qualified as "Koninkaikeishi" under Jap anese law. However, foreign accountants 
not qualified as "Konikaikeishi" may provide "other accounting-related services" (excluding 
taxation services). 
(2) The CPA Law requires those who passed the le vel III examination to do practical training for 
a year or more and to do an internship at an auditing firm for two years or more. According to 
the amended CPA Law, which will come into ef fect in 2006, the first requirement will be 
replaced by a requirement to receive certain credits, and the second requirement may be met 
either before or after the CPA examination.  
(3)  (Duties of CPA) 
 The mission and professional responsibilities of CPAs were added to the Law. Article 1 
provides as follows: 
 a) The mission of certified public account ants, who are professionals of auditing and 
accounting, is to promote fair corporat e activities and to protect investors and 
creditors by securing, from an independe nt position, the reliability of financial 
information including financial statements. By so doing, CPAs shall contribute to the 
sound development of the national economy; and 
 b) CPAs must always (a) maintain their dignity; (b) seek to enhance their knowledge 
and skills; and (c) act with integrit y and fairness in providing service. 
 (Qualification system of CPA)  The first stage examination assesses whether th e candidate has the sufficient literacy skills 
required to apply for the second stage examinati on, in which the applicant is assessed for the 
professional knowledge required of a junior CPA.  In order to become eligible to sit for the 
third stage examination, the applicant must have  completed practical training of three years or 
more. The applicant is assessed for technical  competence in professional judgment required 
for CPA, and, after passing, is permitted to practice as a CPA upon registration at the JICPA. 
In accordance with the amended CPA Law effec tive in 2006, the examination process will be 
simplified to the new system, where a one stage examination (which requires a two-step test 
consisting of multiple-choice ques tions and an essay examination and written examination) is 
required to be qualified as a CPA. 
Q17. In WT/TPR/S/142, page 76, paragraph 62, it is  stated that "The share in Japan's GDP of the 
construction industry fell from 7.2% in 2001 to 6.9% in 2002, and its share in employment also fell 
slightly from 10% in 2001 to 9.9% in 2002. These fa lls reflect recent company closures." Is there any 
specific regulation on the participation of foreign companies in the segment of services of civil construction in Japan? What are the limitations to the participation of foreign companies in the 
rendering of services in this segment? 
A. According to the Construction Business Law,  a person who intends to conduct construction 
business is required to obtain a construction business license. This is non-discriminatory treatment 
and there are no special limitations on foreign companies.  WT/TPR/M/142/Add.1 
 Page 223 
 
 
 Q18. In WT/TPR/S/142, page 76, paragraph 62, it is  stated that "(...) Against this background, the 
Ministry of Land, Infrastructure and Transport (MLIT) announced its Basic Guidelines for Revitalising the Construction Industry in December  2002. The MLIT also introduced a new contract 
clause in 2003 prohibiting bid-rigging; if bid-rigging  is found in tenders concerning MLITs projects, 
the contractors must pay the MLIT 10% of the c ontract value for the damages caused." Could Japan 
provide more detailed information on the Basic Gu idelines for Revitalising the Construction Industry 
and also on the MLITs projects? 
A. The purpose of the Basic Guid elines for Revitalizing the Cons truction Industry is to support 
the business restructuring of individual companies whose revitalization appears feasible in order to revitalize the construction industry, which is in  an oversupply structure while promoting selection 
through market mechanism.  The main contents of the guidelines are as follows: 
(1) Promotion of Selection through the Market Mechanism  Improving the business environment in orde r to promote selection through the market 
mechanism 
(2) Promotion of Firms’ Efforts to Reinforce Their Management Base 
 Creating an environment in which compani es can conduct rational reorganization such as a 
management coalition between two or more companies 
(3) Support for Business Restructuring     Supporting individual companies whose revitalization appears feasible on the basis of 
profitability, capital safety and soundness  
The MLIT’s projects are projects that MLIT direc tly procures, such as road construction projects. 
Q19. In the Professional Services sector, on page  75, paragraph 60 (WT/TPR/S/142), it is stated 
that "accountants must pass the national examina tion and finish a specified number of years of 
practical training". Is there any similar requirement of "years of practical training" so that licenses for 
other professions (e.g. lawyers a nd engineers) can be obtained? 
A. Some examples of professions that require "years of practical training" are as follows. 
Profession Training required 
Bengoshi  (Japanese lawyer) 18 months of legal apprenticeship 
Zeirishi (Certified Public Tax Accountant) 2 years of practical training 
Doctor Minimum of 2 years of compulsory clinical training 
Dentist Minimum of 1 year of opti onal clinical training (compulsory 
from April 2006) 
Q20. As regards, the Education Services sector, on page 76, paragraph 64, could Japan specify 
which are the "certain examinations" required to  apply for admission to Japanese high-schools and 
universities? 
A. In Japan, eligibility for entrance to high school s and universities has been legally designated 
so as to systemically maintain the level of edu cation in such schools a nd to smoothly connect each 
type of school and the upper schools. For example, eligibility for admission to high schools is granted WT/TPR/M/142/Add.1 
Page 224  
 
 to people who have graduated from lower secondary sch ools or who are considered to have attained 
the equivalent academic abilities. In the same way,  eligibility for admission to universities is granted 
to people who have graduated fro m high schools or who are considered to have attained the 
equivalent academic abilities. 
In order to ensure systemic access to Japanese univers ities or high schools for graduates of institutions 
for foreign children such as international schools, b ased on the above, Japan confers the qualifications 
for taking the University Entrance Qualifica tion Examination and Lower Secondary School 
Equivalency Examination to appli cants who have graduated from private institutions for foreign 
children in Japan, so that those who pass the exam inations would institutionally have chances to enter 
Japanese universities and high schools. 
Moreover, Japan made amendments to the relevant regulations in September 2003 in order to grant 
qualifications for entering universities to applicants  who have graduated from institutions for foreign 
children that have been officially certified to have a curriculum equivalent to that of the home country 
schools by the said government. 
Q21. Which are the requirements to install a new dealer for imported vehicles in Japanese cities? 
A. There is no specific requirement for installing a new dealer for imported vehicles in Japanese 
cities, subject to relevant laws a nd regulations on distribution services. 
Q22. Japan has always favored multilateralism in trade negotiations but in the last few years has 
engaged in regional trade negotiations  (only in 2002 did Japan sign its first Free Trade Agreement). In 
Japan's view, has the multilateral system lost space for other trade arrangements? What should be the 
relationship between RTAs and the WTO? What, in Japan´s view, can Members do to improve WTO 
efficacy in promoting trade in MFN terms? 
A. Maintaining and strengthening the multilateral free trade system under the WTO has 
consistently been the main pillar of Japan’s extern al economic policy. In this regard, Japan continues 
to make efforts to achieve progress in negotiations under the WTO.  
While the WTO plays an important role in main taining and strengthening the multilateral free trade 
system, Japan is of the view that bilateral and re gional trade agreements offer a means of achieving 
liberalization beyond levels a ttainable under the WTO as well as strengthening economic 
relationships with trade partners in areas currently not covered by the WTO. 
Q23. As already stated, while the protection for industrial products was 3.8% in average in 2004, 
the agricultural products have an applied tariff average of 17.7%. What is the view of Japan about this 
difference of treatment between industrial and ag ricultural products and its impact on the common 
view about the fairness of WTO rules, particular ly for developing nations? Is Japan prepared to 
reduce the gap between industrial and agricultural tariffs, creating more market access opportunities 
for developing nations? 
A. The present tariff structure of Japan is the result of successive round negotiations including 
the Uruguay Round.  Japan has been actively engage d in the present round of negotiations, based on 
the mandate of the Doha Development Agenda, to achieve substantial improvement in both 
agricultural and non-agricultural market access.  We  look forward to a balanced conclusion of the 
Doha Development Agenda and cr eating more market opportunities for the international community, 
including for the developing Members.  WT/TPR/M/142/Add.1 
 Page 225 
 
 
 Q24. According to the Secretariat Report, p. 28, about 6.6% of the tariff lines of Japan consists of 
non-ad valorem  duties, mostly in the agricultural sector but also for textiles and footwear (Chart III.1, 
p. 29, WT/TPR/S/142). The average of the AVE calcula ted by Japan is incredibly higher than Japan’s 
average applied rate (39.2% against 6.3%), providing the protective power of such non- ad valorem  
tariffs. Nevertheless, such tariffs can have ne gative impact on the cheapest and most competitive 
products as their prices are lowered. Regarding this point, could Japan indicate the specific prospects 
for the adoption of only ad valorem  tariffs? 
A. Japan has no concrete plan to uniformly convert non- ad valorem  duties to ad-valorem duties 
to date. 
Each tariff type has a reason to be chosen; for exampl e, sliding duties exist in order to coordinate the 
interests of both domestic producers and consumer s on goods whose international market prices 
fluctuate considerably. 
Q25. According to the Secretariat Report, p. 60,  paragraph 10, out-of-quota tariffs can reach more 
than 400% for rice imports to Japan. At such hi gh rates, the quota system could turn to be a de facto  
quantitative restriction to imports. According to para graph 12, the amount of rice import subject to in-
quota tariffs was expressively higher than those wh ich paid full tariff in the period 2001-2003. How 
does Japan assess the impact of this tariff structure on the domestic prices of rice? 
A. Japan carried out the tariffication of rice in  1999, in full conformity with the relevant 
provisions of the Agreement on Agriculture, including the level of out-of quota tariffs.  
The Government of Japan imports minimum access ri ce according to the relevant provisions of the 
Agreement on Agriculture. 
Q26. Regarding tariff quotas, according to the S ecretariat Report, the Japanese import quota system 
tends to be intricate. Could Japan please pr ovide the requirements of the MAFF for the quota 
allocation approval? 
A. Please refer to Japan’s notification (Table MA:1) to the WTO Comm ittee on Agriculture for 
the requirements of the MAFF concerning the quota allocation approval. 
Q27. Could Japan please explain the participation of state trading enterprises in in-quota imports, 
giving figures of the purchases by those entities vis-a-vis the amount of the quota and the level of utilization of each quota? 
A. Please refer to Japan’s notification to the WTO concerning tariff quotas (G/AG/N/JPN/99) 
and state trading (G/STR/N/10/JPN). 
Q28. Alongside the higher tariff rates for agricu ltural products, the farm support given by the 
Japanese Government is — according to the number s given in p. 63 of the Secretariat Report — 
higher than the average of OECD countries. In Jap an's view, what are the consequences of such 
policies for developing nations which base their economies in the production and export of these 
products? 
A. Japan, as the world’s largest net food importer, contributes significantly to the economic 
development of developing economies.  WT/TPR/M/142/Add.1 
Page 226  
 
 Japan has reduced its tariffs and domestic support fa ithfully and steadily as ag reed at the agricultural 
negotiation of the Uruguay Round agricultural negotiation and other trade negotiations.  
For example, as a result of tariff reductions impl emented in accordance with the Agreement of 
Agriculture, Japan's agricultural and fishery impor ts from developing countries increased by 50% in 
value from 1990 to 2001.  Regarding domestic support,  the level of total AMS was reduced to about 
18% of the commitment level in the year 2000. This ra tio is much lower than those of other developed 
countries.  Furthermore, Japanese domestic support is being reformed so that it is less trade-distortive. 
Q29. Overall, for non-agricultural products, the level of tariff protection in Japan is low, but for 
products where developing countries have a competit ive edge, like textiles, footwear, leather products 
and fisheries, the protection remains high, includ ing through tariff peaks. How does Japan intend to 
tackle this situation in the WTO NAMA negotiations? 
A. As a result of the past rounds of negotiati ons, Japan has already achieved one of the lowest 
tariff levels among WTO Members. As there is s till room for further improvement in market access 
by correcting disparity in tariff rates among the Member s, Japan is prepared to actively engage in the 
NAMA negotiations with other WTO Members in acco rdance with the Doha Ministerial Declaration, 
giving due consideration to the situa tion surrounding individual products.   
Q30. According to WT/TPR/S/142, there has been an amendment to the Anti-monopoly Act 
(AMA) in 2002 to regulate excessive concentr ation of economic power, to increase maximum 
penalties against juridical persons, and to extend the scope of violations against which the Japanese 
authorities can act even after the violations have  ceased. Other measures were taken to strengthen 
enforcement of the AMA. In response to criticisms  about the effectiveness of its competition policy, 
Japan established a Study Group on Reviewing th e Anti-monopoly Act. The Group issued a report 
containing its recommendations for an amendment to th e AMA. Is this study publicly available? What 
were these recommendations? What actions has Japan already taken to comply with them? 
A. The Study Group on the Anti-monopoly Act subm itted a report on October 28, 2003. It is 
publicly available on the JFTC’s website (http://www2.j ftc.go.jp/e-page/). It recommends the revision 
of the enforcement system, including the upgrading of the surcharge rate and the introduction of a 
leniency program, etc., and the revision of monopoly and oligopoly regulations containing prompt and 
effective measures against conduct to prevent market  entry by the owners of essential facilities. The 
Government of Japan submitted the bill containing the upgrade of the surcharge rate, the introduction 
of a leniency program, the introduction of compulso ry measures for criminal investigations and the 
revision of hearing procedures, etc. to the 161st session of the Diet on October 15, 2004 after 
additional study. But it has been carried over to th e next Diet session, which started on January 21.  
Q31. The document WT/TPR/S/142 states that Japan Fair Trade Commission (JFTC) has 
established a Competition Policy Research Centre (CPRC) within its secretariat to improve relationship with academics and the business community . Could Japan inform about the scope of the 
activities of the CPRC, as well as its functions and the results it has already achieved? 
A. The CPRC aims at strengthening the theo retical foundation for planning and implementing 
competition law and policy. Economistsjurists an d JFTC staff are collaborating in CRPC research 
with that in mind. The reports pub lished in FY2004 are as the following: 
(i)  A report on legal and economic views on vertical and conglomerate mergers  WT/TPR/M/142/Add.1 
 Page 227 
 
 
 (ii)  A report on economic analysis on relation between new index of market structure and 
condition of competition 
(iii) A report on application of EC competition law against abuse of dominant position in public 
utility sectors 
(iv) A report on the actual condition of competition in broadband services 
Also, the CPRC convened international symposiums and open seminars featuring senior officials of 
foreign competition authorities and scholars to discuss competition issues worldwide.  
Q32. Paragraph 79 (Chapter III(5)(iv) of the Secr etariat Report) notes the amendments to Japanese 
Patent Law that took place in the recent years. Pl ease indicate whether Japanese legislation provides 
for remedies aimed at preventing the misappropria tion of genetic resources or traditional knowledge 
that might stem from the granting of intellectual property rights, such as patents. 
A. With regard to recent amendments to the Patent Law, including the one mentioned in the 
paragraph 79 of the Secretariat Report, no case ai med at preventing the misappropriation of genetic 
resources or traditional knowledge. 
As far as the Japanese Patent Law is concerned, no provision exists aiming at the prevention of such 
misappropriation. 
Q33. Please provide specific information as to whether Japanese law requires intellectual property 
rights applications to disclose the origin of ge netic resources or traditional knowledge, as well as to 
provide evidence of conformity to rules governin g access and benefit-sharing in the country where 
these resources or knowledge originate. 
A. The Japanese Patent Law does not mandatorily require applicants to disclose the origin of 
genetic resources or traditional know ledge, or to provide evidence of  conformity to rules governing 
access and benefit-sharing in the patent application. WT/TPR/M/142/Add.1 
Page 228  
 
 NORWAY
 
Q1. On telecommunications, the Secretariat’s repor t states (in paragraph 41 of chapter IV (5)) 
that, in spite of increased deregulation and prod uctivity gains, "the JFTC (Japan Fair Trade 
Commission) continues to maintain that the Japan ese market for telecom services is oligopolistic". 
Please elaborate on this assessment by the Japan Fair Trade Commission. 
A. For appropriate implementation of Section 8-4 of the Anti-monopoly Act (AMA) concerning 
measures against a monopolistic situation, the JFTC has been monitoring industries that are characterized by the following market structure as oligopolistic markets. 
(i)  The aggregated total value of goods and servi ces that are supplied within Japan during the 
past year exceeds 95 billion yen. 
(ii)  The market share of the top firm exceeds 45% of  the market or the combined market share of 
the top two firms exceeds 70% of the market. 
According to research by the JFTC, domestic basi c telecommunications and international basic 
telecommunications met the market conditions (Ref. With the revision of the monitored industries in 
December 2004, the market classification of domestic basic telecommunications and international 
basic telecommunications was changed into  fixed telecommunications and mobile 
telecommunications. Both market s are still under monitoring).   
Q2. Are there any limitations on the share of fo reign capital in companies owning ships registered 
in the Japanese ship register? 
A. There are no limitations on the share of fore ign capital in companies owning ships registered 
in the Japanese ship register. 
Q3. The Secretariat Report, page 73, explains th at certain countries can receive national treatment 
on a reciprocal basis.  Please provide a list of c ountries that on a reciprocal basis has been given 
access to Japanese domestic maritime transport. 
A. For example, pursuant to the stipulation in  the Treaty of Commerce and Navigation with the 
U.K., Japan may allow U.K. flag vessels to engage in carriage between inland ports within the limits 
of international cargoes consigned on through bills  of landing and transshipped between U.K. flag 
vessels upon individual application. 
Q4. Concerns have been expressed that reforms of the harbours have not lessened Japan Harbour 
Transport Association’s ability to deter new entry and restructuring in the ports sector. We would 
therefore appreciate to receive information on whic h measures that has been undertaken by Japanese 
authorities to address concerns about the prior consultation process?  
A. We recognize that JHTA is an association of  private companies and is not a regulatory body. 
The prior consultation system is a system based on agreements among privat e circles in accordance 
with a request from shipping companies, and its revision and abolition should be discussed by the 
parties concerned. 
Drastic procedural simplification and transparency enhancement were achieved by the agreements 
among the parties concerned in October 1997 (cf. Four-Party Agreement and Three-Party Agreement 
(see note)).  As a result of these agreements, the nu mber of issues to be consulted through JHTA has  WT/TPR/M/142/Add.1 
 Page 229 
 
 
 decreased by more than 95%. Shipping compani es have also appreciated this improvement. 
Furthermore, an alternative system under which JHTA is not involved in negotiations has been 
created.  
Note: 
Four-Party Agreement: An agreement on impr oving the prior consultation system, reached 
by the Japan Harbor Transport Association, the Japanese Ship-
owners' Association, the Japan Fo reign Steamship Association and 
the former Ministry of Transport. 
Three-Party Agreement: An agreement among th e Japanese Ship-owners’ Association, the 
Japan Foreign Steamship Associati on and the former Ministry of 
Transport, on the establishment of a system under which the Japan 
Harbor Transport Association is not involved in facilitating employment adjustment. 
Q5. Does the revised Port Transport Law contain give the Ministry of Land, Infrastructure and 
Transport authority to intervene in pr icing decisions of terminal operators? 
A. While the meaning of "pricing decisions of terminal operators" is not clear, the terminal 
handling charges in the nine main harbours are subj ect to a prior notification requirement based on the 
revised Port Transportation Business Law. 
In harbors other than the nine main harbours, the Government of Japan is planning to submit a bill to 
introduce the same regulatory reform as in the nine  major harbours, including the relaxation of the 
regulatory system of charges from permission require ments to prior notification, to the Diet session 
this year. 
Q6. Can you confirm the existence of and expl ain the rationale for the measure mentioned on 
page 73, paragraph 51, in the report from the Secret ariat, that there is a requirement to guarantee 
minimum employment by 1.5 times that of existi ng operators for new entrants?  Which government 
entity administers this requirement? 
A. Not only new entrants but also existing oper ators to Japan's harbor services are required to 
guarantee minimum employment of 1.5 times that of  the former minimum requirement under the law. 
The legal basis of the minimum employment requirement is the pe rmission standard under 
Article 22-2 of the Port Transportation Business Law. 
This requirement was introduced in order to smoothly implement deregulatory measures, such as the 
relaxation of regulatory system of market entry to  abolish demand and supply adjustment system, and 
that of charges from license permission requirements to  prior notification in nine large harbors by the 
revised Port Transportation Business Law (2002), while  avoiding instability in labor relations due to 
replacement of permanent workers with daily work ers by operators for minimizing cost, and also 
preventing low -quality operators which exploit daily workers from entering the market. 
Moreover, the Ministry of Land, Infrastructure and Transport administers this requirement. WT/TPR/M/142/Add.1 
Page 230  
 
 Q7. In the past few years, Japan has moved from a policy of having no free trade agreements, to 
pursuing free trade agreements with a variety of pa rtners. We would welcome elaboration of criteria 
and priorities (political, economic, regional) that steer Japan’s choice of its free trade partners. 
A. Japan decided in December 2004 the "Basic Policy towards further promotion of Economic 
Partnership Agreements (EPAs)" that includes crite ria for identifying countries/regions with which to 
negotiate the FTAs/EPAs.  
The English version of the entire document is available at  
http://www.mofa.go.jp/policy/economy/fta/policy0412.html  
Q8. The Secretariat Report at pages 39-40 describes  certain changes to the specifications and 
standards for food and food additives (under the Food  Sanitation Law), as well as the establishment of 
the Food Safety Commission performing risk assessmen ts.  Will these changes imply a greater extent 
of harmonization of Japanese standards with those of the CODEX Alimentarius Commission in respect of additives to food and feed?  Are ther e otherwise plans to harmonize such Japanese 
standards to a larger extent with those of  the European Union (or the United States)?. 
A. Japan is a member of international orga nizations such as the WTO and Codex, and it 
constantly strives to harmonize its standards and regulations with the rele vant international ones. 
In terms of food additives, as is the case with most  other developed countri es, only food additives 
designated as being safe by the Minister of Hea lth, Labour and Welfare may be used in foods in 
accordance with the Food Sanitation Law in Japan.  When we review a proposed petition, we conduct 
an extensive evaluation concerning the safety and u sefulness of the food additive on the grounds of 
sound science, taking the Codex standards and the ev aluation by JECFA into serious consideration. 
We recognize that the main reason why there are some discrepancies between the designated food 
additives in Japan and the EU/USA- approved food a dditives stems from the fact that, so far, no 
concrete petitions have  been submitted.  
With regard to feed additives, the Codex Committe e has not set standards for them. So there is no 
relation between the revision of the Law Concerni ng Safety Assurance and Quality Improvement of 
Feed in 2003 and the Codex standards.  WT/TPR/M/142/Add.1 
 Page 231 
 
 
 COSTA RICA  
Q1. Paragraph 34 (page 22), with respect to merchandise subject to ceilings, states that "If 
preferential imports from one beneficiary exceed one fi fth of the total value or volume of the ceiling, 
the preferential treatment for that beneficiary is suspended." Does this preferential treatment 
suspension apply to all the merchandise covered by  the GSP imported from a beneficiary country, or 
only to the merchandise subject to ceilings? 
A. This preferential treatment suspension applies only to products subject to ceilings. That is, if 
preferential imports of a certain product from one be neficiary exceed one-fifth of the total value or 
volume of the ceiling, then preferential treatment for the same product from this beneficiary will be 
suspended. 
Q2. With respect to paragraph 5 (page 24), coul d Japan describe the following support schemes 
for exports: export finance, insurance guarantees, and "drawback schemes"? 
A. Japan has an export finance scheme in the Jap an Bank for International Cooperation, which 
supports Japanese plant and technology exports to de veloping countries. Support take the form of 
supplier’s credits (S/Cs) extended to Japanese exporters , buyer’s credits (B/Cs) to foreign importers in 
developing countries and bank-to-bank loans (B/Ls) to  financial institutions in developing countries. 
Because plant facilities such as power generati on units and communications equipment embody 
various advanced technology and va rious technical features, their exports will serve to enhance the 
technological base of Japanese industries. Furthermore,  in view of the fact that the domestic plant 
industry encompasses more than 1,000 firms, in cluding small and medium enterprises (SMEs) 
producing parts and components, plant export financ ing will support a broad spectrum of those firms. 
For developing countries, imported plants will bring such economic benefits as industrial 
infrastructure development, increased employment opportunities and the acquisition of skills through 
technical assistance in plant operations, thereby pr omoting sustainable development. However, the 
provision of long-term financing for developing countries involves country risk, which arises from 
changes in domestic political and ec onomic situations, as well as rather high risks of interest rate and 
currency fluctuation. These risks are often too large to  be dealt with by private financial institutions. It 
is for this reason that JBIC steps in as an official financial ins titution to ensure a well-functioning 
international economy. 
The Japanese trade and investment insurance system  was established in 1950 to facilitate foreign trade 
and overseas investment by Japanese companies, and was administered by the Government of Japan 
for more than 50 years. 
Nippon Export and Investment Insurance (NEXI), esta blished in 2001, took over the role of Japanese 
trade and investment insurance as an Independent Administrative Institute, to which the Government 
of Japan inputs 100% capital. 
The Government of Japan reinsures insurance agreements underwritten by NEXI to enhance the 
creditworthiness of NEXI. 
Q3. With respect to paragraph 6 (page 24), coul d Japan break down by subsector the assistance 
that the agricultural sector receives, including t ypes of assistance and amounts, as well as the source 
of assistance: local or central government? WT/TPR/M/142/Add.1 
Page 232  
 
 A. The percentages of total support estimates (TSE) in question have been estimated by the 
OECD Secretariat.  For details on domestic support by  Japan, please refer to the notification of Japan 
to the WTO Committee on Agriculture (G/AG/N/JPN/98). 
Q4. Regarding paragraph 13 (page 25), what goods re quire the approval of the Director-General 
of Customs?  
A. The latter half of the second sentence in paragra ph 13 needs some clarification.  As stated in 
the first half of the sentence, for most goods, the d eclaration must be made after the goods have been 
taken into a Hozei area, but in the case of Specifi c Items, when approved by the Director General of 
Customs, the declaration may be made while they are loaded aboard a ship or barge or before they are 
taken into a Hozei area (Article 67bis of the Customs Tariff Law). 
(Note) Specific Items  
Items which are difficult to take into a Hozei area  because they are extremel y heavy and large, etc. 
(Article 59ter, Cabinet Order for Enfo rcement of Customs Tariff Law)   
Q5. Risk analysis: Does Japan make a risk analysis  of all the sanitary and phytosanitary products 
imported to the country? What international standa rds does Japan apply in the making of the risk 
analysis? 
A. Yes. The Government of Japan conducts ri sk analysis based on OECD, Codex, JECFA, 
JMPR and other scientific information and knowledge. 
Q6. With respect to paragraph 48 on " Mandatory technical regulations", how is the fulfillment of 
mandatory technical requirements verified? Is ther e a generally applied standard that guides the 
elaboration of Japanese technical regulations? Is th e conformity declaration of the trade facilitation 
mechanism provider applied? 
A. There are no general requirements applied to all technical regulations and mandatory 
conformity assessment procedures in Japan. The re quirement for each technical regulation and the 
way of verification depends on each regulation. Some  technical regulations adopt relevant Japanese 
Industrial Standards (JIS) as specific guides.  
Japan follows the WTO/TBT Agreement with resp ect to the establishment and implementation of 
technical regulations. 
Q7. Regarding item (c) Labelling and packaging requirements paragraph 58, what is the 
technical-scientific foundation made by Japan to  support the mandatory labelling requirements of 
genetically modified products? 
A. This requirement is provided in order to gi ve information for consumers to use in selecting 
products. 
Q8. With respect to paragraph 58, what scientif ic foundation supports the obligation of labelling 
genetically modified products? 
A. This requirement is provided in order to gi ve information for consumers to use in selecting 
products.  WT/TPR/M/142/Add.1 
 Page 233 
 
 
 Q9. Paragraph 76 (page 47), mentions that in the last notification th at Japan sent the WTO 
(September 2003), it indicated that 97 subsidy sch emes existed to assist industry, agriculture, 
fisheries, and other sectors. Under what modalities are these assistance programs to different companies assigned? 
A. Modalities under which these assistance are assi gned to companies are different in each 
subsidy scheme. If you need further information, Japan’s Subsidy Notification and related documents 
including G/SCM/N/95/JPN and G/SCM/Q2/JPN/35 would be useful. 
Q10. Could Japan describe in detail the amendments  done to the Patent Law and other intellectual 
property laws, in May 2004, that are referred to in paragraph 79 (page 37) of the Secretariat's Report? 
A. In order to respond to public demand for pr ompt and appropriate protection of intellectual 
property (IP), Japan has made necessary amendments to  the Patent Law and other relevant intellectual 
property laws (the "Bill to Patent Law Amendmen t Reducing Patent Pendency" was submitted to the 
ordinary session of the Diet in 2004) to expedite patent examination processes, from the viewpoint of 
optimizing the ratio of requests for examination to  patent filings, and reinforcing infrastructure 
necessary for expeditious patent examination. 
In addition to those measures concerning expeditious patent examination, Japan concurrently revised 
the stipulation on employee-inventions in its Patent Law so that remuneration for employee-
inventions could be de termined appropriately. 
(i)  Review of the Designated Searching Organi zation System (Section 37 and others in the Law 
Concerning the Special Provisions to the Procedures Relating to an Industrial Property Right) (hereafter referred to as "the Special Provisions Law") 
(ii)  Instituting a Specified Regi stered Searching Organization System (Section 39-2, etc., Special 
Provisions Law) 
(iii)  Publication of Official Gazettes via the Internet (Section 13, Special Provisions Law) (iv)  Addition to Estimated Deposit as Refund (Section 15, etc., Special Provisions Law) 
(v)  Revision of the Utility Model System 
(vi)  Expansion of the Business of the National Center for Industrial Property Information 
(Section 3, 10, etc., Law on Independent Ad ministrative Agency, National Center for 
Industrial Property Information and Training) 
(vii)  Revision of the stipulation on the Em ployee-Invention (Section 35, Patent Law) 
Q11. Could Japan describe the dispositions contai ned in the Basic Law on Intellectual Property, 
enacted in December 2002, which is referred to in paragraph 79 (page 47) of the Secretariat’s Report? 
A. The Basic Law on Intellectual Property (a) s tipulates basic ideas on the creation, protection 
and exploitation of intellectual property and basi c measures to achieve the ideas, (b) defines the 
responsibilities of the State, local governments, academia including universities and business enterprises, (c) establishes the Intellectual Prope rty Policy Headquarters, and (d) stipulates the 
preparation of a strategic program for the creation, protection and exploitation of intellectual property. WT/TPR/M/142/Add.1 
Page 234  
 
 Q12. Could Japan indicate if the regulations re garding geographical indi cations contemplate the 
protection of geographical indications of products other than wine and spirits, for example, agricultural products, food, and crafts, as well  as the geographical indications of services? 
A. In regard to the protection of GIs in general, that is, not limited to wines and spirits, the act of 
indicating on goods or with respect to services, or in an advertisement thereof or in a document or 
correspondence used for a transaction related thereto,  in a manner which is likely to be misleading 
with respect to the place of origin is, inter alia, prevented by the Unfair Competition Prevention Law. 
Furthermore, the application or registration of a trad emark which contains or consists of such GIs is 
refused or invalidated according to th e stipulation of the Trademark Law. 
Q13. With respect to the revision done in Janua ry 2003 to the Unfair Competition Law, what is 
paragraph 80 of the Secretariat’s Report referring to ? (Please explain what is understood by "misuse 
and illicit acquisition of trade secrets). 
A. In respect of the criminal procedure for the protection of trade secrets, the Unfair Competition 
Law as amended in 2003 (entered into force in Ja nuary 2004) stipulates that a person who falls under 
three categories mentioned below shall be im prisoned up to three years or fined up to 
3,000,000 Japanese Yen: 
(i) A person who, for the purpose of unfair co mpetition, uses or discloses a trade secret which 
was obtained by a fraudulent or other unlawful act, or an act of stealing a document or data storage media which contains or records the trade secret; 
(ii) A person to whom a trade secret was disclosed by its holder and, who, for the purpose of 
unfair competition, uses or discloses it after taking possession of or making a document or data storage media which contains or records the trade secret, by any of the following ways 
through a fraudulent or other unlawful act, or other act of breaching the duty to keep safe 
custody of the media containing the trade secret, 
 a) taking possession of a media containing a trade secret which was under the control of 
the holder, or 
 b) making reproduction of information written or recorded in a media containing a trade 
secret which was under the control of the holder; and, 
(iii) A person who is an executive or an employee of the holder of a trade secret and to whom a 
trade secret was disclosed by its holder, and,  for the purpose of unfair competition, uses or 
discloses it in breach of the duty to k eep safe custody of the trade secret. 
Q14. With respect to paragraphs 84 and 85 (page 50), could Japan explain what the "Three-Year 
Program for Promoting Regulatory Reform ( TPPRR)" for agriculture consists of ?  
A. On March 19, 2004, the Government of Japan decided on the latest "Three-Year Program for 
Promoting Regulatory Reform" (Cabinet decision). The agriculture policy covered by this Program 
consists of the examination of agricultural products, etc. 
Q15. Paragraph 90 (Table III.1.1,  page 52) refers to certain exceptions to the Anti-monopoly Act 
(AMA). Under what criteria are these exceptions decided? 
A. There are various reasons for introducing ex emptions to the AMA on cartels, such as an 
especial characteristic of the businesses concer ned (e.g. cartels on insurance businesses), securing  WT/TPR/M/142/Add.1 
 Page 235 
 
 
 necessary transportation for regional residents (e.g. cartels on transportations ) and consistency with 
international agreements allowing inte rnational cartels also in other c ountries. In addition, with regard 
to the exemption of the AMA on the resale price maintenance system of copyrighted work, it is 
limited to 6 items. These are books, magazines, newspapers and reco rds, which were sold under the 
practice of selling at fixed prices, which existed wh en the exemption system was introduced in 1953, 
and music tapes and music CDs, which have  same features and utilities as records. 
Q16. In general terms, The Secretariat’s Report indicates that Japan is one of the OECD countries 
that grants the most internal assistance to the agricultural sector in proportion to the value of 
production. Furthermore, Japan is one of the countries with a great number of tariff lines in agriculture, which are not ad valorem  tariffs, and generally with high levels of protection. In this 
sense, does Japan consider that such mechanisms do not distort trade and therefore do not affect the 
trade of third countries, especially developing countries? 
A. Japan, as the world’s largest net food importer, contributes significantly to the economic 
development of developing economies. 
Japan has reduced its tariffs and domestic support fa ithfully and steadily as ag reed at the agricultural 
negotiation of the Uruguay Round agricultural negotiation and other trade negotiations. 
For example, as a result of tariff reductions impl emented in accordance with the Agreement of 
Agriculture, Japan's agricultural and fishery impor ts from developing countries increased by 50% in 
value from 1990 to 2001.  Regarding domestic support,  the level of total AMS was reduced to about 
18% of the commitment level in the year 2000. This ra tio is much lower than those of other developed 
countries.  Furthermore, Japanese domestic support is being reformed so that it is less trade-distortive. 
Q17. Regarding paragraph 6 (page 59), could Japan break down the transfers made to the 
agriculture sector by subsector, product, or main tariff items? 
A. Those are the percentages of total support est imates (TSE) in question have been estimated by 
the OECD Secretariat. For details on domestic s upport by Japan, please refer to the notification of 
Japan to the WTO Committee on Agriculture (G/AG/N/JPN/98). 
Q18. With respect to paragraph 10 (pages 59-60), could Japan explain the reason why it continues 
to apply tariffs equivalent to three times the simp le applied MFN average on agricultural subsectors or 
products? How are these practices justified in the face of the Doha Round negotiations? 
A. Japan has reduced its tariffs and domestic s upport faithfully and steadily as agreed at in the 
agricultural negotiation of the Uruguay Round and the series of trade negotiations. 
Japan has been fully committed to the Doha mandate and, has contributed positively to contribute the 
negotiation. 
Q19. With respect to paragraph 11 (page 60), if it is accurate, the notifications describe the 
applicable quota allocation system, but this mechan ism lacks more detailed in formation regarding its 
application on agricultural products. Therefore, could Japan describe with greater detail the quota 
scheme as applied to the following products: coffee, s ugar, dehydrated vegetables, foliage and leaves, 
etc, ornamental plants, tinned tuna fish, juices and vegetable extracts, puree and fruit pastes, as well as 
what is not specified on the list? WT/TPR/M/142/Add.1 
Page 236  
 
 A.  All the necessary information on the quota allocati on system has been given in Japan's notification 
(Table MA:1) to the WTO Committee on Agriculture .  Japan has administered the system in 
accordance with the notification. Jap an does not apply the TRQ system to the products in question. 
Q20. Paragraph 12 (page 60) indicates that Japan allows access to a certain quantity of imported 
rice under the simultaneous buy-and-sell-system (SBS).  Could Japan explain how this system works? 
A. The SBS tender is a system of simultaneous  bidding by both import traders and wholesalers.  WT/TPR/M/142/Add.1 
 Page 237 
 
 
 THAILAND  
Q.1 Industrial Standard (JIS) were aligned to th eir international counterp arts as of March 2004. 
Japan has also taken further steps to ensure acceptance of foreign test data and conformity assessment by, for example, concluding mutual recognition agreem ents." Thailand would like Japan to give detail 
on the progress of such steps? When was mutual  recognition agreement established? Please provide 
information on the number of countries that, to date , Japan has established MRAs with? What are the 
criteria for selecting countries to have mutual recognition agreements? 
A. To date, Japan has concluded MRAs with EC in the areas of:  telecommunications terminal 
equipment and radio equipment, electrical produc ts, Good Laboratory Practice for chemicals and 
Good Manufacturing Practice for medicinal pr oducts; and with Singapore in the areas of: 
telecommunications terminal equipment and radi o equipment and electrical products under the 
framework of the Japan-Singapore Economic Partne rship Agreement. The MRA with EC came into 
force in January 2002, and the MRA with Singapore in November 2002. 
When establishing MRAs with an appropriate country and in the appropriate field, such factors as the 
market size of the partner country, needs of the industrial sector, equivalency of Technical 
Regulations regarding the Conformity Certificati on System, are considered important criteria.  
Q2. Please clarify the food aid measure/policy, in  particular, whether the Japanese government 
uses the imported rice under the TRQ for its food aid contributed to other countries. 
A. Japan has provided food aid in response to va rious needs in developing countries, and, where 
appropriate, has accordingly utilized its stock of rice of both domestic and overseas origins. 
Q3. Under the existing rice import regime(Experi ment Trial Quota – ETQ), rice imported under 
this regime must be a new breed of rice or rice th at has never been imported into Japanese market and 
the quantity of import from each country must not exceed 5,000tons. Please provide the reason for putting these conditions under ETQ. 
A. In FY 2000, when the import of minimum acce ss rice was increasing gradually, experimental 
importation of rice was carried out on a trial basis, in order to take account of end-users’ needs and 
assess the possible demand for new usage of minimum access rice for processing purposes. The 
scheme is no longer in place. 
Q4. Japan has imposed tariff on refined sugar whic h is higher than that of raw sugar by three 
times. Apart from the high tariff, are there any other restrictive trade policies/measures, in particular, 
from the state trading enterprises on refined sugar? 
A. Regarding refined sugar, there are no partic ular border measures apart from the bound tariff 
specified in our Schedule of Concessions.  
Q5. Japan imposes tariff on boneless chicken meat  at 11.9% while imposes tariff on chicken 
thighs at 8.5%.  Would Japan consider reviewing these different rates with the aim of reducing the 
tariff on boneless chicken meat to the rate equalling that of cut and offal chicken meat?  Since these 
two products are substitutes, imposing tariff at diffe rent rates will create trade discrimination resulting 
in loss of competitiveness to countri es that export boneless chicken meat. 
A. The present Schedule of Concessions is the r esult of the Uruguay Round negotiations, and no 
change in the Schedule is being considered at this juncture. WT/TPR/M/142/Add.1 
Page 238  
 
 Q6. Tariff quota for footwear is set at 12 million pairs. Since the quota is allocated according to 
past records, this will make it difficult for coun tries whose total shoe export value to Japan is 
relatively small to increase their exports to Japanese market. As a result, Thailand, with its total shoe 
exports to Japan relatively small, will be put at a disadvantage under this system, leaving no room for 
exporting to Japanese market. We would be interest ed to know whether or not and when Japan would 
consider amending the mentioned condition with a vi ew to eliminating the use of past records?  
A. Quota for footwear is allocated not to c ountries or exporters, but to importers based on a 
historical record in the use of the allocated quot a. Because importers who are allocated the quota can 
choose the country from which they import at their own discretion, specific countries are not put at a disadvantage under this system. 
Q7. Under stringent sanitary measures imposed on tropical fruit imports from Thailand, Japan 
now only allows imports of 6 kinds of fruit, name ly raw bananas, durians, coconuts, pineapples, 
mangosteens and mangoes. Could Japan provide information about the possibility of further expanding market access to allow im ports of other kinds of fruit? 
A. Japan prohibits the import of the host plants of Bactrocera dorsalis  and Bactrocera 
cucurbitae , which exist in Thailand and have not been detected in Japan. Japan will permit the import 
of the host plants if Thailand establishes measures to prevent those fruit fli es from coming into Japan, 
as have been established for mangosteens and mangoes. 
Q8. Under Japan’s Plant Protection Law system, a ll organisms other than 63 species that are 
specified in the non-quarantine plant and animal pest list are automatically classified as harmful 
animals or plants subject to quarantine. Could Japan provide concrete scientific grounds for this 
system? 
A. The plant quarantine measures of Japan are consistent with the WTO/SPS agreement and are 
in line with the relevant international gui delines.  We submitted a WTO/SPS notification 
(G/SPS/N/JPN/132) concerning the revision of the plant quarantine measures including the addition 
of certain pests to the Non Quarantine Pest List. 
Q9. Japan’s regulation restricts formaldehyde c ontent in underwear for infants at 12-18 ppm when 
converted.  This maximum content allowed is set not by ppm unit as in international practice and is at 
about half of those of other countries, making it ve ry different from them a nd probably inconsistent 
with international standards.  Could Japan clarif y scientific grounds for applying this number?  Is 
there any plan to revise the current test method so that the standard will be shown by the ppm unit as 
in international practice?  Please specify the timeline for its introduction if any. 
A. After scientific reviews on the standard of formaldehyde in 2003, HPLC methods were 
introduced in testing formaldehyde contents in tex tile products, such as diapers, diaper covers, bibs, 
underwear, and pajamas.  At the same time, a standa rd of less than 16ppm was set for these products.   
In the review, it was concluded that:  a) Animal tests showed that formaldehyde has a chronic toxicity and can cause sensitivity even 
under the condition of a few ppm. 
b) In order to protect infants and children w hose resistances against chemicals is weak, the 
formaldehyde exposure should be as low as possible.  WT/TPR/M/142/Add.1 
 Page 239 
 
 
 Q10. When applying for certain Status of Resi dence (e.g. manager, intra-company transferee, 
medical services, instructor, engineer, etc.), there ex ists a criterion that the foreign applicant should 
receive no less salary than that a Japanese nationa l would receive for comparable work.  Although 
Japan has a minimum wage requirement to protect  workers in general from being exploited by 
employers, such salary criterion is still being impo sed on foreigners in applying for a number of 
Status of Residence.  How does Japan establis h the salary level which a Japanese national would 
receive in each profession? 
A. The minimum wage in Japan shall beis decidfix ed by taking into consideration the cost of 
living of workers, the wages of similar workers a nd the capacity of normal industries to pay wages. 
"The applicant should receive a no less salary no less than a Japanese national would receive for 
comparable work." , is a criterion provided by the Ministry of Justice Ordinance in Japanese 
immigration control law, which means that foreign workers should be paid the same amount of salary 
as Japanese workers engaging in the same kind of j ob and post( or could be paid more than such 
Japanese workers). 
In this case, "salary" means the basic wages and bonus, which does not include transportation and 
housing allowances and traveling expenses. 
Q11. Scope of activities permitted under Working Visa is limited by the Status of Residence, which 
is categorized, for example, into investor, lega l/accounting, medical, engineer, skilled labour, etc.  
However, there remain some occupations in servi ces area that do not fit into any category of the 
Status of Residence, such as caregiv er, spa therapist, hairdresser, etc.  What type of visa should the 
service suppliers of these services apply for? 
A. Japan has adopted the basic pl an that foreign nationals with the intention to work, who are 
recognised as specialized human resources, should be acc epted in Japan as they previously have been.  
On the other hand, the possibility of acceptanc e of the so-called manual labourers such as 
unspecialized, non-technical, unskilled workers should be carefully examined, taking into account the 
potential impact on Japanese industry, welfare and other social factors. 
From this viewpoint, there are 14 types of residence status for work permits prescribed in the Japanese 
immigration control law, especially 10 types which ar e related to the services area ("Investor/Business 
Manager", "Legal/Accounting Services", "Medical Serv ices", "Researcher", "Instructor", "Engineer", 
"Specialist in Humanities/International Services", "Intra-company Transferee", "Entertainer" and 
"Skilled Labour")  Each of these types has criteria according to the Ministry of Justice Ordinance.  
The criteria explains the concrete requirements for ea ch status of residence and, even though Japanese 
immigration control law never prescribe services dir ectly, are also helpful in understanding what kind 
of service suppliers are eligible to enter and stay in Japan.  
Unless business activities carried out by service supplie rs in Japan fall under any permitted status of 
residence, they will be denied entry and residence in Japan. 
In the current Japanese immigration laws and regul ations, service suppliers such as caregivers, spa 
therapists and hairdressers, are not permitted becau se the status of residence corresponding to these 
activities does not exist.  
Please refer to the attached sheets for the 10 types of status of residence in details. WT/TPR/M/142/Add.1 
Page 240  
 
 Attachment 9 
Reference:  Ministry of Justice Ordinan ce:  Latest Amendment:  February 28, 2002 
Status of Residence Criteria  
1 In cases where the applicant is to commence the operation of international trade or other business, the 
following conditions ar e to be fulfilled. 
a The facilities to be used as an office for the business con cerned is located in Japan. 
b The business concerned has capacity to employ at  least 2 full-time employees in Japan (excluding 
foreign nationals residing under the status of residence enlisted in A nnexed Table 1 of the Immigration 
Control and Refugee Recognition Act), in addition to  those who operate and/or manage the business. 
 
2 In cases where the applicant is to  invest in international trade or  other business and to operate or 
manage that business, or in cases wh ere the applicant is to operate or manage international trade or other 
business on behalf of foreign nationals  (including foreign, corporations; he reinafter in this section "foreign 
nationals" is to include "foreign cor porations") or who has begun such an operation or has invested in such 
a business, the following cond itions are to be fulfilled. 
a The office for the business con cerned is located in Japan. 
b The business concerned has the capacity to employ atleast 2 full-time employees in Japan (excluding 
foreign nationals residing under the status of residence enlisted in A nnexed Table I of the Immigration 
Control and Refugee Recognition Act), in addition to  those who operate and/or manage the business. 
 Investor/Business 
Manager 
3 In case an applicant is to engage in the management  of international trade or other business in Japan, 
he should have at least 3 years' experience in the operation and/or management of business (including the 
period during which the applicant studied business op eration and management at Graduate School) and 
receive no less salary than a Japanese national would receive for comparable work. 
Legal/Accounting 
Services The applicant must engage in professions such  as attorney ("Bengoshi"), judicial scrivener 
("Shihoushoshi"), certified real estate assessor ("To chikaokuchousashi"), attorney recognized as a 
"Gaikokuhou-jimu-bengoshi", certified public accountant ("Koninkaikei shi"), certified public accountant 
recognized as a "Gaikoku-kouninkaikeishi", certified tax specialist ("Zeirishi"), certified social insurance 
and labor specialist ("Shakaihokenroumu shi"), certified patent specialist ("Benrishi"), maritime procedure 
agent ("Kaijidairishi") and certified administra tive procedures specia list ("Gyouseishoshi"). 
1 The applicant who will engage in professions such as  medical doctor, dentist, pharmacist, public health 
nurse, midwife, registered nurse, assistant nurse, dent al hygienist ("Shikaeiseishi "), X-ray technician for 
medical examinations, physical therapist ("Rigakuryouhoushi"), occupational therapist 
("Sagyouryouhoushi"), eye specialist ("Shinoukunrenshi"), clinical technician ("Rinshoukagakugishi") or 
artificial limb technician ("Gishisougushi") should recei ve no less salary than a Japanese national would 
receive for comparable work. 
 
2 In cases where the applicant is to practice as a medi cal doctor or dentist, he must fall under one of the 
following categories. 
a A person who has graduated after co mpleting a course in medical scien ce or dentistry at a college in 
Japan and who is to practice as a trainee at a hospital at tached to a college or the faculty of medical science, 
the faculty of dentistr y or the research institute of  the faculty of medical scie nce of the college, or at a 
hospital designated by the Minister of Health and We lfare in accordance with the provisions of Article 16-
2, Paragraph 1 of the Doctors' Law (Law No. 201 of 1948) or Article 16-2, Paragraph 1 of the Dentists' 
Law (Law No. 202 of 1948), or at a hospital designated by the Minister of Justice in the Official Gazette as 
equivalent thereto, for a period not exceedi ng 6 years from the da te of graduation. Medical Services 
b A person who has graduated after co mpleting a course in medical scien ce or dentistry at a college in 
Japan, who falls under Article 41 or 42 of the Doct ors' Law (Law No. 201 of 1948), or who falls under 
Article 42 or 43 of the Dentist Law (Law No. 202 of 1948), or who has a license valid in Japan as a 
medical doctor or dentist as of June 1, 1990, and who is  to practice at a medical office, designated by the 
Minister of Justice in the Official Gazette, in an ar ea where it is difficult to secure a medical doctor or 
dentist. 
Table (cont'd)  WT/TPR/M/142/Add.1 
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 Status of Residence Criteria  
3 In cases where the applicant is to  practice as public health nurse, midw ife, nurse or assistant nurse, he 
may practice as trainee for a period not exceeding 4 year s from the date of graduation and/or completion of 
the school or training institution provided for by the pr ovisions of Article 1, Para graph 1 of the Regulation 
designating the School and Training Ins titution for Public Health Nurses, Midwives, Registered Nurses or 
Assistant Nurses (Ministry of Education and Ministry  of Health and Welfare Ordinance No. 1 of 1951). Medical Services 
4 In cases where the applicant is to practice as a pharmacist, dental  hygienist, X-ray technician for 
medical, examinations, physical therapist ("Rigakuryouhoushi"), occupational therapist 
("Sagyouryouhoushi"), eye specialist ("Shinoukunrenshi"), clinical technician ("Rinshoukougakugishi"), or 
artificial limb technician ("Gishisougushi"), he must be invited by a medical institution or pharmacy.  
The following conditions are to be fulf illed, unless the applicant is to e ngage in research under a contract 
with the Japanese Government, a lo cal government, a corporation establis hed directly in accordance with 
Japanese laws, a corporation established in accordance with a Japanese special law through special acts of 
establishment, a corporation or an independent administrative institution (meaning the independent 
administrative institution provided for in Article 2, Pa ragraph 1 of the Law concer ning the General Rules of 
the Independent Administrative Institution (Law No. 103,1999); hereinafter the same) which is established 
in accordance with a Japanese special  law through special acts of establishment and is required to obatin 
approval by the administrative authorities with respect to  the establishment, or a corporation de signated by 
the Minister of Justice in the Official Gazette, wh ich is managed by a fund  allotted by the National 
Government , a local government or an independent administrative institution. 
 
1 An applicant should have a master's degree or at leas t 3 years' experience in th e area of related research 
(including experience at graduate school) after graduation from co llege (excluding graduation from 
community or junior college) or an equivalent institutio n or at least 10 years' experience in the area of the 
related research (including research performed at college). 
 Researcher 
2 The applicant should receive no less salary than a Japanese national would receive for comparable 
work. 
1 In cases where the applicant is to engage in in struction at a vocational school ("kakushugakkou") or an 
educational institution equivalent to it in facilities a nd curriculum or in cases wh ere the applicant is to 
engage in instruction at another school in a capacity other than a teacher, the following conditions are to be 
fulfilled. 
However, a) is to be fulfilled in cas es where the applicant is to engage in instruction at a vocational school 
or an educational institution equivalent to it in fac ilities and curriculum which is established to provide the 
children with a status of residence. "Diplomat" or  "Official" mentioned in Table 1 of the Immigration 
Control and Refugee Recognition Act or "Dependent" me ntioned in  Table 4 of the said Act primary and 
secondary education in foreign language. 
a The applicant must have graduated from or comple ted a course at a college  or acquired equivalent 
education, or must hold a license to teach the subject that he intends to teach in Japan. 
b When the applicant is planning on teaching a forei gn language, he must have  acquired education in 
that language for at least 12 years. When the applicant is planning on teaching other subjects, he must have 
at least 5 years' teaching experience in that subject. 
 Instructor 
2 The applicant should receive no less salary than a Japanese national would receive for comparable 
work. 
The following conditions are to be fulf illed , except in the case that the app licant is to engage in a job that 
requires skills and/or knowledge c oncerning information pr ocessing, and has passed the examination on 
information processing skills that is designated by the Minister of Justice in the Official Gazette or has 
obtained the qualification on information processing skills that is designated by the Minister of Justice in 
the Official Gazette, in which case the conditi on provided in Item 1 need not be fulfilled. Engineer 
1 The applicant must have graduated from or comple ted a course at a college  or acquired equivalent 
education majoring in the subject relevant to the sk ills and/or knowledge necessary for performing the job 
concerned, or the applicant must have at least 10 years' experience (including the period of time spent 
studying the relevant skills and knowledge at co llege, "Koutousenmongakkou", senior high school, the 
latter course of secondary educa tional school ("Chutoukyouikugakkou) or during a specialized course of 
study at an advanced voca tional school ("Senshugakkou")). 
Table (cont'd) WT/TPR/M/142/Add.1 
Page 242  
 
 Status of Residence Criteria  
Engineer 2 The applicant should receive no less salary than a Japanese national would receive for comparable 
work. 
The following conditions are to be fu lfilled, unless the applicant is to  engage in business related to 
representation in association with the procedures fo r an international arbitration case, who falls under 
Article 58-2 of the Special Measures Law Concerning the Handling of Legal Business by Foreign Lawyers 
(Law No. 66 of 1986). 
1 In cases where the applicant is to  engage in a job requiring knowledge in the humanities, he must have 
graduated from or completed a course  at a college or acquire d equivalent education majoring in the subject 
relevant to the knowledge necessary for performing the j ob concerned, or have at least 10 years' experience 
(including the period of time spent studying the relevant knowledge at co llege, "Koutousenmongakkou", 
senior high school, the latter course  of secondary educational school ("Chutokyouikugakkou") or during a 
specialized course of study at an a dvanced vocational school ("Senshyugakkou")). 
 
2 In cases where the applicant is to engage in a job requiring speci fic ways of thinking based on 
experience with a foreign culture, the fo llowing conditions are to be fulfilled. 
a The applicant is to engage in translation, interp retation, copywriting, instru ction in languages, public 
relations, overseas transactions, fashion or interior design, product development, or other similar work. 
b The applicant must have at least 3 years' experien ce in the relevant job, except in cases where the 
applicant who has graduated from colle ge is planning to engage in transl ation, interpretation or instruction 
in languages. 
  Specialist in Humanities/ 
International Services 
 
3 The applicant should receive no less salary than a Japanese national would receive for comparable 
work.  
The following conditions are to be fulfilled. 
1 The applicant must have been employed at the main office, or branch office or other office abroad for 
at least 1 year immediately prior to the transfer to Japan while engaging in a job which falls under the 
"Engineer" provided in Annexed Table I (2) of the Immigration Control and Refugee Recognition Act or 
"Specialists in Humanities/Inte rnational Services" categories. 
 Intra-company Transferee 
2 The applicant should receive no less salary than a Japanese national would receive for comparable 
work. 
1 In cases where the applicant is to engage in theatrical performances or musical performances, the 
following conditions are to be fulfilled, except for cases which are stipulated in Item 2. 
a The applicant must fulfill one of the following requirements at to the type of performance in which he 
will engage, except in cases where to tal receipts for the applicant's pe rformance amount to 5 million yen or 
more a day. (If it is a group performance, then  the group's receipts must exceed this amount.) 
(1) The applicant meets the standards set by a fo reign national or local government agency or an 
 equivalent public or private organization. 
(2) The applicant has spent a mini mum of 2 years at a foreign edu cational institution studying subjects 
 relevant to the type of perf ormance in which he will engage. 
(3) The applicant must have a minimum of 2 years' e xperience outside Japan in th e type of performance in 
 which he will engage. 
b The applicant must be invited by an organizati on which fulfills the following requirements. However, 
this does not apply when entertainers are invited to gi ve theatrical or musical performances of ethnic music 
by ethnic restaurants other than those classified as places for the entertai nment of customers under 
Article 2-1, Paragraph 1 or 2 of the Law on Busine ss Relating to Public Morals (Law No. 122 of 1948). 
(1) The operator or the manager of the inviting organi zation should have at least 3 years' experience in 
 show business involving foreign nationals. 
(2) The organization must employ at le ast 5 full-time employees in Japan. Entertainer 
(3) The organization is inviting foreign entertainers at  a ratio of 10 or fewer fo reign entertainers, including 
the applicant, to each full-time employee, who ha s been continuously employed by the organization 
concerned for a minimum of 6 months (including ma nagers, operators and other full-time employees), 
except in cases where the show is to  take place at a facility provided fo r by the provisions of Article 1, 
Paragraph 2 of the Show Business Site Act (Law No. 137 of 1948). 
Table (cont'd)  WT/TPR/M/142/Add.1 
 Page 243 
 
 
 Status of Residence Criteria  
(4) The operator or manager or other regular employees  of the organization must not have been punished 
for an offense under the provisions of Article 73-2 of  the Immigration Act, or  Article 6 or 12 of the 
Anti-Prostitution Act (Law No. 118 of  1956). However, this does not apply when 5 years have passed 
following completion of the sentence or since the da te of the remission of the suspension of execution 
of the sentence period. 
(5) The operator or manager or other regular empl oyees of the organization must not have committed 
collectively or customarily any violent offense provided for in Article  5 of the Enforcement 
Regulations of the Law on Business Relating to Pub lic Morals (National Public Order Committee Rule 
no.1 of 1985). 
c The facility at which the app licant's entertainment is to take place must meet the following 
requirements. In cases where there is no foreigner at the facility with the status of residence of 
"Entertainer" and engaging in entertainment activities,  the facility must meet requirements (6) and (7). 
(1) The audience for the performance must not be  limited to any specific groups or individuals. 
(2) In cases where the facility falls, under Article 2,  Paragraph 1, Item 1 or 2 of the Law on Business 
Relating to Public Morals, the follo wing conditions are to be fulfilled. 
(a) There must be a minimum of 5 employees whose duties are primarily serving customers. 
(b) It should be clear that the foreign performers hol ding the status of residence of "Entertainer" are not 
required to take part in serving customers. 
(3) There must be a stage of at least 13 square meters. 
(4) There must be a waiting room for the entertainers of at least 9 square meters. If the number of 
entertainers is greater than 5, ther e must be an additional 1.6 square me ters for every additional entertainer. 
(5) There must be at least 5 employees at the facility. 
(6) The operator or manager or other regular employ ees of the organization which manages the facility 
concerned must not have been punished for an o ffense under the provisions of Article 73-2. of the 
Immigration Act, or Article 6 or  12 of the Anti-Prostitution Act. Ho wever, this requirement does not 
apply when 5 years have passed following the comple tion of the sentence or since the date of the 
remission of the suspension of execution of the sentence period. 
(7) The operator or manager or other full-time empl oyees must not have collectively or customarily 
committed any violent offense as provided for in Ar ticle 5 of the Enforcement Regulations of the Law 
on Business Relating to Public Morals. 
d The applicant should receive paymen t of at least 200,000 yen per month. 
 
2 When the applicant is to engage in theatrical performances falling into  one of the following a, b or c 
categories, in the case of a, he must be remunerated as specified in d above. In the case of b or c, the 
stipulations in (6) and (7) of c above must be fulfille d and he must be remunerated as specified in d above. 
a The applicant is invited by a national or local gove rnment agency or by a corporation which has been 
directly established under a Japanese law or specially  established under a Japanese special law, or by a 
school, an advanced vocational school, or a vocati onal school provided for under the provisions of the 
School Act (Law No. 26 of 1947). 
b The applicant is invited by an organization which has been established with funds from national or 
local government agencies for the purpose of cultura l exchange between Japan and foreign countries. 
c The applicant is invited to enga ge in activities related to theatrical  or musical performances by an 
organization which operates a facilit y of 100,000 square meters or mo re and which regularly arranges 
theatrical or musical performances by foreigners in order to attract potential t ourists with a theme of 
foreign settings or culture, and the applicant is to pe rform the said activity at the aforementioned premises. 
 Entertainer 
3 In cases where the applicant is to engage in public entertainment other than theatrical or musical 
performances, he should receive no less salary than a Japanese national would receive for comparable 
work. 
Table (cont'd) WT/TPR/M/142/Add.1 
Page 244  
 
 Status of Residence Criteria  
4 In cases where the applicant is to engage in show  business other than public entertainment, he should 
engage in one of the following activities and should r eceive no less salary than a Japanese national would 
receive for comparable work. 
a Activities relating to the advertisement of goods or business 
b Activities relating to the production of broadcast programs (including cable broadcast programs) or 
movies 
c Activities relating to the taking of commercial-use photographs Entertainer 
d Activities relating to the record ing of commercial-use records 
The applicant should fall under one of the following categories and should receive no less salary than a 
Japanese national would receive for comparable work. 
 
1 A person with at least 10 years' experience in pr eparing foreign cuisine or knowledge of special food 
preparation that originated overseas and is foreign to  Japan (including the period of time spent studying at 
educational institutions in a foreign country while majo ring in the skills concerned) who is to engage in a 
job requiring such skills. 
2 A person with at least 10 years' experience in archit ecture or civil engineering characteristic to foreign 
countries (including the period of time spent studying at educational institutions in a foreign country while 
majoring in the skills concerned) who is to engage in  a job requiring such skills. (If the person concerned is 
to engage in a job under the guidance of a person who has at least 10 year s' experience, his experience of 5 
years would be accepted in lieu of 10 years.) 
 
3 A person with at least 10 years' experience in the ma nufacture or repair of products special to foreign 
countries (including the period of time spent studying at educational institutions in a foreign country while 
majoring in the skills concerned) who is to engage in a job requiring such skills. 
 
4 A person with at least 10 years' experience in the pr ocessing of gems, precious stones or fur (including 
the period of time spent studying at educational institu tions in a foreign country while majoring in the skills 
concerned) who is to engage in a job requiring such skills. 
 
5 A person with at least 10 years' experience in tr aining animals (including the period of time spent 
studying at educational institutions in a foreign country  while majoring in the skills concerned) who is to 
engage in a job requiring such skills. 
 
6 A person with at least 10 years' experience in s eabed digging for oil exploration or development of 
terrestrial heat or the study of the seabed for mine rals exploration (including the period of time spent 
studying at educational institutions in a foreign country  while majoring in the skills concerned) who is to 
engage in a job requiring such skills. 
 
7 A person with at least 2,500 hours' experience in piloting an aircraft who is to engage in a job as a pilot 
of an aircraft used for air transport provided for by Article 2, Paragraph 16 of the Aviation Act (Law No. 
231 of 1947) which a person cannot pilot as a captain wit hout the qualification of pilo t in air transport of an 
airline provided for by Article 24 of the Act. 
 Skilled Labor 
8 A person with at least 3 years' experience in in structing sport (including the period of time spent 
studying at educational institutions in a foreign country while majoring in the skills concerned and 
engaging in the sport with remuneration) who is to engage in a job requiring such skills or a person who 
has competed in an international even t such as the Olympics or World Championships and is to engage in a 
job requiring such skills concerni ng instruction in the sport.  
Table (cont'd)  WT/TPR/M/142/Add.1 
 Page 245 
 
 
 Status of Residence Criteria  
9 A person with at least 5 years' experience in assessing,evaluating,and ma intaining the quality of 
wine,and providing wine (hereinafter referred to as "wine assessment,etc.")(including the period of time 
spent studying at educational institutions in a forei gn country while majoring in  the skills concerned)who 
falls under one of the following categories and is  to engage in a job requiring such skills. 
a A person who has achieved excellence in a contest concerning skills for wine assessment,etc. held on 
an international scale (hereinafter referred to as "international sommelier contest"). 
b A person who has entered an international sommelier co ntest ( limited to those that restrict the number 
of contestants to one per country). Skilled Labor 
c A person who has a qualification for skills concerni ng wine assessment, etc. that is certified by a 
national (including foreign countries ) or local government (including fore ign local governments ), or public 
or private organization equivalent th ereto and is designated by the Mini ster of Justice in the Official 
Gazette. 
 
 
__________