WORLD TRADE  
ORGANIZATION  WT/REG234/3 
13 January 2009 
 (09-0119) 
Committee on Regional Trade Agreements  Original:   English 
  
 
STRATEGIC ECONOMIC PARTNERSHIP AGREEMENT  
BETWEEN JAPAN AND CHILE 
 
Questions and Replies
 
 
 
 The following communication, dated 8 January 2009,  is being circulated at the request of the 
delegations of Japan and Chile.   This document reproduces the follow-up
 questions addressed to the Parties following the 
51st Session of the CRTA and the responses submitted. 
 
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Questions from the Delegation of the United States  
 
TRADE IN GOODS 
 1. The United States would like to note that the “ liberalization” of tariffs is not the same as 
tariff  “elimination,” and that it is the amount of trade on which tariffs have been eliminated
 
that is relevant under Article XXIV.   
 In this light, could Japan and Chile plea se reconcile the failure of the Parties to 
eliminate  tariffs on the vast majority of agricultural tariff lines with the requirements of 
Article XXIV, particularly given the significant potential under this agreement for Chile to be a 
much larger agricultural exporter to Japan? 
   Pending agreement between WTO Members, GATT Article XXIV paragraph 8 does not 
specify a quantitative benchmark for assessing “subs tantially all the trade” and moreover does not 
mandate a sector by sector assessment. The only cond ition regarding sectors that is clear in Article 
XXIV is that no exclusion of a major sector is allowed, although Member’s views differ on what 
constitute a major sector. In that sense, th e EPA does not exclude any (major) sector. 
 Pertaining to paragraph 18 of the factual presentation:
 
 2. With regards to products that are subject to negotiation in 2009 and 2011, please clarify 
what real changes Japan or Chile expect to occur vis-à-vis  sensitivities and/or domestic structure 
adjustment that will allow the parties liberalize trade in these products?   
 Because the EPA entered into force only approximately a year ago, it is premature for the 
Parties to predict what real ch anges will occur for these products. 
 
3. What distinguishes products subject to negot iation in 2009 from those products subject 
to negotiation in 2011?  WT/REG234/3 
Page 2  
 
  The products which will be subject to negotiati on on the request of either Party in 2009 and 
2011 were determined as the result of the negotiations , taking into account the interests and concerns 
of the Parties. 
 
TRADE IN SERVICES 
 
Follow-up questions to U.S. Question 14 
 
 4. Parties note that reservations to the EPA obli gations on national treatment (Article 107) 
and local presence (Article 109) for cross-bord er trade in services “can be construed as 
discriminatory or non-discriminato ry quantitative restrictions” and “could be interpreted as 
setting forth a commitment of the kind include d in subparagraph 2 of GATS Article XVI”. 
 Could parties confirm that, to the extent th at quantitative restrictions imposed by either 
Party do not contravene the EPA’s national treatment or local presence obligations, these 
restrictions are nowhere identified in  the text or annexes of the EPA? 
  
 Financial services are not stipulated in th e CBTS Chapter. Market Access for Financial 
Services is stipulated by Article 119 in Chapter 10. 
 
5. With respect to non-discriminatory quantitative restrictions that may be maintained or 
imposed by Parties, is it accurate to say th at the EPA provides no further liberalization beyond 
Parties’ GATS commitments? 
 The commitments made by the Parties regard ing non-discriminatory quantitative restrictions 
with respect to Local Presence discipline are far beyond those under the GATS, where Market-Access 
commitments are undertaken only in the sectors specified in Members’ Schedules. As the Parties decided to adopt “negative-list” approach in th e CBTS Chapter including Local Presence discipline, 
the Parties are committed not to adopt non-discrimin atory quantitative restrictions concerning Local 
Presence except those for which the Parties made reservations in Annexes 6 and 7. 
 
Follow-up comment to U.S. Question 15
 
 
Japan suggests in its response that Paragraph 59.B.2 of the Introduction to the 
Provisional Central Product Classification (CPC)  “admits that certain services may not be 
classified under the categories specified in the CPC.” 
 Paragraph 59.B of the Introduction to the Provisional CPC  addresses a situation in which 
particular services may appear to be classi fiable under two or more CPC categories.  The 
paragraph prescribes rules for determining the most  appropriate classification for a particular 
service.  The paragraph does not suggest that there are services (existing or “new”) that may not 
be classified under the CPC; on the contrary, it  recognizes the fact that not all services will be 
explicitly described and provides guidance on how to determine which CPC category provides 
the best fit.   Paragraph 59 does not detract from or contradi ct the essential principle expressed in the 
Preface and Paragraph 21 of the Introduction to the Provisional CPC —that it is a system of 
categories covering goods and services that is exhaustive and complete.  Paragraph 59.B.2 
reinforces this principle by providing for a meth od of classification for every possible service. 
  WT/REG234/3 
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  Follow-up questions to U.S. Question 16  
 6. Japan suggests in its response that its broad reservation for regulation of services not 
technically feasible at the time of entry of th e EPA was necessary to “ reserve the right to impose 
appropriate measures in respect of new services”. 
 Could Japan explain how – in the absence of this Annex reservation – the obligations of 
the EPA would interfere with its ability to “impose appropriate measures”?  
 Japan considers that there may be a case wher e new services which could not be foreseen at 
the time of entry into force of the CPC and the EPA emerge in the future as a consequence of 
technological advances. Japan wished to reserve th e right to impose appropriate measures in respect 
of new and unknown services in order that such meas ures will not be construed as contravening the 
obligations under the EPA.  
7. Japan’s Annex 7 reservation for “new servic es” apply only with respect to its EPA 
obligations on national treatment, most-favor ed treatment and local presence.  Could Japan 
explain why it envisages having to impose reg ulations on “new” serv ices in a manner that 
discriminates against or among foreign suppliers?  
 Japan considers that there may be a case wher e new services which could not be foreseen at 
the time of entry into force of the CPC and the EPA emerge in the future as a consequence of 
technological advances. Japan wished to reserve th e right to impose appropriate measures in respect 
of new and unknown services in order that such meas ures will not be construed as contravening the 
obligations under the EPA.  
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