WORLD TRADE  
ORGANIZATION  WT/REG198/6 
3 February 2009 
 (09-0457) 
Committee on Regional Trade Agreements Original:   English 
  
 
ECONOMIC PARTNERSHIP AGREEMENT BETWEEN JAPAN AND MEXICO 
 
Questions and Replies
 
  
 The following communication, dated 30 January 2 009, is being circulated at the request of the 
delegations of Japan and Mexico.   This document reproduces the follow-up
 questions addressed to the Parties following the 
51st Session of the CRTA and the responses submitted. 
 
_______________ 
  Questions from the Delegation of the United States
 
 
 
TRADE IN GOODS 
 1. During the CRTA meeting, when responding to  the U.S. question of how the Parties can 
consider the limited coverage of agriculture as appropriate under Article XXIV, Japan asserted 
that the Agreement liberalizes all trade so it is consistent with Article XXIV.  
 While the United States appreciates this response, we note that the “liberalization” of 
tariffs is not the same as tariff  “elimination,” an d of course it is the amount of trade on which 
tariffs have been eliminated that is relevant under Article XXIV.  In this light, could Japan please reconcile the failure of the Parties to elimin ate tariffs on the vast majority of agricultural 
tariff lines with the requirements of Article XXIV,  particularly given the significant potential 
under this Agreement for Mexico to be a mu ch larger agricultural exporter to Japan? 
 
While GATT Article XXIV paragraph 8 does not specify a quantitative benchmark of 
"substantially all the trade", Japan considers that  there is a general view shared by many WTO 
Members in respect of RTA’s consistency with th e said provision that tariff elimination needs to 
cover at least 90% of trade between the parties to the RTA and that no exclusion of a major sector is 
allowed.  There is also a general view that a covera ge ratio should be calculated for all the tariff lines 
as a whole, but not for specific sectors.  
 Under this EPA, 96.5% of the bilateral tr ade in volume in 2002-2004 is subject to duty 
elimination within ten years, and there is no exclusion of a major sector.  
 In light of these elements, it is considered that  this EPA does fulfil the "substantially all the 
trade" requirement. 
 
 
 WT/REG198/6 
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  Follow-up questions to U.S. Question 22
 
 
2. Paragraph 24 of the Factual Presentation no tes lines that will remain dutiable at the end 
of implementation period (2015).  Unfortunate ly the written response to our question on this 
paragraph was confusing. 
 If the lines “whose duty is to be reduced or remained equivalent to MFN” contains 
products excluded from duty elimination, why were these lines separated from the 1032 other 
lines that were noted as excluded from duty elimination?   
 
 The 1032 lines referred in the paragraph 24 of the Factual Pr esentation belong to category X 
only.  But there are 26 lines involving two categories (X and other categories such as A, B4, B8, Ca or 
Q) because of their detailed categorization furt her than HS-9 digit level on which Japanese tariff 
schedule is based.   
3. Additionally the response indicated that some of the 26 lines are in categories A, B4, B8, 
and Ca.  Are these not subject to full duty elimination?  The Japan-Mexico EPA notes that 
duties for products in category A shall be elim inated immediately upon implementation.  B4 
and B8 should be eliminated within four or eight years respectively.  Please indicate which 
products noted as category A, B4, B8, and Ca a re not subject to complete tariff elimination. 
 The goods in categories A, B4, B8 and Ca are s ubject to full duty elimination in the schedule.  
  In respect of 26 lines as referred in the ques tion, all of those 26 lines respectively partly 
include goods categorized as X, and the rests are cate gorized as A, B4, B8 or Ca.  And they are noted 
as such in the schedule explicitly.  
Follow-up questions to U.S. Question 23
 
 
4. Please confirm that there is no commitmen t to liberalize trade in those products 
“subject to consultations.”  Please explain if this is not true. 
 There is no commitment to liberalize trade in these products.  In accordance with 
subparagraph 3(a) of Article 5 of Chapter 3 “trade  in goods”, for products designated in the Schedule 
in Annex1, the Parties shall enter into consultation process for further liberalization on the request of 
either Party. 
 
5. Please confirm that products “whose tariff rates are to remain unchanged until 2015” 
are not subject to any liberalization.  Additional ly consultation regarding further liberalization 
can not be undertaken until 2015.  Please explain if this is not true.  
 In accordance with the subparagraph 3(a)(ii) of Article 5 of the EPA, the products “whose 
tariff rates are to remain unchanged until 2015” could be subject to consultations for the liberalization 
of trade between the Parties after four years of the date of entry into force of the EPA.  Hence 
consultations could take place in accordance with this Article, even before 2015. 
  
 
      WT/REG198/6 
 Page 3 
 
 
  Question raised during the CRTA meeting  
 
6. What was the range of in-quota tariff in the Protocol which entered into force on 
1 April 2007? 
 As regards current in-Quota rates for the goods  agreed in the Protocol, see the table below: 
 
Tariff item 
number Description of goods In quota rate agreed  
in the Protocol 
0201.20 - Other cuts with bone in: 
 Quarter 
 Other   
 
34.6% 
0201.30 - Boneless  30.8% 
0202.20 
0202.30  
 
 - Other cuts with bone in  
- Boneless:  Loin  
 Chuck, Clod and Round  
 Brisket and plate  
 Other  30.8% 
 30.8% 
30.8% 
30.8% 
34.6% 
0206.10 - Of bovine animals, fresh or chilled: 
 Internal organs and tongues  
 Other  
7.6% 
 
0206.21 
 - Of bovine animals, frozen: 
-- Tongues   
7.6% 
0206.22 -- Livers  11.5% 
0206.29  
 
  -- Other 
 Cheek meat and head meat  
 Other: 
 Internal organs   Other   
30.0% 
 
7.6% 19.1% 
0207.11 -- Not cut in pieces , fresh or chilled  10.7% 
0207.12 -- Not cut in pieces, frozen  10.7% 
0207.13 -- Cuts and offal, fresh or chilled  7.6% (Legs with bone in), 
10.7% (Other) 
0207.14 -- Cuts and offal, frozen: 
 Livers 
 Other: 
 Legs with bone in  
 Other   
 
 
6.8% 
8.5% 
1602.31 -- Of turkeys: 
 Guts, bladders and stomachs, whole and pieces  thereof, 
 simply boiled in water 
 Other:  Containing meat or meat offal of bovine animals or 
 swine  
 Other  
 
 
 19.1% 
1602.32 -- Of fowls of the species Gallus domesticus: 
 Guts, bladders and stomachs, whole and pieces  thereof, 
 simply boiled in water  Other: 
 Containing meat or meat offal of bovine animals or 
 swine   Other   
 
  
19.1% 
 3.6% WT/REG198/6 
Page 4  
 
  Tariff item 
number Description of goods In quota rate agreed  
in the Protocol 
1602.39 -- Other: 
 Guts, bladders and stomachs,  whole and pieces thereof, 
 simply boiled in water 
 Other:  Containing meat or meat offal of bovine animals or swine  
 Other  
 
 
 19.1% 
1602.50   
 - Of bovine animals: 
 Guts, bladders and stomachs,  whole and pieces thereof, 
 simply boiled in water 
 Other: 
 Internal organs and tongues of bovine animals  Other: 
 Containing less than 30% by weight of a meat and 
 edible meat offal other than internal organs and  tongues 
 Other: 
 Dried after simply boiled in water   Beef jerky or corned beef  
  Other: 
  In airtight containers, containing vegetables    Other  
  
 
  
 
  
 
 9.0% (Beef jerky),  
19.1% (Corned beef) 
19.1% 
0805.10 - Oranges 8.0% 
(If imported during the period from 1 June to 
30 November) 
16.0% 
(If imported during the 
period from 1 December to 31 May) 
 
 
TRADE IN SERVICES AND INVESTMENT 
 
Follow-up questions to U.S. Question 25   
 7. Parties note that their reservations to  the EPA obligations on local presence 
(Article 100) and national treatment (Article 58) could provide guidance to service suppliers 
regarding the imposition of market access limitat ions described in subparagraphs 2(e) and 2(f) 
of GATS Article XVI. 
 Could Parties confirm that, to the extent th ey maintain quantitative restrictions of the 
kinds described in subparagraphs 2(a) through 2( d) of GATS Article XVI, these restrictions are 
nowhere listed in the text or annexes of the EPA? 
   To the extent that quantitative restrictions d escribed in subparagraphs 2(a) through 2(d) of 
GATS Article XVI are discriminatory against foreign services or service suppliers, they are reflected 
in the reservations on the national treatment ob ligations.  Additionally, Article 108 of the EPA 
stipulates that the Parties shall be bound by their commitments under the GATS, including those relating to the market access. 
 
   WT/REG198/6 
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  8. With respect to non-discriminatory quantitative restrictions that may be maintained or 
imposed by Parties (such as those described in GA TS Article XVI.2(a) through XVI.2(d)), is it 
accurate to say that 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 di scipline are far beyond those unde r the GATS, where market-access 
commitments are undertaken only in the sectors spec ified in Members’ Schedules.  As the Parties 
decided to adopt  “negative –list” approach in the Services Chapter including local Presence 
discipline, the Parties are committed not to ad opt non-discriminatory 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 26
 
 9. Parties suggest in their response that Par agraph 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 clas sifiable 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. 
Follow-up questions to U.S. Question 27
 
 10. Parties suggest in their response that their broad reservations for regulation of services 
not technically feasible at the time of entry of  the EPA were necessary to “reserve the right to 
impose appropriate measures…”. 
 Could Parties explain how – in the absence of these Annex reservations – the obligations 
of the EPA would interfere with their ability to “impose appropriate measures” in respect of 
new services? 
  There may be a case where new services which coul d 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.  The 
Parties wished to reserve the right to impose appropriate measures in respect of new and unknown 
services in order that such measures will not be construed as contravening the obligations under the 
EPA. 
 
11. Parties’ Annex 7 reservations for “new servic es” apply only with respect to their EPA 
obligations on national treatment, most-favoured  treatment and local presence.  Could Parties 
explain why they envisage having to impose regulations on “new” services in a manner that 
discriminates against or among foreign suppliers specifically?  
 WT/REG198/6 
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   There may be a case where new services which coul d 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.  The 
Parties wished to reserve the right to impose appropriate measures in respect of new and unknown 
services in order that such measures will not be construed as contravening the obligations under the 
EPA. 
 
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