WORLD TRADE  
ORGANIZATION  G/STR/Q1/JPN/9 
20 October 2009 
 (09-5152) 
Working Party on 
State Trading Enterprises Original:   English 
 
 
 
STATE TRADING 
 
Replies to Questions Posed by AUSTRALIA1 Concerning  
the New and Full Article XVII Notification of JAPAN2 
 
  The following communication, dated 19 October 2009, is being circulated at the request of the Delegation of Japan.    
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Questions 
 
Ministry of Agriculture, Forestry & Fisheries 
 
 During 2007, Japan introduced new administ rative arrangements for determining the 
domestic price (resell or sale price) for the sale  of imported wheat and ba rley into the domestic 
market.   
 
• Can Japan please explain how these and othe r new administrative arrangements for 
determining the sale price of wheat and barley operate?   
 
Reply
 
 1. Until March 2007, Government of Japan determined the price for selling imported wheat and 
barley to domestic users once a year aiming at  stabilizing the household finance of domestic 
consumers.   
 
2. In April 2007, Government of Japan amende d the Staple Food Law (the Law for Stabilization 
of Supply, Demand and Prices of Staple Food) and introduced the following new administrative 
arrangements for determining the sale price of wheat and barley;   
  i) Regarding the major wheat varieties, G overnment of Japan determines the sale price 
twice a year based on the average purchase price dur ing a certain period of time in the past.   
  ii) Regarding the wheat varieties other than  those major varieties, such as Prime Hard 
wheat or Durum wheat, and all varieties of barl ey, the domestic sale prices are determined by 
the Simultaneous Buy and Sell (SBS) System, which is a system of joint bidding by an importer and a domestic user. 
 
                                                     
 
1 G/STR/Q1/JPN/7.   
2 G/STR/N/12/JPN.    G/STR/Q1/JPN/9 
Page 2  
 
  • Could Japan please explain how the separat e duty free quotas (free from tariffs and 
mark-up duties) for imported wheat (und er the New Staple Food Law Enforcement 
Ordinance, Article 13-2 and the New Staple  Food Law Enforcement Regulations Article 
25) are administered and operated?   
 
Reply
 
 1. The two separate quotas in question are not administered through state trading, but through 
private trading with specific requirements.   
 
2. Regarding the quota based on the provisions  of Article 13-2 of the Staple Food Law 
Enforcement Ordinance, the imported wheat that is  exempt from \9.8/kg tari ff in accordance with the 
Act on Special Provisions of the Customs Act pert aining to the Enforcement of the Agreement under 
Article VI of the Treaty of Mutual Cooperation a nd Security between Japan and the United States of 
America, regarding Facilities and Areas and the Status  of United States Armed Forces in Japan, shall 
also be exempt from the levy of \45.2/kg in acco rdance with the said provision of the Staple Food 
Law Enforcement Ordinance.   
 3. Regarding the other quota that is based on the provisions of Article 25 of the Staple Food Law 
Enforcement Regulations, the wheat flour which is im ported by persons who run a hotel registered by 
the Article 3 of the Act for the Development of Inte rnational Tourist Hotels shall be exempt from the 
levy of \62.6/kg on the conditions that the said persons receive the certification in accordance with the 
Article 2-1 of the Act on Temporary Measures concerning Customs Enforcement Ordinance.  The 
tariff of 25 per cent ad valorem shall be collected and therefore this quota is not duty-free.    Follow-up question to Japan 
 
 Japan will recall Australia's earlier questions  about Japan's import arrangements for 
sugar (G/STR/Q1/JPN/6).  Australia understands that the Sugar and Starch Price Adjustment 
Law,  Article 5, sets out conditions such that importers are under an obligation to sell their 
imports to ALIC to get preferential treatment.    Question 1 
 
• Could Japan please explain the obligations set out under the Sugar and Starch Price 
Adjustment Law  (and other relevant laws) which require sugar importers to sell, or 
purchase, imported sugar to, or from, ALIC in order to receive preferential market 
access.   
 Reply
 
  Japan would like Australia to understand that th e sugar price adjustment system is not state 
trading.    
 
 The Sugar and Starch Price Adjustment Law sets out the conditions that any importer who 
imports designated sugar needs to sell their impor ted designated sugar to ALIC and purchase them 
back from ALIC at once.    
 The quantity imposed the primary levy (low se ll-back price) is determined from actual import 
of the past by each importer.      G/STR/Q1/JPN/9 
 Page 3 
 
 
  Question 2 
 
• In addition to providing details to the above question, Australia requests that Japan also 
provide data regarding ALIC's purchases and sales of " Designated Sugar " from and to 
importers.   
 Reply
 
  Please refer to "Statistics of Customs Clearance of Sugar" on the website below.   
http://sugar.lin.go.jp/japan/data/e.htm
 
 
Question 3  
 
• Australia also requests additional data, ov er the last five years, showing when the 
"Average Import Price"  has been higher than the " Rationalisation Target Price " 
(domestic price).   
 
Reply  
 
 Over the five years, there is no case that th e average import price has been higher than the 
domestic price.    
Question 4  
 
• Could Japan also explain the related admini strative arrangements, including importing 
and on-selling rights, together with any pricing arrangements?   
 
Reply
 
  As for the procedure of importing designated sugar, please refer to the answer of the 
Question 1.   
  This procedure does not impose any restriction on importing and on-selling rights of designated sugar importers.    
  
 
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