WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  WT/TPR/M/243/Add.1 
20 May 2011 
 (11-2509) 
Trade Policy Review Body 
15 and 17 February 2011 Original:   English 
 anglais 
 inglés 
TRADE POLICY REVIEW 
JAPAN  
 
Record of the Meeting  
Addendum  
Chairperson:  H.E. Mr. Bozkurt Aran (Turkey) 
 
 This document contains the advance writte n questions, and replies provided by Japan.1 
__________________________________________________________________________________ 
 
Organe d'examen des politiques commerciales 
15 et 17 février 2011  
EXAMEN DES POLITIQUES COMMERCIALES 
JAPON 
 
Compte rendu de la réunion
 
Addendum  
Président:  S.E. M. Bozkurt Aran (Turquie) 
  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 
15 y 17 de febrero de 2011 
 
EXAMEN DE LAS POLÍTICAS COMERCIALES 
JAPÓN 
 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Sr. Bozkurt Aran (Turquía) 
 
 En el presente documento figuran las pre guntas 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/243/Add.1 
 Page 3 
 
 
  REPLIES PROVIDED BY JAPAN 
 
ARGENTINA  
 
(Translation) 
 
Report by Japan (WT/TPR/G/243 ) 
 
III. J APAN IN THE DOHA DEVELOPMENT AGENDA (DDA) 
 (5) T
RIPS 
 1. In paragraph 22 of its Report, Japan st ates its recognition of the importance of the 
development dimension with respect to intellectual property rights.  Moreover, in October 2010 the Japanese Minister of Foreign Affairs made the following statement:  
"The government of Japan will endeavour to spre ad a global chain of protection of intellectual 
property rights through actively calling on major countries and regions toward acceding in the ACTA 
(Anti Counterfeiting Trade Agreement)".  (a) Would it be possible for the ACTA to take into account the interests of the developing 
countries, considering that, overall, these countri es have been absent from the ACTA negotiating 
process? 
 
RESPONSE 
 
First of all, under the TRIPS agreement Article 1, Members may implement in their laws more 
extensive protection than is required by the agre ement. Consistent with this provision, ACTA 
Participants voluntarily aimed to establish a new in ternational framework that provides a tool for 
more effectively combating the global proliferation of counterfeiting and piracy. In addition, ACTA 
Participants agreed that they shall endeavour to  provide assistance in capacity building and technical 
assistance in improving the enforcement of intell ectual property rights to other Parties to the 
Agreement and, where appropriate, to prospective Parties.  
(b) Does Japan consider that transparency could be increased in regard to the ACTA negotiating 
process?  
RESPONSE 
 
All ACTA Participants took into account the transp arency of the process of the negotiations. Press 
releases and other documents were avai lable on each participant's website.  
 
IX. J APAN 'S DOMESTIC POLICIES  
 
(4) A GRICULTURAL REFORM  
 
2. According to paragraph 92, "[i]n March 2010, the new Basic Plan on Food, Agriculture and 
Rural Areas was decided by the Cabinet. (…) The Pl an (…) demonstrates the direction of agricultural 
policies in the mid-term, including (i) introductio n of a new income support direct payment to 
farmers".  (a) Would Japan kindly provide furt her details regarding this Plan? WT/TPR/M/243/Add.1  
Page 4 
 
 
  RESPONSE 
 
In March 2010, the new Basic Plan on Food, Agricult ure and Rural Areas was decided by the Cabinet. 
It aims at raising the food self-sufficiency ratio to 50% by FY2020 (41% in FY2008), and 
demonstrates the mid-term direction of agricultu ral policies, including  i) introduction of a new 
income support direct payment to farmers,  ii) c onversion to a production system more responsive to 
the consumers' demands for quality and safety, and  iii) promotion of farmers' initiatives to expand 
their businesses into food manufacturing and retail ing sectors making use of their products which 
would bring more income opportunities to rural areas. 
 (b) Would Japan please explain the characteristics of the payments aimed at providing income 
support to farmers?  Are these decoupled payments, for example?  
RESPONSE 
 Under the income support direct payment scheme, direct payments are made to farmers for the 
purpose of stabilizing farm management and securing sust ainability of farming, pursuing eventually to 
foster multi-functionality of agriculture.   WTO Secretariat Report (WT/TPR/S/243
) 
 S
UMMARY  
 
3. According to paragraph 8, trade agreements "with countries that are significant exporters of 
agricultural products tend to exclude many of th ese products. (…) These products are also largely 
excluded from the Generalized System of Preference (GSP) scheme".  What would be the conditions under which Japan c ould provide access in regional agreements with 
developing countries and the GSP scheme for agricultural products from such countries? 
 
RESPONSE 
 
Regarding EPAs, Japan has sufficien tly reduced or eliminated tariffs  on agricultural, forestry, and 
fishery products through the negotiations in a manner consistent with Article 24 of GATT. Regarding 
GSP, Japan has revised its GSP sch eme as necessary so far, and will continue to conduct it in an 
appropriate manner.  
 4. According to paragraph 10, "Japan's non-tariff border measures include some import 
prohibitions and quantitative import restrictions  (for example, import quotas on some fish)". 
 
Would the Japanese Government kindly specify what  other quantitative restrictions it applies and 
provide statistical data concerning imports under th ese quotas over a relevant period (the past three 
years, for example)?  
RESPONSE 
 Import quotas are currently imposed on certain fish products and controlled substances listed in the 
Montreal Protocol on Substances that Deplete the Ozone Layer.   WT/TPR/M/243/Add.1 
 Page 5 
 
 
  Please see the attached table for statistical data on imports within the import quotas. 
5. According to paragraph 12, "[t]he Governme nt has recently begun promoting agricultural 
exports, mainly by providing information to consumers overseas". 
Would Japan kindly provide further details regard ing the promotion of agricultural exports?  In 
particular, what are the products involved and what are the specif ic measures pertaining to these 
products? 
RESPONSE 
 
Japan promotes exports of a lot of agricultural products , i.e. rice, beef, green tea, etc. The government 
of Japan takes some measures for promoti ng Japan's agricultural products as follows: 
 
 - Making some brochures and has showed them on the MAFF website  - Setting up Japan pavilions in some inte rnational food show in foreign countries 
 - Holding some business meetings by inviting foreign buyers, etc.  
6. According to paragraph 16, the agricultu ral sector continues to receive substantial 
government support, which involves, inter alia , "in some sub sectors, production controls". 
 Would Japan kindly give further details regardi ng the sub sectors and types of measure involved? 
 RESPONSE  
The supply-demand adjustment for rice and raw m ilk is conducted by producers and farmers' 
organizations based on annual demand estimates and the market trend.  The target volume of the rice (annua l demand estimate) is calculated by the Government based on the 
recent demand trend. The target volume of the raw milk production is calculated by the national 
producer organization based on the domestic demand projected by private entities.  unit:kg
am ount of i m port for quotas
announced duri ng
2007.4.1-2008.3.31amount of i m port for quotas
announced duri ng
2008.4.1-2009.3.31amount of i m port for quotas
announced duri ng
2009.4.1-2010.3.31total
Pollack, M ackerel , cuttle-fish and
squid, Horsemackerel , etc652,032,569 608, 295,667 352, 612,651 1, 612,940,888
unit:US$
Yellow  tail, S aury, adductors of
shell-fish, N iboshi(sm all boiled and
dried fish for seasoni ng), etc50,022,358 48, 750,669 30, 384,646 129, 157,673
unit:sheet
Laver and i ts food preparati ons 234, 239,074 320, 215,310 119, 791,359 674, 245,743
　　　  "A m ount of i m port" is the am ount of i m port under the correspondi ng quota al location.
        T hi s m ay include im port after the year the correspondi ng quotas were al located.table about amount of i m port for i m port quotas i mposed on certai n fish products
notes:This table is based on data at the end of June 2010.WT/TPR/M/243/Add.1  
Page 6 
 
 
  I. E CONOMIC ENVIRONMENT  
 
(2) M ACROECONOMIC POLICIES  
 
7. Paragraph 3 reports that "[i]n response to th e financial crisis, the Government has launched 
four stimulus packages since August 2008.  Th ese were instrumental in containing further 
deterioration of GDP.  The packages have totalled approximately 4.7 per cent of GDP;  significantly 
higher than the average in other OECD countri es that have implemented stimulus packages". 
 (a) Would Japan kindly provide a list of these stimulus packages (type of measure, relevant 
legislation, sector for which the measure is intended, state of implementation of the measure)? 
 
RESPONSE 
 
These stimulus packages were implemented amid th e recession in the wake of the global financial 
crisis.  The main measures of each stimulus p ackage to boost domestic demand and the relevant 
sectors are shown below.  These include budgetary  measures, changes to the tax system, and 
regulatory reforms.  For the status of implementa tion of the measures, the four packages have been 
implemented as planned, except for a part of the "Policy Package to Address Economic Crisis," which was suspended due to scrutiny by the new government in 2009.  
1 Comprehensive Immediate Policy Package (decided on August 29, 2008) 
: Reducing insurance premiums for elderly hea lth care paid by low income people, Reducing 
expressway tolls, etc. 2 Economic Policy Package (decided on October 30, 2008) : Provision of the "Fixed-sum benefit" to ho useholds, Further reducing expressway tolls, etc. 
3 Immediate Policy Package to Safeguard People's Daily Lives (decided on December 19, 2008) 
: Mortgage loan tax cuts, Tax cuts for environmentally-friendly vehicles, etc. 
4 Policy Package to Address Economic Crisis (decided on April 10, 2009) 
: Reducing gift tax for purchasing houses, Gove rnment subsidies for environmentally-friendly 
vehicles purchases, Introducing the "eco point" system for acceleration of the dissemination of environmentally-friendly home electric appliances, etc. 
Links to the summaries of each stimulus package: 
 http://www5.cao.go.jp/keizai1/2008/0918summary-english.pdf http://www5.cao.go.jp/keizai1/2008/081201outline-english.pdf http://www5.cao.go.jp/keizai1/2008/081224summary-english.pdf 
http://www5.cao.go.jp/keizai1/2009/0420summary-english.pdf 
 (b) Does Japan intend to notif y the WTO of these measures? 
 
RESPONSE 
 
These measures have been listed in a series of  "reports to the TPRB from the DG on trade-related 
developments" (WT/TPR/OV/12, WT/TPR/OV/13, etc.).  (c) Does Japan plan to adopt further stimulus packages in 2011 and, if so, would it please provide details regarding these new schemes? 
  WT/TPR/M/243/Add.1 
 Page 7 
 
 
  RESPONSE 
 
The current priority is that the Government stead ily implements "The Three-Step Economic Measures 
for the Realization of the New Growth Strategy (Cabinet Decision, September 10, 2010)" which was 
formulated last autumn so as to  ensure that Japan will overcome deflation and achieve autonomous 
economic recovery. 
 Meanwhile, the Government will take decisive acti ons if necessary, depending upon the economic and 
employment conditions, while remaining vigilant against the downside risks. (See Fiscal 2011 
Economic Outlook and Basic Stance for Economic and Fiscal Management, Decided by the Cabinet 
on January 24, 2011: http://www5.cao.go.jp/keizai1/2011/0124mitoshi-e.pdf.) 
 8. According to paragraph 9, "[t]he servi ces sector has been relatively sheltered from 
competition (both domestic and international).  Th e key element to boosting productivity in services is 
raising competition (…) Increased foreign co mpetition would also benefit the economy". 
 
Does Japan intend to take measures to promote comp etition in services markets and, if so, could it 
indicate what these measures would be and to which services sector(s) they would apply? 
 
RESPONSE 
 
As the service sectors account for about 80% of Japan's GDP and 78% of its employment, Japan 
certainly recognizes the importance of liberalizing th e service sectors for growth and competitiveness 
and has been taking various steps to promote that liberalization. For instance, in June 2010, the 
Cabinet issued a decision entitled "New Growth Stra tegy," which sets forth strategies for achieving a 
strong economy to return Japan to economic heal th. Furthermore, in November 2010, the Cabinet 
issued a decision entitled "Basic Policy for Comp rehensive Economic Partnerships," where it 
expressed its intention to further promote necessary regulatory reforms in the interest of the 'open up 
the country' vision. In addition, in March 2010,  the "Subcommittee on Regulatory and Institutional 
Reform" was established under the Government Revitali zation Unit. As for the liberalization of trade 
in services, Japan remains strongly committed to  the DDA negotiations. The sectors with Japan's 
focus of interest are computer-related services, telecommunications, construction and related 
engineering services, as well as distribution services, financial services and maritime transport 
services. The basic principle for Japan is that th e comprehensive liberalization of trade in services 
should be achieved in a way that benefits all Me mbers, including developing countries. Japan is 
determined to further promote the liberali zation of services sectors both domestically and 
internationally.  
 
II. T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
 (4) T
RADE AGREEMENTS AND ARRANGEMENTS  
 
(ii) Regional trade agreements 
 9. Paragraph 30 notes that "[a]s the authorities have not, in most instances, conducted 
quantitative analysis on the effects of FTAs on Japan's trade before or after th e entry into force of 
these agreements, their economic benefits are unclear".  In the absence of such analysis, what are Japan's grounds for excluding certain agricultural products 
from the scope of trade agreements? 
 WT/TPR/M/243/Add.1  
Page 8 
 
 
  RESPONSE 
 
The agricultural products excluded from liberalization are decided, based upon negotiations with the 
countries concerned, considering the impact  on the domestic agriculture and so on.  
 
(6) F OREIGN INVESTMENT REGIME  
 
10. According to paragraph 66, the Government adopted a New Growth Strategy in June 2010, 
under which the promotion of FDI was considered as  one of the most important elements to secure 
growth.  (a) Would Japan kindly explain what this new growth strategy involves?  
RESPONSE 
 The "New Growth Strategy" mentions the necessity of domestic reform for unifying the Asian market 
and facilitating the flow of people,  goods and money between Japan and the world, which leads to 
increased FDI.  
For example, Japan plans to in troduce a new scheme which gives global (not limited to foreign) 
companies preferential treatment in terms of cor porate tax with the aim of making Japan's business 
environment more appealing.   (b) What changes does this strategy en tail for the foreign investment regime? 
 RESPONSE  
Based on the "New Growth Strategy", a "program  for promoting Japan as an Asian business center 
and foreign direct investment into Japan" (tenta tive name) will be drawn up by the summer of 2011. 
This program will include system reforms and othe r measures to ensure smooth flows of people, 
goods and funds with the aim of making Japan 's business environment more appealing. 
 1. According to paragraph 67, the Government is  currently considering lowering its relatively 
high statutory corporate tax rate, which can be a deterrent to FDI, and broadening the tax base. 
Would Japan kindly provide further details regarding the changes under consideration? 
 RESPONSE  
In FY2011 Tax Reform, the effective corporate tax ra te, which includes national and local taxes, will 
be reduced by about 5% in order to promote domes tic investment and job creation through enhancing 
Japanese companies' internationa l competitiveness as well as improving the environment for business 
establishment (for your reference, the rate will be reduced from 40.69% to 35.64% in Tokyo). For this 
purpose, the statutory corporate tax will be reduced from 30% to 25.5% by 4.5%. 
 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
 
(1) I NTRODUCTION  
 
2. Paragraph 1 states that "[ t]he Government introduced expansionary fiscal measures in 
FY2009 and in FY2010 in order to recover from the latest recession, but it is ambiguous whether 
these measures are temporary, and some state owne d bodies were established to inject funds into 
private companies, perhaps in the context of indu strial policies.  Although 'buy Japanese' programmes  WT/TPR/M/243/Add.1 
 Page 9 
 
 
  are not prevalent, there are some programmes that  aim to promote the consumption of domestic goods 
(timbers)".  Would Japan kindly provide details regarding the following:  
(a) What are the expansionary fiscal and fund in jection measures referred to in the Secretariat 
Report?  
RESPONSE 
 
As fiscal measures, Japan organized supplem entary budgets in FY2009 and FY2010. The first 
supplementary budget in FY2009 that included e xpenditures related to the "Policy Package to 
Address Economic Crisis" (14.7 trillion yen) was approved in May 2009. The second supplementary 
budget in FY2009 that included expenditures relate d to the "Emergency Economic Countermeasures 
for Future Growth and Security" (7.2 trillion ye n) was approved in Febr uary 2010. The FY2010 
supplementary budget that included expenditur es related to the "Comprehensive Emergency 
Economic Measures in Response to the Yen's Appr eciation and Deflation" (4.9 trillion yen) was 
approved in November 2011.  As for the second question, the Enterprise Turnar ound Initiative Corporation (ETIC) was established 
in October 2009 as a limited-term (with a mandate of  five years) joint stock company that provides 
financial support as well as direct management su pport through the dispatch of management and 
business revitalization professionals, with the objective of restructuring of regional economy by revitalizing key industries.  (b) Are these measures currently in effect and, if so, until when? 
 
RESPONSE 
 
Although it depends on the necessity and content of each measure as to how long it will be 
maintained, Japan will take appropriate measure s when necessary, while carefully considering 
economic trends. 
 
(c) What are the "'buy Japanese' programmes" mentioned in the Secretariat Report?  
RESPONSE 
 
Japan has no "Buy Japanese" programs at all. C oncerning the wood which is mentioned in the 
Secretariat Report, it seems to refer to "the Ac t for the Promotion of Use of Wood in Public 
Buildings". This Act, however, intends to boost the use of wood as a whole in public buildings, 
regardless of its country of origin. The Act, relate d rules and regulations are consistent with the non-
discrimination and national treatment principles in WTO rules, especially the Agreement on 
Government Procurement. 
 
(d) Does Japan intend to notify these programmes to the WTO? 
 
RESPONSE 
 
Japan has no "Buy Japanese" programs at all. C oncerning the "wood" which is mentioned by the 
Secretariat Report, it seems to be regarding "the Ac t for the Promotion of Use of Wood in Public 
Buildings," which intends to boost the use of wood as a whole in public buildings, regardless of its 
country of origin. This act is not a "Buy Japanese" program and Japan does not need to notify to the 
WTO. WT/TPR/M/243/Add.1  
Page 10 
 
 
  3. According to paragraph 5, the share of fore ign suppliers in the total value of government 
procurement has declined in recent years, as well as that of procurement of overseas goods and 
services supplied by foreign suppliers. 
 
How does Japan explain this declining share of foreign suppliers in government procurement? 
 
RESPONSE 
 
Japan is conducting its government  procurement appropriately based on the principles of national 
treatment and non-discrimination.  Japan considers th at the statistics are the result of an appropriate 
procurement process based on these principles.   4. According to paragraph 6, about 46 per cen t of Japanese Industrial Standards (JIS) were 
aligned to international standards in 2009.  The figure has remained unchanged since the previous 
Trade Policy Review. 
 What measures does Japan envisage in order to ra ise the number of standards aligned with the 
corresponding international standards?  RESPONSE  
For existing corresponding international standards, 48% of the JIS are fully consistent with the 
international standards. In addition, some of th e JIS (48 %) are comparable to the international 
standards, but had been partly modified in th e setting of more detailed provisions in order to 
implement them in Japan. Consequently, 96 % of the JI S are equivalent to international standards. As 
can be seen from the JIS results above, since the establishment of the WTO/TBT Agreement in 
January 1995, Japan has been further promoting cons istency with internationa l standards in order to 
respond to demands inside and outside the country. Japan will continue to promote consistency with 
international standards.   (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
 (i) Customs clearance procedures and valuation 
 
5. According to paragraph 17, all importers must  file a declaration with Customs once the goods 
have been taken into a hozei (bonded) area or othe r designated place.  The Report indicates that there 
are five types of hozei area:  designated hozei area, hozei warehouse, hozei manufacturing warehouse, 
hozei display area, and integrated hozei area.  Would Japan kindly explain the features of these five types of hozei area?  RESPONSE  
To collect cargo that has arri ved from overseas, the imported cargo must undergo customs inspection 
and obtain an import permit from the head of the cu stoms office, after payment of duties and excise 
taxes. The cargo in question prior to receiving th e import permit from the head of the customs office 
is called "foreign goods." 
 However, keeping such goods as foreign goods (i.e.,  without payment of duties and taxes) while kept 
in storage at a warehouse, manufactured and processed at a factory or plant, put on display at an exhibition, transported domesti cally, etc. is not only convenient for commercial purposes but it is 
extremely useful in the promotion of tr ade and international cultural exchanges.  WT/TPR/M/243/Add.1 
 Page 11 
 
 
   
The schemes in which such foreign goods may be  stored, processed or manufactured, displayed, 
shipped, etc. are the "customs area system" and the "bonded transport system".  The customs area system is a system in which storag e, processing or manufacturing or display, etc. is 
allowed for foreign goods at designated locations or  facilities. Such designated locations and facilities 
are called customs areas. Customs areas are classified  into customs area designated by the Minister of 
Finance (port facility, etc.) and bonded storage locations  authorized by the head  of the customs office 
(private warehouse, etc.).  
The bonded transport system enables foreign goods to  be transported as is between customs areas, 
ports and airports, with the approval of the head of the customs office.  
<The features of the types of customs areas>  
Types Principal features Length of storage  
(1) Designated customs area Loading/unloading, transport  
and temporary storage of foreign goods 1 month 
(2) Bonded storage location Loading/unloading, transport  
and long-term storage of foreign goods 2 years (may be extended)  
(3) Bonded factory Processing and manufacturing using foreign goods 
as material  2 years (may be extended)  
(4) Bonded exhibition Display and use of foreign goods Length of time designated by the head 
of customs office 
(5) Integrated customs area Loading/unloading, transport  
long-term storage, processing & manufacturing and 
exhibition of foreign goods  2 years (may be extended)  
 
(ii) Tariffs  (b) Applied MFN tariff  Structure 
 
6. According to paragraph 24, almost 2 per cent of  tariff lines are subject to tariff rate quotas and 
the quota allocation method is very intricate, particularly for footwear and textiles, and has not changed since the previous Review.  
Under what conditions does the Government of Japan  consider that the quota allocation systems could 
be simplified?  
RESPONSE 
 
Japan is convinced that its administration of tariff quotas is appropriate and is  conducted in a fair and 
transparent manner, based on the characteristics of  each product. Therefore, Japan has no concrete 
plan to change the existing quota allocation method.  
(viii) Standards, technical regulations, an d sanitary and phytosanitary measures 
 
(a) Standards and technical regulations  
18. Paragraph 62 states that "[w]hile regulat ory impact assessments are conducted by each 
ministry on technical regulations, no cost benefit analyses are conducted".  Would Japan kindly specify what type of impact as sessment is generally conducted in each Ministry? WT/TPR/M/243/Add.1  
Page 12 
 
 
   
RESPONSE 
 
The Implementation Guidelines for ex-ante Evaluation of Regulations state that it is desirable to 
quantify or express in monetary value costs and bene fits to the extent possible. And the Guidelines 
state that cost-benefit analysis, conve rting benefits and costs into mone tary value, is thought to be the 
major technique in Regulatory ex-ante Evaluation.  
The Government of Japan understands that quan tifying costs and benefits to assess regulatory 
proposals is important and promotes it.  19. Paragraph 73 provides information on maximum residue limits for pesticides. 
 Would Japan kindly clarify whether the same type  of control of maximum residue limits on food 
products, in particular monitoring by the Minist ry of Health (MHLW), applies to domestic and 
imported products alike?  It shoul d be pointed out, for example, that while cases of non-compliance 
involving foreign enterprises are published online, there appears to be no similar publication mechanism when it comes to Japanese firms.  RESPONSE  
In Japan, Food Sanitation of imported foods is c ontrolled by the Ministry of Health, Labour and 
Welfare (MHLW) at the borders, and is controlled by local governments at domestic distribution and 
selling points. And also, Food sanitation of domes tic foods is controlled by local governments. 
 
In any case, the established maximum residue limits for food are applied equally to domestic products 
and imported foods.   Any of violation in cases of imported and domestic  foods are equally published in accordance with 
Article 63 of the Japanese Food Sanitation Law. MHLW and local governments publish an outline of 
violations and recall information on its home-page  immediately after discovery. (See the following 
URL).  http://www.mhlw.go.jp/topi cs/yunyu/ihan/index.html 
http://www.mhlw.go.jp/topics/bukyoku/iya ku/syoku-anzen/kaisyu/index.html 
http://www.mhlw.go.jp/topics/sy okuchu/kanren/hp/jititai.html 
 
(b) Sanitary and phytosanitary measures 
 
Based on previous experience, the main constraint facing Argentine firms that export to the Japanese 
market are the high sanitary and phytosanitary requ irements, which in many cases are more stringent 
than international standards.  The problem is compounded by the MAFF's slowness in moving ahead 
with the negotiations.  What is the average length of time needed by the MAFF to examine technical information submitted 
by a country seeking recognition of an FMD free area without vaccination? 
 
RESPONSE 
 
It is difficult to indicate the average time of the procedure for approval for importing specific 
designated items to be quarantined, mainly becau se it depends on the various factors such as the 
commodities concerned, the animal health situation and the information from the applicant country,  WT/TPR/M/243/Add.1 
 Page 13 
 
 
  including the completeness and availability of th e relevant data, and this proposed measures to 
address Japan's concerns.   (c) Once the requirements for exporting live animal s to Japan have been negotiated, what is the 
administrative procedure for applying those re quirements and on average how long does it take? 
 
RESPONSE 
 
Japan takes the necessary procedur es in accordance with the "Standa rd Procedure for Approval for 
Import of Designated Items into Japan to be Quar antined (hereinafter referred to as "Standard 
Procedure") which was established and notified to the WTO Secretariat in April 2007. (see 
footnote 82, page 53, WT/TPR/S/243.)   The Standard Procedure and its operational crite ria are available at the following websites: 
http://www.maff.go.jp/j/syouan/douei/ eisei/sop/pdf/080401sop_eng.pdf 
http://www.maff.go.jp/j/syouan/douei/eisei/sop/index.html  
 Regarding the average duration for the procedur es, please see Japan's res ponse to the previous 
question (p. 12:  What is the average length of  time needed by the MAFF to examine technical 
information submitted by a country seeking recognit ion of an FMD free area without vaccination?) 
from Argentina. 
  
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
 (vi) Export promotion schemes  
(a) Export subsidies, finance, insurance, and guarantees  
20. According to paragraph 105, Japan provides medium- and long-term export credits administered by the Japan Bank for Internati onal Cooperation and Nippon Export and Investment 
Insurance (an institution insuring risks not covere d by existing private insurance institutions). 
 
What do these credits involve and what are the eligibility requirements? 
 
RESPONSE 
 
1. Japan provides export credits based on the terms and conditions of the OECD 
arrangement on officially supported export cr edit. With regard to export finance, 
please refer to the JBIC website (http://www. jbic.go.jp/en/finance/export/index.html) 
for more information. 
 
2. NEXI provides trade insurance based on the terms and conditions of the OECD 
arrangement on officially supported export cr edit. Please refer to the NEXI website  
(http://www.nexi.go.jp/e/ps/index2_frame .html) for more information. WT/TPR/M/243/Add.1  
Page 14 
 
 
  (4) M EASURES AFFECTING PRODUCTION AND TRADE  
 (i) Taxation and tax related assistance 
 
Tax incentives 
 
21. According to paragraph 111, the system of  tax incentives in Japan remains "complex and 
opaque", and thus perhaps distorting.  The Governme nt acknowledges the problem in stating that that 
"Japan's current tax system is unfair and non-transparent". 
 What measures does the Government envisage in  order to simplify the tax incentive system? 
 
RESPONSE 
 
In the FY2010 Tax Reform, the government reviewed 82 items of national tax policy measures (out of 
241 items as of Dec. 22. 2009), and as a result, 41 items were abolished or reduced. Also, in the 
FY2011 Tax Reform, the government reviewed 109 ite ms of national tax policy measures (out of 
231 items as of Dec. 16. 2010) and as a resu lt, 50 items will be abolished or reduced. 
 (ii) Subsidies and other financial assistance 
 
22. Paragraph 115 mentions Japa n's introduction in April 2009 of subsidies for the purchase of 
environmentally friendly vehicles.  According to available information in this connec tion, incentives were introduced in May 2009 for the 
purchase of television sets, air conditioning units a nd refrigerators manufactured in Japan by firms 
supposedly using more ecological production pr ocesses than others.  These measures have been 
extended several times (on 1 January 2011, for ex ample, a further extension until 23 March 2011 was 
approved).  
(a) Would Japan kindly confirm the existence of such measures? 
 
RESPONSE  
The "home appliance eco-point" scheme was estab lished for the promotion of global warming 
countermeasures, economic policy and the diffusion of terrestrial digital TVs. This scheme provides a 
certain number of points to consumers who purchase highly energy-efficient air conditioners, 
refrigerators and televisions. Pro ducts eligible for points are without internal or external 
discrimination. This scheme doesn't support specific companies.  (b) Does Japan intend to notify the WTO of such measures? 
 
RESPONSE 
 
Japan does not consider that the measure need s to be notified under the WTO Agreement. 
 
(c) Would Japan please advise whether it foresee s further extension of such measures? 
 
RESPONSE 
 
This scheme is in place from May 2009 to the end of March 2011. 
  WT/TPR/M/243/Add.1 
 Page 15 
 
 
  23. Paragraph 116 states that the new "Growt h Strategy", adopted by the Cabinet on 
18 June 2010, suggests a policy to "pick winners",  such as the preferential use of domestic wood. 
Would Japan kindly explain in detail what this stra tegy involves and whether the text is available 
online?   RESPONSE  
 - The New Growth Strategy is aimed to realize "Strong Economy, Robust Public 
Finances and Strong Social Security System ". There are three main targets to be 
achieved by 2020 in this strategy. The first target is to achieve real and nominal 
growth in excess of 2% and 3%. The second one is to return the consumer price 
increase to positive by FY 2011. The third one  is to lower the unemployment rate to 
3-4% level. 
 - To achieve these goals, 7 strategic sectors and 21 national strategic projects were 
identified. In order to ensure the implem entation of the New Growth Strategy, the 
government established the Council of the Rea lization of the New Growth Strategy in 
September last year, which is chaired by the Prime Minister and composed of relevant ministers, leaders of business circles and academics, etc. 
 - Several progresses in the implementation of the New Growth Strategy have already 
been observed such as success in  the competition of nuclear power plants in Vietnam, 
the conclusion of EPA negotiations with India and the announcement of the Basic 
Policy for Comprehensive Economic Partnership. 
 - For more information about "New Growth Strategy", please see the website below.  
http://www.npu.go.jp/policy/policy04/index.html 
 
IV. T RADE POLICIES BY SECTOR  
 
(2) A GRICULTURE  
 
(ii) Border measures  
24. According to paragraph 10, estimates of AVEs for some specific duties were not made 
available.  This apparently concerns 115 tariff lines  at the HS nine digit level, which included milk 
and dairy products, live swine and meat of swine,  rice and cereals, fruit juices, groundnuts and their 
oil, and prepared foods". 
 Would Japan kindly provide the ad valore m equivalents for these tariff headings? 
 
RESPONSE 
 
Ad valorem  equivalents (AVEs) of non- ad valorem  duties are automatically calculated with duty, 
import value and volume. For example, AVEs of sp ecific duty can be calculated following formula; 
"specific duty on an item / (import value / import qua ntity)×100 (%). "Therefore, AVEs of some tariff 
lines cannot be provided when there are no imports or de minimis imports of the lines in the year.  
25. Special safeguard 
 Appendix Table AIV.1 provides a breakdown by tariff quota quantity and in quota imports of a number of products for Financial Y ears 2005 2008.  According to this Table, it appears that the quota 
allocated for certain products (such as tubers of  konnyaku (Amorphophalus)) was not fully utilized 
during the period 2005 2008.  Now, Table IV.2 shows that some of these products were subject to a 
special safeguard. 
 WT/TPR/M/243/Add.1  
Page 16 
 
 
  (a) Would Japan kindly clarify whether the produc ts listed in Table AIV.1 (especially tubers, 
rice, butter and milk) are the same as those mentioned in Table IV.2?  RESPONSE  
The products listed in both Tables are same. 
 (b) In order to reconcile the information c ontained in these two Tables, would Japan please 
provide a list of SSG products, of the quotas allocat ed over the past three years for these products, and 
of the imports in each case?  
RESPONSE 
 
In accordance with the results of Uruguay Round ne gotiation, the products subject to SSG set tariff 
quotas, and are designated in the Japan's schedule of concession with the symbol "SSG". Therefore 
the list of products subject to SSG  is same as Table AIV.1. As  for tariff quotas and tariff quota 
imports, please refer to Table AIV.1.   
(5) S
ERVICES  
 
26. Paragraphs 68 to 71 refer to the require ments for supplying medical services in Japan. 
 Would Japan kindly explain the requirements for practising othe r professions, such as in legal 
services, architecture and accounting?  RESPONSE  
In the case of legal services supplied by a lawyer  qualified as "Bengoshi" under Japanese Law, as 
stated in Japan's GATS schedule of specific commit ments, a natural person must make sure to get 
registered as a "Bengoshi," qualified in accordance wi th the domestic law "Attorney Act."  To become 
a "Bengoshi," a natural person has to complete th e legal apprentice training course and have his/her 
name registered in the roll of atto rneys held by the Japan Federation of Bar Associations.  In the case 
of legal advisory services on law of jurisdiction wh ere the service supplier is a qualified lawyer, as 
stated in annotations for the transparency in Jap an's GATS schedule of specific commitments, foreign 
lawyers must make sure to get registered as a "Gaikoku-Ho-Jimu-Bengoshi," qualified in accordance 
with the domestic law "Act on Special Measures concerning the Handling of Legal Services by 
Foreign Lawyers." To be qualified as a "Gaikoku-Ho-J imu-Bengoshi," a natural person must have the 
qualification to become a foreign lawyer and have  the experience of having performed professional 
duties as a foreign lawyer in the state of acquisition of qualification for three years or more after acquiring qualification, and have his/her name regist ered in the Roll of Registered Foreign Lawyers 
kept by the Japan Federation of Bar Associations. 
 
With respect to architecture, only a Kenchikushi (a n architect and/or a building engineer) may engage 
in the design or the construction administration of a certain building. Therefore, only a Kenchikushi or 
a person employing a Kenchikushi may supply arch itectural services such as the design or the 
construction administration of a certain building.  A person who intends to obtain a Kenchikushi 
license must pass the qualifying examination and re gister as a Kenchikushi. There are no nationality 
requirements covering the qualifying examination and there is a special measure for academic 
qualification obtained overseas under the Kenchikushi  Law. A person who has obtained an overseas 
architect license for building design shall be able to obtain a Kenchikushi license without taking the ordinary qualifying examination if the Minister of  Land, Infrastructure, Transport and Tourism deems 
the person possesses qualifications equal or  superior to those of Kenchikushi.  WT/TPR/M/243/Add.1 
 Page 17 
 
 
  In the case of accounting, auditing and bookkeeping services supplied by an accountant qualified as 
"Koninkaikeishi" under Japanese law as stated in the GATS schedule of specific commitments, these 
must be supplied by an accountant qualified as "Koninkaikeishi" or an Audit Corporation under Japanese law. An Audit Corporation under Japanese law is composed of five or more partners who are 
accountants qualified as "Koninkaikeishi" under Japan ese law and have the right and obligation to 
execute activities of the Audit Corporation. The Japanese law requires "Koninkaikeishi" to pass the 
Japanese CAP examination, have worked for audit -related services for at least 2 years, and to 
complete the professional accountancy education pr ogram and receive the confirmation from the 
Prime Minister of Japan. There are no nationality requirements for the qualification of "Koninkaikeishi." 
 
AUSTRALIA
 
Report by Japan  
 
VII. B ASIC POLICY ON COMPREHENSIVE ECONOMIC PARTNERSHIPS  
 1. Australia welcomes the announcement in N ovember 2010 of Japan's new Basic Policy on 
Comprehensive Economic Partnerships , which foreshadows the prospect of real agricultural reform in 
Japan – through the formulation of a basic policy on ag ricultural reform (expected to be completed in 
June 2011) and an action plan on agricultural stru ctural reform (expected to be completed in 
October 2011).  We welcome the fact that the new policy will review border measures, such as tariffs, 
and 'consider transition to a more transparent sy stem in which taxpayers will bear the burden by 
securing stable sources of revenue and shifting over from border measures to fiscal measures'.  These are encouraging new developments and Australia  welcomes these initiatives.  Australia also 
recognises the challenges Japan will face as it undertak es the reform process and stands ready to assist 
Japan as needed, including by draw ing on the experience of agricultu ral reform in Australia over the 
past 20-30 years (para. 68-70, p. 20).  
- Request that Japan keeps the Membership informed about the basic policy on 
agricultural reform, and the action plan to implement this policy, as it is developed 
during 2011? 
 
- Seek an explanation of how the Basic Policy on Comprehensive Economic 
Partnerships will fit in with the existing Basic Plan on Food, Agriculture and Rural 
Areas? 
 
RESPONSE 
 
In March 2010, the new Basic Plan on Food, Agriculture and Rural Areas was decided by the Cabinet. It 
aims at raising the food self-sufficiency ratio to 50% by FY2020 (41% in FY2008), and demonstrates the direction of agricultural policies in the mid-term, including  i) introduction of a new income support direct 
payment to farmers, ii) conversion to a production sy stem more responsive to the consumers' demands for 
quality and safety, and iii) promotion of farmers' initiatives to expand their businesses into food manufacturing and retailing sectors making use of their products which would bring more income opportunities to rural areas. In FY20 11, the new agricultural policy will be steadily implemented according 
to the Basic Plan; For example, income support direct payment scheme will be fully introduced, based on 
the results of the pilot program in FY2010, and expa nding farmers' businesses into food manufacturing and 
retailing sectors making use of their products, based on 'Act on the Creation of New Businesses and Related Activities Utilizing Regional Resources by Farmers, Forestry Workers, Fishery Workers and 
Related Associations and the Promotion of  Utilizing Regional Agriculture, Forestry and Fisheries 
Products' (issued in December 2010), and so on. 
 WT/TPR/M/243/Add.1  
Page 18 
 
 
  Based on the 'Basic Policy on Comprehensive Economic Partnerships', Japan has decided to promote high-
level economic partnerships with major trading powers.   
In order to promote both high-level EPAs and improvement of Japan's food self-sufficiency and 
revitalization of its agriculture industry and rural communities, 'The Headquarters to Promote the Revitalization of the Food, Agriculture, Forestry and Fishery Industries' have been established and will 
develop a basic policy and draw up an action plan. 
 
IX. J APAN 'S DOMESTIC POLICIES  
 (4) A
GRICULTURAL REFORM  
 
3. Australia notes that the Basi c Plan includes the introduction of  a new income support direct 
payment to farmers in 2011 (para. 92, p. 24).  
 
-  Can Japan elaborate on: 
 
a.  how much support will be provided to  farmers under this program;  and 
 
RESPONSE 
 
The FY 2011 Budget amount proposed by the government for the new income support direct payment 
to farmers, which will be implemented in add ition to the pilot program on rice farmers, is 
213.3 billion yen, which is subject to the Diet's approval. 
 
b.  how this program will be notified in the WTO Committee on Agriculture? 
 
RESPONSE 
 
The notification to the WTO Committee on Agriculture will be made in due course.  
 
Report by the Secretariat  
I. E CONOMIC ENVIRONMENT  
 
(3)  S TRUCTURAL POLICIES  
 (i) Services sector 
 
1.  Australia notes that Japan's services sector is  'relatively sheltered from competition', with an 
import penetration rate for services and the share of foreign affiliates in total service turnover 'among 
the lowest in the OECD' (para. 9, p. 3).  
- Australia welcomes Japan's WTO commitments to trade in education services, but 
notes that further liberalisation might offer greater opportunities for academic and 
student exchange.  Has Japan considered r ecognition of providers that confer higher 
education degrees as being equivale nt to universities in Japan?    
  WT/TPR/M/243/Add.1 
 Page 19 
 
 
  RESPONSE 
 
In Japanese law, it could be possible for Japanese universities to recognize school years and credits 
acquired in foreign university with certain  limitation for entrance and credit transfer. 
 
- Australia recognises Japan's WTO commitmen ts in the education sector across all 
modes of education, noting that Japan remains unbound on market access and national presence in Distance Education (M ode 1). Is Japan willing to consider 
recognising that Australian institutions are able to demonstrate their on-line services 
are of the same quality standard as those de livered on campus, and are subject to the 
same high quality assurance standards?  
 
RESPONSE 
In Japan, it is assumed that credits acquired th rough correspondence courses are equally assured in 
terms of quality as those delivered on campus, and that degree conferred in recognizing the 
achievement of those two courses are not di fferentiated from each other legally.  
II. T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
 
(3) T RADE POLICY FORMULATION AND EVALUATION  
 
(i) Trade policy formulation and implementation 
 
2. Australia notes that the effects of FTAs on Japan's trade are not clear, partly because few 
relevant quantitative evaluations have  been published by authorities (par a. 2, p. 11) and cost-benefit 
analyses are seldom undertaken (para. 14, p. 15). 
 
- Can Japan explain how it intends to publici se the benefits of trade liberalisation to 
Japanese consumers? 
 
RESPONSE 
With regard to trade liberalization and its influence on daily life, the Government of Japan is going to 
hold a series of forums in several regions in Japan, which will be chaired by the Minister of State for National Policy or the State Secretaries of related Ministries. 
 
III.  T RADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(i)  Customs clearance procedures and valuation 
3. Australia notes that imports are valued accord ing to their c.i.f. value, taken to be the 
transaction value of the imports (para. 18, p. 33).  A previous report2 by the Special Committee on 
Globalisation and Reform, Council on Economic and Fiscal Policy (CEFP), Japan's Cabinet Office, 
noted, inter alia, the need to streamline differe ntial tariffs such as the gate-price mechanism for 
imports of pig meat.  
4. In particular, the Special Committee noted (at pa ge 8) that the non-transparent nature of the 
gate-price mechanism for pig meat had resulted in 'large-scale tariff evasion', including by 
                                                      
2 The report, dated 8 May 2007, can be found at http://www5.cao.go.jp/keizai-shimon/special/ 
global/02/item1.pdf. WT/TPR/M/243/Add.1  
Page 20 
 
 
  encouraging importers to overvalue their customs d eclarations (to a figure much closer to the gate 
price) in order to receive favourable tariff treatment.  Due to the systematic nature of this problem, the 
Special Committee recommended that the gate-price  mechanism be abolished and replaced with a 
more simplified and transparent arrangement.  
 
- In light of these recommendations, could Japan  provide details of any reform process 
of the gate-price mechanism for pig meat, and outline how these reforms would create a more streamlined, transparent, and predictable tariff regime for pig meat, 
including for customs valuation purposes?   
 
RESPONSE  
The Cabinet' decision "Economic and Fiscal Reform  2007" dated June 19th, 2007, says that handling 
of the gate price mechanism will be "examined th rough the WTO negotiations".  In line with this 
decision, the mechanism is currently under the examination from the various points of view. 
 
(ii) Tariffs 
 
(a) Bound tariff and (b) Applied MFN Tariff 
 
5. Australia notes that Japan's average bound tariff is more than four times higher for agricultural products at 16.0 per cent than for non- agricultural products at 3.5 per cent (para. 21, 
p. 34).  Similarly, agricultural products receive mu ch higher tariff protection at the applied level with 
the simple average tariff for agriculture 15.7 per cent compared to 3.5 per cent for non-agricultural 
products (para. 25, p. 36).     
 
Can Japan explain how support levels under th e Basic Plan's new income support direct 
payment scheme might be effected if Japan's bound tariffs are reduced as a result of the Doha 
Round or applied tariffs are reduced as a result of unilateral or preferential liberalisation? 
 RESPONSE  
Effects that future reduction of bound or applied ta riffs might have on the support levels of the new 
income support direct payment scheme have not been estimated.  6. Australia notes there has been little change in Japan's tariffs on non-agricultural goods since 
the last Trade Policy Review. 
 
-  Does Japan have any plans for further tariff reform? 
 
RESPONSE 
 According to World Tariff Profiles 2010, Japan's tariffs on non-agricultural goods (2.5%) are low 
enough, comparing to other countries. Japan would like to make a continuous effort to set up 
appropriate tariff rates by constructively joining in discussions in the WTO and taking account of the 
results of the Doha round. 
 
(The following website may be useful: http://www.wto.org/english/res_e/publica tions_e/world_tariff_profiles10_e.htm) 
  WT/TPR/M/243/Add.1 
 Page 21 
 
 
  (iv) Non-tariff border measures 
 (b) Import quotas 
 
7. Australia notes the import quota determination pro cess for fisheries products (para. 38, p. 42).  
 
- Could Japan explain any end-use restricti ons that apply to quota allocations for 
fisheries products traded through import quotas?  Are there any country-specific import quotas?  What percentage of total quota allocations is apportioned on a 'first-
come-first-served' basis? 
 
RESPONSE 
 
If "end-use restrictions" is understood as regula tions on the use of imported products by food 
companies, for example, whether it is processed or so ld directly to consumers, there are no end-use 
restrictions that apply to quota allocations for fishery products. 
 Products for which the interest is limited to specifi c countries, such as laver, are subject to country-
specific quotas.  From April 1
st in 2009 to March 31th in 2010, 8.8% of total quota a llocations were apportioned on a 
'first-come-first-served' basis. 
 
- Could Japan explain the nature of any exemptions applying to import quotas for 
fisheries products, including fisheries products used as raw ingredients for 
'commissioned processing'? 
 RESPONSE  
The exemptions are special provisions of Article 14 of the Import Trade Control Order (Cabinet Order 
No. 414 of December 29, 1949).  For example, when you import "a certain quantity of goods to be used for private purposes and excluded from sal e," you can import it under one of the special 
provisions. 
 
(vi)  Government procurement 
 
8. Australia notes that Japan has announced that it will promote the use of domestic wood and is 
aiming to have more than half of its domestic de mand for wood met by domestic supply.  In addition, 
Japan is promoting the use of wood in the constr uction of public buildings (para. 52, p. 45). 
 
- Can Japan please provide detailed informati on on the types of wood to be supported 
by these policies, how these policies will ope rate, how these policies will increase the 
domestic demand for domestic wood and the e ffects these policies have had, or will 
have, on imports of w ood and wood products?  
 
RESPONSE  
In May 2010, "the Act for the Promotion of Use of Wood in Public Buildings" was established to boost the use of wood as a whole in public buildings , regardless of its country of origin. The act and 
related rules and regulations were  carefully designed to ensure co nsistency with non-discrimination  
and national treatment principles in WTO rul es, especially the Agreement on Government 
Procurement. This Act and other Japanese timber-rel ated policies such as the Forest and Forestry 
Revitalization Plan will be operated without di stinction between domes tic and foreign wood. WT/TPR/M/243/Add.1  
Page 22 
 
 
  (vii) State trading 
 
9. Australia notes that according to Japanese au thorities the aim of state-trading activities in 
Japan, which involve leaf tobacco, opium, rice, whea t and barley, and milk products, are to 'stabilise 
the supply and price of these commodities and protect consumer interests'.  Yet, prices of these commodities in Japan tend to be higher  than world prices (para. 58, p. 47 ).   
 
10. The Government Revitalisation Unit (GRU) in the Cabinet Secretariat is Japan's 'central body 
for promoting regulatory reform' (para 143, p. 68). In a report dated 20 January 2011, the Agriculture 
and Regional Revitalisation Working Group, Regulator y and Structural Reform Sub-Committee of the 
GRU,  noted that Japan's state trading arrange ments for wheat and dairy products represented an 
'obstacle to trade', advising that greater flexibilit y in the importation process would promote increased 
competition between Japanese companies and 'benefit Japanese consumers'.
3  The Working Group 
also recommended that the abolition or simplificati on of Japan's state trading system would bring 
'greater efficiency to the Japanese government's administrative operations'.   
 
- Given that domestic prices are higher than world prices, and in light of the Working 
Group's assessment, can Japan explain how  state trading enterprises support the 
objective of stabilising supply and prices, and protecting consumer interests in Japan?  
 
RESPONSE 
 
State trading enterprises import wheat and designated dairy products, and this state trading has been 
contributing to the stabilization of the supply-de mand and of the prices of these essential products. 
 
-  How does Japan plan to respond to the Working Group's recommendations?  
 
RESPONSE 
 
The Working Group has made public its draft report, and the government policy will be authorized as 
a cabinet decision in March 2011. 
 
-  Is Japan considering reforming/deregulati ng any of its state-trading activities?    
 
RESPONSE 
 
Concerning wheat, on October 1st, 2010, MAFF has introduced a new import scheme where it sells 
foreign wheat to domestic flour-milling companies immediately after the importation without any 
period of keeping it as government reserves for any period.  11. Australia notes that that the Agriculture and Li vestock Industry Corporation (ALIC) is a state 
trading enterprise authorised to take measures, including 'stabilising supply-demand situations and 
prices for milk products' in relation to  dairy products (para. 61, p. 48). 
                                                     
 
3 The report can be found at http://www.cao.go. jp/sasshin/kisei-seido/meeting/2010/aguri/0120/ 
item_110120_02_02_01.pdf.  WT/TPR/M/243/Add.1 
 Page 23 
 
 
   
-  Can Japan elaborate on the function of ALIC, including: 
 a. For state traded dairy items such as butte r, milk powders, whey and dairy spreads, 
does ALIC obtain any import revenue (in the form of mark-ups) from products traded 
outside any current access or tariff rate quotas (as appears to be stipulated in 
Article 3(5) and Article 14 of the Ma nufacturing Milk Producer Compensation 
Temporary Law)?  
 
RESPONSE 
 In accordance with Japan's Schedule of concessions in  the WTO Agreement, ALIC collects part of the 
tariff rate on designated dairy pr oducts from out-of-quota trade. 
 
b.  If so, is this mark-up always extracted  at the bound rate for in-quota trade? 
 
RESPONSE 
 
For in-quota trade, ALIC makes appropriate tenders  for designated dairy products and collects the 
differences between buying price and selling price as mark-ups. Since the differences are affected by 
supply and demand in international and domestic dairy markets, mark- ups are not always collected at 
the bound rate. 
 c. Does this mean that ALIC extracts mark-ups from both in-quota and out-of-quota 
trade?  
 
RESPONSE 
 
ALIC extracts mark-ups from in-quota trade and sp ecific amounts within out of quota duties in 
accordance with Japan's Schedule of concessions in the WTO Agreement. 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
 
(iii) State-owned enterprises, corporatisation, and privatisation 
 
12. Australia notes that the Agriculture, For estry and Fisheries Finance Corporation was 
integrated into the Japan Finance Corporation in October 2008 (para. 120, p. 64).    
- What was the role of the Agriculture, Fo restry and Fisheries Finance Corporation 
prior to 2008? 
 RESPONSE  
The purpose of Agriculture, Forestry and Fisheri es Finance Corporation was to provide parties 
engaged in agriculture, forestry and fisheri es with funds required for the maintenance and 
enhancement of production capabilities as loans are not readily available from general financial 
institutions. 
 
-  Has its role changed since its integra tion into the Japan Fi nance Corporation? WT/TPR/M/243/Add.1  
Page 24 
 
 
  RESPONSE 
 
The role of the Agriculture, Forestry and Fisher ies Finance Corporation has not changed since its 
integration into the Japan Finance Corporation. 
 
(vi) Competition policy 
 
13. Australia notes that the Japanese Government retains a stake in major companies, through 
which it 'may directly affect produc tion and trade' (para. 117, p. 63).  Australia also notes that the 
Anti-Monopoly Act 'prohibits mergers and acquisiti ons if they lead to substantial restraint on 
competition' (para. 149, p. 71).  Australia furthe r notes that the Japanese government is currently 
deliberating a draft bill (originally unveiled on 8 February 2010), which proposes the realignment of 
the Japan Post Group as part of a process to re -examine the privatisation of Japan Post. The 
realignment would involve merging Japan Post Hold ings, the Japan Post Services and the Japan Post 
Network into one company, with Japan Post Bank and Japan Post Insurance operating under the 
merged company.   
- Given that the provisions in the draft bill would grant Japan Post Bank – already the 
largest savings bank in the world
4 – a license to move into new product areas, such as 
lending and marketing health insurance po licies in tie-ups with local financial 
companies, could Japan explain what measures would prevent Japan Post from using its dominant market position to unfairly comp ete with other financial institutions in 
the Japanese market?  
 
RESPONSE 
 The bills for Postal Reform (the bills) themselve s do not include the provisions which grant Japan 
Post Bank (JPB) a license to move into new pr oduct areas such as lending and marketing health 
insurance policies.   JPB is an ordinary bank (h as an ordinary license for banking business based on 
the Banking Act), to which related laws are applie d, including the Banking Act, just as they are 
applied to other banks. Moreover,  the bills impose add-on regulations on JPB, such as a deposit 
ceiling and a limitation on the scope of business, wh ich are not imposed on other banks. By these add-
on regulations, we intend to set out a system which takes into consideration equitable conditions of 
competition.  
- Further, could Japan address the concern that under the draft bill, the government 
could implement special measures, such as exemptions from consumption and stamp 
taxes, to compensate the Japan Post Gr oup for the costs it incurs as a result of 
universal service obligations imposed by the government? 
 
RESPONSE 
 Under the bills for Postal Reform, Japan Post Group continues to be subject to the same tax 
obligations as the other private operators, which is unchanged from the current regulatory status 
resulting from the privatization of postal services in  2007.   Japan Postal Services Company (the 
merged company based on the bills fo r Postal Reform) is required to absorb the necessary costs of the 
universal service obligation through its revenue . Therefore, the bills don't introduce any new 
preferential measures for taxation on Japan Post Group to compensate for the cost.  
                                                     
 
4 In 2009 Japan Post Bank held USD1.8 trillion in deposits, including 25 per cent of all Japanese 
household deposits (compared to the total 19.8 per cen t held by Japan's eight major city banks and the 
25.3 per cent held by regional banks).  WT/TPR/M/243/Add.1 
 Page 25 
 
 
   
IV.  T RADE POLICIES BY SECTOR  
 
(2)  A GRICULTURE  
 (i)  Structure 
 
14. Australia understands that even with some amendment to Japan's Agricultural Management 
Reinforcement Law, it is still relatively difficult fo r private corporations to lease agricultural land 
(para. 4, p. 76).     
- Does the Japanese government intend to implem ent further reforms to make it easier 
for corporations to lease agricultural farmland?  
 RESPONSE  
In 24 June 2009the Government of Japan revi sed the Agricultural Land Law and Agricultural 
Management Reinforcement LawUnder the revised la ws, private corporations can rent agricultural 
farmland anywhereAs a result292 co rporations have rented farmla nd and entered the agricultural 
business as of December 30, 2010Now it is important to review the effects of these reforms before 
any further reforms are made. 
 
15. Australia notes that in 2010, the Japanese gove rnment implemented a new single-year pilot 
direct payment program for rice, providing farmers wi th income support to bridge the gap between the 
production cost and the farm gate price of rice, irrespective of the size of the farm scale (para. 9, 
p. 78).  
-  Can Japan elaborate on this pilot program, including: 
 
 a. its evaluation of the pilot program; 
 
b. how this payment system addresses the Japanese government's policy of 
undertaking comprehensive agricultural re forms, including reforms that will 
encourage larger scale operations; 
  
c.  the value of financial support provided under the pilot program; and 
 
d. how it will be notified in the WTO Committee on Agriculture?  
 
RESPONSE 
 a. 1.15 million ha of paddy field have been regi stered under the pilot program, and the area of 
rice planted exceeding the equilibrium of suppl y-demand is estimated to have decreased by 
approximately 8,000ha compared to the previous year. In addition, the number of newly established 
village farming organizations has reached approxima tely 7,300, having increased by 1,600 compared 
to the previous year. These two numbers exem plify the positive results of pilot program. 
 b. In the pilot program for income support throug h direct payment for rice, the payment rate is 
flat irrespective of the farm scale, region, etc. Th is basic payment system would  give incentive to 
scaled expansion through the integra tion of small and fragmented lands. 
 
c. The budget allocated to the pilot program in FY2010 is 337.1 billion yen. 
 WT/TPR/M/243/Add.1  
Page 26 
 
 
  d. Notification to the WTO Committee on Agricu lture will be made in due course.    
 16. In 2011, under the Basic Plan the Japanese G overnment intends to introduce a new direct 
payment system, also extended to other crops, b ased on the results of the pilot program for rice 
(para. 9, p. 78).  
- Can Japan advise which other crops will be  covered by this new direct payment 
system? 
 
RESPONSE 
 
In the FY2011, not only rice farm ers but also farmers of upland crops including wheat and soybean 
are eligible for the new direct payment system.  
-  How will this be program be notified in the WTO Committee on Agriculture? 
 
RESPONSE 
 
The notification to the WTO Committee on Agriculture will be made in due course.  
(ii) Border measures 
 
17. Australia notes that the fill rate for a number of  Japan's tariff rate quotas have been very low.  
For example, there was significant under-fill of tariff quotas for skimmed milk powder for school 
lunches (27.9 per cent), skimmed milk powder for other purposes (29.0 per cent), prepared whey for 
infant formula (32.9 per cent), butter and butter oil (12.9 per cent), mineral concentrated whey 
(20.5 per cent) and ground nuts (41.6 per cent).  
- Can Japan explain the reasons for these tariff quotas being so significantly under-
filled? 
 
RESPONSE 
 
In accordance with the tariffication based on the UR agreement, most tariff quotas have been agreed 
to the reduced tariff based on the mutual agreemen t with each country to replace the average amount 
of import during the base period with a current access in order to create opportunities for imports. 
 
TRQ is appropriately managed based on the charact eristics of each product and the fill-rate of each 
tariff quota is a reflection of domestic  demand for the product concerned. 
 
- Will Japan consider adjusting its tariff quot a administration to increase the fill rates 
and provide greater access for these products? 
 
RESPONSE  
Japan has reallocation mechan ism for the underfilled TRQs. 
 
18. Australia notes that Japan provides rice as food aid and in 2007 and 2008 donated 57,298 tonnes and 126,006 tonnes respectively as dir ect transfers.  In addition, Japan donated 
significant quantities of rice through local and tria ngular purchase arrangements.  In contrast, in 2007 
and 2008, Japan provided US$51.65 million and US $76.32 million respectively for the purchase of  WT/TPR/M/243/Add.1 
 Page 27 
 
 
  grains as food aid for least developed countries (LDCs) and net-food-impor ting developing countries 
(NFIDCs) (para. 12, p. 80).     
-  Can Japan advise why it does not provide all its food aid on fully grant terms, which 
 is less trade-distorting?  
 
-  Will Japan consider moving to provide all its food aid on fully grant terms? 
 
RESPONSE 
 
Japan provides its food aid fully in the form of grant, not in the form of loans. 
 19. Australia notes the applied MFN tariff protection in agriculture, including meat and edible meat offal (Table IV.1, p. 79).  Japan's 50 per cent applied tariff for certain bovine offal such as cheek 
and head meat is considerably hi gher than the 38.5 per cent applied tariff for prime beef cuts such as 
loin, chuck, clod and round. Conversely, the app lied tariff for other bovine offal such as tongue is 
12.8 per cent.  
- Could Japan explain the rationale for th e very large discrepancy in applied MFN 
tariffs for bovine offal? 
 RESPONSE  
Bound tariffs in Japan's schedule of concessions ar e 50% for beef as well as cheek and head meat 
which are similar to beef, while 12.8% or 21.3% for other bovine offal which is  considerably different 
from beef. 
 
As a result of UR negotiations, Japan voluntarily reduces applied tariff rate for beef from 50% to 
38.5%.  20. Australia notes that Japan operates 18 tariff quotas, covering 175 tariff lines, mainly for dairy products and cereals (including rice) (para. 11, p. 79). 
 
- Does Japan impose any quantitative restricti ons or preferential duties on imports of 
malt? Is the purchase of domestic malting barley a precondition for access to any duty-free quantitative restriction for imported malt? What is the nature of this arrangement? 
 
RESPONSE 
 
While the bound tariff rate for imported malt is 21. 3 yen per kg, Japan arranged duty-free access for a 
certain amount of imported malt in order to meet  the domestic demand. Also, purchase of domestic 
malting barley is not a precondition for access to the duty-free imports. 
 
- Does Japan impose any quantitative restricti ons on preferential duties of imports of 
cheese?  Is the purchase of domestic che ese a precondition for access to any duty-free 
quantitative restriction for imported cheese?  What is the rationale for calculating any 
ratio of purchases of domestic produc t compared to imported product? 
 WT/TPR/M/243/Add.1  
Page 28 
 
 
  RESPONSE 
 
The tariff rate quota of natural cheese, which is  intended for processed ch eese, has been operated 
voluntarily in Japan. 
 This TRQ, with zero in-quota tariff rate,  has a pr econdition for importers that requires to tie-up use of 
domestic natural cheese.  
The blending ratio of imported cheese to domestic ch eese is 2.5 to 1 to reduce the production costs of 
domestic processed cheese.  
- Does Japan impose any quantitative restricti ons on preferential duties of imports of 
cane molasses?  What are the end-use rest rictions on preferential access to any duty-
free quantitative restrictions for imported cane molasses? 
 
RESPONSE 
 
As for the tariff rates on cane molasses, Japan commited 0% for feed, 3% for glutamic acid etc., 
15.3 yen/kg for all others. Howeve r, Japan arranged duty-free access for a certain amount of imported 
cane molasses used for alcohol production on a voluntary basis, in consideration of industry 
perspectives. The cane mo lasses imported under this duty-free access must be used for alcohol 
production.  21. Australia notes the import activities of the Ag riculture and Livestock Industries Corporation 
(ALIC) (footnote 12, p. 80). 
 
- Do importers of raw and refined sugar who sell and then repurchase imported sugar 
from ALIC receive market access any way preferable compared to importers who do not sell and then repurchase from ALIC?  C ould Japan explain the nature of this 
access, including any administrative arrangements, primary or secondary 'adjustment 
levies', and any quantitative restrictions on the total volume of sugar which importers 
are able to sell and repurchase from ALIC at preferential rates?   
RESPONSE 
 
Under the Sugar and Starch Price Adjustment La w any importers who impor t raw and refined sugar 
need to sell and repurchase the imported sugar through ALIC. Importers are able to sell and 
repurchase at the primary rate within the volume legally established in accordance with the actual 
imports in the previous year. If they import over that volume, they are able to sell and repurchase sugar which was imported over that volume at a total rate of the prim ary plus secondary rate. 
 
- Are there any requirements for importers  who wish to import raw sugar through 
ALIC at a preferential rate of duty to also  purchase domestic sugar, or own or have 
financial shares in Japanese refineries which also process domestic sugar?  
RESPONSE 
 
No sugar importers are imposed any requirem ents mentioned in question from Australia. 
 
- Could Japan explain if ALIC imposes any 'a djustment levies' on corn imported for the 
purposes of starch production?  What is the size of this 'adjustment levy' and what  WT/TPR/M/243/Add.1 
 Page 29 
 
 
  volume of corn imports attract it?  What is  the nature of the pricing mechanism for 
corn imported for starch production?  
RESPONSE 
 As for the corn for starch, Japan arranged price ad justment system within scheduled bound tariff rate 
(50% or 12 yen/kg, whichever is higher). The size of  the levies is 4.5 yen/kg (2009) and the volume of 
corn for cornstarch imported under this system is 3,104,939 tons/year (2009). 
 
(iii) Domestic measures  
22. Australia notes the comment that 'the general trend in the Government's agriculture policy in 
recent years has been a move away from administer ed prices to direct income support for farmers' 
(para. 18, p. 82).  
- Does the Japanese government have any in volvement in administering prices at 
which domestic beer brewers purchase domes tic malt or malting barley, including 
those brewers seeking access to preferen tial duty-free access for imported malt?  
RESPONSE 
 
The Japanese government is not involved in setting prices on domestic malt or malted barley. 
 
- In April 2007, Japan abolished the requi rement for starch producers to purchase 
domestic starch as a condition for access to dut y-free imports of corn starch.  Does 
Japan consider that the reasons for such reform might also be applicable to any 
restrictions applying to the purchase of imported malt?  If not, could Japan explain why the current import arrangements for im ported malt have been retained whilst 
other similar arrangements (such as those fo r imported starch) have been revised?  
RESPONSE 
 
Japanese government does not impose domestic purchase requirement as a condition for the duty-free 
access of imported malt. Therefore, it is not appropriate to compare arrangement for imported malt and other arrangement with domestic purchase requirement. 
 
23. Australia notes that in 2007, Japan converted its price support schemes for wheat, potatoes (for starch use), and sugar beets into a di rect payment scheme (para. 18, p. 82). 
 
- Can Japan confirm that since 2007 it has not provided price support to wheat, 
potatoes (for starch use) and sugar beet s and that it will no longer provide price 
support to these products?   
 
RESPONSE 
 
Since 2007 it has not provided price support to wheat, potatoes (for starch use) and sugar beets in Japan. 
 
- Can Japan advise the monetary value of th e direct payment scheme that has replaced 
price support for these products?  
 WT/TPR/M/243/Add.1  
Page 30 
 
 
  RESPONSE 
 
The monetary value of the direct payment scheme after the reform is not analysed.  
-  How will Japan notify this direct paymen t scheme in the Committee on Agriculture? 
 
RESPONSE 
 
Japan is currently working on the notification. 
 24. Australia notes that Japan continues to apply price support to beef and pork (para. 19, p. 82).   
- Is Japan considering moving away from pr ice support for these products, as it did for 
wheat, potatoes (for starch use) and sugar beets? 
 
RESPONSE 
 
The Government of Japan is not considering this at this time. 
 
- What was the total price support provided to pork and beef since 2006, which was 
Japan's last domestic support notification to the Committee on Agriculture? 
 
RESPONSE 
 
The total price support provided to pork and beef after 2006 is not ready for notification because the 
data collection and assessment are still in progress. The total price support provided to pork and beef 
in 2006 was 326 billion yen.  25. Australia notes that the total cost of the subsidy payment under Japan's 'supply-demand 
adjustment' measure for rice was valued at ¥153.1 billion in 2008 and ¥146.8 in 2009 (para. 20, p. 83). 
 
-  Can Japan advise how it will notify this program in the Committee on Agriculture? 
 
RESPONSE 
 
Japan is currently working on the notification.  
26. Australia notes that the most heavily-subsid ised commodities in Japan are wheat, barley and 
rice, which received a total of  ¥175 billion in 2005  and ¥176 billion in 2006 – the most recent year 
for which data is available (para. 22, p. 83).  
-  Can Japan please provide the value of the subsidy for each of these products in 2006? 
 
RESPONSE 
 
The value of the subsidy for each of these products in 2006 were as follows: 
 
Rice: 72.4 billion yen Wheat: 92.6 billion yen Barley: 11.1 billion yen  As for more detailed information, please refer to the relevant notifications (G/AG/N/JPN/137).  WT/TPR/M/243/Add.1 
 Page 31 
 
 
   
- Can Japan advise when it will be able to provi de the total value of subsidies for each 
of these products since 2006? 
 
RESPONSE 
 The total value of subsidies for each of these produc ts after 2006 is not ready for notification because 
the data collection and assessment are still in progress.   27. According to Japan's most recent domes tic support notification to the Committee on 
Agriculture (G/AG/N/JPN/137 of 1 July 2008), in 2006 Japan provided ¥28.5 billion in product-
specific AMS to milk (¥2.3 billion in price-related payments and ¥26.2 billion in payments related the 
volume of production).  The Secretariat's report does not include any references to milk or dairy subsidies.   
- Can Japan advise the monetary value of the total annual subsidies provided to 
milk/dairy since 2006? 
 
RESPONSE 
 
The monetary value of the total annual subsidies provided to milk/dairy after 2006 is not ready for 
notification because the data collection and assessmen t are still in progress. The annual subsidies for 
milk/dairy in 2006 were 28.5 billion yen.  
(5) S
ERVICES  
 
27. Australia notes that Japan has offered to re move entirely residency requirements for Mode 4 
legal advisory services in its 2005 revised GATS offer (para. 34, p. 85).  
- What will be the implications of this for temporary licensing for foreign lawyers 
wishing to practice in Japan? 
RESPONSE 
 As stated in annotations for the transparency of Mode 4 legal advisory services in Japan's 2005 
revised GATS offer, foreign lawyers must make  sure to get registered as a "Gaikoku-Ho-Jimu-
Bengoshi," qualified in accordance with the domest ic law "Act on Special Measures concerning the 
Handling of Legal Services by Foreign Lawyers." 
 
- Would foreign lawyers be able to work in Japan on a 'fly-in, fly-out' basis?  If so, 
under what conditions? 
 
RESPONSE 
 
As stated in annotations for the transparency of Mode 4 legal advisory services in Japan's 2005 
revised GATS offer, foreign lawyers must make  sure to get registered as a "Gaikoku-Ho-Jimu-
Bengoshi", qualified in accordance with the domest ic law "Act on Special Measures concerning the 
Handling of Legal Services by Foreign Lawyers".  WT/TPR/M/243/Add.1  
Page 32 
 
 
  (iv) Medical services 
 
28. Australia notes that the proportion of Japan's population that is over 65 is projected to 
increase to 27 per cent by 2015.  We note Japan is  taking steps to address expected upward pressure 
on government spending on health care (para. 69, p. 93).  
- In this context, is Japan considering relaxing restrictions on foreign workers' 
participation in the sector?  If so, how? 
 
RESPONSE 
 
Japan does not have specific restrictions on foreign wo rkers' participation in the medical sector. It is, 
however, necessary to acquire Japanese medical licen ses to practice in Japan and necessary to meet 
the immigration laws and regulations for forei gn workers' entry and temporary stay in Japan. 
 
Report by the Secretariat
 
 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
 
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
 (ii) Subsidies and other financial assistan ce; and (iii) State-owned enterprises, 
corporatization, and privatization 
 
1. Australia notes that in June 2010 the Japanese Cabinet adopted a new Growth Strategy where 
it plans to 'pick winners' in seven areas; science  and technology being one such area (para. 116,  
p. 63).  It is also noted that in July 2009 th e Japanese government establis hed the Innovation Network 
Corporation of Japan (INCJ) with 90 per cent of its funding from the government (US$994m).  This 
institution aims to promote innovation through i nvestment in 'promising areas' that include inter alia 
energy, environment, energy and infrastructure (para. 118, p. 63).   - In light of the above statements, can Japan please provide information on what 
specific 'winners' it foresees under the new 2010 Growth Strategy in the context of 
science and technology?  
 
RESPONSE 
 
The New Growth Strategy is aimed to realize "S trong Economy, Robust Public Finances and Strong 
Social Security System".   There are three main targets to be achiev ed by 2020 in this strategy. The 
first target is to achieve real and nominal growth  in excess of 2% and 3% respectively. The second 
one is to return the consumer price increase to  positive by FY 2011. The third one is lower the 
unemployment rate to 3-4%.   - To achieve these goals, the Government of  Japan has identified 7 strategic sectors and 
21 national strategic projects. In order to  ensure the implementation of the New 
Growth Strategy, the government established in September last year the Council of 
the Realization of the New Growth Strategy, which is chaired by the Prime Minister and composed of relevant ministers, leaders of business circles and academics, etc. 
 
 - In the Science and Technology Area, the Strategy provides some measures such as 
establishment of  "Leading Graduate School s," development of "Tsukuba Nano-tech 
Innovation Arena" and the introduction of a "Tenure Track System" to foster and  WT/TPR/M/243/Add.1 
 Page 33 
 
 
  enhance human resources in the "21 National Strategic Projects" as well as some 
other measures in the roadmap attached to the Strategy. 
  - It is also important to achieve technological innovations in 2 areas, "Green Innovation 
and Life Innovation," and appr opriate measures are being taken in the ministries 
concerned including intensive budget in vestments and special deregulations. 
  - More information about "New Growth Stra tegy" is available at the website below. 
http://www.npu.go.jp/policy/policy04/index.html 
 BRAZIL
 
Q1  "Considering what was stated in Paragr aph 73 and 76 (pages 53-54) of the document 
WT/TPR/S/243, could Japan please present its assess ment of the risks to human health based on 
scientific evidence, in accordance with the provisions of Ar ticle 5 of the Agreement on the 
Application of Sanitary and Phytosanitary Measures,  justifying the maximum residue limits (MRL) of 
0,01 mg/kg for flutriafol in coffee? 
 
RESPONSE 
 
In response to the request (November 2009) from th e Government of Brazil for the establishment of a 
MRL (maximum residue limit) for flutriafol in coffee beans, the Ministry of Health, Labour and 
Welfare of Japan, with the intention to set th e MRL, asked the Food Safety Commission of Japan 
(FSC) to carry out risk assessment for this com pound (April 2010), and it is currently underway.  
Based on the forthcoming assessment result from the FSC, the MRL will be established through 
discussion by the Pharmaceutical Affairs and Food Sanitation Council.  
In Japan, there is currently no MRL set for flutriafol  in coffee beans, so a uniform limit (0.01 ppm) is 
applied.  The uniform limit was established as an amount unlikely to damage human health, based on 
the concept of acceptable exposure that has been  scientifically assessed by JECFA (Joint FAO/WHO 
Expert Committee on Food Additives) and the United States Food and Drug Administration.  0.01 ppm is the same limit the European Union uses.  Before the uniform limit was set, Japan notified 
the WTO in accordance with the SPS Agreement. Therefore, Japan considers the procedure to have 
met the terms of the Agreement.  
 
WT/TPR/S/243
 
 
Page 17:  II. TRADE POLICY REGIME : FRAMEWORK AND OBJECTIVES ; (4) TRADE AGREEMENT 
AND ARRANGEMENTS ; (ii) Regional trade agreements 
 
QUESTION  Would the Delegation of Japan please share with us an y bilateral or multilateral actions taken in 2009 
and 2010 in order to improve trade? Were the bila teral and regional free-trade agreements adopted by 
Japan important to cope with economic slowdow n that followed the financial crisis in 2008? 
 
RESPONSE 
 
Japan's EPAs with Switzerland and Vietnam came into effect in 2009.  In October 2010, the 
negotiations for an EPA with India and with Peru  were completed. In November 2010, the "Basic 
Policy on Comprehensive Economic Pa rtnerships" was decided by the Cabinet. During the course of 
the year, Japan was also actively engaged in th e DDA negotiations.  Even in the economic slowdown WT/TPR/M/243/Add.1  
Page 34 
 
 
  resulting from the financial crisis in 2008, it is expected that the EPAs make economic activities 
between Japan and its EPA partners more active,  thereby improving their economic situation.  
 
Page 27, Paragraph 66 
 Regarding the New Growth Strategy adopted by the Japanese Government in June 2010, would the 
Delegation of Japan describe the main policies a dopted to increase FDI flow? Does it include further 
action regarding FDI licensing? 
 
RESPONSE 
 
The "New Growth Strategy" mentions the necessity of domestic reform for unifying the Asian Market 
and facilitating the flow of people,  goods and money between Japan and the world, which promotes 
FDI.  
 
Based on the "New Growth Strategy", a "program  for promoting Japan as Asian business center and 
direct investments into Japan" (tentative name ) will be drawn up by the summer of 2011. This 
program will include system reforms and other meas ures to ensure smooth flows of people, goods and 
funds with the aim of making Japan's business environment more appealing. 
 
Page 27: "The five Recommendations Toward the Dras tic Expansion of Foreign Direct Investment in 
Japan, issued by the Expert Committee on FDI Promotion on 20 May 2008, consider that the 
Government should promote: enhancement of the sy stem to facilitate M&A;  comprehensive studies 
on FDI regulations; establishment of priority strategies by sector; reduction of business costs and improvement of transparency; and regional revitalization by FDI". 
 
QUESTIONS  What lessons has Japan learned so far from the pursuit of these recommendations?  RESPONSE  
The Government of Japan revised "The Program for the Acceleration of Foreign Direct Investment in 
Japan" in December 2008, based on "The Five R ecommendations toward the Drastic Expansion of 
Foreign Direct Investment in Japan".  The  GO J continues promoting FDI further through reflecting 
the recommendations. 
 
(For reference "The Five Recommendations Toward the Drastic Expa nsion of Foreign Direct Investment in Japan" 
consists of elements including (1) establishmen t of systems toward the facilitation of M&As; 
(2) comprehensive studies on FDI regulations; (3) establishment of sector-by-sector priority 
strategies; (4) reduction in business costs and improve ment in transparency of systems; (5) regional 
revitalization through invitation of foreign capital and enhancement of publicity to attract foreign 
capital.  The current status of progress on the Five Recommendations is as follows: 
 
(1) Establishment of systems toward the facilitation of M&As, The GOJ was to working towards integrating and cl arifying the rules on M&As by the end of the 
summer of  2008. The GOJ compiled a report named "Takeover Defense Measures in Light of Recent Environmental Changes" in the Corporate Value Study Group held on 30 June 2008.      WT/TPR/M/243/Add.1 
 Page 35 
 
 
  (2) Comprehensive studies on FDI regulations, 
The Cabinet Office will continue comprehensive st udies on FDI regulations as they are exceptions to 
the measures of the "non-discrimination principle".   (3) Establishment of sector-by-sector priority strategy,  
The GOJ has selected the sector of medical devices as a priority sector. The Ministry of Health, 
Labour and Welfare (MHLW) created an action progra m to resolve the issue of "device lag" through 
measures such as the enhancement of medical devices approval systems.  - In this respect, could Japan provide exam ples of measures taken in order to improve 
transparency? 
 
RESPONSE 
 
Some activities in the Program have progressed; for ex ample, in order to improve predictability for 
investors, the government is now taking into cons ideration the conditions for the use of the Prior 
Inquiry Procedure (No-Action Letter System ), taking measures to promote its use. 
 To make an effort to respond more rapidly to pr ior inquiries regarding national taxes, the government 
has been increasing the number of employees in charge of the matter.   
Invest Japan was established at JETRO and related ministries and agencies to provide potential 
investors with information on investment procedures,  as well as more practical information such as 
that regarding the establishment of enterprises, visa s, etc.  Also, Japanese regional information, as 
well as its market information, is availabl e in multiple languages on the JETRO website. 
 
Pages 38-40: 
III. TRADE POLICIES AND PRACTICES BY MEASURE ; (2) MEASURES DIRECTLY 
AFFECTING IMPORTS ; (ii) Tariff; (c) Preferential rates; paragraphs 29-32 
 
QUESTION  We would like to know what is the consultation procedure concerning the products Japan intends to 
remove from the GSP products list and the States that Japan intends to graduate. 
 
RESPONSE 
 
1. The GSP (Generalized System of Preference s) applies reduced tariffs to designated import 
goods originating from developing countries or territo ries, with the aim to help them increase export 
income, advance industrialization and promote ec onomic development. Japan  is properly managing 
the system from the viewpoint of contributing to  the economic development of developing countries. 
There are opportunities to comment at the CTD (Committee on Trade and Development).   2.  Regarding removal from the GSP products lis t, Japan removes products that meet certain 
criteria, taking into considerati on international competitiveness. Rega rding graduation, a beneficiary 
country or territory is excluded from the list of GSP beneficiaries if it is clas sified as a "high income 
economy" in all of the previous three years' Worl d Bank statistics, defined as having a per capita GNP 
of $11,456 or more in 2007 in accordan ce with the 2009 World Bank statistics.  
 WT/TPR/M/243/Add.1  
Page 36 
 
 
  Page 57:  III. TRADE POLICIES AND PRACTICES BY MEASURE ; (3) MEASURES DIRECTLY 
AFFECTING EXPORTS ; (iii) Border adjustment in respect of internal taxes and import duties 
(relating to exports); (a) Consumption tax; paragraph 93  
 
"The consumption tax is zero-ra ted on exported goods, internati onal aviation and transportation 
services, and selling or licensing patents to forei gners; domestic components and raw materials used 
in exported goods are eligible for refund of consumption tax. For a refund of the consumption tax, a 
declaration must be made of the tax authorities with the proof of export."  
 
QUESTION  What are the requirements as we ll as the administrative procedur es for certain products that are 
considered eligible to obtain a refund of consumption tax? 
 RESPONSE  
In the Japanese Consumption Tax Act, taxpayers can deduct a tax credit for the consumption tax on 
most purchases. To qualify for the tax credit on purchases, it is necessary to keep both a book that 
records the particulars of taxable purchases and a book that records prices and documents that are 
issued by suppliers. 
 For more information see: http://www.mo f.go.jp/english/tax/taxes2010e_e.pdf 
 Pages 77-78:  
IV. TRADE POLICIES BY SECTOR ; (2) AGRICULTURE ; (i) Structure; paragraph 9 
 
QUESTION 
 We would appreciate if Japan could specify which products, other than rice, that are receiving – or 
that will receive – the support of the direct-payment programme mentioned on paragraph 9.  RESPONSE  
In FY2011, farmers of upland crops such as wheat and soybean, are to be eligible for the new direct 
payment programme, in addition to rice farmers.  Still concerning this paragraph, we would also like to know how is the "production adjustment 
programme" structure, the products it concerns and th e amount of money invested in it, as paragraph 9 
mentions that there would be more information on the subject in the text, but we couldn't find it. 
 
RESPONSE 
 
Please refer to paragraph 20 in IV. TRADE POLICY  BY SECTOR which reflects the Government of 
Japan's explanation on the production adjustment programme.  Pages 52 and 54: 
III. TRADE POLICIES AND PRACTICES BY MEASURE ; (2) MEASURES DIRECTLY 
AFFECTING IMPORTS ; (viii) Standards, technical regulatio ns, and sanitary and phytosanitary 
measures; (b) Sanitary and phytosanitary meas ures; paragraphs 73, 76 and footnote 87. 
 
QUESTIONS  According to Chapter III, paragraphs 73, 76 and footnote 87, Japan has systematically reviewed 
maximum residue levels MRLs for pesticides. Japan considers that MRLs under its positive list  WT/TPR/M/243/Add.1 
 Page 37 
 
 
  system, introduced in May 2006, are based on Codex standards and, to a lesser degree, on standards 
established by countries/economies where MRLs are assumed to be established based on toxicity 
study data equivalent in quantity to those used  in scientific evaluations by the Joint FAO/WHO 
Meeting on Pesticide Residues (JMPR) and th e Joint FAO/WHO Experts Committees on Food 
Additives (JECFA). However, in the Committee on Sanitary and Phytosanitary Measures, members 
have complained that, in many cases, Japanese SPS regul ations are more stringent than internationally 
established standards (Codex) and risk assessment procedures. Please explain in which cases Japan has decided to apply MRLs stricter than those defined by Codex, as well as the rationale for doing so, and present the scientific studies that were conduc ted to support these exceptions to Codex MRLs. 
Japan adopted a Maximum Residue Level (MRL) for "flutriafol" in coffee, but has not presented a 
scientific evaluation for setting this limit. Japan dema nds that countries that disagree with this limit 
should present a scientific study to propose a differe nt MRL. Brazil considers that presenting such 
study is burdensome and that Japan should provi de scientific information to sustain the MRL 
currently applied.  RESPONSE  
As it is mentioned in the question, at the intr oduction of the positive list system in 2006, Japan 
provisionally established MRLs (maximum residue limits) for compound-food combinations without 
MRLs, mainly taking into consider ation Codex and forei gn countries' MRLs. For combinations with 
Codex MRLs, Japan harmonized with them wherever  possible. Prior to finalizing its MRLs, Japan 
notified the WTO in accordance with the SPS Ag reement to seek public comments. Comments 
obtained were thoroughly examined. Therefore, Japan  considers the procedure to have met the terms 
of the Agreement.  As already mentioned in Japan's reply to Brazil's previous question (Brazil 1), in response to the 
request from the Government of Brazil for the establishment of a MRL (maximum residue limit) for 
flutriafol in coffee beans, the Ministry of Health , Labour and Welfare of Japan, with the intent of 
setting the MRL, asked the Food Safety Commission of Japan (FSC) to carry out risk assessment for 
this compound, and it is currently underway. B ased on the forthcoming assessment result from the 
FSC, the MRL will be deliberated a nd established by the Pharmaceu tical Affairs and Food Sanitation 
Council.  
 
There is currently no MRL set for flutriafol in coff ee beans, so a uniform limit (0.01 ppm) is applied. 
For details, please refer to Japan's reply (Brazil 1).  QUESTION 
 
According to Chapter III, paragraph 78, Japan currently imposes import prohibitions on beef and 
poultry from various countries to prevent the spread  of BSE and avian flu. The process of lifting the 
import ban includes technical cons ultations, consideration of impor t requirements and implementation 
of risk assessment that takes due account of the OIE code. Please indicate the average duration of 
processes for lifting these import bans. 
 
RESPONSE 
 
It is difficult to calculate the average duration of  the procedure for approval for import of designated 
quarantine items. The average duration depends on vari ous factors, such as the animal health situation 
in the requesting country, availability and complete ness of the relevant data and proposed measures 
from the requesting country to address Japan's concerns.   In March 2009, Brazil initiated a process for lifting a Japanese ban on Brazilian exports of swine meat 
from the Santa Catarina State, a zone which is free from foot-and-mouth desease (FMD) without WT/TPR/M/243/Add.1  
Page 38 
 
 
  vaccination. Since then, Brazil has made many consultations with the Japanese authorities and 
provided all information demanded by them. However,  Brazil considers that this process has been 
lengthy and inconclusive. Please explain the steps requi red for lifting the ban on this product and give 
an estimate time for the conclusion of the Brazilian demand. 
 
RESPONSE 
 
Japan's animal health authority has been study ing and analyzing the data provided by Brazil's 
counterpart. If the analysis indicates sufficiency of data, the animal health authorities will arrange to 
send a technical mission to Santa Catarina State.  (At the moment, the many veterinary officers in MAFF are tied up with HPAI.)  
SPS Issues – other questions 
 
Japan demands a pest risk analysis (PRA) for ever y single variety of mangoes, instead of a single 
PRA for the species. This measure restricts the vari eties that can be exported to Japan. Please present 
details of the Japanese legislation as well as scientific explanations for the PRA requirements for mangoes. 
 
RESPONSE 
 
Brazil requests Japan to expand the disinfestation treat ment protocol agreed for one variety of mango 
approved for export into Japan to other varieties which Brazil wishes to export to Japan. Japan considers the effectiveness of disinfestation may va ry depending on the shape and size of varieties. 
The applicability of the said disinfestation treatment shall be examined on a variety-to-variety basis. 
 Pages 17-19:  
II. TRADE POLICY REGIME : FRAMEWORK AND OBJECTIVES ; (4) T RADE 
AGREEMENTS AND ARRENGEMENTS ; (II) Regional trade agreements; (a)  Bilateral/regional free-
trade agreements adopted by Japan; paragraphs 24-34 
 
QUESTION  Concerning the bilateral or regional Free Trade Ag reements which Japan ha s adhered to, could the 
Japanese delegation elaborate on the treatment and coverage conferred to the agricultural sector? 
 RESPONSE  
In Japan's existing EPAs, more than 90 % (based on trade volume between the parties) of goods in 
total, including agricultural goods, will be duty free in ten years.   
In our "Basic Policy on Comprehensive Economic Pa rtnership" decided by the Cabinet on 9th of 
November 2010, the Government of Japan, while taki ng into consideration the sensitivity of trade in 
certain products, will subject all goods to negotiati ons for trade liberalization and, through such 
negotiations, pursue high-leve l economic partnerships. 
  WT/TPR/M/243/Add.1 
 Page 39 
 
 
  WT/TPR/G/243  
 
Page 23:  IX.  JAPAN 'S DOMESTIC POLICIES ;  (3) FINANCIAL REFORM ; BANKING AND SECURITIES 
SECTORS ; paragraph 89. 
 QUESTION 
 Brazil takes note of the importance and scope of the Act Concerning Temporary Measures to Facilitate Financing for Small and Medium-Sized Enterprises, which expires in March 2011. Would 
the Delegation of Japan share the main results of th is policy? Could Japan inform if this Act will be 
re-issued? 
 
RESPONSE 
 
The Act Concerning Temporary Measures to Fac ilitate Financing for Small and Medium-Sized 
Enterprises (hereinafter "the Act") was enacted in  December 2009. Since the implementation of this 
Act, more than 90% of requests from the SMEs and other borrowers have been duly accepted by financial institutions for a revision of their loan  terms. The following are some comments from SMEs 
and residential mortgage borrowers:   - "Our company can manage to continue it s operation thanks to the rescheduling of our 
loans made possible by this Act." 
 - "We negotiated with financial institutions using this Act, and were able to avoid 
foreclosure and being auctioned off." 
 The Act was originally supposed to expire at th e end of March 2011. However, considering the 
current economic conditions and the analysis of the results of the implementation of the Act including 
the opinions of relevant stakeholders and the insp ection and observation of fi nancial institutions, in 
December 2010 the Government of Japan decided to extend the Act by one year and made public their 
plans. Following this decision, the Bill to extend the duration of the Act un til the end of March 2012 
was submitted to the Diet on 25 January 2011.  
In addition, the Financial Services Agency of Japan  is planning to improve the implementation of the 
Act by taking following measures:  (a) To revise the supervisory guidelines to pr omote consultation by financial institutions  
(b) To revise the format of the disclosure/repor ting documents in order to ease the administrative 
burden of the financial institutions. 
 QUESTIONS REGARDING SUPPORT FOR THE MITSUBISHI REGIONAL JET   Section IV, paragraph 26 of the Report by the Secretariat reads as follows:  
"Sector-specific subsidies,  such as those provided to companie s involved in the manufacture of civil 
aircraft, have remained unchanged during th e review period. [Footnote: WTO document 
G/SCM/N/186/JPN, 25 June 2009]  In 2007, ¥122  million were provided as a grant to the Japan 
Aircraft Development Corporation (JADC) for th e development of next-generation aircraft.  
Furthermore, in 2007, ¥1,050 million were also provide d in the form of a reimbursable grant to JADC 
and Japan Aero Engines Corporation for the development of civil aircraft." 
 1. Has the government of Japan provided any support for the development of commercial 
aircraft except as outlined in the June 25, 2009 no tification made pursuant to Article XVI:1 of the 
GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing Measures WT/TPR/M/243/Add.1  
Page 40 
 
 
  (G/SCM/N/186/JPN)?  If so, please identify all relevant agencies and programs, the recipients of the 
support, and the amount(s), terms and co nditions of each instance of support.  
 
2. During the 2009 review, Brazil asked ques tions regarding Japanese government support for 
the development of civil aircraft generally and the Mitsubishi's Regiona l Jet ("MRJ") in particular (see 
WT/TPR/M/211/AD.1 at pages 3-4).  Brazil asked, for example, about support provided through the 
New Energy and Industrial Technology Development Or ganization, which is linked to the Ministry of 
Economy Trade and Industry ("METI").  Brazil al so asked about support provided through the 
International Aircraft Development Fund (see WT /TPR/M/211 at paragraph 46).  Brazil does not 
believe that Japan has adequately addressed its questions about these programs or the support being 
provided for the MRJ, and is concerned about the lack of transparency surrounding Japan's support for 
the development of civil aircraft in general, and for the MRJ in particular.  Brazil would therefore 
appreciate it if the Government of Japan could iden tify all of the assistance provided for the MRJ, 
specifying the relevant programs or agencies, amounts provided, and terms and conditions.    
 
RESPONSE 
 
There is no support provided by the government of Ja pan for the development of commercial aircraft 
except as outlined in the notification made pursu ant to Article XVI:1 of the GATT 1994 and 
Article 25 of the Agreement on Subsidies a nd Countervailing Measures (G/SCM/N/186/JPN). 
 3. With regard to support for the MRJ proj ect provided through the Japan Development Bank 
("JDB"), in particular, please explain why the bank accepted non-voting shares in Mitsubishi Aircraft 
Company ("MAC"), whereas the information availa ble indicates that all other investors received 
voting shares.  In our response, please refer to any studies or reports demonstrating that the JDB's 
investment(s) in MAC were consistent with commerc ial considerations or that JDB expects to earn a 
market return on its investment(s).  
RESPONSE 
 
The Japan Development Bank (JDB) no longer exists . The Development Bank of Japan Inc. ('DBJ'), 
established as a joint-stock company in 2008, is  its successor. As a joint-stock company, its 
investments shall be consistent with commercial c onsiderations. Each investment judgment is made 
by the DBJ itself, not by the government. The Mits ubishi Aircraft company case is not an exception. 
 According to the DBJ, the reason why the DBJ hol ds non-voting shares is that these shares are not 
common stock, but preferred stock. It is common that financial institutions place more emphasis on 
financial return than management rights and choo se preferred shares without voting rights, whereas 
non-financial institutions choose common stocks with voting rights.   4. Please specify whether any government entity or entity affiliated with the government will 
provide support for the sale of MRJs to All Nippon Airways or Trans State Holdings.  If any such 
support is planned, please specify its nature (e.g., sales financing loans, guarantees, etc.) and amount. 
 
RESPONSE 
 
It is not decided whether or what kind of suppor t will be provided for the sales of MRJs. Japan will 
provide such support, if any, in a fully compatible way with international rules.   WT/TPR/M/243/Add.1 
 Page 41 
 
 
  CANADA  
Report by the Secretariat (WT/TPR/S/243 ) 
 
Part III. Trade Policies and Practices by Measu re: (1) Introduction: paragraph 5, page 31; 
Part III. Trade Policies and Practices by Measu re: (2) Measures directly affecting imports; 
(vi) Government procurement; paragraph 52, page 45; 
Part III. Trade Policies and Practices by Measure:  (4) Measures affecting production and trade; 
(ii) Subsidies and other financial assist ance; paragraph 116, page 63; and,  
Part III. Trade Policies and Practices by Measure:  (4) Measures affecting production and trade; 
(v) Regulatory reform; paragraph 142, page 68  
 
The Secretariat's Report indicates that Japan aims to increase the consumption of domestic wood with 
a target of covering more than half of dom estic demand for wood with domestic supply. 
 1. Could Japan list central and prefectural govern ment programs and approaches that have been 
proposed or implemented to increase the consumption of domestic wood? 
 2. Can Japan indicate how these programs are desi gned to achieve the goal of increasing the use 
of domestic wood, and will Japan be providing s ubsidies to producers, suppliers or buyers to 
encourage the production or purchase of domestic wood?   
3. Under this new policy to increase the cons umption of domestic wood, can Japan provide 
details on how it is ensuring consis tency with "national treatment", i.e. that imported wood will be 
treated equally to domestic wood in government proc urement policies, regulations, directives, public 
communications and public promotional campaigns?  RESPONSE  
(Q1~3) In May 2010, "the Act for the Promo tion of Use of Wood in Public Buildings" was 
established to boost the use of wood as a whole in pub lic buildings, regardless of its country of origin. 
The central government has carefully designed the Ac t and related rules and regulations to ensure 
consistency with non-discriminati on and national treatment principles in WTO rules, especially the 
Agreement on Government Procurement, and has held a series of briefing sessions to instruct 
prefectural governments to implement them in such  a manner. This Act and other Japanese timber-
related policies such as the Forest and Forestry  Revitalization Plan will be operated without 
distinction between domest ic and imported wood. 
 Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; (vi) Government procurement: paragraph 50, page 44  
 
The Secretariat's Report states that 'a specific cont ractor may be selected under the "single tendering" 
contract method if, inter alia, the nature or objectives of the law does not allow competition…'. 
 
4. Could Japan please explain which law is  being referred to in this instance? 
 5. Could Japan please refer to the specific provisi ons of a law, as in the above question, which 
determine that its nature or obj ectives do not allow competition?  
 RESPONSE  
(Q4~5) The only law being referred to in this instance is the Accounts Law. 
 WT/TPR/M/243/Add.1  
Page 42 
 
 
  The Secretariat's Report states that "the nature or objectives of the law does not allow 
competition…", but the correct wording based on the s tipulation of the Accounts Law is "the nature or 
objectives of the contract does not allow competition… ")  Purchases of art objects by museums would 
be an example in which the nature or objec tives of the contract do not allow competition. 
 
Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; 
(vi) Government procurement: paragraph 50, page 44  
 The Secretariat's Report states that 'a specific cont ractor may be selected under the "single tendering" 
contract method if, inter alia … the contract value is small, in accordance with clause 4 or 5 of 
Article 29.3 of the Accounts Law'.  6. Could Japan please indicate the threshold that is used to determine whether a contract value is 
considered small, permitting the sing le tendering method to be used?   
 
RESPONSE 
 
Cases that may be subject to the single tendering contract method include the following: 
 
 - When construction work or production is to be provided for an estimated value not 
exceeding 2,500,000 yen; 
- When property is to be purchased for an estimated value not exceeding 600,000 yen; 
- When goods are to be rented for an estimat ed annual fee or total rent payable not in 
excess of 800,000 yen; 
- When a contract other than that for cons truction work or production, sale or purchase 
of property, and lending or renting of goods is to be executed for an estimated value 
not exceeding 1,000,000 yen. 
Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; 
(vi) Government procurement: paragraph 51, page 44  
 
The Secretariat's Report notes that 'the authorities st ate that local government procurement procedures 
are basically the same as those of the central government, except for Japan's voluntary measures. 
Japan's voluntary measures include improved market  access and the Action Program on Government 
Procurement.  In addition, there are voluntary measu res pertaining to individual sectors, such as super 
computers, non-R&D satellites, computer products and services, telecommunication, and medical technology.    Except for these voluntary measures,  certain designated local authorities (designated cities), as 
defined under a relevant cabinet order, must comply with the GPA, as mentioned above'. 
 7. Could Japan please elaborate upon the na ture of the voluntary measures listed in 
paragraph 51? For example, how are these voluntary measures implemented?  RESPONSE  
For each of the sectors of super computers, non-R&D satellites, computer products and services, 
telecommunications, and medical technology, resp ective special voluntary measures have been 
provided in order to further promote procurement based on procedures that ensure non-discriminatory, 
transparent, fair and open competition. 
  WT/TPR/M/243/Add.1 
 Page 43 
 
 
  Please see Attachment 2 on the following website for the details of the measures. 
http://www.kantei.go.jp/foreign/procurement/2009/index.html  
Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; 
(vi) Government procurement: paragraph 53, page 45 
 
The Secretariat's Report states that 'in accordance wi th the Basic Guideline for Public Procurement of 
Information Systems, adopted in March 2007, pr ocurement under the basic guidelines may not exceed 
¥500 million per contract;  any pla nned procurement in excess of this threshold must be divided'. 
 
8. Could Japan please explain the rationale for dividing procurements in excess of ¥500 and 
explain how the procurements are divided?  
RESPONSE 
 
In accordance with the Basi c Guideline for Public Procurement of Information Systems, procurement 
of design and development of an information sy stem whose expenditure is over \500 million is 
encouraged to be divided in principle.  The purpose of this guideline is to improve competiti on in procurement of information systems, which 
tend to be large-scale projects, by dividing the unit of  procurement, which would lead to, for example, 
prevention of the vender lock-in of the procurement. Therefore this guideline does not intend to avoid 
the application of the Agreement on Government Pr ocurement. To be precise, as this principle is 
applied to the large-scale projects of informati on systems, each contract value exceeds the GPA 
threshold even if it is divided. This Guideline applies to the central government entities which are 
listed in the Guideline. 
 
The procurement of the information system is divi ded in the each process of works which are system 
design development, operation and main tenance, and divided into hardwa re and software in principle. 
 
Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; 
(viii) Standards, technical regulations, and sani tary and phytosanitary measures; paragraph 71; 
Page 52  
The Secretariat's Report indicates that Japan relies on self-certification systems in the high pressure gas sector, government evaluation in the case of bo ilers, pressure vessels or electrical equipment for 
use in an explosive atmosphere, and a third party certification system for medical devices. 
 
9. Could Japan please provide details on the conformity assessment systems it uses to evaluate safety and electro-magnetic compatibility (EMC) of electrical and electronic products. In particular, 
please provide a list of electrical and electronic pr oducts for which government evaluation and/or 
approval may be required and explain the f unctioning of this particular system? 
 RESPONSE  
Among electronic and electrical products specified by the Electrical Appliances and Materials Safety 
Act, those emitting radio wave noise have to ensure the technical standards of the noise strength.  
Self-agreement by the importers is assumed to be the basis for the agreement confirmation of a 
technological standard concerning electric articl es specified by the Electrical Appliances and 
Materials Safety Act.  Only when the risk is high, Japanese regulators of imported products rely on 
confidence in overseas certificates and test reports that are provided by the Registered Conformity Assessment Bodies.  WT/TPR/M/243/Add.1  
Page 44 
 
 
  In addition, regarding the equipment utilizing high  frequency current specified by the Radio Act, 
inductive reading and writing radio communication e quipment, power carryi ng interphones, general 
power carrying digital transmission equipment, special power carrying digital transmission 
equipment, power line communications, ultrasonic cleaning devices, ultrasonic processing devices, 
ultrasonic welding devices, document copying and printout machines using induction heating and 
electrodeless discharge lamps are ensured of EM C based on approval of type specification by the 
government, and equipment that frequently circulat es into the market in large numbers, such as 
microwave ovens and induction heating cooking equi pment, is ensured based on type Confirmation 
by SDoC. 
 
Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; 
(viii) Standards, technical regulations, and sani tary and phytosanitary measures; paragraph 73; 
Page 52  
 The Secretariat's Report notes that since 2009, Ja pan has made several revisions to its food 
specifications and standards which are established un der its Food Sanitation Law.  Revisions include 
changes to maximum residue limits  (MRLs) for pesticides and amendm ents on food additives.  These 
changes are part of systematic review of the pr ovisional MRLs that were established by Japan for 
758 agricultural compounds or components when it introduced the positive list system in 2006.   
 
Canada has been monitoring changes to MRLs for pesticides present in food commodities.  Canada 
appreciates Japan's transparency and diligence in establishing these MRLs which are generally in line 
with international standards and take into account tolerance levels  established in other countries.  
Canada looks forward to working with Jap an towards a better harmonization of MRLs. 
 
Although not specifically referenced in Japan's  Trade Policy Review, on May 18, 2010, Japan 
announced in a WTO notification its intention to wit hdraw 80 food additives no longer distributed in 
Japan from the current List of Existing Food Additiv es.  A review of the 80 items to be de-listed by 
Japan's MHLW revealed that not all of the items wo uld be deemed by the Codex Alimentarius to be 
food additives.  In addition, it is Canada's understa nding that the substances targeted for de-listing will 
be prohibited if they are used as food additives, but  will still be allowed into  the Japanese market if 
they are used either as food ingredients or flavouring agents.    10. Could Japan please provide more clarity on th e distinction between food additives and food 
ingredients/flavouring agents so as to be able to  determine under which circumstances the import of 
de-listed food items will be deemed by the Japan ese quarantine authorities as a violation to the Food 
Sanitation Law?  
 
RESPONSE 
 
In Japan, food additives are defined as substances that  are used by the methods specified by the Food 
Sanitation Law in the process of producing food or  for the purpose of processing or preserving food. 
Even foods themselves and constituents naturally o ccurring in them can be deemed as food additives 
if they are used for the specified purposes.  Presently, there are four categories of food additives: designated food additives (substances that are 
designated by the Minister of Health, Labour and We lfare as those unlikely to damage human health), 
existing food additives, natural flavor s, and substances that are provi ded for eating or drinking as food 
and that are used as food additives.   WT/TPR/M/243/Add.1 
 Page 45 
 
 
  The existing food additives were published in the List of Existing Food Additives in 1996. Japan 
intends to withdraw some food additives from the list. The targets of the revision are the food 
additives that are no longer distributed in the domestic market.  Basically, substances withdrawn from the list will no longer be permitted for use in food with some 
exceptions. This means that food containing delist ed substances shall not be distributed in the 
Japanese marketplace.   Nevertheless, in the case that a food contains th e same constituent as a delisted additive, if it 
originates from an ingredient of the food or it is naturally produced during the production of the food, 
that constituent will not be deemed to be inten tionally added to the food and the food will not be 
prohibited from being marketed in Japan.  
Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; 
(viii) Standards, technical regulations, and sani tary and phytosanitary measures: paragraph 78, 
page 54  
The Report by the Secretariat states that Japan's process of lifting "import prohibitions on beef and 
poultry from various countries to prevent the sp read of BSE and avian flu includes technical 
consultations, consideration of im port requirements, and the implementation of a risk assessment that 
takes due account of the OIE code."  Canada notes th at two years ago, Canada formally requested that 
Japan commence a risk ass essment on Canadian beef derived from cattle under 30 months of age as a 
next step toward full beef access.   11. Could Japan confirm when the risk assessment  will be commenced and completed, or explain 
the reasons preventing the commencement?  
 
RESPONSE 
 
For importation of beef and beef products into  Japan from a country where a BSE outbreak has 
occurred, the Ministry of Agri culture, Forestry and Fisheries (MAFF), from an animal health 
standpoint, and the Ministry of Health, Labour and Welfare (MHLW), from a food safety standpoint: 
 
 (1) analyse relevant data and info rmation of the country concerned; 
 (2) conduct on-site visits for verification of the data and for additional information, if 
necessary; and 
 (3) request the Food Safety Commission (FSC) to conduct risk assessment. 
 
Japan strives for continuing communi cation, such as having a technical expert meeting with Canada in 
October 2010.  
Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; 
(viii) Standards, technical regulations, and sani tary and phytosanitary measures: paragraph 81, 
page 55  
The Report states that Japan will negotiate mutu al recognition agreements based on industries' 
requests with other countries to reduce technical barri ers to trade. Canada has formally requested that 
Japan enter into discussions on organics standards equivalency for the purpose of facilitating trade. 
Discussions have been initiated and both countries have agreed to share information.    
 12. Has Japan concluded organics equivalency ag reements with other countries and which ones? 
Given the growing global demand for organic products, has this been a priority and will Japan be 
pursuing more of these equivalency agreements?   WT/TPR/M/243/Add.1  
Page 46 
 
 
   
RESPONSE 
 
Japan has unilaterally recognised organic equivalency,  which does not require a reciprocal agreement. 
 Regarding organically produced plants and processed  products thereof (hereinafter referred to as 
"organic foods"), Japan recognises such countries that have equivalent systems to the JAS organic 
system. 
 
As of February 2011, the recognised countries are as follows:  Argentina, Australia, Austria, Belgium, Bulgaria , Cyprus, the Czech Republic, Denmark, Estonia, 
Finland, France, Germany, Greece, Hungary, Ireland , Italy, Latvia, Lithuania, Luxembourg, Malta, 
the Netherlands, New Zealand, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, 
Switzerland, the United Kingdom, and the United States of America. 
 The European Union has recognised the JAS organic system as equivalent to its organic rules and regulations.  
Japan continues its effort towards mutual recognition of organic equivalency. Unfortunately, it should 
be noted that the available resources in  the competent authorities are limited. 
 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (vi) Competition Policy; (v) Regulatory Reform, paragraph 141; page 68 
 13. Since its previous Trade Policy Review, wh at measures has Japan taken to improve its 
regulatory and reimbursement practices for medica l devices, and are these measures applicable to 
imports of medical devices from Canada?   
RESPONSE 
 Good Clinical Practice on medical devices was re vised on Mar. 31 2009. Non-corrective colored 
contact lenses become a "medical device" re gulated under the Pharmaceutical Affairs Law on 
November 4, 2009.  After the medical device pricing revision in 2010, it was decided that "The Medical Device Pricing 
Committee", which discuss the reimbursement price of  medical devices, is to be held twice every 
three month.  These measures are applicable to imports of medical devices from Canada.  Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (vi) Competition Policy; (a) R ecent Development: paragraph 147, page 69 
 
The Report states that a bill to further amend the Anti-monopoly Act (AMA) was submitted to the 
Diet on March 2010 but has not yet been adopted.  The bill seeks to abolish the JFTC's hearing 
procedure for administrative appeals before im posing surcharges on enterprises, and the current 
administrative appeal procedure itself.    14. Could Japan explain the rationale for the ne w bill submitted to the Diet on March 2010 which 
amends the Anti-monopoly Act's (AMA) appeal pro cess? When does Japan antic ipate the bill to be 
adopted?   WT/TPR/M/243/Add.1 
 Page 47 
 
 
   
RESPONSE 
 
It has been pointed out that the hearing procedur e by the Japan Fair Trad e Commission (JFTC) lacks 
fairness. The JFTC is solely responsible for revi ewing whether or not administrative orders issued 
against violating companies are appropriate, alt hough it is the same body that issues them.  The 
amendment of the AMA includes the abolition of th e hearing procedure conducted by the JFTC and 
the consignment of administrative review to district  courts against administrative sanctions by the 
JFTC with a view to resolving the criticisms on pro cedural fairness.  In addition, the amendment aims 
to further improve ex ante procedures when th e JFTC takes measures and also to increase the 
transparency of the process.  The bill is u nder Diet deliberation in the current session. 
 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (vi) Competition Policy; (b) Exemptio ns from the AMA Prohibition of Cartels: 
paragraph 148, page 69 
 
15. Japan decided, in light of a review of the AMA in 2007, that it was necessary to maintain the 
exemption for international shipping activities.  What was the rationale for this decision? 
 
RESPONSE 
 
The International Maritime Transport Sub-committ ee, a special group under the Maritime Affairs 
Section of the Council for Transport Policy, which is a ministerial advisory body for the Minister of Land, Infrastructure, Transport and Tourism(MLIT ), considered in 2007 whether the antimonopoly 
exemption for international shipping activities remain ed necessary. After careful consideration of the 
characteristics of international shipping with regard  to fierce competition, unstable market conditions, 
the necessity of alliances, consistency with internatio nal shipping frameworks and the fact that Japan's 
exemption system is being applied with sufficien t protection for users, the Council highlighted the 
necessity for the exemption. Therefore, the ML IT has decided to retain the exemption. 
 The MLIT intends to undertake further studies on this issue from the following four points of view, which were described in the above recommendation: 
 
 1. The antimonopoly policies taken by other na tions and the impact of those policies on 
the Japanese shipping industry 
 2. The development of the international shipping market including the emergence of 
large shipping companies 
 3. Whether the agreements among shipping companies function to supply a stable 
shipping service 
 4. The impact of the abolition of the anti-monopoly exemption on the Japanese 
economy 
 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (vi) Competition Policy; (c) Holdin g companies, and Mergers and Acquisitions: 
paragraph 149, page 71 
 
16. Could Japan explain how the revised Guidelines to the Application of the AMA concerning the Review of Business Combinations have proved to  be an effective tool to improve predictability 
and transparency, and whether (and how) these me asures accelerate the merger review process for 
enterprises?  WT/TPR/M/243/Add.1  
Page 48 
 
 
  RESPONSE 
 
The Japan Fair Trade Commission (JFTC) formulat ed Guidelines to the Application of the AMA 
concerning the Review of Business Combinati ons on May 2004.  These Guidelines clarify and 
elaborate the types of business combinations subject to reviews, the criteria for determining relevant 
markets, and the frameworks and criteria for dete rmining whether competition will be substantially 
restrained or not.  The JFTC has conducted bus iness combination reviews on the basis of these 
guidelines (revised partly in January 2011).  In a ddition, the JFTC has published "Policies dealing 
with prior consultation regarding business combin ation plans" and the major business combination 
cases every fiscal year.  These efforts by the JF TC contribute to impr oving predictability for 
companies, thereby further ensuri ng the transparency of the application of laws concerning business 
combination reviews.  As for the prior consulta tion regarding business combination plans, the JFTC 
has made efforts to improve the promptness of  business combination reviews through efforts like 
publishing "Policies dealing with  prior consultation regarding business combination plans". 
 
Part IV. Trade Policies by Sector: (2) Agriculture; (i) Structure: paragraph 9, page 78 
 
Although the Japan pork "gate price" import regime is not explicitly outlined in the Secretariat Report, Canada is seeking clarification on the reform process on the "gate price" system. 
 
17. Could Japan provide a follow up and some de tails on the reform process for the pork "gate 
price" system and outline how these reforms are creati ng or will create a streamlined, transparent, and 
predictable tariff regime pork imports?   
RESPONSE 
 "Economic and Fiscal Reform 2007", the Cabinet' s decision in June 19th, 2007, indicates that 
handling of the gate price system will be "exa mined in the framework of the WTO negotiation".  
Japan is in the process examining various options of the reform. 
 Part IV. Trade Policies by Sector: (2) Agriculture; (i) Structure: paragraph 9, page 78 
 
The Report by the Secretariat mentions that in th e recently released Basic Policy on Comprehensive 
Economic Partnerships, Japan promises to "promote a ppropriate domestic reforms" in agriculture with 
a view to "opening the country".  Our understandi ng is that a basic policy for such purposes will be 
developed by the Headquarters for the Promotion of Agricultural Structural Reform by June 2011.   
 
18. Could Japan please inform Canada whether dedi cated resources have been allocated in the 
fiscal year 2011 budget to implement the initiatives th at are scheduled to be announced in June?  
 
RESPONSE 
 The outline on the Revitalization of  the Agriculture, Forestry, Fish ery, and Food Re lated Industries 
will be developed by around this June, and the action plan will be drawn up by around this October. 
After this process, the Government of Japan will implement the plan.  
19. What is Japan's intended implementation date  for the reforms that are scheduled to be 
announced in June?    WT/TPR/M/243/Add.1 
 Page 49 
 
 
  RESPONSE 
 
The outline on the Revitalization of  the Agriculture, Forestry, Fish ery, and Food Re lated Industries 
will be developed by around this June, and the action plan will be drawn up by around this October. 
After this process, the Government of Japan will implement the plan. 
 
Part IV. Trade Policies by Sector: (2) Agriculture; (i) Structure: paragraph 9, page 78 & 
(iii) domestic measures: paragraphs 18-22, pages 82-83 
 
The Secretariat Report notes the shift towards different policy instruments for a number of products, 
such as direct payment schemes and "supply-demand adjustments".   
 20. Could Japan elaborate on the name of these policies, the expected disbursements, and the 
criteria for eligibility, including historical reference amounts?  RESPONSE  
In 2007, Japan introduced a direct payment name d "Programs of Direct Payment for Paddy-Field 
Farming and Upland-Field Farmi ng". The budget of this policy is \231 billion in FY2010.The scheme 
targets "Certified farmers"* and "Village farming collectives" with a certain farming scale (Certified farmers: 4 ha or more, Village farming collectives: 20 ha or more (with special treatment for those in 
disadvantageous areas)). Furthermore, the farmers are requested to use their farmland appropriately 
and follow the agricultural environmenta l code defined by the government. 
 * "Certified farmers" are those who are certified by  municipalities. "Village farming collectives" are 
village-based farming managements. 
 
Part IV. Trade Policies by Sector: (2) Agricu lture (iii) domestic measures: paragraph 20, 
page 82 
 
The Secretariat Report notes that the Governme nt of Japan implemen ts rice "supply-demand" 
adjustment programme to keep domestic prices stab le and raise the food self-sufficiency ratio. The 
"rice diversion programme" is one of the sub-pr ogramme to adjust rice "supply-demand." Under the 
program, government pays farmers to use rice pa ddies for the purpose other than growing rice for 
food. These payments are in addition to other subsid ies received for crops other than rice. However, 
Japan continues to report the payment under "rice diversion programs" as a "Green Box" Measures (as an Environmental Programme) in WTO notifications. 
 
Since the objective of the programme is to stabili ze domestic  rice prices which means the programme 
affects rice prices. In addition, if farmers grow other crops on rice paddies under the rice diversion program then the diversion payment could be c onsidered as production subsidies to increase the 
production of non-rice crops.    
21. Since  the rice diversion program impacts dom estic rice prices and the production of non-rice 
crops, could Japan clarify its claim that the rice di version programme is pri ce and production neutral? 
 
RESPONSE 
 
The objective of the diversion programme is to  preserve, under the product-limiting programme of 
rice, a favourable environment for paddy fields by  growing crops other than rice or adopting other 
appropriate management practices. The payment unde r this programme is exercised in a precise 
manner as an environmental programme stipulated in  the Agreement of Agriculture. It does not have 
the effect of providing price support to producers. WT/TPR/M/243/Add.1  
Page 50 
 
 
   
Part IV. Trade Policies by Sector: (1) Introduction: paragraph 1, page 76: 
Part IV. Trade Policies by Sector: (5) Services;  (i) Financial services: Paragraph 39, page 86 
  
Canada has no view in regard to the privatization of Japan Post per se.  We do, however, seek a level 
playing field in the Japanese financial industry, whic h will be beneficial not only to foreign financial 
institutions operating in Japan but also for Japanes e consumers and for the efficiency and stability of 
the Japanese financial system. Canada also expect s that Japan will ensure that any reforms are 
consistent with Japan's international obligations.  
 Canada is concerned that the draft legislation intr oduced, but not passed, in the last two Diet sessions, 
would perpetuate a unlevel playing field between Japan Post and private providers, and some elements may further tilt the playing field against priv ate-sector competitors to Japan Post's financial 
subsidiaries. 
 
22. Canada would be interested in learning more about Japanese policy regarding the reform of 
Japan Post. We understand that it is the government's  intention to again seek to pass the proposed 
legislation. Are there plans to equalize the treatme nt of financial institutions vis-à-vis Japan Post, 
either through modification of the proposed legislation, or through other actions?    
 
RESPONSE 
 
The bills for Postal Reform have set a basic po licy that postal services are operated with full 
consideration for equitable conditions of comp etition between the Japan Post Group and other 
operators offering similar services. Based on this polic y, the Government of Japan intends to ensure 
consistency with GATS and other interna tional agreements in future operations. 
 
Part IV. Trade Policies by Sector: (5) Serv ices; (iii) Transport: Paragraph 58, page 91 
 
The Secretariat Report notes that "Under the Super-Hub Port project, which aims to reduce port-
related charges by 30% to the level of Busan and Kaohsiung ports, as well as lead times to less than 
24 hours by FY2010, lead times are now approximate ly one day, and port charges were reduced by 
20% between 2000 and 2008".  23. Canada is interested in learning more about  how Japanese ports were able to reduce their port 
fees by 20% as referenced in the above paragraph? 
 
RESPONSE 
 
The methods of reduction in port charges (per container) include the following, among others: 
 
(i) enhancement of the container-handling capacity of the port  
(ii) increasing the number of containers in the Port.   WT/TPR/M/243/Add.1 
 Page 51 
 
 
  CHINA  
 
Report by the Secretariat  
 Section I:  E
CONOMIC ENVIRONMENT  
 
(2) M ACROECONOMIC POLICIES  
 
Paragraph 6, Page 3  
"The nominal exchange rate of the yen against the U.S. dollar appreciated between September 2008 
and November 2010 (from ¥109 per U.S. dollar to ¥81), perhaps owing partly to the unwinding of the 
yen 'carry trade'"  Question 1 
 
Could the Japanese Delegation please elaborate whethe r analysis of the Japanese Government comes 
to the same conclusion?  
RESPONSE 
 Currencies move due to various factors in the floa ting exchange rate system . Japan would appreciate 
it if China would understand that the Government of Japan is not in a position to single out and 
comment on a specific factor.  (3) S
TRUCTURAL POLICIES  
 (i) Services sector 
 
Paragraph 9, Page 3  
"The services sector has been relatively sheltered from competition (both domes tic and international). 
The key element to boosting productivity in servi ces is raising competition, which would involve 
further deregulation especially in wholesale and reta il and in healthcare services. Increased foreign 
competition would also benefit the economy.  To ach ieve the latter, domestic regulations on setting up 
a business, especially with respect to time taken and costs incurred, could be improved and regulatory 
reform accelerated. It is also important to reduce ba rriers to trade in services either on a multilateral or 
unilateral basis. FDI restrictions and product market  regulations that discourage investment could also 
to be eased.  Other factors that may inhibit invest ment are the relatively high corporate tax in Japan 
and the severe restrictions on bringing in foreign workers."  Question 2 
 
Could the Japanese Delegation please indicate whether it concurs with the view expressed in the Secretariat Report?  If the answer is yes, what st eps has Japan taken to improve the situation in its 
services sector?  Are these steps effective?  RESPONSE  
As the service sectors account for about 80% of Japan's GDP and 78% of its employment, Japan 
certainly recognizes the importance of liberalizing the service sectors for growth and competitiveness, and has been taking various steps to  promote that liberalization. For instance, in 
June 2010, the Cabinet issued a decision entitled "New  Growth Strategy," which sets forth strategies WT/TPR/M/243/Add.1  
Page 52 
 
 
  for achieving a strong economy to return Japan to economic health. Furthermore, in November 2010, 
the Cabinet issued a decision entitled "Basic Polic y for Comprehensive Economic Partnerships," 
where it expressed its intention to further promote n ecessary regulatory reforms in the interest of the 
'open up the country' vision. In addition, in March 2010, the "Subcommittee on Regulatory and 
Institutional Reform" was established under the G overnment Revitalization Unit. As for the 
liberalization of trade in services, Japan rema ins strongly committed to the DDA negotiations. The 
basic principle for Japan is that the comprehens ive liberalization of trade in services should be 
achieved in a way that benefits all Members, incl uding developing countries. Japan is determined to 
further promote the liberalization of services sect ors both domestically and internationally.  
 
(ii) Labor market 
 
Paragraph 14, Page 5  
"Another area of concern is Japan's shrinking labor for ce due to its aging population.  In this regard, 
easing restrictions on immigration of foreign workers, especially in sectors facing acute shortages of workers, would help to alleviate the problem and may also increase productivity."  Question 3 
 
Could the Japanese Delegation please indicate whet her it endorses the suggestions made by the 
Secretariat Report?  
RESPONSE 
 
Regarding the Government's response to the shrink ing workforce, the New Growth Strategy (June 18, 
2010 Cabinet Decision) describes that there is conc ern that the shrinking workforce caused by the 
aging of the population will undermine Japan's latent capacity for growth. It is therefore essential to 
enact measures to address the declining birthrate and bring about a recovery, but it will take at least 
20 years for this to result in any expansion of the workforce. Accordin gly, Japan must focus 
immediately on encouraging young people, women, th e elderly, and other people with latent abilities 
to enter the job market. Japan must implement such employment and human resources strategies to cultivate abilities throughout society as a whole, through means including the development of 
occupational skills. For this purpose, Japan will u tilize the full range of government policies to 
increase the employment rate in all strata of so ciety and will thereby overcome the shrinking of its 
workforce. Creating conditions in which everyone can have and raise children without experiencing 
undue concern will entail not only ensuring contin ued employment for women but also providing 
dramatically increased opportunities for women to fu lly utilize their abilities, breathing fresh life into 
the workforce. This will help bring about a sust ainable increase in birthrates and eliminate medium- 
and long-term concern over the rapid population decline.   
In addition, the Basic Plan for Immigration Cont rol (4th edition March 2010) establishes as follows:  
 with regard to dealing with the population decline, in addition to working to improve the birth rate, it 
is important to work on measu res such as utilizing the potential workforce of young people, women 
and elderly people in order to increase productivity. On  the other hand, even with these measures, if 
difficulties or insufficiencies remain, while paying  due consideration to the national consensus on 
issues relating to the daily lives of the people such as the impact on our industries, public safety and 
the labor market, there is a need to have wide-ra nging debate on the acceptance of foreign nationals, 
and on the future ideal image of Japan.   WT/TPR/M/243/Add.1 
 Page 53 
 
 
  (iii) Tax reform 
 
Paragraph 15, Page 5  "To increase revenues, the Government would need to implement comprehensive tax reforms, which 
would include broadening the tax base and finding the right mix of direct and indirect taxes." 
 Question 4  China would like to know whether this is the po licy thrust of the Japanese Government. If so, how 
does Japan plan to implement it? 
 
RESPONSE 
 
Yes, this is the policy thrust of the Japan ese Government. The Cabinet decided the policy on 
December 14th, 2010, to reach an agreement on th e tax reform schedule by the middle of 2011.  
Prime Minister Kan indicated his commitment toward s social security reform and comprehensive tax 
reform, including the consumption tax, at a press conference on January 4th. And the scale of the tax reform will be settled after consideri ng the details of the social security system reform and the fiscal 
prospects.  Section II:  T
RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
 (4) T
RADE AGREEMENTS AND ARRANGEMENTS  
 
(ii) Regional trade agreements  
Paragraph 39, Page 20  "The authorities indicate that Japan has a str ong interest in the progress of the Trans-Pacific 
Partnership (TPP) initiative. It is  seriously considering ways to be involved in it but has not yet 
decided whether to participate in the TPP." 
 Question 5  Could the Japanese Delegation please upda te its involvement in the TPP? 
 
RESPONSE 
 
Based on the "Basic Policy on Comprehensive Economic  Partnership" decided by the Cabinet on the 
9th of November 2010, Japan is consulting with TPP negotiating countries to gather the relevant 
information required for an in-depth internal discussion to decide whether to join the TPP 
negotiations. 
 
Section IV:  T
RADE POLICIES BY SECTOR  
 (3) M
ANUFACTURING  
 
Paragraph 23-25, Page 83 ; Paragraph 17, Page viii 
 "Unlike agriculture, there has b een little government intervention in the manufacturing sector until 
recently." 
  WT/TPR/M/243/Add.1  
Page 54 
 
 
  "In October 2009, the Enterprise Turnaround Initiative Corporation of Japan (ETIC) was established 
in accordance with the Enterprise Turnaround Initi ative Corporation Act (Chapter III(4)(iii).  The 
ETIC is authorized to provide financial support to companies and businesses that  are deemed to have 
revitalization potential and are highly indebted, includ ing those in manufacturing.  Thus far, the ETIC 
has provided support to seven companies (as of October 2010)."    "[I]t would appear that during the period under review, government support to the sector increased 
through the Enterprise Turnaround Initiative Corporation (ETIC)." 
 
Question 6  China would appreciate it if the Japanese Delegation could explain the reason for this policy change? 
 
RESPONSE 
 The Enterprise Turnaround Initiative Corporation of Jap an (ETIC) was established out of necessity to 
rebuild local economies through the revitalization and stimulation of the various enterprises that 
underpin them.  CHINA – 2
ND SET  
 
Report by the Secretariat  
 Section I:  E
CONOMIC ENVIRONMENT  
 
(2) M ACROECONOMIC POLICIES  
 
Paragraph 3, page 2  "In response to the financial crisis, the Govern ment has launched four stimulus packages since 
August 2008. These were instrumental in containing further deterioration of GDP. The packages have 
totalled approximately 4.7% of GDP; significantly higher than the average in other OECD countries that have implemented stimulus packages. ... Cons equently, expenditure rose from 33.7% of GDP in 
2007 to 39.8% in 2009, while total revenue declined  from 31% of GDP to 29.5%. As a result, the 
fiscal deficit rose to over 10% of GDP in 2009...."  
Question 1 
 According to the Secretariat Report, the four s timulus packages have focused on increasing domestic 
demand. Could Japan elaborate more on the main el ements of the four stimulus packages, as well as 
the inter-relationship among them?  
 
RESPONSE 
 
These stimulus packages were implemented amid th e recession in the wake of the global financial 
crisis. The main measures of each stimulus pack age to stimulate domestic demand are as follows: 
 
 1 Comprehensive Immediate Policy Package (decided on August 29, 2008)   : Reducing insurance premiums for elderl y health care paid by low income people, 
Reducing expressway tolls, etc. 
  WT/TPR/M/243/Add.1 
 Page 55 
 
 
   2 Economic Policy Package (decided on October 30, 2008) 
  : Provision of the "Fixed-sum benefit"  to households, Furt her reducing expressway 
tolls, etc. 
  3 Immediate Policy Package to Safeguard People's Daily Lives (decided on 
December 19, 2008) 
  : Mortgage loan tax cuts, Tax cuts fo r environmentally-friendly vehicles, etc. 
  4 Policy Package to Address Economic Crisis (decided on April 10, 2009)   : Reducing gift tax for purchasing houses as a temporary measure, Government 
subsidies for environmentally-friendly vehi cle purchases, Introducing the "eco point" 
system for acceleration of the dissemi nation of environmentally-friendly home 
electric appliances, etc. 
 Question 2 
 
The Secretariat Report later in paragraph 66 Secti on II mentioned New Growth Strategy. Is the New 
Growth Strategy itself part of the stimulus packag es? What are the main elements of the Strategy? 
Does the Strategy include new measures to explore external demand, especially external demand for 
high-tech products and services?   RESPONSE  
The New Growth Strategy is aimed at realizing "Strong Economy, Robust Public Finances and Strong 
Social Security System".  There are three main m acroeconomic targets under this strategy. The first 
target is to achieve real and nominal growth in excess of 2% and 3% respectively. The second is to 
return the consumer price increase to positive by FY 2011. The third is to lower the unemployment 
rate to the 3-4% range. Towards these goals, the Government of Japan has identified 7 strategic 
sectors:  "green innovation," "life innovation," "t he Asian economy", "tourism and regions", "science 
and technology and information and communica tions technology," "employment and human 
resources" and "the financial sector".  
Through the New Growth Strategy, it is determin ed that the Japanese Government will carry out 
domestic reforms to unify with the Asian mark et and double flows of people, goods, and money 
between Japan and the world. Additionally, the government set forth the Basic Policy on 
Comprehensive Economic Partnerships. It goes well beyond the previous stance, promoting high-level 
economic partnerships that compare favourably with world trends. It also takes the lead in promoting 
drastic internal reforms for the necessary strengthening of competitiveness and so on. 
 In addition, Japan will devel op and provide infrastructure that builds on the environmental 
technologies that are Japan's strengths as a package throughout the Asian region. Specifically, the government and the private sector will work together  to provide assistance in building infrastructure 
such as high-speed rail and urban transport, water s upply, and energy, and in the development of cities 
that are in harmony with the environment.  
 Question 3  Could Japan also provide its considerations on the withdrawal of the stimulus packages? Are there 
any measures already withdrawn?  
 WT/TPR/M/243/Add.1  
Page 56 
 
 
  RESPONSE 
 
The withdrawal of each policy measure in the stimul us packages is in general considered, taking the 
economic situation and other aspects into account. Examples of measures which have been already 
withdrawn are the "fixed-sum benefit", government  subsidies for environmentally-friendly vehicle 
purchases, etc.  Question 4 
 
In view of weakening aggregate demand, conti nued deflation and increasing government debt, how 
would the Japanese government react between the s hort-term need of recovery and the long-term 
sustainability of the Japanese econo my? More specifically, how would Japan realize the dual tasks of 
achieving the recovery of the economy and mean while improving its fiscal positions? Would the 
Japanese government stage any new package of  measures to stimulate the economy?  
 
RESPONSE 
 
In June last year, the Government of Japan has launched "the New Growth Strategy" and "the Fiscal 
Management Strategy" as a package in order to simultaneously realize the "strong economy", "strong 
public finances" and "strong social security". The Fiscal Management Strategy forms a framework of 
fiscal management which, while imposing strict fi scal disciplines over medium to long term, provides 
certain degree of flexibility within a short term.  The current priority is that the Government stead ily implements "The Three-Step Economic Measures 
for the Realization of the New Growth Strategy (C abinet Decision, September 10, 2010)" which was 
formulated last autumn so as to  ensure that Japan will overcome deflation and achieve autonomous 
economic recovery.  Moreover, in the FY2011 draft bud get, maintaining fiscal discipline based on "Medium-term Fiscal 
Framework" in the "Fiscal Management Strategy ", the Government conduc ted prioritized budget 
allocation for implementation of the policies in the New Growth Strategy. 
 Question 5  In Japan's view, what are the major long-term consequences of the recent global financial and 
economic crisis on the Japanese economy? Could Japan please provide its forecast on the prospects of 
the Japanese economy this year and the next, as well as its views on major factors constraining the 
Japanese economy in these coming two years?   
RESPONSE 
 
The recent global financial crisis triggered by Lehman's fall damaged the Japanese corporate sector 
very severely, due to the drastic reduction in the am ount of trade, which also lead to a decrease in 
domestic demand. Furthermore, deteriorated bus iness performance worsened the situation in the 
household sector through employment adjustments and so forth, and private consumption started to 
decrease moderately.  
 
The real GDP growth rate in FY2010 has been imp acted by rapid growth in the second half of 
FY2009 resulting from the impetus of external de mand and policy measures to create demand and 
prop up employment. As a consequence, the real GDP growth rate in FY2010 is expected to return to 
a positive rate, around 3.1%, for the first time in three years.    WT/TPR/M/243/Add.1 
 Page 57 
 
 
  In FY2011, with the modest recovery of the wo rld economy, the Japanese economy will pick up and 
move toward a virtuous cycle of economic growth. This will be on the back of improvements in 
employment and income spilling over gradually, and with increasing force, into private demand, which is led by factors such as the full-scale implem entation of the New Growth Strategy through the 
budget, tax system, and other measures. As a  cons equence, the real GDP growth rate in FY2011 is 
expected to be around 1.5%. 
 As for future risks, we should consider the po ssibility of a downturn in the overseas economy and 
movements in foreign exchange markets.  
Paragraph 6, page 3 
 "The nominal exchange rate of the yen against the U.S. dollar appreciated between September 2008 
and November 2010 (from ¥109 per U.S. dollar to ¥81), perhaps owing partly to the unwinding of the 
yen "carry trade." The appreciation in the excha nge rate is likely to erode the international 
competitiveness of Japanese exports, unless it can be at least matched by productivity improvements 
in the export sectors."   Question 6  In Japan's view how has such an appreciation aff ected the Japanese economy both in macro and micro 
senses? 
 
RESPONSE 
 
While it is difficult to describe the negative effect  of yen appreciation on exports and the economy as 
a whole, Japan is of the view that excess volatilit y and disorderly movements in exchange rates have 
adverse implications for economic and financial st ability. The Japanese Government will continue to 
keep a close eye on exchange markets and will take appropriate actions when needed. 
 Question 7  
It is noted that on 15 September 2010 the Japanese government intervened in the foreign exchange 
market by buying up more than 2 trillion yen equiva lent US dollars. It is also reported that more 
interventions of the Japanese government in the fore ign exchange market would be foreseeable if the 
nominal exchange rate of the yen against the US dollar would appreciate again. Is it true that the 
Japanese government will turn more frequently to such  interventions for stability of the Japanese yen? 
Does Japan believe that such interv entions are effective in addressing the mid and long term trend of 
appreciation of Japanese yen?  
RESPONSE 
 
Excess volatility and disorderly movements in excha nge rates have adverse implications for economic 
and financial stability. The Japanese Government w ill continue to keep a close eye on exchange 
markets and will take appropriate actions when needed. It is extremely difficult to comment on the 
effectiveness of intervention in a general manner.  Question 8 
 
What other measures would the Japanese government take in view of the appreciation of its currency?  
 WT/TPR/M/243/Add.1  
Page 58 
 
 
  RESPONSE 
 
To deal with the difficult economic situation as exemplified by the yen's rapid appreciation, the Government formulated "The Three-Step Economic Measures for the Realiza tion of the New Growth 
Strategy (Cabinet Decision, September 10, 2010)" and has undertaken Step 1 using the contingency 
reserves, and Step 2 backed by a supplemen tary budget for FY2010, thereby underpinning the 
economy and employment. These stimulus packages incl ude measures to alleviate the negative impact 
of the yen's rapid appreciation and deflation such as relaxing the criteria for the provision of 
employment adjustment subsidies and promoting support measures for SMEs. 
 
(3) S
TRUCTURAL POLICIES  
 
Paragraph 7, page 3  
"The fiscal stimulus package is not a viable avenue  to sustain growth in the medium to longer term, 
especially when considered against the back drop of Japan's public debt, which is over 200% of GDP 
at present, and the fiscal deficit.  According to the OECD, to be able to sustain growth in the future, 
the Japanese economy will need to undergo far-re aching structural changes focused on improving 
productivity, especially in the services sector, thr ough increased competition and further deregulation, 
as well as reducing the cost of doing business so that the sector attracts more investment (both foreign 
and domestic) ... However, the pace of trade-related structural reforms, such  as trade liberalization 
(particularly in agriculture and certain services), appears to have been slow during the period under 
review."      Question 9 
 
What are the comments of the Japanese government on this view expressed in the Secretariat Report? 
 
RESPONSE 
 
Japan has made some progress in structural reform s in the services and agriculture sectors during the 
period under this review.  In the service sectors, recognizing the importance of liberalizing the service sectors for growth and 
competitiveness, Japan has been taking various step s to promote liberalization. In March 2010, the 
"Subcommittee on Regulatory and Institutional Re form" was established under the Government 
Revitalization Unit. In November 2010, the Cabi net issued the "Basic Policy for Comprehensive 
Economic Partnerships," where it addressed its di rection for further promoting necessary regulatory 
reforms under the philosophy of 'open up the country'.  As for the liberalization of trade in services, 
Japan remains strongly committed to the DDA nego tiations under the basic principle that the 
comprehensive liberalization of trade in services s hould be achieved to benefit all Members, including 
developing countries. 
 On agriculture, the new Basic Plan on Food, Agricu lture and Rural Areas was decided by the Cabinet 
in March 2010. It aims at raising the food self-sufficiency ratio to 50% by FY2020 (41% in FY2008) and demonstrates the direction of agricultural polic ies in the mid-term, including i) introduction of 
new income support direct payments to farmers,  ii) conversion to a production system more 
responsive to the consumers' demands for quality and safety, and iii) promotion of farmers' initiatives 
to expand their businesses into food manufacturing a nd retailing sectors, making use of their products 
and bringing more income opport unities to rural areas. The new ag ricultural policy will be steadily 
implemented according to the Basic Plan. For example, in FY2011, the income support direct 
payment scheme will be fully introduced, based on th e results of the pilot program in FY2010, and  WT/TPR/M/243/Add.1 
 Page 59 
 
 
  farmers' businesses will be expanded into food ma nufacturing and retailing sectors, making use of 
their products, based on the 'Act on the Creation of New Businesses and Related Activities Utilizing 
Regional Resources by Farmers, Forestry Workers, Fishery Workers and Related Associations and the 
Promotion of Utilizing Regional Agriculture, Fo restry and Fisheries Products' (issued in 
December 2010), and so on. 
 
Question 10: It is noted that the Japanese government  has been promoting structural reform for some 
time and it is already a long-term effort of the Japanese government. For example, in paragraph 13, 
Section 1 of the Secretariat Report prepared for th e last review (WT/TPR/S/211) it was stated that 
"Since the previous Review of Japan, the Government  has continued to implement various structural 
reforms". Could the Japanese delegation please provide a factual summary of the key structural 
reform measures that the government has stag ed in the past four or five years?  
 
RESPONSE 
 
The Council on Economic and Fiscal Policies had dr afted "The Basic Policies for Economic and 
Fiscal Reform" every year until 2009.  The following links are the summaries: 
  - Economic and Fiscal Reform 2007 
  
http://www5.cao.go.jp/keizai-shimon/english/pu blication/pdf/070628_basic_policies.pdf  
 - Economic and Fiscal Reform 2008 
  http://www5.cao.go.jp/keizai-shimon/english/ publication/pdf/080627_basic_policies.pdf 
 - Economic and Fiscal Reform 2009: Security, Vitality and Responsibility 
  http://www5.cao.go.jp/keizai-shimon/englis h/publication/pdf/090623_basic_policies.pdf 
 
Question 11  How have these reform measures contributed to th e mid-and-long-term economic policy objectives of 
the Japanese government?  
 
RESPONSE 
 
The Cabinet decided the following mid-and-long-te rm economic policies under the "Basic Policies for 
Economic and Fiscal Reform". 
 The summaries of the economic policies are provided in the links below.   - Direction and Strategy for the Japanese Economy- A Country Open to the World, 
Growth in Which All Participate, Harmon y with the Environment (January 18, 2008) 
  (http://www5.cao.go.jp/keizai-shimon/english/publication/pdf/0801_japanese_economy.pdf) 
-  The Medium- to Long-term Fiscal Policy and an Economic and Fiscal Outlook for the 
 Next Ten Years (January 19, 2009)
 (http://www5.cao.go.jp/keizai1/2009/09030 4_medium-long_term_fiscal_policy.pdf) 
Paragraph 15, page 6 
 "....there are currently 23 different taxes."  
    
Question 12: Could the Japanese delegation please list all the 23 different taxes and indicate whether 
each of the taxes is a central tax, a local tax or a tax shared among the central and local governments? Could the Japanese delegation please also indicate what taxes among the 23 carry the most significant 
weight in the tax revenue of the government? 
 WT/TPR/M/243/Add.1  
Page 60 
 
 
  RESPONSE 
 
The 23 different taxes mentioned in the Secr etariat report are the following local taxes: 
 
- Municipal and prefectural resident's tax 
- Enterprise tax 
- Local consumption tax 
- Real property acquisition tax 
- Prefectural local tobacco tax 
 - Golf course utilization tax  - Automobile acquisition tax  - Light-oil delivery tax  - Automobile tax  - Mine-lot tax 
 - Hunting tax 
 - Fixed property tax  - Light vehicle tax  - Mineral product tax   - Special land acquisition and holding tax 
 - Bathing tax 
 - Business facility tax  - City planning tax  - Water utility and land profit tax  - Common facilities tax  - Residential land formation tax 
 - National health insurance tax 
 - Non-statutory tax  The tax that holds the most significant weight in both municipal and prefectural tax revenues is the 
resident's tax. 
 
(4) D
EVELOPMENTS IN TRADE AND FOREIGN DIRECT INVESTMENT  
 
Paragraphs 20-21, pages 7-10     Question 13 
 
The Secretariat Report noted the recent development in the direction of Japan's merchandise trade 
where China has further consolidat ed its position as the largest trading partner of Japan. During the 
financial and economic crisis China' s recovery in particular provided a large market for the exports of 
Japan. How would such developments affect the tr ade policy orientations of Japan, including those 
concerning regional and bilateral trade initiatives? 
 
RESPONSE 
 
As a cornerstone of its trade policy, Japan has made the utmost effort to maintain and strengthen the 
multilateral trade system, which has been supplemente d by efforts to promote economic partnerships 
through developing EPAs/FTAs. Considering China' s position as the largest trading partner and its 
economic recovery, Japan will continue, for benefit of the both countries, to work towards an early 
conclusion of the Doha Round nego tiations and the promotion of economic partnerships, including 
negotiation of a trilateral investment agreement and the Joint Study for an FTA among Japan, China 
and Korea.  WT/TPR/M/243/Add.1 
 Page 61 
 
 
   
Section II:  T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
 (3) T
RADE POLICY FORMULATION AND EVALUATION  
 Pages 13-14 
 Table II.1 Major trade-related la ws and regulations, October 2010 
 Question 14 
 
Are these laws and Cabinet orders available in  English? Does the Japanese government have a 
systematic arrangement to officially translate a ll its laws and Cabinet orders into a WTO working 
language? If not all laws and Cabinet orders, what are the scope of the laws and Cabinet orders that 
would be officially translated, all trade-related laws  and Cabinet orders, or only those that are subject 
to full-text notification obligations in the WTO? 
 
RESPONSE 
 
A portion of these laws such as the Foreign Exchange  and Foreign Trade Act are available in English 
at the following website, although these are not o fficial translations <http://www.japaneselaw 
translation.go.jp/?re=02>. While there is no plan to translate all laws and Cabinet Orders into a WTO 
working language, translation development plans are drawn up for each fiscal year, and these are available at the following website: <http://www.ja paneselawtranslation.go.jp/rel_info/rel_info_ 
trans?re=02>.  
Paragraph 13, page 14 
 "... All laws and regulations are published in the Government Gazette. The Government makes 
available all laws, Cabinet orders, and minister ial ordinances on the Internet; however, various 
Cabinet decisions and "understandings" are not au tomatically and fully available online...."  
Question 15 
 
Apart from laws and Cabinet orders, how many other types of government regulations or rules (like 
ministerial ordinances, decisions, rulings, understa ndings etc.) are there in the Japanese government 
that are to be compulsorily implemented? Coul d the Japanese delegation please outline the hierarchy 
of the different types of legislation in Japan? 
 
RESPONSE 
 
 1. Basically, Acts are compulsorily implemented. 
  2. According to Article 73 of the Constitu tion, Cabinet Orders cannot stipulate any 
penal provisions or any provisions which impose obligations, without delegation by 
an Act.  
  3. According to Article 7.4 of the "Estab lishment of the Cabinet Office"and Article 12.3 
of the "National Government Organization Act", without delegation by an Act, no 
penal provisions or any provisions that impo se obligations on or restrict the rights of 
citizens may be established in a Cabinet Office Order or a Ministerial Ordinance 
respectively. 
 WT/TPR/M/243/Add.1  
Page 62 
 
 
   4.  Cabinet Decisions and Cabinet Unders tandings are conducted within the bounds of 
the Constitution and laws. They control admi nistrations which are supervised by the 
Cabinet.  
 
 5.  Article 98 of the Constitution stipulates,  "This Constitution shall be the supreme law 
of the nation and no law, ordinance, imperial  rescript or other act of government, or 
part thereof, contrary to the provisions he reof, shall have legal force or validity."  
 
 6.  In addition to this, Japan's legal hierar chy basically consists of the Constitution, Acts, 
Cabinet Orders and Ministerial Ordinances, in order of priority. 
 Question 16  Could the Japanese delegation please explain more from the legislative perspective on its system of 
"rulings" of its government agencies? Are ruli ngs generally applicable and compulsorily 
implemented? How long will the rulings be valid? Ar e rulings implemented retrospectively? Are there 
procedures for comments by interested parties such as  public hearings etc. befo re rulings are made? In 
what form are the rulings of a government agency publicized- Order, Decision or any other forms? 
 RESPONSE  
Japan cannot recognize what "rulings" means. Th erefore, Japan cannot answer this question. 
 Reference:  
Japan has some systems as a way to en hance legal stability and predictability: 
  (i) Prior Confirmation Procedures on the App lication of Laws and Regulations: private 
entities can inquire in advance regarding th e relationship between their actions and 
related laws and regulations, and the government must reply and publicize the 
answer, as well as the content of the inquiry . The purpose of this mechanism is to 
enhance predictability about whether a particul ar action is consistent with the law or 
not. Results of Prior Confirmation Pro cedures are publicized on the website and 
through other media. 
  (ii) Circular notice: circular notice is ba sed on Article 14.2 of the "National Government 
Organization Act, "which stipulates, "a minister, a commissioner or the director-
general of an agency may, for the purpose of giving an order or direction in respect of 
the affairs under the jurisdiction of the mini stry, the commission or the agency, issue 
an instruction or a circular notice to the competent organs and officials." A circular 
notice gives an order or direction to the commission or the agency. It is not 
considered a law. 
 Question 17  Legislation above what level w ould be published in the Government Gazette? Are there separate 
Gazettes of individual ministries publishing all the regulations or rules of a particular ministry?  
  WT/TPR/M/243/Add.1 
 Page 63 
 
 
  RESPONSE 
 
1. As to the first question, according to "the  Cabinet Office Ordinance regarding Government 
Gazettes and All Documents of Laws and Regulations  (provisional translation)", the following are 
published through Gazettes (all these are translated provisionally): 
 
 (a) Amendment of Constitution  (b) Imperial Edict  (c) Laws and Acts  (d) Cabinet Order 
 (e) Treaty 
 (f) Cabinet Office Ordinance  (g) Ministerial Ordinance  (h) Regulation  (i) Ordinance by Agencies 
 (j) Instructions Orders 
 (k) Public Notice  (l) Matters of Diet  (m) Matters of Courthouse  (n) Personal Changes  (o) Conferment of a Court Rank and Decoration 
 (p) Medals of Honour 
 (q) Matters of the Imperial Family  (r) Report by each ministry  (s) Documents  (t) Mattes of Regional Autonomy 
 (u) Public Announcement 
 2. Government Gazettes are under the jurisdicti on of the Cabinet Office. The Cabinet Office 
consigns the editing and the printing to the Na tional Printing Bureau, and then publishes the 
Government Gazettes.  
Paragraph 11, page 14 
 "The Government Revitalization Unit (GRU) w as established on 18 September 2009 under the new 
Government, and has been responsible for regulator y reform. While the Three-Year Program for the 
Promotion of Regulatory Reform, announced by the Committee for the Promotion of Regulatory 
Reform (CPRR) on 22 June 2007 is still in effe ct, on 18 June 2010, the Cabinet authorized a 
regulatory reform programme issued by the GRU. ... "      Question 18  Could the Japanese delegation please clarify the re lationship between the two regulatory reform 
programmes?  
     
RESPONSE 
 
The CPRR was established in January 2007 as an advi sory body to the Prime Minister for the purpose 
of accelerating regulatory reforms. "The Three-Ye ar Program for Promoting Regulatory Reform" was 
authorized in line with the reports delivered by the CPRR. The CPRR was terminated in March 2010.  
In March 2010, the Subcommittee on Regulatory and Institutional Reform was established under the 
GRU in order to examine regulations and systems.  Based on the proposals made by the subcommittee WT/TPR/M/243/Add.1  
Page 64 
 
 
  and its working groups, a regulatory reform program  was authorized on 18 June 2010. Both programs 
were authorized as cabinet decision and are still in effect.   
Question 19 
 Are the GRU and CPRR both under the Cabinet Office? Has GRU replaced CPRR?   
RESPONSE 
 The CPRR originally had an expiration date sti pulated by law and according to the law, it was 
terminated in March 2010. On the other hand, the Subcommittee on Regul atory and Institutional 
Reform was established under the GRU as a ne w regulatory reform body and it now takes 
responsibility for promoting regulatory reform.   
Question 20 
 How does GRU coordinate with all the Ministries when initiating reforms measures that fall within 
the responsibilities of these Ministries?   RESPONSE  
Based on the investigation and report by the subcommittee under the GRU, reform items are 
authorized as cabinet decisions after consulta tion/ discussion with each ministry. Following the 
cabinet decision, each ministry takes measures to realize those reforms. 
 
Paragraph 14, page 15 
 "Cost-benefit analyses of policies, particularly of existing policies, are seldom undertaken.  The lack of such evaluations makes it difficult for consum ers to assess the effectiveness of policies, and 
effectively undermines the Government's intention to promote transparency." 
 
Question 21  Could the Japanese delegation please explain the reason why such analyses are seldom taken?  
RESPONSE 
 The Implementation Guidelines for ex-ante Evaluation of Regulations states that it is desirable to 
quantify or express in monetary valu e costs and benefits to the exte nt possible. The Guidelines also 
state that cost-benefit analysis, conve rting benefits and costs into mone tary value, is thought to be the 
main technique of Regulatory ex-ante Evaluation. 
 
The Government of Japan understands the importa nce of quantifying costs and benefits to assess 
regulatory proposals and will continue to promote it.  
(4) T
RADE AGREEMENTS AND ARRANGEMENTS  
 
Paragraph 30, page 18  "As the authorities have not, in most instances, c onducted quantitative analysis on the effects of FTAs 
on Japan's trade before or after the entry into fo rce of these agreements, their economic benefits are 
unclear. According to the UN Comtrade database, in 2009, exports from Japan to its FTA partners  WT/TPR/M/243/Add.1 
 Page 65 
 
 
  generally fell, just as its total exports fell by 25. 7%, due to the latest global recession; the decrease 
ranged from 9.9% (exports to Brunei)  to 51.3% (exports to Chile)..." 
 Question 22  
What are the comments of the Japanese government on the situation of its trade with its FTA 
partners? Could Japan kindly explain the reason why only exports to Switzerland increased while 
exports to other FTA partners decreased?  
RESPONSE 
 The EPAs have contributed to improving overall ec onomic relations with partner countries, including 
trade and investment. The data of Japan's export r ecord in 2009, which displayed an increase only to 
Switzerland, would not constitute a suitable gauge for measuring the net effects of the EPAs because 
of the global economic recession.  
 
Paragraph 33, page 19  "In its FTAs (EPAs), Japan has made services-related commitments that are not listed on its GATS schedules. ..."   
Question 23 
 Could the Japanese delegation please summarize tho se further liberalization measures of services 
sectors that are beyond its commitments in the GA TS Schedule and indicate also the related RTAs 
where further liberalization has been made?  
 
RESPONSE 
 
In the EPAs that Japan has concluded so far, Japan  provides further commitments in a wide range of 
specific services sectors which are not listed on the Schedules of GATS.  For instance, Japan has committed to further relaxation of foreign equity  participation in telecommunication services and 
liberalization of distribution services for products such as salt, petroleum, and petroleum products. 
 Besides the improvements in specific service sectors,  some of Japan's EPAs have achieved a higher 
level of transparency, adopting a negative list appro ach in the services chapter. In the Japan-Mexico 
EPA and the Japan-Chile EPA, Japan provides natio nal treatment, most-favored nation treatment and 
prohibition of requirements for local presence (e xcept in limited sectors and measures) under a 
negative list approach in the services chapter.  In  the Japan-Switzerland EPA, a negative list approach 
is adopted in not only national treatment, most -favored nation treatme nt and prohibition of 
requirements for local presence, but also in market  access. Moreover, Japan also agreed to take a 
negative list approach in the financial services sector in this EPA.    
Paragraph 41, page 20 
 "Ceilings on import value or volume for the granting of GSP preferential tariffs are determined in 
accordance with the Temporar y Tariff Measures Law,...." 
 
Question 24 
 It is reported that the Temporary Tariff Measures Law is currently being re vised. One of the major 
changes to be introduced seems to concern the ceiling on import value or volume from an individual 
developing country that can enjoy the GSP preferential tariffs. The current country-specific ceiling is WT/TPR/M/243/Add.1  
Page 66 
 
 
  20%, i.e. if the exports from an individual devel oping country that enjoy the GSP preferential tariffs 
reach 20% of the total ceiling established on im port value or volume for the granting of GSP 
preferential tariffs, the rest of the exports are no longe r entitled to the preferential tariffs. It is reported 
that the revision would further lower the 20% ceiling to 10-15%. Could the Japanese delegation 
confirm this?  Could the Japanese delegation please also provide policy considerations behind this 
proposed adjustment?   
RESPONSE 
 The GSP (Generalized System of Preferences) a pplies reduced tariffs to designated import goods 
originating from developing countries or territories, w ith the aim to help them increase export income, 
advance industrialization and prom ote economic development. Japan is in the process of preparing for 
a discussion of the revision of the ceilings for industrial products and preferential tariff on those products. 
 
Question 25  What will be the other major changes to the La w in this revision? Are there opportunities for 
comment available for other WTO members?  Will the revised Law be available in English?  
 
RESPONSE 
 
The GSP (Generalized System of Preferences) a pplies reduced tariffs to designated import goods 
originating from developing countries or territories,  with the aim of help ing them increase export 
income, advance industrialization and promote ec onomic development. Japan  is properly managing 
the system from the viewpoint of contributing to  the economic development of developing countries. 
There are opportunities to comment at the CTD (Committee on Trade and Development).  
(6) F
OREIGN INVESTMENT REGIME  
 Paragraph 70, page 28 
 "Japan's regulatory regime on inward and outward FDI is governed mainly by the Foreign Exchange 
and Foreign Trade Act, together with relevant cabin et and ministerial ordinances, such as the Foreign 
Exchange Order and the Order of Inward Foreign Direct Investment. Inward FDI generally requires 
ex post facto reporting to the Minister of Finance and the Minister in charge of  the sector involved, by 
the 15th day of the month following the investment...." 
 also paragraph 27, page 83 in Section IV  "... Foreign direct investment in certain manufactur ing sub-sectors remains subject to approval (prior-
notification);  additionally, investment (domestic or  foreign) in certain sectors requires permission or 
ex post reporting, as stipulated in various laws  and relevant regulatio ns (Chapter II(6)(i))...". 
 Question 26  
For foreign investors the different requirements in different sectors add to the opaqueness and 
obstacles for FDI in Japan. Could the Japanese dele gation please describe the general procedures for 
FDI by for example providing a procedural chart as the one found in page 41 of the Secretariat Report 
concerning its import control system?   WT/TPR/M/243/Add.1 
 Page 67 
 
 
  RESPONSE 
 
Restrictions on inward foreign direct investment to  Japan are fully compatible with OECD rules and 
are stipulated in the Foreign Exchange and Forei gn Trade Act and relevant decrees and regulations. 
The Government of Japan is firmly convinced that sectors subject to the prior notification system are 
fully transparent, as they are minutely enumerated one  by one, with their list put in the public domain, 
accessible by internet. An English translation is also available.  http://www.japaneselawtranslation.go.jp/common/data/notice/h20z00101je.3.0.htm  
The Government of Japan has been maintaining an  internet site dedicated to potential foreign 
investors particularly interested in investing into  Japan. Detailed information regarding inward foreign 
direct investment procedures are available at Inv est Japan offices established at JETRO and related 
ministries and agencies. More practical informa tion such as that regarding the establishment of 
enterprises, visas and Japan's regional information, as well as Japanese market information, can be 
found at the following address: http://www.jetro.go.jp/en/invest/ 
 For ease of understanding, and as per China's request, below is a flow chart depicting how Japan's 
system functions.  
 
 
Question 27 
 
Could the Japanese delegation please summarize how ma ny different kinds of sector-based specific 
procedures are applicable for FDI in addition to  the general procedures mentioned in the above 
question? Does Japan have a catalogue of industries where industries or sectors that are subject to 
same procedures are grouped together to facilitate the inward FDI in Japan?  
 WT/TPR/M/243/Add.1  
Page 68 
 
 
  RESPONSE 
 
The Japanese law, namely, the Foreign Exchange a nd Trade Act, stipulates two types of procedures 
for inward foreign direct investment, and is fully co mpatible with OECD rules. The general rule is the 
ex post facto reporting system, which requires investors to file a report with the Minister of Finance and the Minister in charge of the sector involved, by the 15th day of the month following the investment. As for the other sectors, Namely, i) those pertaining to national security, public order and public safety;  and ii) those pertaining to sectors wh ere there could be "significant adverse effect on 
the smooth management of the national economy, su ch as agriculture, forestry, fisheries, mining, 
crude oil, leather and leather products, air and ma ritime transport, and telecommunication, a prior 
notification system is put in place. In case where the Minister of Finance and the Minister in charge of 
the sector deem it appropriate to issue an ordinance re quiring the investor to alter or to discontinue the 
planned investment, the Ministers are to convene the Council on Customs, Tariff, Foreign Exchange 
and other Transactions in order to obtain the latter' s view. All the procedures are stipulated in the 
Foreign Exchange and Foreign Trade Act a nd its relevant decrees and regulations.  
 Question 28  In both the general and sector-based examination pro cedures for inward FDI, what are the key issues 
to be examined and what are the criteria applied?  
RESPONSE 
 
The Foreign Exchange and Foreign Trade Act, which is  fully compatible with OECD rules, stipulates 
that restrictions on inward foreign direct investment be limited to two areas: i) those pertaining to national security, public order and pub lic safety; and ii) those pertaining to sectors where there could 
be "significant adverse effect on the smooth ma nagement of the national economy, such as 
agriculture, forestry, fisheries, crude oil, leather and leather products, air and maritime transport, and 
telecommunication." Any decisions taken by the Govern ment of Japan with rega rds to inward foreign 
direct investment is subject to the Foreign Exchange and Foreign Trade Act.  
Question 29 
 While the Secretariat Report does not seem to elab orate on Japan's regime concerning its outward 
investment, could the Japanese delegation please describ e the regulatory regime and policies in this 
regard, as well as also policies encouraging outward investment?   RESPONSE  
Japan will work within the region to realize a seamle ss Asian market by more actively liberalizing and 
facilitating trade and investment while building a sy stem for the protection of intellectual property 
rights. 
 
On top of that, in order to meet strong infr astructure demand in Asia and other regions, the 
Government of Japan has established a framework  for strenuously supporting private companies' 
initiatives in the field of infrastructure, such as w ith the establishment of the Ministerial Meeting on 
Deployment of Integrated Infrastructure Systems in the Cabinet. By promoting deployment of 
integrated infrastructure systems through public-pri vate collaboration, Japan will aim "to expand" the 
outward foreign direct investment as well as to c ontribute to the economic development of the partner 
countries by providing Japanese technologies and experience.  Japan has a fully transparent regime regarding outwar d direct investment. The regime is stipulated by 
the Foreign Exchange and Trade Act and its releva nt decrees and regulations. The general rule under  WT/TPR/M/243/Add.1 
 Page 69 
 
 
  the Act is the ex post facto reporting system, which requires Japanese resident investors to file a 
report with the Ministry of Finance within 20 days of executing a outward foreign direct investment. Exceptions to the general rule apply to the fo llowing sectors for which prior notification to the 
authorities is required: i) those pertaining to dest abilizing international peace, and damaging security 
and public order, such as manufacture of weapon, manufacture of equipment pertaining to weapon, 
and manufacture of biochemical drugs; and ii) those pertaining to sectors where there could be 
significant adverse effect on the smooth management of the national economy designation is limited to very exceptional cases. The full list enumerating a ll the sectors that are subject to this exceptional 
rule can be found in the public domain and is accessible by internet. http://law.e-gov.go.jp/htmldata/S55/S55F03401000044.html 
 
Paragraph 77, page 30  "Japan's investment promotion measures remain subs tantially the same as in 2009.  However, it would 
appear that the Government is considering an intr oduction of a new preferential tax scheme for inward 
FDI." 
 Question 30  Could the Japanese delegation provide more info rmation on the new preferential tax scheme for 
inward FDI that is under consideration? 
 
RESPONSE 
 
Japan plans to introduce two new schemes which are not limited to foreign companies, giving 
preferential treatment in terms of corporate tax to promote investment in Japan, and the related bills 
will be discussed at the ongoing ordinary session of the Diet. Special depreciation, tax credit and 
income deductions will be introduced in the Interna tional Strategic Special Di strict (tentative title), 
which targets big cities with competitive advantages  internationally. Also income deductions which 
aim to attract global companies' R&D centers a nd Asian regional headquart ers will be introduced. 
 Paragraph 79, page 30 
 
"The Government supports investment promotion activities by selected regional governments through 
its Project to Promote Foreign Direct Investment in Selected Areas; ....  By FY2007, 17 regions had 
been selected for such support measures."  
Question 31 
 Could the Japanese delegation provide a list of the 17 regions selected for the support measures? How 
can a particular region be selected to join the Project?    
RESPONSE 
 In the public offering of this project, we accepted proposals from regions with an eagerness to attract 
foreign companies.  The third party committee which is consisted of experts in this field, evaluated the proposals and 
selected 17 regions. 
 Here is the list of the 17 regions selected in 2007:  WT/TPR/M/243/Add.1  
Page 70 
 
 
   - Greater Nagoya Initiative, Ishikawa , Osaka, Okinawa, Kanagawa-Yokohama, 
Kawasaki, Kitakyushu, Kyoto, Kumamoto , Saitama, Shizuoka, Chiba, Hyogo-Kobe, 
Hiroshima, Fukuoka, Miyagi, Yamaguchi-Ube-Shimonoseki 
 
Section III:  T RADE POLICIES AND PRACTICES BY MEASURE  
 (1) C
USTOMS CLEARANCE PROCEDURES AND VALUATION  
 Question 32: According to the Secretariat Report, Japan's Authorized Economic Operator (AOE) may 
"receive the benefit of bonded transportation w ithout obtaining individual permission". Could the 
Japanese delegation please provide more informati on on how its AOE system works with some 
examples or illustrations?  
RESPONSE 
 The benefit of bonded transportation without obtaini ng individual permission is as illustrated below. 
 
 
 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
 (ii) Tariffs 
 
Question 33:  The tariff structure of Japan continues to be featured with a large number of non-ad 
valorem rates (6.6% of all tariff lines). A ccording to the Secretariat Report, "non- ad valorem  rates 
tend to conceal tariff peaks", and " ad valorem  equivalents (AVE) were provided by the authorities for 
408 out of 584 non- ad valorem  tariff lines". Could the Japanese delegation please indicate whether it  WT/TPR/M/243/Add.1 
 Page 71 
 
 
  is possible to provide the remaining AVEs? If not, could the Japanese delegation please provide 
explanations on the absence of AVEs fo r each of the remaining tariff lines? 
 
RESPONSE 
 
When AVEs are calculated, a certain amount of volum e of imports are necessary.  The uniform reason 
of absent AVEs is the volume of imports is too low to calculate.   Question 34  
Have there been any tariff lines tran sferred from non-ad valorem rates to ad valorem  rates in recent 
years? Does Japan have any plan to reduce the nu mber of tariff lines that are subject to the non- ad 
valorem  rates?  
 
RESPONSE 
 Some tariff lines apply non-ad valorem duties for certain items, but the non- ad valorem  tariffs in 
Japan's tariff schedule are consistent with WTO Agreements.  Japan will continue to engage in discussions in the WTO in a constructive manner and set an 
appropriate type and level of tariffs while considering the progress and the result of the DDA 
negotiations.  
 Question 35  Tariff lines that have higher tariff rates, that are subject to non- ad valorem  rates, that are excluded 
from the GSP scheme, and that remain unbound in  Uruguay Round commitments overlap to a large 
extent. What are Japan's plans on domestic adjustme nt and further liberaliz ation of products under 
these tariff lines including for example textiles and clothing, footwear, agriculture and fishery etc.? 
 
RESPONSE 
 
Japan sets its tariff rates acco rding to the situation in domest ic industries and international 
negotiations.  Japan will continue to engage in discussions in the WTO in a constructive manner and set appropriate 
types and levels of tariffs, while considering the progress and the results of DDA negotiations. 
 
(iv) Non-tariff border measures 
  
Question 36  Has Japan made full-text WTO langua ge notifications to the relevant Committees in the WTO of its 
Customs Law, Foreign Exchange and Fore ign Trade Law, Cabinet Order No. 414 of 
29 December 1949, and Public Notice of the Minist ry of International Trade and Industry No. 170 of 
20 April 1966?  If yes, please provide relevant WTO document reference numbers.   
RESPONSE 
 As to the Laws and regulations in question, Japan  does not make full-text WTO language notifications 
to the relevant Committees in th e WTO. Japan will continue to implement this system in an 
appropriate manner.  WT/TPR/M/243/Add.1  
Page 72 
 
 
  Question 37 
 China takes note of the WTO document G/LIC/N/3/ JPN/8 of 7 October 2009 for products subject to 
current import licensing regime. Are these products a nd/or products subject to quota administration in 
Japan also notified to the WTO Market Access Committee in accordance with  the QR notification 
format with WTO justification for each and every product listed?   
RESPONSE 
 Japan had notified the Market Access Committee by th e year 2008. There have been discussions on 
how to improve the notification procedure for quantitative restrictions since 2009. 
 Since there is disagreement on how to deal with th e overlapping scope of th e notifications to other 
committees, the scope of the notification has not been decided yet.  As to those products subject to the 
current import licensing regime (WTO document G/LIC/N/3/JPN/8 of 7 October 2009), Japan is 
ready to make a notification as soon as the discussion of the scope of the notification is decided.  Question 38  
According to the Secretariat Report, the import quota system in Japan is administered by METI, and 
the method allocating quotas tends to be intricate, a lthough specified in METI notices.  In this respect 
China would like to recall that questions in this resp ect were raised in previous trade policy reviews of 
Japan. Could the Japanese delegation in this review provide a list of all the METI notices that regulate 
allocation of quotas? Has Japan made full-text WTO language notifications to the relevant 
Committees in the WTO of all these notices? If yes,  please provide relevant WTO document reference 
numbers. 
 
RESPONSE 
 
The METI's notices that regulate allocation of quotas can be seen at;  <http://www.meti.go.jp/policy/external_economy/tr ade_control/boekikanri/import/wariate/index.htm 
 The full-texts of these notices in WTO language have not been notified to the relevant Committee in 
the WTO. Japan will continue to implement this system in an appropriate manner. 
 Question 39 
 
Is METI the only agency which is responsible for allocation of all the quotas currently maintained by 
the Japanese government?   
RESPONSE 
 METI and MAFF are responsible for allocation of the quotas currently mainta ined by the Japanese 
government.  
(v) Contingency measures 
 
Question 40  According to the Secretariat Report, relevant Cabi net Orders and Guidelines relating to anti-dumping, 
countervailing, and safeguard measures were revised in April 2009. It was also said that in July 2010 
anti-dumping procedures in Japan were revised again. Could the Japanese delegation please provide  WT/TPR/M/243/Add.1 
 Page 73 
 
 
  clarifications in this regard with a summary of the major changes made in the revision as well as 
explanations on considerati ons behind the revision?  
 
RESPONSE 
 
The purpose of the revision in April 2009 was to enhance the transparency and predictability of 
investigating procedures which include, for exampl e, specifying procedures involved in the initiation 
of investigation and preliminary determination (please see G/ADP/N//1/JPN/2/Suppl.6-G/SCM/N/1/JPN/2/Suppl.6-G/SG/N/1/JPN/2/Suppl.2).  Cabinet Orders and Guidelines have not been 
revised since April 2009. 
 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
 (iii) Border adjustment in respect of internal taxes and import duties (relating to exports) 
 Question 41 
 Are there internal taxes in Japan that are levied at border on all im ported goods? If yes, how are they 
levied?  
RESPONSE 
 In the Consumption Tax Act, all foreign cargo, except for tax-free foreign cargo, is subject to 
consumption tax when it is received from bounded areas.  Business enterprises file tax returns and pay 
taxes to the Director of Customs Offices at the time of the receipt of taxable goods from bonded areas. 
 
For more information, see: http://www. mof.go.jp/english/tax/taxes2010e_e.pdf 
 
(iv) Export prohibitions, restrictions, and licensing 
  
Question 42  
Chinese enterprises complain seriously about the l ack of transparency in the export licensing 
procedures in Japan. One example concerns ma chine tools where business relationship between 
Chinese and Japanese enterprises for more than two decades was stopped abruptly by the Japanese 
government refusing to issue export licenses to signed contract for export of machine tools to China. 
Could Japan please explain what machine tools under what tariff lines are subject to export 
prohibition? Since when? What are the reasons be hind the prohibition? Is the export prohibition 
applied uniformly to all countries and regions?  
RESPONSE 
 
From the point of non-proliferation of weapons  of mass destruction and related items and 
technologies, the Government of Japan participates in all international export control regimes and 
implements strict export control on items and technologies based on these regimes' agreements. 
 Based on the Foreign Exchange and Foreign Trade Ac t, items and technologies subject to the control 
are specified by the Export Trade Control Order and Foreign Exchange Orde r, and the details are 
specified in the Ordinance of the Ministry speci fying Goods and Technologies Pursuant to Provisions 
of the Appended Table 1 of the Export Trade Cont rol Order and the Appended Table of the Foreign 
Exchange Order.  WT/TPR/M/243/Add.1  
Page 74 
 
 
  As the specification of the item in issue is not cl ear, it is difficult to answer when the restriction on 
that item started, but the Government of Japan h as been enforcing export co ntrol based on the Act 
since 1 Dec. 1949. Basically, export control applies to all countries and regions. 
 
Question 43  Has Japan notified all the products subject to expor t prohibitions, restrictions and licensing as well as 
their adjustments to the WTO Ma rket Access Committee in accordance with the QR notification 
format? 
 
RESPONSE 
 
Japan has notified the Market Access Committee in an appropria te manner. There have been 
discussions on how to improve the notification pr ocedure for quantitative restrictions since 2009. 
Since there is a discussion on how to deal with the scope of the notifications, the scope of the 
notification has not yet been decided.  All the produc ts subject to export prohibitions, restrictions and 
licensing are not covered within the requirements of the Market Access Committee in accordance 
with the QR notification format. Japan considers it important to improve the notification procedure for 
quantitative restrictions. Japan is ready to make notifications in an appropriate way as we move 
forward. 
 
(vi) Export promotion schemes 
 
Question 44  
According to the Secretariat Report, "the authoriti es maintain that provision of these credits is based 
on the terms and conditions of the OECD Arrangement on Offici ally Supported Export Credits. 
Standard forms of export credit extended by JBIC  include buyer credits and bank-to-bank loans." 
Could Japan please provide more details of the terms and conditions under which it provides export 
credits, including the applicable inte rests rate and how the rate is decided? Could Japan also provide a 
general description of its export credit policies?  
 
RESPONSE 
 
Japan provides export credits based on the term s and condition of the OECD arrangement on 
officially supported export credit. With regard to  export finance, please refer to the JBIC website 
(http://www.jbic.go.jp/en/finance/export/index.html ）for more information.  
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
 
(i) Taxation and tax-related assistance    
Question 45  According to the Secretariat Repor t, Japan was considering whether to lower its statutory corporate 
tax rate. Could the Japanese delega tion update us with some informa tion on the latest development of 
this issue? Are there already details of the refo rm discussed, including for example the new tax rate, 
timetable of implementation etc.?   WT/TPR/M/243/Add.1 
 Page 75 
 
 
  RESPONSE 
 
In the FY2011 Tax Reform, subject to the approval from the diet, the effective corporate tax rate, 
which includes national and local taxes, will be reduced by 5% in order to promote domestic 
investment and job creation through enhancing Jap anese companies' international competitiveness as 
well as improving the environment for business esta blishment [40.69% to 35.64% (Tokyo)]. For this 
purpose, the statutory corporate tax will be reduced by 4.5%, from 30% to 25.5%. 
 Question 46  
It was also reported that Japan was considering increasing its consumption tax (VAT) rate. Could the 
Japanese delegation please confirm whether there is indeed such a consideration? If yes, could the Japanese delegation please also inform the background of such a consideration of adjustment, as well 
as major elements of the adjustment considered?  RESPONSE  
Currently the Japanese government is discussing a refo rm of the social security system. To secure 
necessary revenues for reforming the social secur ity system, it is necessary to discuss tax reform 
(including consumption tax). The government will announce a ny policy about tax reform by 
June 2011. 
 
Question 47  According to the Secretariat Report, the system  of tax incentives in Japan remains complex and 
opaque, thus perhaps distorting. Tax incentives are very much likely to fall in the WTO definition of 
subsidies, and consequently subject to the notifi cation obligation under the SCM Agreement. In view 
of the large number of special tax measures (tax incentives) in Japan, and al so the fact that in 
document G/SCM/N/186/JPN there was few tax measures included, how will Japan ensure that all its 
subsidy programmes including eligible tax incentives have been notified to the WTO as required by 
the SCM Agreement?  RESPONSE  
Tax measures subject to the notification obliga tion under the SCM Agreement have already been 
notified in document G/SCM/N/186/JPN.  (ii) Subsidies and other financial assistance 
  
Question 48  According to the Secretariat Report, The Japanese gove rnment has concentrated its resources into the 
development of "seven strategic areas" including environment and energy, medical and health care, 
economic integration with other Asian countries, tourism and rev italization of regional economies, 
science and technology, human resources, and financ ial services. In this r espect could the Japanese 
delegation please inform whether there are prefer ential policies and measures including subsidies and 
financial assistance provided for promotion of th e development of the LED lighting industry? 
 RESPONSE  
The Japanese Government expended 5.7 billion yen on  a research and development program for basic 
technologies of next generation lighting (including  LED lighting) in the revised budget in FY2009. 
 WT/TPR/M/243/Add.1  
Page 76 
 
 
  Question 49 
 Further to question 43, could the Japanese delega tion please inform whether there are preferential 
policies and measures including subsidies and financial assistance provided to encourage the 
development of new medicines as well as the pharmaceutical industry?  
RESPONSE 
 
Japan is trying to provide support for the developm ent of new medicines for prioritized disease areas, 
including cancer, which were decided based on "the New Strategy" approved by the Cabinet in June, 2010. We would be grateful if Japan could share with us  its experiences in encouraging the development of 
SMEs by providing detailed informati on related to the following questions. 
 
Question 50 
 Could the Japanese delegation please describe its le gal framework for assisting the development of 
SMEs? Could a list of major laws , Cabinet orders and decisions and ministerial public notices and 
decisions be provided? 
 
RESPONSE 
 
The basic principle and definition of SMEs are defined in the "Basic Law for Small and Medium 
Enterprises"  
On the basis of this law, the government of Japan implements relative laws such as the "Act for the 
Sophistication of Basic Manufacturing Technology of Small and Medium Enterprises" for supporting 
manufacturing SMEs, the "Shopping District Promot ion Association Act" for supporting commercial 
avenues and the "Act for Facilitating New Bu siness Activities of Small and Medium-sized 
Enterprises" for promoting corporation among SMEs in different fields. 
 
Question 51  Could the Japanese delegation please provide its annual  budget arranged for assistance of SMEs in the 
past few years and the specific programmes using the budget? Could the Japanese delegation also describe its tax incentives that ar e specially designed for SMEs? 
 
RESPONSE 
 
The government of Japan provided \191.1 billion in FY 2010 and \189.0 billion in FY2009 as a 
budget for SME assistance.  
 
The government of Japan strongly facilitates financ ing for SMEs and supports the development of 
new fields and commercial avenues.  In terms of tax incentives, the government of Japan  plans to decrease the reduc ed tax rate for SMEs 
from 18% to 15%. 
 Question 52  It was reported that in August 2010 METI issued  a guideline on 2010 SMEs-specific assistance which 
stated that the 2010 budget for this purpo se would be 43.5 billion Japanese yen.  WT/TPR/M/243/Add.1 
 Page 77 
 
 
   
Could the Japanese delegation please provide details as to how this budget would be allocated, and 
what would be the applicable terms and c onditions when SMEs apply for the assistance? 
 
RESPONSE 
 The government of Japan plans to provide \196.9 billion in the next fiscal year as a budget for SMEs 
for the purpose of supporting SMEs' financing, tech nological development and overseas development. 
 In particular, the government of Japan supports fina ncing for SMEs which have been burdened by the 
unfavorable business environment resulting from the rise of the yen. 
Question 53 
 Could the Japanese delegation please provide a brief description of the services system for SMEs including financial services assisting SMEs? 
 
RESPONSE 
 
The government of Japan promotes changing loan c onditions (e.g., repayment schedule) to alleviate 
the debt burden of SMEs. We also promote the di rect loan system held by the Japan Finance 
Corporation and the credit guarantees to private fi nancial institutions by the National Federation of 
Credit Guarantee Corporations. 
 Question 54  SMEs were the most vulnerable during the global financial and economic cr isis. What were the 
policies and measures staged by the Japanese government  that were specially designed for or targeted 
at SMEs?  
RESPONSE 
 
Since the government of Japan considers that SMEs sustain Japan's industry, employment and 
domestic economy, it believes that s upporting SMEs is one of the most important topics in Japan. The 
government of Japan plans to provide \196.9 billion in the next fiscal year for the purpose of supporting SMEs' financing, technological development and overseas development.  
 
Section IV:   T
RADE POLICIES BY SECTOR  
 
(3) M ANUFACTURING  
 
Question 55  Further to question 50, could Japan please share wi th us how it promotes technology advancement in 
its manufacturing industries and telecommunicati ons sector? Are there preferential policies and 
measures provided to encourage technology innovations and research  and development activities of 
enterprises?  If yes, what are these policies and measures?  
RESPONSE 
 As part of the implementation of the "New Growth  Strategy," Japan is promoting the research and 
development of green life innovation and creating new industries. Moreover, in order to support the 
spread of new technologies and systems domestically  and abroad, Japan is actively promoting pilot WT/TPR/M/243/Add.1  
Page 78 
 
 
  projects. Additionally, Japan is taking measures to a ttract excellent talent both from inside and outside 
of Japan and is constructing a renewed system  for research and development through industry-
academia-government cooperation. 
 
Question 56  Could Japan please inform the development status of  its environmental protection industries including 
those engaged in energy conserva tion and efficiency improvement? 
 
RESPONSE 
 
According to the estimation by the Ministry of the Environment, the environmental industry's market 
in Japan was approx. \70 trillion as of 2006 and is expected to grow.  
On the New Growth Strategy, the Government sees the energy and environment industries as a 
"growth area driven by Japan's strength", and has fixed a target to create over \50 trillion in new 
environment-related markets and 1.4 million new jobs in the environmental sector by 2020. 
 Question 57 
 
Could Japan please inform its policies and measures c oncerning the recycle of used and scrap cars as 
well as the development status of the industry?  
RESPONSE 
 
Japan's policies and measures concerning recycling of  used and scrap cars are stipulated in the 
Automobile Recycling Law. The law defines the ro les of the automobile manufacturers and importers, 
businesses involved in recycling, and motor vehicle users in facilitating the recycling of motor vehicles. Owners of motor vehicles need to pay a f ee for recycling their vehicles. All four-wheeled 
vehicles (including large vehicles and commercial vehicles such as trucks and buses) are in principle 
subjected to the Law. The outline of the law can be found at the following website: 
 <http://www.meti.go.jp/policy/automobile_recycle/other/pdf/pamphlet/foreigner.pdf>  For the development status of the industry, an auto mobile recycling information system is now stably 
in service. In 2008, 3,580,000 used cars were  accepted. With the increasing number of airbags 
mounted on cars, the volume of airbag processing is  sharply on the rise. Through an established 
recycling (destruction for chlorofluorocarbon) sy stem, automobile manufacturers now receive 
Automobile Shredder Residue(ASR), airbags, a nd chlorofluorocarbon to process and recycle them 
properly in a consistent manner. On the consignmen t of the automobile manufacturers concerned, the 
Japan Automobile Recycling Promotion destroys  the recovered chlorofluorocarbon at its eight 
facilities.  
 Question 58  According to the Secretariat Report and WTO doc ument G/SCM/N/186/JPN, subsidies are provided 
to Japan Aircraft Development Corporation (JADC ) and Japan Aero Engines Corporation (JAEC). 
Could the Japanese delegation please provide more de tails concerning the subsidies? For example, 
apart from the Law of Aircraft Industry Promotion, wh at are other laws or regulations and rules at the 
Cabinet or ministerial level that are related to th e subsidies? How are the s ubsidies granted, according 
to actual expenses of JADC and JAEC on certain as pects or in respect of the expenses? How are the 
subsidies related to the operation and profitability of  the two companies? How much in total has been  WT/TPR/M/243/Add.1 
 Page 79 
 
 
  provided to the two companies since the subsidies were in place since 1986 and 1991? Apart from the 
grants, are there other forms of subsidies includi ng tax incentives and government provision of goods 
and services to support the air industry?  
RESPONSE 
 Details concerning the subsidies mentioned in the question, including how subsidies are granted and 
how/whether subsidies are related to  the operation and profitability of the recipient, are all stipulated 
in the Law of Aircraft Industry Promotion. Subsidie s provided in the past can be found in the past 
notifications. All the subsidies have been notifie d according to the SCM agreement, regardless of 
what form they took. 
    Japan is a major steel producing country in the wo rld renowned for its advanced technology and high 
environment standards. China would appreciate it if Japan could share with us its experiences in policies concerning the steel industry by providi ng detailed responses to the following questions. 
 
Question 59  Could the Japanese delegation please outline major elemen ts in its industry policy of the steel sector? 
 
RESPONSE 
 See http://www.jisf.or.jp/en/statistics/sij/index.html where "The Steel Industry of Japan 2010" 
outlines relevant information.  Question 60 
 
What are the requirements in Japan for the steel industry in respect of energy consumption, water 
saving and emission reduction? Could the Japanese delegation please provide relevant information 
including legislations in this respect? Thr ough what measures are these requirements enforced? 
 
RESPONSE 
 To achieve the reduction target of the Kyoto Prot ocol, the Steel sector, as well as other sectors, needs 
to save energy. Japan Business Fe deration (Nippon Keidanren) to ok the lead and settled on the 
"Environmental voluntary action plan" in 1997, and The Japan Iron and Steel Federation also settled 
on a voluntary action plan.  In addition, Japan has the Act on the Rational Use of Energy as the pillar 
of Japanese energy conservation policies, which requ ests that not only the industrial sectors (including 
manufacturing ones, such as steel), but also the commercial and transportation sectors save energy. 
 Question 61  Does the Japanese government provide preferential policies and measures including financial support 
and/or tax incentives for such projects of energy sav ing and emission reduction in the steel sector, for 
example projects promoting utilization of non-fo ssil fuels and utilization of middle and low 
temperature waste-heat resources? If yes, what are these policies and measures?   
RESPONSE 
 The Japanese government doesn't provide preferentia l policies and measures sp ecifically for the steel 
sector.  WT/TPR/M/243/Add.1  
Page 80 
 
 
  Question 62 
 Are there specific trade policies or measures in pl ace in Japan concerning the import of raw materials 
and fuels for the steel industry? 
 
RESPONSE 
 
The Japanese government doesn't have  any specific trade policies and measures for the import of such 
materials and fuels. 
 Question 63  Could Japan please inform its technological developments  in the steel sector in respect of such areas 
as low-carbon metallurgical technologies, carbon dioxide capturing, non-fossil fuels utilization, 
middle and low temperature waste-heat utilization etc.? 
 
RESPONSE 
 
See:  http://www.jisf.or.jp/course50/index_en.html  
(5) S
ERVICES  
 (i) Financial services 
 
Paragraph 48, page 89 
 
"During the period under review, the sector appears to have become less concentrated.  As of 
March 2009, the top four life-insurance companie s accounted for 39.5% of total life-insurance 
company assets, compared with 60.6% in September 2007. Over the same period, the share of the top 
seven non-life companies declined to 86.5% from 90.3%." 
 
Question 64  (1) Has Japan taken any measures to facilitate the d econcentration in life insurance market? (2)Why is 
non-life insurance market still so concentrat ed as compared to life insurance market? 
 RESPONSE  
As of September 2009, the total assets of the top four life insurance companies (Nippon Life 
Insurance Company, The Dai-ichi Life Insurance Company, Meiji Yasuda Life Insurance Company, 
Sumitomo Life Insurance Company) accounted for 39.5% (March 2009) of those of the whole life 
insurance sector, which is a decrease from 60.6% in September 2007. 
 The main factor for the lower concentration is th at the amount of assets of the Japan Post Insurance 
Company, which was established in October 2007, was approximately 10 billion yen (accounting for 
about 34% of the total assets of all life insurance companies), and was added to the total assets of the 
whole life insurance sector. 
 If the assets of the Japan Post Insurance Company ar e excluded from the calculation, the share of the 
total assets of the four biggest life insurance comp anies is 59.6% in March 2009 and is a decrease 
compared with September 2007.   WT/TPR/M/243/Add.1 
 Page 81 
 
 
  The share of the total assets of the top seven non-life insurance companies (Tokio Marin & Nichido 
Fire Insurance Co, Sonpo Japan Insurance Inc,  Mitutsui Sumitomo Insurance Co, Nipponkoa 
Insurance Co, Aioi Insurance Co, Nissay Dowa  General Insurance Co) declined to 86.5% 
(March 2009) from 89.0% (September 2007).  
The main factor for the decline is the drop in securities held due to the decrease in stock prices. 
Consequently the amount of total assets of the top seven non-life insurance companies fell to 
7.7 trillion yen. (In addition, the amount of total assets of non-life insurance companies except for the 
top seven decreased slightly (about 0.1 trillion yen).)   
(Note: the figure of 90.3% in the Secretariat's Repo rt is the share of eight biggest companies as of 
September 2007.)  There are no restrictions on foreign capital invest ment in Japan's insurance market. In the life 
insurance sector, there are 15 subsidiaries a nd 4 branches are non-Japan ese companies out of 
47 existing companies. In the no n-life insurance sector, 4 subsidiaries and 22 branches are foreign-
owned out of 50 companies. This shows that Jap an's insurance market is fully liberalised. 
 Paragraph 49, page 90  "Additionally, an alternative dispute resolution syst em for insurance issues ha s been established, as 
well as a system for managing insurance firms' conflicts of interest." 
 Question 65  How does this system work? How does it differ from the Ombudsman system in Europe?  
 
RESPONSE 
 
The primary purposes of the alternative dispute reso lution system in the financial sector (financial 
ADR) are as follows:  
 (a) to ensure the neutrality and fairness of  the dispute settlement through designating a 
dispute resolution body for each financial sector; and   
 (b) to ensure the effectiv eness of the dispute settlement through requesting financial 
institutions to accept dispute settlement pr ocedures, and to respect the proposed 
settlement. 
  In other countries, there exist different j udiciary and financial systems. Thus, there is 
variety in Financial ADR in terms of in stitutional framework and implementation. 
  For instance, in the UK, where financial ADR is developed, the financial ombudsman 
service (FOS) is established under the Financial Services Authority (FSA). The FOS conducts financial ADR for the entire fina ncial sector, covering banking, insurance 
and the securities sector. 
 
Question 66  Regarding bancassurance, are there any specific re gulations on the insurance selling process at bank 
outlets? Is the selling of insurance products conducted by staff of insurance companies or banks? How 
do banks cooperate with insuran ce companies in this area?  
 WT/TPR/M/243/Add.1  
Page 82 
 
 
  RESPONSE 
 
 (1) Regarding bancassurance, banks are admitte d to deal with all insurance products. At 
the same time, there are certain market conduct rules from the perspective of 
policyholder protection and convenience. These rules include (a) protection of 
confidential information and (b) restri ctions on solicitation to borrowers. 
 (2) The selling of insurance products is conducted by bank staff registered as an 
insurance solicitor. 
 (3) When insurance compani es entrust the selling of insurance products to banks, the 
insurance companies are required to estab lish a policy regarding the entrustment, 
from the perspective of ensuring sound and appropriate management of operation and 
fairness of insurance solicitation. On th e premise of the establishment of the 
entrustment policy, insurance companies can conclude a contract with banks, thereby 
commissioning banks to sell insurance produc ts. The specific form of co-operation 
between insurance companies and banks re garding the selling of insurance products 
can take various shapes as it is decided in  the contracts between insurance companies 
and banks. 
 Question 67 
 
The market share of foreign insura nce companies in Japan is small. What's Japan's view on the reason 
of the situation?  
RESPONSE 
 
There are no restrictions on foreign capital invest ment in Japan's insurance market. In the life 
insurance sector, there are 15 subsidiaries and 4 branches which are non-Japanese companies out of 
47 existing companies. In the non-life insurance s ector, 4 subsidiaries and 22 branches are foreign-
owned out of 50 companies. This shows that Jap an's insurance market is fully liberalized. 
 (ii) Telecommunications 
 
Paragraph 50, page 90  "Foreign investment in NTT is limited to 33%."  
Footnote 47, page 90 
 "According to Article 4 of the NTT Law, the Governme nt must hold at least one third of the shares in 
the NTT Corporation.  At present the Government holds 33.7%.  The authorities maintain that the 
Government holds the share for public interest and safety reasons." 
 
Question 68  Is there any plan to remove the limit on fo reign investment in the NTT corporation? 
 RESPONSE  
NTT is a shareholder of NTT East and NTT W est, which provide most of the communications 
infrastructure that is the foundation of social activity . Foreign investment restri ctions applied to NTT, 
which is deeply related to national security, ar e in place to avoid national security issues and undue 
influence by foreign countries.  WT/TPR/M/243/Add.1 
 Page 83 
 
 
   
Therefore, there are no plans to either relax or abolish the above measures at this point.  Paragraph 51, page 90  
"Under the Telecommunications Business Law, the category I and category II classification pertains 
to facilities (not carriers)."  Question 69  
(1) Besides the NTT Group, is there any other ca rrier who owns a category I license? If so, please 
provide more details. If not, is there any plan to  liberalize the category I market? (2) How does this 
facilities-based category classification correspond to  product classification in Japan's Accession 
Protocol concerning telecommunications services?  RESPONSE  
(1) Although what is meant by "Category I license" is  not specified clearly in this matter, with 
regard to Category I classification, it is a system  that imposes asymmetric  regulation on dominant 
operators in the fixed telecommunications mark et. Specifically, those who hold over 50% of the 
access line share are designated as Category I tel ecommunications facilities and come under special 
regulation. Only NTT East and NTT West are designated as such operators at this point. 
 (2) Currently, services of the Category I desi gnated telecommunications facilities correspond to 
all product classifications (Telecommunicati ons Sectors subject to Reference paper: 
2.C.a,b,c,d,f,g,and o) in the accession agreement.   
 
Paragraph 53, page 90  "In 2008, NTT group accounted for 91.2% of "in-pref ecture" fixed-line call sales and 47.4% of "out-
of-prefecture" call sales; it was r esponsible for 77.7% of in-city call volume and 54.4% of out-of city 
volume.  In the mobile market, NTT Docomo  had a 49.5% share of sales and 50.8% of 
communications traffic." 
 Question 70  Please indicate the measures taken and to be taken to  ensure fair competition in the market. Is there 
any assessment concerning the effectiveness of these measures? 
 
RESPONSE 
 
The government of Japan has been promoting asymmetr ic regulation to ensure a fair and competitive 
environment in the telecommunications market and has been imposing special regulations on 
dominant operators. On the other hand, regard ing regulations on other telecommunications 
businesses, a stance has been taken towards gradua lly loosening regulatio ns based on ex-post 
regulations.  As for the previously mentioned dominant opera tors, based on the Designated Telecommunications 
Facilities System, there are separate restrictions applied to fixed telecommunications markets, 
designated as Category I telecommunications facil ities, and mobile telecommunications markets, 
designated as Category II telecommunications facilities.  WT/TPR/M/243/Add.1  
Page 84 
 
 
  Specifically regarding NTT East and NTT West, which are presently designated as Category I 
telecommunications facilities, service regulations such as the obligation of notification of user 
charges, interconnection rules such as setting interconn ection charges that properly reflect the cost, as 
well as restrictions on particular acts to prev ent unreasonable and discriminatory treatment, are 
applied to them as a unit.  NTT Docomo, KDDI and Okinawa Cellular must fo llow the rules for drawing up and releasing 
interconnection agreements applied to Categor y II designated telecommunications facilities. 
Furthermore, for NTT Docomo, action restrictions  for Category I designated telecommunications 
facilities are applied as well.  Regarding trends in the telecommunications sector, in order to accurately understand these trends and 
properly reflect the market situation in teleco mmunications policies, the government has been 
conducting a "competition review in the teleco mmunications business field" every year.  
 
Question 71  It is reported that a plan was drafted in D ecember 2007 concerning a comprehensive piece of 
legislation on telecommunication, broadcasting a nd television services. Can Japan please confirm this 
information and provide the latest updates on the legislation progress? 
 
RESPONSE 
 
Japan issued the "Amendment of  the Broadcast Act, etc."in December 2010, which contained 
amendments regarding broadcasting, radio and te lecommunications businesses that were necessary for 
organizing and streamlining institutions leading to and corresponding to the progress of digitalization 
in the telecommunications and broadcasting sectors. Japan is now consolidating relevant orders for 
implementing the law.  
Postal services 
 Question 72 
 (1) Please indicate the requirements and approva l procedures for foreign service providers to 
engage in domestic and inte rnational delivery services of parcels and other items.  
 RESPONSE  
Whether it is a postal service or not, parcel delivery service providers need to go through the approval 
procedures for the Truck Transport Business La w and  Freight Forwarding Business Law.  
 
Under the Truck Transport Business Law and Freight  Forwarding Business Law (regarding the use of 
truck, rail and coastal shipping), foreign service provi ders are treated equally with national providers. 
Under the Freight Forwarding Business Law (regarding the ues of international shipping and international aviation), foreign service providers  need approval as foreign business operators. 
Cabotage regulations restrict foreign freight  forwarders from using domestic aviation. 
 
The requirements and approval procedures of th e Truck Transport Business Law and Freight 
Forwarding Business Law are mentioned on the following website. (language: Japanese only)  http://wwwtb.mlit.go.jp/kanto/jidou_koutu/kamotu/k amotu_jigyoukaisi/k_ jigyo.htm (language:  
Japanese only)  WT/TPR/M/243/Add.1 
 Page 85 
 
 
   
http://www.mlit.go.jp/seisakutokatsu/freight/seisa kutokatsu_freight_mn3_0000 02.html (language:  
Japanese only) 
(2) Please indicate the current situation of commercial presence of foreign service providers in 
this area. 
 
RESPONSE 
 
The number of foreign providers is available on ly with regard to international shipping and 
international aviation. 
 
(March 2009) 
 
Total Number of Providers Foreign Providers 
(Included in Total) The Ratio of 
the Foreign Providers 
International Shipping  596 93 15.60% 
International Aviation  145 35 24.14% 
 
Question 73 
 Are foreign service providers allowed to engage  in "special correspondence delivery business" 
provided for in the Law Concerning Correspondence De livery Provided by Private-Sector Operators? 
If so, Please indicate the criteria and approval proce dures for foreign service providers to operate in 
this area as well as their current situation of commercial presence. 
 
RESPONSE 
 
As stated in the Japan's Revised Offer (TN/S/O/JP N/Rev.1), any foreign service provider is allowed to 
engage in "special correspondence delivery business"  (SCDB) as provided for in the Law Concerning 
Correspondence Delivery Provided by Private-Sector Operators. 
 If an operator wants to engage in SCDB, it has to f ile an application with the Ministry of Internal 
Affairs and Communications (MIC).  
The application should include: 
  - A business plan about receiving and delivering correspondence, etc.  - A written estimate of revenue and expenditure  
As of November 2010, 339 operators were permitted to engage in SCDB. 
 Although there are no barriers for foreign corporations  to engage in SCDB, no foreign corporations 
are engaged in SCDB at present.  Question 74 
 
Could the Japanese delegation please provide the latest  updates on its postal service reform, including, 
inter alia, cross-subsidization between p ublic services and profit-making business? 
 WT/TPR/M/243/Add.1  
Page 86 
 
 
  RESPONSE 
 
The postal reform aims to address the problems cau sed by its privatization in 2007 and it provides 
that:  (1) Japan Post Group is to be reorganized (fro m five companies to three companies). (2) It is to 
be ensured that universal services such as postal se rvice, savings, and life insurance are integrally 
made available to people at post offices in a simple and user-friendly manner. (3) It is to be ensured 
that Japan Post Group will be able to provide th ese services equally and universally throughout the 
country over the coming years. 
 
The bills for Postal Reform have been submitted to the current Diet session.  
 For your reference, the postal service in Japan is required to be managed with the fees that 
recompense reasonable cost of postal service under efficient management a nd generate reasonable 
profit, in accordance with the Postal  Act. The bills will not change th is principle. Furthermore, they 
oblige the Japan Postal Services Company (the merg ed company based on the bills for Postal Reform) 
to publish income and expenditures sorted by busin ess segments, with a view to realizing adequate 
profit-and-loss management for each service and to enhancing transparency through disclosing 
information.  (iv) Medical services 
 
Question 75  What are the requirements and approval procedures for foreign medical service providers to operate in 
Japan? What is the rationale behind these requirements? 
 
According to the Medical Care Act (Act No. 205 in 1948), those who want to open a medical 
institution in Japan have to gain permission from th eir local governors. The purpose of this Act is to 
protect the health of the nation by means of safegua rding the interests of recipients of medical care 
and ensuring a system that efficiently delive rs adequate medical care with good quality. 
 
RESPONSE 
 
According to the Medical Care Act (Act No. 205 in 1948), those who want to open a medical 
institution in Japan have to gain permission from th eir local governors. The purpose of this Act is to 
protect the health of the nation by means of safegua rding the interests of recipients of medical care 
and ensuring a system that efficiently delive rs adequate medical care with good quality. 
 Question 76  What are the requirements and approval procedures fo r foreign medical staff to work in Japan? What 
is the rationale behind these requirements? 
 
RESPONSE 
 
If medical services are not provided appropriately, people may be exposed to serious and apparent 
risks to their lives and bodies. Because of this, it is necessary to acquire a Japanese medical license to 
practice in Japan.  Question 77  Is there any plan to further liberalize the medical service sector, especially in mode 3 and mode 4?  WT/TPR/M/243/Add.1 
 Page 87 
 
 
   
RESPONSE 
 
The Japanese government cannot easily make furthe r commitments on mode 3 and mode 4 for the 
following reasons: (1) If medical services are not provided appropriately, people may be exposed to 
serious and apparent risks to their lives and bodi es, and (2) people are highly concerned about the 
credibility of medical services. Those who provide medical services in Japan have to comply with the 
Medical Care Act (Act No. 205 in 1948). The purpose of  this Act is to protect the health of the nation 
by means of safeguarding the interests of recipients of medical care and ensuring a system which efficiently delivers adequate medical care with good quality. 
 
CHINA - 3
rd set 
 
Report by the Secretariat  
 
I. E CONOMIC ENVIRONMENT  
 (2) M
ACROECONOMIC POLICIES  
 
Question 1  
How does Japan ensure the authen ticity of foreign exchange payment and settlement under trade in 
goods and services accounts? Does the administration examine and verify documents like commercial 
contracts?  
 
RESPONSE 
 Under the current Japanese system, the underlying gene ral rule is that foreign exchange payment and 
settlement can be undertaken without any prior approval by the authorities. In this regard, there is no 
such process as verification of documents by the ad ministration. The exception to this general rule 
applies to transactions subject to a United Nations Security Council sanctions regime. In such cases, 
banks are obliged, under the Foreign Exchange and Foreign Trade Act, to scrutinize all documents 
submitted by their customers in order to verify that  the transactions do not violate any relevant United 
Nations Security Council sanctions regime. Th e Government, for its part, conducts on-sight 
investigations to make sure that banks are disch arging their obligations to verify the documents 
pursuant to the Foreign Exchange and Foreign Trade Act. 
 
Question 2 
 What measures has Japan taken to deal with the in flow of speculative capital? Is there any assessment 
of the effects of these measures?  
 
RESPONSE 
 Under the current Japanese system, the underlying general rule is that cross-border capital 
transactions can be conducted wit hout any prior approval by the authorities, except in cases that are 
governed by a United Nations Security Council sanctions regime.  
 
Question 3 
 How does Japan understand capital account convertibi lity? How does Japan operate it in practice?  
 WT/TPR/M/243/Add.1  
Page 88 
 
 
  RESPONSE 
 
Under the current Japanese system, the underlying general rule is that cross-border capital 
transactions can be conducted without any prior a pproval by the authorities, except in cases governed 
by a United Nations Security Council sanctions regime.  Question 4  
How does Japan deal with banks and firms viol ating regulations concerning foreign exchange? 
 
RESPONSE  
In order to ensure the conformity of banks with  the Foreign Exchange and Foreign Trade Act, the 
Government undertakes on-sight investigations.  In a ddition, the Act stipulates that contraventions to 
the Act are subject to penalties. 
 
Question 5  How does Japan deal with foreign banks and firm s without any commercial presence in Japan when 
they engage in foreign exchange business to the detriment of Japan's interest?  
 
RESPONSE  
It is not clear what is meant by "foreign exchange  business" and "Japan's interests", but as far as the 
current Japanese system is concerned, the underlying general rule is that foreign exchange payment 
and settlement as well as capital transactions can be  undertaken without any prior approval by the 
authorities. As noted above, the exception to this gene ral rule applies to trans actions subject to United 
Nations Security Council sanctions regimes. 
 
Question 6 
 
Could Japan please provide an assessment of the e ffects and potential risks of the monetary and 
foreign exchange policies it has taken against the background of the crisis? Please also indicate the 
new monetary policies Japan plans to take in 2011.  
 
RESPONSE 
 
(i) Monetary Policy 
 
After the fall of 2008, when the turmoil in global financial markets intensified, the Bank of Japan 
implemented a wide range of policy measures on both the monetary policy and financial system 
policy fronts. The Bank of Japan judges that a serie s of measures implemented has been effective in 
ensuring the stability of the financial system and facilitating corporate financing.  At the same time, in order for Japan's economy to  overcome deflation and return to a sustainable 
growth path with price stability, the Bank of Japan continues to consistently make contributions as the 
central bank through the three-pronged approach of  pursuing powerful monetary easing consisting of 
comprehensive monetary easing, ensuring financ ial market stability, and providing support to 
strengthen the foundations for economic growth.  As for the conduct of monetary policy going forward,  the Bank will continue to carefully examine the 
outlook for economic activity and prices, and ta ke policy actions in an appropriate manner.  WT/TPR/M/243/Add.1 
 Page 89 
 
 
  (ii) Foreign Exchange Policy 
 
Japan's foreign exchange policy is based upon the common understanding mutually shared in a 
number of international fora such as G20. The last G20 summit communiqué in Seoul last November states that "we will move toward more market-d etermined exchange rate  systems and enhance 
exchange rate flexibility to reflect underlying economic fundamentals and refrain from competitive 
devaluation of currencies. Advanced economies, including those with reserve currencies, will be 
vigilant against excess volatility and diso rderly movements in exchange rates". 
 The Japanese Government will continue to keep a close eye on exchange markets and will take 
appropriate action when needed. 
 
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
 (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
 
(vi) Government procurement 
 
Question 7  In the government procurement of Japan, procur ement of overseas goods and services, supplied by 
either domestic or foreign suppliers, is notably  low. Could Japanese delegation please explain the 
reasons behind this situation?   
RESPONSE 
 
Japan conducts its government procurement appr opriately, based on the principles of national 
treatment and non-discrimination.  Japan considers th at the statistics are the result of an appropriate 
procurement process based on these principles.  Question 8  
According to the Secretariat Re port, in Japan government procurement is used to support SMEs. 
Could Japan please elaborate on details of those government procurement policies that are in favour of SMEs and provide a list of legislations in this  respect including laws (for example Law on Ensuring 
the Receipt of Orders from the Government and Other Public Agencies by Small and Medium Enterprises), Cabinet orders and decisions as well as ministerial public notices, decisions etc.?  
 RESPONSE  
Japan sets a "Policy of contracts by the Government and other public agencies" each fiscal year, based 
on the "Law on Ensuring the Receipt of Orders fro m the Government and Other Public Agencies by 
Small and Medium Enterprises". This Policy incorpor ates measures such as providing information for 
SMEs, facilitating SMEs' particip ation in tendering through establis hing reasonable deadlines for the 
delivery of goods and services as well as further simp lifications of applicati on procedures, and giving 
special attention to newly established or high-tech SM Es, which are considered to be some part of the 
characteristics of SMEs.  
Foreign SMEs can benefit from the laws and po licies on Government Procurement as well as 
domestic SMEs.  WT/TPR/M/243/Add.1  
Page 90 
 
 
  Question 9 
 The Secretariat Report mentioned the "Basic Guid eline for Public Procurement of Information 
Systems" which Japan adopted in March 2007. It w as also reported that in June 2007 a rule named 
"Standard for Information Security Measures fo r Central Government Computer Systems" was 
adopted. What is the relationship between the two rules?   
RESPONSE 
 "The Basic Guidelines for Public Procurement of Information Systems" quotes "Standards for 
Information Security Measures for the Central Gove rnment Computer Systems" as the standard to 
which information security measures described in the procurement specification of the government 
conforms.  
Concretely, it is necessary for each government entity to define measures corresponding to the 
importance of each information asset and its risk af ter considering the requirements established in its 
information security policy conforming to the "Sta ndards for Information Security Measures for the 
Central Government Computer Systems" and related manuals. 
 
Reference: p. 25 of "Basic Guideline for P ublic Procurement of Information Systems" 
http://www.soumu.go.jp/main_sosiki/gyo ukan/kanri/pdf/070301_1.pdf  
 Question 10  The "Standard for Information Security Measures fo r Central Government Computer Systems" is said 
to have introduced a series of new security re quirements for equipments procured, services out-
sourced and software externally contracted by  the government. Many of the requirements are 
compulsory. Could Japanese delegation please provide details on these new requirements? How are these new requirements related to the general criteri a applied when deciding whether a foreign or 
domestic firm can have the central-government-w ide unified qualification for participating in 
tendering contracts for manufacturing and sales of products?  
 
RESPONSE 
 
The "Standards for Information Security Measures for the Central Government Computer Systems" 
provide the minimum required standards for the in formation security measures that each government 
entity should take to further raise the level of in formation security in the unified framework. Each 
government entity is responsible for the conformity  of its information security policies to the 
Standards and its officials must observe their own entity's policies.  These Standards for Measures are not related to th e general criteria of the central-government-wide 
unified qualification for participating in tendering contracts. 
 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
 
(vi) Export promotion schemes 
 
Question 11  Could Japan please provide an assessment of the impact  of the crisis on the situation of Japan's trade 
finance? What measures has Japan take n to deal with the situation?  
  WT/TPR/M/243/Add.1 
 Page 91 
 
 
  RESPONSE 
 
To overcome the current constrains on trade financ e caused by the impact of crisis, in 2009, the 
Government of Japan announced its  additional assistance to trade finance up to US$ 22 billion for two 
years, including enhancing trade finance of JBIC (Japan Bank for International Cooperation) up to 
US$ 6 billion and making available of trade in surance of NEXI (Nippon Export and Investment 
Insurance) up to US$16 billion, in addition to US$ 90 billion per annum on average.  Please refer to http://www.mof.go.jp/eng lish/if/jbic_090402.pdf  for detail.  
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
 
(iv) Intellectual property rights 
 
Question 12 
 
Could Japan please indicate the status of its implementation of the Amendment of the TRIPS Agreement? Has Japan revised the provisions  concerning compulsory license of patents? 
  
RESPONSE 
 
Japan notified its acceptance of the protocol of amending the TRIPS Agreement in August 2007. 
Japan did not need to revise the Patent Act for this acceptance. 
 
Paragraph 138, page 67  
"The Intellectual Property (IP) High Court, a special branch within the Tokyo High Court, deals with 
appeals against trial/appeal decisions made by the JPO on patent actions and suits…" 
 Question 13 
 
Is The Intellectual Property (IP) High Court the only court dealing with patent-related cases in Japan? 
If not, could Japan please provide more detailed data  concerning patent infringement brought to all 
courts in Japan since the previous review, includi ng their legal basis, means of remedy, criminal 
liabilities and nationalities of infringers?  
 
RESPONSE 
 Suits against appeal/trial decisions made by th e Japan Patent Office come under the exclusive 
jurisdiction of the Tokyo High Court (Article 178 (1) of the Patent Law), and shall be handled by the 
IP High Court which is established within the Tokyo High Court as a special branch (Article 2 (ii) of 
the Law for Establishing the IP High Court).  
A civil action relating to a patent right shall be subj ect to the jurisdiction of the Tokyo District Court 
and the Osaka District Court as the court of the fi rst instance (Article 6 (1) of the Code of Civil 
Procedure).   An appeal to the court of the second instance against the final judgment on an action 
relating to a patent right shall be subject exclus ively to the jurisdiction of the Tokyo High Court 
(Article 6 (3) of the Code of Civil Procedure), a nd shall be handled by the IP High Court which is 
established within the Tokyo High Court as a special br anch (Article 2 (i) of the Law for Establishing 
the IP High Court). Final appeal may be filed with  the Supreme Court against a final judgment made 
by the IP High Court as the court of second instance (A rticle 311 (1) of the Code of Civil Procedure). 
 In addition, a Summary Court shall have jurisdicti on of the first instance over claims where the value WT/TPR/M/243/Add.1  
Page 92 
 
 
  of the subject matter of litigation does not exceed 1,4 00,000 yen (Article 33 (1) (i) of the Court Act). 
A District Court shall have jurisdiction over the appeals from judgments rendered by Summary Courts 
(Article 24 (iii) of the Court Act). A High Court sh all have jurisdiction over the final appeals from 
judgments rendered by District Courts  (Article16 (iii) of the Court Act). 
 As for the number of civil actions relating to a pate nt right handled by the District Courts as the court 
of the first instance, 147 suits were filed and 142 cases were decided in 2008, 174 suits and 162 cases 
in 2009 respectively. There are no statistics about cases handled by Summary Courts. There were no 
cases of prosecution with respect to a violation of the Patent Act in 2008 a nd 2009. There are no other 
detailed data in question.  Question 14 
 
Could Japan please provide detailed information c oncerning technology transfer to least-developed 
members as well as technological cooperation with developing and least-developed members since 
the previous review, especially those concer ning emission reduction a nd climate change?  
 
RESPONSE  
In 2009, Japan implemented 165 million USD of trad e-related technical assistance for least developed 
countries, including about 5,800 pe rsons which consisted of disp atching experts and receiving 
trainees. Some of this assistance have also contribu ted to mitigating and adap ting for climate change, 
such as forest preservation, solar energy and irrigation.  The figures for 2010 are not available yet.  
Question 15 
 Regarding a foreign GI already registered in its c ountry of origin, which government agency shall the 
registration application be submitted to for this GI  to get registered and thus be legally protected? 
What is the specific procedure for registration application? 
 
RESPONSE 
 
Additional protection for geographical indication (GI) for wines and spirits pursuant to Article 23 of 
the TRIPS Agreement is authorized by the National Tax Agency under footnote 4 of the TRIPS agreement stating "Notwithstanding the first sentenc e of Article 42, Members may, with respect to 
these obligations, instead provide for enforcement by administrative action."  Although there is no 
registration/designation system for foreign GIs for wi nes and spirits, they are protected based on this 
labelling standard without registration or designati on in Japan.  As for protection for GIs for all 
products pursuant to Article 22 of the TRIPS Agreemen t, there is no registration or designation system 
in Japan and whether or not the use of a GI is pr ohibited is decided in courts based on the Unfair 
Competition Prevention Act on a case-by-case basis. 
 Question 16  What forms of legal remedies does Japan provide to  GIs? Could Japan please indicate the laws and 
regulation in this regard and specific articles therein?  
  WT/TPR/M/243/Add.1 
 Page 93 
 
 
  RESPONSE 
 
1. Japan provides TRIPS22 level protection for GI on goods other than wines and spirits under 
the Unfair Competition Prevention Act as follows.  
With regard to the protection of GIs, under Item 13, Paragraph 1, Article 2 of the Unfair Competition 
Prevention Act, the act of indicating in a manner whic h is likely to mislead the public with respect to 
the place of origin of goods and the act of assigning  goods with such an indication are regulated as 
included in the types of unfair co mpetition.  Although Item 1, Paragr aph 1, Article 19 of the said Act 
provides that the provision of Item 13, Paragraph 1,  Article 2 does not apply to the act of using or 
indicating a common name or commonly-used indica tion in a normal manner, this exemption does not 
include the act of using or indicating the name of  a place of origin of goods which is made from 
grapes or uses grapes as an ingredient, and has become a common name.  The Unfair Competition Prevention Act does not provide  for exclusive rights for the indication of the 
place of origin of goods, but prohibits an act of indicating which is likely to mislead the public with 
respect to the place of origin of goods.  Pursuant to Articles 3 and 4 of the Unfair Co mpetition Prevention Act, a person whose business 
interests are infringed or are likely to be infringed by a particular party's act of indicating on goods, which is likely to mislead the public with respec t to the place of origin, is entitled to seek an 
injunction for preventing or suspending such act a nd, in cases in which his/her business interests are 
infringed intentionally or negligently, compensation for damages in a civil suit against the aforementioned particular party.  Item 1, Paragraph 2,  Article 21 of the Unfair Competition Prevention Act stipulates that a person who 
commits, for an unfair purpose, an act described in It em 13, Paragraph 1, Article 2 shall be sentenced 
to imprisonment with labour for a term not exceeding five years or fined an amount not exceeding five million yen, or both.  And Paragraph 1, Ar ticle 22 of the Unfair Competition Prevention Act 
stipulates that a juridical person shall also be  fined an amount not exceeding three hundred million 
yen in cases in which a representative or an agent or other employee of the aforementioned juridical 
person has committed, in connection with its business, an act of indicating on goods which is likely to 
mislead with respect to the place of origin of goods.  The procedure of imposing these criminal 
punishments shall be subject to the Code of Criminal Procedure. 
 
2. Japan provides TRIPS 23 level protection for GI  on wines and spirits as follows. The Minister 
of Finance may, when there is a liquor producer or a liquor seller who fails to comply with the 
standards for labeling concerning GIs, give such liquor  producer / seller instructions to comply with 
such standards.  Furthermore, the Minister of Finance may, when th ere is a liquor producer / seller who fails to follow 
the instructions stated in the preceding paragraph,  announce such facts publicly and give an order to 
comply with the standards. 
 
The penal provisions are applied to a liquor producer  or a liquor seller who violates the order stated in 
the preceding paragraph.  WT/TPR/M/243/Add.1  
Page 94 
 
 
  IV. T RADE POLICIES BY SECTOR  
 
(4) E NERGY AND UTILITIES  
 
Paragraph 28, page 84  "Under the provisions of the Foreign Exchange a nd Foreign Trade Law, foreign entities wishing to 
invest in electric and gas utilities must notify their intention to the competent authorities, including the 
METI." 
 
Question 17  
Could Japan provide more details concerning the legal framework on electric power market access, 
including a list of laws, regulations, pol icies and specific articles therein?  
 
RESPONSE  
The purpose of Electricity Businesses policies is to  protect the interests of electricity users and 
achieve the sound development of Electricity Bu sinesses by realizing appropriate and reasonable 
management of Electricity Businesses, and to  assure public safety and promote environmental 
preservation by regulating the construction, mainte nance and operation of Electric Facilities. More 
details concerning its law are as follows.  
http://www.japaneselawtranslation.go.jp/law/ detail/?ft=1&re=02&dn=1&co=01&x=30&y=17&ky=el
ectricity+business+act&page=19  Question 18  
Could Japan please describe its policy developments concerning international bidding for government 
procurement in electric power sector since its previous review? 
 
RESPONSE  
Though the intention of the question is not clear, as fa r as the Japanese electric sector is concerned, it 
is basically private. Concerning China's question about "the policy developments concerning 
international bidding for government procurement in the electric power sector", there are no policy 
developments because there is not such policy in the first place. 
 
(5) S
ERVICES  
 
(i) Financial services 
 
Question 19  What is Japan's assessment of the impact of Basel III on Japan's banking sector? Could Japan please 
provide a plan on the implementation of Basel III? What measures is Japan going to take concerning 
the supervision of capital and liquidity of foreign banks operating in Japan?  
 
RESPONSE  
Basel III is balanced concerning both the necessity  of strengthening capital over the medium and long 
terms and the impact on the real economy.  It is vi able for Japanese banks to complete it to the extent  WT/TPR/M/243/Add.1 
 Page 95 
 
 
  of management efforts without impact on the real economy.  We are planning to amend existing 
domestic capital regulations in order to impl ement the Basel III amendment from the end of 
March 2013.  
(liquidity) 
 
Considering the progress in international discussions , the FSA and the Bank of Japan (BOJ) will 
continue to properly examine the liquidity risk management conducted by each financial institution 
based on the Guidelines for Supervision and financ ial inspection manuals, and On-site Examination 
Policy. The FSA will especially examine the appropr iateness of cross-company liquidity management 
in the group, and of foreign currency liquidity management. The BOJ will continue to check the 
appropriateness of liquidity risk management by mainly focusing on further strengthening of the resilience in a stress phase and on further enhancing of the global liquidity risk management system. 
 
(Capital) 
 
The FSA and BOJ intend to implement necessary measu res based on the Basel III rules text published 
at the end of 2010, taking into account that the reform avoids having negative effects on bank's lending activities. 
 
Regarding supervision of a branch of foreign-owne d bank, there is no stipulated article on the capital 
of its branches in the Banking Act.  However,  the FSA supervises its soundness through the global 
bank-wide base (adequacy of the capital).  For example, the soundness of the banking operati on is examined based on Banking Act Article 4 (1) 
when a foreign bank applies for a banking license to  establish a branch in Japan.  Specifically, the 
capital ratio of its head office (i.e, bank-wide capital ratio) is checked and the monitoring of capital is 
continually conducted by the FSA.  On the other hand, the capital control based on th e Banking Act applies to subsidiaries of foreign 
banks as well as to Japanese banks.  Under the supe rvisory guidelines, it is checked whether the bank 
has a process to evaluate the level of the adequacy of  equity capital in light of the risk profile of the 
bank and whether it takes appropriate measures to ma intain the adequacy of equity capital in quality 
and quantity.     Question 20  
What are Japan's considerations on the supervis ion and regulation of sh adow banking system?  
 
RESPONSE 
 
The supervision and regulation of shadow banking is currently being discussed at the FSB and Japan 
would like to continue to participate in this di scussion. However, we re cognize that the scale of 
shadow banking in Japan is not larger than that of the Europe and the United States. 
 
Question 21  Could Japan please give details on direct purchases of  ETF and REITS already made and to be made 
by the Bank of Japan against the background of the crisis, including their objective, process and 
effect?  
 WT/TPR/M/243/Add.1  
Page 96 
 
 
  RESPONSE 
 
Purchases of exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) have 
been made through the Asset Purchase Program es tablished under the comprehensive monetary easing 
policy. The purchases aim at encouraging the reduction of various risk premiums. 
 The maximum outstanding amount for each asset to be purchased is about 0.45 trillion yen for ETFs and about 0.05 trillion yen for J-REITs. As of February 25, the Bank of Japan has purchased 
82.8 billion yen in ETFs and 4.6 billion yen in J-REITs. 
 With regard to the method of purchase, the Bank of Japan purchases ETFs and J-REITs as trust 
property through a trust bank that the Bank appoints as trustee. To encourage reductions in various 
risk premiums as efficiently as possible, purchases of ETFs and J-REITs are conducted by the trustee pursuant to standards prescribed by the Bank of Japan, taking into account the conditions of the 
markets. 
 Looking at the effects of the Bank of Japan's purch ases, J-REIT prices have increased. At the same 
time, the purchase by the Bank of Japan appears to be acting as a catalyst to increase the transaction 
volume of J-REITs and ETFs. 
 
Paragraph 43, page 88  "The Financial Revival Programme, which started in 2002, has conti nued to provide support to the 
financial sector through grants for losses, injection of capital, and purchase of assets." 
 
Question 22 
 Could Japan please give details on this programme, incl uding its objective, process, effect and future 
arrangements?  RESPONSE  
Details of The Financial Revival Programme, whic h started in 2002, is published on the FSA's 
website as follows:  http://www.fsa.go.jp/en/policy/pfr.html 
 
Question 23  Could Japan please describe the situation of fo reign banks establishing branches in Japan and 
investing in Japanese banks? What criteria do fore ign banks need to meet in order to establish 
branches in Japan or to invest in and acquire Japanese banks?  
 
RESPONSE 
 (Foreign banks establishing branches) 
 
The Banking Act provides licensing requirements for banks for prudential reas ons. Article 4 provides 
licensing requirements for banks incorporated in  Japan, including subsidiaries of foreign banks. 
Article 47 provides licensing requirements for foreign banks' branches. Both articles provide that, in 
issuing banking licenses, the Financial Services Agen cy shall examine whethe r (1) the applicant has 
adequate financial capacity to carry out sound an d efficient banking business, and the prospective  WT/TPR/M/243/Add.1 
 Page 97 
 
 
  income and expenses of its business operations will be sat isfactory, (2) the applicant, in respect of its 
personnel composition, etc., has the relevant knowle dge and experience to carry out banking business 
appropriately, fairly and efficiently, a nd possesses adequate social credibility. 
 
(Investing in Japanese banks) 
 
Holding of voting rights of the bank is stipulated in Chapter 7-3 of the Banking Act. In particular, a 
person who intends to become a holder of voti ng rights of Japanese banks which amounts to the 
Major Shareholder Threshold shall obtain aut horization from the Prime Minister in advance 
(Article 52-9). This provision also applies to a foreign national or a foreign juridical person 
(Article 52-16). 
 
The examination for the authorization is conducted based on the following requirements, in case of an 
application by foreign juridical person:  
(a) In light of the matters concerning funds for the acquisition, the purpose of holding the 
voting rights, or any other matters concer ning the holding of voting rights of the Bank 
which amounts to the Major Shareholder Thres hold or more by that applicant or the 
company or any other juridical person to be established under the authorization (hereinafter referred to as the "Juridical Person Applicant, etc." in this item), there 
shall be no risk of impairment of sound a nd appropriate management of the business 
of the Bank for which that Juridical Person Applicant, etc. is or will become a holder 
of the voting rights which amounts to the Major Shareholder Threshold or more; 
 
(b) In light of the status of property and in come and expenditure of the Juridical Person 
 Applicant, etc. and its Subsidiary Comp anies (including any company that will 
 become a Subsidiary Company), there shall be at no risk of impairment of sound and 
 appropriate management of the business of the Bank for which that Juridical Person 
 Applicant, etc. is or will become a Hold er of the Voting Rights which amounts to the 
 Major Shareholder Threshold or more;  and 
 
(c) In light of such matters as its personnel st ructure, the Juridical Person Applicant, etc. 
 has sufficient understanding of the public nature of the business of the Bank and has 
 sufficient social credibility. (Article 52- 10-1, in the case of an application by a 
 foreign national, please refer to 52-10-2). 
 
Other services 
 
Question 24  Could Japan please describe its legal and polic y framework concerning surveying and mapping 
services, especially laws, regulations and polici es on foreign service providers operating in Japan? 
 
RESPONSE  
Surveying and mapping services are stipulated by the Survey Act (Act No.188 of 1949), which is 
aimed at securing the accuracy of survey, as well as  the substantial development of the industries. 
 
The Act requires registration of survey companies wh en they contract certain operations categorized 
in Articles 4, 5 and 6 (Basic Survey, Public Survey , and Surveys other than Basic Survey or Public 
Survey, including compiling maps and taking photogra phs for surveying).  Article 55-13 of the Act 
requires registered survey companies to station at least one Surveyor in each business office. As long WT/TPR/M/243/Add.1  
Page 98 
 
 
  as these requirements are satisfied, foreign companies intending to engage in survey business in Japan 
can be registered according to the Act.  
Article 50 stipulates qualifications to become a Su rveyor, and there is no difference between Japanese 
nationals and aliens in these qualifications. 
 Definition of "survey" in the Survey Act  
1. Basic Survey (Article 4) 
  Surveys that serve as a basis for all other surv eys, and that are conducted by the Geographical 
Survey Institute 
 
2. Public Survey (Article 5) 
 
Surveys other than Basic Surveys, whose expenses are, wholly or in part, borne or subsidized 
by the National Government or other public organizations, except for minor surveys specified by Government Ordinance, such as local surv eys for minor roads or buildings, and surveys 
not requiring high accuracy 
 
3. Surveys other than Basic Survey or Public Survey (Article 6)  
 Any surveys, except Basic or Public Surveys,  executed based on survey results obtained in 
 Basic or Public Surveys (except for minor su rveys specified by Government Ordinance, such 
 as local surveys for minor roads or buildi ngs, and surveys not requiring high accuracy). 
 
Question 25  How does Japan deal with fore ign surveying and mapping service providers involved in sensitive 
information collection?   RESPONSE  
While the definition of "sensitive information collec tion" is not clear, foreign companies as well as 
Japanese companies intending to engage in survey bus iness in Japan shall be re gistered as a survey 
company under the provisions of the Survey Act. 
 
Question 26  Could Japan please define the role of cultural content industry in its national economy? 
 
RESPONSE 
 
The market size of the Japanese cultu ral content industry, the second larg est market in the world, is 
around 14 trillion yen. Japanese cultural content industry has an economic effect on other fields. Therefore, the development of the Japanese cultura l content industry serves as a breakthrough point 
for the economic revitalization of Japan. 
 
Question 27  Could Japan please indicate the strategic target of foreign trade in the cultural content industry?  
  WT/TPR/M/243/Add.1 
 Page 99 
 
 
  RESPONSE 
 
Seeking out common elements on a basis of advant ages and the diversity of Asian countries, Japan 
aims to build a business model which can be  developed mutually among Asian countries. 
 
Question 28 
 Could Japan please indicate the share of its cultura l content industry in its  international trade?  
 
RESPONSE 
 The share of Japanese cultural content industry in its international trade is approximately 5%. 
  (Note: Definition of "content" indicates contents of information such as videos, music, games, and 
books which consist of such communicative elements as video, still images, audio, text, and software 
programs distributed by using various methods.) 
 Question 29  Could Japan please describe the legal and administra tive framework of its cultural content industry, 
including international trade? Could Japan also describe its measures to support the development and 
exports of the cultural industry?  
 
RESPONSE  
Regarding the cultural content industry, there is  the Act of Creation, Protection and Utilization 
Promotion on Content, and its purpose is to co mprehensively and effectively promote policies 
concerning the creation, protection and utilization of cultural contents and to contribute to the sound 
development of the lives of Japanese citizens and the national economy. 
 The Intellectual Property Strategy Headquarters formulates "The Intellectual Property Strategic 
Programme (IPSP)", relating to intellectual propert y that includes contents every year. Relevant 
ministries implement the program. 
 Question 30  Could Japan please describe the legal and policy framework as well as measures and practices 
concerning market access for foreign cultural products?  
 
RESPONSE  
Co Festa is a platform for promoting overseas ope rations to provide opportunities for the Japanese 
content industry, such as movies, mu sic and animation, to go overseas. 
 
In addition, there are co-productions with over seas companies and frameworks for international 
dialogues that examine problems to attempt to deve lop the cultural content industry mutually through 
the government and private sectors. (Examples:  Asia Content Business Summit (ACBS), Japan-
China-Korea cultural conten t industry forum, etc.) 
 WT/TPR/M/243/Add.1  
Page 100 
 
 
  CHINA – 4th Set  
Report by the Secretariat  
 I. E
CONOMIC ENVIRONMENT  
 
(4) D EVELOPMENTS IN TRADE AND FOREIGN DIRECT INVESTMENT  
 
 Paragraph 22, page 10 
 
"Japan's inward FDI remains substantially lower than outward FDI, and low compared with other 
developed economies.  In 2009, FDI inflows declined  substantially compared with the previous two 
years." 
 
Question 1 
 
What's Japan's view on the reason of the situatio n, especially in the area of transport? Could 
investment restrictions be relevant here? If so, please give more details.  
 
RESPONSE 
 According to a recent Ministry of Economy, Trad e and Industry survey, conducted in FY 2008, the 
obstacles to business in Japan generally cited as a major factor  by foreign affiliated companies are as 
follows:  
 1. The difficulty of hiring eligible employees 
 2. The high business cost  3. The high level of customer demand and market competitiveness 
 *http://www.meti.go.jp/pr ess/20090416001/20090416001.html 
 In order to solve those problems, a "program  for promoting Japan as an Asian business hub and 
foreign direct investment into Japan" (tentative na me) will be drawn up by the summer of 2011. This 
program will include system reforms and other meas ures to ensure the smooth flow of people, goods 
and funds with the aim of making Japan's  business environment more appealing. 
 
Also, the Government of Japan has not introduced  new restrictions on inward foreign direct 
investment in the transport sector in the past few years. 
 
II. T
RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
 (6) F
OREIGN INVESTMENT REGIME  
 
Paragraph 79, page 30  "The Government supports investment promotion activities by selected regional governments through 
its Project to Promote Foreign Direct Investment in Selected Areas…  and support for regional 
initiatives to promote their publicity ab road (area sales support programme)." 
 
Question 2  Could Japan please indicate its principles and methods in selecting programmes and areas in 
investment promotion activities? What measure s has Japan taken to ensure fair trade?  WT/TPR/M/243/Add.1 
 Page 101 
 
 
  RESPONSE 
 
In the selection of region, an evaluation committee consisting of FDI specialists, such as academics, 
was formed. This committee evaluated projects from various perspectives, for instance, the attractiveness of regional tie-up, concreteness of the project, and th e right approach to the target. 
 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
 
(viii) Standards, technical regulations, an d sanitary and phytosanitary measures 
 
Question 3  
As is known to all, Japan maintains a strict administration system on the safety of imported food. 
Could Japan describe its administration system on the safety of food to be exported?  
 
RESPONSE 
 
Regarding the Japanese administration system on the safety of food to be exported from Japan, please 
refer to the following websites.   - Plant Quarantine 
http://www.pps.go.jp/english/index.html 
 
 - Animal Quarantine   http://www.maff.go.jp/aqs/english/index.html  Question 4  
 Regarding Japan's CR Regulation on lighters 
  1) Chinese manufacturers and exporters claims that this regulation is stricter than its 
 counterparts in some other Members, coul d Japan give the rationale behind it? Is 
 there any plan to loosen the restrictions? 
2)  Is there any plan to shorten the period of and lessen the fee on testing and 
 examination? 
3) This regulation, effective as of 27 September 2011, was published on 
27 December 2010, leaving a transitional period of only 9 months. Would Japan 
consider extend the transitional period so as to facilitate foreign manufacturers' 
adaptation to this new regulation?  
RESPONSE 
 1) The Ministry of Economy, Trade and Industry regulates lighters in view of the situation of 
domestic accidents while keeping in mind the trends of the overseas regulation. There is not a plan to 
change the contents of the regulation.  2) The fees and the period of the inspection vary among Registered Conformity Inspection 
Bodies and it is not determined by the Mi nistry of Economy, Trade and Industry. 
 3) There is no plan to extend the period. WT/TPR/M/243/Add.1  
Page 102 
 
 
   
Question 5  
According to Japan's notification G/SPS/N/JPN/262,  For Azinphos-methyl, Japan cannot adopt the 
Codex standards because the ADI established by the Food Safety Commission of Japan was lower 
than that set by JMPR.   1) How does Japan justify this MRL in light of articles 2.2, 3.1, 5.4 and 5.6 of the SPS 
 Agreement?  
2) Could Japan please provide scientific basis as well as the result of risk assessment for 
this MRL?  
RESPONSE 
 
Japan recognizes that any country may adopt the ADI it has determined on its own based on scientific 
evidence to establish MRLs (maximum residue limits).  In fact, Article 3 of the SPS Agreement allows 
Members to set their own standards, provided th at there is a demonstrable scientific basis. 
 
Regarding Azinphos-methyl, the Food Safety Commi ssion of Japan concluded as follows after its 
deliberations. The minimum NOAEL in the results of various toxicity tests referred for the assessment 
was 0.149mg/kg BW/day, which was the result of a 1-year study using dogs. Therefore the ADI is 
0.0014mg/kg BW/day, based on that 1-year dog study with a safety factor of 100.  Question 6  
Could Japan please further elaborate on the definition of  "label agent" as provided for in Article 2 of 
"Partial revision of the Minist erial Notification under the Househ old Goods Quality Labelling Law 
(G/TBT/N/JPN/303)"? Under what circumstances should "label agents" perform their duties?  
 
RESPONSE  
"Label agent" refers to a person who is commissi oned by a manufacturer or a seller to engage in 
labeling matters.  In the case of the products which are not labeled properly by a label agent in view of 
the principle of the Law, the label agent is re quired to correct it in accordance with the Law. 
 
Question 7 
 
Japan's positive list system provides for many MRLs  that are above CAC standards. Could Japan 
please provide the rationale behind it? Is each of su ch MRLs based on appropriate risk assessment? If 
so, please elaborate.  
 
RESPONSE  
When establishing or amending maximum residue le vels (MRLs) for agricultural chemicals under the 
Food Sanitation Law (FSL), Japan follows the WTO SPS Agreement as a Member. Specifically, Japan's MRLs are harmonized with Codex MRLs wher ever possible. Also information available from 
in and outside Japan is taken into consideration. However, if the estimate of dietary exposure in 
Japanese people exceeds the ADI conducted on the basi s of scientific evidence by the Food Safety 
Commission of Japan, Japan cannot adopt Codex MRLs . In such a case, MRLs are set based mainly 
on appropriate residue data from in and outside Japan.     WT/TPR/M/243/Add.1 
 Page 103 
 
 
  Question 8 
 Japan's positive list system applies different MRLs to domestic and imported products, and to like 
products imported from different members. For exam ple, Chinese enterprises claim that Japan applies 
different MRLs of Clenbuterol to pork and beef products from China as compared to those from the 
US and Canada. Japan applies a 0.01ppm MRL on fenpropathrin in certain mushrooms imported to 
Japan, while that on domestic like products is 1 ppm.  How does Japan justify these different MRLs in 
light of the principle of national treatment?   
RESPONSE 
 Under the Japanese Food Sanitation Law, the esta blished maximum residue limits on food for 
agricultural chemicals and veterinary drugs are app lied equally to domestic f oods and imported foods.  
Thus China's comment is not based on the fact.  If the Chinese relevant authority provides Japan with 
what it considers to be an instance, Japan woul d be ready to cooperate in its verification. 
 
Question 9  Japan's positive list system provides for a unifo rm MRL of 0.01mg/kg for non-listed chemicals, 
despite the fact that some of these chemicals ha ve CAC standards. How does Japan justify this 
measure in light of Article 3 of the SPS Agreement?   RESPONSE  
In establishing or amending maximum residue levels (MRLs) for agricultural chemicals, Japan 
follows the WTO SPS Agreement as a Member. Speci fically, Japan's MRLs are harmonized with 
Codex MRLs wherever possible for pesticide-food co mbinations with individual Codex standards. 
For pesticide-food combinations without individual Codex standards, a uniform limit (0.01 ppm) may 
be applied if appropriate resi due data is not available. 
 The uniform limit was established as an amount un likely to damage human health, based on the 
concept of acceptable exposure that has been scientifically assessed by JECFA (Joint FAO/WHO 
Expert Committee on Food Additives) and the United States Food and Drug Administration. 0.01 ppm 
is the same limit as the one the European Union uses.  Before the uniform limit was set, Japan notified 
the WTO in accordance with the SPS Agreement. Therefore, Japan considers the procedure to have 
met the terms of the Agreement. 
 
Question 10 
 Japan's positive list system does not provide for te sting measures for many chemicals. Does Japan 
plan to improve the system in this regard? 
 
RESPONSE 
 For pesticides for which MRLs have been set, Japan makes efforts to develop analytical methods as 
soon as possible. 
 
Question 11 
 
Could Japan provide detailed information concerning  market access of spinage, including criteria, 
approval procedure? 
 WT/TPR/M/243/Add.1  
Page 104 
 
 
  RESPONSE 
 
The tariff rate of spinach is 3% for fresh or ch illed spinach (070970), 6% for frozen spinach (071030).  
Chinese spinach is subject to the inspection order for Agricultural chemicals on border control under 
Section 3, Article 26 of the Japanese Food Sanitation La w (hereinafter "the Law ").  In addition, when 
imported Spinach products are classified as frozen f oods, an examination for microbiological criteria 
is also required on border contro l under Article 11 of the Law. Th e import procedure of food under 
the Law has been available to the public  on our website at the following URL:  
http://www.mhlw.go.jp/english/topics/importedfoods/1.html 
 Question 12  Could Japan provide detailed information concerning  the lifespan labeling system for electrical and 
mechanical products, including the cr iteria and assessment measures thereof? 
 RESPONSE  
Use conditions are provided in JIS about the calcula tion of "Design Standard Period of Use" provided 
in The Technical Standards under the Electrical Appliances and Materials Safety Act.  
Electric fans     <JIS C9921-1 in 2009/03/20> 
Ventilators     <JIS C9921-2 in 2009/03/20> Air conditioners    <JIS C9921-3 in 2009/03/20> Washing machines (excluding dryers)   <JIS C9921-4 in 2009/03/20> Braun tube televisions <J IS C9921-5 in 2009/03/20> 
 
Moreover, please see the following URL for the expl anation in English of The Long-term Use 
Consumer Product Safety Indication System.  http://www.meti.go.jp/product_safety/producer/shouan/gaiyou2009ENG.pdf 
 
Question 13  Regarding application of Japan's EAL4 or EAL5 certificate by Chinese smart card manufacturers:   1) Could Japan please provide a detaile d list of documents to be submitted? 
2)  How long does the process take and how much does it cost?  
 
RESPONSE 
 Regarding the issues that are being addressed here, it is difficult for the GOJ to answer as these issues 
are at the discretion of the evaluating laborator ies which are private entities. However, as the 
evaluation/certification scheme within Japan is  operated upon the "common criteria" which are 
international standards, the GOJ believes that th e necessary documents and processes, etc. are similar 
to other schemes based on the "common criteria".  
  WT/TPR/M/243/Add.1 
 Page 105 
 
 
  IV. T RADE POLICIES BY SECTOR  
 (5) S
ERVICES  
 
(iii) Transport 
 
Question 14 
 
Could Japan please provide the overview of the air transport industry in Japan, including: the volume 
of passenger traffic in recent years, the volume of freight traffic; the number of airline companies and the ones that are controlled or invested by th e government, the number of airports, etc.   
 
RESPONSE 
 
(the volume of passenger traffic) 
 
(the volume of freight traffic) *tot al of cargo, excess baggage, mail 
 
 Number of airline companies:  68 
 Number of controlled or invested in by the government:  0  Number of airports 
 National airports (managed by the national government):  20 
Municipal airports (managed by local governments):  68 Military-Civil aerodromes:  7 Corporate airports (shares partially or en tirely owned by the national government):  3 
 
Paragraph 60, page 92 
 
"The Japanese air transport sector is regulated by th e Civil Aeronautics Law and the many bilateral air 
agreements that Japan has signed…prior notification is required for FDI in air transport and aircraft 
using businesses." 
 
Question 15 
 Could Japan please provide more details about polici es concerning market access, price control, route 
access and allocation of domestic air transport market? 
 
RESPONSE 
 (market access) 
 
Any applicant who satisfies the standards set by  the Civil Aeronautics Act can obtain a license. 
 FY Domestic (thousands)  International (thousands)  
2007 94,849 17,681 
2008 90,662 15,886 
2009 83,872 15,400 
FY Domestic cargo tons (tons)  International cargo tons (tons)  
2007 1,144,699 1,431,433 
2008 1,073,560 1,258,261 
2009 1,024,119 1,322,060 WT/TPR/M/243/Add.1  
Page 106 
 
 
  (price control, route access) 
 
The Civil Aeronautics Act requests domestic air carrier s to notify the Ministry of Land, Infrastructure, 
Transport and Tourism in advance when they fix ta riffs and charges for passengers and cargo. As for 
the airline route, the airline shall obtain a license from the Minister of Land, Infrastructure, Transport 
and Tourism, with regard to utilizing a congested airport. In other cases, it is necessary to notify 
MLIT in advance of the flight.  (allocation of domestic air transport market) 
 
Though the meaning of "allocation of domestic air tr ansport market" is not clear, the Government of 
Japan is not involved in the allocati on of domestic air transport market. 
 Paragraph 61, page 92  
"Of the 58 bilateral agreements, 10 are "open sky" agreements (with Canada;  Hong Kong, China;  
Macao, China;  the Republic of Korea;  Malaysia ;  Singapore;  Sri Lanka;  Thailand;  the United 
States;  and Viet Nam.  Under the open sky arrangements, restrictions are removed, on a reciprocal basis, on entry points, routes and frequency of flights.  Other areas that  open sky agreements address 
are prices/tariffs, airline capacities.  Competition sh ould increase as a result of open sky agreements". 
 
Question 16  Does this signify a policy change on international air transport? If so, please elaborate. 
 
RESPONSE 
 
Japan has not changed in principle its open  sky policy since the last review period. 
 In accordance with the realization of a capacity in crease plan for Tokyo Metr opolitan airports, Japan 
is promoting the open sky policy including Tokyo Metropolitan airports as well. 
 
Question 17 
 Based on the "Open Sky Agreements" signed by Japan, restrictions are removed on Traffic right III and IV.  How does Japan ensure fairness and transpar ency on allocation of slot in major airports? Are 
there any specific rules on time of entry by foreign airlines into th e Narita Airport?  
 
RESPONSE  
Landing and takeoff slot allocation at Narita air ports is done by the Japan Schedule Coordination 
Office (JSC), which is independent from the Jap anese Government. Landing and takeoff slots are 
allocated in according with IATA guidelines, and there are no specific rules applying to foreign 
airlines only. 
 
Questions 18  
Does the Haneda Airport, after internationalizati on, open for all airlines from countries that have 
signed bilateral air service agreements with Japan?  Are cargo flights and passenger flights treated differently? 
  WT/TPR/M/243/Add.1 
 Page 107 
 
 
  RESPONSE 
 
Slots at Haneda Airport will be continue to be a llocated through bilateral consultation, due to the 
extremely congested situation.  
Manner of treatment of cargo flights at Haneda Airport varies depending on each agreement. Slots 
during daytime hours (0600-2255) are currently used for international flights on high-demand business routes connecting the nearby Asian cities with Tokyo.  Question 19 
 
What's Japan's consideration of the role of Narita Airport and Haneda Airport? Is there any plan to 
expand the Narita Airport in the future?  
 
RESPONSE 
 To strengthen the competitive edge in business a nd sightseeing in the metropolitan area as greatly as 
possible as was pointed out in the Ministry of Land, Infrastructure and Transport growth strategy formulated in May last year, and to act as driving force that calls in more people, more goods, and 
more money to Japan, Japan recognizes that it is in dispensable to expand capacity and drastically 
enhance the functions of both Haneda and Narita airports.  
 
Please refer to Strategies 1 and 2 of the Growth Strategy- Aviation Sector- of Ministry of Land,  Infrastructure and Transport for further detail.   (http://www.mlit.go.jp/common/000136525.pdf) 
 
As was explained above, Japan aims for economic growth by advancing international connections 
with utilizing both Haneda and Narita airports while making the most of their characteristics. 
 Please refer to "Directions for NRT Reforms" listed in Strategy 2 of the Growth Strategy- Aviation 
Sector- of Ministry of Land,Infrastructure and Transport pertaining to the expansion plan of Narita 
Airport. 
 (http://www.mlit.go.jp/common/000136525.pdf)  Question 20 
 
Are low-cost Japanese airline companies allo wed to operate international flights? 
 
RESPONSE  
There is no definition of "low-cost airline" in Japanese law. Any Japanese airline can operate 
international flights if they obtain approval for their operation plan for international flights. 
 
Questions 21  Are there any support policies for Japan's air tr ansport industry, especially tax incentives and 
subsidies?  
 WT/TPR/M/243/Add.1  
Page 108 
 
 
  RESPONSE 
 
MLIT has implemented cuts to the aviation fuel tax and fixed assets tax on airline routes to isolated islands. Also, MLIT has implemented assistance to cover a portion of the cost of routes of aircraft 
necessary for the lives of island inhabitants. 
 
Question 22  
Are there any taxes or funds levied specifically  for air transport infrastructure and industry 
development in Japan? If so, please describe the management models and basis of levy?  
 
RESPONSE  
There are no charges specifically imposed on fore ign airlines operating international flights. 
 
However, there is an aviation fuel tax imposed on domestic airlines opera ting domestic flights. 
 It is allotted as fiscal resources for airport development, airways and airport environmental policies. And it is imposed per amount of aviation fuel and is  used for airport development, etc. after being 
carried over to the general account. 
 
Question 23  Are there any specific requirements on investment in security by domestic airlines and airports in Japan?   RESPONSE  
With respect to investment relating to aviation secur ity, airlines and airport operators are required to 
comply with the National Civil Aviation Security  Programme (NCASP) which was established based 
on the ICAO Standard. 
 Question 24  How does Japan regulate the aircraft leasing market  and business? Are there any preferential policies 
for this sector?   RESPONSE  
There is no policy on regulating the aircraft leasing market and business. 
 
For your information, the way of operating aircraft is  regulated by the Civil Aeronautics Act of Japan. 
For example, in the case that service is supplied th rough the use of aircraft registered as a Japanese 
aircraft, the aircraft must be owned by a natural person with Japanese nationality or a juridical person 
established under Japanese law, with all representati ves and not less than two-thirds of executives 
having Japanese nationality and with not less than two- thirds of the voting share held by Japanese 
persons. 
 Question 25  Could Japan please indicate the requirements on foreign investment in air transport as well as aircraft leasing enterprises? What is the limit on foreign ownership?  WT/TPR/M/243/Add.1 
 Page 109 
 
 
   
RESPONSE 
 
Any applicant who falls under any of the follo wing categories in accordance with the Civil 
Aeronautics Act could not obtain a license. 
 
 (1) Any person who does not ha§ve Japanese nationality  (2) Any foreign state or public entity or its equivalent in any foreign state  (3) Any juridical person or body established in accordance with the laws and ordinances 
 of any foreign state 
 (4) Any juridical person of which the repr esentative is any one of those listed in the 
 preceding three items or of which more than one-third of the officers are such persons  or more than one-third of voting rights are held by such persons 
 
Report by Japan
 
 Paragraph 15, page 7 
 "According to a Ministry of Finance report, Japan's outflow of foreign direct investment (FDI) (Outward FDI) decreased to ¥6,989.6 billion in CY2009, which represents a decrease of 41.2% from 
CY2008 (a decrease of ¥6,242.4 billion)." 
 
Question 26  What's Japan's view on the reason of the situatio n, especially in the area of transport? Could 
investment restrictions be relevant here? If so, please give more details.  
 
RESPONSE  
Global FDI outflows continued to decline in 2009 mainly due to the global economic and financial 
crisis. It is inferred that the decline of the outward FDI in the area of transport is also due to the global 
economic and financial crisis. FDI outflows signifi cantly contracted in most major economies, but 
Japan's FDI outflows in 2009 were slightly above the 2007 level and Japan became the third largest 
economy on FDI outflows following the United States and France.   
CHILE 
  
(Translation) 
 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
 (3) M
EASURES DIRECTLY AFFECTING EXPORTS  
 
(v) Export cartels 
 
According to paragraph 103 of the Secretariat Re port, export cartels are exempted from the general 
prohibition of cartels under Japan's Anti-monopoly Act.   It also states that the Japanese authorities do 
not consider that shipping cartels (e.g. liner conferences) constitute export cartels. 
 Question  Would Japan kindly give the reasons why it does not consider that shipping cartels constitute export 
cartels? WT/TPR/M/243/Add.1  
Page 110 
 
 
   
RESPONSE 
 
Antimonopoly exemption applies to the internat ional shipping activities in cases where prior 
notifications from international shipping operators  are examined and accepted by the Ministry of 
Land, Infrastructure, Transport and Tourism in acc ordance with the Marine Transportation Law for 
the following reasons:  
 1) Assuring stable maritime transport services 
 2) Promoting the rationalization and effici ency of the business through international 
collaboration and cooperation between companies  
 3) Consistency with international frameworks on shipping  
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
 
(vi) Competition policy  (b) Exemptions from the AMA prohibition of cartels  
According to paragraph 148 of the Secretariat Repor t, no changes have been made in respect of the 
exemptions from the prohibition of cartels since the previous Trade Policy Review.  The AMA exemption for international shipping activities was reviewed in 2007, and the result of the review highlighted the necessity for the exemption.  In June 2010, however, the MLIT abolished some 
exemptions for international aviation from the AMA.  
Questions 
 Is Japan planning to review the situation regarding exemption for the international maritime transport 
sector in the near future?  RESPONSE  
The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has reviewed the antimonopoly 
exemption for international maritime transport.  As described in paragraph 142 on WTO Secretariat' s report, the Cabinet indicated its position on the 
Cabinet Decision in June 2010 that the exemption from AMA for international shipping activities will 
be reviewed.  It describes, "MLIT shall analyze and verify the cond itions with regard to the shippers' benefit, the 
influence on the Japanese economy and situati ons from foreign framework for the antimonopoly 
exemptions for international shipping activities,  and continue to review the exemption while 
discussing with Japan the Fair Trade Co mmission in the fiscal year of 2010". 
 Therefore, MLIT has since reviewed the exemption, based on the Cabinet Decision. 
 
What are the differences between the international maritime transport sector and the international 
aviation sector that justified abolishing cer tain exemptions in the case of aviation? 
  WT/TPR/M/243/Add.1 
 Page 111 
 
 
  RESPONSE 
 
The International Maritime Transport Sub-committ ee, a special group under the Maritime Affairs 
Section of the Council for Transport Policy, which is a ministerial advisory body for the Minister of Land, Infrastructure, Transport and Touris m, considered in 2007 whether the antimonopoly 
exemption for international shipping activities remain ed necessary. After careful consideration about 
characteristics of international shipping with regard  to fierce competition, unstable market conditions, 
the necessity of alliances, the consistency with inte rnational shipping frameworks and the fact that 
Japan's exemption system is being applied with ta king care of user protection sufficiently, the Council 
highlighted the necessity for the exemption. Therefor e, the Ministry of Land, Infrastructure, Transport 
and Tourism (MLIT) has decided to retain the exemption. 
 Last June, MLIT reviewed the AMA exemption system for international aviation, considering changing circumstances surrounding the AMA system in other countries, and decided to exclude some kinds of agreements, which are not consid ered to cause problems for the AMA, from the 
categories of the AMA exemption. However, MLIT  didn't amend the AMA exemption system itself. 
 
IV. T RADE POLICIES BY SECTOR  
 
(1) A GRICULTURE  
 (iii) Domestic measures 
 
According to the Secretariat Report (paragraph 18, p. 82), the general trend in the Japanese 
Government's agriculture policy has been a move away from administered prices to direct income 
support for farmers.  It also states that in 2007, the price support sch emes for wheat, potatoes (for starch use), and sugar 
beets were converted into a direct payment scheme. 
 
Questions  Is Japan considering pursuing this trend of changing the way in which subsidies are provided by moving from administered prices to direct income support for farmers? 
 
What new products would be covere d by this change in the way subsidies are provided to the sector? 
 
RESPONSE 
 
In FY2010, a pilot program is being carried out in paddy fields. Based on the evaluation on this 
tentative measure, the new direct payment scheme will be introduced extended to upland crops in 
FY2011.  
III. T RADE POLICIES AND PRACTICES BY MEASURE  
 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
 
(vi) Government procurement 
 
Paragraph 55 (page 46) of the Secretariat Report st ates that open tendering is the norm.  However, for 
procurement contracts between the Government a nd a Cooperative Association or Federation of  
 WT/TPR/M/243/Add.1  
Page 112 
 
 
  Cooperative Associations of small and medium en terprises (SMEs), the Government can use limited 
tendering procedures, in line with special pro cedures laid down in Cabinet Order 300 of 1980. 
 
According to this paragraph, the relevant legi slation seeks to encourage or expand procurement 
opportunities for SMEs.  It also states that alt hough the legislation facilitates procurement for SMEs 
and helps them, it is not reserved exclusively for SMEs and is not discriminatory because it applies 
equally to domestic and foreign SMEs.  
Question: 
 How does Japan define an SME, and what are the pa rameters used for this purpose?  Chile has two 
ways of determining whether an enterprise is an SME:  invoicing and the number of employees.  
RESPONSE 
 "Small and Medium Sized Enterprise Operator" sha ll mean one that falls under any of the following 
items. (i) Any corporation whose amount of stated capita l or the total amount of capital contribution is 
300,000,000 yen or less and any cor poration or individual whose number of regular employees is 300 
or less, the main business of which is classified as manufacturing, construction,  transportation or other 
business type (excluding the business types listed in the next item (ii) through item (iv)) 
(ii) Any corporation whose amount of stated capita l or the total amount of capital contribution is 
100,000,000 yen or less and any cor poration or individual whose number of regular employees is 100 
or less, the main business of which is classified as wholesale business (iii) Any corporation whose amount of stated capita l or the total amount of capital contribution is 
50,000,000 yen or less and any co rporation or individua l whose number of regular employees is 100 
or less, the main business of which is classified as a service business (iv) Any corporation whose amount of stated cap ital or the total amount of capital contribution is 
50,000,000 yen or less and any corporation or indivi dual whose number of regular employees is 50 or 
less, the main business of which is classified as a retail business 
 
(viii) Standards, technical regulations, an d sanitary and phytosanitary measures 
 
(a) Standards and technical regulations 
 
Paragraph 62 
 
"Technical regulations and conformity assessment pr ocedures are adopted by the central government 
in accordance with various relevant laws and regul ations, including the Pharmaceutical Affairs Law, 
the Industrial Standardization Law, and the Law Concerning Standardization and Proper Labelling of 
Agricultural and Forestry Products (JAS Law).  Th ese laws are the legal basis for implementing the 
TBT Agreement in Japan.  While regulatory imp act assessments are conducted by each ministry on 
technical regulations, no cost-benefit analyses are c onducted.  The lead agencies for coordinating and 
developing international trade policy on standards activities and in discussions and negotiations with 
foreign countries are the Ministries of Foreign Affa irs;  Economy, Trade and Industry;  Agriculture, 
Forestry and Fisheries;  Health, Labour and Welfare;  Internal Affairs and Communications;  and 
Land, Infrastructure and Transport.  Japan su bmitted a notification on the implementation and 
administration of the TBT Agreement in June 1996.  Its enquiry points under the Agreement are the 
Standards Information Service within the Interna tional Trade Division of the Ministry of Foreign 
Affairs (mainly handling enquiries on drugs, cosmet ics, medical devices, foodstuffs, food additives, 
telecommunication facilities, motor vehicles, ship s, aircraft, and railway equipment (excluding 
enquiries concerning certain JIS handled by JETRO);  and the Standards Information Service within  WT/TPR/M/243/Add.1 
 Page 113 
 
 
  the Information Service Department of the Japan  External Trade Organization (JETRO) (mainly 
handling enquiries on electric equipment, gas a ppliances, measurement scales, foodstuffs, food 
additives, and JIS related to medical devices, motor ve hicles, ships, aircraft, and railway equipment).  
The Ministry of Foreign Affairs is Japan's notification authority under the Agreement". 
 
Question 
 Our understanding of the above para graph is that the impact assessments conducted by each Ministry 
relate to quality.  Is this kind of an alysis available for public information? 
 RESPONSE  
The Implementation Guidelines for ex-ante Evaluation of Regulations state that it is desirable to 
quantify or express in monetary value costs and be nefits to the extent it is possible. And the 
Guidelines state that cost-benefit analysis, converting benefits and costs into monetary value, is 
thought to be the major technique in Regulatory ex-ante Evaluation. 
 The Government of Japan understands that quan tifying costs and benefits to assess regulatory 
proposals is important and promotes it.  The Guidelines are available on the website of the Ministry of Internal Affairs and Communications 
and the reports of the analyses are available on the websites of the each ministry responsible. 
 Paragraph 63  "As part of the process for the adoption of technical regulations and conformity assessment 
procedures, the agency responsible must publish proposed regulations and provide any interested 
persons an opportunity for comment.  Since Oc tober 2007, based on the MIC's Implementation 
Guidelines for ex-ante Evaluation of Regulations, regulatory impact assessments have been made 
compulsory for the adoption of regulations through a law or a cabinet order (as well as for amendments or abolition).  Regulatory impact anal yses have not been conducted when adopting some 
regulations through ordinance inferior to a cabinet order." 
 
Questions  The paragraph indicates that all interested persons  are given an opportunity for comment.  Are the 
responses to these comments submitted directly to  whomever conducted the enquiry or are they 
published, thus becoming public information? 
 
RESPONSE 
 
When technical regulations and c onformity assessment procedures are applicable to "Administrative 
Orders" under the Administrative Procedure Act, al l stakeholders have an opportunity to comment 
(Article 39).  The submitted comments, the resu lts following the consideration of the submitted 
comments, and the grounds for them are available on the "e-Gov" website.  What is the average length of time between expiry of  the public consultation period and the entry into 
force of the draft technical regulation? 
 
RESPONSE 
 
It is difficult to provide a general estimate for the average time, because the time for each procedure 
for adopting technical regulation is varied. WT/TPR/M/243/Add.1  
Page 114 
 
 
   
Is there a single site where all information con cerning technical regulations can be obtained in 
electronic form? 
 
RESPONSE 
 
Japan does not compile all information on technical re gulations in an electronic way.  Should Chile 
have any inquiry, it would be appreciated if Chile would contact Japan's TBT Enquiry Point 
(enquiry@mofa.go.jp). 
 
Mandatory technical regulations 
 
Paragraph 69  
"In response to a series of accidents involving elect ric appliances and illegal sales of contaminated 
rice, Japan has been revising laws to introduce va rious technical requirements for product safety and 
distribution.  Regulations to implement these laws  have been coordinated by the Consumer Affairs 
Agency and other government bodies since 1 September 2009.  In addition, in order to evaluate the risks of all chemical substances, the Chemical  Substances Control Law was amended in 2009 and 
partially entered into force on 1 April 2010.  On 1 April 2009, oil-fired boilers and oil-stoves were 
made subject to the technical regulations under the Consumer Product Safety Act.  On 
27 August 2009, mandatory technical regulations for organic plants were revised;  some substances 
were added to or deleted from the list of substances permitted for the production of organic plants.  
On 12 May 2010, pressure cookers and autoclaves (cer tain containers) for home use, and helmets 
were made subject to technical regulati ons under the Consumer Product Safety Act." 
 
Questions  Based on experience and the contents of the above  paragraph, is there a procedure and formal 
timetable for the revision of technical regulations? 
 
Is there an annual work programme for areas requiring regulation? 
 
RESPONSE  
Japan evaluates and revises with consideration as to  whether the products are circulated within the 
market, the status of use, changes of society and innovation, etc. in an appropriate manner and with 
appropriate timing.  
IV. T RADE POLICIES BY SECTOR  
 
(5) S ERVICES  
 
Paragraph 33 of the Secretariat Report states that Jap an has restrictive regulations, mainly relating to 
licensing and foreign investment. 
 Question  Would Japan kindly specify in which sectors such measures apply? 
  WT/TPR/M/243/Add.1 
 Page 115 
 
 
  RESPONSE 
 
As the service sectors account for about 80% of Japan's GDP and 78% of its employment, Japan 
certainly recognizes the importance of liberalizing the service sectors for growth and competitiveness, 
and has been taking various steps to promote that  liberalization. For instance, in June 2010, the 
Cabinet issued a decision entitled "New Growth Stra tegy," which sets forth strategies for achieving a 
strong economy to return Japan to economic heal th. Furthermore, in November 2010, the "Inward 
Investment Promotion Roundtable-Council" (w hich is established under "the Council on the 
Realization of the New Growth Strategy") introduced  the "Inward Investment Promotion Program". In 
the program, the reconsideration of existing regulations  that constitute impediments to investment and 
business operations was identified as an area of gove rnment focus. Also, in November 2010, the 
Cabinet issued a decision entitled the "Basic Po licy for Comprehensive Ec onomic Partnerships," 
where it expressed its intention to further promote n ecessary regulatory reforms in the interest of the 
'open up the country' vision. In addition, in March 2010, the "Subcommittee on Regulatory and 
Institutional Reform" was established under the Gove rnment Revitalization Unit where the following 
three working groups were set up to survey specific sectors: the Green-Innovation Working Group 
(regarding the environment and energy sectors), the Life-Innovation Working Group (regarding the 
medical and elderly care services sectors), and the Agriculture, Forestry and Regional Development Working Group.    
(ii) Telecommunications 
 
According to paragraph 50, foreign invest ment in NTT is limited to 33 per cent. 
 Question  
Does Japan envisage changi ng this at any point? 
 
RESPONSE 
 
NTT is a shareholder of NTT East and NTT W est which provide most of the communications 
infrastructures that is the foundation of social activit y. The foreign investment restrictions applied to 
NTT, which is deeply related to national security , are in place to avoid national security issues and 
undue influences by foreign countries.  Therefore, there are no plans to either relax or abolish above measures at this point.  (iii) Transport 
 
Air transport 
 
Paragraph 61 states that Japan has an aviation liberalization policy.  
Questions 
 Would Japan kindly explain what this policy involves? Is the policy aimed at any particular geographical area or is it open to any interested Member?  RESPONSE  
Japan will make its decisions strategically from th e standpoint of its own national interests while 
considering partner countries in terms of factors like market size, growth, their forward-thinking 
approach to liberalization, and the potentia l for new entrants and increase of services. WT/TPR/M/243/Add.1  
Page 116 
 
 
   
Such liberalization would start with 3rd and 4th free dom traffic rights and woul d later expand to cover 
5th freedom traffic rights. 
 
Japan has already started consultatio n with some countries, putting high  priority on East Asian nations 
and ASEAN nations to reach open sky agreements which include Tokyo Metropolitan Area airports.  
 
COLUMBIA  
 
(Translation)  
Secretariat report (WT/TPR/S/243) 
 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
 
(1) I NTRODUCTION  
 
Paragraph 1 states that "[t]he Government intro duced expansionary fiscal measures in FY2009 and in 
FY2010 in order to recover from th e latest recession, but it is am biguous whether these measures are 
temporary, and some State owned bodies were estab lished to inject funds into private companies, 
perhaps in the context of industrial policies".  1. Would Japan kindly expl ain how long it intends to maintain the expansionary fiscal measures 
introduced in order to address the latest recession?  RESPONSE  
Although it depends on the necessity and content of each measure as to how long it will be 
maintained, Japan will take appropriate measure s when necessary, while carefully considering 
economic trends. 
 2. How does the Japanese Governme nt select the companies due to receive funds from the State 
owned bodies established, such as the Enterp rise Turnaround Initiative Corporation (ETIC)? 
 
RESPONSE 
 As for the ETIC Committee, for example, it decides whether or not ETIC should provide support for 
the business based on such conditions as possessing important management resources and revitalization potential in line with the Sta ndards for Determining Support by the Japanese 
Government. 
 
3. How does the Japanese Governme nt ensure that the companies receiving such funds are not 
generating subsidies for the comp anies' goods and services exports? 
 
RESPONSE 
 The conditions for ETIC's providing companies wi th financial support include possessing practical 
management resources and having excessive debt. ETIC does not have any requirements concerning 
exports.   WT/TPR/M/243/Add.1 
 Page 117 
 
 
  (2) M EASURES DIRECTLY AFFECTING IMPORTS  
 (i) Customs clearance procedures and valuation  
Paragraph 16 states that Japan's Authorized Ec onomic Operator (AEO) programme was extended to 
manufacturers and that Japan has concluded mutual  recognition arrangements with New Zealand, the 
United States, the European Union, and Canada.  4. Would Japan kindly share its experience in implementing the AEO programme and mutual recognition arrangements with other countries, and specify the measures involved? 
 
RESPONSE 
 
The experience of implementing Japan's AEO progra mme and MRs with other countries is pictured 
below. 
 
 
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  WT/TPR/M/243/Add.1 
 Page 119 
 
 
  
 
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Page 120 
 
 
  
 
 
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  According to paragraph 18 of the Secretariat Report, "[i]mports are valued according to their c.i.f. 
value".  5. How does Japan conduct prior and subseque nt verification of the declared value? 
 RESPONSE  
Japan has a system where importers can ask Customs to  verify their value declarations, prior to their 
import declarations. Where importers submit value declaration forms in which customs value is to be calculated under the Transaction Value method (Article  4.1 of the Customs Tariff Law), prior to their 
import declarations, the valuation sections in regiona l Customs would verify the price actually paid or 
payable of import goods and the amount to be adjusted to the price.  Furthermore, where importers submit value declar ation forms in which customs value is to be 
calculated under the methods other than the Transa ction Value method (Articles 4-2 to 4-4 of the 
Customs Tariff Law), prior to their import declara tions, the valuation sections in regional Customs 
would verify the methods to calculate the customs value of imported goods.  Japan Customs officials visit the offices of importers to verify their import declarations after customs 
clearance (i.e. importation of goods). (Post Clearance Audit).  
PCA is conducted by inquiring the importers, cust oms brokers, consignees a nd other related parties 
and by auditing the accounting books, corresponden ce, other relevant documents and so on. 
 6. How does Japan carry out valu ation analyses in the event of disputes concerning the declared 
value of goods? 
 
RESPONSE 
 
If the valuation sections in regional customs offi ces have disputes with importers concerning the 
customs value of imported goods, they would consu lt with the Customs Valuation Center in Tokyo 
Customs and inform the importers of the resolution. 
 
7. In order to streamline procedures, does Japan  have or envisage havi ng goods simultaneously 
inspected by all control bodies involved in export and import procedures?  What has been its 
experience in this regard?  RESPONSE  
Concerning simultaneous inspection by all contro l bodies involved in export and import procedures, 
Customs and other control bodies often inspect importe d goods at the same time if importers request 
Customs to do so based on the agreement between Customs and other control bodies. For example, 
imported food could be inspected simultan eously by Customs and Quarantine.   
 
(vii) State trading 
 
According to paragraph 58 of the Secretariat Re port, "[c]urrent state trading activities in Japan 
involve leaf tobacco, opium, rice, wheat and barley , and milk products, the same as in 2009.  While 
the authorities maintain that the ai ms of Japan's State trading activities are to 'stabilize the supply and 
price of these commodities and protect consumer in terests', prices of these commodities in Japan tend 
to be higher than the world prices.  State trading activities are generally underpinned by legislated import or export rights and, in some cases, by specific monopoly rights over domestic production and distribution". WT/TPR/M/243/Add.1  
Page 122 
 
 
   
8. Would Japan kindly explain the mechanisms used to stabilize the supply and price of leaf tobacco, opium, rice, wheat, barley and milk products  and protect consumer interests, when prices of 
these commodities tend to be higher than the world prices? 
 
RESPONSE 
 
With regard to opiumin Article 23 of the Singl e Convention on Narcotic Drugs, 1961, government  
is granted the exclusive right of importing, expor ting, wholesale trading and maintaining stocks of 
opium. In order to be consistent with the Convention, the right of importing, exporting, storage and 
sale of opium is exclusive to the State under Japan's Opium Law.  With regard to rice, wheat, barley and designated dairy products, state trading enterprises import these 
essential products. This state trading contributes to  the stabilization of the supply-demand and the 
prices of these products. 
 
(3) M
EASURES DIRECTOR AFFECTING EXPORTS  
 (vi) Export promotion schemes 
 
According to paragraph 105 of the Secretariat Repor t, "Japan provides medium  and long term export 
credits.  These are administered by the Japan Bank for International Cooperation (JBIC) (a government affiliated financial in stitution), and Nippon Export and Investment Insurance (NEXI) (an 
independent administrative institution, insuring ri sks not covered by existing private insurance 
institutions).  The authorities maintain that pr ovision of these credits is based on the terms and 
conditions of the OECD Arrangement on Officially Supported Export Credits". 
 9. Would Japan kindly explain the terms and c onditions of medium and long term credits for 
agricultural exports administered by the Japan Bank for International Cooperation? 
 RESPONSE  
JBIC doesn't provide export credit for the export of agricultural products. 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
 
(iv) Intellectual property rights  
According to paragraph 124 of the Secretariat Repor t, "[a]mendments to the Copyright Law entered 
into force on 1 January 2010, and to the Unfair  Competition Prevention Act on 1 July 2009.  The 
amendment to the Copyright Law, inter alia, allowe d certain use of copyrighted works by Internet 
search service providers without the consent of copy right holders, and the amendment to the Unfair 
Competition Prevention Act expanded the scope of a pplication of criminal penalties for infringement 
of trade secrets".  10. In what cases does the Law authorize the use of protected works by Internet search service 
providers without the consent of the copyright holders? 
  WT/TPR/M/243/Add.1 
 Page 123 
 
 
  RESPONSE 
 
Please refer to the following provisions of our Copyright Law. 
 (Reproduction for the prevention, etc. of a difficulty in transmission) 
 
Article 47 quinquies.  (1) For a person, who engages in the business of pr oviding an interactive transmission server, etc. 
("interactive transmission server, etc." means an  interactive transmission server and a specified 
transmission server ("specified transmission server"  means a server which, when connected with 
telecommunication networks, has a function of maki ng a specified transmission of information which 
is either recorded on such a part of its memo ry as used for the specified transmission (in item 
(i) referred to as "specified transmission memory ") ("specified transmission" means the public 
transmission, designated by Cabinet Order, of ra dio communication or wire-telecommunication, other 
than the interactive transmission; the same shall apply hereinafter in  this paragraph) or inputted to 
such device; the same shall apply hereinafter in  this Article) for the use for the interactive 
transmission, etc. made by others, it shall be perm issible to record on memories, mentioned in the 
following items, works of which the making transmi ttable, etc. ("making transmittable, etc." means 
the making transmittable and the act for enabling a specified transmission, designated by Cabinet Order; the same shall apply hereinafter in this Article) is made by means of such interactive 
transmission server, to the extent deemed necessa ry for the purposes mentioned in the following 
items, respectively:   
(i) for the purpose of preventing a delay in tr ansmission caused by the concentration of 
demands for interactive transmission, etc.  upon such interactive transmission server, 
etc. or a difficulty in transmission cau sed by a trouble with such interactive 
transmission server, etc. : memories, other than public transmission memories, etc. ("public transmission memories, etc." means public transmission memories and specified transmission memories; the same shall apply in next item) concerned with the making transmittable etc., which are intended for the use for interactive 
transmission, etc. concerned with the making transmittable, etc.;  
 
(ii) for the purpose of restoring a copy, destroyed or damaged, of a work which has been 
recorded on s public transmission memory, et c. concerned with the making available, 
etc.: memories (excluding public transmissi on memories, etc.) other than the public 
transmission memories, etc.  
 
(2) In the case where a person, who engages in th e business of providing an interactive transmission 
server, etc. for the use for the interactive transmi ssion, etc. made by others, makes a transmission for 
relaying an interactive transmission, etc. of a work  of which the transmittable, etc. has been made 
(excluding a work of which the making transmittable, etc. has been made by means of an interactive 
transmission server, etc., he may record such work on a part, to be used for such transmission, of a 
memory of such interactive transmission server, et c., to the extent deemed necessary for efficiently 
making a transmission for relaying an interactive tran smission, etc., of such work, made after such 
transmission.   (3) The following persons may not reserve copies of  works, made in accordance with the provisions 
of the following items, after the time mentioned in the following items, respectively:  
 
(i) a person who has recorded a work on a memo ry in accordance with the provisions of 
paragraph (1) (only the part concerned with  item (i) ) or the preceding paragraph): 
when it is considered that it is no more necessary to reserve such copies for the WT/TPR/M/243/Add.1  
Page 124 
 
 
  purposes mentioned in these provisions, or when he has noticed that the making 
transmittable, etc., of the work concerned infringes copyright (in the case of a making 
transmittable, etc. made outside this country, a making transmittable which would 
constitute infringement on copyright if  it was made in this country);  
 
(ii)  a person who has recorded a work on a me mory in accordance with the provisions of 
paragraph (1) (only the part c oncerned with item (i): when it is considered that it is no 
more necessary to reserve such copies for the purpose mentioned in that item.  
 
(Reproduction, etc. for a retrieval, etc. of a tran smitter identification code of information which has 
been made transmittable)  Article 47sexies. For a person who engages in th e business of retrieving a transmitter identification 
code of information which has been made transm ittable ("a transmitter identification code "means a 
letter, a number, a symbol or another code for iden tifying a transmitter of an interactive transmission; 
the same shall apply hereinafter in this Article) a nd of offering the result th ereof, in response to a 
request from the public (including a person who engag es in a part of such business, and limited to a 
person who does the collection, the arrangement and the offer of information which has been made 
transmittable, in accordance with the standard designated by Cabinet Order), it shall be permissible, to 
the extent deemed necessary for such retrieval and su ch offer of the result thereof, to make recording 
on a memory or make adaptation (including recording of a derivative work created by such adaptation) of a work which has been made tran smittable (in the case where measures are taken for 
demanding an input of information for identifying a receiver of an interactive transmission of such 
work, or where other measures are taken for limiting a reception of su ch transmission, only a work in 
respect of which the consent has been granted by  a person who has taken such measures for reception 
of such interactive transmission), and to make, in response to a request from the public, an interactive 
transmission (including the making transmittable)  by using a copy concerned with a transmitter 
identification code out of copies of such work reco rded on a memory (including copies of a derivative 
work of such work; hereinafter in this Article refe rred to as "retrieval result offering record" together 
with an offering of a transmitter identification code  of information, which has been transmittable, 
concerned with such demand. However, he may not make an interactive transmission (including the 
making transmittable) by using such retrieval resu lt offering record after he has noticed that the 
making transmittable of a work concerned with su ch retrieval result offering record infringes 
copyright (in the case of a making transmittable made outside this country, a making transmittable which would constitute an infringement on copy right if it was made in this country). 
 
Article 47 quinquies of Copyright Law refers to the limitation for reproduction for the prevention, etc. 
of a difficulty in transmission for providing tel ecommunication networks including some providers of 
internet search services..  (Cashing or backup in order to prevent a difficulty in transmission) In addition,  
Article 47 sexies of Copyright Law refers to the limita tion for reproduction, etc. for a retrieval, etc. of 
a transmitter identification code of information whic h has been made transmittable. (Copying etc. to 
implement an Internet search service.)  According to paragraph 126 of the Secretaria t Report, "[b]etween April 2009 and March 2010 
(FY2009), there were 367,000 'first actions' (completion of first examinations of patent applications), 
up from 348,000 in FY2008, and the average waiting peri od for 'first action' was about 29 months 
(same as in FY2008).  The Government aims to shor ten the average waiting period for 'first action' to 
11 months or less by 2013.  The number of patent  examiners increased to 1,703 in FY2010, from 
1,692 in FY2009.  In addition, the IPO outsourced prior art searches to eight registered search organizations with a view to 'pursuing efficiency' of patent examination.  In FY2009, 233,000 prior art  WT/TPR/M/243/Add.1 
 Page 125 
 
 
  document searches were outsourced (225,000 in FY2008).  The total IP related budget in FY2010 
amounted to about ¥71.0 billion,  substantially lower than th e FY2009 figure (¥214.8 billion)". 
 11. Is there any type of mechanism for cooperati on or exchange of information between patent 
offices in Japan and other trading partners? 
 
RESPONSE 
 
The examination-related information of the Japan Pa tent Office (JPO) is provided to foreign Offices 
via a dedicated network or the Internet; and the ex aminers of the JPO, the United States Patent and 
Trademark Office, the European Patent Office a nd the Korean Intellectual Property Office can access 
the examination-related information of these Offices online via the dedicated network. 
 
IV. T RADE POLICIES BY SECTOR  
 
(2) A GRICULTURE  
 (ii) Border measures 
 
According to paragraph 10 of the Secretariat Report, "[a]s estimates of AVEs for some specific duties (which tend to involve relatively high tariffs) were  not made available, the average tariffs for the 
associated subsector may be underestimated.  In  cases where AVEs were available, the simple 
average for non ad valorem  tariff rates for agriculture (WTO definition) was 57.8 per cent, 
considerably higher than the simple average of pur ely ad valorem tariff rates of 9.8 per cent.  AVEs 
were not available for 115 tariff lines at the HS nine digit level, which included milk and dairy 
products, live swine and meat of swine, rice and cereals, fruit juices, groundnuts and their oil, and 
prepared foods".  12. Is it possible to obtain the data for the cal culation of AVEs for some specific duties on the 
remaining agricultural products, so as to complete the information concerning average tariffs in these 
agricultural subsectors?  
RESPONSE 
 
When AVEs are calculated, a certain amount of volume of imports are necessary.   The uniform 
reason of absent AVEs is the volume of imports is too low to calculate.   According to paragraph 11 of the Secretariat Repor t, "Japan operates 18 tariff quotas, which it has 
notified to the WTO Committee on Agriculture, cove ring 175 tariff lines, mainly for dairy products 
and cereals (including rice).  The average fill ra tio in 2008 was about 69 per cent but varies from one 
quota to another, from a low of 13 per cent for butter and butter oil to over 100 per cent for dairy 
products for general use (Table AI V.1).  There have been no chang es to the administration of TRQs 
since the last Review of Japan (Chapter III(2)(iv)).   The names of companies or persons that are 
allocated quotas are posted online by the MAFF releas es on the Internet;  no information pertaining to 
quota amounts allocated to firms or individuals was available.  In quota imports of rice, wheat and 
barley, and certain milk products are handled main ly by state trading entities;  certain amounts of 
these products may be imported by private entities".  13. Would the Japanese Government kindly provi de information pertaining to quota amounts 
allocated to individuals?  WT/TPR/M/243/Add.1  
Page 126 
 
 
  RESPONSE 
 
The individual allocation quantity ca nnot be disclosed because it is u ser's confidential information. 
 
(iii) Domestic measures 
 
According to paragraph 19 of the Secretariat Repor t, "[p]rice support through administered prices 
continue to apply to beef and pork.  The Agricu lture and Livestock Industries Corporation aims to 
stabilize beef and pork prices by buying from the mark et when wholesale prices fall below the 'lower 
stabilization price' and releasing stock onto the market when wholesale pr ices exceed the 'upper 
stabilization price'".  14. Would Japan kindly explain the method and s ources of information used to determine the 
"lower stabilization price" and "upper stabiliza tion price" applying to beef and pork and the 
"guaranteed base price" for calf producers? 
 
RESPONSE 
 
Referring to a recommendation by the Council of F ood, Agriculture and Rural Area Policies, these 
administrative prices are determined every fiscal year, considering conditions for production, supply-
demand situation, and other economic circumstances.  According to paragraph 22 of the Secretariat Repor t, "[s]ubsidies for wheat, barley, and rice totalled 
¥176 billion in FY2006 and ¥175 billion in FY2005 (the latest years for which data are available);  
these continue to be the most heavily supp orted commodities.  Separate amounts for these 
commodities were not made available to the Secretariat". 
 15. Would it be possible to have updated figur es for subsidies for co mmodities such as wheat, 
barley, and rice, since the most recent data are for 2006, and to know which other products receive 
subsidies and the amounts involved? 
 
RESPONSE 
 
The figures on subsidies for these products since 2006 are not yet ready for notification because the 
collection of data and their assessment are still being carried out.  (5) S
ERVICES  
 (i) Financial services 
 
According to paragraph 38 of the Secretariat Repor t, "[a] ministerial licence is required to conduct 
insurance business in Japan;  approval is required for new insurance products, for modifications to 
existing products, and for premium rates.  Life  and non life insurance companies may enter each 
other's markets only through subsid iaries.  Commercial presence is normally required in order to offer 
insurance services in Japan except, inter alia, for certain reinsu rance, commercial aviation insurance, 
and international marine hull insurance.  The cr iteria for granting licences and the solvency margin 
requirements are the same for Japanese and foreign insurance providers". 
 16. As regards "new products", how does Japan defi ne the concept of "new financial services"?  
How are these regulated?  How does Japan ensure th at there is no regulatory discrimination when the 
product/service does not originate in Japan?   WT/TPR/M/243/Add.1 
 Page 127 
 
 
  RESPONSE 
 
Regarding "new financial services" , Japan undertakes its specific commitments in accordance with the 
Understanding on Commitments in Financial Services.  Banking 
 
According to paragraph 39 of the Secretariat Re port, "[t]he structure of the banking sector has 
remained largely unchanged during the review period (Table IV.3).  The five largest banks accounted 
for over 45 per cent of the deposit base and nearly 46 per cent of loans in September 2009, slightly 
lower than in February 2008.  State involvement  continues in the sector through the Government's 
interests in, inter alia, Japan Post Bank, Resona Bank, and the Development Bank of Japan.  Reforms 
regarding the privatization of Japan Post, a landmark reform initiated in 2007, have been under review 
since 2009, with a view, inter alia, to introducin g measures to maintain a certain postal network 
level". 
 
17. Could the above reference to continued State involvement in the sector through the 
Government's interests in various banks mean th at Japan intends to continue acquiring shares in 
currently private or State invested banks?  18. What criteria does Japan apply in assessi ng whether to acquire shares in banks? 
 
RESPONSE 
 
(17,18)  While the Japanese government holds shar es of Japan Post Holdings, which is a holding 
company of Japan Post Bank, since 2007 when priv atization of Japan Post was initiated, it has not 
held any shares of Japan Post Bank,  even after the Postal Reform. 
 The Japanese government acquires shares in banks wh en banks apply for their purchase to strengthen 
their capital and the examination criteria stipulated in relevant laws and re gulations are satisfied. 
Moreover, when these banks apply for the reimburseme nt of the injected capital, the government will 
duly proceed with the reimbursement as long as specifi c requirements in relevant laws and regulations 
are fulfilled.  
 
(iii) Transport 
 Maritime transport 
 
According to paragraph 55 of the Secretariat Report, "Japan is especially reliant on maritime transport 
particularly for traded goods, almost all of which are shipped by sea.  The sector is regulated by the 
Ports and Harbour Bureau of the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) and the Maritime Bureau.  Legislation governing th e sector includes the Ship Law, the Marine 
Transportation Law, and the Coastal Shipping Law.   There have been no changes to these during the 
period under review.  Foreign investment in the wa ter transport industry is subject to the prior 
notification requirement".  19. What does the "prior notification" requirement involve?  RESPONSE  
The prior notification requirement under the Forei gn Exchange and Foreign Trade Law applies to 
foreign investors who intend to make investments in the "water transport industry in Japan". To clarify, "water transport industry in Japan" refers to the coastwise transport (i.e., maritime transport WT/TPR/M/243/Add.1  
Page 128 
 
 
  between ports within Japan) industry, the inland water transport industry and the coastwise ship 
leasing industry.   
According to paragraph 57 of the Secretariat Report,  "[e]ntry into the port transport sector requires 
permission from the MLIT, and port transport charg es are subject to prior notification procedures;  
licensing requirements and the economic needs test ha ve been abolished since 2006.  Under the Port 
and Harbour Act of 1950, port development, manage ment and operation is entrusted to local public 
organizations.  In October 2008, Japan integrated the Nippon Automated Cargo and Port Consolidated 
System (NACCS) for customs procedures with the Port Electronic Data Interchange (Port EDI) for 
port related procedures.  Furthermore, in October 2009, simplified port related procedures were added 
to the integrated system".  20. Considering the above para graph, how can port services be provided in Japan?  Under a 
concession or is there some other specific legal procedure? 
 
RESPONSE 
 
The port transport industry is regulated by the Port Transport Business Law in Japan.  
 
 By the Law, Port Transport Businesses are defi ned as the following acts carried out to meet the 
demands of other persons.   1) General Port Service  2) Port Stevedoring Service  3) Barge Transport Service 
 4) Raft Transport Service 
 5) Tallying Service  6) Surveying Service  7) Calibration Service  
The Port and Harbor Act defines the procedures fo r the port management body's use of the electronic 
data processing system as defined as follows, whic h are services the NACCS has been providing. 
  1) Entrance/clearance notice  2) Use of berthing facilities  3) Refund of port charge  
 4) Vessel movement notice 
 5) Use of ferry/passenger terminal facilities  6) Use of cargo handling machinery such as gantry crane  7) Use of tag boat  8) Use of building such as storage shed 
 9) Use of facilities for vessel service(feeding water / oil) 
 10) Use of certain area such as freight handling area  11) Use of waste processing facility  12) Use of electric equipment such as reefer power supply  
According to paragraph 59 of the Secretariat Report,  "[t]he Government con tinues to provide support 
to Japanese flag carriers under the international ship regime.  It also continues to provide a tonnage 
tax, adopted in 2008, under which a company may calculate its corporate tax based on assumed profit 
per net tonne of vessels flying the Japanese flag.  The presumably lower tonnage tax is applicable 
instead of the corporate tax and is an incentive for shipping companies.  An internationally operating 
shipping company must submit a plan that ensures stable international maritime transport to the  WT/TPR/M/243/Add.1 
 Page 129 
 
 
  MLIT;  this must be approved by the Minister before the tonnage tax can be applied.  As of 
March 2010, 11 companies had been approved by the MLIT to apply the tonnage tax".  21. What type of "support" does the Japanese Gove rnment provide to Japanese flag carriers?  Is 
such support of a permanent or temporary nature  and what are the requirements for receiving it? 
 
RESPONSE 
 (a) The International Ship Regime  
 The Japanese Government continues to provide  support to Japanese flag carriers under the 
international ship regime, including tax relief measu res in respect of ship registration tax and local 
property tax, securing economic security and promo ting the possession of internationally competitive 
vessels for the Japanese merchant fleet by promoti ng the possession of the International Ship, which 
is a high-quality Japanese-flagged vessel wh ich has adopted technological innovation. 
 
Under the current tax program, these measures will expire on 31 March 2012.   The Japanese vessels which are deemed important to ensure marine transportation between Japan and 
foreign countries are prescribed by the Ordinance of  the Ministry of Land, Infrastructure, Transport 
and Tourism based on their transportation capacity, na vigation behavior, efficiency of operation and 
technological level needed for operation, which ma kes them eligible for these support measures.  
Foreign-invested companies which are established in  Japan and fulfill certain requirement are eligible 
for the International Ship Regime.  
(b) The Tonnage Tax 
 
The Japanese Government also continues to prov ide a tonnage tax, which has become a global 
standard, adopted in 2008, under which a company may calculate its corporate tax based on assumed 
profit per net tonnage of vessels flying the Japanese flag.  Under the current tax program, this me asure will expire on 31 March 2013.  
 
An internationally operating shipping company must submit a plan that ensures stable international 
maritime transport to the MLIT; this must be approv ed by the Minister before the tonnage tax can be 
applied.  
Foreign-invested companies which are established in Japan and fulfill certa in requirements were 
eligible for the Tonnage Tax scheme. However, to  apply to the scheme, companies had to get the 
approval of a plan to ensure stable internati onal maritime transport by securing Japanese-flagged 
vessels and seafarers from the Ministry of Land, Infrastructure, Transport and Tourism by March 2010.  (iv) Medical services 
 
According to paragraph 71 of the Secretariat Report, "Japan's medical system, despite being among the most efficient in the world, could be made more efficient through further reforms.  To this end, the 
authorities introduced an online payment system in 2006, and, in principle, by 2011, all hospitals and 
pharmacies will need to submit electronic receipts or receipts online to examination and payment 
organizations.  The new system is expected to in crease efficiency and the quality of healthcare;  
electronic processing of bills is expected to facilitate  the review of all reimbursements to weed out 
fraud and abuse and reduce administrative costs.  At the same time, the reform may include the 
removal of restrictions on the number of medical students, and on foreign workers permitted in the WT/TPR/M/243/Add.1  
Page 130 
 
 
  sector, and relax the rules that prevent equity fina nce to facilitate the restructuring of the hospital 
sector.  This would enable the creation of more e fficient hospitals as well as M&As of hospitals and 
clinics.  In the Basic Policy on Comprehensive Ec onomic Partnerships, announced by the Ministerial 
Committee on Comprehensive Economic Partnershi ps on 6 November 2010, Japan intends to 
'consider measures to address the issues relating to  the movement of natural persons from abroad, 
such as nurses and certified care workers' with regard to EPAs".  Colombia understands that the Japan   India EPA, on which an agreement in pr inciple was reached in 
September 2010, includes elements aimed at fac ilitating the movement of health professionals and 
members of the nursing profession in particular.  22. Colombia would welcome further details in th is regard and would like to know whether what 
has been concluded in this agreement might serve as a model for future EPAs. 
 RESPONSE  
Regarding India, the EPA has not been signed yet, and therefore specific content of the EPA is not 
available at the present stage. However, unde r the Basic Policy on Comprehensive Economic 
Partnership (Cabinet Decision, November 9th, 2010 ) the Government of Japan will consider measures 
to address the issues relating to the movement of natural persons from abroad, such as nurses and 
certified care workers, on the basis of its efforts to promote the "employment and human resources strategies" described in its New Growth Strategy (Cabinet Decision, June 18, 2010), and it will do so 
with due attention to future domestic demographic trends, the possible effect of such movement on 
employment in Japan, requests from other countries, as well as securing Japan's economic growth and social stabilization. A group to study the issue h as been established under the Minister of State for 
National Policy, and by June 2011 it will develop a basic policy 
 
Report by Japan (WT/TPR/G/243
) 
 
IX. J APAN 'S DOMESTIC POLICIES  
 
(4) A GRICULTURAL REFORM  
 
Paragraph 92 of the Report by Japan states that  "[i]n March 2010, the new Basic Plan on Food, 
Agriculture and Rural Areas was decided by the Cabi net.  One of the Plan's objectives is to introduce 
a new income support direct payment to farmers". 
 23. Would Japan kindly explain how the new inco me support direct payment to farmers operates 
and what conditions the farmers are required to meet in order to be eligible for this form of support? 
 RESPONSE  
In the FY2010, the Government of Japan implem ented a new single-year pilot direct-payment 
programme for farmers participati ng in production adjustment programme on rice. In the FY2011, not 
only rice farmers but also farmers of upland crops including wheat and soybean are eligible for the 
new direct payment system.  
  WT/TPR/M/243/Add.1 
 Page 131 
 
 
  COSTA RICA  
(Translation) 
 
Macroeconomic Policies 
 1. As regards the various stimulus packages ai med at increasing public spending and equivalent 
to 0.5 per cent of GDP, did any of the packages involve resource transfer (financial or in kind) to one or more production sectors?  If so, would Japan kindl y specify the sectors concerned and the monetary 
value of these transfers?  RESPONSE  
Since it is not clear what measures Costa Rica i ndicates by "equivalent to 0.5% of GDP," Japan 
cannot provide appropriate information for this question. 
 
2. The Report states that "the pace of trade-relate d structural reforms, such as trade liberalization 
(particularly in agriculture and certain services), appears to have been slow during the period under 
review".  Which scheduled measures or reforms have  been slowed down and to what extent?  Have 
some not yet been implemented and are they due fo r implementation in the near future?  If so, which 
of them and when?  RESPONSE  
Japan has made some progress in structural reform s in the services and agriculture sectors during the 
period under this review.  
In the service sectors, recognizing the importance of liberalizing the service sectors for growth and 
competitiveness, Japan has been taking various step s to promote liberalization. In March 2010, the 
"Subcommittee on Regulatory and Institutional Re form" was established under the Government 
Revitalization Unit. In November 2010, the Cabi net issued the "Basic Policy for Comprehensive 
Economic Partnerships," where it addressed its di rection for further promoting necessary regulatory 
reforms under the philosophy of 'open up the country'.  As for the liberalization of trade in services, 
Japan remains strongly committed to the DDA nego tiations under the basic principle that the 
comprehensive liberalization of trade in services s hould be achieved to benefit all Members, including 
developing countries.  On agriculture, the new Basic Plan on Food, Agricu lture and Rural Areas was decided by the Cabinet 
in March 2010. It aims at raising the food self-sufficiency ratio to 50% by FY2020 (41% in FY2008) 
and demonstrates the direction of agricultural polic ies in the mid-term, including i) introduction of 
new income support direct payments to farmers,  ii) conversion to a production system more 
responsive to the consumers' demands for quality and safety, and iii) promotion of farmers' initiatives 
to expand their businesses into food manufacturing a nd retailing sectors, making use of their products 
and bringing more income opport unities to rural areas. The new ag ricultural policy will be steadily 
implemented according to the Basic Plan. For example, in FY2011, the income support direct 
payment scheme will be fully introduced, based on th e results of the pilot program in FY2010, and 
farmers' businesses will be expanded into food ma nufacturing and retailing sectors, making use of 
their products, based on the 'Act on the Creation of New Businesses and Related Activities Utilizing 
Regional Resources by Farmers, Forestry Workers, Fishery Workers and Related Associations and the 
Promotion of Utilizing Regional Agriculture, Fo restry and Fisheries Products' (issued in 
December 2010), and so on.  WT/TPR/M/243/Add.1  
Page 132 
 
 
  3. The Report states that "China overtook the Un ited States as Japan's largest export market".  
Which products exported to China underwent th e most significant increases between 2007 and 2009? 
 RESPONSE  
While the paragraph 20 of the Chapter 1 is based on the data made by the WTO Secretariat, the 
Government of Japan doesn't have them. Therefore,  the GOJ is not in the position to answer Q3. 
 Trade Policy 
 
4. Which are the highly sensitive agricultura l products excluded by Japan from existing 
preferential trade agreements with countries th at are significant exporters of such products? 
 
RESPONSE 
 The agricultural products excluded from liberalization are decided, based upon negotiations with the 
countries concerned, considering the impact  on the domestic agriculture and so on. 
 5. The Report states that existing regulations and measures that are not subject to amendment or 
abolition are not subject to evaluation.  Thus, the co st and benefits of protection from various tariffs 
and or other trade policy measures are not evalua ted by the Government".  Has there been any 
evaluation of the benefits from the tariff reducti on provided for in any of the bilateral trade 
agreements entered into by Japan after 1 October 2007?  
RESPONSE 
 There is no official evaluation published by the G overnment of Japan on cost-benefits of tariff 
elimination after the entry into force of EPAs. Ho wever, various estimations  on future EPAs have 
been conducted and published in the process of preparing the "Basic Policy on Comprehensive 
Economic Partnerships".  
 
Available at: http://www.mofa.go.jp/mofaj/g aiko/fta/policy20101106.html (in Japanese). 
 
Trade Agreements and Arrangements 
 
6. According to paragraph 5 of document WT /TPR/S/243, Japan's Generalized System of 
Preference (GSP) scheme is valid until March 2011.  Are there any plans to extend it and, if so, will 
there be any changes to the scheme?  
RESPONSE 
 
The GSP (Generalized System of Preferences) a pplies reduced tariffs to designated import goods 
originating from developing countries or territories, w ith the aim to help them increase export income, 
advance industrialization and prom ote economic development. Japan is properly managing the system 
from the viewpoint of contributing to the econo mic development of developing countries.  
 
Japan is in the process of preparing for discu ssion of  the extension of its GSP scheme until 
March 2021.  7. Paragraph 36 reports that it has not been po ssible to conclude the negotiations for a free trade 
agreement with Korea, which have been paralysed since 2004.  What have been the chief obstacles in 
these negotiations?  WT/TPR/M/243/Add.1 
 Page 133 
 
 
   
RESPONSE 
 
Following the agreement at the summit meeting be tween Japan and Korea in May 2010, a Director-
General-level consultation meeting for the EPA was held in September 2010, in which such issues as 
trade/investment bottlenecks, government procurem ent, industry cooperation and market access were 
discussed. 
 
Japan will intensify its efforts to resume the currently suspended Japan-Korea EPA negotiations, as 
described in the "Basic Policy on Comprehensive Economic Partnerships." 
 
8. Japan is currently negotiating free trade agreem ents with the Gulf countries, India, Australia 
and Peru.  Does it plan to enter into negotiati ons with another country in the near future? 
 
RESPONSE 
 Based upon the "Basic Policy on Comprehensive Econom ic Partnerships" endorsed by the Cabinet on 
November 9
th, 2010, Japan will work actively to st rengthen economic partnerships, including 
conclusion of EPAs, with Asian c ountries, newly emerging powers, a nd resource-rich countries, based 
on a comprehensive assessment from economic as well as diplomatic and strategic viewpoints, taking 
into account the progress in the negotiations on the Doha Development Agenda, efforts for regional 
integration in the Asia-Pacific region, and efforts for the strengthening of economic partnerships with 
major countries. It is currently under consideration as to what kind of measures should be taken to 
strengthen economic relati onships between Japan and individual countries. 
 
Aid for Trade 
 
9. According to paragraph 59 of the Review , Japan pledged to provide US$12 billion through 
bilateral assistance for trade-related projects fro m 2009 to 2011, as well as technical assistance for 
40,000 people in the field of trade-related activities.   This represents a 20 per cent increase compared 
with Japan's commitment at the Hong Kong Minister ial Conference in 2005.  Considering the impact 
of the global economic crisis on the country in 20 09, when exports declined by some 25 per cent and 
GDP contracted by 5.2 per cent, does Japan consider  that it might be necessary to adjust the amount 
pledged?  
RESPONSE 
 
Japan foresees that it will not be necessary to make  any adjustments to the amount announced in the 
Development Initiative for Trade (DIT).  10. Paragraph 59 also states that among OECD c ountries, Japanese expenditure on aid for trade 
remains one of the highest, when measured as a share of its overall aid budget (69 per cent in 2008).  On what grounds has Japan decided to focus its ai d efforts on AFT?  Does it intend to continue 
prioritizing this area? 
 
RESPONSE 
 
The "Aid for Trade" initiative is  expected to contribute to "Poverty Reduction" and "Sustainable 
Development" which are also priority issues ensh rined in Japan's Official Development Assistance 
(ODA) Charter and Japan will continue to put priority on this field.  WT/TPR/M/243/Add.1  
Page 134 
 
 
  Measures Affecting Imports 
 
11. What type of programmes is Japan currently  implementing to promote the consumption of 
domestic goods?  How are these programmes rec onciled with import promotion initiatives? 
 
RESPONSE 
 
In principle, the Government of Japan does not discriminate imported goods in promotion of consumption.  In certain sectors, the Governme nt of Japan promote consumption of domestic goods 
through publicity activities, which are operated in  a manner consistent with the WTO Agreements. 
 12. Would Japan kindly provide further details rega rding "statutory rates" and in which cases they 
apply?  Are they due to remain in effect for this year?  (footnote 17, Chapter III(2)(ii)) 
 RESPONSE  
Statutory rates include both gene ral and temporary rates.  In the case of statutory rates, the 
"temporary" rate, which is reviewed annually, is nor mally used instead of the higher general rate;  the 
lower of the statutory and WTO bound rates are a pplied to WTO Members on an MFN basis, except 
when preferential rates are applied. 
 13. What are the main tariff reductions or exemptions applied by Japan?  According to 
paragraph 28, they amounted to about 24.4 per cent of tariffs actually collected.  
RESPONSE 
 Among systems for reduction and exemption of Custom s Duty in Japan, the major system is reduction 
and exemption for raw materials (corn for feed, etc. ) for manufacturing use (Article 13 of the Customs 
Tariff Law).  
(Reference) 
 Japan Customs HP Systems for Reduction, Exemp tion, Refund and Repayment of Customs Duty 
(FAQ)  http://www.customs.go.jp/tetsuzuki/c-answer/imtsukan/1602_jr.htm 
 
14. How does Japan determine the type of method to be used for quota allocation?  For which 
products do pre-established criteria have to be met and to which products does the first-come 
first-served method apply?  Are lottery allocations  on a totally random basis or is some additional 
parameter used? 
 
15. In the case of tariff quotas subject to complia nce with requirements, what is the allocation 
method used?  
RESPONSE 
 (14, 15)  At the beginning of each fiscal year (early April), the Ministry of Economy, Trade and 
Industry (METI) accepts applications for TQ on l eather and leather footwear and allocates quotas. 
Quotas are divided into two portions, one for the applicants having the past record of using TQ in the recent previous years, and the other for new applicants.   WT/TPR/M/243/Add.1 
 Page 135 
 
 
  If the total volume requested by the applicants is gr eater than the volume available, in the first case, 
quotas are distributed proportionally to the quotas act ually used in the previous years. In the second 
case, quotas are evenly distributed. If the total volume re quested by the applicants  is smaller than the 
volume available, quotas are distributed as requested by  the applicants. Each applicant is required to 
prove his/her own capability of conducting the importation of the relevant items. 
The allocation of tariff quotas for agricultural products is implemented by the Ministry of Agriculture, 
Forestry and Fisheries (MAFF) in accordance with the Government Ordinance on the tariff quota 
system. Regarding the details of the allocation fo r each products, please refer the notification (MA:1) 
under the WTO agreement.  
Can an allocated quota be used only for the duration for which the certificate has been granted or is it 
possible to import within the year for which the quot a was opened?  Can a certificate be renewed if it 
has not been used within the stipulated period?  
RESPONSE 
 The TQ quotas on leather and leather footwear are valid during the relevant fiscal year, but the 
validity can be extended maximum for one month in certain cases.  As to the TRQ on agricultural products, the Ministry  of Agriculture, Forestry and Fisheries doesn't 
renew an expired TRQ certification. 
 
What is the positive list system for defining MRLs?  Are MRLs based on guidelines issued by the international reference organiza tions?  (paragraph 73, page 52) 
 
RESPONSE 
 Under the positive list system, pesticides for which MR Ls are set are allowed to remain in target food 
commodities up to the corresponding limits. For pest icide-commodity combinations without MRLs, a 
uniform limit (0.01 ppm) is applied.  The unifo rm limit is established as an amount unlikely to 
damage human health. The setting and revision of MR Ls are, in principle, based on sound science and 
Japan's MRLs are harmonized with Codex MRLs wherever possible. 
 
What are the requirements for the labelling of agricultural and forestry products?  
RESPONSE 
 
All foods being sold in Japan are required to be la beled according to the standards stipulated in the 
Food Sanitation Act and on the Law Concerning Sta ndardization and Proper Labeling of Agricultural 
and Forestry Products (JAS Law). The JAS Law sti pulates the quality labeling standards of each item 
of fresh foods and processed foods. No requirements are imposed on the labeling of forestry products. The English versions of the relevant regul ations are available at the URL below: 
Food Sanitation Act 
http://www.japaneselawtranslation.go.jp/law/ detail/?ft=1&re=01&dn=1 &co=01&ky=%E9%A3%9F
%E5%93%81%E8%A1%9B%E7%94%9F%E6%B3%95&page=6 Ordinance for Enforcement of the Food Sanitation Act http://www.japaneselawtranslation.go.jp/law/ detail/?ft=1&re=01&dn=1 &co=01&ky=%E9%A3%9F
%E5%93%81%E8%A1%9B%E7%94%9F%E6%B3%95&page=8 
The Law Concerning Standardization and Proper La beling of Agricultural and Forestry Products 
-Food Labeling for Fresh Foods http://www.maff.go.jp/e/jas/labeling/fresh.html WT/TPR/M/243/Add.1  
Page 136 
 
 
  Processed foods 
http://www.maff.go.jp/e/jas/labeling/process.html  
19. Are all technical regulations subject to ex-ante evaluation or does this only apply to 
regulations issued by the Ministry of Internal Affairs and Communications?  
RESPONSE 
 
In the article 9 of the Government Policy Evaluations Act, it is stipulated that an administrative organ 
shall carry out the ex-ante evaluation about affairs un der their jurisdiction 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 that meets the following conditions, and to be specified by Cabinet Order.   
(i) It is expected that administrative act pursu ant to the policy has considerable impact 
on the lives of people and/or society and the economy, or a large amount of expense is incurred before the aims of the said policy are achieved. 
 
(ii) It is an established knowledge that the method for acquiring information on the 
effects of policy and other methodology  required for the conduct of ex-ante 
evaluation have been developed. 
 To get the Cabinet Order please see: http://www.soumu.go.jp/main_content/000082217.pdf  
20. What is an "ex ante" evaluation?  What does the evaluation procedure involve? 
 
RESPONSE 
 
The items in the evaluation report and the deadline fo r publication of the evaluation report, etc., are 
identified in the "Implementation Guidelin es for ex-ante Evaluation of Regulations". 
 (Reported Items)   1. Purpose, content and necessity of the regulation  2. Analysis of costs and benefits 
 3. Analysis of cost-benefit relationship 
 4. Comparison with alternatives  5. Views from experts and other related matters  6. Time and conditions for reviews  
(Publication) 
 If a regulation is enacted, revised or abolished by a la w, an evaluation report, et c., shall be publicized 
no later than the Cabinet's approval of the draft law.  If by a cabinet order or ordinance equivalent or 
inferior to a cabinet order, an evaluation repor t, etc. shall be publicized no later than the 
commencement of public comment procedures. 
 For more information on the "Implementation Guid elines for ex-ante Evaluation of Regulations", 
please refer to the following website: http://www.soumu.go.jp/hyouka/seisaku_n/pes/implementation.pdf   WT/TPR/M/243/Add.1 
 Page 137 
 
 
  Origin and Customs Procedures 
 
21. What type of information is considered to be "private" and hence not published in the 
decisions, rulings, regulations, and regulatory pr oposals online?  Would Japan kindly provide 
examples?  (paragraph 13, page 32) 
 
RESPONSE 
 
For example, administrative measures against i ndividual enterprises contai ning personal information 
such as the name of company could fall under "private" category. 
 
22. Why are advance rulings not legally binding ?  Is this the way in which the matter was 
negotiated in all of Japan's free trade agreements?  (paragraph 19, page 33) 
 
RESPONSE 
 Customs shall endeavor to make an appropriate r esponse to an inquiry made by any taxpayers or any 
other party concerned, according to Article 7.3 of the Customs Law, which is an advisory provision. 
Therefore, Customs officials respect advance ruli ngs issued, but the rulings are not binding on the 
holders of ruling and, thus, are not legally binding. With regard to the provisions of advance ruling in 
Japan's EPAs, they are consistent with the national system of advance ruling. 
 
23. How far ahead of time must the online preliminar y declaration be filed in  order to be eligible 
for the immediate import permission system as soon as cargo entry is confirmed?  (footnote 4, page 33)  RESPONSE  
This system is that Customs give instantly importers permission to import goods as soon as those 
goods arrive, if those goods through NACCS (Ni ppon Automated Cargo And Port Consolidated 
System) are not inspected because they are tr ouble-free from the perspective of inspection. 
 
If Customs can decide that the declaration is trouble-free without documen ts, importers may submit 
those documents after permission. Contrary to this case, if Customs cannot decide that the declaration 
is trouble-free without those documents, it is desi rable that importers submit those documents to 
Customs as soon as possible in order to allow Customs to check those documents before arrival of the 
goods.  
 
24. Why is it necessary to comply with a rule of origin for MFN duties to apply?  Do MFN rates 
differ from the general rates?  In which cases does each apply?  (paragraph 34, page 40) 
 
RESPONSE 
 
In order to apply a bound tariff rate based on WT O agreement as Most-Favored Nation Treatment, a 
good shall qualify as the one originating in a WTO member country.  Importers apply the rate at the time of import declaration.  
Measures affecting exports 
 
25. According to paragraph 94, "[i]mport duties (tariffs) levied on raw materials used in the 
production of certain exported goods may be exempted, reduced, or re funded, as determined by the 
Government".  What criteria does the Government us e to determine exemption, reduction, or refund? 
 WT/TPR/M/243/Add.1  
Page 138 
 
 
  RESPONSE 
 
1. In accordance with paragraph 1 of Article 47 of the Cabinet Order for Enforcement of the 
Customs Tariff Law, the following items are fully ex empted from tariffs:  lead (for the production of 
alloys using lead and antimony);  cotton seed oil (for fish products (canned or bottled));  soya bean oil 
cake, certain starches and molasses (for the production of monosodium glutamate);  sugar (for refined sugar);  certain starches (for caramels);  molasses (for  lysine);  certain starches (for refined glucose);  
and inputs approved by Customs (for export goods approved by Customs). 
 
2. In accordance with paragraph 2 of Article 47 of the Cabinet Order, reduced tariff rates apply 
to certain inputs at the time of importation.  The re duced tariff rates are app lied to wheat flour (for the 
production of monosodium glutamate);  and certain starches (for the production of vitamin C, 
crystallized glucose, and eythorbate or sorbitol).    
3. In accordance with paragraph 1 of Article 19 of the Customs Tariff Law, Japan Customs can 
use the system fairly though two following requirement.   1) The products must be manufactured at a factory which has obtained approval from the Director of Customs as a manufacturing factory. 
 
2) The products must be exported within two y ears from the date of the import permission of 
their raw materials.  26. According to paragraph 105, "Japan provid es medium- and long-term export credits".  Would 
Japan kindly expand on this point and specify the recipient sectors? 
 
RESPONSE 
 
1. Japan provides export credits based on the te rms and conditions of the OECD arrangement on 
officially supported export credit. With regard to  export finance, please refer to the JBIC website 
http://www.jbic.go.jp/en/finance/export/i ndex.htmlfor more information.  
 2. NEXI provides trade insurance based on the terms and conditions of the OECD arrangement 
on officially supported export credit. Please refer to the NEXI website (http://www.nexi.go.jp/e/ps/ 
index2_frame.html) for more information.  Measures affecting production and trade 
 
27. As regards the regulatory reform programme re ferred to in paragraph 141, Costa Rica would 
welcome further details on the following points:  (a ) the mechanism for promoting the use of domestic 
wood;  and (b) the exemption for agricultura l cooperatives (paragraph 142) and agriculture 
(paragraph 144). 
 
RESPONSE  
1) Japan has announced "Forest and Forestry Rev italization Plan" in December 2009, in order to 
make the best use of the potential of man-made fore st that are getting ready for their harvest. In line 
with the Plan, "the Act for the Promotion of Use of Wood in Public Buildings" was established in 
May 2010, to boost the use of wood as a whole in pub lic buildings, regardless of its country of origin. 
The Act and other Japanese timber-related polici es such as the Plan will be operated without 
distinction between domestic and foreign wood.   WT/TPR/M/243/Add.1 
 Page 139 
 
 
  2) The review of the exemption from the Antimonopoly Act (AMA) regarding agricultural 
cooperatives is described in the "Policy on regul atory and institutional reform" endorsed by the 
Cabinet on 18 June, 2010.  The Japan Fair Tr ade Commission (JFTC) in coordination with the 
Ministry of Agriculture, Forestry and Fisheri es (MAFF), has been examining and analyzing the 
current situation as to whether it is probable that  the sound development of Japanese agriculture is 
hindered.  On the basis of this policy, the JFTC , in coordination with MAFF, will reach a conclusion 
on the review of the exemption from the AMA rega rding agricultural cooperatives by the end of 
March 2011.  3) The existing exemptions for concerning agriculture is only "project using manure breeding 
pet insect" only. It is prohibited fro m putting animal's excrement on gro und directly is prohibit by law 
in order to may prevent environmental pollution by low. In a Special Zone, this behaviormatter is 
permitted in a Special Zone for pet insect's breeding insects.  28. The Report states that Japan currently has 68 subsidy schemes to assist agriculture, forestry, 
and fisheries, industry, finance, and transport sector s.  Would Japan kindly expand on this point and 
specify the incentives provided under these schemes?  
RESPONSE 
 
As to details of these programs, please refer to  the WTO document G/SCM/N/186/JPN, 25 June 2009. 
 
29. Japan is seeking to amend regulations and vari ous systems that have become obstacles to new 
entry and innovation.  Would Japan kindly specify which are the regulations and systems to which the 
document refers?  RESPONSE  
Japan believes that opening up the economy is the op timal means for Japan and the world to achieve 
mutual prosperity by liberalizing trade and i nvestment and facilitating the exchange of human 
resources. From this perspective, Japan will take initiatives to formulate trade and investment rules 
designed for the twenty-first century  in the Asia-Pacific region. Also , the Government of Japan, with 
a view to "opening the country", will first promote ap propriate domestic reforms with respect to areas 
of regulatory reforms.  For example, the Government Revitalization Unit h as taken actions written in paragraph 83-85 in IX. 
JAPAN'S DOMESTIC POLICIES (WT/TPR/G/243). 
 
Paragraph 144 deals with the Special Zone for Stru ctural Reform Act.  How is a "special zone" 
defined?  What are the requirements for exemption fr om certain regulations?  Is there a website where 
the relevant information can be accessed in English?  
RESPONSE 
 The range of the Special Zone, depending on what pr oject to be implemented by local governments, 
can be set to any reasonable extent in order to carry  out the project. To apply exceptions, a plan which 
includes measures for receiving preferential treatment in the Special Zones must be applied by local 
government and the plan must be approved. So far, no  English website is available to find the related 
information.  
 WT/TPR/M/243/Add.1  
Page 140 
 
 
  Taxation and tax-related assistance 
 
31. Paragraph 109 mentions a tax re form in 2010.  Has this reform been implemented?  What are 
the main changes introduced by the reform? 
 
RESPONSE 
 
Regarding the FY2010 Tax Reform (Main Points), see: http://www.mof.go.jp/english /tax/tax2010/tax2010a.pdf 
 
Labour market 
 
32. Paragraphs 12 to 14 of document WT/TPR/S /243 highlight the need to reform the labour 
market in order to increase domestic demand, and reference is made to a series of specific measures.  
Would Japan kindly indicate whether such measures  and/or additional measures have already been 
implemented and what are the results achieved?  
RESPONSE 
 
In Japan, the government promotes the transition of non-regular to regular employment and balanced 
treatment of non-regular workers by providing various  subsidies, etc. Moreover, non-regular workers' 
career formation is supported by the Job Card schem e, which provides those who lack experience as 
regular workers, such as job-hoppers, with close ca reer consulting and practical  vocational training. In 
addition, Japan is working on strengthening the saf ety net by expanding coverage of unemployment 
insurance to non-regular workers, as well as carry ing out a program providing training and benefits 
during the training period, for people who are not eligible for the usual unemployment benefits. 
 
Government procurement 
 
33. Paragraph 48 of document WT /TPR/S/243 states that with respect to "articles and services of 
central government", companies need to be regist ered to participate in  tenders for government 
procurement.  Is there a registration fee, or is re gistration free of charge?  Do the requirements apply 
to domestic and foreign suppliers alike?  
RESPONSE 
 
Registration is free of charge. C oncerning requirements for registrati on, foreign suppliers are treated 
same as domestic suppliers.   34. Paragraph 55 of document WT/TPR/S/243 re fers to the Law on Ensuring the Receipt of 
Orders from the Government and Other Public Agencies by Small and Medium Enterprises and 
mentions that the relevant laws and regulations apply equally to domestic and foreign SMEs.  What 
type of measures do public agencies apply under this Law to expand procurement opportunities for SMEs, and what percentage of government procurem ent contracts has been awarded to domestic and 
to foreign SMEs?  RESPONSE  
Japan confirms that foreign SMEs can be bene fited by laws and regulations on Government 
Procurement, as can domestic SMEs. The proportion of the total volume of the government procurement contracts which were awarded to SMEs  to the overall volume was about 50% in fiscal  WT/TPR/M/243/Add.1 
 Page 141 
 
 
  year 2009. But the data excludes contracts that ar e, by their nature, impossible to award to SMEs, 
such as large vessel building.    To be precise, it is not possible to attribute these r esults to the enforcement of the law and regulations. 
 State trading  
35. Paragraph 60 of document WT/TPR/S/243 st ates that in the Law for Stabilization of 
Supply-Demand and Price of Staple Food, rice, wheat and barley are defined as staple food for the Japanese people and as important agricultural products .  Which is/are the entity(ies) in charge of 
implementing measures to stabilize supply-demand s ituations and the prices of rice, wheat and 
barley?  What measures has Japan a pplied to ensure stability, considering that domestic prices are still 
above world prices?  
RESPONSE 
 The Government of Japan makes forecasts on the supply of and demand for those staple food and 
manages stockpiles.  36. Paragraph 61 of document WT/TPR/S/243.  Are individuals authorized to import dairy products or are these imported solely by the Agricu lture & Livestock Industries Corporation?  Which 
are the products customarily imported to ensure  "proper and smooth operation of the system to 
stabilize supply-demand and prices of the designated milk products"?  From which markets are such 
products generally imported?  
RESPONSE 
 Under Japan's Schedule of concessions in the WTO Ag reement, individuals who clear the customs are 
allowed to import all ki nds of dairy products. 
 Among dairy products, designa ted dairy products for general us e can be imported through both in-
quota and out-of-quota trade. For in quota, the ALIC (Agriculture and Livestock Industrial 
Corporation), as a state trading enterprise , imports all designa ted dairy products. 
 ALIC imports designated dairy products* to stab ilize supply-demand and prices for dairy products. 
Most of the designated dairy products imported to Japan come from Oceanian countries. 
*designated dairy products:  skimmed milk powder, butter etc. 
 
State-owned enterprises, corporatization, and privatization 
 
37. According to paragraph 117 of document WT/ TPR/S/243, the State retains a stake in major 
companies in several sectors.  In addition to its  shareholdings, does the State participate in the 
administration of State-owned enterprises? 
 
RESPONSE 
 
1. Although the Japanese government holds shares of  JT, the government respects its maximum 
managerial autonomy as a shareholder. 
 
2. The Government of Japan, according to th e Act on Passenger Railway Companies and Japan 
Freight Railway Company, requires authorization of the Minister of Land, Infrastructure, Transport and Tourism on the financial affairs, the appointme nt of the officers and the annual business plans WT/TPR/M/243/Add.1  
Page 142 
 
 
  with a view to supervising the status of bus iness of Hokkaido Railway Company, Shikoku Railway 
Company, Kyushu Railway Company, and Japan Freight Railway Company.  
3. According to Act on Kansai International Airport Co., Ltd., it is necessary to obtain the 
permission of the Minister of Land, Infrastructur e Transport and Tourism of the following matter 
concerning management in Kansai International Airport.  
- Issue of the stocks or share purchase warrant 
- Resolution of selection and dismissal su ch as representative directors in company 
- Business scheme at every fiscal year - Recruitment of the person who undertakes recruitment corporate bond - Issue of bond that is stock transaction - Borrowing of the capital for repaym ent-due date to exceed one year 
- Transfer and having the mortgage of important property 
- Change in statutes of corporation 
- Disposal of surplus - Resolution of amalgamation, division, and dissolution, etc. 
 4. With regard to Narita International Airport Co., Ltd., it is based on the rule of the Narita 
International Airport Co., Ltd Act, and Ministry of Land, Infrastructure, Transport and Tourism 
performs the authorization of the Business scheme at every 
fiscal year and necessary administration regulation.  
Intellectual property 
 38. Paragraph 122 of document WT/TPR/S/243 refe rs to the number of pending trademark and 
patent applications at the JPO.  Would Japan kind ly specify the average length of time required in 
Japan for the trademark and patent examination and granting process?  
RESPONSE 
 In patent examination, the first action pendenc y and total pendency were respectively 29.1 and 
35.3 months from the date of request for examinati on in 2009. As for trademark examination, the first 
action pendency and total pendency were respectively 6.2 and 14.3 months from the date of filing 
in 2009.  
39. Paragraph 124 of document WT /TPR/S/243 refers to the recent amendments to the Copyright 
Law and the Unfair Competition Prevention Act.   Would Japan please provide further details 
regarding the scope of the amendments to the Copy right Law, which in some cases allows certain use 
of copyrighted works by Internet  search service providers without the consent of copyright holders.  
As regards amendments to the Unfair Competition Pr evention Act, what types of act are deemed to 
constitute infringement of trade secrets and what are the applicable penalties? 
 
RESPONSE 
 
As to the Copyright Law, please refer to  the attached provisions of the Law. 
 
Article 47 quinquies of Copyright Law refers to th e limitation for reproduction for the prevention, 
etc., of a difficulty in transmission for providing telecommunication networks including some providers of internet search services. (Caching or backup in order to prevent a difficulty in 
transmission)   WT/TPR/M/243/Add.1 
 Page 143 
 
 
  In addition, Article 47 sexies of Copyright Law refe rs to the limitation for reproduction, etc., for a 
retrieval, etc., of a transmitter identification code  of information which has been made transmittable. 
(Copying, etc., to implement an Internet search service).  With regard to the Unfair Competition Prevention Ac t, the main aim of the amendment of the Act is 
to take measures for the protection of trade secrets in criminal procedures and penalties, including the 
expansion of the scope of appli cation, in order to strengthen th e protection of trade secrets for 
ensuring fair competition.  The major arrangements are as follows. 
 
(1) The previous principle of unfair comp etition purpose requirement for trade secrets 
infringement in criminal cases was revised to "the purpose of making a gain for himself or another, or causing loss to another or exposing another to a risk of loss."   
(2) The previous use/disclosure of trade secrets as an act eligible for punishment was extended 
"misappropriation" and so on.  As to the penalty for violation of trade secret s under the Unfair Competition Prevention Act, any 
person who falls under any specific acts provided under paragraph 1 of Article 21 of the Act shall be 
punished by imprisonment with work for not more than ten years, a fine of not more than ten million 
yen, or both. 
 40. Paragraph 127 states that under the Trademark Act, certain trademarks are not eligible for 
trademark registration.  Would Japan kindly expl ain the new grounds on which a trademark may not 
be registered in Japan? 
 
RESPONSE 
 
Registerable trademarks must have the capacity  to distinguish one party's goods or services from 
another's. The marks under paragraph 127 do not meet this requirement and are not eligible for 
trademark registration. Paragraph 127 explains not new grounds but one of the basic requirements for 
trademark registration in Japan. 
 
Competition policy 
 
41. Paragraph 146 of document WT/TPR/S/234 refe rs inter alia to the amendments to the 
Anti-monopoly Act in effect since January 2010, including those concerning the prior notification 
requirement for mergers and acquisitions.  Would Japan kindly specify what percentage of prior 
notifications of mergers and acquisitions to th e JFTC are approved and how many are rejected. 
 
RESPONSE 
 
If it decides that a business combinations including mergers & acquisitions may substantially restrain 
competition in a particular field of trade, the JFTC  has the power to take legal measures, including the 
prohibition of a transaction.  Throughout FY 2009, 48 mergers were notified based on the provisions 
of Article 15, 15 demergers were notified based on the provisions of Article 15-2, 3 joint share 
transfers were notified based on the provisions of Article 15-3, 79 cases of business acquisitions were 
notified based on the provisions of Article 16 and 840 stockholdings were reported or notified to the 
JFTC based on the provisions of Article 10 of the Antimonopoly Act (AMA).  None of the stockholding, mergers, demergers, or business ac quisitions cases notified and reported in FY 2009 
were cases in which the JFTC took legal measures.  In addition, th e JFTC conducts prior consultation 
regarding business combination plans on the basis of "Policies dealing with prior consultations WT/TPR/M/243/Add.1  
Page 144 
 
 
  regarding business combination plans".  In FY 2009,  there were 24 prior consultation cases regarding 
business combination plans on which the JFTC provided its views as to whether there were any issues 
under the AMA, and the JFTC approved all of them.   Out of 24 cases, 4 were approved by the JFTC 
subject to the proposed remedial measures. 
 
Agriculture 
 
42. Would Japan kindly indicate whether it is po ssible to obtain an English translation of the 
Basic Law on Food, Agriculture and Rural Areas and of the revised Basic Plan for Food, Agriculture 
and Rural Areas mentioned in paragraph 3,  page 76, of document WT/TPR/S/243?  
 
RESPONSE 
 
As regard to the Basic Law on Food, Agriculture and Rural Areas, please refer to the following 
website 1. 
 For the new Basic Plan on Food, Agriculture and Rural Areas (decided by the Cabinet in March), 
please refer to the following website 2. There are the summary and the background of the new Basic 
Plan on this website.  
 
 1. http://www.maff.go.jp/e/index.html  2. http://www.maff.go.jp/e/a nnual_report/2009/index.html 
 
EQUADOR
 
(Translation) 
 
Secretariat Report (WT/TPR/S/243 ) 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  
 
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
 (viii) Standards, technical regulations, an d sanitary and phytosanitary measures 
 
(a) Standards and technical regulations  Voluntary standards 
  According to paragraph 68, the Minister of Agriculture, Forestry and Fisheries as well as 
Registered Certifying Bodies and Registered Overseas Certifying Bodies are entitled to certify operators to affix JAS (Japan Agricultural Standard) marks.  1. Has Japan considered having the updated lis t of foreign and Japanese bodies accredited to 
certify enterprises published online by the Ministry  of Agriculture, For estry and Fisheries? 
 
RESPONSE 
 
Japan regularly updates the list of the Registered Do mestic/Overseas Certifying Bodies, and the latest 
version is available on the following website (in Japanese only): 
http://www.maff.go.jp/j/jas/jas_kikaku/kikan_itiran.html 
  WT/TPR/M/243/Add.1 
 Page 145 
 
 
  For your convenience, an English version is av ailable on the following website. This list will be 
updated in due course.  http://www.maff.go.jp/e/jas/jas/pdf/rcb_100819.pdf  (b) Sanitary and phytosanitary measures 
 
Paragraph 73 refers to Japan's re visions of the maximum residue lim its for pesticides and amendments 
on food additives.  According to paragraph 76, in the Committee on Sanitary and Phytosanitary 
Measures Members have complained that, in many cases, Japanese SPS regulations are more stringent 
than internationally established  guidelines and risk assessment procedures;  these include maximum 
residue limits.  2. Would Japan kindly provide further information on the establishment of maximum residue limits for 2, 4 D as regards imports of cocoa bean s, and their consistency with the CODEX and the 
OIE directives? 
 Paragraph 73 reports that the Ministry of Agricu lture, Forestry and Fisheries has established import 
requirements to allow the importation of fresh fruits from some of Japan's trading partners. 
 
RESPONSE 
 Japan harmonizes its MRLs with Codex MRLs wher ever possible. With the introduction of the 
positive list system in 2006, there is no Codex MRL set  for 2,4-D in cocoa beans, so a uniform limit 
(0.01 ppm) is applied.  The uniform limit is est ablished as an amount unlikely to damage human 
health, based on the concept of acceptable exposur e that has been scientif ically assessed by JECFA 
(Joint FAO/WHO Expert Committee on Food Ad ditives) and the United States Food and Drug 
Administration.   3. What are the requirements for mango imports?  
RESPONSE 
 Japan established import requirements for fresh fr uits of the Kent Mango variety from Peru and 
Tommy Atkins Mango variety from Colombia, and a llows their importation under specific conditions. 
The outline of the requirements is described below.  
 1) hot water immersion treatment (Peru) or vapor heat treatment (Colombia) under 
specific conditions 
 2) export inspection and certification by the NPPO of the exporting countries  3) on-site visit by Japan's plant quarantine officers to examine the implementation of the 
above-mentioned measures. 
 EUROPEAN UNION
 
Report of the Government of Japan  
 Government of Japan Report, page 7 - Trends in Foreign Direct Investment 
 In various policy speeches, Japan's PM Kan has stat ed that 2011 year would be the "base year to 
launch an opening up of Japan" and the year fo r domestic regulatory reforms to renew with 
sustainable economic growth creating jobs while pursuing fiscal consolidation.   
 WT/TPR/M/243/Add.1  
Page 146 
 
 
  1. On the eve of discussions in Japan's FY 2011 budget, could Japan further detail what are the 
governmental priorities in terms of regulatory and institutional reforms which would increase Japan's market openness and Japan's FDI ratio? 
 
RESPONSE 
 
The "New Growth Strategy" mentions the necessity of domestic reform for unifying the Asian market 
and facilitating the flow of people,  goods and money between Japan and the world, which leads to 
increased FDI.  
 Based on the "New Growth Strategy", a "program for promoting Japan as Asian an industrial center 
and direct investment into Japan" (tentative name ) will be drawn up by the summer in 2011. This 
program will include system reforms and other meas ures to ensure smooth flows of people, goods and 
funds with the aim of making Japan's business environment more appealing. 
 
Government of Japan Report, page 11, para. 31 
 
Based on the information in the Government's report we understand that the coverage of Japan's Duty 
Free Quota Free (DFQF) treatment remains the same since the last TPR in 2009, i.e. 98%.  
 
2. Could Japan present the latest percentage  figure showing the least developed countries 
(LDCs) imports entering duty free as compared with total import from LDCs, in value terms?  
RESPONSE 
 
In fiscal year (April – March) 2009, the share of dut y free imports from LDCs accounted for 95.4% of 
the total imports from LDCs in value terms.  3. Could Japan also provide a list of products that are not covered by DFQF?  RESPONSE  
For the tariff lines which are subject to tariffs not  covered by DFQF, please refer to the following 
website:   http://www.customs.go.jp/english/tariff/2011/index.htm.  
 
4. Could Japan inform whether it plans to extend DFQF treatment, either in terms of tariff lines 
or value?  
RESPONSE 
 Since 1 April 2007, Japan has expanded duty-free an d quota-free (DFQF) market access to the Least-
Developed Countries (LDCs), covering approximately 98% of all tariff lines, thereby realizing upon 
its commitment to provide DFQF market access for at least 97% of products originating from LDCs, 
as is stated in the WTO Hong Kong Ministerial Declaration (See WT/COMTD/N/2/Add.14 for 
details.). Japan will continue to apply its tariffs in an appropriate manner.  
 
Government of Japan Report, page 12, paras 36 and 37 
 
According to the Government's report, Japan, th e People's Republic of China and the Republic of 
Korea decided to launch a joint research on econom ic cooperation in November 1999. Since 2003, the  WT/TPR/M/243/Add.1 
 Page 147 
 
 
  focus of this joint research has shifted to th e economic effects of a possible Japan-China-Korea 
trilateral FTA. Following the completion of the stud y in 2009, the Joint Study Committee for an FTA 
among China, Japan and the Republic of Korea was launched.   5. Could Japan describe in detail the results of  the joint research on economic effects of the 
possible trilateral FTA?  
 
RESPONSE 
 
According to the Joint Report and Policy Recomm endations on Possibilities and Prospects for a 
China-Japan-Korea FTA made by institutes representi ng the three countries, the National Institute for 
Research Advancement (NIRA) for Japan (from 2009,  Japan External Trade Organization (JETRO)), 
the Development Research Centre of the State C ouncil (DRC) for China and the Korean Institute for 
International Economic Policy (KIEP) for Korea in 2007, the joint research project assessed the 
economic impact of the possible China-Japan-K orea FTA by means of a computable general 
equilibrium (CGE) model; and the estimated ga ins on real gross domestic product (GDP) are 
0.30 percent, 0.41 percent, and 5.26 percent for China, Japan, and Korea, respectively.  
 The report indicated that the benefits of the FTA  would be much larger, because the FTA would 
promote the formation of a production network in East Asia, thereby materializing scale merits.  
 
6. Could Japan outline the time schedule of work  of the Joint Study Committee and elaborate on 
areas of economic cooperation which have been studied by the Committee?   
RESPONSE 
 
Japan, China and the Republic of Korea launched th e Meeting on the Joint Study for a trilateral FTA 
in May 2010 in the Republic of Korea, which includes representatives of government, business, and 
academia from the three countries. The second and the third meeting were held in Japan in 
September 2010 and in China in December 2010 respectively.   The three countries exchanged views on their FTA po licies, trade and economic relations, trade of 
goods, rules, investment and services. 
 The three countries aim to complete the Joint Study by 2012.  
Government of Japan Report, page 19, paras 61-66 and page 21, paras 80 and 81 
 
According to the Government's report, "Japan cons iders the acceleration of economic growth for the 
prosperity and stability of Africa quite important.  Expansion of the volume of trade and investment 
will largely contribute to achieving this goal."  7. The movement "One Village, One Product (O VOP)" is one example of Japan's activities in 
promoting trade with Africa. Could Japan inform  whether there are any links between its OVOP 
projects in African LDCs and its DFQF coverage – i.e. would the usefulness of the OVOP projects 
increase if the products that are part of the OVOP were also covered by DFQF? 
 
RESPONSE 
 Japan has announced the establishm ent of the comprehensive pack age "Development Initiative" for 
sustainable development through trade as the Japane se contribution to the successful conclusion of the 
DDA at the Hong Kong Ministerial Conference in December 2005.  The Initiative provides a "one 
village, one product" project and duty-free and quot a free market access to products from the LDCs. WT/TPR/M/243/Add.1  
Page 148 
 
 
  The OVOP project and the QFDQ are not directly link ed with each other; however, both are a part of 
Japanese support to promote trade in developing countries, including the LDCs.  Government of Japan Report, page 19, para. 66 
 
The Government's report states that "Private sector  development is also im portant to make African 
sustainable development possible. In this cont ext, Japan provided US$300 million to the AfDB 
(African Development Bank) for projects to enhance the capacity of SMEs in Africa." 
 
8. Could Japan provide information on which other activities it is carrying out to support 
sustainable development in Africa, notably with regard to labour and e nvironmental standards? 
 
RESPONSE  
As mentioned in the report (page 19, para. 66), private sector development is important to make 
African sustainable development possible. With rega rd to human resource development, for example, 
Japan supports African countries in policy making on industrial development strategies and provides 
technical support for improving industrial devel opment through the TICAD process. As of 2009, a 
total of 1,035 trainees participated in a variety of JICA training programs (training courses in Japan, 
in-country training, third-country training courses, semi nars, etc.) in fields related to private sector 
development. For further information, please refer to the following website:  http://www.mofa.go.jp/region/africa/ticad/ticadfollow-up/report/index.html  
Government of Japan Report, page 20, para. 74  
 
The Government's report states: /…/ For this purpo se, the Government will accelerate efforts to 
reform its domestic non-tariff measures. /…/  9. Could Japan sketch out the major issues being considered in the program of regulatory 
reforms announced and present the timetable of its domestic reforms in terms of dismantling non-
tariff measures?  
RESPONSE 
 
To move toward integration and strengthening of  Japan-EU economic relati ons, the Government of 
Japan will address non-tariff measures (NTMs) indicated as EU's concerns.  
 In this action, with regard to re gulatory and institutional reform, the Government of Japan will decide 
on concrete plans for reform items currently bei ng deliberated in the Subcommittee on Regulatory and 
Institutional Reform by the end of March 2011. 
 
WTO Secretariat's Report
 
 
WTO Secretariat's report, page vii, para. 6 
 The Secretariat's report states that "While admini strative organs are required to conduct ex-ante 
evaluation of regulations, and a procedure for ex-ant e regulatory impact analysis has been introduced, 
cost-benefit analysis is not freque ntly used when formulating, revising, or abolishing policies and 
measures;  such analysis is rarely used to ev aluate existing measures, such tariff and non-tariff 
protection of agriculture, or to evaluate the ec onomic effects of preferential trade agreements 
(PTAs)./…/".   WT/TPR/M/243/Add.1 
 Page 149 
 
 
   
10. The EU welcomes the fact that Japan has in  place procedures for ex-ante evaluations of 
regulations and ex-ante regulatory impact analyses.  Could Japan introduce in more details the manner 
of implementing such impact assessments in Japan?  RESPONSE  
On August 2007, the MIC drew up the "Implementation Guidelines for ex-ante Evaluation of 
Regulations" that provides standard guidance for wh at kind of analysis should be conducted, what 
procedures are necessary and other matters related to  ex-ante evaluation of re gulations for smooth and 
efficient implementation. The items in the evalua tion report and the deadline for publication of the 
evaluation report, etc., are identified in the "Imp lementation Guidelines for ex-ante Evaluation of 
Regulations".  (Reported Items) 
 
  1. Purpose, content and necessity of the regulation  2. Analysis of costs and benefits  3. Analysis of cost-benefit relationship  4. Comparison with alternatives 
 5. Views from experts and other related matters 
 6. Time and conditions for reviews  (Publication)  
If a regulation is enacted, revised or abolished by a la w, an evaluation report, et c., shall be publicized 
no later than the Cabinet's approval of the draft law.  If by a cabinet order or ordinance equivalent or 
inferior to a cabinet order, an evaluation repor t, etc. shall be publicized no later than the 
commencement of public comment procedures.  For more information on the "Implementation Guid elines for ex-ante Evaluation of Regulations", 
please refer to the following website. 
 http://www.soumu.go.jp/hyouka/seisaku_n/pes/implementation.pdf  11. Could Japan provide more information on the steps it is taking, or planning  to take, in order to 
consistently include an analysis of benefits and cost s in such evaluations, and to extend this practice to 
other areas as well, such as review of existing measures or PTAs?  
 
RESPONSE  
Administrative organs are required to conduct ex-ante evaluation of regulation (any effects restricting 
the rights of the public or imposing obligations  on the public) when introducing, revising, or 
abolishing regulation by the enactment, revision or abolition of a law or a Cabinet Order.  
 Therefore, implementation of ex-ante evaluation of regulation is not limited to specific areas.   
Regarding the review, the Guidelines state that an evaluation report shall contain the time and 
conditions for reviewing the appropriateness of the re gulation in question (enactment or revision) in 
light of the socioeconomic situation. 
 WT/TPR/M/243/Add.1  
Page 150 
 
 
  I. E CONOMIC ENVIRONMENT  
 
(3) S TRUCTURAL POLICIES  
 (ii) Labour market  
WTO Secretariat's report, page 5, paras 12-14  
The Secretariat's report describes Japan's labour market.  12. Could Japan elaborate on the situation with rega rd to employment in th e informal sector and 
explain how it ensures that the eight fundamental ILO Conventions (no-s 29, 87, 98, 100, 109, 111, 
138 and 142) are respected in the informal sector?   
RESPONSE 
 
Employees in Japan are basically entitled to fundamen tal rights at work through related legislation, 
including the Labour Standards Law and the Labour Un ion Law. The effectiveness of this legislation 
is ensured by administrative organizations such  as the Labour Standards Inspection Offices and the 
Labour Relations Commissions, whic h have locations nationwide. 
 13. With regard to rights and obligations under ex isting international agreements in the area of 
labour, the EU welcomes the fact that Japan has ra tified 6 of the core ILO Conventions. Could Japan 
indicate its intentions in relation to the ratifica tion of the following core ILO Conventions, which it 
has not yet ratified: Convention 105 on the Abolition of Forced Labour, Convention 111 on 
Discrimination in Respect of Employment and Occupation?  RESPONSE  
Japan ratifies ILO Conventions after ensuring their c onsistency with its nationa l laws and regulations. 
Regarding ILO Conventions No. 105 and No. 111, further study is required to scrutinize such 
consistency.   
14. Could Japan provide information what measures – if any – it takes to ensure that goods 
destined for export are produced in full  respect of fundamental rights at work? 
 
RESPONSE 
 
Employees in Japan, including those in the export industry, are basically entitled to fundamental 
rights at work through related legislation, incl uding the Labour Standards Law and the Labour Union 
Law. The effectiveness of this legislation is en sured by administrative organizations such as the 
Labour Standards Inspection Offices and the Labour  Relations Commissions, which have locations 
nationwide.    WT/TPR/M/243/Add.1 
 Page 151 
 
 
  II. T RADE POLICY REGIME : FRAMEWORK AND OBJECTIVES  
 (3) T
RADE POLICY FORMULATION AND EVALUATION  
 (ii) Transparency and policy evaluation 
 
WTO Secretariat' s report, page 15, para. 15 
 
The Secretariat's report describes the ex-ante regulatory impact analysis (RIAs), which is promoted by the OECD and is also an effective instrument  for more objective decision-making and enhanced 
fairness in assessing both positive and negative implications of new regulations.   
 The EU welcomes the increased attention attached by the Government of Japan to RIA since 2007 
while noting that on two recent important policy me asures- the reform of the Japan Post Office and 
the rescue of the Japan airlines, an  ex-ante RIA was not conducted. 
 
15. Could Japan state whether (in the ongoing  program of administrative reforms) the 
Government of Japan is considering the extension of  the compulsory applicatio n of ex ante evaluation 
of regulations to all fields of activities as well as th e publication of the results of these evaluations as 
priorities?  RESPONSE  
Please refer to the answer to question 11 from the EU. 
 16. Could Japan provide information on whether RIAs include a sustainability dimension (e.g. 
they identify potential social or environmental impacts of proposed regulations)?  
 
RESPONSE  
The Guidelines state that specific cost and benef it elements expected to increase or decrease by 
enactment, revision or abolition of regulations sha ll be enumerated and explained to the extent 
possible.  
 The Guidelines also state that adverse impacts on the whole social economy and environment are 
social costs.  
17. The Japanese government has altered the refo rm process of Japan Post which, among other 
issues, intended to level the playi ng field between Japan Post and its private competitors in the sectors 
of insurance, banking and express delivery. It seems th at the recently proposed legislation will in fact 
lead to an even worse situation for private compe titors. How is Japan ensuring that the situation will 
not conflict with its GATS commitments? 
 
RESPONSE 
 
The bills for Postal Reform have set a basic po licy that postal services are operated with full 
consideration for equitable conditions of comp etition between the Japan Post Group and other 
operators offering similar services. Based on this polic y, the Government of Japan intends to ensure 
consistency with GATS and other interna tional agreements in future operations. 
 WT/TPR/M/243/Add.1  
Page 152 
 
 
  (4) T RADE AGREEMENTS AND ARRANGEMENTS  
 
(ii) Regional trade agreements 
 
(a) Bilateral/regional free-trade agreements adopted by Japan  WTO Secretariat' s report, page 18, para. 31 
 According to the Secretariat's report, "In th e Committee on Regional Trade Agreements, some 
Members raised concerns about Japan's FTAs.  These included disproportionate liberalization 
between agricultural and non-a gricultural products /…/".  
 18. Could Japan provide information on whether the agricultural products usually excluded from 
Japan's FTAs will be included in future negotiations for trade liberalization?  
 
19. If yes, does Japan consider any exemptions?  
RESPONSE 
 
(Q18 and 19) As the "Basic Policy on Comprehensiv e Economic Partnerships" decided by the Cabinet 
on 9 November lays down, Japan's position is that, with regard to EPAs or broader regional economic 
partnerships that are politically and economically impor tant and will be of especially great benefit to 
Japan, the government of Japan, while taking into c onsideration the sensitivity of trade in certain 
products, will subject all goods to negotiations for trade liberalizati on and, through such negotiations, 
pursue high-level economic partnerships. 
 
WTO Secretariat' s report, page 19, para. 32 
 
The Secretariat's report mentions that "The FTA s Japan has concluded do not have chapters on 
environment or labour. The authorities consider that most FTAs address the issue of sustainable 
development and labour standards through the reaffi rmation of the rights and obligations under other 
existing international agreements and the vari ous economic cooperation activities described in 
chapters on cooperation./…/"   20. Could Japan provide further details on how the cooperation chapters of its FTAs address 
labour and environmental issues? 
 
RESPONSE 
 
Japan's existing EPAs generally carry no articles specifically tailored for labor issues in the 
cooperation chapter or elsewhere. 
 
Some articles on environmental issues, such as measures concerning environmental protection or 
cooperation for the environment, are included in  Japan's existing EPAs, both in the cooperation 
chapters and elsewhere.  (5) A
ID FOR TRADE  
 WTO Secretariat's report, pages 24-27 
 
As part of the New Growth Strategy, the Governme nt of Japan (GoJ) promotes infrastructure-related 
exports (e.g. water treatment, railways, nuclear power plants, photovoltaic and waste management).  WT/TPR/M/243/Add.1 
 Page 153 
 
 
  The GoJ plans to support these exports by reinfo rcing public (financial a nd other) support schemes 
such as those provided by JBIC, NEXI and JICA.   21. Could Japan describe what are measures cons idered to reinforce the role of JICA in 
supporting infrastructure-related e xports and what will be the new regulatory framework for JICA's 
operations? 
 
RESPONSE  
JICA's Private Sector Investment Finance (hereinaft er referred to as "PSIF") will be resumed by this 
March, in order to provide finance for highly- effective development projects which cannot be 
financed by existing financial institutions. The targeted sectors are those of the MDGs, poverty 
alleviation, infrastructure for acceleration of grow th, and climate change. The PSIF is not used for 
increasing the amount of export by subsidizing Japanese companies.  
22. Could Japan elaborate further on how a nd by whom JICA's ODA activities and such 
infrastructure-related export suppor t scheme will be coordinated? 
  
RESPONSE 
 
JICA will consult with Ministry of Foreign Affairs,  Ministry of Finance, and Ministry of Economy, 
Trade and Industry in the process to adopt projects.  Also, according to the advice of Private Sector 
Investment Finance Committee (provisional title), JICA will decide whether they can assist the 
projects.  
(6) F
OREIGN INVESTMENT REGIME  
 
WTO Secretariat's report, page 27, para. 65 
 
The Secretariat's report describes Japanese foreign i nvestment regime and low level of FDI in Japan. 
The aim of the Five Recommendations Towards the Drastic Expansion of FDI in Japan from 2008 is 
to promote inward investments.  
 
23. Could Japan describe in detail the measures undertaken on the basis of the document "Five 
Recommendations"? 
 
RESPONSE 
 The Government of Japan revised "The Program for the Acceleration of Foreign Direct Investment in 
Japan" in December 2008, based on "The Five R ecommendations toward the Drastic Expansion of 
Foreign Direct Investment in Japan". The Govern ment will continue to consider recommendations 
and will steadily expand FDI into Japan.  
 
（For reference ） 
 
"The Five Recommendations Toward the Drastic Expa nsion of Foreign Direct Investment in Japan" 
consists of elements including (1) establishmen t of systems toward the facilitation of M&As; 
(2) comprehensive studies on FDI regulations; (3) establishment of sector-by-sector priority 
strategies; (4) reduction in business costs and improve ment in transparency of systems; (5) regional 
revitalization through inviting fore ign capital and enhancement of th e publicity to attract foreign 
capital.   WT/TPR/M/243/Add.1  
Page 154 
 
 
  In more detail, the current status of prog ress on the Five Recommendations is as follows 
Establishment of systems toward the facilitation of M&As  
The GOJ was to work on integrating and clarifying  rules on M&As by the end of summer of 2008. 
The GOJ compiled a report named "Takeover Defense Measures in Light of Recent Environmental Changes" in the Corporate Value Study Group held on 30 June 2008.     Comprehensive studies on FDI regulations 
The Cabinet Office will continue comprehensive studies on FDI regulations as exceptional measures 
to the "non-discrimination principle".   Establishment of sector-by-sector priority strategy The GOJ has selected the sector of medical devices as a priority sector. The Ministry of Health, Labor 
and Welfare (MHLW) made its action program to so lve the issue of "device lag" through measures 
such as enhancing systems for medical device approval. 
 24. Will the government contin ue with implementing the recommendations in FDI sector?  
 
RESPONSE 
 The government will continue to promote the FDI sector, further reflecting those recommendations 
and others.  25. Will the government implement some other step s/measures with them aim to expand flow of 
FDI into Japan in accordance with a New Gr owth Strategy adopted in June 2010? 
 
RESPONSE 
 
Based on the "New Growth Strategy", the "program  for promoting Japan as an Asian business center 
and foreign direct investment into Japan" (tenta tive name) will be drawn up by the summer of 2011. 
This program will include system reforms and othe r measures to ensure smooth flows of people, 
goods and funds with the aim of making Jap an's business environment more appealing.  
 
WTO Secretariat's report, pages 27-30 
 
The Secretariat's report outlines Japan's foreign investment regime. 
 
26. Could Japan confirm that economic activity undertaken in relation to a new or existing 
investment respects Japan's national labour law, th e fundamental rights at work as embodied by the 
ILO's 2008 Declaration on Social Justice for a Fair  Globalisation and the 8 core ILO Conventions?  
 
27. How does Japan ensure that these are in fact respected? 
 
RESPONSE 
 
(26, 27) Employees in Japan are basically entitled to fundamental rights at work through related 
legislation, including the Labour Standards Law and the Labour Union Law. The effectiveness of this 
legislation is ensured by administrative organizati ons such as the Labour Standards Inspection Offices 
and the Labour Relations Commissions , which have locations nationwide. 
  WT/TPR/M/243/Add.1 
 Page 155 
 
 
  (ii) Investment promotion measures 
 
WTO Secretariat' s report, page 30, paras 77 and 79 
 
The Secretariat's report describes the promotion meas ures related to investments and states that Japan 
is considering an introduction of a new preferential tax scheme for inward FDI.  
 28. Could Japan provide more information on the de tails on that intention - when would the tax 
new scheme be implemented and would the new prefer ential tax scheme focus on the regions of Japan 
or on the selected branches of industry? (It mean s the amount of tax incentives will depend on the 
region or on the branch of industry where the investment is located?) 
 
RESPONSE 
 
Japan plans to introduce two new schemes, which are not limited to foreign companies, giving 
preferential treatment in terms of corporate tax to promote investment in Japan, and the related bills 
will be discussed at the ongoing ordinary session of the Diet. The focus of one scheme will be R&D 
and RHQ, and the other's will be on the regions and the branches of industry. 
 Paragraph 79 outlines the implementation of the Pr oject to Promote Foreign Direct Investment in 
Selected Areas.  
 
29. Could Japan inform whether this project is still ongoing?  
RESPONSE 
 
Unfortunately this project w ill terminate in March 2011. 
 30. Where can one find more information on that Project?  
RESPONSE 
 
No information is available on-line due to the termina tion of this project, but here is the outline. This 
project consists of three programs, and a s hort description of each program is as follows; 
 
- Business Matching: Business matching between Japanese companies and foreign 
companies considering entering the Japanese market. Matching is organized at major 
exhibitions in Japan. 
- Invitation Program: Arrangement of site  tours for foreign companies looking for 
suitable locations/business partners in Japan's rural areas 
- Regional Initiative: Support area sales of re gional consortiums consisting of Japanese 
regional governments, public/economic organi zations, etc., with exhibition booths at 
international trade shows. 
 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
 
(1) I NTRODUCTION  
 
31. Does Japan favour tariff libera lisation for environmental goods? 
 WT/TPR/M/243/Add.1  
Page 156 
 
 
  RESPONSE 
 
Yes. Japan understands that the el imination or reduction of tariff and non-tariff barriers to trade in 
environmental goods is essential to promote th e dissemination of cleaner low-carbon energy 
technologies worldwide.  32. Is Japan studying the use of border adjustments for goods coming from countries where environmental legislation is less strict? 
 
RESPONSE 
 
While Japan is watching international discussions concerning border adjustments for goods coming 
from countries where environmental legislation is less strict, Japan does not have any plans to introduce it. 
 
WTO Secretariat' s report, page 31, para. 5 
 
The Secretariat's report states that "/…/ It would appear that Japan will start giving preferences for the use of domestic wood in public procurement."  
 
33. Could Japan state how it can provide assuranc e that such measures will not be distorting 
import?  
RESPONSE 
 
The related measures were carefully designed to ensure consistency with non-discrimination and 
national treatment principles in WTO rules, especi ally the Agreement on Government Procurement. 
For instance, in May 2010, "the Act for the Prom otion of Use of Wood in Public Buildings" was 
established to boost the use of wood as a whole in public  buildings, regardless of its country of origin.  
This act and other Japanese timber-related policies such as Forest and Forestry Revitalization Plan 
will be operated without distinction between domestic and imported wood. 
 According to the Secretariat's report, "/…/The share of procurement of overseas goods and services, 
supplied by domestic or foreign suppliers, declined  to 7.1% in 2008 (from 9.1% in 2007) in terms of 
value.  In 2008, the share of open tendering in total procurement rose to 63.5% compared with 58.6% in 2007./…/" 
 
34. In spite of Japan's adhesion to GPA, the sh are of foreign suppliers is not only extremely 
small, but keeps shrinking. Could Japan state wh ich concrete and systemic actions it plans to 
undertake to remedy this situation?  RESPONSE  
Japan is conducting its government  procurement appropriately based on the principles of national 
treatment and non-discrimination. Japan considers that  the statistics are the result of an appropriate 
procurement process based on these principles.  
  WT/TPR/M/243/Add.1 
 Page 157 
 
 
  (2) M EASURES DIRECTLY AFFECTING IMPORTS  
 (ii) Tariffs  
 
As regards import tariffs on spirits, in accordance with the settlement of the WTO Liquor Tax case 
(WT/DS8/17/Add.1), Japan has been committed to applying a zero import tariff on EU spirits since 
1 April 2002. However whereas the zero tariff on whis ky and brandy is permanent, the renewal of the 
interim zero tariff for other spirits, notably rum, gin,  vodka and liqueurs has to be approved by the two 
chambers of Parliament every year, with the uppe r chamber being controlled by the opposition party 
(creating significant problems for the tariff's renewal in 2008). 
 
35. Could Japan indicate whether it is prepared to eliminate permanently the import tariff on 
white spirits based on the result of dis pute settlement of the WTO Liquor Tax case 
(WT/DS8/17/Add.1)?  RESPONSE  
In light of the mutually acceptable solution in "Jap an - Taxes on Alcoholic Beverages", Japan will 
continue duty free treatment on white spir its in the framework of domestic law. 
 
(a) Bound tariff 
 
WTO Secretariat's report, page 34, para. 21 
 
The Secretariat's report indicates that "Japan's ta riff schedule comprised 8,826 lines at the HS nine-
digit level in FY2010.   Japan has bound 98.8% of lines (108 lines are unbound) (Table III.1); 
unbound lines relate mainly to fisheries (fish, cr ustaceans, seaweed), petroleum oils, and wood and 
articles thereof.  Ad valorem rates account for 8,159 bound lines (92.4%);  212 lines (2.4%) carry 
specific rates, 57 lines (0.6%) compound rates, and 290 lines (3.3%) have alternate rates of duty. 
 36. Could Japan inform about its intentions to reform the tariff structure in order to simplify 
administrative burden and make it more transparent? 
 
RESPONSE 
 
Japan sets its tariff rates acco rding to the situation in domest ic industries and international 
negotiations. 
 
Japan will continue to engage in constructive di scussion in the WTO and set appropriate types and 
levels of tariffs, while considering the progress and the results of DDA negotiations. 
 
(b) Applied MFN tariff 
 
WTO Secretariat's report, page viii, para. 9 and pages 35-40 
 
WTO Secretariat's report states that tariff continues to  be Japan's main border restriction, which is true 
from a quantitative point of view. However, Japan h as tariff peaks and its non-tariff measures include 
some import prohibitions and quantita tive import restrictions: a) Currently, 155 tariff lines (1.8%) are 
subject to tariff-rate quotas; for 38 of these lines th e out-of-quota rates are ad valorem. b) Current 
state-trading activities in Japan involve leaf tobacco, opium, rice, wheat, barley, and dairy products, the same as in 2009. c) Prices of the above-mentione d commodities tend to be higher in Japan than the 
world prices. d) The simple average rate for all th e AVEs  supplied is 32.0%, although the highest rate WT/TPR/M/243/Add.1  
Page 158 
 
 
  is 458%; for broad beans (out-of-quota rate); 92 of the 100 highest tariffs had non ad valorem rates. 
Thus, non-ad valorem rates tend to conceal tariff peaks.   
37. Does Japan plan to liberalise part of these ta riff lines so as to cut import costs and increase 
consumer real income?  
RESPONSE 
 
Japan sets its tariff rates acco rding to the situation in domest ic industries and international 
negotiations.  Japan will continue to engage in constructive di scussion in the WTO and set appropriate types and 
levels of tariffs, while considering the progress and the results of DDA negotiations. 
 (vi) Government procurement 
 
38. Could Japanese authorities define the scope of  goods and services subject to the operational 
safety clause under Japan's market access commitments and how they relate to safety requirements? 
 RESPONSE  
As the GOJ explained at the last TPR, with regard to the scope of this clause, the GOJ recognizes that 
it applies to the following five categories. Con cerning the procurement relating to railway, highly 
technical knowledge is required, because specific char acteristics of railway transportation are to be 
taken into consideration. Therefore, these five cate gories are strictly identified in view of strict 
indispensability for securing high-degree railway safety. 
  1) Supplies forming railway facilities  2) Rolling stocks and supplies for rolling stocks  3) Supplies for maintenance 
 4) Construction, reform ation and repair of railway facilities themselves 
 5) Construction, reformation and repair works which are carried out right above or right 
below the railway tracks 
 39. How the Japanese authorities envisage to preven t the operational safety clause to be used in 
such manner that no international tendering pro cedure are conducted for the purchase of railway 
equipment? 
 
RESPONSE 
 
In order to assure the proper application of the operational safety clause, the GOJ requests the 
procuring entities to apply it in a strict manner, a nd to refer to the GOJ in advance when questions 
arise in deciding on the application of the clause.  In any event, the GOJ recognizes that the procuring entities make their procurem ent, even in the cases 
of those which fall under the scope of the clause, without distinction between domestic and foreign 
supplies, searching for good quality and price. 
 
WTO Secretariat's report, page 43, para. 47 
 
The Secretariat's report gives an overview about th e notifications Japan has presented under GPA.  
  WT/TPR/M/243/Add.1 
 Page 159 
 
 
  40. Could Japan indicate when it will publish sta tistics of the procurement of its entities falling 
under Annex 3 (public corporations) in line with its  obligations under Article XIX (5) of the GPA? 
 
RESPONSE 
 
Japan submits its procurement statistics on th e Central Government Entities and Sub-Central 
Government Entities covered by the GPA to WTO, b ased on Article XIX (5) of the GPA every year.  
As for the statistics on Annex 3 entities, they have not been submitted due to some technical reasons, 
e. g. Annex 3 includes the entities which have alrea dy been completely privatized or have already 
been abolished, in addition to difficulties caused  by institutional reorganization of these entities. In 
any case, Japan has been notifying and modifyi ng based on Article XXIV (6)(a) in a proper and 
expeditious manner and will try to submit the statis tics on Annex 3 Entities to the extent possible. 
 
WTO Secretariat' s report, page 44, para. 48 
 According to the Secretariat's report, " The Ac count Law and relevant ordinances specify the 
procurement procedures for central government entiti es, while the Local Autonomy Law and relevant 
ordinances stipulate the procedures for local governments./…/".   41. Could Japan indicate which articles of the Accounts Law and the Local Autonomy Law are relevant to procurement? 
 
RESPONSE 
 
Concerning procurement by the central Government , the Accounts Law stipulates the procedures in 
Article 11 and Article 29ter to 29undecies. The ar ticles relevant to procurement in the Local 
Autonomy Law are stipulated in 3 of Article 232, Article 234. 2 of Article 234 and 3 of Article 234 . 
 42. Could Japan list the relevant ordinances us ed by the Tokyo Metropolitan Government to 
implement the GPA?  
RESPONSE 
 The Tokyo Metropolitan Government has establishe d the "Tokyo contract office work rule" which 
covers procurements under the GPA. For more de tailed information, please refer to the following 
website (Japanese only):  
43. Could Japan provide the list of the urban tr ansport operators that are covered by the GPA 
under the coverage of the 12 designated cities (shite i toshi) and indicate those for which note 5 of 
Annex 2 to Appendix I of GPA applies and those for which it does not apply?  
RESPONSE 
 
The urban transport operators that are covered by  the GPA under the coverage of the 12 designated 
cities (shitei toshi) are as follows:  
- Sapporo-shi (City)  Subway  Tram - Sendai-shi  Subway  Bus 
- Yokohama-shi  Subway  Bus 
- Kawasaki-shi  Bus - Nagoya-shi  Subway  Bus - Kyoto-shi  Subway  Bus - Osaka-shi  Subway  Automated Guideway Transit  Bus WT/TPR/M/243/Add.1  
Page 160 
 
 
  - Kobe-shi  Subway  Bus 
- Kitakyusyu-shi  Bus - Fukuoka-shi  Subway 
 
The urban transport operators that  are covered by note 5 of Annex 2 to Appendix I of GPA under the 
coverage of the 12 designated cities (shitei toshi) are as follows:  
- Sapporo-shi (City)  Subway  Tram 
- Sendai-shi  Subway 
- Yokohama-shi  Subway  - Nagoya-shi  Subway   - Kyoto-shi  Subway   - Osaka-shi  Subway  Automated Guideway Transit  - Kobe-shi  Subway 
- Fukuoka-shi  Subway 
 44. Japan applies note 5 of Annex 2 to Appendix I of GPA to designated cities and note 4 (a) of Annex 3 to Appendix I of GPA to specific entities. Could Japan indicate which of the goods codes of 
the Chapters 44, 68, 73, 85 and, in particular, 86 of the Harmonized System H.S. 2007 and which of 
the service codes of the UN CPC pov classification are covered by the afore mentioned notes? 
 
RESPONSE 
 
As for the procurement relating to railway whic h falls under the operational safety clause, highly 
technical knowledge is required because specific charact eristics of railway transportation are to be 
taken into consideration. Because of this, whether to apply the Notes or not is judged by examining 
carefully if a good or service corresponds to the five  categories or not in accordance with its nature; it 
cannot be judged uniformly by the HS code or CPC classification. As we have stated the afore Q39., the GOJ request s the procuring entities to apply the Notes strictly 
and prevents them from abusing the Notes. 
5. According to WTO document GPA/61, the EU  understands that compliance to GPA for each 
Annex 3 entity is ensured through a responsible Mi nistry. Could Japan provide a list indicating for 
each of the entities of Annex 3 the competent Ministry?  
RESPONSE 
 
Please see the following List. The order of th e entities is based on the GPA Annex 3. 
         MLIT: Ministry of Land, Infrastructure, Transport and Tourism         MAFF: Ministry of Agriculture, Forestry and Fisheries         MHLW: Ministry of Health, Labour and Welfare 
        METI: Ministry of Economy, Trade and Industry 
        MIC: Ministry of Internal Affairs and Communications         CAO: Cabinet Office         MOF: Ministry of Finance         CAA: Consumer Affairs Agency 
        MEXT: Ministry of Education, Culture, Sports, Science and Technology 
        MOE: Ministry of Environment         MOFA: Ministry of Foreign Affairs         MOD: Ministry of Defense   WT/TPR/M/243/Add.1 
 Page 161 
 
 
  Group A 
Name of the entity Ministry 
Japan Water Agency MLIT, MAFF, MHLW, METI 
Japan Regional Development Co rporation N/A (abolished) 
Urban Renaissance Agency MLIT  
Organization for Small & Medium Enterpri ses and Regional Innovation, Japan METI 
Japan Railway Construction Public  Corporation N/A (abolished) 
Japan Railway Construction, Trans port and Technology Agency MLIT 
Narita International Airport Corporation MLIT 
East Nippon Expressway Company Limited MLIT 
Central Nippon Expressway Company Limited MLIT 
West Nippon Expressway Company Limited MLIT 
Metropolitan Expressway Company Limited MLIT 
Hanshin Expressway Company Limited MLIT 
Honshu-Shikoku Bridge Expressway Company Limited MLIT 
Japan Expressway Holding and Debt Repayment Agency MLIT 
Urban Development Corporation N/A (abolished) 
Japan Science and Technology Agency MEXT 
Japan Atomic Energy Agency MEXT 
Japan Environmental Safety Corporation MOE 
Japan International Cooperation Agency MOFA 
Welfare and Medical Service Agency MHLW 
Government Pension I nvestment Fund MHLW 
Agriculture and Livestock Industries Corporation MAFF 
Japan Oil, Gas and Metals National Corporation METI 
Japan Small and Medium Enterpri se Corporation N/A (abolished) 
Japan Post MIC 
Japan Labour Health and Welfare Organization MHLW 
Employment and Human Resources Deve lopment Organization of Japan MHLW 
Okinawa Development Finance Corporation CAO, MOF 
Japan Finance Corporation MOF 
Japan Housing Finance Agency MLIT, MOF 
Japan Finance Organizati on for Municipalities MIC 
Development Bank of Japan Inc. MOF 
Tokyo Metro Co. Ltd MLIT 
Japan Tabacco Inc. MOF 
Hokkaido Railway Company MLIT 
East Japan Railway Company N/A (fully privatized) 
Central Japan Railway Company N/A (fully privatized) 
West Japan Railway Company N/A (fully privatized) 
Shikoku Railway Company MLIT 
Kyushu Railway Company MLIT 
Japan Freight Railway Company MLIT 
Nippon Telegraph and Telephone Co. MIC 
Nippon Telegraph and Telephone East Co. MIC 
Nippon Telegraph and Telephone West Co. MIC 
Northern Territories Issue Association CAO  
National Consumer Affairs Center of Japan CAA 
Table (cont'd) WT/TPR/M/243/Add.1  
Page 162 
 
 
  Name of the entity Ministry 
RIKEN MEXT 
Environmental Restoration and Conservation Agency MOE 
Fund for the Promotion and Development of the Amami Islands MLIT 
Japan Foundation MOFA 
Japan Student Service Organization MEXT 
Japan Arts Council MEXT 
Japan Society for the Promotion of Science MEXT 
University of the Air Foundation MEXT 
National Agency for the Advancemen t of Sports and Health MEXT 
Social Insurance Medical Fee Payment Fund MHLW 
National Center for Persons with Severe Intellectual Disabilities, Nozominosono MHLW 
Japan Racing Association MAFF 
Mutual Aid Association of Agriculture, Fore stry and Fishery Corporation Personnel MAFF 
The National Association of Racing MAFF 
Farmers' Pension Fund MAFF 
Keirin Promotion Association METI 
Japan External Trade Organization METI 
Motorcycle Racing Promotion Association METI 
New Energy and Industrial Technolog y Development Organization METI 
Japan Alcohol Corporation METI 
Japan National Tourist Organization MLIT 
The Japan Institute for Labour  Policy and Training MHLW 
Mutual Aid Fund for Official Casualties and Retirement of Volunteer Firemen MIC 
Corporation for Advanced Transpor t and Technology N/A (abolished) 
The Promotion and Mutual Aid Corporation for Private Schools of Japan MEXT 
Organization for Workers' Retirement Allowance Mutual Aid MHLW 
  
Group B  
Name of the entity Ministry 
National Archives of Japan CAO 
National Institute of Information and Communications Technology MIC 
National Research Institute of Fire and Disaster MIC 
National Research Institute of Brewing MOF 
National Center for University  Entrance Examinations MEXT 
National Institute of Special Needs Education MEXT 
National Institute for Youth Education MEXT 
National Women's Education Center MEXT 
National Science Museum MEXT 
National Institute for Material Science MEXT 
National Research Institute for Earth Science and Disaster Prevention MEXT 
National Research Institute for Earth Science and Disaster Prevention MEXT 
National Aerospace Laboratory of Japan N/A (abolished) 
National Institute of Radiological Sciences MEXT 
National Museum of Art MEXT 
National Institutes for Cultural Heritage MEXT 
Table (cont'd)  WT/TPR/M/243/Add.1 
 Page 163 
 
 
  Name of the entity Ministry 
National Center for Teachers' Development MEXT 
National Institute of Health and Nutrition MHLW 
National Institute of Occupati onal Safety and Health MHLW 
Food and Agricultural Materials Inspection Center MAFF 
National Center for Seeds and Seedlings MAFF 
National Livestock Breeding Center MAFF 
National Agriculture and Food Research Organization MAFF 
National Fisheries University MAFF 
National Institute of Agrobiological Sciences MAFF 
National Institute for Agro-E nvironmental Sciences MAFF 
Japan International Research Cent er for Agricultural Sciences MAFF 
Forestry and Forest Products Research Institute MAFF 
Fisheries Research Agency MAFF 
Research Institute of Econo my, Trade and Industry METI 
National Center for Industrial Prope rty Information and Training METI 
Nippon Export and Investment Insurance METI 
National Institute of Advanced Indu strial Science and Technology METI 
National Institute of Tec hnology and Evaluation METI 
Public Works Research Institute MLIT 
Building Research Institute MLIT 
Japan Health Insurance Association MHLW 
National Cancer Center MHLW 
National Cerebral and Card iovascular Center MHLW 
National Center for Neurol ogy and Psychiatry MHLW 
National Center for Global Health and Medicine MHLW 
National Center for Child Health and Development MHLW 
National Center for Geriatrics and Gerontology MHLW 
National Traffic Safety and E nvironment Laboratory  MLIT 
National Maritime Research Institute MLIT 
Port and Airport Research Institute MLIT 
Electronic Navigation Research Institute MLIT 
Civil Engineering Research Institute of Hokkaido MLIT 
Marine Technical Education Agency MLIT 
National Institute for Sea Training MLIT 
Civil Aviation College MLIT 
National Institute for Environmental Studies MOE 
Labor Management Organization for USFJ Employees MOD 
National Agency for Vehicle Inspection MLIT 
National Statistics Center MIC 
Japan Mint MOF 
National Printing Bureau MOF 
Japan Nuclear Energy Sa fety Organization METI 
National Hospital Organization MHLW 
National University Corporation MEXT 
Inter-University Research Institute Corporation MEXT 
Institute of National Colleges of Technology, Japan MEXT 
National Institution for Academic Degr ees and University Evaluation MEXT 
Center for National University Finance and Management MEXT WT/TPR/M/243/Add.1  
Page 164 
 
 
  46. Could Japan clarify which "dokuritisu gyosei hojin" are not covered by GPA? 
 
RESPONSE 
 Please see the following List.  
 Incorporated Administrative Agencies which are not covered by GPA (As of 1 April 2010)  
Okinawa Institute of Science and Technology 
The Public Foundation for Peace and Consolati on, Incorporated Administrative Agency 
Commemorative Organization for the Japan World Exposition Japan Aerospace Exploration Agency Japan Agency for Marine-Earth-Science and Technology Japan Organization for Employment of the Elderly and Persons with Disabilities 
Pharmaceuticals and Medical Devices Agency 
National Institute of Biomedical Innovation Readjustment of Facilities for Persons and Beneficiaries Organization Agriculture, Forestry and Fisheries Credit Foundations Information-Technology Promotion Agency, Japan 
National Agency for Automotive Safety & Victims' Aid 
Organization for Environment Improve ment around International Airport 
Maritime Disaster Prevention Center  WTO Secretariat' s report, pages 44-45, para. 51  
The Secretariat's report indicates that "/…/ The au thorities state that local government procedures are 
basically the same as those of those of the central government/…/".   47. Could Japan clarify what are the existing differences between local government procedures and central government, at least for instance as far as the Tokyo Metropolitan Government or the city 
of Osaka are concerned? 
 
RESPONSE 
 
Local government procedures, including those of th e Tokyo Metropolitan Government and the city of 
Osaka, are basically the same as those of the central government.  However, Japan's voluntary 
measures do not cover the local governments. 
 
WTO Secretariat' s report, page 45, para. 53 
 
The Secretariat's report introduces the Basic Guid eline for Public Procurement of Information 
Systems.  
 48. Could Japan explain how the basic Guide lines for Public Procurement of Information 
Systems adopted in March 2007 actually comply with article II.3 of GPA?  RESPONSE  
In accordance with the Basi c Guideline for Public Procurement of Information Systems, procurement 
of design and development of an information sy stem whose expenditure is over \500 million is 
encouraged to be divided in principle.   WT/TPR/M/243/Add.1 
 Page 165 
 
 
  The purpose of this guideline is to improve competiti on in procurement of information systems, which 
tend to be large-scale projects, by dividing the unit of  procurement, which would lead to, for example, 
prevention of the vender lock-in of the procurement.   This principle is applied to proc urements covered under the GPA. As this principle is applied to the 
large-scale projects of information systems, each c ontract value exceeds the GPA threshold even if it 
is divided.  Therefore, it doesn't contradict article II.3 of the GPA which prohibits the division of procurement 
with the intention of avoiding th e application of the Agreement. 
 
49. Which goods and services are covered by these guidelines?  
 Which goods and services are covered by these guidelines?  RESPONSE  
The Basic Guideline for Public Procurement of In formation Systems covers contracts such as the 
design and development of the Information Syst ems, the borrowing of hardware designed for 
operating the Information System.  
50. Does it apply to all levels of administra tion and to the entities covered under Annex 3 of 
Appendix I to the GPA?  
RESPONSE 
 
The Basic Guideline for Public Procurement of In formation Systems applies to central government 
entities which are listed in the Guideline and not to  the entities covered under Annex 3 of Appendix I. 
 Tenders are not centralized at the Ministry level in Japan, but split between the many branches of the 
Ministry in different prefectures. In certain sectors, such as ICT, Japan requires that contracts above a certain amount are split (IT Basic law).  
 
51. What concrete and systemic action will Japan undertake to ensure that such splitting practices 
are eliminated? 
RESPONSE 
 
Some Entities of the Central Government have bran ches in districts of Japan which have conducted 
procurement from the viewpoint of effective implemen tation of the procedure.  To be more precise, 
there is no intention of avoiding  the application of the GPA, and procurement at these branches is 
conducted in full compliance with related dome stic laws and the GPA, especially the non-
discrimination and national treatment principles.  WTO Secretariat' s report, page 45, para. 54 
 
The Secretariat' s report states that "/…/ The shar es of foreign suppliers in contracts resulting from 
open and single tenders, respectively, were 1.1% and 4.3% in 2009 (0.8% and 4.1% in 2008).  As of 
16 September 2010, 59,915 firms (of which 394 were either wholly or partially owned by foreigners) 
have central-government-wide unified qualificati on for participating in tendering contracts for 
manufacturing and sales of products."  WT/TPR/M/243/Add.1  
Page 166 
 
 
  52. Could Japan explain what it understands unde r "'wholly-owned by foreigners" and under 
"partially-owned by foreigners"?  RESPONSE  
"Firms wholly-owned by foreigners" indicates enterp rises that are owned fully by  foreign capital and 
"'firms partially-owned by foreigners" indicates enterprises roughly over 50 of whose stocks are 
owned by foreign capital. At any rate, these defi nitions are introduced for compiling statistics of 
procurement and there is no discrimination based on these definitions. 
 53. How is this related to the definition of the Action Programme? 
 
RESPONSE 
 
Though the question to Japan is not clear enough, as far as the qualifications for participating tender 
contract, there are no nationality requirements under the Action Program, as the overall Japanese 
government procurement system, including the Ac tion Program, is designed to ensure national 
treatment and non-discrimination.  In the Action Program"foreign s uppliers" and "foreign goods and 
services" are referred to not for the purpose of discriminating against them in the government 
procurement procedure but to make it clear that one of the Program's objectives is to further facilitate 
market entry equality between competitive domestic and "foreign" suppliers; and "foreign ratios" are 
referred in the annual report of "Japan's Govern ment Procurement" simply for the purpose of 
compiling statistics.  
WTO Secretariat' s report, page 46, para. 55 
 
According to the Secretariat's report, "/…/ Pr ocurement from SMEs is "encouraged" under the Law 
on Ensuring the Receipt of Orders from the Gove rnment and Other Public Agencies by Small and 
Medium Enterprises (enacted in 1966);  under the Law, the Government, local authorities and other 
public agencies must endeavour to expand procuremen t opportunities for SMEs, by way of inter alia, 
providing information on procuremen t plans. Nonetheless, no tendering is reserved exclusively for 
SMEs.  According to the authorities, these laws a nd regulations apply equall y to domestic and foreign 
SMEs."  54. Could Japan provide more details about the system to "encourage" procurement from SMEs?  
 RESPONSE  
Japan sets a "Policy of contracts by the Government and other public agencies" each fiscal year, based 
on the "Law on Ensuring the Receipt of Orders fro m the Government and Other Public Agencies by 
Small and Medium Enterprises". This Policy addresses measures and policies focused on providing 
opportunities for SMEs such as enhancing availab ility of government procurement information to 
SMEs, facilitating SMEs' procurements by estab lishing reasonable deadlines for delivery of goods 
and services as well as further simplification of appli cation procedure, and giving special attention to 
newly established or high-tech SMEs, generally gi ving consideration to the characteristics of SMEs. 
 
55. Could Japan confirm that this is not a system of "set asides"? 
 
RESPONSE 
 
Japan confirms that this is not a set aside.  It is  not legally binding and is not intended for setting an 
exclusive quota of contracts to SMEs.  WT/TPR/M/243/Add.1 
 Page 167 
 
 
   
56. Could Japan confirm that this system is not  discriminatory, as overall the Japanese legislation 
ensures that the program of support can be direct ed towards foreign SMEs (i.e. there are no legal 
obstacles for foreign SMEs to benefit from such a support programme)?   RESPONSE  
Japan confirms that foreign SMEs can benefit fro m laws and regulations on Government Procurement 
as well as domestic SMEs.  
57. Could Japan elaborate on the meaning of "must endeavour to  expand procurement 
opportunities for SMEs, by way of inter alia, providing information on procurement plans"? 
 
RESPONSE 
 
As explained in RESPONSE 54. 
 58. Could Japan clarify whether in addition to th e above it applies any other measures to expand 
procurement opportunities for SMEs?   
RESPONSE 
 There are no measures to expand procurement opportunities for SMEs except for the "Law on 
Ensuring the Receipt of Orders from the Govern ment and Other Public Agencies by Small and 
Medium Enterprises".  WTO Secretariat' s report, page 47, para. 57 
 
The Secretariat's report introduces the bodies responsib le handling the complaints about procurement 
procedures.   59. Could Japan provide a list of the independent  review bodies of each of the local governments 
covered by Japan's Annex 2 of Appendix I to the GPA? 
 
RESPONSE 
 
Please see the following list of the independent review bodies of the Sub-Central Governments 
covered by Japan's Annex 2. 
 
Entity Contact point Tel. Ext. 
<Sub-central Government Entities>   
Hokkaido Planning Section, General Affairs Div., Acc ounting Dept. 011(231)4111 32-217 
Aomori-ken International Affairs Div., Department of Environment and Public 
Affairs 017(722)1111 3578 
Iwate-ken General Affairs Div., A ccounting Dept. 019(629)5969 Direct 
Miyagi-ken Contract Div., Accounting Dept. 022(211)3332 Direct 
Akita-ken General Affairs Div., Gene ral Affairs Dept. 0188(60)1055 Direct 
Yamagata-ken Finance Div., Genera l Affairs Dept. 023(630)2043 Direct 
Fukushima-ken Auditing Div., Acc ounting Dept. 024(521)7556 Direct 
Ibaraki-ken First Accounting Div., Accounting Dept. 029(301)4822 Direct 
Tochigi-ken Management Div., A ccounting Dept. 028(623)3039 Direct 
Gunma-ken Payroll and Purchasing Div., 
Bureau of the Treasury 027(226)3811 Direct 
Saitama-ken General Affairs Div., Treasury Bureau 048(830)5719 Direct 
Chiba-ken Management Div., Civil E ngineering Dept. 043(223)3113 Direct 
Table (cont'd) WT/TPR/M/243/Add.1  
Page 168 
 
 
  Entity Contact point Tel. Ext. 
Tokyo-to General Affairs Section, Budgeting & Accounting Div., Financial 
Affairs Dept. 03(5388)2607 Direct 
Kanagawa-ken General Affairs Div., Treasury Bureau 045(210)6714 Direct 
Niigata-ken International Affairs Div., Depa rtment of Policy and Planning 025(285)5511 2212 
Toyama-ken Accounting Div., Accounting Dept. 076(431)4111 4491 
Ishikawa-ken Procurement & Premises Management  Div., General Affairs Dept. 0762(23)9049 Direct 
Fukui-ken International Affa irs Div., Citizens' Affair s Dept. 0776(20)0295 Direct 
Yamanashi-ken Management Div., Tr easury Dept. 055(223)1306 Direct 
Nagano-ken Accounting Div., Acc ounting Dept. 026(235)7352 Direct 
Gifu-ken Accounting Div., Treasury Bureau. 058(272)1111 3213 
Shizuoka-ken Finance Office, Genera l Affairs Dept. 054(221)2034 Direct 
Aichi-ken General Management Div., Office of the Treasury 052(961)2111 2916 
Mie-ken Budget Div., General Affairs Bureau 059(224)2120 Direct 
Shiga-ken Management Div., Acc ounting Dept. 077(528)4312 Direct 
Kyoto-fu Accounting Div., Bureau of Treasury Management 075(414)5408 Direct 
Osaka-fu Finance Division, Gene ral Affaires Dept. 06(944)0351 2111-2 
Hyogo-ken General Affairs Div., Public Works & Development Dept. 078(341)7711 4348 
Nara-ken Accounting Div., A ccounting Dept. 0742(22)1101 4703 
Wakayama-ken Procurement & Premises Management  Div., General Affairs Dept. 073(441)2217 Direct 
Tottori-ken Auditing Div., Accounting Dept. 0857(26)7429 Direct 
Shimane-ken Accounting Div., Acc ounting Dept. 0852(22)5908 Direct 
Okayama-ken Accounting Div., Acc ounting Dept. 086(226)7532 Direct 
Hiroshima-ken Property Administration office/Financial 
Management Office General Affairs and Planning Dept. 082(228)2169 Direct 
Yamaguchi-ken International Div., Planni ng & Promotion Dept. 083(933)2343 Direct 
Tokushima-ken Property Management Div., 
Planning and General Affairs Dept. 088(621)2063 Direct 
Kagawa-ken Accounting Div., Revenue and Expenditure Bureau 087(832)3631 Direct 
Ehime-ken General Administration Div ., General Affairs Dept. 089(941)2111 2310 
Kochi-ken Procurement & Premises Management Div., General Affairs Dept. 088(823)9788 Direct 
Fukuoka-ken Procurement & Premises Manageme nt Div., General Affairs Dept. 092(651)1111 2377 
Saga-ken Accounting Div., Acc ounting Dept. 0952(25)7191 Direct 
Nagasaki-ken Accounting Div., Accounting Dept. 095(824)1111 3213 
Kumamoto-ken Accounting Div., Treasury Bureau 096(383)1111 6325 
Oita-ken Accounting Div., Acc ounting Dept. 097(538)3668 Direct 
Miyazaki-ken Accounting Div., Treasury Bureau 0985(26)7203 Direct 
Kagoshima-ken International Affairs Div. 099(286)2111 2303 
Okinawa-ken Finance Div., Affairs Dept. 098(866)2095 Direct 
Sapporo-shi Contract Management Sect ion, Property Custody Dept., Finance 
Bureau  011(211)2152 Direct 
Sendai-shi Contract Section, Finance Bureau 022(214)8147 Direct 
Chiba-shi Contract Section, Finance De pt., Finance Bureau 043(245)5088 Direct 
Yokohama-shi Coordination Unit, Contract Div., Finance Dept. 045(671)3805 Direct 
Kawasaki-shi Contract Section, Prope rty Administration Dept. 044(200)2111 2097 
Nagoya-shi Supplies Section, Finance Di v., Finance Dept. 052(972)2349 Direct 
Kyoto-shi Supplies Section, Finance and Budget  Div., Financial Bureau 072(222)3311 Direct 
Osaka-shi Procurement Dept., Property Manageme nt Div., Finance Bureau 06(6208)8271 Direct 
Kobe-shi Contracts Div., Finance Dept. 078(322)5146 Direct 
Hiroshima-shi Contract Dept., Finance Bureau 082(504)2083 Direct 
Kitakyushu-shi Contracts Office, Admi nistration Section 093(582)2545 Direct 
Fukuoka-shi Contact & Acquisitions Section, Fi nance Dept. Finance Bur eau 092(711)4181 Direct 
 
The existing CHANS system does not seem to be ef fective enough since the procuring entity does not 
have to abide by the recommendations made. Forei gn suppliers being disproportionally small in the 
public procurement market, this situation problem s for smaller players in the public procurement 
market,  since they do not have many opportunities to make up for a lost bid.  
 60. What concrete and systemic actions will Jap an undertake to transform this bid-challenge 
system into a real remedy system, and extend it to local government level?  RESPONSE  
The central government and other government-relate d entities (incorporated administrative agencies, 
etc.) have a government procurement challenge sy stem (CHANS) for review ing specific complaints  WT/TPR/M/243/Add.1 
 Page 169 
 
 
  on government procurement based on the GPA. Japan  recognizes that it is working appropriately as a 
remedy system and will continue to promote this system.  The local governments which are covered by the GPA have set up its remedy system in line with the 
provision of the GPA.  
 
(viii) Standards, technical regulations, an d sanitary and phytosanitary measures 
 (a) Standards and technical regulations 
 According to recent press information, the Japan ese government is launching a campaign to have 
Japanese technology adopted as international standa rds e.g. advanced medical technologies, next 
generation vehicles, energy management (smart grid, accumulators), robots, etc. This seems to include 
the promotion of Japanese Intellectual Property Rights in "strategic areas".  
 
61. Could Japan inform what are the mechanisms to ensure that these international standards will 
be drafted based on performance rather than  design or descriptive characteristics?  
 As a condition of authorisation and market introduc tion in Japan satisfactory evidence of the clinical 
safety and performance of a medical device is requi red. Information from the Japanese Ministry of 
Health, Labour and Welfare (MHLW) indicates that, in the case of a majority of medical devices 
subject to pre-market authorisation and for which clinical investigation data are required, data 
gathered outside Japan are accepted as primary clini cal data. However, in those cases where such data 
are not accepted, significant additional delays and expense are incurred by having to conduct a new 
clinical investigation in Japan.   RESPONSE  
Japan recognizes that the appropriate international standards in strategic areas are important for 
enhancing companies' competitiveness and management  ability for protection and utilization of IPs.  
Whenever appropriate, Japan has based its technical regulations, on performance rather than design or 
descriptive characteristics in accord ance with TBT Agreement and w ill try to continue to do so. 
 
62. Could Japan specify what measures have been ta ken in the context of the 5 year Strategy for 
Creating Innovative Drugs and Medical devices to ac celerate and streamline the approval procedures 
for pharmaceutical products and medical devices?  RESPONSE  
The Government of Japan is working systematically  to increase the number of review staff for new 
drugs and medical devices in the Pharmaceutical s and Medical Devices Agency to resolve drug and 
device lag based on the "5-Year Strategy for Crea tion of Innovative Pharmaceuticals and Medical 
Devices" formulated in April 2007. 
 
63. What type of additional measures does Jap an intend to take to shorten the medical 
certification process and reduce the 'device lag'  of medical equipment marketed in Japan? 
 
RESPONSE 
 In principle, all medical devices of Class II will ha ve certification standards set by March 2012 so that 
they are shifted to "Ninsho" items from "Shonin" items.  WT/TPR/M/243/Add.1  
Page 170 
 
 
  64. Supplier declaration of Conformity (SDoC) is a tool for simplifying the conformity 
assessment process. Under the SdoC the supplier hi mself provides written assurances of conformity to 
all required Japanese technical regulations for a ma rket.  Would Japan be prepared to introduce a 
Supplier's Declaration of Conformity (SdoC) at least for certain categories of medical devices? 
 
RESPONSE 
 
Class I medical devices are subject to self-declaration of conformity. A conformity assessment by the Government of Japan or registered certification bodies is not required. 
 
WTO Secretariat's report, page 49, para. 63 
 
The Secretariat's report states that "/…/ Since Oc tober 2007, regulatory impact assessments have been 
made compulsory for the adoption of regulation through a law or cabinet order./…/". 
 
65. Could Japan explain who is responsible for th e impact assessment: is it the regulator or an 
independent body and what is the purpose of the impact assessment?  
RESPONSE 
 The ministries that implement ex-ante evaluation of  regulations bear all the responsibility for their 
own evaluations. The purposes of the ex-ante evaluation of regulatio ns are to improve the quality of the regulation 
through the evaluation and to ensure accountability to the public.   
66. In addition, who assesses th e quality of the assessment?  
 
RESPONSE 
 
The Ministry of Internal Affairs and Communicat ions checks the evaluations that each ministry 
conducts in order to ensure their quality. 
 67. Can a draft regulation be abandoned or bl ocked as a result of an impact assessment? 
 
RESPONSE 
 
The ex-ante evaluation system in Japan does not have a mechanism to abandon or block a draft 
regulation as a result of an evaluation.   
Voluntary standards 
 
WTO Secretariat's report, page 49, para. 65  
According to the Secretariat's report, "/…/ about  48% of JIS are comparable to international 
standards, and 96% of these were aligned with inte rnational standards in 200 9 (no change since 2008) 
/…/. 
 
68. Could Japan clarify what the term "compa rable to international standards" means? 
 
RESPONSE 
 
This means "identical to international standard s "or "modified from international standards".   WT/TPR/M/243/Add.1 
 Page 171 
 
 
   
69. Are Japanese Industrial Standards (JIS) included in this calculation "fully or partially aligned 
with international standards" and, if the latte r is the case, could Japan provide statistics on the 
percentage of those JIS standards which are b ased only partly on international standards? 
 RESPONSE  
JIS identical to international standards is 40%. JIS modified from international standards is 56%.  The 
degree of correspondence of the standards with in ternational standards is in accordance with the 
definition of ISO/IEC Guide 21-1. The rate of cons istency (%) is obtained using the "number of JIS 
with corresponding international standards" as a parameter. 
 70. What concrete measures does Japan intend to take to foster and facilitate alignment with 
international standards?  RESPONSE  
As the result above with the enforcement of th e WTO TBT Agreement in January 1995, Japan has 
been further promoting consistency with international standards in or der to respond to demands in and 
outside the country. Japan will continue to promot e consistency with international standards.  
 
71. Has Japan any plans to increase the share of a lignment of JIS with international standards? 
 
RESPONSE 
 
With the enforcement of the WTO TBT Agreemen t in January 1995, Japan has been further 
promoting consistency with international standards in order to respond to demands in and outside the 
country.  Japan will continue to promote c onsistency with international standards. 
  72. Could Japan inform where the exporters/impor ters can find the Japanese regulations related to 
the certification of toys (for children less than 7 years old)?  RESPONSE  
Japan has no domestic regulations regarding the cer tification of toys focused only on children less 
than 7 years old, but the regulations for toys are to  ensure children's safety.  Japan has some laws and 
regulations, such as the Food Sanitation Law and Elect rical Appliances and Material Safety Act. In 
cases where young children (under the age of 6 year s) put toys in their mouth or in cases where 
children (regardless of their age) play with electr onic toys without accurate knowledge for their use, 
chemical substances and electronic troubles could be  a hazard to their lives and health. Japan's laws 
and regulations are stipulated to prevent such accidents.  The Food Sanitation Law stipulates specifications and standards for the designated toys in Section 4 -
Toys of the Ministry of Health and Welfare Notice No. 370 (December 28, 1959). 
 The details are available in Japanese at http:// www.mhlw.go.jp/topics/bukyoku/ iyaku/kigu/dl/5.pdf  
"Designated toys" refers to toys designated by th e Minister of Health, Labour and Welfare as those 
that may pose health hazards to young children (unde r the age of 6 years) through contact therewith.  
 
WTO Secretariat' s report, page 50, para. 68 
 
The JAS law (the Law Concerning Standardization and Proper Labelli ng of Agriculture and Forestry 
Products) does not allow third countries' organic pr oducts to be labelled with Japan Agricultural WT/TPR/M/243/Add.1  
Page 172 
 
 
  Standards (JAS) logo under a control body recognised by the third country prior to being exported to 
Japan. In order to be able to attach the JAS logo in  the third country prior to exports the producer (or 
processor or distributor) needs to be certified by a Registered Certifying body or Registered Overseas 
Certifying body. This rule also applies to countri es to which Japan has granted organic equivalency.  
 73. Could Japan explain why third countries, wh ich have obtained organi c equivalency in Japan, 
are not allowed to attach JAS logo in their country  under their own control bodies prior to exports? 
 RESPONSE  
According to Articles 15-2 (1) and 18 of the Law Concerning Standardisation and Proper Labelling of 
Agricultural and Forestry Products, no one except certif ied JAS operators is allowed to attach the JAS 
logo to organically produced plants and processed products thereof.   
74. In Japan's view, what is the added value of  organic equivalency recognition by Japan for a 
third country?  
RESPONSE 
 
Regarding organically produced plants and processed  products thereof (hereinafter referred to as 
"organic foods"), Japan recognises such countries that have equivalent systems to the organic JAS 
system. The advantage of recognised countries is that orga nic foods produced and/or processed in accordance 
with their systems are allowed to be named as "organic" in Japan.  (a) Sanitary and phytosanitary measures   WTO Secretariat's report, page 52, para. 73 
 
The Secretariat's report indicates that there have be en several revisions to Japan's food specifications 
and standards, including changes to maximum resi due limits (MRLs) for pesticides and amendments 
on food additives.   Many food additives which are commonly used worldw ide remain prohibited in Japan and therefore 
different types of processed food cannot enter th e Japanese markets. These  additives are already 
recognised as being safe by international sta ndard setting bodies, such as FAO/WHO Expert 
Committee on Food Additives (JECFA). In 2002, Japan  committed itself to study a list presented by 
the EU of 46 priority food additiv es, however currently 19 additives from this list are still pending 
approval. Meanwhile, more and more food additives are authorised worldwide.   75. Could Japan inform how is it contemplati ng a process of convergence on these limits allowed 
in food, towards the levels generally accepted by  the international standards setting bodies?  
 76. Does Japan plan to accelerate the approval pr ocedures in place for food additives that are 
widely used around the world and considered safe but that are still subject to lengthy and cumbersome 
approval procedures in Japan?  
 
RESPONSE 
 
(75, 76)  In order for any substance to be approved as a food  additive, the relevant laws require that the 
Food Safety Commission (FSC) conduct health ri sk assessment in response to a request for 
consultation received from the Ministry of Health , Labour and Welfare (MHLW), which subsequently  WT/TPR/M/243/Add.1 
 Page 173 
 
 
  carries out deliberations to draw up relevant standards. These legal procedures are steadily done based 
on international standards, taking into considerati on the latest information from in and outside Japan. 
 Of the 46 priority food additives presented by the EU, 15 substances are pending approval. Japan is 
making the utmost efforts to exped ite the approval procedure in place. 
 
A government conference on deregulation is now discussing whether it is possible to simplify and accelerate the approval procedure for the 15 substan ces. Their policy recommendations are scheduled 
to be presented at the end of March 2011.  WTO Secretariat' s report, page 54, para. 78 
 
The Secretariat's report indicates that Japan current ly imposes import prohibitions on beef and poultry 
from various countries to prevent the spread of BSE and avian flu. Some main trading partners are 
allowed to export beef to Japan, and others are not, even if the countries carry the same OIE-
determined risk status.  
 77. Could Japan explain how it ensures this amounting to discriminatory treatment?  
RESPONSE 
 
For importation of beef and beef products into  Japan from a country where a BSE outbreak has 
occurred, the Ministry of Agri culture, Forestry and Fisheries (MAFF), from an animal health 
standpoint, and the Ministry of Health, Labour and Welfare (MHLW), from a food safety standpoint: 
  (1) analyse relevant data and info rmation of the country concerned, 
 (2) conduct on-site visits for verification of the data and for additional information, if 
necessary, 
 (3) request the Food Safety Commission (FSC) conduct risk assessment   All relevant data and informati on, including the OIE recognition of BSE status for the country 
concerned, will be provided to the FSC at the time of the request for risk assessment. 
 
78. Could Japan state when it would allow the imports of beef and other products from EU Member States and thus apply the same treatment as for other WTO members?   
RESPONSE 
 For importation of beef and beef products into  Japan from a country where a BSE outbreak has 
occurred, the Ministry of Agri culture, Forestry and Fisheries (MAFF), from an animal health 
standpoint, and the Ministry of Health, Labour and Welfare (MHLW), from a food safety standpoint: 
  (1) analyse relevant data and info rmation of the country concerned, 
 (2) conduct on-site visits for verification of the data and for additional information, if 
necessary, 
 (3) request the Food Safety Commission (FSC) conduct risk assessment   All relevant data and informati on, including the OIE recognition of BSE status for the country 
concerned, will be provided to the FSC at the time of the request for risk assessment. 
 As soon as all relevant data and information require d for risk assessment by the FSC are provided, the 
above-mentioned Ministries will start the procedure as described in (1) above.  WT/TPR/M/243/Add.1  
Page 174 
 
 
  79. Could Japan confirm and explain how it effec tively and correctly applies regionalisation for 
importing countries of poultry products so that tr ade can take place under the rules set down by the 
OIE concerning avian influenza? 
 
RESPONSE 
 
Japan has already applied "regiona lization" to avian influenza, taking into account the OIE code. 
Japan has already determined animal health require ments for the application of "regionalization", and 
has been discussing technical issues with countries th at requested the application of regionalization of 
avian influenza.  
(b) Labelling and packaging requirements 
 WTO Secretariat's report, page 55-56 
 
The Secretariat's report describes Japan' s labelling and packaging requirements.  
 There have been many cases when spirit brands, in cluding Scotch Whiskies, were sold in Japan 
without the original manufacturer's lot codes as they were purchased in third countries and re-
exported to Japan. 
 80. Is Japan prepared to consider introducing new legislation requiring the manufacturer's lot 
code to be on imported goods and th ereby forbid its removal/effacement? 
 
RESPONSE 
 Japan is not considering introducing new legislation requiring the manufacturer's lot code to be on 
imported goods and thereby forbidding its removal/effacement.  
(vi) Export promotion schemes 
 
WTO Secretariat' s report, page 59 
 
One of the objectives of the new "growth strategy"  of the GoJ is to foster Japanese companies' 
overseas business development. To achieve this obj ective, financial support from the Government 
(through its financial agencies such as JBIC) is granted to Japanese companies when they want to 
develop their operations overseas. A Cabinet Order has expanded the scope of eligible projects by 
JBIC in industrial countries by including proj ects listed below along with the nuclear power 
generation and inter-city high-speed train projects, wh ich is already set forth in the Cabinet Order. 
JBIC can now support Japanese firms' overseas busin ess development in industrial countries in the 
infrastructure projects in which Japanese firms have  strengths, within its role of complementing 
financing provided by private financial institutions . The expanded financial ope ration is expected to 
lead to maintaining or improving the intern ational competitiveness of Japanese industries. 
 81. How the objective of promoting the inte rnational competitiveness of Japanese companies 
relates to the overall objective of ensuring a fair competitive environment and a level-playing field for 
all companies, including those from third countries, at international level? 
 
RESPONSE 
 
Japanese Government and related financial ag ency has been supporting Japanese companies 
considering WTO compatibility. For example, since the Cabinet Order 'Revising Part of the Order for  WT/TPR/M/243/Add.1 
 Page 175 
 
 
  Enforcement of the Japan Finance Corporation Act' on November 2010 was implemented, JBIC 
became able to help Japanese firm s make inroads into developed countries overseas, get involved in 
infrastructure projects, in an area Japanese firms excel in such as majo r city railway construction, and 
complement financing provided by private financial institutions.  (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
 (ii) Subsidies and other financial assistance  WTO Secretariat' s report, page 62, para. 115 
 
The Secretariat's report states "With a view to  stimulating the domestic economy, the Japanese 
government introduced subsidies for purchasing new e nvironmentally friendly vehicles in April 2009.  
The scheme was available to qualifying vehicles irr espective of origin; /…/ data provided by the 
authorities indicate that approximately 43% of im ported vehicles are eligible for the subsidy. " 
 
82. While sales figures on the Japanese market ha ve dropped by 10 %, the sales of cars imported 
from EU dropped by 15% in the same period. In addition, the absence of a common test cycle for 
measuring fuel efficiency results in a compe titive disadvantage for cars imported from EU, as the 
scrapping scheme applied by Japan is linked to th e national 2010 environmental standards for which 
the Japanese test cycle is  used. Could Japan provide statistical information about the impact of the 
scheme in terms of sales of car and from which origin?  
 83. Furthermore, could Japan also comment the figures in the light of the comments above?  
RESPONSE 
 (82, 83) Recent data indicates that 43% of all impor ted cars sold in Japan we re eligible for the eco-
friendly vehicle purchasing subsidies. While most of  those vehicles were European manufactures, all 
cars that met the stipulated criteria were eligible.   The subsidy scheme for environmentally-friendly ve hicles (EFVs) was intended, from the perspective 
of protecting the environment and stimulating the economy, to encourage consumers to purchase 
EFVs by giving a subsidy for (1) a scrap incentive and (2) consumers who were purchasing a new EFV without an older vehicle to replace.   The evaluation of whether or not a vehicle met the requirement for the subsidies for EFVs 
with regard to fuel efficiency and air pollutant em ission was made based on officially approved values 
regarding environmental performan ce, which were calculated and a pproved through testing for each 
type designation.   This method of evaluation was applied indiscr iminately, whether the vehicles were Japanese 
or foreign. Also, there were both Japanese and forei gn vehicles that did not have official values, as 
they did not have the appropriate type designations . The subsidy scheme for EFVs was not applicable 
to these vehicles, but whether the vehicle was Japanese or foreign did not affect the applicability. Thus, the subsidy scheme for EFVs was a non-discriminatory measure.  In addition, in order to increase the number of imported vehicles qualified for the program from the 
standpoint of expanding options for achieving an eco -friendly society while stimulating the economy, 
vehicles imported under *the PHP were decided to  be covered by this program if they met the 
requirements. This measure was announced a nd took effect on the 19th of January 2010. 
 WT/TPR/M/243/Add.1  
Page 176 
 
 
  *The PHP (Preferential Handling Procedure) was in troduced in 1986 in response to the request from 
the U.S. for preferential treatment for imported vehicles whose annual number of sales is 2000 or less.   (iii) State-owned enterprises, corporatization, and privatization  WTO Secretariat' s report, pages 63 -64 
 
The Secretariat's report outlines Japan's policy conc erning State-owned enterprises, corporatization, 
and privatization. 
 84. Could Japan elaborate on how it ensures the fundamental rights at work as embodied by the ILO's 2008 Declaration on Social Justice for a Fair Globalisation and the 8 core ILO Conventions are 
respected by state-owned enterprises?  RESPONSE  
Employees in Japan, including those of state-owned enterprises, are basically entitled to fundamental 
rights at work through related legislation, incl uding the Labour Standards Law, the Labour Union 
Law and the Law concerning Labour Relations of Specified Independent Administrative Institutions. 
The effectiveness of this legislation is ensured by administrative organizations such as the Labour 
Standards Inspection Offices and the Labour Re lations Commissions, which have locations 
nationwide.   85. How will the Government of Japan, through its participation in Enterprise Turnaround Initiative Corporation (ETIC) ensure a level-playi ng field for all civilian aircraft companies on the 
Japanese market, including for European ones?  
 
RESPONSE 
 
The Ministry of Land, Infrastructure, Transport a nd Tourism (MLIT) believes that, JAL, supported by 
public funds, shouldn't be involved in indiscrimin ate fare reductions, not only because it would 
damage the level-playing field, but also because it could threaten JAL's rehabilitation in that such 
short-term fare reductions could cause a scramb le for passengers and hinder the improvement of 
structural problems.  The MLIT, therefore, issued a public notice to JAL on February 5 in 2010 saying that  the MLIT will 
carry out the instruction and supervision of JAL so that JAL's rehabilitati on, though supported by 
public funds, would not disturb the level-playing fi eld between various airlines or the structural 
reform of JAL. In line with this idea, the MLIT is  dealing with the problem in an appropriate manner. 
 
(iv) Intellectual property rights 
 
WTO Secretariat's report, page 65, para. 130  
 
86. Could Japan provide data on whether th e exports of well-known Japanese regional food 
brands (Kobe beef, Yubari melon etc. ) to other markets are increasing? 
 
RESPONSE 
 
There is no official data on the resu lts of particular private businesses. 
  WT/TPR/M/243/Add.1 
 Page 177 
 
 
  The EU notes that GIs for wines and spirits are prot ected in Japan under the standard for indication in 
relation to geographical indications (in accordance  with Article 86-6 of the law concerning Liquor 
Business Associations and Measures securing Revenue from Liquor Tax Act).    87. Could Japan indicate whether protection of wines or spirits is subject to any specific 
designation or any other procedural requirements? If so, which ones?  
 88. Are such designation or procedural require ments applicable to Japanese goods and/or to 
foreign goods?  RESPONSE  
(87, 88) GIs for Wines and Spirits are designated in Japan by the Commissioner of the National Tax 
Agency under the following fundamental principles:   
1) The Commissioner of the National Tax Agency designates places where wines and 
spirits are produced that possess specifi c characteristics in quality or a good 
reputation and whose place name indicates specific characteristics in quality or a 
good reputation; 
2) The place of origin of wines and spir its is protected as valuable in Japan; 
3) The name of a place is an administrative area (city, prefecture, etc.) or indicates an 
area which is generally known as a specific area (ex. the former name of place). 
 GIs for wines and spirits in the territories of ot her WTO Members are protected according to the 
provisions of Article 23 of the TRIPS Agreement.  
89. Could Japan inform whether it intends to re view the Liquor Tax Law to further define the 
categories of spirits?  
RESPONSE 
 
There is no plan to review the Liquor Tax Law to fu rther define the categories of spirits at present. 
 
(v) Regulatory reform 
 WTO Secretariat' s report, page 68, paras 141 and 143 
 The EU welcomes the new regulatory reform progra mme Basic Policy for Regulatory Reform, issued 
on 18 June 2010 by the Government of Japan, in orde r to review regulations  concerning environment 
and energy, medical and elderly care services, a nd agriculture. On 9 November 2010 Japan adopted 
the Basic Policy for comprehensive economic partnership.  90. Could Japan explain what has been the im pact of the Basic Policy for comprehensive 
economic partnership on its regulat ory reform program set out by the Basic Policy for Regulatory 
Reform?   
RESPONSE 
 
As the Basic Policy on comprehensive economic pa rtnership (9 November 2010) was adopted after 
"policy on regulatory and institutional reform" on 18 June 2010, it does not have any influence. 
However, based on the Basic Policy on comprehens ive economic partnership, the Government of 
Japan starts the consideration at the Subcommitt ee on Regulatory and Institutional Reform under the WT/TPR/M/243/Add.1  
Page 178 
 
 
  Government Revitalization Unit (GRU) and will deci de on concrete plans to address several possible 
items by the end of March 2011.  
91. Could Japan provide the details of the GRU' s work program, time table and organizational 
chart?  
RESPONSE 
 
The Subcommittee on Regulatory and Institutional Refo rm was established under the GRU in order to 
examine regulations and systems. The Subcommittee  has had the deliberations on the latter half of 
FY2010 since October 2010. Based on the investigation and report by the subcommittee, reform items 
will be authorized as the cabinet decision on Ma rch 2011 after consultation/ discussion with each 
ministry. The organizational chart is as follows;  
 
 (vi) Competition policy   
 
     
 
    
 
 
(b) Exemptions from the AMA prohibition of cartels 
 WTO Secretariat' s report, page 69, para. 148 
 The Secretariat's report states that "/…/On 18 Ju ne 2010, the Government mandated the JFTC to 
review the validity of the exemption of the Japan Agricultural Cooperatives from the AMA during 
FY2010."  92. Could Japan provide an update on the status  of this review and forthcoming prospects? 
 
RESPONSE 
 
The review of the exemption from the Antimonopol y Act (AMA) regarding agricultural cooperatives 
is described in "Policy dealing with regulatory and institutional reform" endorsed by the Cabinet on 
18 June, 2010.  The Japan Fair Trade Commission (JFTC),in coordination with the Ministry of 
Agriculture, Forestry and Fisheries (MAFF), has been  examining and analyzing the current status as 
to whether it is probable that the sound development of  Japanese agriculture is inhibited.  On the basis 
of this policy, the JFTC, in coordination with MAFF, will reach a conclusion on the review of the 
exemption from the AMA regarding agricultural cooperatives by the end of March 2011.  Government Revitalization Unit  
   Chair: Prime Minister 
   Minister responsible  for Regulatory Reform 
 
The Subcommittee on Regulatory and Institutional 
Reform
WG 
WG 
WG  WT/TPR/M/243/Add.1 
 Page 179 
 
 
  IV. T RADE POLICIES BY SECTOR  
 (1) I
NTRODUCTION  
 
(2) A GRICULTURE  
 
(i) Structure  
In March 2010, the Subcommittee on Regulatory and Institutional Reform was established under the 
Government Revitalization Unit. It has three wo rking groups which are the (1) green innovation 
working group (environment and energy), (2) life in novation working group (medical and elderly care 
services), and (3) agriculture working group.  
 93. Does the agriculture working group al so study agricultural state trading? 
 
RESPONSE 
 Items examined in the Agriculture, forestry and regional development WG include state trading-
related matters.  
WTO Secretariat's report. page 76, para. 3 
 The Secretariat's report states "The Basic Law on Food, Agriculture and Ru ral Areas continues to 
provide the framework and policy direction for agricu lture;  implementation of the Law is through the 
revised Basic Plan for Food, Agriculture and Rural Ar eas, adopted in March 2010.  Salient features of 
the current plan include:  achieving a higher self-su fficiency ratio;  encouraging consolidation of 
production, processing, and distribution of agricu ltural produce with a view to increasing value-
added;  improving food safety;  participating in international standard-setting;  and establishing 
income support regardless of the size of farms."  94. Could Japan state which method it uses to calculate food self-sufficiency and why that 
particular method has been chosen?  RESPONSE  
MAFF calculates the total food self-sufficiency ra tios on a calorie basis and on a production-value 
basis as well as on the self-sufficiency ratio of each ag ricultural product calculated on a weight basis.   
 
The calorie-based food self-sufficiency ratio is the in dicates energy as basic nutri ents essential for life. 
 The value-based food self-sufficiency ratio is the indicator that evaluates more proportionally the 
production activities of comparatively low-calorie ag ricultural products such as vegetables and fruits. 
 (4) E
NERGY AND UTILITIES  
 WTO Secretariat's report, page 84 
 
Japan is planning to expand the existing feed-in-tari ff system which is limited to photovoltaic.  The 
major points of current discussions are the type of energy to be purchased, from whom, at what price 
and how burden will be shared.   
 95. What are the recent developments of the discussions? What is the timeframe towards the 
introduction of the new scheme? WT/TPR/M/243/Add.1  
Page 180 
 
 
   
RESPONSE 
 
Japan started the feed in tariff program in Novemb er 2009. With reviewing the work of the current 
system, Japan is now consideri ng the further expansion.   
 
(5) S ERVICES  
 
(i) Financial services  
WTO Secretariat's report, pages 85-86 
 
Kyosai are not included under the much stricter re gulatory oversight of the Financial Services Agency 
(FSA).  
 
96. Could Japan inform how this situation (i.e . to apply different regulatory frameworks) is 
compatible with the Japanese GATS commitment?  
RESPONSE 
 The kyosai cooperative societies are mutual-aid or ganizations established by people in the same 
geographical area or field of work. The member s invest their own capital and use the insurance 
services that the organization provides. These servi ces form part of a broad range of mutual-aid 
services available to the members (joint ventures, loans, welfare services, etc.). Because of their 
unique nature they need to be regulated separately,  and each of them operates within the scope of the 
law and under the supervision of the relevant government authorities. 
 In addition, mutual-aid activities being conducted by  agricultural cooperative societies and consumers' 
cooperative societies are regulated under the Agricultural Cooperatives Act and the Consumer 
Cooperatives Act, which have provisi ons equivalent to those applied to private insurers, so that 
soundness of the business and consumer protection ar e guaranteed by prudent supervision such as 
careful reviews on the method for calculating the mutual aid premiums and the liability reserve.  
WTO Secretariat' s report, page 85, para. 35 
 
The Secretariat's report states that "The financial se rvices sector in Japan is largely open to foreign 
participation./…/".  
 97. There are overlapping inspections of Foreign Banks by the Financial Service Agency (FSA) 
Securities and Exchange Surveillance Commission, Tokyo Stock Exchange, Japan Securities Dealers 
Association; Ministry of Finance and Bank of Japan. Foreign Banks have to maintain special staff in 
order to cope with this task. What type of measure s, if any, does the Government of Japan intend to 
take to reduce the burden borne by fo reign banks due to this overlap? 
 
RESPONSE 
 
Inspections of financial institutions (not limited to foreign banks and incl uding Japanese institutions) 
are conducted by the following organisations:    (a) the Japanese government through supe rvisory regulators such as the Financial 
Services Agency and the Securities a nd Exchange Surveillance Commission;  WT/TPR/M/243/Add.1 
 Page 181 
 
 
   (b) the Bank of Japan, based on the contr acts with financial institutions (those are 
referred to as on-site examinations); and 
 (c) self-regulatory organisations (SROs) such as the Japan Securities Dealers 
Association, which are authorized under the Financial Instruments and Exchange Act. 
 
These organisations have been c onducting inspections effectively a nd efficiently through enhancing 
mutual coordination. In particular, in order to re duce the burden on financia l institutions, coordination 
has been made not only among the regulators themselves but also among the regulators, the Bank of Japan and the SROs as to which financial instituti ons are to be inspected and the timing of the 
inspections. These inspecting agenci es are committed to improving the efficiency and effectiveness of 
the inspections. 
 
Insurance 
 WTO Secretariat's report, pages 89 – 90, paras 47 – 49  
 
Japanese authorities have decided to allow Foreign Banks to assume insuran ce activities. But these 
companies have to submit applications for an y new "product" they launch into the market. 
 98. Could Japan state whether it intends to simplify respective legislation?  
 
RESPONSE 
 
Regarding the examination of insurance products, Japa n has been consistently endeavouring to ensure 
flexibility of the process by using (a) the authori sation and (b) the notification with examination 
concurrently. The notification system has alread y been introduced in many wholesale insurance 
products, and the authorisation is required only in retail products, in wh ich stronger consumer 
protection is needed.  Therefore, it is difficult to eliminate the requi rement for prior authorisation and introduce the 
notification system for retail products, from the perspective of consumer protection.  
 
However, in order to further streamline the pro cess, the Financial Services Agency is currently 
considering the possibility of contracting the peri od required for the authorisation process. Japan will 
continue to strive to ensure e fficient and effective response.   
 
(ii) Telecommunications 
 
WTO Secretariat's report, page 90 
 
Foreign investors are deterred from entering the Japanese telecoms market because of the anti-
competitive behaviour of the dominant players there and the fact that the government acts as both the 
regulator and major share holder in the leading tel ecoms provider. More generally, there are corporate 
practices and market rules that inhibit foreign acquisition of Japanese firms (such as insufficient 
financial disclosure practices, cross-holding of  shares among companies belonging to the same 
business grouping and a low proportion of publicly tr aded common stock relative to total capital in 
many companies).   
99. How does the Government of Jap an intend to address these concerns? 
 WT/TPR/M/243/Add.1  
Page 182 
 
 
  RESPONSE 
 
In Japan, regarding the dominant players, base d on the Designated Telecommunications Facilities 
System, there are separate restrictions applied to fixed telecommunications markets, designated 
Category I telecommunications facilities, and m obile telecommunications markets, designated 
Category II telecommunications facilities.   Currently NTT East and NTT West, as Category I designated telecommunications facilities, have 
service regulations obligating notification of user ch arges, etc., interconnection rules such as setting 
interconnection charges that properly reflect the co st, as well as restrictions on particular acts to 
prevent unreasonable and discriminatory treatment, applied to them as a unit.  NTT Docomo, KDDI and Okinawa Cellular, must follow the rules for dr awing up and releasing interconnection agreements 
applied to Category II designated telecommunica tions facilities. Furthermore, for NTT Docomo, 
action restrictions for Category I designated te lecommunications facilities are applied as well.  
 
Other than clearly dividing the legal responsibilities and authorities between the Ministry of Internal 
Affairs and Communications (MIC) as a regulatory body  and the Ministry of Finance as a shareholder 
of NTT, MIC also exercises its authority followi ng the requirements and measures which are clearly 
stated in the Telecommunications Business Law. 
 
And as for establishing, altering,  and abolishing regulations, Japan  is now further promoting the 
reflection of opinions from users and operators, as we ll as the transparency and predictability of the 
process by conveying public comments, etc., in order to  develop an environment of fair and equitable 
competition.  
The Ministry of Internal Affairs and Communications continues to be the regulatory authority 
responsible for the sector. In order to promote competition in the telecommunications sector, GoJ sets out a policy to establish an independent regulatory authority.   100. Will Japan set up a regulatory body independent from the Ministry of Internal Affairs and 
Communications (MIC)? 
 
RESPONSE 
 
The Ministry of Internal Affairs and Communications  (MIC) is legally and structurally independent 
and, as stipulated in Article 5 of the Telecommunica tions Reference Paper of the Fourth Protocol to 
the GATS, it is ensured that MIC is separate fro m, and not accountable to, any telecommunications 
services suppliers. Taking into account the current situation of the telecommunications sector in 
Japan, fair competition is properly ensured a nd significant progress has been made in the 
telecommunication market under the current administra tive structure. Thus, Japan is not planning to 
review the current governmental structures related to telecommunications.  
 
Furthermore, the description given above read ing "In order to promote competition in the 
telecommunications sector, GoJ sets out a policy to establish an independent regulatory authority." 
seems to be a misinterpretation of the facts. 
101. Is there any plan to review the restructuring of NTT?  WT/TPR/M/243/Add.1 
 Page 183 
 
 
  RESPONSE 
Regarding the status of organization of NTT East  and NTT West, Japan is currently introducing a 
system to implement functional separation of bottleneck facilities owned by sectors of NTT East and 
NTT West.  
In the future, Japan will have comprehensive evaluations within the first 3 years of the 
implementation of the system, and if an environmen t for fair competition is not sufficiently ensured, 
we need to discuss measures such as strengthe ning firewall regulations, including structural 
separation/separation of equity links, to cr eate an environment of fair competition. 
102. What is MIC's frequency allocation plan for digital dividends which will be created in the 
transition to terrestrial digital TVs? 
RESPONSE 
Regarding the vacant frequencies which will be create d in the transition to terrestrial digital TVs in 
July 2011, Japan is planning to introd uce the following plans from this year: 
i. "Broadcasting" (multi-media mobile broadcasting, etc.) 
ii. "Self-owned communications" (to make vi sual information transmission possible in 
the case of a disaster, etc.) 
iii. "ITS (Intelligent Transportation Systems)" (to reduce the number of traffic accidents, 
etc.) 
iv. "Telecommunication" (mobile phones, etc.) 
Digital TV Broadcast
（13～52ch）
90 108 170 222 710 77090～108MHz, 170 ～222MHz
（1～3ch, 4～12ch）
470
Self-owned communications
(to preserve security and safety) 
18MHz Wide 35MHz Wide 17MHz WideBroadcasting (multi- med ia 
mo b ile 
br oadcasting, etc.)VHF Band 【It will be able to use from 25 July 2011 】
108 170 205 222170～222MHz 90～108MHz
90
Telecommunications
(mobile phones, etc.)

f
a
f
a
10MHz Wide 40MHz WideITSUHF Band 【It will be abele to use from 25 July 2012 】
710～770MHz
730 770 710The Frequency Assignment Plan has been revised on December 2007.
Broadcasting 
(m ulti-m edia 
mobile 
broadcasting, etc.)
After digitization90～108MHz
（1～3ch）170～222MHz
（4～12ch）470～770M Hz
（13～62ch）
Analog TV
BroadcastingAnalog TVBroadcasting
 Analog TV Broadcasting
Digital TV Broadcasting
Digitalization of Analog TV Broadcasting(Draft)
0 
WTO Secretariat's report, page 90 
 
103. Could Japan provide information on the turnove r in the field of broad band internet access 
services and on the market share of the dominant providers? 
 WT/TPR/M/243/Add.1  
Page 184 
 
 
  RESPONSE 
 
The market share of the dominant providers of  broadband subscriptions (including FTTH, ADSL and 
cable-based access services) at the end of Septem ber 2010 were: NTT East 28.7%, NTT West 22.9%, 
Softbank Group 10.3%, e Access 6.3% and KDDI 4.8%.  104. Moreover, could Japan provide  information on how "Fibre to the Home" (FTTH) access is 
financed? 
 
RESPONSE 
 
In Japan, broadband infrastructure improvement is b asically done by the private sector. However, for 
regions less improved by private entities alone, FT TH will be developed through the approach of 
public works.   
 
WTO Secretariat' s report, page 90, para. 54 
 
According to the Secretariat's report, "The Universal Service Fund System (USFS) has been 
operational since 2006; it subsidizes the costs of tel ecoms carriers that provid e universal services with 
respect to both subscriber and public telephone services./…/" 
 105. Could Japan provide further information on  which services form part of the universal 
services?  
RESPONSE 
 These services are subscribed telephones (basic plan ), public phones and em ergency notification. 
 106. Could Japan provide also information on the annual level of expenditures of the Universal 
Service Fund and its recipient(s)? 
 
RESPONSE 
 
The annual level of expenditures of the Univer sal Service Fund permitted in 2010 was 15.26 billion 
yen. Recipients are the designated Eligible Tel ecommunications Carriers (NTT East and West) based 
on Article 108 of paragraph 1 of the Telecommunications Business Act. 
 
Air transport 
 
WTO Secretariat's report, page 92 
 The Japanese Government has reopened Haneda Airpor t for international flights. Landing and takeoff 
slot allocations made by the Japan Schedule Coor dination Office (JSC) are convenient for American 
and Japanese operators but not for European intercontinental flights because travellers have to spend 
the night in London, Paris or Amsterdam and leave very early in the morning in order to  land in Tokyo at a proper time. 
 
107. Could Japan inform whether it is going to re form the landing schedules of foreign airlines in 
Haneda airport in order to facilitate the service for all travellers?   WT/TPR/M/243/Add.1 
 Page 185 
 
 
  RESPONSE 
 
As for Haneda airport, slots for international sch eduled flights during daytime hours (0600-2255) will 
increase from the current 30,000 to 60,000 in tota l, as early as FY2013, pending implementation of 
safety measures and completion of the terminal expansion project. 
 
These daytime slots will be exclusively used for international flights on high-demand business routes 
connecting the cities of the world, which includes European cities, with Tokyo. 
 Additional slots will be continue to be allocated through bilateral consultati ons, due to the extremely 
congested situation. 
 As the expansion plan for Haneda has not been fina lized yet, Japan is still considering the criteria and 
time frame to start these consultations.  
108. Will Haneda airport be opened up for in tercontinental flights on a 24-hour basis? 
 
RESPONSE 
 
Haneda airport is already open for international scheduled flights on a 24-hour basis, from the IATA 
2010 Winter Schedule. 
 
Currently, slots in daytime hours (0600-2255) are limited to short-range flights to Asia. However, as 
previously stated, the number of slots will be in creasing from the current 30,000 to 60,000 in total as 
early as FY2013, and these additional daytime slots will be allocated to international flights on high-
demand business routes connecting the cities of the world, which include European cities, with 
Tokyo. 
 The air services market regulation seems to impede th e ability of foreign airline companies to set up 
their air fares flexibly by requiring prior approval from MILIT of air fares 30 days ahead of flying.  
 109. Could Japan indicate what measures, if any, it intends to introduce to remove the restrictions 
on air services? 
 
RESPONSE 
 
While the MLIT recognizes the need to examine a nd approve tariffs and charges in advance to 
eliminate inappropriate ones (e.g., those which are di scriminatory or too high), it deregulated the rules 
of pricing for international air transport in order to  realize more flexible and market-oriented pricing 
in Oct. 2010.  Under the new framework, filing for approval is requi red only for the highest tariff rate applied under 
each sales condition. Under this upper limit, airlines only have to notify the MLIT when they fix or 
change tariffs. 
 According to a Nikkei article, "At Tokyo's Narita  airport, landing fees for a large plane on an 
international flight are about 10 times those of Britain's  Heathrow airport and more  than triple the fees 
at Singapore's Changi airport." (June 1, 2010 ANA's Ta xes, Fees More Than Triple Singapore Air's). 
It costs 770,000 yen, or about $9,400, to land a Boeing 747-400 at Narita, compared with 70,000 yen 
at Heathrow Airport in London.  110. In order to foster the competitiveness of Nar ita and Haneda airports, what actions does Japan 
envisage to bring this cost burden to the level f ound in other major airports throughout the world? WT/TPR/M/243/Add.1  
Page 186 
 
 
   
RESPONSE 
 
At Haneda Airport, the offshore expansion project and re -expansion projects were undertaken in order 
to expand the capacity and respond to increasing demand.  The landing fee for Haneda Airport was set in order to cover the cost of these projects. 
 
The Growth Strategy of the MLIT (MLIT growth strategy conference May 17, 2010stated that it 
will consider restricting the landing fee schedules,  including the lowering of landing fees for small-
sized aircraft to the extent possible.  JCAB will review the landing fee schedules based on the Growth Strategy of the MLIT.  
As regards Narita Airport, the landing charge(s) are set forth at the discretion of and through the 
decision-making process (as dictated by the corporate governance) of Narita International Airport Corporation, based on prior consultation with its us er airlines and with consideration of maintaining 
the airport's market competitiveness.  
Furthermore, from the perspective of the passengers , the total burden of taxes and public dues per 
person (including not  only the landing fee but also the passenge r tax) of Haneda Airport and Narita 
Airport is less than that of Heathrow Airport and Frankfurt Airport.  
EUROPEAN UNION – 2
nd set 
 Before answering EU's additional and follow-up questions, Japan would like to make a brief 
annotation regarding Japan's government procurement as follows.  Government procurement in Japan is basically conducted through open tendering procedures. 
 
In the statement from the second day of the TPR Jap an, the EU referred to €12 billion as the size of 
Japan's entire procurement market, a figure which might  have been taken from a statistical report that 
includes neither the procurements of Sub-central  Government Entities nor public works contracts. 
Japan commits to a much larger procurement mark et under the GPA and does not have any laws or 
regulations providing preferences to Japanese goods or  services for government procurement. Japan is 
of the view that the current share of contracts should not be attributed to structural reasons, but it is a 
question of market dynamics. 
 
Additional questions  
 
1) Japan's import regime for pork meat restricts the free flow of goods and does not allow 
operators sufficient predictability.   
a) Is Japan planning to modify its gate price sy stem in the near future and if yes, in which 
context? 
  
RESPONSE 
 
The Cabinet's decision "Economic and Fiscal Reform 2007" dated June 19th, 2007, says states that the 
handling of the gate price mechanism will be "exa mined through the WTO negotiations". In line with 
this decision, the mechanism is currently under the examination from the various points of view. 
  WT/TPR/M/243/Add.1 
 Page 187 
 
 
  b) Does Japan foresee ending the automaticity of the pork safeguard in the near future or 
adjusting the trigger levels in order to allow more imports? 
 
RESPONSE 
 
An emergency tariff measure for pork was agreed upon in the consultations with interested exporting 
countries in the UR negotiations.  The measure will be examined from various points of view through 
the current WTO negotiations in Agriculture. 
 
2) The EU presented the following question alr eady in its statement on 15th February. The EU 
would kindly ask Japan to provide its reply also in written form.  
Japan participates in the Pharma ceutical Tariff Elimination Agreement stemming from the Uruguay 
Round. This agreement is regularly updated, the fourth update has just been finalised and is 
implemented by all participants except Japan. Could Japan indicate when the agreed list of duty free 
products and substances wi ll be implemented?   
 
RESPONSE 
 The Government of Japan endeavors to submit the modified tariff Schedules to the Diet as early as 
possible. 
 
Follow-up questions
 
 
1) Follow–up on questions 21 and 22 
 
EU thanks Japan for the responses on the activities of the Japan International Cooperation Agency 
(JICA), however would kindly welcome some additi onal information regarding its Special Terms for 
Economic Partnership (STEP) Programme.  
 
a) Could Japan please indicate the amount of funds channelled through the Special Terms for Economic Partnership (STEP) Progr amme and provide an overview of all projects financed through 
the STEP Programme in the last 5 years?  
 
RESPONSE 
 
The total amount of STEP projects committed in th e last 5 years is 377,177 million Japanese yen. 
STEP projects in the last 5 years are as follows: 
 
1. Photovoltaic Rural Electrification and Water Supply Project 
2. The Galle Port Development Project (I) 
3. Tanjung Priok Access Road Construction Project (II) 
4. Nhat Tan Bridge (Vietnam – Japan Frie ndship Bridge) Construction Project (I) 
5. Engineering Services for the Jakarta MRT System Project 
6. Pasig-Marikina River Channel Improvement Project (Phase II) 
7. National Television Broadcasting Center Project 
8. National Geo-Spatial Data Infrastructure Development Project  
9. Ho Chi Minh City Urban Railway Construction Project (Ben Thanh – Suoi Tien 
Section (Line 1)) (I) 
10. Hanoi-HCMC Railway Line Bridges Safety Improvement Project(II) 
11. Mombasa Port Development Project 
12. New Ulaanbaatar Airport Construction Project 
13. Hanoi City Urban Railway Construction Project (Line 1) (E/S) WT/TPR/M/243/Add.1  
Page 188 
 
 
  14. East-West Road Improvement Project (N-70) (I) 
15. Greater Colombo Urban Transport Development Project (Phase 2(I)) 
16. Construction of Jakarta Mass Rapid Transit Project (I) 
17. Hanoi City Urban Railway Construction Project: Nam Thang Long – Tran Hung Dao 
Section (Line 2) (I) 
18. Dedicated Freight Corridor Construction Project (Phase 1)  
19. Port Moresby Sewerage System Upgrading Project 
20. Terminal 2 Construction Project in Noi Bai International Airport (I) 
21. Cuu Long (Can Tho) Bridge Construction Project (II) 
22. Upper Kotmale Hydro Power Project(II) 
 b) Recently, the Japanese Foreign Ministry ap pointed 121 officials as specialists on 
infrastructure projects at 49 diplomatic posts. The tasks of these specialists involve both collecting information on infrastructure construction projects ( nuclear power plants, high-speed rail links, and 
water supply and sewerage) and to promote the sale of Japanese technologies to local governments. 
Can Japan indicate whether STEP loans will be used to support the sale of Japanese technologies by 
these officials and how this relates to the overall objective of ensuring fair competitive environment 
and a level-playing field for all companies, including those from third countries, at international level?  
 RESPONSE  
Those specialists will not directly support the formulation of STEP projects. Japanese ODA including 
STEP ODA Loan is being implemented in alignmen t with OECD's "Arrangement on Officially 
Supported Export Credit" to confirm the fair competitive environment and avoid distortion of international trade. In addition, the Japanese government considers providing STEP ODA loan only 
when the government of developing countries requests it. 
 The EU questions 21 and 22  21. Could Japan describe what are measures cons idered to reinforce the role of JICA in 
supporting infrastructure-related e xports and what will be the new regulatory framework for JICA's 
operations?  22. Could Japan elaborate further on how and by whom JICA's ODA activities and such infrastructure-related export suppor t scheme will be coordinated? 
 
Japan' s replies 
 21. JICA's Private Sector Investment Finance (h ereinafter referred to as "PSIF") will be resumed 
by this March, in order to provide finance for highly-effective development projects which cannot be 
financed by existing financial institutions. The targeted sectors are those of the MDGs, poverty 
alleviation, infrastructure for acceleration of grow th, and climate change. The PSIF is not used for 
increasing the amount of export by subsidizing Japanese companies.  22. JICA will consult with Ministry of Foreign A ffairs, Ministry of Finance, and Ministry of 
Economy, Trade and Industry in the process to adopt projects. Also, according to the advice of Private 
Sector Investment Finance Committee (provisional title ), JICA will decide whether they can assist the 
projects.   WT/TPR/M/243/Add.1 
 Page 189 
 
 
  3) Follow-up on questions 39 and 44   
 
The EU remains quite concerned by the unclear sc ope of the "operational safety clause". Regarding 
question 39, Japan recognizes that the scope of the "operational safety clause" applies to 5 categories 
of goods and services (i.e. "Supplies forming railw ay facilities", "Rolling stocks and supplies for 
rolling stocks", "Supplies for maintenance", "Construc tion, reformation and repair of railway facilities 
themselves" and "Construction, refo rmation and repair works which are carried out right above or 
right below the railway tracks") and that the applicati on of the note must be judged on the basis of the 
nature of the good or service in question, yet indi cates that the "operational safety clause" cannot be 
judged uniformly by HS code or CPC classification, in particular because if the " highly technical 
knowledge " required.  
 In this context, could Japan indicate which measures it has taken to ensure that contracting authorities 
apply these notes "strictly" - and consistently - given that the scope definition requires " highly 
technical knowledge "? 
 RESPONSE  
As for the procurement relating to railway, since the specific characteristic of railway transportation is 
to be taken into consideration, each procuring entity is primarily entrusted the application of the 
Notes. The GOJ ensures the proper application of the Notes by requesting each procuring entity to 
apply it strictly. For example, the GOJ holds hearings from procuring entities to exchange 
information, and the GOJ requests that they refer to the GOJ in advance when questions arise in 
deciding on the applications of the Notes.  The EU question 39 
 
How the Japanese authorities envisage to prevent the operational safety clause to be used in such 
manner that no international tendering procedur e are conducted for the purchase of railway 
equipment?  Japan's reply 
 
In order to assure the proper application of the operational safety clause, the GOJ requests the 
procuring entities to apply it in a strict manner, a nd to refer to the GOJ in advance when questions 
arise in deciding on the application of the clause.  
In any event, the GOJ recognizes that the procuring entities make their procurem ent, even in the cases 
of those which fall under the scope of the clause, without distinction between domestic and foreign 
supplies, searching for good quality and price.  The EU question 44  
Japan applies note 5 of Annex 2 to Appendix I of GPA to designated cities and note 4 (a) of Annex 3 
to Appendix I of GPA to specific entities. Could Japan indicate which of the goods codes of the 
Chapters 44, 68, 73, 85 and, in particular, 86 of the Harmonized System H.S. 2007 and which of the service codes of the UN CPC pov classification are covered by the afore mentioned notes?  
Japan's response 
 As for the procurement relating to railway whic h falls under the operational safety clause, highly 
technical knowledge is required because specific charact eristics of railway transportation are to be 
taken into consideration. Because of this, whether to apply the Notes or not is judged by examining WT/TPR/M/243/Add.1  
Page 190 
 
 
  carefully if a good or service corresponds to the five  categories or not in accordance with its nature; it 
cannot be judged uniformly by the HS code or CPC classification.  
As we have stated the afore Q39., the GOJ request s the procuring entities to apply the Notes strictly 
and prevents them from abusing the Notes.  4) Follow-up on questions 54, 55, 56, 57, 58  
The EU thanks Japan for the clear  responses it has provided. In the light of these responses, which 
indicate that Japan maintains no set asides for SMEs and that its measures are not discriminatory, the 
EU still would like to understand the rationale of Note 3 to Annexes 1 and 2 and Note 2 to Annex 3 of 
Appendix I of the GPA, which states "the Agreemen t shall not apply to contracts to be awarded to 
cooperatives or associations in accordance with laws and regulations existing at the time of the entry 
into force of this Agreement for Japan"?  RESPONSE  
The rationale of this Note is to secure the policy on development of SMEs.  It should be noted, as 
mentioned in the responses to the questions from Members, that there is no nationality requirement 
for membership in co-operatives or associations a nd no description of nationali ty in the definition of 
SMEs in the relevant laws. No provision would, th erefore, prevent foreign SMEs from affiliating with 
cooperatives or associations. 
 
5) Follow–up on question 61 
 The EU thanks Japan for its reply,  and would kindly ask to clarify fu rther whether its standards bodies 
- as per their obligations under the Code of Good Pr actice in Annex 3 of the TBT Agreement - ensure 
that duplication of, or overlap with the work of relevant international st andards bodies is avoided? 
 
RESPONSE 
 Japan considers that it is important to promote th e agenda in accordance with the TBT Agreement and 
existing relevant international standards.  Theref ore, Japan does not intend to duplicate and overlap 
with the relevant international standards and the work of relevant international standards bodies. 
 
The EU question  
According to recent press information, the Japan ese government is launching a campaign to have 
Japanese technology adopted as international standa rds e.g. advanced medical technologies, next 
generation vehicles, energy management (smart grid, accumulators), robots, etc. This seems to include 
the promotion of Japanese Intellectual Property Rights  in "strategic areas". Could Japan inform what 
are the mechanisms to ensure th at these international standards will be drafted based on performance 
rather than design or descriptive characteristics  Japan's reply  
Japan recognizes that the appropriate international standards in strategic areas are important for 
enhancing companies' competitiveness and management  ability for protection and utilization of IPs.  
Whenever appropriate, Japan has based its technical regulations, on performance rather than design or 
descriptive characteristics in accord ance with TBT Agreement and w ill try to continue to do so. 
  WT/TPR/M/243/Add.1 
 Page 191 
 
 
  6) Follow-up on question 94 
 
Japan explains that its Basic Law on Food, Agricu lture and Rural Areas is implemented through the 
revised Basic Plan for Food, Agriculture and Rural Areas, adopted in March 2010, which, inter alia 
includes covers income support. We thank Japan for th eir reply provided and would also like to invite 
Japan to provide further information on how it w ill catagorise the income support under the WTO?  
 
RESPONSE  
Notification to the WTO Committee on Agriculture will be made in due course.  
The EU question  The Secretariat's report states "The Basic Law on Food, Agriculture and Ru ral Areas continues to 
provide the framework and policy direction for agricu lture;  implementation of the Law is through the 
revised Basic Plan for Food, Agriculture and Rural Ar eas, adopted in March 2010.  Salient features of 
the current plan include:  achieving a higher self-su fficiency ratio;  encouraging consolidation of 
production, processing, and distribution of agricu ltural produce with a view to increasing value-
added;  improving food safety;  participating in international standard-setting;  and establishing 
income support regardless of the size of farms." Could Japan state which method it uses to calculate 
food self-sufficiency and why that particular method has been chosen?  
 
Japan' s reply  MAFF calculates the total food self-sufficiency ra tios on a calorie basis and on a production-value 
basis as well as on the self-sufficiency ratio of each  agricultural product calculated on a weight basis. 
The calorie-based food self-sufficiency ratio is the in dicates energy as basic nutri ents essential for life. 
The value-based food self-sufficiency ratio is the indicator that evaluates more proportionally the 
production activities of comparatively low-calorie ag ricultural products such as vegetables and fruits. 
 
HONG KONG, CHINA
 
Macroeconomic Policies 
 
(WT/TPR/S/243: p. vii, para. 4) 
 
1. We note from the Secretariat Report that wh ile the looser macroeconomic policies have 
helped Japan's economy to recover from the globa l financial crisis, they have not addressed the 
economy's long-standing structural problems.  Wh at is the Japanese Administration's plan in 
addressing such important structural issues, which would be the backbone of the economy's economic 
development?  
RESPONSE 
 
Aiming at realizing "Strong Econom y, Robust Public Finances and Strong Social Security System," 
Japan completed the "New Growth Strategy" in June , 2010.  Facing Japan's recent economic situation, 
which featured sluggish growth, deflation and an  increasing unemployment rate, Japan set the three 
main targets to be achieved by 2020 in this stra tegy as following: to bring real and nominal growth 
rate in excess of 2% and 3% respectively, to return the consumer price increase to positive by 
FY 2011, and to lower the unemployment rate to between 3-4%. To achieve these goals, 7 strategic 
sectors and 21 national strategic projects were selected.  WT/TPR/M/243/Add.1  
Page 192 
 
 
  Japan's "New Growth Strategy" clarifies the directio ns for the following strategic areas: growth areas 
driven by Japan's strengths (environment and energy ; health), growth areas driven by pioneering new 
frontiers (Asia; tourism and local revitalization), and platforms to support growth (science, technology 
and IT; employment and human resources; financing). In order to effectively achieve the targets in 
each strategic area, the 21 National Strategic Projects have been selected from among areas which are expected to make great contributions to economic growth.   Japan has already partially carried out advanced implementation of the "New Growth Strategy" in 
stimulus packages since September of last year. 
 For more information about The New Growth St rategy, please refer to the following website; 
http://www.npu.go.jp/policy/policy04/index.html.  
(WT/TPR/S/243, p. vii, para. 5) 
 
2. The Secretariat Report notes that the Japa nese authorities have introduced a New Growth 
Strategy in June 2010, focusing on seven priority ar eas.  How are these priori ty areas chosen?  What 
is their significance to the Jap anese economy and society?  What are the major components or 
features of the New Growth Strategy?  Has this in stilled a change in Japan's macroeconomic policies? 
 
RESPONSE 
 
Firstly, the New Growth Strategy is aimed at rea lizing "Strong Economy, Robust Public Finances and 
Strong Social Security System". There are three main targets to be achieved by 2020 in this strategy. The first target is to achieve real and nominal growth in excess of 2% and 3% respectively. The 
second is to return the consumer price increase to  positive by FY 2011. The third is to lower the 
unemployment rate to the 3-4% level. To achieve these goals, the Government of Japan has identified 
7 strategic sectors.  Secondly, Japan believes that the key to creating demand is the pursuit of a "problem-solving" 
national strategy. Japan will seek to create new dema nd and jobs by tackling head-on the pile of new 
problems, such as global warming, the declining birt h-rate and the aging of the population, and then 
Japan will present the solutions for these problems.  For example, there is demand that has yet to be sa tisfied, such as in the medical, nursing and child 
care fields, although people strongly feel the need. Moreover, there is overseas demand that Japan has 
not so far tapped into. 
 In terms of the supply-side growth strategy, to increase the supply capacity by taking appropriate policy actions, it is particularly important to cr eate (a) a favorable employment environment for 
elderly people, women and youth and (b) a favorable environment for motivated people to start up 
venture companies, social enterprises and NPOs and establish operations in Japan. It is also important 
to (c) build up human capital and (d) promote innovation and accumulation of intellectual assets. 
 Therefore, the Government of Japan chose such gr owth areas as "green innovation," "life innovation," 
"the Asian economy" and "tourism a nd the regions." the Government of Japan is also implementing 
strategies related to "science and technology a nd information and communications technology," 
"employment and human resources" and the "financi al sector," which are areas essential to supporting 
growth.   WT/TPR/M/243/Add.1 
 Page 193 
 
 
  Securities 
 (WT/TPR/S/243, p. 89, para. 45) 
 
3. We note that Japan Securities Dealers Associ ation (JSDA) implemented new rules regarding 
the "origin and distribution" of securitized pr oducts in 2009.  Given that JSDA is a hybrid 
organization, we are interested in knowing the lega l effect of its "rules" and whether they fall under 
"measures by Members" as defined under GATS Article  I: 3(a)(ii).  And under what circumstances or 
based on what criteria the intervention will take the form of rules of JSDA vis-à-vis legislation or 
regulations of the government? 
 
RESPONSE 
 
The JSDA is one of the Authorized Financial In struments Firms Associations (hereinafter the 
"Authorized Associations") stipulated in the Financ ial Instruments and Exchange Act (hereinafter "the 
Act"). The Act stipulates the Associations are sel f-regulatory organisations, thereby they may make 
self-regulated regulations for members. These regulat ions fall under the "measures by Members" as 
defined under GATS Article I: 3(a) (ii).  The JSDA's internal procedures regarding the enact ment of self-regulated regulations are as follows: 
 
(a) Grasp the need for the regulation and estab lish a working group under the Self-Regulation 
Board or a relevant committee; 
(b) Consider the regulation draft in the worki ng group; (Its members are assigned from not only 
members of the JSDA but also customers, re gulatory authorities and market participants, 
depending on the matter.) 
(c) Deliberate the regulation draft in the relevant  committee, and collect public comment (usually 
two weeks to one month); 
(d) Decide on the regulation after deliberating th e draft in the relevant committee and the Self-
Regulation Board based on public comment. 
 
Maritime transport services 
 
(WT/TPR/S/243, p. 91, para. 59) 
 
4. We note that Japan adopted a tonnage tax in  2008, under which a company could calculate its 
corporate tax based on assumed profit per net tonne  of vessels flying the Japanese flag.  We would 
like to know whether foreign invested  companies are also eligible to  this scheme.  If yes, among the 
11 companies approved for applying this tax, how many of them are foreign companies?    
RESPONSE 
 
A company which is established in Japan and fulf ills certain requirements was eligible for the 
Tonnage Tax scheme. Therefore, foreign-invested companies were not excluded. However, to apply 
to the scheme, companies had to get the approval of a plan to ensure stable international maritime 
transport by securing Japanese-flagged vessels and seafarers from the Ministry of Land, 
Infrastructure, Transport and Tourism, as stipulat ed under Article 35 of the Marine Transportation 
Law, by March 2010. There was no foreign-invest ed company among the 11 companies which were 
approved by the Ministry of Land, Infrastructure, Transport and Tourism for the application of the 
tonnage tax.  WT/TPR/M/243/Add.1  
Page 194 
 
 
  INDIA – 1st set 
 
SUMMARY  
 Para. 3 of Secretariat Report states the stimulus packages have focused largely on increased spending.  
Consequently, the fiscal deficit rose to 10% of GDP in 2009 and public debt  reached roughly 220% of 
GDP. 
 
Question 1  What are the measures Japan proposes to take to reduce the fiscal deficit and public debt. 
 RESPONSE  
In the "Fiscal Management Strategy" (Cabinet Deci sion, June 2010), Japan set the fiscal consolidation 
targets that the deficit ratio to GDP for the prim ary balance shall be halved from the ratio in FY2010 
by FY 2015 at the latest and that a surplus shall be achieved by FY 2020. And the Strategy introduced 
the Medium-term Fiscal Framework as a means of achieving these targets. The Medium-term Fiscal 
Framework stipulates that the "primary balance e xpenses" (General Account expenditure excluding 
debt repayment and interest payment) shoul d not exceed approx. 71 trillion yen during FY2011 
through FY2013 ("Overall Expenditure Limit") and Japan  should make every effort to ensure that the 
amount of new government bond issuance in FY2011 does not exceed that of FY2010 (approx. 44.3 trillion yen). 
 
In the FY2011 draft budget, Japan maintained th e "Overall Expenditure Li mit" (approx. 71 trillion 
yen) and on the revenue side, restrained the am ount of new government bond issuance to the FY2010 
level (approx. 44 trillion yen).   
Based on the "Fiscal Management Strategy", Japan will continue to implement fiscal consolidation 
steadily in FY2011 and beyond.   Para 4 of Secretariat states while looser macro economic policies have helped Japan's economy to 
recover from the global financial crisis, they do not address its long-standing structural problems 
(including the rapid aging of its population) that are reflected in sluggish growth during the past 
decade or so in both real GDP and total factor productivity (TFP), a key determinant of Japanese 
firms' international competitiveness.  Question 2  
We would appreciate Japan sharing with us measu res it proposes to take in a time bound manner to 
improve the international compe titiveness of the Japanese firm . 
 
RESPONSE 
 
To strengthen Japanese industrial competitiveness, our industrial stru cture needs to be transformed 
from one that relies on a narrow range of manufacturing sectors to one that encompasses a variety of 
strategic sectors like environm ent, energy and culture.  
 By lowering the corporate tax rate, which is one of the highest in the world, and by promoting 
economic partnerships, Japan will build world-class business infrastructures. 
  WT/TPR/M/243/Add.1 
 Page 195 
 
 
  INDIA – 2nd set 
 
Secretariat report (WT/TPR/S/243 ) 
 Summary 
 
Page vii, para. 3  
The stimulus packages have focused largely on incr eased spending.  Consequently, the fiscal deficit 
rose to 10% of GDP in 2009 and public debt reached roughly 220% of GDP.   
 
Question 1  What are Japan's plans to reduce the fiscal deficit and public debt? 
 
RESPONSE 
 
Please refer to the answer to Question 1 on page 191 of Japan's response to the advanced written 
questions. 
 
Page vii, para 4 
 While looser macroeconomic po licies have helped Japan's economy to recover from the global 
financial crisis, they do not address its long-standing  structural problems (including the rapid aging of 
its population) that are reflected in sluggish growth  during the past decade or so in both real GDP and 
total factor productivity (TFP), a key determinant of Japanese firms' international competitiveness.   
 
Question 2  What are Japan's specific plans, schemes to addr ess longstanding structural challenges (including the 
rapid ageing of its population)? 
 
RESPONSE 
 
Aiming at realizing a "Strong Economy, Robust Public Finances and Strong Social Security System," 
Japan completed the "New Growth Strategy" in Ju ne 2010.  In light of Japan's recent economic 
situation, which has featured sluggish growth, de flation and an increasing unemployment rate, Japan 
set 7 strategic sectors and 21 national strategic projects. 
 Japan's "New Growth Strategy" clarifies the directi ons for the following strategic areas: growth areas 
driven by Japan's strengths (environment and energy , health), growth areas driven by pioneering new 
frontiers (Asia, tourism and local revitalization), and platforms to support growth (science, technology 
and IT; employment and human resources; financing). In order to effectively achieve the targets in 
each strategic area, the 21 National Strategic Projects have been selected from among areas which are 
expected to make great contributions to economic growth.   Japan has already partially carried out advanced implementation of the "New  Growth Strategy" in 
stimulus packages since September of last year. 
 
Regarding the Government's response to the shrinking workforce, the New Growth Strategy (June 18, 2010, Cabinet Decision) describes that th ere is concern that the shrinking workforce caused 
by the aging of the population will undermine Japan's  underlying capacity for growth. It is therefore 
essential to enact measures to address the declining birthrate and bring about a recovery, but it will WT/TPR/M/243/Add.1  
Page 196 
 
 
  take at least 20 years for this to result in any ex pansion of the workforce. Accordingly, Japan must 
focus immediately on encouraging young people, wo men, the elderly, and other people with untapped 
abilities to enter the job market. Japan must im plement such employment and human resources 
strategies to cultivate abilities throughout so ciety as a whole, through means including the 
development of occupational skills. For this purpose,  Japan will utilize the full range of government 
policies to increase the employment rate in all strata of society and will thereby overcome the 
shrinking of its workforce. Creating conditions in wh ich everyone can have and raise children without 
experiencing undue concern will entail not only ensu ring continued employment for women but also 
providing dramatically increased opportunities for women to fully utilize their abilities, breathing 
fresh life into the workforce. This will help br ing about a sustainable increase in birthrates and 
eliminate medium- and long-term concern over the rapid population decline.   
Page vii, para 6 
 
While administrative organs are required to co nduct ex-ante evaluation of regulations, and a 
procedure for ex-ante regulatory impact analysis has been introduced, cost-b enefit analysis is not 
frequently used when formulating, revising,  or abolishing policies and measures;   
 Question 3 
 
Could Japan share why cost-benefit analysis is not  frequently used when formulating, revising or 
abolishing policies and measures?  
 
RESPONSE  
The Implementation Guidelines for ex-ante evaluation of regulations state that it is desirable to 
quantify or express in monetary value costs and benefits to the greatest extent possible.  
 The Guidelines also state that cost -benefit analysis, converting benefits and costs into monetary value, 
is thought to be the main technique of regulatory ex-ante evaluation. 
 
The Government of Japan understands the importa nce of quantifying costs and benefits to assess 
regulatory proposals and will continue to promote it.  
Page viii, para. 8 
 
The agreements with countries that are significant exporters of agricultural products tend to exclude 
many of these products.  They also exclude certa in industrial goods, such as leather products and 
footwear, which the authorities consider to be hi ghly sensitive.  These products are also largely 
excluded from the Generalized System of Pref erence (GSP) scheme, under which Japan grants 
preferential treatment to products from certai n developing and least developed countries. 
 
Question 4  How does Japan's objectives of enteri ng into such trade agreements m eet the trade needs, objectives 
of its developing and LDC partners for enabling them to export products of their interest to Japan?  
 RESPONSE  
As for RTA agreements, Japan decides how to meet trade needs through negotiations. 
  WT/TPR/M/243/Add.1 
 Page 197 
 
 
  Page viii, para. 13 
About 46% of Japanese Industrial Standards (JIS) we re aligned to interna tional standards in 2009 
(unchanged since 2008).  Although Japan maintains that its SPS measures are based on scientific 
assessment of risks, it has apparently not conduc ted cost-benefit analysis in this connection. 
Question 5 
Does Japan plan to increase percentage of its indus trial standards to international standards and by 
what percentage?  What are the reasons for Jap an not conducting cost-benefit analysis of SPS 
measures? 
RESPONSE 
 
Regarding JIS, among those which have corresponding in ternational standards, 48% of them are fully 
consistent with international st andards; another 48 % is comparable though partly modified from 
international standards in order to implement th em in Japan by setting more detailed provisions.  
Consequently, 96 % of JIS are equiva lent to international standards. 
 
As stated above, with the entry into force of the WTO/TBT Agreement in January 1995, Japan has 
been taking further steps to reassure consistency w ith international standards in order to respond to 
requests in and outside the country and it will continue this policy.  As for the cost-benefit analysis  on SPS measures, the Government of Japan understands that 
quantifying costs and benefits to assess regulat ory proposals is generally important, but does not 
conduct it for the SPS measures. Japan reiterate s that the process for approval for importing 
designated items to be quarantined involves cons ultations with relevant domestic industries and 
consumers as well as requesting countries, in order to  properly reflect the opinions of stakeholders. 
Japan takes into consideration cost-benefit analy ses conducted by requesting countries, if they are 
provided. 
 
Page viii, para. 16 
With regard to agriculture, whose labour productivity  remains much lower than in the rest of the 
economy, the Government has continued to move away from price support toward income support.  
However the sector continues to receive subs tantial government support, which involves, inter alia,  a 
relatively higher average applied MFN tariff rate compared with other sectors, tariff quotas, income 
support, and, in some sub-sectors, production controls. 
Question 6 What steps Japan proposes to take to increase la bour productivity in agriculture and does Japan 
envisages reducing support to make the sector internationally competitive? 
RESPONSE 
 Japan has been undertaking following measu res to increase agricultural productivity. 
 
1. Farmland consolidation 
 
The Government promotes consolidated use of farmland. 
 (Based on the Agricultural Land Law revised l ast year, we established a mechanism through 
which organizations for farm land concentration in munici palities rent out farmland to WT/TPR/M/243/Add.1  
Page 198 
 
 
  motivated farmers. These organizations are en trusted by farmland owne rs and rent out the 
land on behalf of the owners. In this way,  farmland is utilized most effectively.) 
 
2. Infrastructural services 
 
 (1) Water supply facilities, dams and drainage schemes 
 (2) Road and other means of transport  (3) Infrastructural works associat ed with environmental programmes 
 
3. Research and development  Development of new crop varieties; Research , development and dissemination of cultivation 
technology; and improved management techniques.  Page viii, para. 18 
Certain services continue to be subject to, inter alia,  licensing and restrictions on foreign investment;  
as in many other sectors, they are also faced with  the generally high cost of doing business in Japan, 
which has been considered as one of the main deterrents to inward FDI in services and thus 
competition in the services sector.   
Question 7 
What time bound steps Japan proposes to take to restor e restrictions on foreign investment in certain 
services sectors and reducing high cost of doing business in Japan?  
RESPONSE 
 
According to a recent Ministry of Economy, Trade and Industry survey, cond ucted in FY 2008, the 
obstacles to business in Japan generally cited as a ma jor factor by foreign affiliated companies are as 
follows.    1. The difficulty of hiring eligible employees   2. The high business cost 
  3. The high level of customer demand and market competitiveness 
   *http://www.meti.go.jp/pr ess/20090416001/20090416001.html 
 In order to solve these problems, a "program for promoting Japan as an Asian business hub and 
foreign direct investment into Japan" (tentative na me) will be drawn up by the summer of 2011. This 
program will include system reforms and other meas ures to ensure the smooth flow of people, goods 
and funds with the aim of making Japan's  business environment more appealing. 
 
For the purpose of strengthening the competitiveness  of companies operating in Japan and improving 
the environment for business establishment in Japan, th e effective corporate tax rate, which includes 
national and local taxes, will be reduced by 5% [40.69% ֜35.64%]. The related bills are being 
discussed at the ongoing ordinary session of the Diet. 
  WT/TPR/M/243/Add.1 
 Page 199 
 
 
  The Japanese Government introduced a subsidy fo r global companies to set up their regional 
headquarters/R&D centers to offset their initial costs in setting up regional headquarters or R&D 
centers in Japan.   We plan to introduce a new scheme giving global ( not limited to foreign) companies preferential 
treatment in terms of corporate tax and the related bill will be discussed at the ongoing ordinary 
session of the Diet.  
I. E
CONOMIC ENVIRONMENT  
 
(1) M AIN ECONOMIC DEVELOPMENTS  
Page 1, para. 1 
However, the recovery is fragile and susceptible  to shocks in the global economic environment.  
Question 8 
What are government's plans to consolidate, strengt hen recovery and reduce susceptibility to shocks?  
RESPONSE 
 
Since last autumn, in accordance w ith "The Three-Step Economic Measures for the Realization of the 
New Growth Strategy (Cabinet Decision, Sept ember 10, 2010)" the Government of Japan has 
undertaken Step 1 using the contingency reserve, and Step 2 backed by a supplementary budget for 
FY 2010, thereby underpinning the economy and employment.  In addition to steadily carrying out these economic  measures, the Government of Japan will 
seamlessly implement Step 3 comprised of FY2011 budget and the tax-system revision with an 
emphasis on growth and employment, so as to en sure the achievement of economic recovery. 
 
Page 2, para. 2 
To be able to sustain growth in the medium to l onger term, domestic demand will need to pick up and 
drive growth.
   To achieve this the Japanese economy w ill need to undergo structural reforms inter 
alia to improve productivity in the services sector (w hich is much lower than in manufacturing), 
reform the labour market, and reform taxation. 
Question 9 
 
We would appreciate Japan sharing its plans to boost domestic demand and re forming productivity in 
the services sector?  
 
RESPONSE  
Since last autumn, in accordance w ith "The Three-Step Economic Measures for the Realization of the 
New Growth Strategy (Cabinet Decision, Sept ember 10, 2010)", the Government has undertaken 
Step 1 using the contingency reserve, and Step 2 backed by a supplementary budget for FY 2010, in 
order to preemptively address the downside risk on economy and employment with a focus on the demand side.  In addition to steadily carrying out these economic measures, the Government will seamlessly 
implement Step 3 comprised of the FY2011 budget and the tax-system revision which place emphasis WT/TPR/M/243/Add.1  
Page 200 
 
 
  in growth and employment, so as to achieve economic growth with a focus on employment. 
 As for the reform of productivity in services sectors,  Japan has been taking various steps to promote 
liberalization recognizing the importance of liberalizing services sectors for growth and 
competitiveness. Since March 2010, "Sub-committ ees on Regulatory Reform and Institutional 
Reform" was established under the Government Revi talization Unit. In November 2010, the Cabinet 
issued a decision entitled "Basic Policy for Comp rehensive Economic Partnerships," where it 
expressed its intention to further promote necessa ry regulatory reforms under the philosophy of  
"opening up the country".  As for the liberali zation of trade in services, Japan remains strongly 
committed to the DDA negotiations under the basic pr inciple that a comprehensive liberalization of 
trade in services should be achieved to benef it all Members including developing countries. 
 
(3) S
TRUCTURAL POLICIES  
Page 3, para. 7 
The fiscal stimulus package is not viable avenue to  sustain growth in the medium to longer term, 
especially when considered against the back drop of Japan's public debt, which is over 200% of GDP 
at present, and the fiscal deficit. 
Question 10 How does Japan envisage reducing publ ic debt and fiscal deficit?  
RESPONSE 
 
Please refer to the answer to Question 1 on page 191 of Japan's response to the advanced written 
questions.  
(i) Services sector 
Page 3, para. 8 The services sector, which accounts for about 80% of  Japan's GDP and 78% of its employment, is 
characterized by weak labour productivity growth. 
Question 11 In view of weak productivity growth in services sect or, does Japan envisage bringing in international 
competitiveness to increase efficiency? 
RESPONSE 
Japan recognizes the importance of bringing intern ational competitiveness for the growth of the 
services sector, and has been taking various steps to  promote the liberalization of the sector. For 
instance, in June 2010, the Cabinet issued a decisi on entitled "New Growth Stra tegy," which sets forth 
strategies for achieving a strong economy to return  Japan to economic health. Furthermore, in 
November 2010, the Cabinet issued a decision entitled "Basic Policy for Comprehensive Economic 
Partnerships," where it expressed its intention to further promote necessary regulatory reforms in the 
interest of the 'open up the country' vision. In  addition, in March 2010, the "Subcommittee on 
Regulatory and Institutional Reform" was establishe d under the Government Revitalization Unit. As 
for the liberalization of trade in services, Japan remains strongly committed to the DDA negotiations.  WT/TPR/M/243/Add.1 
 Page 201 
 
 
  Japan is determined to further promote the libera lization of the services sector both domestically and 
internationally.  
Page 5, para. 11 
An important engine of growth globally has b een information and communication technology (ICT) 
services.  Japan has been an excepti on in this regard;  reasons cited for Japan's lacklustre performance 
include the lack of financing available and the dearth of venture capitalists.   
Question 12 In what ways Japan proposes to  address this situation?  
RESPONSE 
 
ICT industry in Japan accounts for 10 % of the total no minal domestic product in all industries. It has 
contributed to a positive real GDP growth at all tim es. Also in view of the current situation, Japan 
recognizes ICT service as an important engine of growth globally.  Japan recognizes the importance of ICT capital growth. It  is expected that Cloud Service will facilitate 
the introduction of ICT by a broad range of comp anies and thus will stimulate ICT investment. 
Especially, the Government considers it necessary to promote the introduc tion of Cloud Service 
concerning safety and reliability assurance, and so on.   
(ii) Labour market 
Page 5, para. 12 
The share of non-regular workers rose from 20% in 1990 to 34% in 2008. Question 13 
Could Japan inform members for the sharp in crease in percentage of non-regular workers? 
RESPONSE 
 
In response to the collapse of the bubble economy in Japan, large enterprises curbed their hiring of 
new employees. The number of regular employees has tended to decrease since the late 1990s and the 
number of temporary workers has increased.  The Government of Japan considers that the incre ase in the percentage of non-regular workers has 
been caused by many companies firm intention to curb increases in labor costs and to hire labourers 
whose wages are relatively low as well as by the f act that companies regard ensuring experienced 
workers as important instead of training new graduates thoroughly. 
 
Page 5, para. 13 
The authorities realize the need to reform the labou r market, and it is a focus area in the stimulus 
package. 
Question 14 
Does Japan have any time-bound plan to carry out labour reforms? WT/TPR/M/243/Add.1  
Page 202 
 
 
  RESPONSE 
 
The Government of Japan took the time-bound empl oyment measures as follows in the stimulus 
package. In addition, the time boundaries are put in parentheses: 
 
  - Job creation in priority areas proj ect (from the second supplementary budget of 
FY2009 until the end of FY2011 (some part are until FY2012)) 
 - Immediate job creation project (from the second supplementary budget of FY2008 
until the end of FY2011). 
 
Page 5, para. 14 
Another area of concern is Japan's shrinking labour fo rce due to its aging population.  In this regard, 
easing restrictions on immigration of foreign workers, especially in sectors facing acute shortages of workers, would help to alleviate the problem and may also increase productivity.  
Question 15 
We would be interested to know what are Japan's  plans to address this situation and especially on 
easing restriction and on immigration of foreign workers. 
RESPONSE 
 
Regarding the Government's response to the shrinking workforce, the New Growth Strategy 
(June 18, 2010 Cabinet Decision) describes that th ere is concern that the shrinking workforce caused 
by the aging of the population will undermine Japan's  latent capacity for growth. It is therefore 
essential to enact measures to address the declining birthrate and bring about a recovery, but it will 
take at least 20 years for this to result in any ex pansion of the workforce. Accordingly, Japan must 
focus immediately on encouraging young people, wome n, the elderly, and other people with latent 
abilities to enter the job market. Japan must im plement such employment and human resources 
strategies to cultivate abilities throughout so ciety as a whole, through means including the 
development of occupational skills. For this purpose,  Japan will utilize the full range of government 
policies to increase the employment rate in all strata of society and will thereby overcome the 
shrinking of its workforce. Creating conditions in wh ich everyone can have and raise children without 
experiencing undue concern will entail not only ensu ring continued employment for women but also 
providing dramatically increased opportunities for women to fully utilize their abilities, breathing 
fresh life into the workforce. This will help br ing about a sustainable increase in birthrates and 
eliminate medium- and long-term concern over the rapid population decline.   In addition, the Basic Plan for Immigration Control (4th edition, March 2010) establishes as follows: 
with regard to dealing with the population decline, in addition to working to improve the birth rate, it 
is important to work on measu res such as utilizing the potential workforce of young people, women 
and elderly people in order to increase productivity. On  the other hand, even with these measures, if 
difficulties or insufficiencies remain, while payi ng due consideration to the national consensus on 
issues relating to the daily lives of the people such as the impact on our industries, public safety and 
the labor market, there is a need to have wide-ra nging debate on the acceptance of foreign nationals, 
and on the future ideal image of Japan.   WT/TPR/M/243/Add.1 
 Page 203 
 
 
  (iii) Tax reform 
Page 5, para. 15 
To increase revenues, the Government would need to implement comprehensive tax reforms, which 
would include broadening the tax base and finding the right mix of direct and indirect taxes. 
Question 16 
We would appreciate Japan sharing deta ils of its plans on tax reforms.  
RESPONSE 
In December 14th 2010, the Cabinet decided to put forward a social security reform agenda and a tax 
reform agenda which aim to secure the financial re sources needed for the social security reform as 
well as to achieve fiscal consolidation simultaneously . The final reform plan with the roadmap will be 
formulated by the middle of 2011. 
II. T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
(1) I NTRODUCTION  
Page 11, para. 1 
Since Japan's previous Trade Po licy Review in 2009, changes in the government ministries and 
agencies responsible for the formulation, implemen tation, and evaluation of its trade policies have 
included the establishment of the Consumer Affa irs Agency (CAA) on 1 September 2009 and of the 
Government Revitalization Unit (GRU) on 18 September 2009. 
Question 17 
We would appreciate Japan sharing details of object ives and scope of the G overnment Revitalization 
Agency. 
RESPONSE 
 
From the viewpoint of the public, in order to revitalize what the central government including the state budget and institutions should be and to review  what the roles of the central government, the 
local government and the public sector should be, th e Government Revitalization Unit with the Prime 
Minister as the chairman was established by a cabinet decision in September 2009. 
 The Program Review, conducted by the Government  Revitalization Unit, has made the budgetary 
processes far more transparent through open discu ssions, participation of external experts, and 
assessment from the viewpoint of budget execu tion on the ground. The Program Review has 
contributed to reducing wasteful budget spe nding and ensuring necessary revenue through 
scrutinizing various activities by government-affiliate d corporations, thus resulting in a major success. 
Moreover, in order to introduce the Program Review  method to each ministry's level, the Program 
Review of Entire Public Activities (PREPA) has been promoted so that each ministry is to accurately 
grasp a whole picture of expenditure and reflect the results of those reviews within the ministry into 
their budget requests. 
 WT/TPR/M/243/Add.1  
Page 204 
 
 
  Page 11, para. 2 
 
The effects of FTAs on Japan's trade are not clear, partly because few relevant quantitative 
evaluations have been published by the authorities. 
Question 18 Does Japan propose to increase publication of st udies of impact of FTAs on its trade? 
RESPONSE 
 
Various estimations on future EPAs have been co nducted and published in the process of preparing 
the "Basic Policy on Comprehensive Economic Partnerships".   (Viewed at: http://www.npu.go.jp/pdf/20101109/20101109_en.pdf)  The GOJ continues to endeavor to provide the necessary information. 
 Page 14, para. 13 
Language 
Question 19 
It is mentioned that as a part of the Government 's efforts to increase transparency, many laws and 
regulations "of great interest" have been translated in to English. It is also mentioned that information 
in English websites tend to be less frequently update d and contain less detailed information compared 
with the original Japanese versions. India will like to  know as to what criteria are adopted to translate 
select regulations in English and leave out the others. It will considerably improve transparency of Japanese laws and regulations if information regard ing laws and regulations are made available in 
English and in sufficient detail for various stakehol ders to use them effec tively. India seeks Japan's 
reaction to this suggestion and also some informati on regarding future policy initiatives in this regard. 
RESPONSE 
 
When selecting the laws and regulations to be cove red by the translation development plan, several 
factors are taken into consideration, such as the ne ed for a translation and its importance in facilitating 
international business. The laws a nd regulations covered by the tr anslation development plan are 
expanded or modified when necessary. 
 
(4) T
RADE AGREEMENTS AND ARRANGEMENTS  
(ii) Regional trade agreements (a) Bilateral/regional free-trade agreements adopted by Japan 
Page 18, para. 31 In the Committee on Regional Trade Agreements, so me Members raised concerns about Japan's 
FTAs.  These included disproportionate liberali zation between agricultural and non-agricultural 
products, and Japan's longer implementation period s compared with some developing country FTA 
partners (such as Brunei and the Philippines).  WT/TPR/M/243/Add.1 
 Page 205 
 
 
  Question 20 
We would appreciate to hear Japan's views to address these concerns on its FTAs. 
RESPONSE 
 
Japan's EPAs liberalize substantially all the trade with its EPA partners in accordance with the WTO 
Agreements. Their liberalization of agricultu ral and non-agricultural products and their 
implementation periods are part of the agreements between the parties as a result of negotiations.  
 
(iii) Generalized system of preferences a nd other preferential arrangements adopted 
unilaterally by Japan 
Page 20, para. 40 
Trade preference 
Question 21 
WTO Secretariat Report had indicated that Japan had under the Generalized System of Preferences 
(GSP) scheme, grants preferential tariff treatment unilaterally to certain developing countries. The 
current GSP scheme is valid until 31 March 2011. Can Japan be pleased to indicate whether they will 
extend the present GSP Scheme beyond March 2011?  
RESPONSE 
 
1. The GSP (Generalized System of Preferences) applies reduced tariffs on designated imported 
goods originating from developing countries or territori es, with the aim of helping them increase their 
export income, advance their industrialization and promote their economic development. Japan is 
properly managing the system from the viewpoint of contributing to the economic development of developing countries.   2. Japan is in the process of preparing for di scussion of the extension of its GSP scheme until 
March 2021. 
 
Page 21, para. 43 
Data provided by the authorities indicate that the value of imports from LDCs under the duty-free and 
quota-free treatment amounted to ¥65,566 milli on in FY2008 (up from ¥62,904 million in FY2006).  
Question 22 
Could Japan share information on low incr ease (less than 5%) in imports from LDCs? 
RESPONSE 
Japan has achieved the provision of duty-free quot a-free market access for approximately 98% of 
products originating from LDCs, defined at the ta riff line levels, in accordance with the Ministerial 
Declaration in Hong Kong.  WT/TPR/M/243/Add.1  
Page 206 
 
 
  (6) F OREIGN INVESTMENT REGIME  
Page 27, para. 65 
On the other hand, the Japanese authorities consider  that the main reasons for the recent decline 
include the difficulty of hiring qualified employees;  high business costs in Japan ;  and high customer 
expectations.  On the other hand, Japan's trading part ners indicated in the past that the low level of 
inward FDI in Japan could be attributed, inter alia,  to impediments to mergers and acquisitions;  
insufficient regulatory reform and financial transparency  and flexibility;  and lack of flexibility in the 
labour market.   
Question 23 We would appreciate Japan sharing concrete step s it proposes to take to address these challenges 
which impact negatively on Japan's FDI infl ows, high cost of doing business in Japan.  
RESPONSE 
For the purpose of strengthening the competitiveness  of companies operating in Japan and improving 
the environment for business establishment in Japan, th e effective corporate tax rate, which includes 
national and local taxes, will be reduced by 5% [40.69% ֜35.64%]. The related bills are being 
discussed at the ongoing ordinary session of the Diet. 
The Government of Japan introduced a subsidy for global companies to set up their regional 
headquarters/R&D centers to offset their initial costs in setting up regional headquarters or R&D 
centers in Japan.  
The Government of Japan plans to introduce a new scheme giving global (not limited to foreign) 
companies preferential treatment in terms of corpor ate tax and the related bill will be discussed at the 
ongoing ordinary session of the Diet. 
A "program for promoting Japan as an Asian indus trial center and direct investment into Japan" 
(tentative name) will be drawn up by the summer of 2011. This program will include system reforms 
and other measures to ensure the smooth flow of people, goods and funds with the aim of making 
Japan's business environment more appealing. 
Question 24 
It is seen that the foreign direct investment in Japan has declined recently in compared to other 
developed countries such as US and EU. The present Report does not indicate the cost of doing 
business in Japan. Data revealed by the World Bank on doing business in Japan is given below: 
Item DB 2011 Rank DB 2010 Rank Change in Rank 
Starting a Business 98 90 -8 
Dealing with Construction Permits 44 43 -1 
Registering Property 59 53 -6 
Getting Credit 15 14 -1 
Protecting Investors 16 16 0 
Paying Taxes 112 119 7  WT/TPR/M/243/Add.1 
 Page 207 
 
 
  Trading Across Borders 24 21 -3 
Enforcing Contracts 19 19 0 
Closing a Business 1 1 0 
Source: http://www.doingbusiness.org/da ta/exploreeconomies/japan/  
 
Japan may like to state what measures have been ta ken or are contemplated to improve the situation 
with special reference to starting a business (r ank 98) and paying taxes (rank 112) (starting a 
business). 
RESPONSE 
 
The "New Growth Strategy" mentions the necessity of domestic reform for unifying the Asian Market 
and facilitating the flow of people,  goods and money between Japan and the world, which leads to 
promoting FDI. Based on the "New Growth Strategy", a "program  for promoting Japan as an Asian business center 
and foreign direct investment into Japan" (tentativ e name) will be drawn up by the summer of 2011. 
This program will include system reforms and othe r measures to ensure the smooth flow of people, 
goods and funds with the aim of making Japan 's business environment more appealing. 
 For the purpose of strengthening the competitiveness  of companies operating in Japan and improving 
the environment for business establishment in Japan, th e effective corporate tax rate, which includes 
national and local taxes, will be reduced by 5% [40.69% to 35.64%]. The related bills are being 
discussed at the ongoing ordinary session of the Diet. 
 We plan to introduce the new scheme giving global  (not limited to foreign) companies preferential 
treatment in terms of corporate tax and the related bill will be discussed at the ongoing ordinary session of the Diet.  
 
(i) Regulatory regime 
Page 28-29, para. 71 
The authorities state that only one re quest for approval has been denied.
   Besides the approval (prior 
notification) requirements under the Foreign Excha nge and Foreign Trade Act, various other laws 
stipulate specific restrictions on inward FDI in  certain sectors, including the acquisition of land, 
mining, oil industry, telecommunications, and transpor t.  As developing mineral resources in Japan is 
deemed to serve the national interest, mining rights (including those for the oil industry) are granted only to Japanese citizens or juridical persons, in acc ordance with Article 17 of the Mining Act.  In 
telecommunications, on the grounds of national security, foreign capital participation in NTT 
Corporation, which holds all the shares of NTT East Co rporation is restricted to less than one third;  
under the Radio Act, foreign ownership in radio stations  is limited, in principle, to less than one third 
of voting rights.
   Ships not flying the Jap anese flag are prohibited from entering Japanese ports that 
are not open to foreign commerce and from carrying cargoes or passengers between Japanese ports, unless otherwise specified in Japan's laws and regulati ons, or international agreements to which it is a 
party.  Permission to conduct air transport business as  a Japanese air carrier is not granted to a legal 
person of which more than one third of the memb ers of the board of directors comprise natural 
persons or entities that do not have Japanese nationality  or to a legal person of which more than one 
third of the voting rights are held by the foreign pe rsons or entities.  In addition, the ratio of shares 
that can be owned by foreign entities to total shares in certain companies are r estricted:  less than 20% 
for TV stations, less than one third for the Nippo n Telegraph and Telephone Corporation, and less 
than one third for companies approved by the Government to conduct aviation and transportation 
services.  Selected products that are deemed conver tible to military equipment are included in the list WT/TPR/M/243/Add.1  
Page 208 
 
 
  of products subject to approval, as stipulated in the Appendix to the Export Trade Control Order, for 
reasons of national security. 
Question 25 
Does Japan proposes to ease restrictions and move towa rds a more liberalised regime to enhance FDI, 
improve competitiveness? 
RESPONSE 
 
Taking into account that the regulations should be  more predictable while maintaining national 
security, public order, and so on, relevant ministries will continue in dividual studies on the appropriate 
form of Foreign Direct Investment regulations as an exception to the principle of non-discrimination 
between domestic and foreign investors.  
III. T RADE POLICIES AND PRACTICES BY MEASURE  
(1) I NTRODUCTION  
Page 31, para. 2 
Tariffs 
Question 26 
It has been stated that 6.6% of the tariff lines are under non- ad valorem  tariffs. Japan may explain the 
reasons for doing so. Further, Japan may like to cl arify whether there any plans for conversion of 
these lines to ad valorem  tariffs. If so, details thereof may kindl y be provided. Japan may also provide 
estimates of average ad valorem equivalent of the NAVs.  
RESPONSE 
 
Ad valorem  equivalents (AVEs) of non-ad valorem duti es are automatically cal culated with duty, 
import value and volume. For example, AVEs of a specific duty can be calculated using the following 
formula; "a specific duty on an item / (import va lue / import quantity)×100 (%). "Therefore, the AVEs 
of some tariff lines cannot be provided when there are no or de minimis imports of the lines over a 
year.   Page 31, para. 6 
About 46% of Japanese Industrial Standards (JIS) we re aligned to interna tional standards in 2009 
(unchanged since 2008).  Although Japan maintains that its SPS measures are based on scientific 
grounds to assess risks, it has apparently not cond ucted cost-benefit analyses to justify such risk 
factors. 
Question 27 
Does Japan proposes to conduct cost-benefit analyses to  justify risk factors of its SPS measures?  If 
so, by when? 
RESPONSE  WT/TPR/M/243/Add.1 
 Page 209 
 
 
  The Government of Japan understands that quan tifying costs and benefits to assess regulatory 
proposals is generally important, but does not apply the method for the SPS measures.  Japan 
reiterates that the process for approval for import of designated items to be quarantined involves 
consultations with domestic relevant industries an d consumers as well as requesting countries, in 
order to properly reflect the opinions of stakehol ders. Japan takes into consideration cost-benefit 
analyses conducted by requesting countries, if provided. 
Question 28 In the context of NTMs (like SPS and TBT measu res) at ground level what is the system of 
application which ensures its non-discrimination across countries?  Can Japan intimate which 
agencies are involved in this process and how cust oms clearances for these notified products may be 
obtained? 
 
RESPONSE  
The Government of Japan ensures its non-discr imination across countries on SPS and TBT measures 
in accordance with the SPS Agreement and the TBT Agreement.  Regarding SPS measures, the 
Government of Japan takes measu res based on scientific background in an appropriate manner.  
Products violating SPS measures are generally found out through the quarantine procedure , not under 
custom clearances.  Regarding TBT measures, ev ery product consistent wi th relevant laws and 
regulations could be circulated into commerce with out the discrimination of customs.  Generally, the 
relevant authorities on these procedures are the Minist ry of Foreign Affairs; the Ministry of Health, 
Labour and Welfare; the Ministry of Agricultur e, Forestry and Fisheries; the Food Safety 
Commission, the Consumer Agency; the Ministry of  Economy, Trade and Industry, the Ministry of 
Internal Affairs and Communications; and the Mini stry of Land, Infrastructure, Transport and 
Tourism.  
Question 29 
It is indicated that although Japan maintains that  its SPS measures are based on scientific grounds to 
assess risks, it has apparently not co nducted cost-benefit analyses to jus tify such risk factors. In view 
of this, Japan is requested to clarify as to how  it justifies continuance of such SPS measures? 
RESPONSE 
 
The Government of Japan understands that quan tifying costs and benefits to assess regulatory 
proposals is generally important, but does not ap ply the method for SPS measures. Japan reiterates 
that the process for approval for import of designate d items to be quarantined involves consultations 
with domestic relevant industries and consumers as well as requesti ng countries, in order to properly 
reflect the opinions of stakeholders. Japan takes in to consideration cost-benefit analyses conducted by 
requesting countries, if provided. 
 
Page 32, para. 9 
Trade facilitation 
Question 30 
It is indicated that various laws on intellectual pr operty rights (IPRs) have been amended since Japan's 
previous Review with a view to, inter alia, stre ngthening the role of Customs in enforcement, and 
expanding the scope of application of criminal pe nalties for infringement of trade secrets. India 
requests Japan to inform in more detail the rati onale and need for such strengthening of customs WT/TPR/M/243/Add.1  
Page 210 
 
 
  enforcement. It would also like to know as to how customs officers are being enabled to fulfill these 
additional responsibilities? 
RESPONSE 
 Japan has committed itself to strengthening the prot ection of intellectual property rights carrying the 
banner for realizing an "intellectual property natio n" as a strategy for the entire Japanese government. 
As regards IPR-infringing goods which are produced overseas and brought into Japan, we would face 
difficulties in detecting and seizing such goods afte r they were released into free circulation in the 
domestic market. It should, however, be noted that Customs is able to conduct more effective and 
efficient control of IPR-infringing goods at the bor der through which they are to pass. Customs has 
therefore been strengthening border enforcement through additional categories  of IP rights and 
transportation methods subject to border enforc ement, and strengtheni ng of penal provisions. 
 With regard to the Unfair Competition Prevention Act,  the main aim of the amendment of the Act is to 
take measures for the protection of trade secrets in criminal procedures and penalties, including the 
expansion of the scope of application, in order to strengthen the protection of trade secrets to ensure 
fair competition.  In principle, "usage or disclosure" of illegally obtained trade secrets "for the purpose of unfair 
competition" constituted "infringement of trade secrets," which was punishable by imprisonment 
before the amendment of the Act.  However, the act was not eligible for criminal punishment without the "purpose of unfair competition", such as disclosure of trade secret s to a third party with no competitive relations  or 
disclosure to the public just for the pu rpose of causing damages to the holder . 
 
The reason and necessity for this amendment was to allow the regulation of the Act to apply to the 
abovementioned situations adequately.   
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs clearance procedures and valuation 
Page 32-33, para. 15 
Since the previous review of Japan, time required for customs clearance has been reduced for sea 
cargo, but increased for air cargo.  The latest availa ble data indicate that, in 2009, the average time 
between arrival of goods and the granting of impor t permission was 62.4 hours (63.8 hours in 2006) 
for sea cargo and 16.0 hours (14.4 hours in 2006) for air cargo (including time required under the 
"immediate import permission system upon arrival").  
Question 31 Could Japan explain factors responsible for increase in customs clearance for air cargo? 
RESPONSE 
 
Japan Customs has conducted the Time Required for the Release of Import Goods Study (hereinafter 
called "TRS") nine times between February 1991 and March 2009. As mentioned in the question, the 
8
th TRS conducted in March 2006 showed that the average time for air cargo was 14.4 hours, 
compared to 16.0 hours according to the 9th TRS conducted in March 2009.  WT/TPR/M/243/Add.1 
 Page 211 
 
 
   
Here is a breakdown of both TRS results: According to the 8th TRS, time from port arrival to 
warehouse was 1.2 hours, from warehouse to custom s declaration was 12.8 hours, and from customs 
declaration to import permission was 0.4 hours. Likewise, the 9th TRS found that the time from port 
arrival to warehouse was 5.5 hours, from warehouse to customs declaration was 10.1 hours, and from 
customs declaration to import permission was 0.4 hours. 
 Comparing the 8
th and the 9th TRS, the time from port arrival to warehouse increased by 1.6 hours.  
Small packages which arrive and are discharged at Na rita Airport were previously declared in the 
Narita area; however, because of a logistics shift, since 2007, those packages have been transported 
and declared in the Tokyo area, which is some dist ance from Narita Airport. This shift resulted in an 
increase in the average ti me recorded in the 9th TRS.  
 Here is a breakdown of the two TRS results, excluding those ports affected by the logistics shift: According to the 8
th TRS (factoring out the logistics shift), time from port arrival to warehouse was 
2.9 hours, from warehouse to customs declaration was 13.1 hours, and from customs declaration to 
import permission was 0.4 hours. Likewise, the 9th TRS (factoring out the logistics shift) found that 
the time from port arrival to warehouse was 3.6 h ours, from warehouse to customs declaration was 
7.0 hours, and from customs declaration to import permission was 0.4 hours. 
 
Page 33, para. 19 
Trade facilitation Question 32 
It is indicated that Advance rulings on customs matte rs are not legally binding. In such a situation, 
India would like to know from Japan regarding the advantage for going for such Rulings and 
incurring cost on the same when afterwards, the trad er is not sure of its binding application.  
RESPONSE 
 
The expression "not legally binding" means that Customs officials honour advance rulings issued at 
the time of importation, but the rulings are not binding on the holders of the ruling. The issued rulings are treated the same by all regional Customs official s in Japan within the period of which the rulings 
are valid. 
 
Advance rulings allow the inquiring importers and other parties to be aware of tariff rates, rules of 
origin, customs valuation and other information on their goods before their actual importation, thus 
enabling them to have more accurate cost calculations  and more easily plan for selling and marketing. 
 
Since Customs officials already know the tariff classif ication, tariff rates, etc. when the inquired goods 
are imported, they can be more properly declared and, thus cleared faster.  Japan's advance ruling system is, therefore, suff iciently convenient enough for traders, conducive to 
predictability, impartiality and faster Customs clearance.  
In addition, traders can obtain advance rulings free of charge. 
 WT/TPR/M/243/Add.1  
Page 212 
 
 
  (iv) Non-tariff border measures 
Page 42, para. 37 QRs  
Question 33 
WTO Secretariat Report had indicated that Japan c ontinues to use quantitative restrictions on imports 
on certain fish products and cont rolled substances listed in the Mont real Protocol on Substances that 
Deplete the Ozone Layer. Can Japan clarify unde r which provisions of GATT are they maintaining 
these QRs?  
RESPONSE 
As for certain fish products, quantitative import restrictions are consistent with the 1994 GATT 
(Article 11.2(c) and Article 20(g)).  As for cont rolled substances listed in the Montreal Protocol, 
Japan controls such substances for the implementation of the Protocol.  
(vi) Government procurement 
Page 43, para. 46 
Government procurement Question 34 
It has been stated that "accord ing to an OECD study, Japan sp ends about 16.8% of its GDP on 
government procurement". In paragraph 54 of the re port it has been stated that the total value of 
procurement above the threshold level of SDR 10 0,000 specified under Japan's unilateral 1994 Action 
Program on Government Procurement Procedures was about ¥1.36 trillion in 2008. Could Japan 
provide reasons for significant difference betwee n procurement estimates of OECD and Japan's 
notification to WTO's Committee on Government procurement?  
RESPONSE 
 
The statistics in paragraph 54 of the report are based on the Japanese voluntary measures called 
"Action Program". The statistics do not include pr ocurements by the entities listed in Annex 2 and 
construction services.  The size of the Japanese government procurement as a whole is much larger than the figure mentioned in the report.   Concerning the OECD study mentioned in India's question, Japan does not know how OECD 
calculates the figure in question; so Japan  is not in a position to comment on it. 
Question 35 Could Japan provide the value of total procurem ent of goods and services during 2008 through limited 
tendering under Article XV:1 of the GPA?  WT/TPR/M/243/Add.1 
 Page 213 
 
 
  Page 45, para. 54 
Government procurement 
Question 36 
It has been stated that procurement of foreign goods amounted to 9.1% of the total in 2008.  
Procurement from foreign suppliers increased from 1.8% in 2007 to 2.0% in 20 08 in contract terms, 
but decreased from 3.7% to 3.0% in value terms during the same period. In respect of goods and 
services procured from foreign sources during 2008, could Japan provide the share of total procurement of goods and services through limited tendering under Article XV:1 of the GPA?  
RESPONSE to Questions 35 and 36 
 The total value of the government procurement cont racted by the entities of Annex 1 and Annex 2 in 
2008 through limited tenderi ng under Article XV 1 of the GPA was approximately 617 billion yen, 
and the share of the foreign goods and services was about 2.6 %.  
 
(viii) Standards, technical regulations, an d sanitary and phytosanitary measures 
Page 48, para. 62 
SPS/TBT 
Question 37 
As per "Recommended Procedures for Implementi ng the Transparency Obligations of the SPS 
Agreement (Article 7)" [as contained in the Committee on Sanitary and Phytosanitary Measures 
document No. G/SPS/7/Rev.3 dated 20 June 2008, Annex A-1: Rou tine Notifications, Item 3. 
Products Covered], it is expected that all notifi cations shall carry "Tariff item number(s) (normally 
HS, chapter or heading and number) as contained in the national schedule deposited with the WTO. 
Can Japan state the reasons for not providing such in formation (HS nomenclatures) in its notifications 
on SPS to the WTO Secretariat? 
RESPONSE 
The Government of Japan generally provides all th e necessary information such as HS nomenclatures 
in SPS notifications whenever appropriate. 
Page 53, para. 75 
SPS/TBT 
Question 38 
Japan has been using Japanese as sole language for ma ny of notifications, as shown in Table 1 below: WT/TPR/M/243/Add.1  
Page 214 
 
 
  Table 1 
TBT and SPS Measures from January 1995 to September 2010 
Total 224  SPS Notifications 
Only in Japanese 49 
TBT Notifications Total 
Only in Japanese 588 
131  
Source: Centre for WTO Studies, Online Web Portal  and Database at http://docs.iift.ac.in/sps/ and http://docs.iift.ac.in/tbt/ 
respectively. 
As per Annex B of the SPS Agreement paragraph 7, "Notifications to the Secretariat shall be in 
English, French or Spanish." Evidently, this is not  being followed in all the cases by Japan. Similarly, 
as per Article 10.9 of the TBT Agreement, "Notifications  to the Secretariat shall be in English, French 
or Spanish." This is not being followed as well. 
 
This is likely to act as a problem for trade. Japan is requested to intimate the reasons for departure 
from the provisions of the two Agreements fo r notifications of SPS and TBT measures.  
RESPONSE 
The Government of Japan uses English when provid ing SPS and TBT notifications to the Secretariat 
in accordance with the SPS Agreement,  the TBT Agreement and their Annexes.  
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(v) Export cartels Page 59, para. 103 
Exports Question 39 
WTO Secretariat Report had indicated that Japan  had exempted export cartels from the general 
prohibition of cartels under Japan's Antimonopoly Act. Japanese authorities indicated that there are no known export cartels in Japan. Japan considers that sh ipping cartels (e.g. liner conferences), which are 
exempt from the Anti-monopoly Act under the Marine  Transportation Law, constitute export cartels 
(section (4) (VI)). Japan may please explain why it do es not consider shipping cartels to be in the 
nature of export cartels? 
RESPONSE 
 
Antimonopoly exemption applies to internationa l shipping activities in cases in which prior 
notifications from international shipping operators  are examined and accepted by the Ministry of 
Land, Infrastructure, Transport and Tourism in acco rdance with the Marine Transportation Law for the 
following reasons:  
1) Assuring stable maritime transport services 
2) Promoting the rationalization and efficiency of business through international 
collaboration and cooperation between companies  
3) Consistency with internati onal frameworks on shipping.  WT/TPR/M/243/Add.1 
 Page 215 
 
 
  (4) M EASURES AFFECTING PRODUCTION AND TRADE  
(iv) Intellectual property rights Page 65 & 66, para. 130 IPRs Question 40 
It is stated that Japan protects wines and spirits as GIs in its FTAs in the context of Paragraph 1 of 
Article 22 of the TRIPS Agreement. Japan may please state if it has any plans to extend GI protection 
to products other than wines and spirits. 
RESPONSE 
Japan considers that further examination of merits and demerits is necessary regarding GI extension to 
products other than wines and spirits.  
Question 41 Japanese law on GIs does not allow registration of GI s by any entity other than the rightholder. India 
would like to understand how Japan would address th e case of GIs that have been registered by the 
Government, as is done in many c ountries including India, on behalf of  the holders for effecting better 
commercialization of the GI  
RESPONSE 
 
In Japan, the right to use GIs is not given to partic ular individuals or entities. Japan has provided for 
the "Labeling Standard Concerning Geographical In dications" pursuant to Article 23 of the TRIPS 
Agreement where additional protection for geogra phical indication (GI) for wines and spirits is 
prescribed. With regard to foreign GIs for wines a nd spirits, they are protected based on this labelling 
standard without registration or designation in Jap an.  As for protection for GIs for all products 
pursuant to Article 22 of the TRIPS Agreement, there is no registration or designation system in Japan 
and whether or not the use of a GI is prohibited is  decided in courts based on the Unfair Competition 
Prevention Act on a case-by-case.   Page 67, para. 136 
IPRs 
Question 42 
The ACTA negotiations have ended and a legally ve tted text has been released by the negotiating 
parties. Japan may please elucidate how the provisions of ACTA would be operated in the context of 
non-members.  
RESPONSE 
 
ACTA does not impose any legal obligations on non-me mbers as well as usual international treaties.  
On the other hand, if members would change their domestic laws and regula tions based on obligations 
provided by ACTA, they have to take account of  MFN and NT prescribed by TRIPS Agreement so WT/TPR/M/243/Add.1  
Page 216 
 
 
  that nationals of member of ACTA and those of non-member of ACTA could not be treated in a 
distinctive manner in domestic measure s such as laws and regulations.   
 
Question 43 
Japan may also like to indicate the process and th e time-frame within which the ACTA would come 
into force.  
RESPONSE 
 
ACTA will be open for signature by participants in its negotiations, and by any other WTO Members 
the participants may agree to by consensus, from 31 March 2011.  ACTA will enter into force thirty days after the da te of  the deposit of  the sixth instrument of 
ratification, the acceptance, or approval as be tween those Signatories that have deposited their 
respective instruments of ratification, acceptance, or approval. 
 
Page 67, para. 139 
IPRs 
Question 44 
It has been stated that the Cust oms Law of Japan prohibits placement of goods that infringe IPRs into 
bonded areas for transhipment and customs transit.  Japan may like to elucidate as to how this 
provision is operated in the context of goods which do not infringe any IPRs recognized under 
Japanese laws. 
RESPONSE 
 
Japan's Customs Law provides that the goods de signated in Items 9 and 10 of Paragraph 1 of 
Article 69-11 are the objects of control for "transit"  goods. The goods designated in the said two Items 
are those infringing intellectual property rights, and the definition of infringement of each intellectual 
property right (e.g. patent, trademark right, etc.) is  provided for in the corresponding Japan's IPR law 
(e.g. the Patent Law, the Trademark Law, etc.) respectively. It follows that goods which do not 
infringe IPR under corresponding Japan's IPR law are not the objects of control for "transit" goods. 
 
I
V. T RADE POLICIES BY SECTOR  
(2) A GRICULTURE  
Page 77, para. 7 & 8 
Agriculture Question 45: WTO Secretariat Report reveals that  the agriculture sector continues to receive 
substantial government support, which involves, inte r alia, a relatively higher average MFN applied 
rate compared with other sectors, tariff quotas an d income support. The current total aggregate 
measurement of support in Japan was ¥517.2 billion in 2006. According to the OECD, "total support 
estimates" for agriculture for 2006-08 were 1.1%  of GDP, only slightly less than the sector's 
contribution to GDP, which was 1.2% in 2009. Ca n Japan explain how these measures are affecting 
the market access prospects of agricultura l products from developing countries.  WT/TPR/M/243/Add.1 
 Page 217 
 
 
  RESPONSE 
Japan is the largest net food-importing country in  the world, and we depend on imported food for 
around 60% of our calorie intake. Annual agricultur al imports amount to ab out 55 billion dollars, 
which shows to what degree our agricult ural market contributes to world trade.  
Page 82, para. 18 
Agriculture Question 46 
WTO Secretariat Report indicates that the general tr end in the Government's agriculture policy in 
recent years has been a move away from administered  prices to direct income support for farmers. In 
2007, the price support schemes for wheat, potatoes (fo r starch use), and sugar beets were converted 
into a direct payment scheme. This scheme was ba sed on historical refere nce amounts, which were 
calculated according to the farmers' harvested area and normal yield in the region concerned. This 
situation would indicate these payments are not totally decoupled from the current production and 
prices. Japan may like to clarify if direct payments actually decoupled or not? As and when the historical planting and yields data are updated, it has impact on the current production through wealth 
and risk effect. What is the base year for the hist orical planting and yield data? Has Japan changed the 
base year for any commodities after the direct income support scheme for farmers was introduced. 
RESPONSE 
 
The base period for the historical planting and yield data is 2004 to 2006, which has not been 
changed. 
 
Notification to WTO No. G/AG/N/JPN/137 – Green Box Section G 
Agriculture 
Question 47 
How Japan does seek to ensu re that the farmers who had been covered under the structural adjustment 
assistance provided through producer retirement pr ogrammes do not again engage in marketable 
agricultural production? What sort of monitoring  mechanism has been put in place to ensure 
compliance? 
RESPONSE 
 
An extra payment of the farmer's pension in excess of the deposit by each planholder requires 
completing a transfer of the right to use his farmla nd to a successor or a third party. Therefore, the 
payment of the pension stops if the pensioner restarts agricultural production.   Monitoring is executed by the local government, which observes the utilization of the farmland. 
Technical questions to the Secretariat (ref. Statement on Cover page of WT/TPR/S/243) 
Question 48 
The count of Japan's SPS notifications from Janua ry 1995 to September 2010, is 268; of which are 
224 actual notifications and the rest 44 are in the nature of addition/corrigendum/revision. While for WT/TPR/M/243/Add.1  
Page 218 
 
 
  the TPR purposes it is only notifications from 1st January 2009 which is accounted for, while it is 
evident that such NTM measures can cumulated to a rrive at the market access impact. It only provides 
partial information, on account of  not covering the two years completely, for which TPR is being 
conducted. The WTO Secretariat may clarify on this issue.(WT/TPR/S/243 Page 53, Point 75). 
Question 49 
The above mentioned issue of the cumulative nature is also applicable in the case of TBT measures. 
Japan and the WTO Secretariat are requested clarify on the same.  It also requested as to how many 
number of TBT notifications were issued since January 1995. 
RESPONSE 
 
The Government of Japan uses English when provid ing SPS and TBT notifications to the Secretariat 
in accordance with the SPS Agreement, the TBT Agreement and their Annexes. 
 
The total number of Japan's TBT notifications since January 2001 is 352 including Addendums and 
Corrigendums. 
Japan still has high tariffs for imported agri cultural commodities, especially for rice. 
Question 50 
What are Japan's plans for reducing the tariffs on agricultural products? 
RESPONSE 
 
Japan will continue to set appropriate tariffs wh ile considering the results of DDA negotiations. 
 It is learnt that percentage of farm income  in total household income is only about 19%. 
Question 51 
Do farmers need such heavy protection? 
RESPONSE 
 
Japan does not provide heavy agricultural protection compared to other Members in terms of border 
measures and domestic support.  
 
Small sized holdings dominate agriculture in Japan  despite being highly inefficient as compared to 
large sized farms. 
Question 52 Is there any plan to address this issue?  
RESPONSE 
 
1. The Basic Plan for Food, Agriculture and Rural Areas which was fo rmulated last March 
affirms that the "Government encourages effective u se of farmland by the consolidation of farmland 
use to motivated farmers in acco rdance with regional conditions." 
  WT/TPR/M/243/Add.1 
 Page 219 
 
 
  2. Based on the Agricultural Land Law revised in  2009, we established a new mechanism for the 
more efficient use of farmlands, which enables m unicipalities to rent out farmlands to motivated 
farmers as an agent of the farmland owners.  Question 53 
Why is food self-sufficiency ratio declining in  Japan despite heavy agricultural protection? 
RESPONSE 
 
The food self-sufficiency ratio in Japan is 40% on a calorie basis and 70% on a value basis in 
FY2009. Beginning in FY1965, these figures gradually  decreased mainly due to changes in the 
national diet and contraction of domestic production capacity; for the last decade, however, they have 
remained between 39-41% and 65-72% respectively. 
Japan does not provide heavy agricultural protection compared to other Members in terms of border 
measures and domestic support.   
Question 54 
Did sharp reduction in Japan's Amber Box subsidy sup port affect its agricultural production? If yes, in 
what way? 
RESPONSE 
 
The sharp reduction in Japan's Amber box took place in  1998, when the market price support for rice 
was lifted. As for the effect on rice production after 1998, it is difficult to specify the effect of that 
policy reform because other factors such as food demand also affect it.  Question 55 
How do the Japan's domestic support notifications to the WTO compare to disciplines/rules under the 
WTO Agreements? 
RESPONSE 
 
Notifications to the WTO Committee on Agriculture have been handled in a manner consistent with 
WTO agreements.  
Japan started the Rice Farming Income Stabiliza tion Program (RFISP) from 1998 – its first blue box 
program.  In 2007, RFISP was replaced by the pr ogram for Rice Farming Structural Reform, which 
was scheduled to be terminated in 2010. 
Question 56 Has it been terminated? RESPONSE 
Yes, it has. 
Low level of Japanese procurement is awarded to fo reign suppliers due to wide range of barriers 
including lack of transparency, qualification require ments and the extensive use of single tendering. WT/TPR/M/243/Add.1  
Page 220 
 
 
  Question 57 
How does Japan propose to address these issues?  
RESPONSE 
 Japan is conducting its government  procurement appropriately based on the principles of national 
treatment and non-discrimination.  Japan considers th at the statistics are the result of an appropriate 
procurement process based on these principles.   
In October 2010, Bank of Japan established an Asset Purchase Programme for purchase of 
government securities, commercial paper, corpor ate bonds, Exchanged Traded Funds (ETFs) and 
Japanese Real Estate Investment Trusts (J-REITs ) totalling to Yen 35 trillio n including existing fixed 
rate operations.  Some of these assets such as ETFs and J-REITs carry fair amount of risks.  Many of these programmes have been dubbed by the market players as too little and too late as the intended 
investments etc. have not picked up and recovery of the economy continues to be weak. 
Question 58 
What has the outcome of Asset Purchase Programme been satisfactory?  
RESPONSE 
 
The Bank of Japan has been pursu ing a policy initiative through a comprehensive monetary easing 
policy consisting of the following: (1) a change in the guidelines for money market operations, 
(2) clarification of the policy time horizon based on the "understanding of medium- to long-term price stability" as well as (3) the establishment of an A sset Purchase Program to purchase various financial 
assets (5 trillion yen) and provide lo nger-term funds (30 trillion yen). 
 Looking at market developments since the compre hensive monetary easing policy was decided on, in 
the interbank markets, interest rates on term in struments such as TIBOR and Yen LIBOR have edged 
down further from the already very low levels. In te rms of reducing risk premiums, in the corporate 
bond market, credit spreads have been narrowing, notably for lower-rated bonds, and REIT prices have also been on the rise. The comprehensive monetary easing has also been acting as a catalyst to increase the transaction volume of J-REITs and exch ange-traded funds (ETFs), and for an increasing 
variety of corporate bond issuers. 
 In the meantime, however, yields on longer-term government bonds, which declined immediately 
following the decision on the comprehensive monetary easing policy, have recently increased. The Bank of Japan is of the view that the increase ha s been in tandem with what has been observed in 
bond markets in the United States, where long-term inte rest rates have increased further on account of 
growing optimism on the economic outlook: in hi ghly globalized financial markets, such overseas 
developments affect domestic interest rates. Th e increase in longer-term in terest rates in Japan, 
however, has been relatively modest, in part, refl ecting our commitment to keep the virtually zero 
interest rate policy until it judges, on the basis of  the "understanding of medium- to long-term price 
stability," that price stability is in sight, on conditi on that no problem will be  identified in examining 
risk factors including the accumulation of financ ial imbalances (the policy duration effect). 
 Assessing financial market developments as a whole, the Bank of Japan believes that the 
comprehensive monetary easing policy on the whole has effectively helped to ease financial conditions even further. 
  WT/TPR/M/243/Add.1 
 Page 221 
 
 
  In June 2010, Bank of Japan introduced a new progr am through which it provid es long term funds at a 
low interest rate to private financial institutions  to encourage their efforts for term lending and 
investment.  At the same time, it is recognized that  deposits at financial institutions far exceed loans 
and that financial institutions use those funds for investment in securities such as government bonds.  
This indicates that there is no shortage of cash or liquidity but investment opportunities are not 
growing. 
Question 59 Is Japan contemplating any other steps in future to stimulate investment?  
RESPONSE 
 
In November 2010, the Inward Investment Promo tion Round-Table (Chair: the Minister of Economy, 
Trade and Industry) issued the "Inward Investment Promotion Program" to make Japan more attractive for domestic and foreign investment.   In related measures, the effective corporate tax ra te, which includes national and local taxes, will be 
reduced by 5% in order to promote domestic inv estment and job creation through enhancing Japanese 
companies' international competitiveness as we ll as improving the environment for business 
establishment [40.69% ֜35.64%]. The related bills are bei ng discussed during the ongoing ordinary 
session of the Diet. 
 In order to stimulate investment from foreign investors, it is also important to improve the business environment by promoting EPAs which include hi gh-level investment-relate d provisions. Japan will 
enhance its efforts to promote EPAs with major trading partners and prom ote appropriate domestic 
reforms with a view to "opening the country". 
 
Pharmaceutical firms are required to file all registration documents in Japanese only with Pharmaceuticals and Medical Devices Agency (PMDA) for introduction of product in Japan. 
Question 60 
PMDA should allow filing of documents in English. 
RESPONSE 
The Government of Japan accepts some dossier s in English for the marketing approval of 
pharmaceuticals. However, at this point, it is difficult  to allow applicants to submit all the dossiers in 
English because it might lead to prolongations of  review time as it would take more time to 
comprehend the data.  
Question 61 
 Japan is only 40% self sufficient in food. What is the procedure for import of food items and food safety regime in Japan?   WT/TPR/M/243/Add.1  
Page 222 
 
 
  RESPONSE 
 
Regarding the procedure for importing food items and the food safety regime in Japan, please refer to 
the following websites: 
  - Customs   http://www.customs.go.jp/english/exp-imp/index.htm  
 - Plant Quarantine 
  http://www.pps.go.jp/english/index.html   - Animal Quarantine   http://www.maff.go.jp/aqs/english/index.html  
 - Tariff Quotas 
  Please refer to the notification concerning the administration of tariff quotas (MA1).   - Food Inspections   http://www.mhlw.go.jp/english/topics/importedfoods/index.html  
Question 62 
 Whether unique conditions or special requirements or SPS measures that have to be fulfilled for 
import of agricultural products in Japan?  
 
RESPONSE 
 
Under the Japanese Food Sanitation Law, there are no unique conditions or special requirements or 
SPS measures targeted on imported foods from fore ign countries, and the established standards and 
specifications have been applied e qually to domestic and imported foods. 
 
For import requirements related to animal and plant quarantines, please refer to the following websites:  
- Animal quarantine; http://www.m aff.go.jp/aqs/english/index.html 
- Plant quarantine; http://www.pps.go.jp/english/index.html 
 
Question 63 
 Japanese Pharma market is around US $ 60-65 bill ion, of which around US $ 10 billion is being 
imported. But in view of Non-Tariff Barriers access  to the Japanese market is  difficult. Whether the 
Japanese Government has taken steps to remove No n- Tariff barriers in pharma products? What are 
the steps required to register a pharmaceutical product in Japan? 
 
RESPONSE  
Japan participates in the International Conference on the Harmonisation of Technical Requirements 
for the Registration of Pharmaceuticals for Human Use (ICH) to achieve greater global harmonisation in pharmaceutical regulations.   WT/TPR/M/243/Add.1 
 Page 223 
 
 
  The main procedures required to market  pharmaceuticals in Japan are as follows: 
 
- A person who wants to market a drug must obtain a license for marketing business.  - A person who wants to manufacture a drug must obtain a license for manufacturing 
drugs (or an accreditation for foreign manufactur e if he/she intends to manufacture it 
in foreign countries)   
- A person intending to market a drug must obtain marketing approval for each 
product. 
 
Question 64  
Are the standards for quality of products or other technical standards applied by Japan different from 
international standards adopted by USA and other countries? 
 
RESPONSE 
 In the existing corresponding international standard s 96 % of JIS are equivalent to international 
standards. Consequently 4% of JIS are different from international standards. 
 
Question 65 
 
Whether process of registration of medicine in Japan is similar (or more stringent) to USFDA? 
 
RESPONSE  
Japan maintains an equivalent level in the registrati on system of medicines to that of the US, as Japan 
works together with US-FDA as well as the EU in ICH to achieve greater harmonization in 
pharmaceutical regulations.  
 
Question 66 
 Whether Biostudies done by the Pharma companie s on patients other than Japanese patients are 
accepted by Japan?  
 
RESPONSE  
The Government of Japan accepts foreign clinical data based on ICH-E5 guidelines and other relevant 
notices on its implementation.  
 
Question 67 
 Japan is major importer of footwear. What is the procedure for import of footwear in Japan? How the 
duty on import of foot wear is regulated?   RESPONSE  
At the beginning of each fiscal year (early April), the Ministry of Economy, Trade and Industry 
(METI) accepts applications for TQ on leather footwear and allocates quotas. 
 
The Customs Tariff Law and Temporary Tariff Measur es Law regulate the duty on the import of foot 
wear. 
 WT/TPR/M/243/Add.1  
Page 224 
 
 
  Question 68 
 How the "pooled quota" for import of footwear fro m different countries is determined? Whether zero 
duty is imposed on footwear imported from Bangladesh? 
 
RESPONSE  
The pooled quota for the import of leather footwear is  set up taking into consideration of the situation 
of domestic industries, based on the bound volume at  the UR. Japan basically applies zero duty for 
footwear from Bangladesh, giving an equal treatment with other LDCs.  Question 69  Japan is one of the largest importers of Sesame seed s in the World. What is the percentage share of 
import of Sesame seed from India?  
 
RESPONSE  
According to Trade Statistics of Japan, Ministry of Finance, the share of import of Sesame seed from 
India in 2009 is 0 ％. 
 
Question 70  What are the pre requisites for textiles and leather products import in to Japan?  RESPONSE  
Currently, Japan has no prerequisites for textiles. Regarding the prerequisites for leather products, 
Japan applies a tariff rate quota system for some leather and leather footwear. 
 
Question 71 
 What is the procedure for imports of co smetics and beauty products into Japan? 
 
RESPONSE 
 The main procedures required by the Pharmaceu tical Affairs Law for importing and marketing 
cosmetics in Japan are as follows:  
- Obtain a License for Manufacturing Cosme tics from the governor of the prefecture.  
- Obtain a License for Marketing Business of Cosmetics from the governor of the 
prefecture.  
- Submit a Notification of the Marketing Business of Cosmetics Manufactured in 
Foreign Countries to the Pharmaceuticals and Medical Devices Agency (PMDA).  
- Submit a Notification of the Marketing Business of Cosmetics to the governor of the 
prefecture. 
- Submit a Notification of Importing Cosmetics for the Marketing Business to the 
Kanto-Shinetsu or Kinki Regional Bureau of Health and Welfare. 
 
Question 72 
 
What is the procedure for imposition of withhol ding tax? How withholding tax is determined?   WT/TPR/M/243/Add.1 
 Page 225 
 
 
   
RESPONSE 
 
Please refer to the following website: 
 
http://www.nta.go.jp/foreign_language/withholdingtax2008.pdf 
 
INDONESIA  
1. In reference to WT/TPR/S/243, Page 38, Para graph 27, the WTO Secretariat reported that in 
2010 the average MFN tariff applied by Japan was 5.8%. The applied MFN tariff for agricultural 
products was higher than other produc ts with an average of 15.7%. Tariff escalation was also imposed 
on certain sectors such as textiles, refined pe troleum, industrial chemicals, food products, 
manufacturing products, leather products, wood and paper products, and also other chemicals 
products. Could Japan please explain why certain pr oducts such as textiles, refined petroleum, 
industrial chemicals, food products, manufacturi ng products, leather pr oducts, wood and paper 
products, and other chemicals was s ubjected to the tariff escalation?  
 
RESPONSE 
 
Japan sets an appropriate tariff rate on each product considering the situation in domestic industries. 
As tariff escalation is one of the elements of  the agriculture and the NAMA negotiations, Japan 
intends to address such issues in consider ation of the result of the DDA negotiations. 
 2. In reference to WT/TPR/S/243, Page VIII, Paragraph 10, the WTO Secretariat reported that 
Japan continues to impose non-tari ff measures such as import prohib ition and quantitative restrictions 
on imports. For example, quantitative imports rest rictions for certain fish products, and import 
restrictions for tobacco leaves, opium, rice, wheat , barley, and also for dairy products. Could Japan 
please explain why they are still imposing quantitative import restrictions (import quotas) for certain 
fish products, and import restriction for tobacco  leaves, opium, rice, wheat, barley, and dairy 
products? In addition, could Japan please clarify th e details of the implementation of impof quota 
itself? Does it violate the existing provisions within the WTO?  
 1. There is no import restriction for tobacco leaves. 
 2. In Article 23 of the 'Single Conve ntion on Narcotic Drugs', 1961, government 
agencies are granted the exclusive right of importing, exporting, wholesale trading 
and maintaining stocks of opium. In order to  be consistent with the Convention, the 
right of importing, exporting, storage and sale of opium is exclusive to the State 
under Japan's Opium Law. 
 3. A.  Quantitative import restrictions (import quotas) play an important role in the 
conservation and management of fishery r esources in waters adjacent to Japan. This 
system is consistent with WTO Agreements . Japan will continue to implement this 
system in an appropriate manner. 
 
The following products are required to establis h allocation of import quota in accordance with 
IMPORT TRADE CONTROL ORDER, Article 3, FOREIGN EXCHANGE AND FOREGIN TRADE ACT, Article 52.   ("ex" indicates that only a part of the heading is covered). 
 WT/TPR/M/243/Add.1  
Page 226 
 
 
   HS No .  Description of Goods  
  ex 03.01    Herring, Cod, Yellow ta il, Mackerel, Sardine, Horsemackerel 
 ex 03.02    Saury, roes of Cod and Niboshi (small boiled and dried fish 
 ex 03.03    for seasoning), live, fresh, chilled, frozen, dried, salted or in brine  ex 03.04     ex 03.05     ex 03.07    Scallops, adductors of she ll-fish, cuttle-fish and squid (excluding "Mongo 
   i k a " )  
ex 12.12    Edible seaweeds  and its food preparations  
 ex 21.06    Japan doesn't impose import restriction for opium, rice, wheat, barley, and dairy products. Japan is 
convinced that the Japanese tariff quota regime is consistent with WTO Agr eements and implemented 
appropriately in line with Japan's schedules. 
 3. In reference to WT/TPR/S/243, Page VIII, Paragraph 16, the WTO Secretariat reported that 
Japan is still applying protection measures for domes tic agricultural products. This is being done in 
the form of tariff quotas, income support, and cont rol of production for agricultural industries. These 
protective measures will make it more difficult for agricultural products originating from developing 
countries to enter the Japanese market. Nowadays , Japan is trying to encourage the export of 
agricultural products to the international markets.  Could Japan please clarify whether this kind of 
protectionism within the agricultural sector viol ates the existing WTO provisions, in particular the 
Agreement on Agriculture? We would also like to  ask whether Japan's exports of subsidized 
agricultural products will not affect the price of ag ricultural products in the interactional market? 
 
RESPONSE 
 
The Government of Japan hasn't taken any measu res that violate WTO agreements. And Japane does 
not export agricultural products which affect the pr ice of agricultural products in the international 
market. 
 4. In reference to WT/TPR/S/243, Page 47-48, Paragraphs 58-61, the WTO Secretariat reported 
that the State Trading Enterprises in  Japan rule the trade intobacco l eaves, opium, rice, wheat, barley, 
and dairy products. This is in order to stabilize the supplies and prices of commodities and also to 
protect the consumers. The role of State Tradi ng Enterprises is supported by legislation, special 
import and export licenses, and special monopoly ri ghts over domestic production and distribution- 
For example, Japan Tobacco Inc has the monopoly ri ghts to purchase all tobacco leaves grown in 
Japan for domestic cigarette production. This m onopoly effectively makes all imports of tobacco 
leaves for Japan's cigarettes production dependenda nt on the purchase made by Japan Tobacco and 
disrupts the national tobacco product market. Could Jap an please explain the nature of the role of the 
Competition Board in monitoring these State Trading Enterprises monopolistic practices? 
 
RESPONSE 
 
The Antimonopoly Act (AMA) is applied to both  State Trading Enterprises and other private 
enterprises.  The Japan Fair Trade Commission ap plies the AMA strictly even to anticompetitive 
activities by the State Trade Enterprises, as long as their conducts fall into the infringement of 
competition which is prohibited by the AMA.  The Tobacco Business Law stipulates that Japan Tobacco Inc. (JT) sh all, in the case where it intends 
to purchase the domestically produced leaf tobacco , conclude an agreement in advance with the  WT/TPR/M/243/Add.1 
 Page 227 
 
 
  cultivators. JT purchases the domestic leaf tobacco as the implementation of this agreement; therefore, 
JT doesn't have the monopoly rights to purchase all domestic leaf tobacco. In addition, JT doesn't 
have the legal monopoly rights to import leaf tobacco.  5. In reference to WT/TPR/S/243, Page 2, Pa ra 3, the WTO Secretariat reported that the 
Japanese government introduced a stimulus packag e in August2008 to help overcome the financial 
crisis. This stimulus package focused on increasi ng domestic demand by sup porting for the financial 
sector, extending of subsidy schemes on environm entally friendly vehicles, and supporting the labour 
market.  Could Japan please guarantee whether th e stimulus packages, such as support for the 
financial sector, extension of subsidy, schemes for environmentally friendly vehicles, and support for 
the labour market will not distort the market and violate the existing subsidies and run counter to 
provisions in the WTO?  
RESPONSE 
 
Japan's stimulus packages carried out in the wake of  the financial crisis do not distort the market in a 
way that provides different conditions of comp etition to domestic goods/ services providers and 
foreign goods/ services providers, nor violate any provisions in the WTO Agreement. 
 For example, subsidies scheme for environmenta lly-friendly vehicles (EFVs) was aimed at, from the 
perspective of protecting the environment and s timulating the economy, encouraging consumers to 
purchase EFVs by subsidy to (1) scrap incentive an d (2) consumers who are purchasing a new EFV 
without an older vehicle to replace.  Subsidy sch eme for EFVs had some environmental requirements 
for eligibility such as the age of the vehicle to be scrapped and a certain level of fuel efficiency and 
emission. If those requirements were satisfied, consumer s were eligible for subsidy, irrespective of the 
origin of the vehicle, with no discriminatory treatment. Thus, subsidy scheme for EFVs did not 
provide different treatments to Japanese vehicles and foreign vehicles, which ensured consistency 
with the WTO Agreement.  As for the support for the labour market, Japan has supported efforts by SMEs to maintain 
employment, as well as non-regular workers to stab ilize their employment, etc. As these measures 
were applied without discrimination between domes tic companies and foreign companies, or between 
Japanese workers and foreign workers, Japan is of the view that these efforts did not distort the 
market, nor violate the WTO Agreement.  Although some of them have already terminated, Japan will continue to implement measures included 
in a package, if any, in a cons istent manner with the WTO rules. 
 
6. In reference to WT/TPR/S/243, Page 41, Para . 36, the WTO Secretariat reported that products 
subjected to restrictions and import licenses in clude certain marine products, drugs, chemical 
products, propellant powder, nuclear material, weapons , animals and plants, ozone  depleted materials, 
hazardous waste, chemical weapons, alcohol, rough diamonds, illegal cultural property from lraq, all 
goods from North Korea, weapons and other items rela ted to the nuclear program or ballistic missile 
programs of lran, weapons and also other items from Eritrea. Could Japan please explain the 
reasoning behind the decision for Japan to include medical products, alcohol, chemical products and certain marine products on the ba nned list of imported products? 
 
RESPONSE 
 1. They are not banned, but put into restriction by the Foreign Exchange and Foreign Trade Act.  
2. Chemical products are restricted for the im plementation of international agreement. Certain 
marine products are restricted for the implemen tation of international agreements as well as 
for conservation of fishery resources. WT/TPR/M/243/Add.1  
Page 228 
 
 
  3. With regard to medical pr oducts, narcotics and psychotropi c substances are controlled under 
import licensing system for prevention of drug abuse and ensuring licit access to them. 
4. Industrial alcohol over 90 Celsius degrees coul d be imported only by authorized importers to 
prevent its unauthorized use in liquor production and to ensure a stable and smooth supply. 
 7. In reference to WT/TPR/S/243, Page 78, Pa ra 9, the WTO Secretariat reported that most 
countries have their own procedures to support pri ces, including border protection, which can delay 
structural change and obstruct the prevalence of  scale economies and mechanization. In terms of 
Japan, , rice has been one of the most highly prot ected crops and rice paddies are characterized as 
small-land assets involving part-time farmers.Therefor e, the Government introduced a direct payment 
scheme in April 2007 for farmers with a certain s cale. In 2010, the Government implemented a new 
single-year pilot scheme for a direct-payment rice  programme. This programme  provides participating 
farmers with financial support to close the gap be tween the production costs and the "farm gate" price 
of rice, irrespective of the size of the farm scal e. ln 2011, the Japanese government will officially 
introduce a new direct payment system, which will also be extended to other crops. Could Japan 
please expand on the details about this direct paymen t method to farmers in Japan? And does it violate 
the principles of the prohibited subsidies, particularly SCM?  
RESPONSE 
 Under the new scheme, the method of supporting farm  management changes to direct payments to 
farmers from the  government, in which the governme nt transfers public funds directly to farmers' 
bank accounts based on individuals farm ers' applications, not through fa rmers' organizations or other 
entities.  
Payment through income support direct payment schemes does not fall into the category of so-called 
"prohibited subsidies" stipulated in Article 3 in the SCM agreement (export subsidy and domestic 
content subsidy).  8. In reference to WT/TPR/S/243,  Page 5, Para 12-13, we understa nd that with the development 
of the Japanese economy there are several types of  employment which cannot be performed by the 
local workforce. Could Japan please briefly outline government plans to employ foreign labour in 
Japan?  
RESPONSE 
 
According to the "Employment Countermeasures Basic Policy" (February 2008 notice from the 
Minister of Health, Labour and Welfare), as the principal employment policy in Japan: "Expanding the scope of accepting foreign laborers, such as th e acceptance of unskilled laborers, results in dual 
labor markets, obstructs the betterment of work ing conditions, and also adversely affects job 
sufficiency and the procurement of personnel. In order to maintain the workforce, it is essential to first 
focus on having Japanese young people, women, elde rly, and other people participate in the labor 
market."   In addition, the Basic Plan for Immigration Cont rol (4th edition March 2010) establishes as follows: 
with regard to dealing with the population decline, in addition to working to improve the birth rate, it 
is important to work on measu res such as utilizing the potential workforce of young people, women 
and elderly people in order to increase productivity. On  the other hand, even with these measures, if 
difficulties or insufficiencies remain, while paying  due consideration to the national consensus on 
issues relating to the daily lives of the people such as the impact on our industries, public safety and 
the labor market, there is a need to have wide -ranging debate on what the acceptance of foreign 
nationals should be, and on th e future ideal image of Japan.  WT/TPR/M/243/Add.1 
 Page 229 
 
 
  9. In reference to WT/TPR/S/243, Page 52, Pa ra. 73, the WTO Secretariat reported that Japan 
had made some revisions to the standards and specifications for Japanese food products. These 
included the revision of the change in the maximu m residue limits Levels (MRLs) for pesticides, 
changes in food additives and the determination of  import requirements for fresh fruit. Could Japan 
please clarify whether these revision have b een submitted to the WTO Secretariat? 
 
RESPONSE 
 
As to the revision of the maximum residue limits Le vels (MRLs) for pesticides, the changes in food 
additives and the determination of import requirement s for fresh fruit, the Government of Japan has 
provided all notification required under the SPS Agreement. 
 10.  In reference to WT/TPR/S/243, Page 11, Para  5, could Japan provide more clarification about 
the criteria required to determine which states are el igible to receive the facilities of the Generalized 
System of Preference (GSP)? 
 
RESPONSE 
 
Beneficiaries of Japan's GSP are countries a nd territories meeting the following criteria:  
  (1) Economy of the country or the territory must be in the stage of development. 
 (2) The territory must have its own tariff and trade system. 
 (3) The country or the territory desires to receive preferential tariff treatment under the 
GSP scheme. 
 (4) The extension of such preferences to  a country or a territory is regarded as 
appropriate. 
 
11. In reference to WT/TPR/S/243, Page 3 Para. 6, we recognise the Japanese economy has 
decreased as a result because of global economic cr isis. The appreciation of the yen has had major 
impact on Indonesia's foreign debt in yen. We would like ask if Japan has a policy to control or maintain the stabilization of the yen currency?  RESPONSE  
Excess volatility and disorderly movements in excha nge rates have adverse implications for economic 
and financial stability. The Japanese Government w ill continue to keep a close eye on exchange 
markets and will take appropr iate actions when needed. 
 
12. In reference to WT/TPR/S/243, Page VII, Para. 12, the WTO Secretariat report mentioned 
that the Japanese government has provided drawb ack facility for Japanese exporters. Does Japan 
agree with Indonesia that the drawback facilities provi ded to exporters could in fact be regarded as a 
subsidy?  RESPONSE  
Import duties are refunded where im ports are re-exported from Japan or  where imported raw materials 
are used for the production of certain exported goo d since it is not necessary to impose customs duty 
on items which are not finally imported into Japan. Th erefore, Japan doesn't regard drawback facility 
for Japanese exporters as a subsidy. 
 WT/TPR/M/243/Add.1  
Page 230 
 
 
  MEXICO  
(Translation) 
 
Paragraph 6 states that about 46 per cent of Japanese Industrial Standards are aligned to international 
standards.  We would like to know if there are an y plans to continue this alignment, which has 
remained unchanged since 2008.  
RESPONSE 
 For existing corresponding international standards, 48% of the JIS were fully consistent with the 
international standards. In addition, some of the JIS (48 %) were comparab le to the international 
standards, but had been partly modified in th e setting of more detailed provisions in order to 
implement them in Japan. Consequently, 96 % of the JIS were equivalent to international standards. 
As can be seen from the JIS results above, sin ce the enforcement of the WTO/TBT Agreement in 
January 1995, Japan has been further promoting cons istency with internationa l standards in order to 
respond to demands inside and outside the country. Japan will continue to promote consistency with 
international standards.  Given that labour productivity in the agricultural sect or is lower than in the rest of economy, what 
steps is Japan taking to reverse this trend? 
 
RESPONSE 
 
Japan has been undertaking following measu res to increase agricultural productivity. 
 
1. Farmland consolidation 
 The Government promotes consolidated use of farmland (Based on the Agricultural Land Law revised last y ear, we established the mechanism through which 
organizations for farmland concentration in munici palities rent out farmland to motivated farmers. 
These organizations are entrusted by farmland owners and rent out the land on behalf of the owners. 
In this way, farmland is utilized most effectively.)  2. Infrastructural services   (1) Water supply facilities, dams and drainage schemes 
 (2) Road and other means of transport 
 (3) Infrastructural works associated  with environmental programmes. 
 3. Research and development  
Development of new crop varieties; Research , development and dissemination of cultivation 
technology; and improved management techniques.  The report states that no cost benefit analyses have  been conducted in connection with SPS measures.  
We would like to know if Japan plans to conduc t such analyses and why it has not yet done so. 
  WT/TPR/M/243/Add.1 
 Page 231 
 
 
  RESPONSE 
 
The Government of Japan understands that quan tifying costs and benefits to assess regulatory 
proposals is generally important, but does not apply the method for the SPS measures. Japan reiterates 
that the process for approval for import of designate d items to be quarantined involves consultations 
with domestic relevant industries and consumers as well as requesti ng countries, in order to properly 
reflect the opinions of stakeholders. Japan takes in to consideration cost-benefit analyses conducted by 
requesting countries, if provided.  What are the procedures for drafting, modifying an d annulling technical regulations and how is the 
requirement in Article 2.9.1 of the TBT Agreement met? 
 
RESPONSE 
 
If the technical regulation under consideration may ha ve a significant effect on international trade and 
the domestic market such as through its drafting, modification, or annulment, the Government of 
Japan makes an effort to make a public notificati on and reflect opinions, provided from interested 
parties or people of not only Japan but also other me mber countries, at an early and appropriate stage.  
To contribute to transparency, the Government of Japan ensures appropriate procedures such as public 
consultations based on the Administrative Proce dure Act and WTO notifications based on the TBT 
Agreement, etc. 
 
Are there any annual or periodic programmes listing the issues that are to be regulated by the various government ministries and, if so, where can they be consulted?  
RESPONSE 
 The list of whitepapers and annual reports issued by each ministry is available at the following 
website (in Japanese).  http://www.e-gov.go.jp/link/white_papers.html  
Can nationals (persons and companies) of WTO Members participate in the drafting, modification and 
annulment of technical regulations at national level?  
RESPONSE 
 
In the case of drafting, modification and annulment of  technical regulations at the national level, the 
Government of Japan provides necessary notificatio ns based on the TBT Agreement.  Following the 
Agreement, the Government of Jap an makes efforts to pr ovide information requested from enterprises 
or parties from other member countries, such as relevant documents and data, and to respond to 
comments from interested bodies in an appropriate manner.  
What percentage of all Harmonized System tariff h eadings are regulated by technical standards or 
regulations?  
RESPONSE 
 
Basically, most Harmonized System tariff headings are regulated by technical standards or regulations 
in accordance with the TBT Agreement.  WT/TPR/M/243/Add.1  
Page 232 
 
 
  Paragraph 115 in Chapter 3 states that with a vi ew to stimulating the domestic economy, subsidies 
have been introduced for purchasing new environmen tally friendly vehicles.  We would like to know 
the following: 
 
The amount paid since the introduction of these subsidies in 2009;  
RESPONSE 
 
582.7 billion yen.  
 The characteristics of an environmentally friendly vehi cle.  Is fuel efficiency (15 per cent more) the 
only characteristic or are there others such as the type  of fuel used (e.g. biofuel) and/or the use of 
alternative energy (electricity or solar power)? 
RESPONSE 
 Aside from fuel efficiency, there were some other requirements, such as a certain age for the vehicle 
to be scrapped and a certain level of emission for the EFV, regardless of the energy source.  According to paragraph 13 of Chapter II (Tra de Policy Regime:  Framework and Objectives), 
"promoting transparency is one of the Government 's policy priorities".  However, "various […] 
decisions and "understandings" are not automatically  […] available online".  Does Japan think it will 
be in a position to make these texts available online soon?  
RESPONSE 
 
1. Most of the titles of the Cabinet decisions a nd understandings are carried at any given time 
under " Cabinet meeting items"" on the website of the Prime Minister of Japan and his Cabinet 
(http://www.kantei.go.jp/jp/kakugi/index.html).  2. In addition, although it is not necessarily ex haustive, most of the Cabinet decisions and 
understandings are published on the following websites or publications, such as the official gazettes 
by each Ministry:   http://www.cas.go.jp/   http://www.clb.go.jp/   http://www.jinji.go.jp/top.htm  
 http://www.cao.go.jp/  
 http://www.kunaicho.go.jp/   http://www.jftc.go.jp/   http://www.npsc.go.jp/  http://www.npa.go.jp/ 
 http://www.fsa.go.jp/  
 http://www.caa.go.jp/   http://www.soumu.go.jp/  http://www.soumu.go.jp/kouchoi/   http://w ww.fdma.go.jp/  
 http://www.moj.go.jp/  
 http://www.moj.go.jp/KOUAN/index.html   http://www.mofa.go.jp/mofaj/   http://www.mof.go.jp/   http://www.nta.go.jp/   WT/TPR/M/243/Add.1 
 Page 233 
 
 
   http://www.mext.go.jp/  
 http://www.bunka.go.jp/   http://www.mhlw.go.jp/    http://www.mhlw.go.jp/churoi/index.html   http://www.maff.go.jp/  
 http://www.rinya.maff.go.jp/  
 http://www.jfa.maff.go.jp/   http://www.meti.go.jp/   http://www.enecho.meti.go.jp/   http://www.nisa.meti.go.jp/ 
 http://www.enecho.meti.go.jp/  
 http://www.jpo.go.jp/indexj.htm   http://www.chusho.meti.go.jp/   http://www.mlit.go.jp/  http://www.mlit.go.jp/kankocho/  
 http://www.jma.go.jp/jma/  
 http://www.mlit.go.jp/jtsb/   http://www.kaiho.mlit.go.jp/   http://www.env.go.jp/   http://www.mod.go.jp/   http://www.jbaudit.go.jp/ 
 
3. The Government of Japan will continue to ma ke efforts to promote e-Government initiatives. 
 In Chapter II, paragraph 77 states that Japan's i nvestment promotion measures remain the same as in 
2009.  However, "the Government is considering an introduction of a new preferential tax scheme for 
inward FDI".  Mexico would like to know the scope and duration of this policy. 
 
RESPONSE 
 
Japan plans to introduce two new schemes which are not limited to foreign companies, giving 
preferential treatment in terms of corporate tax to promote investment in Japan, and the related bills 
will be discussed at the ongoing ordinary session of the Diet. Special depreciation, tax credit and 
income deductions will be introduced in the Interna tional Strategic Special Di strict (tentative title), 
which targets big cities with competitive advantages  internationally. Also income deductions which 
aim to attract global companies' R&D centers a nd Asian regional headquart ers will be introduced. 
 
In Chapter IV (Trade Policies by Sector), paragr aph 49 mentions that a number of recent changes 
have been made including the introduction of an a lternative dispute resolution system for insurance 
issues and a system for managing insurance firms' c onflicts of interest.  Could Japan provide further 
information on the operation and implementation of these systems?  
RESPONSE 
 The financial alternative dispute resolution system  (ADR) aims to achieve dispute resolution by a 
Dispute Resolution Organisation meeting a certain  level of qualifications. The overview of the 
financial ADR is as follows:  
 (a) Administrative agencies, such as the Fi nancial Services Agency of Japan, designate 
Dispute Resolution Organisations, following an application from those organisations. 
The administrative agencies also supervise such organisations. 
 (b) The financial institutions conclude a basi c contract for the implementation of dispute 
resolution procedures with the Designated Dispute Resolution Organisation. WT/TPR/M/243/Add.1  
Page 234 
 
 
   (c) Customers file with the Designated Dispute Resolution Organization for dispute 
resolution of financial disputes between  themselves and financial institutions. 
 (d) Dispute Resolution Mediators who have expertise in financial services preside over 
the dispute resolution process, and then presen t a proposal settlement to the parties of 
the dispute. 
 (e) Once the settlement proposal is agreed among the parties, financial institutions are 
required to endeavour to resolve the dispute based on the settlement. 
 
 * The Dispute Resolution Organisation also receives claims from customers. 
 
IV. T RADE POLICIES BY SECTOR  
5) S ERVICES  
i) Financial services In paragraph 38 it is mentioned th at a ministerial licence is require d to conduct insurance business in 
Japan; approval is required for new insurance product s, for modifications to existing products, and for 
premium rates. We would like to know the requirements to obtain a license. 
RESPONSE 
The examination requirements for insurance products are stipulated in Article 5 (1) (iii) and (1) (iv) of 
the Insurance Business Act and Article 11 and 12 of  the Ordinance for Enforc ement of the Insurance 
Business Act. The examination for insurance pr oducts is conducted based on these requirements.  
The Insurance Business Act  
Article 5 (Examination Requirement for a License)  (1) (iii) The matters stated in the documents liste d in paragraph (2) (ii) and (iii) of the preceding 
Article conform to the following requirement: 
 (a) The contents of the insurance contact are not likely to be lacking in the protection of 
policyholders, those insured, a person who should be receiving an insurance amount, and other relevant persons (hereinafter  referred to as "Policyholders, etc."); 
 (b) No specific persons will be subject to unfair discriminatory treatment under the 
contents of the insurance contract; 
 (c) The contents of the insurance contract  are not likely to encourage or induce acts 
harmful to public policy and good morals; 
 (d) The rights and obligations of Policyholders, etc. and other contents of the insurance 
contract are specified clearly and simply for the Policyholders, etc.; and 
 (e) Other requirement specified by a Cabinet Office Ordinance.  
 (iv) The matters stated in the documents liste d in paragraph (2) (iv) of the preceding Article 
conform to the following requirement: 
 (a) The calculation procedures for insurance premiums and policy reserve are reasonable 
and proper pursuant to actuarial science; 
 (b) No specific persons will be subject to unfair discriminatory treatment with regard to 
insurance premiums; and  
 (c) Other requirement specified by a Cabinet Office Ordinance.  For reference: URL of the Insurance Business Act http://www.fsa.go.jp/common/law/ins01.pdf 
  WT/TPR/M/243/Add.1 
 Page 235 
 
 
  In paragraph 46 it is said that in response to the fi nancial crisis as well as to improve the stability and 
transparency of the financial system and to prot ect investors, the Act for the Amendment of the 
Financial Instruments and Exchange Act was promulga ted in May 2010.  Mexico would like to know 
more details about the Act. Is it possible to have access to it through a specific website in English?  
 RESPONSE  
The outline which describes the amendment of th e Financial Instruments and Exchange Act 
promulgated in May 2010 is published on th e FSA's website in English as follows:  
http://www.fsa.go.jp/en/refer/diet/174/01.pdf 
 
IV. T
RADE POLICIES BY SECTOR  
 5) S
ERVICES  
 
ii) Telecommunications  
In paragraph 50 it is indicated that foreign investme nt in NTT Corporation is limited to 33%.  There 
are no other statutory restrictions on foreign companies entering the telecommunications sector in Japan. We would like to know if Japan has any pl an to increase foreign investment participation? 
 
RESPONSE 
 
As for NTT, there are restrictions in light of the fact that it is a shareholder of NTT East and West, 
which provide most of the communications infrastruct ure that is the foundation of social activity, and 
in light of the importance of their public role, whic h is deeply related to national security. Therefore, 
these restrictions will continue to be maintained.   
IV. T
RADE POLICIES BY SECTOR  
 
5) S ERVICES  
 iii) Transport / Maritime  transport 
 
In paragraph 56 it is indicated that Japan does not discriminate against foreign participation in 
international maritime services and accords national treatment. We would like to know if there are 
restrictions on maritime transport services for forei gn companies other than foreign participation or 
national treatment.  
RESPONSE 
 
There are no restrictions on maritime transport ser vice for foreign companies except as reserved in the 
Japan's Revised Offer (TN/S/O/JPN/Rev.1), which was submitted to the WTO Secretariat on 17 June 2005.  In paragraph 57 it is said that entry into the port transport sector requires permission from the Ministry 
of Land, Infrastructure, Transport and Tourism (MLI T), and port transport charges are subject to prior 
notification procedures. Could Japan tell us what  requirements foreign companies need to obtain 
permission for entry into the port transport sector.  WT/TPR/M/243/Add.1  
Page 236 
 
 
  RESPONSE 
 
As with Japanese companies, foreign companies must satisfy the standards of the Port Transportation 
Business Act. 
 The standards include the following, among others:   (i) For the General Port and Harbour Transpor tation Business, etc., the applicant has, at 
least, facilities and workers specified by an  Ordinance of the Ministry of Land, 
Infrastructure, Transport and Tourism, for each type of the Port and Harbour Transportation Business and each Port and Harbour; 
  (ii) For the Tallying Business, etc., the app licant maintains a system required to secure 
the fair and proper operation of the Tallying Business, etc.; 
 
 (iii) The applicant has an appropriate plan from the viewpoint of operating the relevant 
business; 
  (iv) The applicant has a management structur e so as to clarify the scope of responsibilities 
of a person operating the relevant business;  
  (v) The financial basis for the relevant business is reliable;   And so on …  IV. T
RADE POLICIES BY SECTOR  
 5) S
ERVICES  
 
iv) Medical services  
In paragraph 71 it is mentioned that Japan's medical system, despite being among the most efficient in 
the world, could be made more efficient through further reforms.and accords national treatment.  The 
new system is expected to increase efficiency and the quality of healthcare. At the same time, the 
reform may include the removal of restrictions on the number of medical students, and on foreign 
workers permitted in the sector, and relax the rules that prevent equity finance to facilitate the 
restructuring of the hospital sector.  We are intere sted to know the restrictions on the number on 
foreign workers permitted in the sector. We would also want to know how the rules that prevent 
equity finance operate.  RESPONSE  
We do not set a cap on the number of foreign workers in the medical sector. It is, however, necessary 
to acquire a Japanese medical license to practice in Japan.  
According to Article 7(5) of the Medical Care Act (Act No. 205 of July 30, 1948),prefectural 
governors may not give permission to an applicant w ho intends to run a hospital, a clinic or a birth 
center for profit.  The administrative order issued by the Director of  the General Affairs Division in the Health Policy 
Bureau, the Ministry of the Health, Labour and Welf are, on February 2, 1993, stipulates how to make 
sure that a hospital, a clinic or a birth center is not-for-profit.  WT/TPR/M/243/Add.1 
 Page 237 
 
 
   
The key points to be checked are as follows:   1) The applicant who intends to run a medical  institution is not a corporation for profit. 
 2) The applicant does not distribute profits to either the board members or any third 
parties. 
 In accordance with the regulation above, a busines s corporation is not allowed to run a medical 
institution in Japan in principle. Still, there are some exceptions, such  as medical institutions 
established before the enactment of the Medical Ca re Act or those in regulatory reform special 
districts. 
 (Translation)  
Intellectual Property Rights (IPRs) 
 
1. With regard to paragraph 123, what are th e consequences for the li censor and licensee where 
the patent application in respect of which they have concluded a licensing agreement is rejected? 
 
RESPONSE 
 
Apart from the issue of contractual obligations, u nder the Patent Act, the provisional license is 
extinguished and the provisional licensee does not acqui re any rights when the patent application is 
not granted.  2. In relation to paragr aph 124, which copyrighted works may be used by Internet search service 
providers without the consent of the copyright holder? 
 
RESPONSE  
Please refer to the following provisions of Copyright Law. 
 
(Reproduction for the prevention, etc. of a difficulty in transmission) 
 Article 47quinquies. (1) For a person, who engage s in the business of providing an interactive 
transmission server, etc. ("interactive transmissi on server, etc." means an interactive transmission 
server and a specified transmission server ("specifi ed transmission server" means a server which, 
when connected with telecommunication networks, h as a function of making a specified transmission 
of information which is either recorded on such a part of its memory as used for the specified 
transmission (in item (i) referred to as "specified transmission memory") ("specified transmission" means the public transmission, designated by Ca binet Order, of radio communication or wire-
telecommunication, other than the interactive transm ission; the same shall apply hereinafter in this 
paragraph) or inputted to such device; the same shal l apply hereinafter in this Article) for the use for 
the interactive transmission, etc. made by others , it shall be permissible to record on memories, 
mentioned in the following items, works of which the making transmittable, etc. ("making transmittable, etc." means the making transmittable a nd the act for enabling a specified transmission, 
designated by Cabinet Order; the same shall apply he reinafter in this Article) is made by means of 
such interactive transmission server, to the extent  deemed necessary for the purposes mentioned in the 
following items, respectively:  
  (i) for the purpose of preventing a delay in  transmission caused by the concentration of 
demands for interactive transmission, etc.  upon such interactive transmission server, 
etc. or a difficulty in transmission cau sed by a trouble with such interactive WT/TPR/M/243/Add.1  
Page 238 
 
 
  transmission server, etc.:  memories, other than public transmission memories, etc. 
("public transmission memories, etc." means public transmission memories and specified transmission memories; the same shall apply in next item) concerned with 
the making transmittable etc., which are intended for the use for interactive 
transmission, etc. concerned with the making transmittable, etc.;  
  (ii) for the purpose of restoring a copy, destroyed or damaged, of a work which has been 
recorded on s public transmission memory, et c. concerned with the making available, 
etc.: memories (excluding public transmissi on memories, etc.) other than the public 
transmission memories, etc.  
 (2) In the case where a person, who engages in the business of providing an interactive 
transmission server, etc. for the use for the inter active transmission, etc. made by others, makes a 
transmission for relaying an interactive transmission,  etc. of a work of which the transmittable, etc. 
has been made (excluding a work of which the making  transmittable, etc. has been made by means of 
an interactive transmission server, etc., he may re cord such work on a part, to be used for such 
transmission, of a memory of such interactive transmission server, etc., to the extent deemed necessary for efficiently making a transmission for rela ying an interactive transmission, etc., of such 
work, made after such transmission.  
 
(3) The following persons may not reserve c opies of works, made in accordance with the 
provisions of the following items, after the time mentioned in the following items, respectively:  
  (i) a person who has recorded a work on a me mory in accordance with the provisions of 
paragraph (1) (only the part concerned with  item (i) ) or the preceding paragraph): 
when it is considered that it is no more necessary to reserve such copies for the 
purposes mentioned in these provisions, or when he has noticed that the making transmittable, etc., of the work concerned infringes copyright (in the case of a making 
transmittable, etc. made outside this country, a making transmittable which would 
constitute infringement on copyright if  it was made in this country);  
 
 (ii) a person who has recorded a work on a memory in accordance with the provisions of 
paragraph (1) (only the part c oncerned with item (i): when it is considered that it is no 
more necessary to reserve such copies for the purpose mentioned in that item.  
 (Reproduction, etc. for a retrieval, etc. of a tran smitter identification code of information which has 
been made transmittable) 
 Article 47sexies. For a person who engages in th e business of retrieving a transmitter identification 
code of information which has been made transm ittable ("a transmitter identification code "means a 
letter, a number, a symbol or another code for iden tifying a transmitter of an interactive transmission; 
the same shall apply hereinafter in this Article) a nd of offering the result th ereof, in response to a 
request from the public (including a person who engag es in a part of such business, and limited to a 
person who does the collection, the arrangement and the offer of information which has been made 
transmittable, in accordance with the standard designated by Cabinet Order), it shall be permissible, to 
the extent deemed necessary for such retrieval and su ch offer of the result thereof, to make recording 
on a memory or make adaptation (including recording of a derivative work created by such 
adaptation) of a work which has been made tran smittable (in the case where measures are taken for 
demanding an input of information for identifying a receiver of an interactive transmission of such 
work, or where other measures are taken for limiting a reception of su ch transmission, only a work in 
respect of which the consent has been granted by  a person who has taken such measures for reception 
of such interactive transmission), and to make, in response to a request from the public, an interactive  WT/TPR/M/243/Add.1 
 Page 239 
 
 
  transmission (including the making transmittable)  by using a copy concerned with a transmitter 
identification code out of copies of such work reco rded on a memory (including copies of a derivative 
work of such work; hereinafter in this Article refe rred to as "retrieval result offering record" together 
with an offering of a transmitter identification code  of information, which has been transmittable, 
concerned with such demand. However, he may not make an interactive transmission (including the 
making transmittable) by using such retrieval resu lt offering record after he has noticed that the 
making transmittable of a work concerned with su ch retrieval result offering record infringes 
copyright (in the case of a making transmittable made outside this country, a making transmittable which would constitute an infringement on copy right if it was made in this country). 
 
Article 47 quinquies of Copyright Law refers to the limitation for reproduction for the prevention, etc. 
of a difficulty in transmission for providing tel ecommunication networks including some providers of 
internet search services.  (Caching or backup in order to prevent a difficulty in transmission.) 
 In addition, Article 47 sexies of Copyright Law refe rs to the limitation for reproduction, etc. for a 
retrieval, etc. of a transmitter identification code  of information which has been made transmittable. 
(Copying etc. to implement an Internet search service.)  3. As regards paragraph 139, how do the custom s authorities determine whether or not a product 
infringes IPRs?  RESPONSE  
Paragraph 5 of Article 69-12 of Customs Law provides that when the Director-General of the 
Regional Customs makes a determination on whether or not the declared goods violate IPRs, the 
Director-General shall notify the right holders and th e importers of the result of the determination and 
the reason therefore.  
 4. Do customs officials consult the JPO in order to determine whether goods infringe IPRs or do 
the customs authorities have their own intellectual property experts?  
RESPONSE 
 Article 69-17 of the Customs Law provides that the Director-General of Regional Customs may, in 
the course of the procedure for the determinati on of whether the declared goods infringe upon a 
patent, industrial design right or utility model right, hear the opinion from the Commissioner of Japan Patent Office as to the technical scope of the disputed right. 
 
Article 69-19 of the Customs Law also allows the Director-General of Regional Customs to hear 
opinions as necessary from the "IPR Advisory Staff"  consisting of lawyers, patent attorneys and 
academic scholars of IPR laws in the course of th e procedure for the determination of whether the 
declared goods infringe upon IPRs.  
5. Are any databases shared by the JPO, the Agency for Cultura l Affairs and Customs so that 
IPR ownership can be verified in r espect of exported and imported products? 
 
RESPONSE 
 
There is no database shared by the three bodies.   
 6. What happens to detained goods once it has been determined that they infringe IPRs? 
 WT/TPR/M/243/Add.1  
Page 240 
 
 
  RESPONSE 
 
Infringing goods seized by the police in the cour se of investigation are referred to the public 
prosecutors for their consideration for use in pr osecution as documentary evidence relevant to the 
alleged offence. On the other hand, when Custom s find merchandise determined to be IPR infringing 
goods, it is confiscated and disposed of by Customs or is taken to a public prosecutor. 
 After infringing goods are handed over, they shall be destroyed or disposed of by the public 
prosecutor once: 1) the court orders the confiscat ion of such infringing goods based on final and 
binding criminal conviction or 2) the owner of such infringing goods renounces his/her ownership on 
a voluntary basis.   7. Lastly, and in reference to paragraph 140, in which cases are IPR infringers given a fine and 
in which cases are they sentenced to imprisonment?  RESPONSE  
The application of the penalty is stipulated by law and the contents of punishment to which a 
defendant is sentenced are given in a decision in  accordance with the regulat ions depending on the 
details of the case, so that it is difficult to i ndicate the criteria that apply to every situation.  
 2. Sanitary and phytosanitary measures  8. What rules does Japan apply to  determine the maximum pesticide residue limits in products?  
Does it use national MRLs or those established by CODEX?  RESPONSE  
Japan establishes MRLs in the almost same manner as interna tional bodies, such as the Joint 
FAO/WHO Expert Meeting on Pesticide Residue s (JMPR) uses. Japan's MRLs are based on a 
comparison of estimates of dietary exposure derived  from residue data with the ADI (acceptable daily 
intake). Japan, as a WTO Member, harmonizes its MRLs with Codex MRLs wherever possible.  9. Can Japan provide any examples of case studies re garding problems with specific substances?  
If so, which substances? 
 
RESPONSE 
 
There are no examples of case studies regarding problems with specific substances. 
 10. Are Japan's requirements for establishing mutu al recognition agreements for laboratories the 
same as the European Union's requirement s or are any other requirements made? 
 
RESPONSE  
Japan has not established MRA for laboratories between  Japan and the European Union.  Furthermore 
Japan does not have any plans to establish that kind of MRA with other countries at the moment. 
 11. What progress has Japan made with regard to  the harmonization of standards and regulations 
relating to good manufacturing practices? 
  WT/TPR/M/243/Add.1 
 Page 241 
 
 
  RESPONSE 
 
Japan continuously sets up SPS-related standards base d on the relevant scientific evidence, taking into 
consideration international standards.  
12. What are Japan's requirements for the entry of  organic products that have been approved by a 
government?  
RESPONSE 
 
There are two ways for overseas operators to expor t their organically produced plants and processed 
products thereof (hereinafter referred  to as "organic foods") to Japan:  
 1. Organic foods that are produced or manufact ured in accordance with the organic JAS system 
by overseas operators are certified by Registered Domestic/Overseas Certifying Bodies; 
 
2. Organic foods that are produced or manufact ured in accordance with the organic rules and 
regulations of countries recognised by Japan as having an equivalent system to the organic 
JAS system, and imported with certificates issued  by the governmental organisations or the 
bodies designated as equivalent to such organisa tions by the Japanese Agricultural Minister in 
those countries. 
 
NEW ZEALAND
 
Question 1 (WT/TPR/S/243, p. 31, para. 2): The Secretariat's states that "Non- ad valorem  duties, 
which account for 6.6% of Japan's tariff lines, tend to involve high ad valorem equivalents, and are an 
important feature of Japan's tariff, particularly fo r agricultural products" and paragraph 26 on page 37 
states, "non- ad valorem  rates tend to conceal tariff peaks". Does Japan have any plans to move to a 
more transparent ad valorem  regime and, if not, what is the rationale for maintaining the different 
types of non- ad valorem  tariff?  
 
RESPONSE 
 
Some tariff lines apply non-ad valorem duties for cer tain items, but the non ad-valorem tariffs in 
Japan's tariff schedule are consistent with WTO Agreements.  Japan will continue to engage in discussion in th e WTO in a constructive manner and set appropriate 
types and levels of tariffs, while consider ing the progress and results of DDA negotiations. 
 
Question 2 (WTO/TPR/S/243, p. 42, para. 38) For fisheries products that are imported under import 
licences, can Japan please provide import levels for the last five years and advise what proportion of available licences were taken up?  
RESPONSE 
 Please find the following table.  
  WT/TPR/M/243/Add.1 
Page 242 
unit:kg
amount of
allocation(A)amount of
imp or t ( B)(B /A )amount of
allocation(A)amount of
im port(B )(B /A )amount of
allocation(A)am ount of
im port(B )(B /A )amount of
allocation(A)amount of
imp or t ( B)(B /A )amount of
allocation(A)am ount of
imp or t ( B)(B /A )amount of
allocation(A)amount of
imp or t ( B)(B /A )
Pollack, M ackerel , cuttle-fish and
squid, Horsemackerel , etc1,288,355,127 1,062,747,711 82. 5% 1,136,005,379 936, 522,974 82. 4% 905, 349,138 652, 032,569 72. 0% 799, 708,036 608, 295,667 76. 1% 676, 675,101 352, 612,651 52. 1% 4,806,092,781 3,612,211,573 75. 2%
unit:US$
Yellow tail, S aury, adductors of
shell-fish, N iboshi(sm all boiled and
dried fish for seasoni ng), etc51,964,590 45, 128,350 86. 8% 57, 257,442 48, 573,705 84. 8% 57, 257,062 50, 022,358 87. 4% 62, 480,954 48, 750,669 78. 0% 45, 372,900 30, 384,646 67. 0% 274, 332,948 222, 859,728 81. 2%
unit:sheet
Laver and i ts food preparati ons 518, 791,200 386, 353,064 74. 5% 370, 452,243 234, 523,039 63. 3% 329, 348,400 234, 239,074 71. 1% 415, 641,922 320, 215,310 77. 0% 336, 941,841 119, 791,359 35. 6% 1,971,175,606 1,295,121,846 65. 7%
notes:This table is based on data at the end of June 2010.
　　　  "Amount of i m port" is the amount of i mport under the correspondi ng quota al location.
        T hi s m ay include import after the year the correspondi ng quotas w ere al located.about quotas announced duri ng
2005.4.1-2006.3.31about quotas announced duri ng
2006.4.1-2007.3.31about quotas announced duri ng
2007.4.1-2008.3.31about quotas announced duri ng
2008.4.1-2009.3.31about quotas announced duri ng
2009.4.1-2010.3.31total WT/TPR/M/243/Add.1 
 Page 243 
 
 
  Question 3 (WT/TPR/S/243, p. 45, para. 52): The Secr etariat refers to the announcement of a target 
for the Japanese government of covering half of do mestic demand for wood with domestic supply.  
Does this target relate to domestic demand generall y, or for government procurement?  What is the 
policy rationale for this target, and what policies ar e being introduced to achieve the goal?  How is 
Japan's domestic wood supply targ et consistent with national treatment and non-discrimination 
principles in the GATT and the WTO Agreement on Government Procurement? 
 
RESPONSE 
 
The target announced in the "Forest and Forestry Revitalization Plan" relate s to domestic demand in 
general. The purpose of the policy is to make the best  use of the potential of man-made forests that are 
getting ready for harvest. The "Act for the Promotion of Use of Wood in Public Buildings" was established in May 2010 with a view to boost the use of wood as a whole in public buildings, 
regardless of its country of origin. The domestic  wood supply target itself is merely a nonbinding 
target, and the Act, related rules and regulations  are consistent with the non-discrimination and 
national treatment principles in the GATT and WTO rules, and especially with the provisions of the 
Agreement on Government Procurement.  Question 4 (WT/TPR/S/243, p. 46, para. 55): The Secretariat cites Japan's law requiring agencies to expand procurement opportunities for SMEs by providi ng information on procurement plans.  Has the 
Japanese government been able to measure any ou tcomes from this policy?  If so, what are the 
outcomes?  What other programmes does Japan ma intain to expand opportunities for SMEs to 
participate in government procurement and for agencies to expand procurement opportunities for 
SMEs?  
RESPONSE 
 This policy addresses matters such as the provision of information for SMEs. More specifically, the 
policy for FY2010 includes ensuring the provision of information on orders from government and public agencies, making arrangements for ordering in a manner that enables SMEs to easily receive orders and other considerations re garding the characteristics of SMEs. 
 
The Government, local authorities and other public agencies notify the Small and Medium Enterprise 
Agency of the status of implementation of the measures provided in the policy, and the Small and 
Medium Enterprise Agency, each fiscal year, compiles data on such status of implementation and makes it public under the title of "Status of impl ementation of measures to  expand opportunities for 
SMEs to receive orders." 
 
Question 5 (WT/TPR/G/243, p. 7, para. 14.):  Japan re fers to the strategy of doubling direct inwards 
investment as part of the "New Growth Strate gy". Does Japan see a role for agriculture related 
investment in improving agriculture productivity? How is Japan trying to promote such investment? 
 
RESPONSE 
 The Ministry of Agriculture, Forestry and Fisheri es (MAFF) of Japan has implemented policies which 
aim to increase foreign direct investment (FDI) to Japan.   Specifically, MAFF conducts required ex aminations of applications by foreign entities for FDI in the 
sectors of agriculture, forestry an d fisheries in Japan in an appropriate manner, under the advance 
notification system based on the "Foreign Exchange and Foreign Trade Law" (No. 228 of the law in 
1949).  WT/TPR/M/243/Add.1 
Page 244  
 
  The above-mentioned advance notification system shor tens time required for examinations of foreign 
direct investment by foreign entities to the sector of agriculture, forestry and fisheries in Japan, 
depending on the details of the applications.  Question 6 (WT/TPR/S/243, p. 48-49, paras 62-63): Th e Secretariat highlights the fact that Japan 
carries out regulatory impact assessment (RIA) for all technical regulations, but 'no cost-benefit 
analyses are conducted' as part of RIA.  This is su rprising, given Japan's obvious interest in regulatory 
quality and efficiency – and given that Japan is a member of both APEC and the OECD, whose good regulatory practice codes recommend quantifying costs and benefits to assess regulatory proposals.  What does Japan's RIA methodology it entail?  What is  Japan's view on cost-benefit analysis as a tool 
in good regulatory practice, and does Japan plan to make use of it in the future? 
 
RESPONSE 
 
The Implementation Guidelines for ex-ante Evaluation of Regulations state that it is desirable to 
quantify or express in monetary value costs and bene fits to the extent possible. And the Guidelines 
state that cost-benefit analysis, conve rting benefits and costs into mone tary value, is thought to be the 
major technique in Regulatory ex-ante Evaluation.  The Government of Japan understands that quan tifying costs and benefits to assess regulatory 
proposals is important and promotes it. 
 
Question 7 (WT/TPR/G/243, p. 49, para. 65):  Ha rmonising domestic regulatory requirements with 
international standards is one way of  facilitating trade, and this is covered in the Secretariat's Report.  
Another tool is cooperation with fellow regulators in other countries to harmonise or align regulatory 
approaches, or at least improve their inter-operabilit y.  Has Japan participated in any bilateral or 
plurilateral regulatory dialogues that would contribute to trade facilitation? 
 
RESPONSE 
 
Japan is making efforts to harmonize domestic regulatory requirements through bilateral dialogue 
with such partners as the EU and the United States  or plurilateral dialogues.  Additionally, in some 
FTAs or EPAs, TBT chapters are included and sub-committees are establis hed as a framework to 
contribute to trade facilitation.  Question 8 (WT/TPR/S/243, p. 52, para. 72):  To what extent to Japanese regulators of imported products rely on the confidence in overseas certifi cates and test reports that is provided by the 
accreditation body peer review system of the ILAC and IAF mutual recognition schemes? The 
Secretariat refers to designation of overseas inspection bodies and certification bodies by METI and MHLW.  Do these designations include the ILAC and IAF schemes and the international standards 
that they embody?  If not, why not?  Does Japan s ee scope to increase its reliance on the international 
accreditation systems?  RESPONSE  
Certain mechanical equipment prescribed by the In dustrial Safety and Health Law of Japan (herein 
after referred to as the "ISHL") is required to be inspected before circulation to confirm that the 
equipment meets the standards designated by the ISHL. 
 
The "designated foreign bodies for inspection" insp ect overseas whether certain equipment meets the 
standards of Japan.  Any equipment inspected befo re its importation into Japan is exempted from 
inspection in Japan as pre-inspected items.  WT/TPR/M/243/Add.1 
 Page 245 
 
 
  In order to be designated as a "designated foreign body for inspection", a mutual recognition scheme 
is not a precondition, rather the only condition is to meet the requirements to prove that it is able to 
inspect properly (facilities for inspection, qualifications of inspectors, etc.). 
 For example, boilers are required to be inspected  individually in the production stage based on the 
ISHL. Since boilers imported from foreign countries have difficulties for inspection after production, 
if a "designated foreign body for in spection" inspects a boiler before it is exported to Japan, it would 
be exempted from domestic inspection following its importation into Japan.  Self-agreement by the importers is assumed to be the basis for the agreement confirmation of a 
technological standard concerning electric articl es specified by the Electrical Appliances and 
Materials Safety Act. The importers can utilize th e examination reports such as ILAF and LAF.  
 Only when the risk is high, Japanese regulators of imported products rely on confidence in overseas certificates and test reports that are provided by the Registered Conformity Assessment Bodies. 
 
The importers can use the IECEE CB scheme as the conformity assessment.  Self-agreement among the importers is also assumed to  be the basis for the agreement confirmation of 
a technological standard concerning consumer products and gas equipments specified by the 
Consumer Product Safety Act, the Gas Business Ac t and the Act on the Securing of Safety and the 
Optimization of Transaction of Liquefied Petroleu m Gas. The importers can utilize the examination 
reports such as ILAF and LAF.   Only when the risk is high, Japanese regulators of imported products rely on confidence in overseas certificates and test reports that are provided by the Registered Conformity Assessment Bodies. 
 
Question 9 (WT/TPR/S/243, p. 92, paras 61 and 63):  New Zealand noted with interest the progress 
that Japan has made on negotiating open skies agreem ents.  We would welcome further explanation of 
the principles underlying Japan's current international air transport policy. In terms of implementation, 
could Japan explain the process whereby countri es could be considered as partners for the 
negotiations of such agreements?  What are the process and criteria for airlines to obtain slots for 
international scheduled services at Haneda Airport? 
 
RESPONSE 
 
Japan will make its decisions strategically from th e standpoint of its own national interests while 
considering partner countries in terms of factors like market size, growth, their forward-thinking 
approach to liberalization, and the potentia l for new entrants and increase of services. 
 Such liberalization would start with 3rd and 4th free dom traffic rights and woul d later expand to cover 
5th freedom traffic rights.  
Japan has already started consultatio n with some countries, putting high  priority on East Asian nations 
and ASEAN nations to reach open sky agreements which include Tokyo Metropolitan Area airports.  
 As for Haneda Airport, slots for scheduled inte rnational flights during daytime hours (0600-2255) will 
increase from the current 30,000 to 60,000 in tota l as early as FY2013, pending implementation of 
safety measures and completion of the terminal expansion project. 
 These daytime slots will be exclusively used for international flights on high-demand business routes 
connecting the cities of the world with Tokyo.  WT/TPR/M/243/Add.1 
Page 246  
 
  Additional slots will continue to be allocated th rough bilateral consultation, due to the extremely 
congested situation.  As the expansion plan for Haneda has not been fina lized yet, Japan is still considering the criteria and 
time frame to start these consultations. 
 
Question 10 (WT/TPR/G/243, p. 24, para. 92)  In add ition to the policies mentioned in Japan's Report, 
we understand that the Japanese government has recen tly developed a policy to support the "local 
production and consumption" ("chisan-chisho") of  agricultural products? What was the thinking 
behind this initiative and what have been the results? 
 
RESPONSE 
 
By promoting the "local consumption of local pr oduce"("chisan-chisho"), we expect to enhance 
interaction between producers and consumers and understanding of food and agriculture among 
consumers. It could also result in giving an inco me opportunity to local farmers, in addition to 
transportation cost reduction and environmental con servation. Various actions have been promoted 
throughout the country.  Question 11 (WT/TPR/GS/243, p. 43, para. 46) What guidance is given to Japanese schools by central 
and local authorities about using domestically produced  foods in school lunches?  What percentage of 
foods used in school lunches is domestically produced? 
 
RESPONSE 
 
With regard to the first question, no guidance is given by the government of Japan concerning school 
lunches about using domestically produced foods. In addition the government of Japan has never 
notified local authorities on the matter of guidelines re garding the use of domestically produced foods 
in school lunches. Whether or not guidance is gi ven by local governments is a matter over which we 
do not have jurisdiction and therefore we do not k now. With regard to the second question, Japan 
doesn't have any official statistics through nationall y-conducted surveys with regard to the percentage 
of domestically-produced food used in school lunches. 
 
Question 12 (WT/TPR/G/243, p. 8) New Zealand notes w ith interest that Japan ese agricultural exports 
have continued to increase.  What are the main barriers Japan faces in further increasing exports of 
agricultural products to key markets?  RESPONSE  
Japanese agricultural exports decreased  in 2009, but it is expected to increase in 2010. The main 
barriers Japan is now facing vary by countries and by products, which include export capacities, price 
differences, lack of marketing channels, SPS/TBT measures and/or language barriers. 
 NIGERIA 
 
Question 1 
 As pointed out in the Secretariat's report (page vii, paragraph 2), Japanese economy contracted during the period under review owing to the sharp fall (b y 29% in 2009).  Nigeria would like to know how 
the government intends to rectify this situation? 
  WT/TPR/M/243/Add.1 
 Page 247 
 
 
  RESPONSE 
 
Four stimulus packages were implemented amid th e recession in the wake of the global financial 
crisis. The main measures of each stimulus pack ages to stimulate domestic demand are as below: 
 
 1 Comprehensive Immediate Policy Package (decided on August 29, 2008) 
  : Reducing insurance premiums for elderl y health care paid by low income people, 
Reducing expressway tolls, etc. 
 2 Economic Policy Package (decided on October 30, 2008)   : Provision of the "Fixed-sum benefit"  to households, Furt her reducing expressway 
tolls, etc. 
 3 Immediate Policy Package to Safeguard People's Daily Lives (decided on 
December 19, 2008) 
  : Mortgage loan tax cuts, Tax cuts fo r environmentally-friendly vehicles, etc. 
 4 Policy Package to Address Economic Crisis (decided on April 10, 2009) 
  : Reducing gift tax for purchasing houses as a temporary measure, Government 
subsidies for environmentally-friendly vehi cle purchases, Introducing the "eco point" 
system for acceleration of the dissemi nation of environmentally-friendly home 
electric appliances, etc. 
 Question 2 
 
We note from the Secretariat report (page viii, pa ragraph 10) Japan's continued use of non-tariff 
border measures, which include some import prohibiti ons and quantitative import restrictions. Nigeria 
would like to know the rationale behind this and the measures being taken by the Government to 
reduce or completely eliminate these obstacles to trade? 
 
RESPONSE 
 
1. In Article 23 of the 'Single Convention on Narcotic Drugs', 1961, government agencies are 
granted the exclusive right of importing, exporti ng, wholesale trading and maintaining stocks of 
opium. And, in order to be consistent with the C onvention, the right of importing, exporting, storage 
and sale of opium is exclusive to the State under Japan's Opium Law. 
 2. On Foreign Exchange and Foreign Trade Act, we restrict import items for the implementation 
of international agreement (CITES, Montreal Prot ocol on Substances that deplete the Ozone Layer 
etc) and the conservation of fishery resources, etc. 
 
3. Under the 'Law for Ensuring Safety of Pe t Food', the Minister of Environment and the 
Minister of Agriculture, Forestry and Fisheries prohi bits the import of pet foods that don't meet safety 
standards and can prohibit the import of pet foods which are actually or possibly contaminated by toxic substances or pathogenic microorganisms.  
4. On the basis of the 'Invasive Alien Speci es Act', importing of designated invasive alien 
species (IAS) is prohibited. However, in the cas e of academic research and other specific cases, 
importing IAS is exceptionally a llowed by permission from the competent ministers. In addition, 
uncategorized invasive alien species (UAS) need th e detailed investigation by the competent ministers 
in order to be allowed to be imported into Japan. 
 
5. On the basis of the 'Wildlife Protection and Appropriate Hunting Law', the birds and 
mammals set by an ordinance of the Ministry of the Environment can't be imported without the legitimate capture certificates of exporting countr ies' governments. However, certificates aren't 
needed from countries which have no proof sy stems about capture, extraction or export. WT/TPR/M/243/Add.1 
Page 248  
 
   
6. At present, the above limits on trade are not scheduled to be abolished. 
 Question 3  
We observe from the Secretariat report (page viii, pa ragraph 18) that certain services continue to be 
subject to inter alia, licensing and restrictions in foreign investment, coupled with the high cost of 
doing business, which has been considered one of the main deterrents to inward FDI in services, could 
Japan explain the justification for this acti on and the efforts to address the situation? 
 RESPONSE  
According to a recent Ministry of Economy, Trade and Industry survey, cond ucted in FY 2008, the 
obstacles to business in Japan generally cited as majo r factors by foreign-affiliated companies are as 
follows:  
 
 1. The difficulty of hiring eligible employees  2. The high business cost  3. The high level of customer demand and market competitiveness  http://www.meti.go.jp/pr ess/20090416001/20090416001.html 
 
In order to solve those problems, a "program  for promoting Japan as an Asian business hub and 
foreign direct investment into Japan" (tentativ e name) will be drawn up by summer 2011. This 
program will include system reforms and other meas ures to ensure smooth flows of people, goods and 
funds with the aim of making Japan's business environment more appealing.  
 
Question 4  
(3) S
TRUCTURAL POLICIES  
 (i) Services Sector 
 
We note from the Secretariat report 9 page 3, para graph 8) that the services sector which accounts for 
about 80% of Japan's GDP and 78% of its employment , is characterised by weak labour growth, while 
the sector has been relatively sheltered from co mpetition. Nigeria would like to know what the 
government is doing towards further liberalising the sector. 
 
RESPONSE 
 
As the service sectors account for about 80% of Japan's GDP and 78% of its employment, Japan 
certainly recognizes the importance of liberalizing the service sectors for growth and competitiveness, 
and has been taking various steps to promote that liberalization. For instance, in June 2010, the 
Cabinet issued a decision entitled "New Growth Stra tegy," which sets forth strategies for achieving a 
strong economy to return Japan to economic heal th. Furthermore, in November 2010, the Cabinet 
issued a decision entitled "Basic Policy for Comp rehensive Economic Partnerships," where it 
expressed its intention to further promote necessary regul atory reforms in the interest of the 'open up a 
country' vision. In addition, in March 2010, the "Subcommittee on Regulatory and Institutional 
Reform" was established under the Government Revitali zation Unit. As for the liberalization of trade 
in services, Japan remains strongly committed to th e DDA negotiations. The basic principle for Japan 
is that the comprehensive liberalization of trade in  services should be achieved in a way that benefits 
all Members, including developing countries. Japan is  determined to further promote the liberalization 
of services sectors both domestically and internationally.  WT/TPR/M/243/Add.1 
 Page 249 
 
 
   
Question 5 
 
(II) T RADE POLICY REGIME : FRAMEWORK AND OBJECTIVES  
 
(i) Introduction 
 
We note from the Secretariat report (page 11, paragra ph 5) that Japan grants preferential treatment to 
products from certain developing and least develo ped countries under its Generalized System of 
Preferences ( GSP) scheme. The main beneficiari es are China; the Philippines; Vietnam; Indonesia; 
and India, while the scheme excludes many agri cultural products and so me industrial products. 
Although the GSP scheme is valid until March 2011, Ni geria would like to know the intention of the 
government to extend the scheme, including its coverage.  
RESPONSE 
 1. The GSP (Generalized System of Preference s) applies reduced tariffs to designated import 
goods originating from developing countries or territo ries, with the aim to help them increase export 
income, advance industrialization and promote ec onomic development. Japan  is properly managing 
the system from the viewpoint of contributing to the economic development of developing countries.  
 
2. Japan is in the process of preparing for di scussion of the extension of its GSP scheme until 
March 2021.   Question 6 
 
Standards, and Sanitary and Phtosanitary Measures  On technical standards and regulations, Nigeria appreciates the steps taken by Japan to harmonise its standards and technical regulations with interna tional norms, however, we would like to know the 
efforts the government is making towards addressi ng the complexity and lack of transparency 
associated with the measures.  
 
RESPONSE 
 
The Government of Japan has made efforts to en sure transparency regarding the measures in a 
positive and appropriate manner under the TBT Agreem ent and its Appendixes.  For example, Japan 
has submitted WTO notifications not only for technical  regulations, but also for voluntary standards, 
and has provided relevant information,  such as documents and data, at the request of Member States 
for contributing to this purpose.  
NORWAY
 
Questions related to the Report by the Secretariat 
 
Maritime transport services  
 
a) Paragraph 55 gives information on notificati on requirement for foreign investments in the 
water transport industry. Could Japan please elaborate on these requirements? 
 WT/TPR/M/243/Add.1 
Page 250  
 
  RESPONSE 
 
The prior notification requirement under the Forei gn Exchange and Foreign Trade Law applies to 
foreign investors who intend to make investments in "water transport industry in Japan". To clarify, 
"water transport industry in Japan " refers to the coastwise transport (i.e., maritime transport between 
ports within Japan) industry, the inland water transport industry and the coastwise ship leasing 
industry.   b) Paragraph 56 states that under treaties of fri endship, commerce and navigation, Japan allows 
ships to access cabotage services on a reciprocal b asis. Could Japan please provide more information 
in this regard and which foreign companies/forei gn flag that provides cabotage services in Japan 
today.  
RESPONSE 
 
Based on bilateral agreements, Japan may grant the U.K., Norway and Denmark flag vessels to 
engage in the carriage between ports in Japan upon i ndividual application, if the cargo is recognized 
as the part of the international maritime trans port and is transshipped between vessels flying flags 
from the same country.  c) Paragraph 57 states that entry into the port transport sector requires permission and are levied 
port transport charges. Could Japan please give more  information on this scheme, for instance what 
kind of services falls into this category and how the charges are levied?  
RESPONSE 
 
The services that fall into this category are as follows: 
  (i) the General Port and Harbour Transportation Business;  (ii) the Tallying Business, etc., the applicant maintains a system; 
 (iii) The applicant;  (iv) The applicant has a management structur e so as to clarify the scope of responsibilities 
of a person operating the relevant business; 
 (v) The financial basis for the relevant business is reliable;  and so on.  
"Port transport sector" means a for-profit or non-profit business of performing Port and Harbour 
Transportation.  "Port and Harbour Transportation" means the followi ng acts performed to meet the needs of others: 
  (i) Act of performing acts listed in the following items (ii) to (v) inclusive in an 
integrated manner which are performed at a port and harbour under a commission 
from a consignor or vessel operator before or after receiving from a vessel or delivering to a consignor cargo transported by vessel or receiving from a consignor or 
delivering to a vessel cargo to be transported; 
 (ii) Act of loading or unloading a vessel at a port and harbour (excluding acts listed in 
item (iv)); 
 (iii) Act of transporting cargo at a port and harbour by vessels or barges (excluding cargo 
transportation performed by a person who runs the passenger transport business by 
operating passenger vessels (vessels with a capacity of 13 or more passengers) 
navigating a given passage, using such passenger vessels navigating the said passage,  WT/TPR/M/243/Add.1 
 Page 251 
 
 
  and other cargo transportation provided for in the Ordinance of the Ministry of Land, 
Infrastructure, Transport and Tourism), transporting cargo by barges in a section between ports and harbours or a section between a port or harbour and a place 
provided for in the Ordinance of the Ministry of Land, Infrastructure, Transport and Tourism (hereinafter simply referred to as "Designated Section"), or tugging barges 
or rafts by tugboats at a port and harbour or in the Designated Section; 
 (iv) Act performed at a port and harbour of carrying in a shed or other cargo handling 
yard (excluding water lumberyards; herein after simply referred to as "Cargo Handling 
Yard") cargo transported by vessels or ba rges, carrying cargo to be transported by 
vessels or barges out of the Cargo Handling Yard, handling or storing such cargo in 
the Cargo Handling Yard, unloading vessels (limited to those with less gross tonnage 
than that prescribed in the Ordinance of  the Ministry of Land, Infrastructure, 
Transport and Tourism; hereinafter the same shall apply in this item) or barges, or 
loading vessels or barges (unloading or lo ading vessels shall be conducted only in 
cases where such vessels are moored at a quay, pier, or lighter's wharf, and no 
hoarding equipment of such vessels is used); 
 (v) Act of transporting rafted lumber at a port and harbour or in the Designated Section, 
act performed at a port and harbour of carry ing to a water lumberyard lumber rafted 
or transported by vessels or barges, carrying out of a water lumberyard lumber to be rafted or transported by vessels or barges, or handling or storing such lumber in water lumberyards; 
 (vi) Act of calculating the number of sea cargos or certifying a delivery (hereinafter 
referred to as "Tallying") when loading or landing sea cargos; 
 (vii) Act of performing the certification, investigation and surveying relevant to the 
stowage of sea cargos (hereinafter referred to as "Surveying"); and 
 (viii) Act of calculating or certificating th e volume or weight of sea cargos (hereinafter 
referred to as "Measuring") when loading or landing sea cargos. 
 The charges are usually decided between the Port and Harbour Transportation Business Operator and 
the consignor or vessel operator. Thereafte r the Operator will follow the procedures. 
 d) In paragraph 58 it is stated that the Supe r-Hub Port project aims at reducing port related 
charges by 30 %, as well as lead time to less than 24 hours. Could Japan please indicate how this will 
be done and when the project will be completed?  
RESPONSE 
 
The methods of reduction in port charges (per container) include the following, among others: 
 
(i) enhancement of the container-handling capacity of the port  
(ii) increasing the number of containers in the Port 
  and so on. 
 
And the main methods of shortening lead time include the following, among others:   (i) shortening the time of cargo handling service   (ii) simplification and acceleration of th e procedure time related to Import/Export and 
Port. 
 
The deadline of the Super-Hub Po rt project has been set by the end of this fiscal year. 
 WT/TPR/M/243/Add.1 
Page 252  
 
  PAKISTAN
 
1. The Secretariat Report notes that Economic Pa rtnership Agreements with countries that are 
significant exporters of agricultural products tend to  exclude many of the agricultural products.  The 
Report further notes that in the Committee on Regional Trade Agreements, some Members raised concerns about Japan's FTAs which include dispro portionate liberalization between agricultural and 
non- agricultural products. Could Japan explain how it plans to reduce the imbalance between 
liberalisation of agricultural and non-agricultural pr oducts covered under the EP As, esp. in the context 
of the substantially all trade cr iterion? (para. 2, 31, chap. 2). 
 
RESPONSE 
 With regard to EPAs, based on the "Basic Policy on Comprehensive Economic Partnership" decided 
by the Cabinet on 9th of November 2010, the Government of Japan, while taking into consideration the sensitivity of trade in certain products, will subj ect all goods to negotiations for trade liberalization 
and, through such negotiations, pursu e high-level economic partnerships. 
 
2. The Secretariat Report has highlighted that trade-related reforms initiated in the services 
sector have slowed, and certain services continue to be subject to, inter alia, licensing and restrictions 
on foreign investment and are also faced with the generally high cost of doing business in Japan. The 
reason cited is that the services sector has been relatively sheltered from competition (both domestic 
and international). Could Japan explain if it has pl ans for further liberalisation in the services sector? 
(para. 2, chap. 4). 
 
RESPONSE 
 
As the service sectors account for about 80% of Japan's GDP and 78% of its employment, Japan 
certainly recognizes the importance of liberalizing the service sectors for growth and competitiveness, 
and has been taking various steps to promote that liberalization. For instance, in June 2010, the 
Cabinet issued a decision entitled "New Growth Stra tegy," which sets forth strategies for achieving a 
strong economy to return Japan to economic heal th. Furthermore, in November 2010, the Cabinet 
issued a decision entitled "Basic Policy for Comp rehensive Economic Partnerships," where it 
expressed its intention to further promote necessary regulatory reforms in the interest of the 'open up 
the country' vision. In addition, in March 2010,  the "Subcommittee on Regulatory and Institutional 
Reform" was established under the Government Revitali zation Unit. As for the liberalization of trade 
in services, Japan remains strongly committed to th e DDA negotiations. The basic principle for Japan 
is that the comprehensive liberalization of trade in  services should be achieved in a way that benefits 
all Members, including developing countries. Japan is  determined to further promote the liberalization 
of services sectors both domestically and internationally.  
 3. Japans' tax to GDP ratio (18% in 2007) is one of the lowest by international standards, 
leading to low tax revenue and high public debt (220 % of GDP). It also has the highest corporate tax 
rate (40%) which discourages inward FDI. Can Japan explain what steps it is taking to streamline its taxation system? (para. 15, chap. 1). 
 
RESPONSE 
 
Please refer to FY2011 Tax Reform (Main Points ), available at http://www.mof.go.jp/english/ 
tax/tax2011/tax2011a.pdf. 
  WT/TPR/M/243/Add.1 
 Page 253 
 
 
  REPUBLIC OF KOREA  
Question 1 
 
Government Report, paragraph 92, page 24 
 In March 2010, the Japanese Government introduced  the new Basic Plan on Food, Agriculture and 
Rural Areas, a new income support direct payment sche me for farmers. In this regard, a pilot program 
was carried out in FY2010, and a new scheme w ill be introduced in FY2011. How does the Japanese 
Government evaluate the possible trade-restricting effects of this scheme?  RESPONSE  
Japanese government does not have any estimation on the effect of the new payment scheme on trade 
flows.  
Question 2 
 
Secretariat's Report, paragraph 4, page 11 
 
Cost-benefit analyses are widely u sed tools to assess the economic effects of new regulatory measures 
or regional trade agreements. The Japanese Gove rnment, however, has rarely undertaken such 
analyses when introducing, revising, or abolishi ng various regulatory measures. Why is the Japanese 
Government not more active in using these tools? 
 
RESPONSE  
The Implementation Guidelines for ex-ante Evaluation of Regulations states that it is desirable to 
quantify or express in monetary valu e costs and benefits to the exte nt possible. The Guidelines also 
state that cost-benefit analysis, conve rting benefits and costs into mone tary value, is thought to be the 
main technique of Regulatory ex-ante Evaluation.  The Government of Japan understands the importa nce of quantifying costs and benefits to assess 
regulatory proposals and will continue to promote it. 
 
Question 3 
 
Secretariat's Report, paragraph 71, page 28 
 
Recent press reports have stated that Japanese lawmakers are considering a revision of the Alien Land Act and the Forest Act in order to restrict th e acquisition of land and forests in Tsushima and 
Hokkaido by foreigners. If these acts are revised, ar e they not likely to excessively restrict the 
acquisition of land and forests by foreigners?  RESPONSE  
The Government of Japan is not in a position to make comments on any lawmak er-initiated legislative 
proposals that are still in deliberation in the Diet.  WT/TPR/M/243/Add.1 
Page 254  
 
  Question 4 
 
Secretariat's Report, paragraph 5, page 31 
 
In the case of Japan, the share of fo reign suppliers in the total valu e of government procurement was 
3.0% in 2009, and the share of procurement of  overseas goods and services was 7.1% in 2008. Do 
these results not come from the Japanese Government's  explicit or implicit preferential treatment for 
domestic suppliers  and products? 
 
RESPONSE 
 Japan is conducting its government  procurement appropriately based on the principle of national 
treatment and non-discrimination. Therefore, there ar e no explicit or implicit preferential treatment for 
domestic suppliers and products.  
 
Japan considers that the statistics are the result of an appropriate procurement process based on the 
principle of national treatment and non-discrimination.  Question 5  
Secretariat's Report, paragraph 10, page 32 
 
In June 2010, the Japanese Government introduced  a "New Growth Strategy" to revitalize the 
Japanese economy. It remains to be decided, however , whether this strategy will involve "pick-the-
winner"-type industrial policies. What is the Japanese Government's view on the opinion that the "New Growth Strategy" could be a factor of uncer tainty for foreign investors and trading partners? 
 
RESPONSE 
 
As for the industrial policies in the New Growth  Strategy, for the purpose of strengthening the 
competitiveness of companies operating in Japan and encouraging more foreign companies to set up 
business bases in Japan, the effective corporate tax ra te will be reduced to levels seen in other major 
countries. Then the outlined FY 2011 tax system revision includes measures to lower the effective 
corporate tax rate for combined national and regional taxes by 5 percent.  Furthermore, a "program for promoting Japan as As ian industrial center and direct investment into 
Japan" (tentative name) will be set during this summe r to invite foreign firms that bring high value-
added products and services into Jap an and to double employment by foreign firms and also double 
direct inward investment.  We aim to create a new markets in the sectors wh ich have a potential demand such as environment 
and health. Moreover, we carry out the measures above which aim to increase competitiveness of 
companies operating in Japan and bring about an increase in employment of all industries as described 
above. 
 Question 6  
Secretariat's Report, paragraph 49, page 44 
 
The Secretariat's Report states that Japan included a procurement chapter in all of its nine FTAs except in the one with Malaysia. It also refers to  the Japan-Singapore FTA as an example of the SDR 
threshold being lower than that of the GPA. Can Ja pan provide the level of its own SDR thresholds in 
other FTAs?  WT/TPR/M/243/Add.1 
 Page 255 
 
 
   
RESPONSE 
 
The following are brief summaries of the thresholds  provided for in Japan's EPAs with Mexico and 
Chile. Other EPAs do not specify thresholds for the application of the agreements. For more detailed 
information, please refer to the texts of the Agreements available at http://www.mofa.go.jp/ 
policy/economy/fta/index.html.  Japan-Chile EPA: The thresholds for procurement by covered entities under the EPA are as set out in 
Japan's Appendix I to the GPA, except that the th resholds for procurement of goods and services 
(other than construction services and architectural, engineering and other technical services) by such 
entities other than those covered by Annex 2 of Japan's Appendix I to the GPA are SDR 100,000. 
 Japan-Mexico EPA : Thresholds for central govern ment entities and other entities are the same as 
those in the GPA. Sub-central government entities are not covered by the EPA. 
 
Question 7  
Secretariat's Report, paragraph 57, page 47 
 
Is there any penalty in case the procurement en tity does not follow the recommendations of the 
GPRB? 
 
RESPONSE 
 
The procuring entity (hereinafter referred to as "the entity.") has no legal duty to follow the recommendation of the GPRB, so no penalties are im posed on the entity even if the entity does not 
follow the recommendation.  However, the entity is expected, in principle, to  follow, on its own decision, the recommendations of 
the GPRB on any complaints filed appropriately to the GPRB based on the "Review Procedures for 
Complaints Concerning Government Procurement." For more detailed information, please refer to 
following website. 
 URL: http://www5.cao.go.jp/acces s/english/chans_main_e.html 
 Question 8 
 
Secretariat's Report, paragraph 64, page 49 
 
Are there any technical regulations or standards th at have not yet been notified to the WTO? If so, 
could Japan provide a list of them with the names of the agencies which proposed them?  RESPONSE  
All necessary notifications have been submitted a ppropriately to the WTO under the TBT Agreement 
and its Appendixes.  WT/TPR/M/243/Add.1 
Page 256  
 
  Question 9 
 
Secretariat's Report, paragraph 64, page 49 
 
As of 2009, only 29% of the regulations on ro ad vehicle safety standards corresponded to 
international standards. Wh y is this rate so low? 
 
RESPONSE 
 
With regard to regulations and type approval syst ems for road vehicles, the GOJ has been actively 
working in line with the Agreement on Unifor m Technical Prescriptions for Vehicles (the 1958 
Agreement) since its acceding, aiming at disseminating safer and more environmentally friendly vehicle standards and promoting more efficient international distribution of vehicle parts and equipment.  For example, it has been active in ensu ring the international harmonization of regulations 
and the appropriate implementation of the mutual recognition of certifications.  Currently, the GOJ 
has applied 40 Regulations of the UNECE Regul ations under the Agreement to its domestic 
regulations (increased from 38 Regulations, as of 2009), based on which it implements the mutual 
recognition of type approval.  The GOJ intends to  apply UNECE Regulations in accordance with its 
priorities, taking into account such elements as dom estic and international requests, the impact on 
safety and the environment, the economic ramifications  of harmonization, among others.  For this, the 
GOJ will work actively to promote the application of UNECE Regulations while, as appropriate, 
proposing necessary amendments to those Regulati ons at the World Forum for Harmonization of 
Vehicle Regulations under the UN to reflect the traffic situation in Japan.  Question 10  Secretariat's Report, paragraph 65, page 49 
 
According to the Secretariat's Report, Japan has t oo many voluntary standards compared to mandatory 
ones. Voluntary standards have recently become highl y relevant to trade and researchers are focusing 
on their effects on market demand and international trade. At the Fifth Triennial Review of the operation and implementation of the TBT agreement, the TBT committee discussed whether to 
include voluntary standards in the agenda or not . Could Japan provide a list of items that have 
voluntary standards? What is Japan's official positio n on the inclusion of voluntary standards in the 
agenda?   
RESPONSE 
 With regard to voluntary standards, anyone can search all the JIS on the JISC HP (available at 
http://www.jisc.go.jp/app/JPS/JPSO0020.html) and the JSA HP (available at http://www.webstore.jsa. 
or.jp/webstore/JIS/SearchEn.jsp) and all that JAS on the MAFF HP (available at http://www.maff.go. jp/j/jas/jas_kikaku/ kikaku_itiran.html), for example.  
Furthermore, the 11 Japanese standardization bodi es accept CGP on the TBT Agreement Annex 3. 
Hence Japan has positively contributed to the im plementation of the TBT Agreement regarding 
voluntary standards. Japan would like to deliberat ely consider additional treatment for voluntary 
standards based on the TBT Agreement and other re levant discussions such as Triennial Reviews. 
  WT/TPR/M/243/Add.1 
 Page 257 
 
 
  Question 11 
 
Secretariat's Report, paragraph 71, page 52 
 
Does Japan have any future plans for MRAs with ot her countries or industries? If so, which countries 
or industries does Japan envision? 
 
RESPONSE 
 
Japan does not have concrete plans for MRAs at this point. Japan will facilitate the information 
exchange on the conformity assessment procedures w ith other countries and consider the possibility 
of MRAs as necessary.  Question 12  Secretariat's Report, paragraph 121, page 64 
 
According to the Secretariat's Report, the "Reorgan ization and Rationalization Plan for Incorporated 
Administrative Agencies" on restructuring SOEs heav ily depends on the nature of the administration. 
Does the Japanese Government have a long-term plan or strategy for reorganizing SOEs? 
 RESPONSE  
Regarding incorporated administrative agencies, the Government of Japan deci ded "Drastic Review of 
Incorporated Administrative Agencies in the Ca binet Council" on 25 December 2009. Based on this 
cabinet decision, the clerical works and projects of all incorporated administrative agencies were 
intensely scrutinized, and the Government of Japan decided "The Basic Policy for Review of Clerical 
Work and Projects of Incorporated Administ rative Agencies" in the Cabinet Council on 
7 December 2010.  Hereafter, in light of this policy, the Government  of Japan will continue to review the system and 
organization of incorporated administrative agencies. 
 
Question 13  
Secretariat's Report, paragraph 140, page 68 
 The Secretariat's Report shows that there is a total of 364 cases of IPR violations subject to criminal 
remedies. Of this total, what is the proportion of  civil, administrative, and criminal remedies, 
respectively?   
RESPONSE 
 
As is described in paragraph 140 of the Secret ariat's Report, 364 cases were subject to criminal 
remedies. As for civil remedies, 527 suits on infringem ent of IPRs were filed in the first instance in 
2009 and 469 cases were concluded. With regard to administrative remedies, the data about border 
enforcement can be found in paragra ph 139 of the Secretariat's Report. 
 
Question 14 
 
Secretariat's Report, paragraph 144, page 68 
 
What is the purpose of the Special Zone for Structural Reform Act? WT/TPR/M/243/Add.1 
Page 258  
 
   
RESPONSE 
 
The Special Zone for Structural Reform Act is promoted for the following two purposes. 
 
1. To stimulate the Japanese economy, by show ing successful cases of structural reforms, 
regulatory reforms can be extended nationwide.  2. To stimulate regional economies by encour aging industrial clusters according to the 
characteristics of the area, and by creating new industries. 
 
Question 15  
Secretariat's Report, paragraph 144, page 68 
 What are the specific measures related to medica l care among the 466 measures adopted in the special 
zones and implemented on a nation-wide basis?  
RESPONSE 
 
So far, 466 measures have been implemented as re gulatory reforms at the nation-wide level, not 
proposed and adopted in the special zones. Among th ese, in the medical field, the following examples 
have been implemented at the nation-wide level, w ithout having been carried out in the special zones. 
  - The expansion of a paramedic's res ponsibilities (administering the epinephrine 
injection to a patient in anaphylactic shock) 
 - Guidelines have been made to clarify the coverage of Pharmaceutical Affairs Act 
regarding the clinical research stage in order to make medical equipment 
development smoother. 
 - Easing of restrictions on the number of hos pital beds to facilitate the integration and 
reorganization improvements for secondary medical care facilities 
 - Foundation of a clinical training system for foreign medical practitioners other than 
doctors 
 - Approval of the use of automatic exte rnal defibrillators (AED) by non-doctors 
 - Adoption of a policy that allows for a re mote diagnosis in cases where a face-to-face 
consultation is difficult. 
 
Question 16 
 
Secretariat's Report, paragraph 147, page 69 
 
The amendment of the AMA appears to simplify th e procedure. Could it not be eliminating the 
opportunities to mull over the matters on the table? 
 
RESPONSE 
 
With regard to the hearing pro cedure by the Japan Fair Trade Co mmission (JFTC), it has been pointed 
out as lacking fairness that the JFTC which issu es the administrative orders against violating 
companies reviews by itself whether or not the admi nistrative orders are appropriate. The amendment 
of the AMA includes the abolition of the hear ing procedure conducted by the JFTC and the 
consignment of administrative review to district co urts against administrative sanctions by the JFTC 
with a view to resolving criticisms on procedural fa irness.  In addition, the amendment sets out further 
enhancement and transparency concerning ex ante  procedures when the JFTC takes measures.   WT/TPR/M/243/Add.1 
 Page 259 
 
 
  Therefore, the amendment of the AMA does not e liminate the opportunities to mull over the matters 
on the table.  Question 17  Secretariat's Report, paragraph 149, page 71 
 
The AMA is trying to regulate the size of the voti ng block in order not to  restrain competition. 
However, many studies show that the size of one's voting block does not affect the decision of committees, unless proposal or veto rights are given. Therefore, it would be better for the AMA to try 
to control the proposal or veto rights rather than to stipulate detailed criteria. What is the Japanese 
Government's view on this?  
RESPONSE 
 
In Article 10 of the Antimonopoly Act (AMA), no comp any shall acquire or hold shares of any other 
companies where the effect of such acquisition or ho lding of shares may be substantially to restrain 
competition in any particular field of trade.  In a ddition, in case the ratio of the total number of voting 
rights of the share issuing company to be held  by the share acquiring company and its group 
companies exceeds the percentage threshold provid ed in a Cabinet Order (20% or 50%), such 
companies shall give the Japan Fair Trade Commission (JFTC) prior notification of a plan pertaining 
to the acquisition.  However, the JFTC institute d the notification thresholds in order to find 
appropriate clues on business combinations which ha ve high probability of violating the AMA while 
taking the burden on companies into consideration.  Therefore, in light of the relationship between 
interested parties as well as the ratio of the numbe r of voting rights, the JFTC evaluates whether the 
business combinations have an impact on competition in the market (a particular field of trade) 
through the forming, maintaining or strengthening of  a relationship in which two or more companies 
operate a business in a united form, whether fully or  partially by shareholding, mergers or other 
transaction.  In case the business combinations c ould have an impact on competition in the market 
through the forming, maintaining or strengthening of a relationship, the JFTC targets those for 
business combination review.  
Question 18 
 
Secretariat's Report, paragraph 153, page 72 
 
What are the competition promotion policies applied to the telecommunications market which is 
considered as one of the 27 monopolistic ma rkets by the Japan Fair Trade Commission? 
 
RESPONSE 
 
The Japan Fair Trade Commission has defined, in  its Guidelines Concerning the Interpretation of 
"Specific Business Field" as Defined in the Pr ovisions of "Monopolistic Situation" in the 
Antimonopoly Act, a "specific business field" as (1) those business fields recognized as 
corresponding to domestic total supply value requireme nts as well as market share requirements for 
monopolistic situations regulated under the An timonopoly Act, and (2) those business fields 
recognized as likely to come under such requireme nts according to changes in future economic 
circumstances.  Both fixed and mobile telecomm unications businesses are included in such business 
fields. 
 The Ministry of Internal Affairs and Communications has been promoting a fair competition environment while dealing with the changes in ma rket environment in the telecommunications sector, 
such as by opening the bottleneck facilities owned by dominant operators (NTT East and NTT West). WT/TPR/M/243/Add.1 
Page 260  
 
  In order to continue promoting broadband, the government will further focus on competition by 
streamlining institutions, for example through the functional separation of NTT East and NTT West. 
 Question 19  Secretariat's Report, paragraph 12, page 80 
 
It is stated that a certain amount of imported ri ce may be purchased and marketed directly under the 
SBS (Simultaneous Buy and Sell) system. Could Japan provide detailed in formation on the SBS 
system? It is also stated that rice will be offered as food aid. Does this include imported rice? 
 
RESPONSE 
 
Since April of 1995, MAFF Japan has introduced  the Simultaneous Buy and Sell (SBS) System on 
rice importation with limited amount. Under the SBS system, an actual user and an importer jointly 
bid together for the tender. For further details su ch as bidding qualifications, please refer to MAFF's 
website.  Imported rice has been included in Japan 's grant food aid.  http://www.maff.go.jp/j/ 
soushoku/ boueki/nyusatu/index.html  Question 20  Secretariat's Report, paragraph 13, page 80 
 
Many SSGs, including 13 price-based and 11 volume-based for the years 2008-2010, have been imposed on various products. What is the specific process for invoking SSGs?  RESPONSE  
The specific process for invoking SSGs is stipulated in the relevant provisions in the Temporary 
Tariff Measures Law in accordance with the Ar ticle 5 of the WTO Agreement on Agriculture. 
 Question 21 
 
Secretariat's Report, paragraph 14, page 81 
 
Japan administers its SPS system in a strict way. Members are concerned that the administration is done in a more stringent way than provided for by  the relevant international guideline. Does Japan 
have any plans to change this situation? What is the case mentioned in footnote 15? Could Japan 
explain the 'risk assessment procedures' in detail?  
RESPONSE 
 
Japan committed itself to establishing SPS measures following the step-by-step processes of risk 
analysis. It is essential to intensify and apply scien tific decision-making with regard to SPS measures. 
Japan strives for continuing bilateral communications  with its trading partners toward mutually 
agreeable solutions.   WT/TPR/M/243/Add.1 
 Page 261 
 
 
  Question 22 
 
Secretariat's Report, paragraphs 50 and 53, page 90 
 
Does Japan have any plans to reduce or remove the st rict foreign investment restrictions applied to 
NTT? (Foreign investment ceiling of 33.3% and ma ndatory government ownership of 33.3% of NTT 
shares)  
RESPONSE 
 
NTT is a shareholder of NTT East and NTT W est, which provide most of the communications 
infrastructure that is the foundation of social activity . The foreign investment restrictions applied to 
NTT, which is deeply related to national security , are in place to avoid national security issues and 
undue influence by foreign countries.  
Given NTT's important public role, such as the responsibility of providing universal services, 
promoting research and disseminating the research results, the government functions as a stable shareholder in order to prevent any domination of NTT management or abuse of shareholder rights by 
specific entities and to ensure the stability of company management and appropriate business 
operations. For these reasons, the government is  obliged to hold the shares of NTT.  
 
Therefore, there are no plans to either relax or abolish the above measures at this point.  
 Question 23  
Secretariat's Report, paragraph 53, page 90 
 
It is difficult to conclude that market comp etition and deregulation are realized in Japan's 
telecommunications market. What are the MIC's efforts to introduce greater competition in the telecommunications services market?  
RESPONSE 
 The Ministry of Internal Affairs and Communications has been promoting a fair competition 
environment while dealing with the environmental changes in the telecommunications sector, such as 
by opening the bottleneck facilities owned by dominant  operators (NTT East and NTT West). In order 
to continue promoting broadband de ployment and utilization, the governme nt is taking actions such as 
implementing the functional separation of NTT E ast and NTT West to further promote a fair 
competition environment.    Question 24  
Secretariat's Report, paragraph 71, page 94 
 
Could Japan provide details on the restrictions that  have been removed following the medical system 
reform (number of medical students, foreign workers allowed to work in the healthcare sector, etc.)? 
 
RESPONSE 
 Although the WTO report states 'the removal of rest rictions on the number of medical students", the 
Government of Japan doesn't permit universities to increase the number of medical students in principal.  WT/TPR/M/243/Add.1 
Page 262  
 
  In order to correspond to a doctor shortage, si nce 2008 the Government has exceptionally permitted 
universities to increase the number of medical students under specific conditions (the number of medical students in 2011 is 8,923, an increase of 1,298 compared with 2007).   The frameworks in 2010 and 2011 are 1) To increas e the doctors who work in certain areas, 2) To 
increase the doctors who research and develop medicine, and 3) To decrease the number of students in 
the Department of Dentistry.  Concerning the restrictions on immigration control fo r foreign nationals to work in the medical sector 
in Japan, the Ministry of Justice Ordinan ce was amended on November 30, 2010, and some 
restrictions for the following two specific professions were abolished. 
  - Abolished restrictions for foreign dentists   the restriction of activities which were limited to practice as a trainee, the period of 
stay (within six years of acquiring a dentistry license), and the extent of areas where 
they can work in the country 
 - Abolished restrictions for foreign pub lic health nurses, birthing assistants, and 
registered nurses. 
 - the restriction of activities which were limited to practice as a trainee, and the period 
of stay (within four years of acquiring a license for public health nurses and birthing assistants and within seven years for registered nurses) 
 
Question 25  
Secretariat's Report, paragraph 71, page 94 
 What specific measures have been taken to rem ove the regulations regarding market opening to 
foreign healthcare professionals?  
RESPONSE 
 
Concerning immigration controls and restrictions on fo reign nationals to work in the medical sector in 
Japan, the Ministry of Justice Ordinance has been amended as of November 30, 2010, and some 
restrictions specifically for the following  two professions have been abolished. 
  - The following restrictions regarding fore ign dentists have be en abolished: the 
restriction on activities limited to practice for trainees, the allowed period of stay (six 
years after acquiring a dentistry license), and the extent of areas where they may work 
in the country. 
 - The following restrictions regarding fore ign public health nurses, birthing assistants, 
and registered nurses have been abolished: the restriction on the activities limited to 
practice for trainees and the allowed period of stay (four years for public health 
nurses and birthing assistants after acquiring a license and seven years for registered 
nurses after acquiring a nursery license). 
 Note that it is necessary to acquire Japanese me dical licenses to practice medicine in Japan. 
 Question 26 
 
Secretariat's Report, paragraph 71, page 94 
 
With the EPAs with the Philippines, Indonesia, and India, Japan has eased its regulations on foreign 
nurses. Could Japan provide further details on this?  WT/TPR/M/243/Add.1 
 Page 263 
 
 
  RESPONSE 
 
Under the EPAs with the Philippines and Indonesia,  Japan grants entry and temporary stay, which 
may be extended for three years in total for nurse candidates and four years in total for certified care worker candidates, to those candidates who will engage in activities to acquire the necessary skills 
and knowledge through tr aining for the purposes of being qualified as nurses or certified care workers 
in Japan.  If they are qualified as nurses or certified care workers, they will be granted entry and temporary stay, which may be extended, in order to work as nur ses or certified care workers in Japan. These are 
exceptional systems under the governmental manageme nt and framework of EPAs between Japan and 
the respective countries.  For India, the EPA has not been signed yet, and therefore specific contents of the EPA are not 
available at the present stage. 
 
Question 27  
Secretariat's Report, paragraph 71, page 94 
 
How many foreign nurses have entered Japan after the EPAs came into effect and what impact did the 
market opening to foreign healthcare professionals have on the Japanese market? 
 
RESPONSE 
 
Under the EPAs with the Philippines and Indonesi a, Filipinos and Indonesians are now permitted to 
engage in training activities including work as a nurse's aid for the purpose of being qualified as a 
nurse under the laws and regulations of Japan and to engage in work as nurses after proper nursing 
qualifications are attained. Three such candida tes for nurses have been qualified as nurses under the 
laws and regulations of Japan. Nurses under the laws and regulations of Japan, from not only 
Indonesia and the Philippines, but also other fo reign countries are permitted to work in Japan. 
 
Furthermore 455 nursing candidates have entered Japan. Japan has been managing the acceptance 
system under the EPAs in the view to prevent a negative impact on the nurse-aid-related labor 
markets in Japan.   Question 28 
 
Secretariat's Report, paragraph 71, page 94 
 
What is Japan's position on the market opening to foreign nurses in future EPAs?  
RESPONSE 
 Under the Basic Policy on Comprehensive Economic Partnership (Cabinet Decision, November 9th, 
2010) the Government of Japan will consider measures to address the issues relating to the movement 
of natural persons from abroad, such as nurses and cer tified careworkers, on the basis of its efforts to 
promote the "employment and human resources stra tegies" described in its New Growth Strategy 
(Cabinet Decision, June 18, 2010), and it will do so with due attention to future domestic 
demographic trends, the possible effect of such  movement on employment in Japan, requests from 
other countries, as well as securing Japan's economic gr owth and social stabilization. A group to study 
the issue has been established under the Minister of State for National Policy, and by June 2011 it will 
develop a basic policy. WT/TPR/M/243/Add.1 
Page 264  
 
   
Question 29  
Secretariat's Report, paragraph 57, page 91 
 The Secretariat's Report states that port transport ch arges are subject to prior notification procedures 
but in fact, not only those char ges but also the matters related to entry into and departure from 
Japanese ports or change of terminals customarily ar e subject to prior consultation. Even though this 
system of prior consultation is not a government po licy, it is regarded as a non-tariff barrier which can 
undermine the free provision of shipping services. Does Japan have any plan to address this issue? If 
so, could Japan provide the details of the plan? 
 
RESPONSE 
 
The charges are based on the Port Transportation Busi ness Act, while the system of prior consultation 
is based on an agreement among private compani es at the request of shipping companies.  
 These prior consultation procedures were much improve d in terms of facilitation and transparency by 
an agreement among the persons concerned in Oc tober 1997. As a result, conventional prior 
consultation matters through the Japan Harbor Tran sportation Association have decreased by more 
than 95%, and shipping companies have expressed their gratitude. 
 
Additionally, another procedure, which does not involve the Japan Harbor Transportation 
Association, has been established. Therefore, it depends on the decision of shipping companies 
whether to involve the Japan Harbor Transportation Association or not.    SINGAPORE
 
Question 1 
 We welcome Japan's efforts in encouraging inward  FDI, including through measures facilitating FDI 
approval.  
We welcome any updates Japan could share on its pl ans to introduce additional initiatives to further 
enhance Japan's environment for foreign investments.  
RESPONSE 
 
The "program for promoting Japan as an Asian i ndustrial center and direct investments into Japan" 
(tentative name) will be drawn up by the summer of 2011. This program will include system reforms 
and other measures to ensure smooth flows of peopl e, goods and funds with the aim of making Japan's 
business environment more appealing.  We also welcome any updates Japan could share regarding its list of sectors for which foreign 
investments are currently subject to prior approval, notification, or ex post reporting, and any plans to 
review these sectors.   
RESPONSE 
 
Restrictions on inward foreign direct investment to  Japan are fully compatible with OECD rules and 
stipulated by the Foreign Exchange and Foreign Trade Act and its relevant decrees and regulations. 
The list enumerating all the sectors that are subject to  prior approval, notification, or ex post reporting 
information can be found in the pub lic domain and accessible by internet. Please note that the latest  WT/TPR/M/243/Add.1 
 Page 265 
 
 
  revision to the list dates back to April 2009. As of the time of this response (February, 2011), 
additional revisions are not envisaged. The full list can be obtained at the following internet site with 
its English translation.  (http://www.japaneselawtranslation.go.jp/c ommon/data/notice/ h20z00101je.3.0.htm) 
 
Question 2  We note with interest from the WTO Secretariat' s Report (WT/TPR/S/243, page 29, paragraph 75) 
and Japan's Report (WT/TPR/G/243, page 12, paragra ph 38) about the trilateral investment agreement 
currently being negotiated between Japan, China, and Korea.  The Secretariat Report further mentions 
that at the latest trilateral summit held in May 201 0, the three countries were of the common view of 
making their "utmost efforts" to "reach a substantive agreement of the trilateral investment treaty in a 
few months time".  
Could Japan give an update on the latest status of the negotiations and the expected timeline for 
conclusion of the agreement?  
RESPONSE 
 
With regard to the Japan-China-Korea investment agreement, as was confirmed at the Japan-China-
Korea trilateral summit in October 2010, the three countries are in negotiations aiming at an early 
agreement in principle. A specific date for conc luding the agreement has not been fixed at this 
moment.  Question 3 
  
The WTO Secretariat's Report (WT/TPR/S/243, page 90, paragraphs 50-53) indicates that in Japan's Telecommunication Services sector, "Foreign investment  in NTT is limited to 33%." and that "NTT, 
which is partly government owned, continues to be the single largest player in Japan's 
telecommunications sector.  In 2008, NTT group acc ounted for 91.2% of "in-prefecture" fixed-line 
call sales and 47.4% of "out-of-prefecture" call sal es; it was responsible for 77.7% of in-city call 
volume and 54.4% of out-of city volume.  In the mobile market, NTT Docomo had a 49.5% share of 
sales and 50.8% of communications traffic."     With regard to market liberalisation in the Tel ecommunications sector, does Japan have any intention 
to relax its foreign investment restrictions in NTT? 
 
RESPONSE 
 
NTT is a shareholder of NTT East and NTT W est which provide most of the communications 
infrastructures that is the foundation of social activit y. The foreign investment restrictions applied to 
NTT, which is deeply related to national security , are in place to avoid national security issues and 
undue influence by foreign countries. 
 Therefore, there are no plans to either relax or abolish the above measures at this point.   Question 4 
 
We are glad to note from the WTO Secretariat's Re port (WT/TPR/S/243, page 94, paragraph 71), that 
the Japanese authorities have introdu ced reforms in Japan's medical system.  Besides the introduction 
of an online payment system to increase efficiency  and the quality of healthcare, we note that "At the 
same time, the reform may include the removal of restrictions on the number of medical students, and WT/TPR/M/243/Add.1 
Page 266  
 
  on foreign workers permitted in the sector, and relax the rules that prevent equity finance to facilitate 
the restructuring of the hospital sector.  This would enable the creation of more efficient hospitals as 
well as M&As of hospitals and clinics."  Could Japan elaborate on its Reform plans and progress thus far, to reduce or remove these 
restrictions on foreign participation in the Medical Services sector?  
 
RESPONSE 
 
Concerning the restrictions on immigration control fo r foreign nationals to work in the medical sector 
in Japan, the Ministry of Justice Ordinan ce was amended on November 30, 2010, and some 
restrictions for the following two specific professions were abolished.    
Abolished restrictions for foreign dentists 
 The restriction of activities which were limited to practice as a trainee, the period of stay (within six 
years of acquiring a dentistry license), and the extent  of areas where they can work in the country. 
 
Abolished restrictions for foreign public health  nurses, birthing assistants and registered nurses 
 
The restriction of activities which were limited to prac tice as a trainee, and the period of stay (within 
four years of acquiring a license for public health nurses and birthing assistants and within seven 
years for registered nurses).  Note that it is necessary to acquire a Jap anese medical license to practice in Japan. 
 
Question 5 
 The WTO Secretariat Report (WT/TPR/S/243, page v ii, paragraph 5) states that Japan has introduced 
a "New Growth Strategy, focusing on seven priori ty areas (i.e. environment and energy, medical and 
health care, economic integration with other Asia n countries, tourism and revitalization of regional 
economies, science and technology,  human resources, and financial services)."  The Report further 
notes that "it remains to be seen whether the measures to be adopted  in accordance with the strategy 
involve policies to "pick winne rs"" (page 32, paragraph 10). 
 Could Japan please indicate where more information (p referably in English) can be found regarding 
its "New Growth Strategy"?  
 
The New Growth Strategy is aimed to realize "S trong Economy, Robust Public Finances and Strong 
Social Security System". There are three main target s to be achieved by 2020 in this strategy. The first 
target is to achieve real and nom inal growth in excess of 2% and 3% respectively. The second one is 
to return consumer prices to positive increas es by FY 2011. The third one is to lower the 
unemployment rate to between 3-4%. 
 
To achieve these goals, we have identified 7 strate gic sectors and 21 national strategic projects. In 
order to ensure the implementation of the New Growth Strategy, the government established in 
September of last year the Council of the Realiza tion of the New Growth Strategy, which is chaired 
by the Prime Minister and composed of relevant mini sters, leaders of business circles, academics, etc. 
 
We have already observed some progress in the impl ementation of the New Growth Strategy, such as 
being selected to supply a nuclear power plants to Vietnam, the conclusion of EPA negotiations with 
India and the announcement of the Basic Polic y for Comprehensive Economic Partnership. 
  WT/TPR/M/243/Add.1 
 Page 267 
 
 
  More information about the "New Growth St rategy"is available at the website below: 
 http://www.npu.go.jp/policy/policy04/index.html.  Question 6 
 
The WTO Secretariat Report (WT/TPR/S/243, page 51,  paragraph 69) states that "Japan has been 
revising laws to introduce various technical re quirements for product safety and distribution".  
 Would Japan consider translating its national deviatio ns from international standards such as IEC into 
English, to ensure that changes made to the T echnical Standards under the Electrical Appliances and 
Materials Safety Law are clear to importers?  
RESPONSE 
 
There is no plan to translate into English the di fferences between international standards such as IEC 
and national deviations in the Technical Standards under the Electrical Appliances and Materials 
Safety Act.  However, the Ministry of Economy,  Trade and Industry is prepared to give such 
information in compliance with inquiries from importers on a case-by-case basis.  
SWITZERLAND 
 
Report by the Secretariat  
 II. T
RADE POLICY REGIME : FRAMEWORK AND OBJECTIVES  
 
(3) T RADE POLICY FORMULATION AND EVALUATION  
 (i) Trade policy formulation and implementation 
 
In para. 11, the Secretariat mentions the work  of the Government Revitalization Unit (GRU) 
established by the DPJ Government. It notes that  the Cabinet has authorized a GRU devised 
regulatory reform programme on 18 June 2010, aimi ng at the review and improvement of some 
60 regulations in a wide range of sectors. Meanwh ile, the Government of Japan emphasizes in para. 
85 of its report the "Regulatory Reform 100 to Revitalize Japan" d ecided in September 2010 as part of 
"The Three-Step Economic Measures for the Rea lization of the New Growth Strategy". This 
Regulatory Reform 100 is mentioned to consist of regulatory and in stitutional reforms in five so-
called strategic fields of activity ("acceleration of urban revitalization and housing investment; 
promotion of investment and utilisation of the environment and energy technology; creation of 
demand and jobs in the medical and nursing care sectors; local revitalization activities such as 
promotion of tourism; and economic strategies to op en Japan to overseas"). Could Japan explain the 
relationship between and the prioritisation of th e measures taken in these two reform programmes? 
Could Japan expand on the impact of these measures on Japanese trade policies, on access to the 
Japanese market for goods and services (e.g. in the medical sector including pharmaceuticals and 
medical devices or in the sector of environmentally friendly, clean technologies), on the movement of natural persons, on the adoption of  international standards in technical regulations as well as on the 
facilitation of FDI ?  RESPONSE  
Both "policy on regulatory and institutional reform " and "Regulatory Reform 100 to Revitalize Japan" 
are Cabinet Decisions and we do not prioritize th e two reform programs. The former was drafted WT/TPR/M/243/Add.1 
Page 268  
 
  based on the discussion at the "Subcommittee on Regul atory and Institutional Reform" and the latter 
was decided as a part of the economic stimulus package.  These two reform programs include items such as improving convenience on issuance of certificates 
of origin, further reduction of drug/ device lag, re view of regulations to accelerate the diffusion of 
renewable energy sources, the introduction of a point system to accept highly-qualified human 
resources from overseas, and servicing windows for ad ministrative procedures at the national and 
local level for international businesses. Each minist ry has taken measures to realize those reforms. 
Some reform items have already been implemented.   
According to para. 12 of the Secretariat's report,  Japanese authorities state "that each ministry and 
agency receives inputs from the private sector con cerning matters related to trade policies through, 
inter alia, exchanging opinions with private en tities and receiving petitions from them." Could Japan 
explain, if these exchanges are open for all en tities of the private sector, both Japanese and 
foreign?How may established foreign stakeholders  be invited to these exchanges? Could Japan 
provide a list of points of contacts within each ministry and agency?  
 
RESPONSE 
 
1. Japan provides the opportunity for an excha nge of opinions as well as for petitions to 
basically all entities in the private sector and recognizes that there is no discrimination between 
domestic entities and foreign entities. 
 2. In general, foreign stakehol ders may be invited to exchange opinions, petition, etc. by 
individual ministries and agencies whenever they think it necessary or following requests from these 
stakeholders.  
 
3. The appropriate contacts are as follows:   (a) For the Ministry of Fore ign Affairs, the contact for the WTO (excluding the service 
trade) and preferential trade agreements fo r developing countries is the International 
Trade Division. The contact for EPAs/FTAs (excluding the services trade) is the 
Economic Partnership Division and that for the services trade is the Services Trade 
Division. However, with EPAs and FTAs, there are a few exceptions (For example, the Middle East Second Division is in charge of the FTA negotiations with GCC.). Also, there are some agreements which specific regional affairs Divisions are in charge of.  
 
 (b) For the Ministry of Finance, the contact  for the WTO is the Office of International 
Trade Organizations, Customs and Tariff Bureau. For EPA/FTAs, it is the International Affairs and Research Divisi on and Office of Economic Partnership, 
Customs and Tariff Bureau. 
 
 (c) For the Ministry of Agriculture, Forestry  and Fisheries, the contact for the WTO and 
for EPA/FTAs is the International Economy Division, International Department of 
Affairs. 
  (d) For the Ministry of Economy, Trade and Industry, the contact point for the WTO is 
the Multilateral Trade System Department. Fo r general and cross-sectional matters of 
EPA/FTAs, it is the Economic Partnershi p Department. For individual EPA/FTAs, it 
is the corresponding regional affairs Division.  
  WT/TPR/M/243/Add.1 
 Page 269 
 
 
  (4) T RADE AGREEMENTS AND ARRANGEMENTS  
 (ii) Regional trade agreements 
 
In para. 39, the Secretariat's report indicates that  Japan has a strong interest in the progress of the 
Trans-Pacific Partnership (TPP) initiative and that it is seriously considering ways to be involved in it.  
Could the Japanese authorities indicate, if they indeed take the decision to participate to the TPP, how 
they intend to reconcile such a participation to  the TPP with Japan's agricultural policy ? What 
adjustments to the present policy would then be required?   RESPONSE  
At present, Japan hasn't made any decision on par ticipation in the Trans-Pacific Partnership (TPP) 
negotiation. Based on the "Basic Policy on Compre hensive Economic Partnership" decided by the 
Cabinet on 9th of November 2010, Japan is gather ing information regarding TPP from the countries 
concerned. Therefore, at this stage, it is difficult to concretely show what changes in the agricultural 
policy would be necessary if Japan participates in the TPP.  
(iii) Generalized system of preferences 
 
Paras. 40-43 of the Secretariat's report and para. 12 of Japan's Government's report suggest that GSP 
imports (2 trillion JPY) account for about 4% of Japan ' total imports in 2008-9; w ith 78% of this total, 
China is by far the largest beneficiary of the Japanese GSP and LDCs only receive a small share of 
imports under the GSP. Could the Japanese authoriti es indicate whether Japan considers improving 
the rules of origin for its GSP to induce a highe r utilization of the Japanese GSP also by LDCs ? 
 RESPONSE  
Japan has already adopted simple and transparent rul es of origin for its GSP.  Japan will continue to 
apply its rules in an appropriate manner.  
III. T
RADE POLICIES AND PRACTICES BY MEASURES  
 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
 (ii) Tariffs  
 
(a) Bound tariff  
 
Para. 21: The Secretariat's report indicates in para . 21 that Japan has 108 unbound lines, which relate 
mainly to fisheries, petroleum oils, and wood and articles thereof.  Could Japan explain the reasons 
why it still has unbound duties for some categories of fish, such as cod or herrings as well as for some 
categories of woods, such as coniferous ? The curre nt NAMA modalities foresee that all tariffs would 
be bound in ad valorem terms. Once the negotiations  are completed is Japan ready to bind its duties 
on these products as this will increase tr ansparency and predictability ? 
 
RESPONSE 
 There are indeed some unbound products such as  fish, lumber, and petroleum. Regarding non-
agricultural products, however, 99.6% of products are bound as a result of a series of Round negotiations, and such a percentage is not particular ly lower than that of other major countries such as 
Switzerland (99.7%) (Source: WTO(2010) "World Tariff Profiles 2010"). 
 WT/TPR/M/243/Add.1 
Page 270  
 
  Japan will continue to engage in discussion in th e WTO in a constructive manner and set appropriate 
types and levels of tariffs, while consider ing the progress and results of DDA negotiations. 
 
(v) Government procurement 
 Para. 54: According to the statistical overview in table III.3 of the Secretariat's report, the value of 
procurements of railway vehicles and associat ed equipement increased between 2007 and 2008 by 
about 10'000'000 Yens up to 64'000'000 Yens. At the sa me time, the share of foreign supplies for 
these procurements decreased from 70 % to 18 %. Various reasons such as the operational safety clause or restructurations might of course explain such a significant change. Would it be possible for 
the Japanese authorities to shed so me light on the reasons for this sharp decrease in the share of 
foreign suppliers for this category of procurements ?  
RESPONSE 
 
The value of procurements varies from year to year in accordance with the timing of new 
procurements or the renewal of goods. The reason fo r the decrease in the share of foreign supplies 
between 2007 and 2008 is that high-value procuremen t cases from foreign suppliers (e.g., multiple tie 
tamper) were concentrated in 2007 by chance.  Para. 55: The Secretariat's report indicates that for contracts between the Government and a 
Cooperative Association or Federati on of Cooperative Associations of  small and medium enterprises 
(SMEs), the Government can use limited tenderi ng - instead of open tendering - procedures. The 
report also says that the laws and regulations a pply equally to domestic and foreign SMEs. Could the 
Authorities of Japan explain how the regulations ensure that the basic provisions of non discrimination and national treatment apply to foreign SMEs when procurement contracts are 
concluded between a procuring entity and the said Cooperative Association or Federation of 
Cooperative Associations of small and medium enterprises (SMEs) ?  
RESPONSE 
 
There is no nationality requirement for member ship in co-operatives or associations and no 
description of nationality in the defi nition of SMEs in the relevant la ws. So there is no provision that 
would prevent foreign SMEs from affili ating to cooperatives or associations. 
 
(vii) Standards, and sanitary  and phytosanitary measures 
 
(a) Standards and technical regulations 
 Conformity assessment 
 
Para. 71: With regard to confor mity assessment, could the Japanese authorities indicate  to what 
extent Good Manufacturing Practice (GMP) certificates from Members of the Pharmaceutical 
Inspection Cooperation Scheme (PIC/S) are considered to be in compliance with Japanese legislation?  
 
RESPONSE 
 
Japan thinks that the Japanese GMP is equivalent to  the PIC/S guidelines. Japan would like to add that 
Japan requests manufacturing approval holders to  submit the GMP certificate in the case of a GMP 
audit.   WT/TPR/M/243/Add.1 
 Page 271 
 
 
  Sanitary and phytosanitary measures 
 
In para. 78, the Secretariat's report notes that Japan imposes import prohibitions on beef and poultry from various countries to prevent the spread of BSE and avian flu. The World Organization for 
Animal Health (OIE) has established a list of c ountries according to BSE risk, following a thorough 
scientific process. This list is based on the most up to date scientific evidence. Considering those 
elements, could Japan elaborate on the reasons for continuous restrictions on beef imports? In its 
internal assessment of BSE risk, is Japan taking into  consideration the substantial work carried out by 
the OIE and the results thereof?   RESPONSE  
For importation of beef and beef products into  Japan from a country where a BSE outbreak has 
occurred, the Ministry of Agri culture, Forestry and Fisheries (MAFF), from an animal health 
standpoint, and the Ministry of Health, Labour and Welfare (MHLW), from a food safety standpoint: 
 
 (1) analyse relevant data and info rmation about the country concerned, 
 (2) conduct on-site visits for verification of the data and for additional information, if 
necessary; and 
 (3) request the Food Safety Commission (FSC) conduct risk assessment.  
All relevant data and informati on, including the OIE recognition of BSE status for Switzerland, will 
be provided to the FSC at the time of the request for risk assessment.  Following the technical discussions held last Decemb er between the two countries, in January, 2011, 
Japan received Switzerland's response to the Japan's  questionnaire. Japan has been analysing and 
evaluating it. 
 
IV. T
RADE POLICIES AND PRACTICES BY SECTOR  
 (2) A
GRICULTURE  
 
(i) Structure 
 
Para. 3: The Secretariat's report indicates that Japan's agricultural policy scheme is based on the 
revised Basic Plan for Food, Agricu lture and Rural Areas. One of the salient features seems to be the 
achievement of a higher self-sufficiency ratio. Could Japan describe its level of self-sufficiency in the 
recent years? Could Japan explain the effects of the revised Basic Plan on the level of self-sufficiency?  
RESPONSE 
 
MAFF annually estimates the total food self-sufficiency  ratios on a calorie basis and on a production-
value basis and makes them public on its webs ite (in Japanese). http://www.maff.go.jp/j/zyukyu/ 
zikyu_ritu/012.html  The latest figures of the food self-sufficiency are 40% on a calorie basis and 70% on a value basis in 
FY2009. For the last decade, they have remain ed between 39-41% and 65-72% respectively. 
 The Basic Plan which was revised last year set the target ratios of food self-sufficiency at 50% on a 
calorie basis and at 70% on a value basis by FY2020. In order to achieve the target ratios, the Government of Japan is undertaking measures bot h on the production and the consumption side. 
Japan intends to contribute to the global food security through increased agricultural production as WT/TPR/M/243/Add.1 
Page 272  
 
  endorsed at several international fora such as th e APEC Ministerial Meeting on Food Security held 
last October or FAO World Summit on Food Security held in 2009.  
(iii) Domestic measures 
 Para. 18: The Secretariat's report indicates that Japan 's agriculture policy has, in recent years, moved 
away from administered prices to direct income s upport for farmers. Could Japan describe the effects 
of this policy change on its domestic price level for the respective products? 
 
RESPONSE 
 Japan could not describe the effects of this polic y change, because many factors affected prices of 
respective products.  
(3) M
ANUFACTURING  
 
In para. 25, the Secretariat's report notes that in October 2009, the Enterp rise Turnaround Initiative 
Corporation of Japan (ETIC) was established to  provide financial support to companies and 
businesses that are deemed to have revitalization pot ential and are highly indebt ed, including those in 
manufacturing ? Could the Japanese authorities explai n why they have choosen such an approach ? 
Instead of establishing the Enterprise Turnaround Initiative Corporation of Japan, wouldn't it have 
been simpler, more efficient and potentially less market distorting to reform the bankruptcy code, so 
that firms could succeed a turnaround quickly fo llowing for example a chapter 11 procedure ?   
 
RESPONSE 
 
At the time ETIC was established, rebuilding the local  economy was an urgent and vital task in Japan, 
and the Japanese government determined it was b est to establish ETIC to support local business 
revitalization, in accompaniment with volunt ary liquidation, for coping with the task. 
 
THAILAND  
Report by the Secretariat (WT/TPR/S/243 ) 
 
IV. T RADE POLICIES BY SECTOR  
 
(2) A GRICULTURE  
 (i) Structure  
Page 78, Paragraph 9   
9. The experience of many countries is that measures to support prices, including border 
protection, tend to delay structural change, and hamper the prevalence of scale economies and mechanization.  In the case of Jap an, for example, rice has been one of the most highly protected 
crops and rice paddies are characterized by smal l land holdings involving part-time farmers. 
Therefore, the Government introduced a direct payment scheme in April 2007 for farmers with a 
certain scale.  In 2010, the Government implem ented a new single-year pilot direct-payment 
programme on rice.  The programme provides particip ating farmers with income support to bridge the 
gap between the production cost and the "farm gate" price of rice, irrespective of the size of farm 
scale.  In FY2011, the Government intends to fo rmally introduce a new direct payment system, 
extended also to other crops, based on the results of  the pilot programme.  In addition to the direct 
income support, the Government continues to ma intain the production adjustment programme (see  WT/TPR/M/243/Add.1 
 Page 273 
 
 
  below).  Furthermore, in the Basic Policy on Co mprehensive Economic Partnerships announced by 
the Ministerial Committee on Comprehensive Economic  Partnerships on 6 November 2010, Japan is 
to  "commence consultations with the TPP member  countries", and, at the same time, "promote 
appropriate domestic reforms" in agriculture  with a view to "opening the country". 
 
 - Could Japan elaborate more on how the direct-payment program on rice was 
implemented? 
 
RESPONSE 
 
The direct-payment programme is implemented fo r farmers participating in production adjustment 
programme on rice, the payment rate is flat irrespective of the farm scale, region,etc.  1.15 million ha of paddy field has been registered under the pilot program, and the rice area planted in 
excess of the equilibrium set in the supply-demand is estimated to have decreased by approximately 
8,000ha compared to the previous year. In additi on, the number of newly established village farming 
organizations has reached approximately 7,300, in creased by 1,600 compared to the previous year. 
  - The report indicates that Japan would reintroduce its "Domestic Reforms" in 
agriculture with a view to "opening the country". Would Japan kindly elaborate further on the details and the current status of  such reforms? 
 
RESPONSE 
 
Based on the 'Basic Policy on Comprehensive Econom ic Partnerships', Japa n ,while taking into 
consideration the sensitivity of trade in certain products, has decided to pr omote high-level economic 
partnerships with major trading powers. 
 In order to promote both high-level EPAs and im provement of Japan's food self-sufficiency and 
revitalization of its agriculture industry and rura l communities, 'The Headquarters to Promote the 
Revitalization of the Food, Agriculture, Forestry  and Fishery Industries' is established and will 
develop a basic policy at around June 2011 and dr aw up an action plan at around October 2011. 
 
(ii) Border measures 
 Page 78, Paragraph 10  
 10. The average applied MFN tariff for agri culture (WTO definition) is 15.7% (FY2010), 
compared with an overall average of 5.8% (Chapter  III(2)(ii)).  In addition to having relatively high 
tariffs on agriculture goods, the rate varies consid erably from chapter to chapter and often from one 
product to another within the same  HS chapter.  Of the applie d MFN tariffs on agricultural goods 
(WTO definition), 17.4% are non-ad valorem.  Ma ny sub-sectors within agriculture are protected by 
relatively higher MFN tariffs than the sectoral average;  these include industrial and medicinal plants, 
dairy products, edible vegetables, sugars, and cereals and products ther eof (Table IV.1).  Additionally, 
several agricultural sub-sectors are also subject to tariff peaks (defined here  as tariff rates exceeding 
three times the simple applied MFN average).  As estimates of AVEs for some specific duties (which 
tend to involve relatively high tariffs) were not made available, the average ta riffs for the associated 
sub-sector may be underestimated.  In cases where AVEs were available, the simple average for non-
ad valorem tariff rates for agriculture (WTO defi nition) was 57.8%, considerably higher than the 
simple average of purely ad valo rem tariff rates of 9.8%. AVEs were  not available for 115 tariff lines 
at the HS nine-digit level, which included milk and dairy products, live swine and meat of swine, rice 
and cereals, fruit juices, groundnuts and their oil, a nd prepared foods.  For example, the rate payable 
on imports of broad beans is among the highest in Japan's customs tariff with an ad valorem  WT/TPR/M/243/Add.1 
Page 274  
 
  equivalent of 458% (out-of-quota rate).  Tariffs tend to be particularly  high and variable for 
vegetables, cereals, and sugars and sugar confectionery (HS Chapters 7, 10 and 17). 
  - What step would Japan take to re duce tariff peak in agricultural products? 
 RESPONSE  
Japan sets an appropriate tariff rate on each prod uct, taking into consider ation the situation of 
respective domestic sectors, which is consistent with WTO Agreements. Japan will continue to set 
appropriate tariffs while consideri ng the results of DDA negotiations. 
 
(iii) Domestic measures 
 Page 82, Paragraph 20  
 20. For rice, the Government implements "supply- demand adjustment" measures, which inter alia 
set a volume cap for production.  According to the authorities, the supply-demand adjustment is in 
place to keep domestic prices stable and raise th e food self-sufficiency ratio.  The rice diversion 
programme pays farmers to use rice paddies for purposes other than growing rice for food.  Diversion payments vary according to the crop actually sown  or how the land is used by the farmer.  The 
payments are in addition to other subsidies receive d for crops other than ri ce.  According to some 
estimates, in the absence of the pr oduction adjustment policy, the producer price of rice in Japan 
would be ¥9,500 per 60kg (US$1,704/tonne) compared  with the current price of about ¥14,000 per 
60kg (US$15,067/tonne). The authorities reaffirmed that the supply-demand adjustment continues to be conducted voluntarily by farmers and farmers' organizations and is based on the Government's 
annual demand estimate.  The annual demand estim ate in 2009 was 8.15 million tonnes (8.19 million 
tonnes in 2008).  The production control (set-aside ) levels were 1.15 million hectares in 2008 and 
2009;  the total cost of the subsidy payment w as ¥153.1 billion in 2008 and ¥146.8 billion in 2009. 
  - Could Japan elaborate more on how the production adjustment program or supply-
demand adjustment program was  implemented? 
 RESPONSE  
The supply-demand adjustment for rice is conducted by producers and farmers' organizations based 
on annual demand estimates and the market trend.  
The target volume of the rice (annua l demand estimate) is calculated by the Government based on the 
recent demand trend.   
Report by Japan (WT/TPR/G/243
) 
 
IX. J APAN 'S DOMESTIC POLICIES  
 
(4) A GRICULTURAL REFORM  
 
Page 24, Paragraph 92  
 
92. In March 2010, the new Basic Plan on Food, Agriculture and Rural Areas was decided by the 
Cabinet.  The Plan envisages a society where th e agriculture and rural areas are supported by the 
citizens, which in turn contributes to the prosperity of the country as a whole.  It aims at revitalizing 
agriculture and rural areas and at raising the food se lf-sufficiency ratio to 50% by FY2020 (41% in 
FY2008), and demonstrates the direction of agricultural policies in the mid-term, including   WT/TPR/M/243/Add.1 
 Page 275 
 
 
  i) introduction of a new income support direct pa yment to farmers,  ii) conversion to a production 
system more responsive to the consumers' demands for quality and safety, and  iii) promotion of 
farmers' initiatives to expand their businesses into food manufacturing and retailing sectors making use of their products which would bring more income opportunities to rural areas.   
 - As shown in the report, Japan's new basic food plan on food would aim at revitalizing 
agriculture and rural areas and at raising the food self-sufficiency ratio to 50%. Would Japan kindly elaborate further on the de tails in order to achieve the mentioned 
plan? 
 RESPONSE  
In March 2010, the new Basic Plan on Food, Agricult ure and Rural Areas was decided by the Cabinet. 
It aims at raising the food self-sufficiency ratio to 50% by FY2020 (41% in FY2008), and demonstrates the mid-term direction of agricultu ral policies, including  i) introduction of a new 
income support direct payment to farmers,  ii) c onversion to a production system more responsive to 
the consumers' demands for quality and safety, and  iii) promotion of farmers' initiatives to expand 
their businesses into food manufacturing and retail ing sectors making use of their products which 
would bring more income opportunities to rural areas.   
THAILAND – 2
ND set 
 
The Report by the Secretariat (WT/TPR/S/243 ) 
  IV. T
RADE POLICIES BY SECTOR  
 
(5) S ERVICES  
 (i) Financial services 
 
Page 85, Paragraph 36   
36. The banking sector is regulated by the Financ ial Services Agency (FSA), which administers 
the Banking Law.  Under the law, all banks need to be licensed to conduct business in Japan. Foreign 
banks may provide banking services through branch es and subsidiaries (incorporated in Japan).  
Under the Banking Law, deposit insurance does not  apply to branches of foreign banks not 
incorporated in Japan.  Nationally licensed subsid iaries of foreign banks are subject to the same 
prudential requirements as domestic banks.   
- The Report indicates that nationally licensed subsidiaries of foreign banks are subject 
to the same prudential requirements as dom estic banks. Are there any restriction on 
setting up physical branches e.g. limit of a number of branches, location? 
RESPONSE 
 
There is no restriction on setting up  branches, e.g. limit on the numb er of branches or on location 
when the subsidiary of the foreign bank whic h has been licensed based on the Banking Act 
Article 4 (1) plans to establis h a branch office in Japan. 
 However, the bank shall notify the Prime Minister in advance based on the Banking Act Article 8(1). 
 WT/TPR/M/243/Add.1 
Page 276  
 
  Page 88, Paragraph 42 
 
42. To mitigate the impact of the crisis, the au thorities took a number of measures to ensure the 
smooth flow of credit as well as shoring up banks' balance sheets.  Measures taken by the Bank of 
Japan include:  an increase in outright purchases of government bonds and fac ilitation of bank lending 
to the corporate sector;  introduction of a "special  funds supplying operation" in January 2009, which 
provided banks with unlimited funds at the policy ra te and expanded the range of corporate financing 
instruments that could be used as collateral for such funds;  resumption of the purchase of equities 
held by banks by the Bank of Japan in February 2009;  and the provision of subordinated loans to 
banks that were engaged in  international operations. 
- Do these measures apply to both nationa lly licensed banks and foreign branches? 
Please provide more information of those measures. 
RESPONSE 
 
1. An increase in outright purchases of gove rnment bonds and Special funds-supplying 
operations to facilitate corporate financing.  While eligible counterparties may differ depe nding on policy measures, both nationally licensed 
banks (i.e. Japanese banks) and Japanese branches of foreign banks may in principle become 
counterparties as long as relevant conditions are met.  
 With a view to ensuring stability in the financial markets, the Bank of Japan  increased its outright 
purchases of JGBs to an annual pace of 16.8 tr illion yen in December 2008 and then again to 
21.6 trillion per year in March 2009. For instance, as for the outright purchases of government bonds, 
"Principal Terms and Conditions" gives specifics to eligible counterparties as follows: 
 
- Eligible counterparties shall,  pursuant to the Bank's releva nt rules, be selected from 
financial institutions (as defined in Article 37, Paragraph 1 of the Bank of Japan Law, 
Law No. 89, 1997, excluding the Resolution and Collection Corporation and bridge banks [as defined in Article 2, Paragra ph 13 of the Deposit Insurance Law, Law 
No. 34, 1971]), financial instruments firms (Article 10, Paragraph 1, Clause 2 of the 
Bank of Japan Law Enforcement Order [O rder No. 385 of 1997]) that conduct the 
first financial instruments business (Artic le 28, Paragraph 1 of the Financial 
Instruments and Exchange Law, Law No . 25, 1948), securities finance companies 
(Article 10, Paragraph 1, Clause 3 of the Order), and tanshi  companies (Article 10, 
Paragraph 1, Clause 4 of the Order). 
 
Eligible counterparties are chosen annually for this  operation. For fiscal 2010, 38 institutions have 
been chosen including both Japan ese and foreign institutions.  
 "Special funds-supplying operations to facilitate co rporate financing" - a measure that expired at the 
end of March 2010 - referred to loans that provid ed funds with the pooled eligible collateral as 
security by way of open market operations for an  unlimited amount against the value of corporate 
debt pledged as the standing pool of eligible collatera l at loan rates equivalent to the target for the 
uncollateralized overnight call rate . Eligible counterparties to this  operation that were financial 
institutions that were already counterparties in the Bank's Funds-Supplying Operations against Pooled 
Collateral at All Offices and wished to be count erparties could apply. Its Principal Terms and 
Conditions defined eligible  counterparties as follows. 
 
- Eligible counterparties shall,  pursuant to the Bank's releva nt rules, be selected from  WT/TPR/M/243/Add.1 
 Page 277 
 
 
  financial institutions (as defined in Article 37, Paragraph 1 of the Bank of Japan Act, 
Act No.89, 1997, excluding the Resolution and Collection Corporation and bridge banks [as defined in Article 2, Paragr aph 13 of the Deposit Insurance Act, Act 
No. 34, 1971]), financial instruments firms (Article 10, Paragraph 1, Clause 2 of the 
Bank of Japan Act Enforcement Order [Order  No. 385 of 1997]) that conduct the first 
financial instruments business (Article 28, Paragraph 1 of the Financial Instruments 
and Exchange Act, Act No. 25, 1948), secu rities finance companies (Article 10, 
Paragraph 1, Clause 3 of the Order), and ta nshi companies (Article 10, Paragraph 1, 
Clause 4 of the Order). 
You will find all the details on our m onetary policy measures at our website. 
http://www.boj.or.jp/en/mopo/measures/index.htm/ 
 2. Provision of subordinated loans to banks a nd Resumption of the purchase of stocks held by 
banks  Eligible Banks 
 
Bank of Japan's provision of subordinated loans to banks and its resumption of the purchase of stocks 
held by banks are available to nationally licensed  banks. Eligible banks for these measures are the 
banks that hold a current account with the Bank of Japan and meet certain criteria.  
 
Outlines 
 Provision of subordinated loans to banks Re sumption of the purchas e of stocks held by 
banks 
Purposes To enable nationally licensed banks to maintain 
sufficient capital base in  adverse financial and 
economic environments, thereby ensuring the 
smooth functioning of fi nancial intermediation 
and financial stability To support nationally license d banks in their efforts 
to reduce the risk of shareholdings, thereby 
contributing to financ ial system stability 
Period From March 2009 to March 2010 From February 2009 to April 2010 
Total limit One trillion yen One trillion yen 
Limit per 
banks 350 billion yen 250 billion yen 
Eligible banks Of the banks th at hold a current account with 
the Bank of Japan, banks, subject to 
international capital standards, which wish to 
be the recipients of the loans and which are 
deemed credit worthy. Of the banks that hold a current account with the 
Bank of Japan,  
i) banks whose stockholdings exceed 50 percent of 
its Tier I capital, or  
ii) banks whose total stockholdings exceed 500 billion yen, or  
iii) banks who adopt the capital adequacy ratio based 
on international standards. 
Properties of loans and 
eligible stocks  ・10-year subordinated loans and perpetual 
subordinated loans  
・The interest rate will increase after 5 years of 
loan disbursement (plus 1.5% per year).  
・ Recipient of each loan has the right to 
redeem the loan on any interest payment date 
after 3 years from the day of loan disbursement. Listed stocks with a rating of BBB- and above; such 
stocks need to be actually traded for 200 days or 
more per year on a stock exchange, and have an 
annual turnover of 20 billion yen or more on a stock 
exchange. The Bank of Japan will set a purchase 
limit per issuer to ensure the diversification of its 
purchased stocks. 
 
＊The international capital standard under Basel II is the capital standard for nationally licensed 
banks which have foreign bran ches or foreign subsidiaries. 
 
Please refer to following URL for more details: The provision of subordinated loans to banks
:  
http://www. boj.or.jp/en/finsys/psloans/index.htm WT/TPR/M/243/Add.1 
Page 278  
 
   
The resumption of the purchase of stocks held by banks
: 
http://www. boj.or.jp/en/finsys/spp/index.htm.  
 
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND 
MATSU  
Report by the WTO Secretariat (WT/TPR/S/243 ) 
 I. E
CONOMIC ENVIRONMENT  
 
(3) S TRUCTURAL POLICIES  
 
(ii) Labour market 
 (page 5, paragraph 13) 
 
As indicated in the Report, the authorities realize the need to reform the labour market, and it is a 
focus area in the stimulus pack age.  Specific measures include: increasing subsidies for employment 
adjustment;  implementing measures that will support  re employment and develop vocational skills;  
creating new jobs;  measures to protect dispatched workers, foreign workers, and temporary workers; 
measures to prevent withdrawal of job offers;  creating jobs and providing employment support in 
priority business sectors;  establishing a trampolin e-type second safety net that provides poor and 
needy job applicants with an opportunity to re bound;  and strengthening the functions of the 
employment insurance system. 
 Could Japan please explain what new measures have been taken to protect non-regular workers? 
 
RESPONSE 
 In Japan, the government promotes the transition of non-regular to regular employment and balanced 
treatment of non-regular workers by providing various  subsidies, etc. Moreover, non-regular workers' 
career formation is supported by the Job Card schem e, which provides those who lack experience as 
regular workers, such as job-hoppers, with close ca reer consulting and practical vocational trainings. 
In addition, Japan is working on strengthening the safety net by expanding  unemployment insurance 
coverage to non-regular workers, as well as carrying out a program providing training, as well as 
benefits during the  training period, for people who are not eligible for the usual unemployment 
benefits.  
II. T
RADE POLICY REGIME : FRAMEWORK AND OBJECTIVES  
 
(4) T RADE AGREEMENTS AND ARRANGEMENTS  
 (ii) Regional trade agreements 
 
(b) Bilateral/regional free-trade agreements currently being negotiated (or studied)  
 (page 20, paragraphs 38/39)  
The Report states that, as part of Japan's trilatera l cooperation with China and the Republic of Korea, 
joint research on a possible FTA has been conducted since 2001 by private institutions of the three 
countries.  Pursuant to a joint statement during th e trilateral Economic and Tr ade Ministers' Meeting  WT/TPR/M/243/Add.1 
 Page 279 
 
 
  in October 2009, a joint study committee (JSC) composed of government officials, business and 
academic experts was established in May 2010, which is due to issue its final report by 2012.   
 The authorities indicate that Japan has a strong interest in the progress of the Trans-Pacific 
Partnership (TPP) initiative.  It is  seriously considering ways to be involved in it but has not yet 
decided whether to participate in the TPP. 
 (1) Does the 'Japan-China-Korea trilateral FTA' ha ve the timetable or schedule?  Could Japan 
please provide us with an update on the progress  made so far?  RESPONSE  
Japan, China and the Republic of Korea launched th e Meeting on Joint Study for a trilateral FTA in 
May 2010 in the Republic of Korea, which incl uded representatives of government, business, and 
academia from the three countries. The second a nd third meetings were held in Japan in 
September 2010 and in China in December 2010 respectively. 
 The three countries exchanged views on their FTA po licies, trade and economic relations, trade of 
goods, rules, investment and services, etc. The three countries aim to complete the Joint Study by 2012.  
(2) If Japan decides to participate in the TPP nego tiations, will this decision have an impact on its 
on-going negotiations on the formation of a trila teral FTA with China and Korea?  We would 
appreciate having the Japanese government's views on the possibility of the TPP negotiations having 
an impact and, if so, the degree of impact expected.  RESPONSE  
Concerning the Trans-Pacific Partnership (TPP) Agre ement, in the cabinet decision on "Basic Policy 
on Comprehensive Economic Partnerships," dated November 9th, 2010, it was decided as follows:  
 "…it is necessary to act through ga thering further information, and Japan, while moving expeditiously 
to improve domestic environment, will commence co nsultations with the TPP member countries."   
 Japan is going to decide whether it will participate in the TPP negotiations or not around June this 
year. At this stage, it is not possible to prej udge eventual impact on other EPAs in case Japan 
participates in the TPP negotiations.  
 
(3) Could Japan please share with us its strategy  for joining the current TPP talks and how it has 
improved its country's regulatory a nd trade regime to meet the required high standards, especially on 
deregulation in the agricultural sector?  Furthermore,  what actions are to be taken to strengthen the 
competitiveness of Japanese farmers or the agricu ltural sector as a whole in response to the TPP 
negotiations? 
 
RESPONSE 
 
With regard to the Trans-Pacific Partnership (TPP)  Agreement, Japan is going to decide whether it 
will participate in the TPP negotiations or not around June this year. At this stage, Japan has not 
decided to participate in the TPP negotiations. 
 In any case, Japan has decided in its "Basic Policy on Comprehensive Economic Partnerships" that it 
will promote high-level economic partne rships and that, at the same time , it will first press ahead with WT/TPR/M/243/Add.1 
Page 280  
 
  fundamental domestic reforms in order to stre ngthen the competitiveness it will need for economic 
partnerships of this kind.    In particular, for agriculture, the Headquarters to Promote the Revitalization of the Food, Agriculture, 
Forestry and Fishery Industries has been established, and a basic policy will be developed around 
June 2011 and an action plan will be decided around October 2011.  
 
III. T
RADE POLICY AND PRACTICES BY MEASURE  
 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
 (ii) Transparency and policy evaluation  
(pages 32 & 33, paragraphs 15)  
Since the previous review of Japan, time required for customs clearance has been reduced for sea 
cargo, but increased for air cargo.  The latest availa ble data indicate that, in 2009, the average time 
between arrival of goods and the granting of impor t permission was 62.4 hours (63.8 hours in 2006) 
for sea cargo and 16.0 hours (14.4 hours in 2006) for air cargo (including time required under the 
"immediate import permission system upon arrival").  It would be appreciated if Japan could explain the reason why the average time between the arrival of 
goods and the granting of import permission for air cargo in 2009 was longer than that in 2006.  RESPONSE  
Japan Customs has conducted the Time Required for the Release of Import Goods Study (hereinafter 
called "TRS") nine times between February 1991 an d March 2009. As mentioned in the question, the 
8th TRS conducted in March 2006 showed that th e average time for air cargo was 14.4 hours, 
compared to 16.0 hours on the 9th TRS conducted in March 2009.  
 Here is a breakdown of both TRS results: Accord ing to the 8th TRS, time from port arrival to 
warehouse was 1.2 hours, from warehouse to custom s declaration was 12.8 hours, and from customs 
declaration to import permission was 0.4 hours. Like wise, the 9th TRS found that the time from port 
arrival to warehouse was 5.5 hours, from warehouse to customs declaration was 10.1 hours, and from 
customs declaration to import permission was 0.4 hours.  Comparing the 8th and the 9th TRS, the time from port arrival to warehouse increased by 1.6 hours. 
Small packages which arrive and are discharged at Na rita Airport were previously declared in the 
Narita area; however, because of a logistics shift, since 2007, those packages have been transported 
and declared in the Tokyo area, which is some dist ance from Narita Airport. This shift resulted in the 
increase of the average time on the 9th TRS.   Here is a breakdown of the two TRS results, excludi ng those ports affected by the logistics shift: 
According to the 8th TRS (factoring out the logistic s shift), time from port arrival to warehouse was 
2.9 hours, from warehouse to customs declaration was 13.1 hours, and from customs declaration to 
import permission was 0.4 hours. Likewise, the 9th TRS (factoring out the logistics shift) found that the time from port arrival to warehouse was 3.6 h ours, from warehouse to customs declaration was 
7.0 hours, and from customs declaration to import permission was 0.4 hours.   WT/TPR/M/243/Add.1 
 Page 281 
 
 
  (4) M EASURES AFFECTING PRODUCTION AND TRADE  
 (iii) State-owned enterprises, corporatization, and privatization  (page 63, paragraph 117) 
 
The State retains a stake in major companies in several sectors, through which it may directly affect 
production and trade.  It also influences various semi-governmental bodies.  As of March 2010, the 
government held 33.8% of the stock of Nippon Te legraph and Telephone Corporation (NTT), 50.0% 
of Japan Tobacco Inc. (JT), and 100% of Na rita International Airport Corporation.   
 
Are there any plans for the privatization of the th ree above-mentioned State-owned entities in the near 
future?  
RESPONSE 
 1. The meaning of "privatization" is not clear in this matter, however, when defying 
privatization as being a joint-stock company, then NTT had been "privatized" in 1985.  On the other hand, when defying privatization as di ssolving state-owned shares,  the government holds 
shares of NTT in view of NTT's important public role such as responsibility of providing universal 
services, promoting research and disseminating research result in order to ensure stable company 
management and appropriate business operations. Therefore, there are no plans to dissolve any state-
owned shares at this point.  2. As for Japan Tobacco Inc. (JT), JT became  a joint-stock company in 1985 and the Japanese 
government holds 50.0% of its shares. The Japanese g overnment has no specific pl an to sell its shares 
at this time.  3. Strategic Growth Plan of MLIT describes th e approach of Narita International Airport's 
privatization as follows: It should be noted that th ere has been debates and discussions about moving 
towards the complete privatization of the Narita In ternational Airport Corporation. However, any such 
move shall require the involvement of a privatizati on strategy, and also an approach that takes into 
consideration the current and future capacity expa nsions of the Tokyo Metropolitan Area airports. 
Consideration shall also be required of the other points that have been discussed above, points whose 
aim is to establish NRT as an Asian hub airport. Pr ivatization of the airport, therefore, will be 
discussed after due consideration as described in the Plan. 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
 (iv) Intellectual property rights  (page 64, paragraph 124) 
 
Amendments to the Copyright Law entered into  force on 1 January 2010, and to the Unfair 
Competition Prevention Act on 1 July 2009.  The amendment to the Copyright Law, inter alia, allowed certain use of copyrighted  works by Internet search service providers without the consent of 
copyright holders, and the amendment to the Unfair Competition Prevention Act expanded the scope 
of application of criminal penalties for infringement of trade secrets. 
 Amendments in 2009 on Article 47 quinquies (reproduction of a difficulty in transmission) and Article 47 sexies (reproduction of a transmitter identif ication code for information which has been WT/TPR/M/243/Add.1 
Page 282  
 
  made transmittable) seem to allow certain use of  copyrighted works by Internet service providers 
without the consent of copyright holders.   We would appreciate knowing more details of th e legislation relating to these amendments and 
whether Japan has encountered any difficulties in implementation. 
 
RESPONSE 
 
As to the Copyright Law, please refer to  the attached provisions of the Law. 
 
Article 47 quinquies of the Law refers to the limitati on for reproduction for the prevention, etc. of a 
difficulty in transmission. (Caching or backup in order to prevent a difficulty in transmission)  Article 47 sexies of the Law refers to the limitation for reproduction, etc. for a retrieval, etc. of a 
transmitter identification code of information which has been made transmittable. (Copying etc. to 
implement an Internet search engine) 
 In implementation, the Government of Japan has not encountered any difficulties at this moment. 
With regard to the Unfair Competition Prevention Act,  the aim of the amendment of the Act is to take 
measures for the protection of trade secrets, including the expansion of the scope of application, in order to ensure fair competition. 
 
The major arrangements are as follows:   (1) The previous purpose requirement for unf air competition in criminal cases of trade 
secrets infringement was revised to "the purpose of making a gain for himself or 
another, or causing loss to another or exposing another to a risk of loss."  
  (2) The acts eligible for prosecution previ ously defined as the use/disclosure of trade 
secrets was expanded to include "misappropriation" and so on. 
 The said amendments to the Unfair Competition Pr evention Act entered into force on 1 July 2010. 
 
(page 65, paragraph 130)  Geographical indications (GIs) are protected in  Japan under the Trademark Act and the Unfair 
Competition Prevention Act.  In addition, GIs rela ting to wines and spirits are protected under the 
Law Concerning Liquor Business Association and Measures for Securing Revenue from Liquor Tax, 
through its Labelling Standard Concerning Geographi cal Indications.  Five GIs for Japanese liquors 
have been designated in Japan.  Furthermore, under FTAs signed by Japan, various GIs for foreign 
spirits are recognized as GIs referred to in para graph 1 of Article 22 of the TRIPs Agreement. 
 A description of the GI system relating to wines and spirits under the Law and Labelling Standard is 
indicated in the WTO document WT/TPR/M/211/Add.1, 22 May 2009, pp.256-257. According to our 
understanding of the above document, a place of origin  for sake (seishu) in the territory of Japan and 
any other WTO member may be designated as a geographical indication (GI) by the Commissioner of the National Tax Agency if it fulfils specific requireme nts. In terms of the places of origin for wines 
and spirits, the Commissioner of the National Tax Agency may designate the places of origin as GIs 
for wines and spirits only in Japan.  
 Could Japan please explain the reasons for the different treatment between sake and wines/spirits?    WT/TPR/M/243/Add.1 
 Page 283 
 
 
  RESPONSE 
 
Any GIs for wines and spirits in the territories of WTO Members are protected according to the 
provisions of Article 23 of the TRIPS Agreement.  
According to the TRIPS Agreement, WTO Members may choose to implement laws which give more 
extensive protection than is required by the agreem ent, so long as the additional protection does not 
contravene the provisions of the agreement.  Although GIs for Sake (seishu) are not covered by the provisions of Article 23 of the TRIPS 
Agreement, Japan additionally protect s the places of origin of Sake.  
 Any GIs for wines and spirits in the territories of WTO Members are protected according to the 
provisions of Article 23 of the TRIPS Agreement.  
According to the TRIPS Agreement, WTO Members may choose to implement laws which give more 
extensive protection than is required by the agreem ent, so long as the additional protection does not 
contravene the provisions of the agreement.  Although GIs for Sake (seishu) are not covered by the provisions of Article 23 of the TRIPS 
Agreement, Japan additionally prot ects the places of origin of Sake. 
 
(page 67, paragraph 138)  The Intellectual Property (IP) High Court, a special branch within the Tokyo High Court, deals with 
appeals against trial/appeal decisions made by the JPO on patent actions and suits.  The IP High Court 
also deals with all other cases related to intellect ual property brought to the Tokyo High Court.  Data 
provided by the authorities indicate that 88 suits  were filed in 2009 and 90 cases were decided. 
 How many patent and trademark cases were there among the 90 cases decided by the IP High Court in 2009, and what proportion of the JPO decisions was upheld by the Court?  RESPONSE  
These 90 civil cases were appeals against decisions by not the JPO but district courts.  Among the 
90 cases, 56 cases were related to patents and 5 cases were related to trademarks.  Meanwhile, among 
the 442 suits against appeal/trial decisions made by  the JPO at the IP High Court, 93 of the JPO's 
decisions were cancelled. 
 (page 68, paragraph 143)  The Government Revitalization Unit (GRU), establi shed on 18 September 2009, is the central body 
for promoting regulatory reform.  The Subcomm ittee on Regulatory and Institutional Reform under 
the GRU has three working groups (WGs) to ex amine regulations:  the Green-Innovation WG; Life-
Innovation WG; and, Agriculture, forestry and regional development WG.  It would be appreciated if Japan could please provide  further information about the functions, role and 
operations of the GRU in the regulatory management system. 
 
RESPONSE 
 
The GRU was established under the Cabinet Office to revitalize national administration systems such 
as the national budget system and others, as well as to review the role of national/local governments WT/TPR/M/243/Add.1 
Page 284  
 
  and the private sector from the perspective of  the public. The Subcommittee on Regulatory and 
Institutional Reform was establishe d under the GRU in order to examine regulations and systems.  
 The Subcommittee has three working groups (W Gs): the Green-Innovation WG, Life-Innovation WG, 
and Agriculture, forestry and regional development WG.  
 
The Subcommittee reviews and investigates existing re gulations/systems and draf ts its report from the 
following perspectives:    (1) whether or not a regulation/system is an obstacle to the provision of diverse and high-
quality services,  
  (2) whether or not a regulation/system is an obstacle to new businesses or the creativity 
of businesses, and  
 
 (3) whether or not the complexity of a procedure puts too much burden on the public, or 
causes waste or inefficiency.  
 Based on the investigation and report by the subcomm ittee, reform items are authorized as the cabinet 
decision after consultation/discussion with each mi nistry. Recently, around 60 reform items were 
authorized as the cabinet decision in June 2010. Those reform items included such issues as the re-
examination of the range of mixing medical treatme nts that are covered by health insurance with 
treatments that are not, and the re-examination of relevant regulations to promote recycling rare 
metals. Following the cabinet decision, each ministry  has taken measures to realize those reforms.  
 
IV. T
RADE POLICIES BY SECTOR  
 
(4) E NERGY AND UTILITIES  
 (page 84, paragraph 29/30) 
 
According to the Report, during the period under re view, the regulatory framework for the electricity 
and gas markets has remained largely unaltered.  Wi th regard to electricity, the authorities state that 
further retail sales liberalization in the absence  of increased competition in the generation and 
wholesale markets would not benefit consumers; the cost of implementing such reforms would outweigh the benefits, implying that competition should increase.  The authorities were of the opinion that the issue of retail market liberalization should be revisited in 2013. 
 
The authorities advocate the development of a comp etitive environment for the electricity generation 
and wholesale markets, and a number of reforms are envisioned in this regard.    (1) Besides those mentioned in the Report, such as strenthening the JEPX, increasing 
trading options at the JEPX and improving  market surveillance, have any other 
measures been adopted by the Japanese governme nt to enhance market competition?   
 
RESPONSE 
 
The rate system for imbalances has been revised a nd operating risks concerning imbalances have been 
mitigated in order to reduce risks to power companies and to put public utility companies and PPSs on 
equal footing. For instance, the charge for an im balance exceeding a fixed amount of change has been 
reduced. In addition, the threshold value of an im balance exceeding a fixed amount of change for new 
market entrants has been raised for a fixed period of time.   WT/TPR/M/243/Add.1 
 Page 285 
 
 
   (2) Does the fact, as stated in the Report, that the issue of electricity retail market 
liberalization will be revisited in 2013 imply that further market liberalization will not 
be possible before 2013? 
 
RESPONSE 
 The effects of the existing system will be evaluate d by 2013. If necessary, the issue of retail market 
liberalization will be revisited, based on the results of the evaluation.  (page 84, paragraph 31) 
 
Liberalization of the retail gas market in Japan star ted in 1995.  The market was further liberalized in 
2007, and customers consuming a minimum of 100,000 m3 of gas were allowed to buy from all gas 
suppliers.  The impact of the liberalization can be  gauged by the sharp increase in gas sales in a 
relatively short time span.  However, the share of the 28 entrants since 1995 rose from 9.7% of gas 
supplied in 2006 to 12.2% in 2008.  Despite the lib eralization, gas prices for both residential and 
industrial use remain high, compared with other countries in the region.    In the future, is it possible that Japan will expand the scope of liberalizati on to include consumers 
consuming less than 100,000 m3?  If so, is there a schedule already planned for such further liberalization? 
RESPONSE 
 
In the future, Japan will consider whether to expa nd the scope of liberalization to include customers 
consuming less than 100,000 m3, based on the situat ion surrounding the gas industry, such as global 
warming countermeasures. However, currently there is no schedule planned for further liberalization. 
 
(4) S
ERVICES  
 (i) Financial services  Banking 
 
(page 88, paragraphs 41- 43) 
 
According to the Report, banks in Japan were a dversely affected by the fluctuations in capital 
markets, declining equity prices, and the contracti on in the real economy, all caused, to some extent, 
by the global economic crisis.  To mitigate the impa ct of the crisis, the authorities took a number of 
measures to ensure the smooth flow of credit as we ll as shoring up banks' bala nce sheets. Action taken 
by the FSA included allowing the Banks Shareholdi ng Purchase Corporation to purchase equities held 
by banks, and raising the upper limit on such purchases to ¥20 trillion.  This measure was expected to 
improve the capital position of the banking sector.  The Act on Special Measures for Strengthening 
Financial Functions was reactivated and its  conditions relaxed in December 2008.   
 
 (1) What is Japan's stance and its polic y on foreign bank branches and subsidiaries 
following the global economic and financial crisis? 
 
RESPONSE 
 Regarding supervision of branches of foreign-ow ned banks, group-wide management policies and 
tasks formulated by their headquarters or regional head office (hereinafter "the headquarters etc") 
have an influence on business and management of their branches. Based on this understanding, the WT/TPR/M/243/Add.1 
Page 286  
 
  Financial Services Agency (FSA) revised the compre hensive supervisory guide line for major banks in 
March 2010. The revised guideline clarifies that it is necessary to sufficiently understand the group-
wide management policies and tasks in supervis ing branches of foreign banks, utilising dialogues 
between the FSA and the headquarters etc of foreig n banks and their home supervisory authorities. It 
also makes clear that monitoring of branch manage ment is based on such understanding of the group-
wide policies and tasks. 
  (2) In addition, does Japan plan to tighten re levant supervisory measures, for instance, on 
liquidity, for these branches /subsidiaries? 
 RESPONSE  
Liquidity management is regarded as an important area in our supervision of major banks (not limited 
to branches/subsidiaries of foreign banks). Based on this, the annual supervisory policies for major 
banks for programme year 2010 (between August 2010 and July 2011) states as follows:  
 
"Regarding liquidity management, considering pr ogress in international discussions, the FSA will 
investigate whether appropriate liquidity manageme nt systems are built into major banks, especially 
the appropriateness of cross-company liquidity ma nagement in the group and of foreign currency 
liquidity management."  Report by Japan (WT/TPR/G/243
) 
 V. J
APAN 'S REGIONAL ACTIVITIES  
 (4) A
SIA-PACIFIC ECONOMIC COOPERATION (APEC)  
 
(pages 13-14, paragraphs 42-44) 
 
As indicated in the Report, as chair of APEC 2010,  Japan took the lead in assessing progress toward 
achieving the Bogor Goals and, as host economy at th e Meeting of APEC Ministers Responsible for 
Trade in June 2010 and the APEC Ministerial M eeting in November 2010, made a stand-alone 
statement on supporting the multilateral trading system  and resisting protectionism.  Japan has also 
taken the lead in exploring a range of possible pa thways to achieve a Free Trade Area of the Asia-
Pacific (FTAAP).  APEC leaders at their Meeting in Yokohama in November 2010 agreed that an FTAAP should be pursued as a comprehensive free trade agreement by developing and building on 
ongoing regional undertakings, such as ASEAN+3, ASEAN+6, and the Trans-Pacific Partnership, 
among others.  
 We understand that making the FTAAP a reality will be  a long-term process, and it is important to 
ensure inclusive participation of  all member economies in a way th at would effectively avoid the 
negative effects of market disintegration.  We are also of the view that APEC needs to formulate a 
clear multi-year roadmap and guiding principles in due course for such a long-term undertaking, so 
that economic integration can be advanced in a strategic and systematic manner.  
  (1) We would be interested in knowing Japan's opinion of formulating a clear multi-year 
roadmap and guiding principles? 
 RESPONSE  
APEC Leaders agreed in Yokohama in November  2010 that APEC would make an important and 
meaningful contribution as an incubator of an FT AAP by providing leadership and intellectual input 
into the process of its development, and by playing a critical role in defining, shaping and addressing  WT/TPR/M/243/Add.1 
 Page 287 
 
 
  the "next generation" trade and investment issues th at an FTAAP should contain. They also agreed 
that APEC should contribute to the pursuit of an FTAAP by continuing and further developing its 
work on sectoral initiatives in su ch areas as investment, services, e-commerce, rules of origin, trade 
facilitation, including supply chain connectivity an d Authorized Economic Operator (AEO) programs, 
and environmental goods and services (EGS).  
 
APEC should continue to work to achieve an  FTAAP, based on the aforementioned Leaders' 
consensus. Formulating a multi-year roadmap and guiding principles depends on the outcome of further discussion within APEC.  
 (2) The TPP and ASEAN+X are both possible pa thways to an FTAAP.  In what way can 
Japan foresee that a TPP and these processes coul d be integrated or synergized in the 
future? 
 
RESPONSE 
 At the APEC Summit held in Yokohama on Novemb er 2010, it was confirmed that an FTAAP should 
be pursued building on ongoing regional undertak ings, such as ASEAN+3, ASEAN+6, and the TPP, 
among others. It has also been confirmed that APEC would make an im portant and meaningful 
contribution as an incubator of an FTAAP by providing leadership and intellectual input into the process of its development. Japan would like to discu ss actively within APEC on the way to achieve a 
FTAAP building on ongoing undertakings.  
  (3) It would be appreciated if Japan could please elaborate further on its latest policies or 
views on how an FTAAP can best be achieved. 
 RESPONSE  
At the APEC Summit held in Yokohama on November  2010, it was confirmed, among others, that an 
FTAAP should be pursued building on ongoing re gional undertakings and that APEC should 
contribute to the pursuit of an FTAAP by contin uing and further developing its work on sectoral 
initiatives. Japan considers that it is important to impl ement steadily the leaders' instructions issued at 
the APEC summit.   
 
TURKEY
 
Report by the Government (WT/TPR/G/243 ) 
 
VI. J APAN 'S BILATERAL ACTIVITIES  
 (1) FTA/EPA
S 
 
The Government Report states that "Japan has also promoted its regional and bilateral trade policies 
as a means of complementing the multilateral tr ading system, particularly through Economic 
Partnership Agreements including elements of Free Trade Agreements and institution-building." 
 In light of the list of Japan's bilateral trade agreements and trade initiatives provided in the 
Government Report, we are inclined to conclude that  Japan is heavily concentr ated in trading with its 
periphery, the Pacific Area to be specific.  Japan's  close relations with the European Union and its 
candid interest in African development are also worth the mention here. 
 Could the Japanese Delegation kindly offer detailed information on whether Japan plans to pursue a 
policy of extension of cooperative arrangement s to include the non-GCC Middle East and the WT/TPR/M/243/Add.1 
Page 288  
 
  Eurasian region for example? If that is a possib ility, could the Japanese Delegation further elaborate 
on Japan's preferred schemes/modes/agreements un der which such cooperation can be established? 
 
RESPONSE 
 
Based upon the "Basic Policy on Comprehensive Econom ic Partnerships" endorsed by the Cabinet on 
November 9th, 2010, Japan will work actively to  strengthen economic partnerships, including the 
conclusion of EPAs, with Asian c ountries, newly emerging powers, a nd resource-rich countries, based 
on a comprehensive assessment from economic as well as diplomatic and strategic viewpoints, taking 
into account the progress in the negotiations on the Doha Development Agenda, efforts for regional 
integration in the Asia-Pacific region, and efforts for the strengthening of economic partnerships with 
major countries. It is currently under consideration as to what kind of measures should be taken to 
strengthen economic relati onships between Japan and individual countries.  
 
IX. J APAN 'S DOMESTIC POLICIES  
 
(2) I NTELLECTUAL PROPERTY RIGHTS  
 
The Government Report indicates on intellectual pr operty rights that a number of initiatives were 
undertaken by The Intellectual Property Strategy Hea dquarters in the direction of providing protection 
for innovation and intellectual property etc.  The Turkish Government observes that global violations of intellectual property rights are on the rise and causing a great concern for the members of the WTO. 
 
Could the Japanese Delegation kindly provide wh at advice the Japanese Government can offer in 
respect of deterring and preventing viola tions of intellectual property rights? 
 
RESPONSE 
 
In Japan, the Intellectual Property Basic Act wa s enacted in 2002, and the Intellectual Property 
Strategy Headquarters, comprised of the Prime Mini ster, all the ministers and civilian experts, was 
established in 2003. Under the leadership of the Prime Minister, the creation, protection and utilization of intellectual property is to be prom oted by all the ministries together, and many 
achievements have been made so far. Specifically , the Intellectual Property Strategic Program is 
developed at the Intellectual Property Strategy Head quarters every year, and each item in the program 
is assigned to the relevant ministries, whic h  are responsible for implementing them. 
 What are the details of Japan's strategy in tackling the issue of intellectual property rights violations, 
internationally as well as domestically?  RESPONSE  
As stated in the previous question, Japan has pr omoted intellectual property policy, including anti-
counterfeiting and piracy measures, along with th e Intellectual Property Strategy Program, and 
currently is implementing the "Intellectual Propert y Strategic Program 2010", which was laid out last 
May. 
 In the program,    (1) as for international efforts, conclusion  of ACTA negotiations (already concluded in 
October 2010) and expansion of member  countries thereafter and strengthening  WT/TPR/M/243/Add.1 
 Page 289 
 
 
  measures to deter  intellectual property right s violations through bilateral talks are 
carried out by ministries in charge. 
  (2) as for the domestic efforts, toughening access control device regulations, building an 
effective framework where internet ser vice providers and rights holders work 
together to tackle infringing contents on  the internet, holding educational activities 
aimed at the eradication of counterfeit and pirated goods and other policies are carried 
out by the ministries in charge. 
 
Report by the secretariat (WT/TPR/S/243
) 
 
II. T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
 Para. 40, pp. 20 
 The Secretariat Report states that "In 2009, Japan c onsidered that Saudi Arabia had graduated from 
the scheme and removed it from its GSP list.  There has been no other chan ge in the scheme since 
Japan's previous Review.  The current G SP scheme is valid until 31 March 2011."  
 Could Japan elaborate on the implementation of the GSP schemes following the expiration of the 
current one in March 2011, with regards to the c oncept of time frame and the countries to be involved 
in the schemes?  
 
RESPONSE 
 
1. The GSP (Generalized System of Preference s) applies reduced tariffs to designated import 
goods originating from developing countries or territo ries, with the aim to help them increase export 
income, advance industrialization and promote ec onomic development. Japan  is properly managing 
the system from the viewpoint of contributing to the economic development of developing countries.   2. Japan is in the process of preparing for di scussion of the extension of its GSP scheme until 
March 2021. 
 
Para. 65, p. 27  "... inward FDI has been lower th an the authorities expected; net FD I inflow in 2009 declined more 
than 50%, due mainly to the global recession. On the other hand, the Japanese authorities consider 
that the main reasons for the recent decline include the difficulty of hiring qualified employees; high 
business costs in Japan; and high  customer expectations." 
 1. Could the Government of Japan explain what  are the high customer expectations? Could the 
Government give specific examples by sector?  RESPONSE  
By high customer expectations we mean a high product quality standards demanded by customers. 
According to a recent Ministry of Economy, Trad e and Industry's survey, c onducted in 2008FY, the 
obstacles in business in Japan generally-cited as a majo r factor by foreign affiliated companies are the 
following: 
  1. The difficulty of hiring eligible employees  2. High business cost WT/TPR/M/243/Add.1 
Page 290  
 
   3. The high standards of product qual ity demanded by customers and market 
competitiveness 
 http://www.meti.go.jp/pr ess/20090416001/20090416001.html 
 
In order to solve those problems, a "program  for promoting Japan as an Asian business hub and 
foreign direct investment into Japan" (tentative name) will be drawn up by the summer in 2011. This 
program will include system reforms and other meas ures to ensure smooth flows of people, goods and 
funds with the aim of making Japan's business environment more appealing. 
Para 70, p. 28 
 
… Inward FDI generally requires ex post facto repor ting to the Minister of Finance and the Minister 
in charge of the sector involved, by the 15th da y of the month following the investment.  The 
reporting period was extended on 23 June 2009.  The authorities' approval in response to investors' 
"prior notification" is required for inward FDI in industries recognized in the OECD Code of 
Liberalization of Capital Movements, such as agricultu re, forestry and fisheries, crude oil, leather and 
leather products, and air and maritime transport.   2. Could the Government of Japan clarify th e main reasons behind the requirement of the 
authorities' approval in response to investors' "p rior notification" by aforementioned sectors?  
 RESPONSE  
Restrictions on inward foreign direct investment to  Japan are fully compatible with OECD rules and 
are stipulated in the Foreign Exchange and Foreign Tr ade Act. The Act stipulates that restrictions are 
put in place from the point of view of two sets of  reasons: i) those pertaining to national security, 
public order and public safety; and ii) those pertai ning to sectors where there could be "significant 
adverse effect on the smooth management of the national economy, such as agriculture, forestry, 
fisheries, crude oil, leather and leather products, air and maritime transport, and telecommunication." 
 
III. T
RADE POLICIES AND PRACTICES BY MEASURE , (ii) Tariffs 
 Japan maintains high tariffs and non-advalorem duties on footwear. Does Japan envisage any reform 
on its policy regarding this sector so as to increase market  access possibilities? 
 
RESPONSE 
 
Non-ad valorem duties applied in Japan are set in  a consistent manner with WTO agreements. Japan 
will continue to engage in discussion in the WTO in  a constructive manner, and set appropriate tariffs, 
considering the progress and results of the DDA negotiations.   
IV. T
RADE POLICIES BY SECTOR  
 
Para. 2, pp. 76  
As stated in the Secretariat Report "Services sectors are subject to various domestic regulations, for example licensing and restrictions on foreign investme nt;  they are also faced with the generally high 
cost of doing business in Japan, which has been co nsidered as one of the main factors preventing 
growth in inward foreign direct investment in services." 
 Could Japan evaluate the impact of the free trad e agreements she has in place with a significant 
number of countries within the context of the liber alization of services sector and tackling the issues 
of high cost of doing business and regulatory barriers?  WT/TPR/M/243/Add.1 
 Page 291 
 
 
   
RESPONSE 
 
Although it is difficult to evaluate the quantitativ e effects on the services trade from concluding free 
trade agreements in comparison with the trade in g oods, where it is easy to measure, the effects of 
tariff elimination, investment and trade in service s with the FTA/EPA partners have positive impact 
by the assurance of transparency and stability of measures and admi nistrative procedures related to 
the services trade and the avoidance of backtrack ing of regulations in liberalized sectors. 
 
UNITED STATES OF AMERICA  
WT/TPR/G/243  
 
Page 7, paragraph 14:  In its report, the government  states that "A 'program for promoting Japan as an 
Asian industrial center and direct investment into Japan' (tentative name) will be drawn up by the end 
of 2010."  What is the status of this program, and could Japan please share with us its details?  
 
RESPONSE 
 
The "program for promoting Japan as an Asian i ndustrial center and direct investments into Japan" 
(tentative name) will be drawn up by the summer in  2011. This program will include system reforms 
and other measures to ensure smooth flows of peopl e, goods and funds with the aim of making Japan's 
business environment more appealing. 
 Page 18, paragraph 56:  Japan states that Japan and EU leaders agreed to put focus on "a few specific non-tariff issues."  Is Japan able to provide furthe r details, including the status of resolving those 
issues, and confirm that any changes made by  Japan would be applied on an MFN basis? 
 
RESPONSE 
 
At the Japan-EU Joint High Level Group, Japan a nd the EU agreed on the completion of a few 
specific non-tariff issues (Paragraph 34), including (1) guidelines for advanced automobile safety 
technology, (2) government procurement, (3) wooden  construction materials, and (4) medical devices. 
This process started on the occasion of the Japan-EU Summit in 2009, focusing on a few specific non-
tariff issues which were expected to bring concrete outcomes, in a mutually beneficial way and in a 
short period.  Page 20, paragraph 69:  Japan states that it w ill promote "high-level ec onomic partnerships."  
However, the Secretariat has found that Japan's duty free tariff lines under its FTAs only covered 
81.2% - 82.3% of tariff lines (WT/TPR/S/243, pa ge 18, paragraph 28).  Please explain Japan's 
definition of "high-level" partne rships, including whether this incl udes plans by Japan to greatly 
expand the number of Japan's tariff lines that become duty free in its future FTAs (Economic Partnership Agreements).  RESPONSE  
With regard to Japan's existing EPAs, Japan belie ves a sufficiently high level of liberalization has 
been achieved, as more than 90 % of goods, based on  both sides' trade volume, will be duty free in ten 
years. In our "Basic Policy on Comprehensive Economic Partnerships", it is stated that Japan will take 
major steps forward from its present posture and prom ote high-level economic partnerships that will 
withstand comparison with the trend of other such relationships. Japan will consider the number of 
duty free tariff lines in its future EPA/FTAs in or der to achieve high-leve l economic partnerships. 
 WT/TPR/M/243/Add.1 
Page 292  
 
  Page 24, paragraph 93:  Japan stat es that a new direct payment scheme for farmer income support will 
be implemented in FY 2011 based on evaluation of a pilot program carried out in FY2010.  Please 
provide further information on the criteria and timeline for this evaluation.   
RESPONSE 
 Evaluation of the pilot program has been carried out from various viewpoints, including total size of 
the paddy fields in farmers' applications, total area planted in excess of the equilibrium set in the 
supply-demand adjustment scheme and the number of applications by village  farming organizations 
(find related figures in "(2) Agriculture (iii) Domes tic measures"). The evaluation will be reflected in 
the planning of the new scheme from FY2011.  Furthe rmore, practical challenges in implementation 
of the scheme will be reviewed, and the resu lts will be reflected in future execution. 
 
WT/TPR/S/243
 
 
I. E CONOMIC ENVIRONMENT  
 (3) S
TRUCTURAL POLICIES  
 (i) Services sector  
 Page 3, paragraph 9:  The report notes that to in crease foreign competition, "domestic regulations on 
setting up a business, especially with respect to time  taken and costs incurred could be improved and 
regulatory reform accelerated."  This often incl udes requirements for Japan-specific documentation to 
receive business licenses.  What steps is Japan ta king to improve such regulations in order to 
encourage foreign competition? 
 
RESPONSE 
 
In June 2010, the Cabinet issued a decision entitle d "New Growth Strategy," and there it showed a 
commitment to advancing intensive domestic reforms,  including revisions of regulations in order to 
increase the flow of people, goods, and money in to Japan. Furthermore, in November 2010, the 
"Inward Investment Promotion Roundtable-council" (which is established under "the Council on the 
Realization of the New Growth Strategy,") introduc ed the "Inward Investment Promotion Program".  
In the program, the reconsideration of existing regul ations that constitute impediments to investments 
and business operation was identified as an area of government focus. Discussions on regulatory reforms are held also in the "Subcommittee on Regulatory and Institutional Reform," which was 
established in March 2010 under the Government Revita lization Unit. In addition, Japan is an active 
member of the negotiations on Domestic Regulati ons in the WTO. Japan is committed to further 
promoting necessary regulatory reforms.    
(iii) Tax reform 
 Page 5, paragraph 11:  The Secretariat states that  "an important engine of growth globally has been 
information and communications technology (ICT) serv ices [but that] Japan has been an exception."  
Is Japan prepared to address factors beyond financing and venture capital issues cited by the Secretariat that would also help lead to a mo re robust ICT market, including ensuring greater 
transparency in the regulatory process and adopti ng an unwavering policy of technology neutrality? 
 
RESPONSE 
 
The ICT industry in Japan accounts for 10% of the to tal nominal domestic product in all industries. It 
has contributed to positive real GDP growth for a l ong time. Also, in view of the current situation,  WT/TPR/M/243/Add.1 
 Page 293 
 
 
  Japan recognizes ICT services as an important engine of growth globally. The policy has developed in 
a way that guarantees high transparency, such as i nviting public comments on the regulatory process, 
in order to realize growth in the ICT industry,  which is one of the most important issues for 
development in Japan.   II. T
RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
 (3) T
RADE POLICY FORMULATION AND EVALUATION  
 (ii) Transparency and policy evaluation 
 
Page 16, paragraph 18:  According to the Secret ariat:  "Ministries and agencies must publish draft 
regulations, including draft cabinet orders or mi nisterial orders, and receive comments from the 
public;  they must allow, in principle, at least 30 days to receive comments, from the date of publication of the draft.  Ministries and agencies are required to consider the comments submitted by 
the public and publish the comments, as well as the r esults of their consideration, and the reason for 
the results.  The Ministry of Internal Affair s and Communications (MIC) conducts and publishes a 
comprehensive annual survey on the implementati on of the public comment procedure under the 
Administrative Procedure Act.  A report publishe d in December 2009 states that comments submitted 
have been reflected in 122 (25.2%) out of 485 cases.   While the Office for the Postal Reform held a 
number of public hearings on the postal reform and conducted the public comment procedure before 
submitting the bills for postal reform to the Diet on 30 April 2010, the Government did not conduct an 
ex-ante evaluation."    (1) What steps is the government of Japan  taking to increase the number and percentage 
of cases in which comments submitted have  been reflected in the government's 
comment procedure under the Administrative Procedure Act?  What steps are taken 
to ensure ministries and agencies fully  take comments into consideration? 
 
RESPONSE 
 
It is not necessarily appropriate to focus on sole ly the number and percentage of cases in which 
submitted comments are reflected, because whether the comments are reflected or not depends on the 
contents of the proposed Administrative Orders and the comments themselves. On the other hand, 
under the Administrative Procedure Act, ministri es and agencies are required to consider all 
comments adequately (Article 42), and to notify th e public of the results following the consideration 
of the submitted comments, as well as the grounds for the decisions (Article 43(1)(iv)). MIC examines 
the implementation status of the public comment procedure and sends notices to ministries and 
agencies to adequately ensure proper implementa tion of this public comment procedure under the 
Administrative Procedure Act.   (2) What steps has Japan taken to ensure  that it conducts "ex-ante evaluation" of 
comments submitted? 
 
RESPONSE 
 
In the Administrative Procedure Act, such procedures are not provided for. 
 
 (3) If a comment is not reflected in the final measure, are opportunities provided to 
appeal?  What are the general steps and time frame for such an appeals process, and is 
there a procedure for a party to halt implementation of the measure during an appeals process? 
 WT/TPR/M/243/Add.1 
Page 294  
 
  RESPONSE 
 
In this case, there is no opportunity to appeal. 
 
(4) T
RADE AGREEMENTS AND ARRANGEMENTS  
 
(ii) Regional trade agreements 
 
Please explain Japan's exclusion from its RTAs of the products identified in the Secretariat's Report 
(WT/TPR/S/243-06), especially those cited in Table AII.3 under "Main products excluded from 
liberalization," in light of Japan's obligations under GATT Article XXIV.  
 
RESPONSE 
 
Japan's EPAs cover more than 90% of trade volume between the parties, keeping consistency with 
Article 24.8 of the GATT., while excluding some pr oducts, taking into consid eration possible adverse 
impacts on domestic industries.   
(6) F
OREIGN INVESTMENT REGIME  
 
(ii) Investment promotion measures  
Page 30, paragraph 77:  The Secretariat Report states:  "Japan's investment promotion measures remain substantially the same as in 2009.  Howe ver, it would appear that the Government is 
considering an introduction of a new preferential tax scheme for in ward FDI."  Please confirm 
whether the government of Japan is considering a ne w preferential tax scheme for inward FDI.  If so, 
when does it plan to introduce this tax scheme?  Is  Japan considering allowi ng flexible and convenient 
tax deferral for triangular mergers and other non- cash cross-border transactions in this scheme? 
 
RESPONSE 
 
Japan plans to introduce a new scheme giving global (not limited to foreign) companies preferential 
treatment in terms of corporate tax and the related bill will be discussed at the ongoing ordinary session of the Diet. Tax deferral for triangular merger s and other non-cash cross-border transactions is 
not included in the scheme.  III. T
RADE POLICIES AND PRACTICES BY MEASURE  
 (1) I
NTRODUCTION  
 
Page 32, paragraph 10:  The Secretariat report states,  "It would appear that the pace of Japan's trade-
related regulatory reforms has slowed, if not reversed , since 2009."  It also cites efforts by Japan to 
implement measures that may involve policies to "p ick winners."  In light of the policy recently 
adopted by Japan's government to "open Japan":   1) Is Japan preparing to again make progress on "opening Japan" by addressing non-
tariff barriers and promoting further regulato ry reforms in line with this objective? 
 
RESPONSE 
 
Japan believes that opening up the economy is the op timal means for Japan and the world to achieve 
mutual prosperity by liberalizing trade and i nvestment and facilitating the exchange of human 
resources. From this perspective, Japan will take initiatives to formulate trade and investment rules  WT/TPR/M/243/Add.1 
 Page 295 
 
 
  designed for the twenty-first century  in the Asia-Pacific region. Also , the Government of Japan, with 
a view to "opening the country", will first promote ap propriate domestic reforms with respect to areas 
of regulatory reforms.    2) How will Japan's policies related to the New Growth Strategy avoid introducing new 
measures that create new preferences for domestic companies and/or create new 
barriers to trade? 
 
RESPONSE 
 
In the New Growth Strategy, it is determined that the Japanese Government will carry out the 
domestic reforms to unify with the Asian mark et and double flows of people, goods, and money 
between Japan and the world.   Then, the government set forth the Basic Policy on Comprehensive Economic Partnerships. It goes 
well beyond the previous stance, promoting high-le vel economic partnerships that compare favorably 
with world trends. It also takes the lead in pr omoting drastic internal reforms for the necessary 
strengthening of competitiveness and so on.  Moreover, a "program for accelerating Japan as an As ian industrial center and direct investment into 
Japan" (tentative name) will be set this summer to invite foreign fi rms that bring high value-added 
products and services into Japan and to double employment by foreign firms and also double direct 
inward investment.  
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
 
(ii) Tariffs  
Page 36, Paragraph 23:  The Secretariat's report notes Japanese actions in reducing or eliminating 
tariffs.    (1) Please explain in detail the domestic process required for implementing changes to 
Japan's tariff schedule, including the role of  the Ministries, the Cabinet, and the Diet. 
 
RESPONSE 
 
Relevant Ministries of the Government of Japan will cooperate to translate the certification of 
modifications and rectifications  to Japan's tariff Schedules into Japanese, and prepare some 
explanatory materials for the examination by the Cabinet Legislation Bureau before the cabinet 
decision to request the Diet approval of conclusion of the certification. After the Diet gives approval of the conclusion, the Government of Japan, based  on the cabinet decision, notifies the Director-
General of the WTO of the date of entry into force of the certification.   
 (2) Japan is a Member of the WTO Phar maceuticals Agreement, which confers MFN 
duty-free treatment to pharmaceutical products  and identified chemical intermediates 
used in the production of pharmaceuticals.  In May 2010, Participants concluded 
negotiations for the 4th Update to lists of  products eligible for duty-free treatment 
under the Agreement.  In January 2011, all Parties to this Agreement, implemented 
the negotiated tariff commitments from the 4t h Update, with the exception of Japan.  
With all the other Parties having alr eady implemented the Update effective 
January 2011, can Japan provide an update on its plans to implement the 4th Update 
to the WTO Pharmaceuticals Agreement, in cluding whether it will do so in an 
expeditious manner? WT/TPR/M/243/Add.1 
Page 296  
 
   
RESPONSE 
 
The Government of Japan endeavors to submit the modified tariff Schedules to the Diet as early as 
possible. 
 
(vi) Government procurement 
 
Page 44, paragraph 48:  The Report notes that for c onstruction, Japan maintains thresholds that are 
substantially higher than the thresholds of othe r GPA Parties.  Please explain the reason Japan 
maintains higher construction threshol ds for its Annex 2 and 3 entities? 
 
RESPONSE 
 
Japan sets the construction thresholds in Annex 1 (all the Central Government Entities) and Group B 
of Annex 3 (almost half of the Other Entities of Annex 3) lower than those of the other Parties of the 
GPA, although domestic construction investment has been decreasing sharply in recent years, and it 
brings about bankruptcies and unemployment in the construction sector.  As for the local economies, 
the situation is more serious and the current thresholds are therefore to be maintained. 
 Page 44, paragraph 48:  The Report states: "With respect to 'articles and services of central 
government', companies need to be registered to participate in tend ers for government procurement.  
The criteria for registration are published in official  gazettes and online."  What is the purpose of the 
criteria?  On what basis are requests or applications for registration denied?   
RESPONSE 
 The purpose of establishing the criteria for registra tion is to ensure proper implementation of the 
contract.  Any application for registration by part icipants in tenders for government procurement 
itself, different from the examination on qualification, is not to be denied.   Page 44, paragraph 48:  How does Japan's commitme nts under the free trade agreements described in 
para. 49 differ from its obligations under the GPA?  Please explain whether the FTAs cover more of 
Japan's procurement than the GPA, other than with respect to the application of lower thresholds in 
some agreements.   
RESPONSE 
 With respect to Japan's EPAs with Singapore, Me xico, Chile and Switzerland, the coverage of the 
application of the Agreement for Japan does not have GPA plus elements . Other EPAs have no 
specific provisions regarding the coverage as thei r focus is mainly on cooperation, such as the 
exchange of information and establishment of a sub-committee on government procurement, while 
some Agreements have articles regarding such  principles as national treatment, most-favoured-
treatment and transparency. For more detailed inform ation, please refer to the texts of the Agreements 
available at http://www.mofa.go.jp/policy/economy/fta/index.html.  Page 31, paragraph 5, page 45, paragraph 52, and page 63, paragr aph 116:  The Secretariat's Report 
states:  "It would appear that Japan will start giving preferences for the use of domestic wood in 
public procurement."  On page 45,  paragraph 52, The Secretariat's report further states that in 2010 
the Government of Japan announced its intentions to promote the use of domestic wood "with a target 
of covering more than half of domestic demand fo r wood with domestic supply".  The Secretariat's 
report furthermore points out on page 63, paragra ph 116, that in Japan's Growth Strategy, Japan  WT/TPR/M/243/Add.1 
 Page 297 
 
 
  appears to be adopting a policy whereby Japan may "'pick winners,' such as preferential use of 
domestic wood."   (1) Please explain how the Government of Japan plans to implement this policy of 
promoting the use of domestic wood. 
 
 (2) Will the programs for promotion of dom estic wood be applied in procurement that 
Japan covers under the Agreemen t on Government Procurement? 
  (3) Please describe any preferences that will be applied to promote the use of domestic 
wood in the construction of public build ings, such as for the construction of 
traditional school gymnasiums. 
   (4) Has Japan communicated with (or notif ied) Members regarding the eligibility of 
imported woods for these initiatives? 
 
 (5) Does Japan intend to provide subsidies as an incentive under this initiative, and if so, 
are any conditions applied that woul d require the use of domestic wood? 
 
RESPONSE 
 
((1)~(5)) "The Act for the Promotion of Use of W ood in Public Buildings" was established to boost 
the use of wood as a whole in public buildings, regard less of its country of origin. Therefore, there are 
no programs, such as those indicated in (1), (2) and (3), which only promote the use of domestic 
wood, nor does Japan stipulate eligibility of im ported woods. The Act and other Japanese timber-
related policies, including subsidy policies, will be operated without distinction between domestic and 
imported woods.  
 Page 45, paragraph 53:  The Report states:  "In accordance with the Basi c Guideline for Public 
Procurement of Information Systems, adopted in March 2007, procurement under the basic guidelines may not exceed ¥500 million per contract; any planned procurement in excess of this threshold must 
be divided."  Please explain the purpose of this li mitation on information system procurements.  Does 
this provision apply to procurement that is cove red under the GPA?  If so, please explain how it is 
consistent with the GPA provision on the division of procurements.  
RESPONSE 
 
In accordance with the Basi c Guideline for Public Procurement of Information Systems, procurement 
of design and development of an information sy stem whose expenditure is over \500 million is 
encouraged to be divided in principle.  The purpose of this guideline is to improve competiti on in procurement of information systems, which 
tend to be large-scale projects, by dividing the unit of  procurement, which would lead to, for example, 
prevention of the vender lock-in of the procurement.  
 This principle is applied to procur ements covered under the GPA.  As this principle is applied to the 
large-scale projects of information systems, each c ontract value exceeds the GPA threshold even if it 
is divided. 
 
Therefore, it doesn't contradict article II.3 of the GPA which prohibits the division of procurement 
with the intention of avoiding th e application of the Agreement. 
 WT/TPR/M/243/Add.1 
Page 298  
 
  The covered entities are those centr al government entities which are listed in the Guideline, and the 
procurements covered by this Guideline are cont racts such as the design and development of the 
Information Systems, the borrowing of hardware designed for operating the Information System. 
 Page 46, paragraph 55:  The Report states: "O pen tendering is the norm in Japan's government 
procurement."  Please describe how "open tendering " is applied in Japan?  Does it require any pre-
qualification or pre-selection of suppliers?   
RESPONSE 
 
The Japanese government conducts open tendering first by giving public notice in the official gazette 
to provide the necessary information,  including the qualifications for suppliers to participate in, the 
deadline and the locations for the tendering and accepting of sealed tender documents. Tender 
documents may be submitted in person or by mail and can also be submitted over the Internet to some 
procuring entities. 
 
Each procuring entity is to specify qualifications  for suppliers who wish to participate in the 
competitive tendering procedures, while maintaining fairness of competition, to verify the potential 
candidates as necessary, and to award contract s to suppliers with sufficient capabilities. 
 Page 46, paragraph 55:  The Report states that th e laws and regulations relating to SMEs "apply 
equally to domestic and foreign SM Es."  Please provide information on  the extent to which these laws 
and regulations have be nefited foreign SMEs. 
 
RESPONSE 
 
Regarding these laws, there are no nationality requ irements for membership in co-operatives or 
associations and no description of nationality in the definition of any SMEs; thus, there are no 
provisions that would prevent foreign SMEs from affiliating with any cooperatives or associations. 
Therefore, foreign SMEs can benefit from laws  and regulations just as domestic SMEs can. 
 
(viii) Standards, technical regulations, an d sanitary and phytosanitary measures 
 
(a) Standards, testing, and conformity assessment. 
 
Page 49, paragraph 66:  The Secretariat reports that according to Japanese authorities "JAS standards 
were established in accordance with the Codex…"  Please explain how Japan's zero tolerance policy 
for pesticide residues on organic products complies with CODEX guidelines for organic production?  
Are domestic organic products subject to the same  level of testing as impor ted organic products?  Will 
Japan revisit this policy as part of its current review of organic standards? 
 
RESPONSE 
 
The JAS standards for organically produced plants require operators to take the necessary measures in 
production sites to prevent prohibited substances from drifting into and flowing from surrounding 
areas.   Japan regularly tests for any residue of prohibite d substances in both domes tic and imported organic 
foods. The main objective of the inspection is to  ensure that operators comply with the JAS 
requirements for the production of organic foods . Both domestic and imported organic foods are 
tested using the same methods of analysis.   WT/TPR/M/243/Add.1 
 Page 299 
 
 
  When prohibited substances are dete cted in organic foods, Japan inv estigates to determine the cause 
of contamination. The necessary corrective measures are taken if the cause is due to non-compliance with the JAS requirements. In this regard, Japan notes that our policy is in line with paragraph 6 of the 
foreword of the Codex "Guidelines for the Pro duction, Processing, Labelling and Marketing of 
Organically Produced Foods, GL32-1999". 
 
The provisions of residue testing for the organic foods are not being discussed in the current review of the organic JAS.  
Mandatory technical regulations 
 
Page 51, paragraph 69:  The Secr etariat report highlights that since September 2009, Japan has been 
revising laws to introduce various technical requi rements for product safety and distribution under the 
coordination of the Consumer Affairs Agency and other government bodies.  Please explain the role 
that the Consumer Affairs Agency  plays in Japan's food safety regime.  Specifically, what is the 
extent of the Consumer Affairs Agency's invol vement with respect to the creation, review, 
implementation, and approval of food regulations  and standards?  What role does it play in 
coordinating with other regulatory agencies?  
RESPONSE 
 
Since 2009, with the amendment of related la ws, introduction of the new legal system and 
establishment of the Consumer Affairs Agency (CAA), Japan has been striving for more protection of 
consumers.  With regard to Food Safety, according to the re vised Food Sanitation Act, the Consumer Affairs 
Agency is required to be consulted by th e Ministry of Health, Labour and Welfare （MHLW） when 
the Ministry is to establish new standa rds for residual agricultural chemicals. 
 Concerning the Food Labelling System, prior to the establishment of the Consumer Affairs Agency, the Food Labelling System related to the i) Food Sanitation Act and ii) Health Promotion Act were 
under the jurisdiction of the MHLW and the iii) Quality Labelling Standard of Agricultural and 
Forestry Products were under the jurisdiction of the Ministry of Agriculture, Forestry and Fisheries 
(MAFF).  After the revision of the said Acts and establishment of the CAA, the Food Labelling System was streamlined and the CAA is primar ily responsible for all Food Labelling. According to the revised 
Acts, when the CAA is to revise the Food Labelling Standards, it is required to consult with the 
Consumer Commission (CC), the MHLW and MAFF on  the revisions. On the other hand, the MHLW 
may require the CAA to formulate a new labelling standard of food and food additives and MAFF 
may require the CAA to formulate a new quality labelling standard.  
 Enforcement power of the said Acts is centraliz ed in the CAA under the new regime of the Food 
Labelling System. The CAA can order improvement  of improper quality la belling and order/take 
measures (Food Sanitation Act, Health Promotion Ac t) in cases where par ties have violated the 
provisions of the Act.  Page 51, paragraph 69:  The Secretariat's report i ndicates that Japan revised its mandatory technical 
regulations for organic plants in 2009.  We understand that Japan w ill be completing a new review of 
these technical regulations in 2011.  Please describe the current review process.  Specifically, what 
changes is Japan considering for the list of permis sible substances for use in organic production?  
 WT/TPR/M/243/Add.1 
Page 300  
 
  RESPONSE 
 
The Ministry of Agriculture, Forestry and Fisheri es (MAFF) is preparing a revised draft of JAS for 
organically produced plants. The draft will be available for comment through the public review 
mechanism in Japan and the WTO notification system. MAFF will consider both comments provided 
through the public review mechanism and comments from WTO Members. MAFF intends to 
complete the revision of JAS taking the comments into account.  MAFF provided a detailed explanation of the latest version of the draft revised JAS proposed by the 
Food and Agricultural Materials Inspection Center to  the US Embassy in Tokyo upon its request in 
December 2010. The US Embassy informed MAFF that  the relevant parts of the draft had been 
translated into English and the tran slation had been shared with the relevant departments of the United 
States Government.  For reference, no change has been made to the draft JAS since December 2010. 
 
(b) Sanitary and phytosanitary measures 
 
Page 52-53, paragraph 73:  The Secretariat's report st ates that revisions to Jap an's food specifications 
and standards under the Food Sanitation Law include changes to maximum resi due levels (MRLs) for 
pesticides and amendments on food additives.  Si nce its 2009 TPR, what additional steps has Japan 
taken to align domestic policy w ith Article V of the WTO SPS Agreement?  The United States 
continues to have questions about Japan's dua l classification of post harvest fungicides as both 
pesticides and food additives.  This dual classificati on thus requires that a second risk assessment be 
conducted.  Please explain the current post harvest fungicide policy in light of Japan's WTO SPS 
obligations to base its measures on internationa l science-based standards, recommendations and 
guidelines or to provide the scientific evidence to support this dual classification.  Further, please 
explain whether domestically-produced post harvest  fungicides have a dual classification as both a 
pesticide and a food additive and whether they are required to go through two risk assessments. 
 
RESPONSE 
 
As for the establishment and am endment of food specifications and standards, including maximum 
residue levels (MRLs) for pesticides, under the Food Sanitation Law (FSL), Japan follows the WTO 
SPS Agreement as a Member. Specifically, Japan harmonizes Japanese standards with Codex 
standards wherever possible. Information availabl e from inside and outside Japan is taken into 
consideration. Prior to finalizing, Japan notifies th e WTO of the establishment or revision of standards 
to seek public comments.  
  The FSL defines "food additives" as substances that  are used by being added to, mixed with, 
infiltrated into, or otherwise used on food, in th e process of producing food or for the purpose of 
processing or preserving food. If some substances are u sed on crops after harvesting to prevent rotting 
and staleness caused by microorganisms such as fungi, they are considered, based on the FSL, to have 
been used for the purpose of food preservation, and as a result, they are categorized as food additives. 
 As for substances that are pesticides and also perm itted for post-harvest application as food additives, 
if they are used after harvesting, they shall meet use standards as food additives under the FSL and 
also comply with residue standards for pesticides. 
 
Page 52-53, paragraph 73:  The Secretariat's re port outlines Japan's changes to approved food 
additives.  In 2003, Japan initiated the evaluation of 46 additives with the intent of authorizing them 
for approval.  Please provide an update on the progre ss of these approvals.  When the review of the 
additives nears completion, will Japan consider eval uating a new set of substances?  If so, will Japan  WT/TPR/M/243/Add.1 
 Page 301 
 
 
  use the same criteria in selecting a new set?  Speci fically, will Japan consider only substances which 
have been already evaluated by JEFCA a nd that have wide international use? 
 
RESPONSE 
 
Out of the 46 additives for which the GOJ had take n the initiative to discuss with the intent of 
authorizing them for approval, 31 substances have so  far been approved and become usable.  GOJ will 
continue to proceed with the procedures for the rema ining 15 substances to approve them as promptly 
as possible.  
There is no plan to initiate the evaluation of a new set of substances that would be selected based on 
the same criteria as the 46 substances.  The GOJ woul d like to indicate that the authorization of the 
46 substances is based on an exceptional measure. In  principle, the approval process starts with an 
application filed by an applicant. The applicant prepares all documents required for the assessment.  
For the 46 substances, however, the GOJ, acting as the applicant, collected and prepared the 
documents.  
 As for substances other than the 46, the regular a pproval procedure is carried out one by one based on 
applications filed. The GOJ recognizes that this pr ocess is quite similar to that done by the United 
States and European Union.    
Page 54, paragraph 78:  The Secretariat reports that according to Japanese authorities the process of 
lifting the current BSE and avian flu import prohib itions takes full account of the OIE regulations.  
The United States continues to work with Japan to ensure that its restrictions on the importation of 
beef and poultry are consistent with the OIE c ode, particularly as it relates to BSE and avian 
influenza.   
 
 a) Please describe Japan's st eps since its 2009 TPR review and any additional actions it 
will take to further enhance harmonization with international practices and guidelines 
on BSE established by the World Organization for Animal Health (OIE). 
 
RESPONSE 
 For importation of beef and beef products into  Japan from a country where a BSE outbreak has 
occurred, the Ministry of Agri culture, Forestry and Fisheries (MAFF), from an animal health 
standpoint, and the Ministry of Health, Labour and Welfare (MHLW), from a food safety standpoint: 
 
 (1) analyse relevant data and info rmation of the country concerned; 
 (2) conduct on-site visits for verification of the data and for additional information, if 
necessary; and 
 (3) request the Food Safety Commission (FSC) conduct risk assessment.  Japan strives for continuing communication, such as through the technical expert meeting with the 
United States of America in September 2010. 
  b) Please explain why Japan continues to li nk gelatin to BSE despite OIE guidance to 
the contrary. 
 RESPONSE  
The Food Sanitation Law prohibits the production of foods, including gelatine products, from bovine 
vertebral columna originating from BS E-affected countries or areas.  
 WT/TPR/M/243/Add.1 
Page 302  
 
  In order to permit the use of gelatine derived from bovine vertebral columns, a risk assessment by the 
Food Safety Commission of Japan is required, mainly  to review the current scope of specified risk 
materials (SRMs) on a scientific basis. In additio n, Japan considers it necessary for each country to 
have a management system to ensure that SRMs  are not used as ingredients in food production. 
Japan would like to continue to exchange t echnical information with the United States.  
 
 c) Please describe Japan's st eps since its 2009 TPR review and any additional actions it 
will take to further enhance harmonization with international practices and guidelines 
on avian influenza as established by the World Organization for Animal Health 
(OIE). 
 
RESPONSE 
 
Since the 2009 TPR, Japan has committed itself to information exchange with the OIE member 
countries and other trading partners, including the United States of America on avian influenza.  
 
 (d) Labeling and packaging requirements  Page 55, paragraph 83:  The Secretariat repor t outlines the main changes in Japan's labeling 
requirements since 2008.  The United States notes that in 2009, the Government of Japan announced a Rice Traceability Law consisting of new requirement s for rice and rice products: one relating to 
record keeping of transactions, and another relating to the country of origin labeling.  The first set of 
requirements went into effect in October 2010, wh ile the second set of requirements will be effective 
starting July 2011.  Was this law notified to the WT O?  How has Japan taken into consideration other 
Members' comments in devel oping this regulation?  
 RESPONSE  
This law was notified to the WTO committee on TBT in documents G/TBT/N/JPN/289 (dated 
22 December 2008) and G/TBT/N/JPN/289/add.1 (dat ed 24 June 2009). No member countries made 
comments concerning this notification.  
 a) With regard to the traceability requir ements of the law, is Japan considering 
expanding these requirements to include other food stuffs? 
 
RESPONSE 
 
Based on the Basic Plan for Food, Agriculture an d Rural Areas, Japan is considering whether to 
expand traceability requirements to other food stuffs.   b) Beginning in July 2011, Japan will begi n requiring country of origin labeling (COOL) 
for certain rice and rice products.  Please clarify how this requirement differs from the current labeling requirements for country of origin on imported foods.  In particular, 
will these COOL requirements extend to im ported rice ingredients/materials for use 
in processed products manufactured in Japan? 
 
RESPONSE 
 
This system will require information on the origin of rice ingredients to be recorded for processed 
products. However, it is already required by the curr ent requirements that  place of origin information 
for imported rice ingredients/materials for use in  processed products manufactured in Japan be 
provided. In cases where the origin of rice ingr edients in imported pro cessed products is unknown, 
information on the origin of the processed product itself is required.  WT/TPR/M/243/Add.1 
 Page 303 
 
 
   
Only entities trading in Japan are obliged  to comply with these requirements. 
 
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
 
(ii) Subsidies and other financial assistance  
Fisheries Fuel Subsidies:  It is our understanding that Japan provided subsidies in 2007 to its fishers 
through two tax exemptions for fossil fuels:  a heavy oil exemption for agriculture, forestry and 
fishing sectors and a light oil exemption for non-road users.  
 
 (1) Please describe how the fishers claim the fuel tax exemption. 
 
RESPONSE 
 
The fishers purchase tax-exempted fuel. 
  (2) Does Japan reimburse fuel taxes paid by its fisheries to fuel suppliers in third 
countries?  
 
RESPONSE 
 They are not reimbursed. 
 According to press reporting, Japan provided US $752 million as emergency fish aid in 2008, 
primarily through its emergency fuel price subsi dy.  This program was introduced to encourage 
energy-efficient fishing operations. 
  (1) Please describe how the fishers claim the incremental fuel price subsidy.  
 
RESPONSE 
 
The fishers make plans for energy-efficient fishing operations as a precondition for the support for the 
incremental fuel price, and the fishers receive th e supports after the operations based on those plans 
have been completed.   (2) Please describe how this program encourages energy-efficient fishing operations. 
 
RESPONSE 
 
This program requires the fishers to create energy -efficient fishing operation plans that reduce fuel 
consumption by more than 10% compared to co nventional ones in order to receive the supports. 
 
 (3) Please describe any other fuel subsidy pr ograms that Japan provides to its fishers and 
the U.S. dollar value of such programs.  
 
RESPONSE 
 
There is no fuel subsidy paid to the fishers other than the program in 2008. 
 WT/TPR/M/243/Add.1 
Page 304  
 
  (iii) State-owned enterprises, corporatization, and privatization 
 
Page 63, paragraph 117:  The Secretariat notes that the Japanese Government held 33.8% of stock in 
Nippon Telegraph and Telephone Corp oration (NTT) as of March 2010.  What measures is Japan 
taking to ensure fairness and impartiality in regulatory treatment and enforcement in the 
telecommunication sector, particularly in light of the Ministry of Internal Affairs and 
Communications' dual regulatory oversig ht and industrial policy functions? 
 
RESPONSE 
 
Regarding measures which ensure fairness and impartiality, the Telecommunication Business Law 
stipulates as its objectives to "ensure proper and re asonable operations (of the telecommunications 
business)" and to "promote fair competition". It is also stipulated that eco nomical efficiency and 
effective competition be considered in decision-making.  
In addition, the requirements and measures for the exer cise of the rights of the Ministry of Internal 
Affairs and Communication (MIC) are clearly sti pulated in laws such as the Telecommunication 
Business Law, and when establishing or abolishing   regulations, public comments are solicited to 
ensure transparent procedures, more predictability, and a better reflection of the opinions of users and 
operators   
Page 63, paragraph 117:  The Secretariat states that  "the State retains a stake in major companies in 
several sectors, though which it may directly affect  production and trade."  What additional measures 
is Japan prepared to take to ensure equal cond itions of competition between Japan Post and foreign 
suppliers of insurance, banking, and express deliver y services?  How will Japan address concerns that 
the effects of the postal reform legislation introduced  in October 2010, which is expected to be carried 
over to the Diet session starting in January 2011, will further negatively impact the conditions of 
competition in these sectors?  
RESPONSE 
 
The bills for Postal Reform have set a basic po licy that postal services are operated with full 
consideration for equitable conditions of comp etition between the Japan Post Group and other 
operators offering similar services. Based on this polic y, the Government of Japan intends to ensure 
consistency with GATS and other interna tional agreements in future operations. 
 
(iv) Intellectual property rights 
 
Page 65, paragraph 125:  The Secretariat indicates that the Intellectual Property Strategic Programme 
(IPSP) 2010 was adopted by the IP Headquarters on May 21, 2010.  We understand that the Bunkacho 
Advisory Council is hosting several subcommittee  meetings in January 2011 to discuss various 
matters related to the Copyright Law, includi ng possible studies and possible new legislative 
initiatives.  Is any considerati on being given to limitations and exceptions proposed under Japanese 
copyright law?  How do any such proposals for new statutory exceptions comport with the three-step 
test in TRIPS Article 13?   
RESPONSE 
 
The Subcommittee on Copyright of the Council for Cultural Affairs concluded in January 2011 that 
there is great necessity in introducing "general provision on limitations of rights" to respond to 
emerging technological development.   WT/TPR/M/243/Add.1 
 Page 305 
 
 
  The "general provision on limitations of rights" is more comprehensive than existing individual 
provisions on restrictions, which indicate each pur pose of usage under the current Japanese copyright 
law.  Specifically, the Subcommittee on Copyright of th e Council for Cultural Affairs deemed that 
Types A, B and C below should be subject to the "g eneral provision on limitations of rights" under the 
consideration of Japan's current situation and the le gality principle. (These ar e not the exact words of 
the provisions.)  (Type A) Incidental exploitation  
 
"an incidental exploitation of a work in an act wh ich is not mainly aimed at the exploitation of said 
work, provided that the exploitation is deemed to be qualitatively [and] quantitatively insignificant 
under social conventions"  
(Type B) Exploitation in the preliminary stage prior to a lawful exploitation of a work  
 "an exploitation of a work , which is reasonably necessary in the preliminary stage prior to a lawful 
exploitation of said work, provided that the exploitation is deemed to be qualitatively and 
quantitatively insignificant under social conventions"  
(Type C) Exploitation not enjoying an expression of a work  
 "an exploitation that is not deemed to be aimed to perceptually enjoy an expr ession of a work in light 
of the type and the usage of the work as well as the purpose and the manner of the exploitation" 
On the basis of the report of the Subcommittee on Copyright of the Council for Cultural Affairs, the 
Government of Japan is preparing to amend the c opyright law, but a specific schedule has not been 
determined as yet.  With regard to complying with the three-step test of TRIPS Article 13, legal experts discussed it in the 
Subcommittee on Copyright of the Council for Cultu ral Affairs and concluded that the 3 types above 
comply with the three-step test. 
 
Moreover, even when carrying out the work of ame nding the copyright law, the Government of Japan 
is carefully keeping consistency with the th ree-step test of TRIPS Article 13 in mind. 
 
IV. T
RADE POLICIES BY SECTOR  
 
(2) A GRICULTURE  
 (ii) Border measures 
 
Page 79, paragraph 11 and Page 116 Table AIV.1  Tariff quota and in -quota imports, FY 2005-2008:  
The Secretariat's report describes the difference between  in-quota fills, in particular the low quota-fill 
of 13% for butter and butter oil compared to othe r quota products.  How does Japan account for this 
wide difference?  
RESPONSE 
 Each TRQ is appropriately managed based on the ch aracteristics of each dairy product, consistent 
with WTO agreements including Jap an's tariff schedule of concessions. In-quota imports of butter and 
butter-oil have been under-filled because their dome stic consumption, relating to these TRQs, has 
been declining. WT/TPR/M/243/Add.1 
Page 306  
 
   
With respect to butter imports eligible for use at  international trade fairs, the United States has 
increasing concerns with MAFF's extraneous re quirements imposed in addition to those under 
document "International #1241, Year 20 (2008) Tariff Rate Quota Announcement#48 regarding the 
Tariff Rate quota for Butter and Butter Oil for th e Fiscal Year 2009."  These additional requirements 
imposed on retailers before, during, and after co mpletion of promotional events renders sales 
unprofitable and continues effectively to discourage imports.  Please explain this practice in light of 
Article III:2 of the Agreement on Agriculture.  
RESPONSE 
 Butter imports eligible for use at international trade fairs shall be imported for the purpose of 
advertisement at trade fairs and not for marketing.  Face-to-face explanation to the vi sitors at the fair is the minimum requirement to meet the 
precondition for the low tariff.  
 However, how the face-to-face explanation should be conducted will be dealt with flexibly on a case 
by case basis.  
(iii) Domestic measures 
 
Page 82, paragraph 18:  The Secretariat's report st ates that in 2007 Japan's price support schemes for 
certain agriculture products were converted into di rect payments.  The United States notes that in 
2010, the Government of Japan in itiated a pilot program to support Japanese rice production known as 
the Individual Farm Income Compensation program.  This program is now be ing expanded to include 
rice and crops grown in rice paddies. 
  a) What is the status of the results of the pilot program conducted in 2010?  
RESPONSE 
 
1.15 million ha of paddy field has been registered  under the pilot program, and the area planted in 
excess of the equilibrium of supply-demand is estimat ed to have decreased by approximately 8,000ha 
compared to the previous year. In addition, the number of newly established village farming 
organizations has reached approximately 7,300, incr eased by 1,600 compared to the previous year. 
These two numbers would exemplify positive results for the pilot program. 
 
 b) What are the intended outcomes of the planned 2011 compensation plan as it is 
currently funded? 
 
RESPONSE 
 
The income support direct payment for farmers fro m FY2011 is aiming to stabilize farm management 
and secure sustainability of farming, leading to an eventual revitalization of rural areas and to secure 
multi-functionality of agriculture.  c)  Under this compensation scheme, transfer payments to agriculture production will increase 
substantially.  In conformity with the criteria se t out in Annex 2 of the Agreement on Agriculture, 
how does Japan intend to notify these new assistance measures?    WT/TPR/M/243/Add.1 
 Page 307 
 
 
  RESPONSE 
 
The notification to the WTO Committee on Agriculture will be made in due course. 
 
(5) S ERVICES  
 
(i) Financial services 
 
Page 89, paragraph 47:  The Secretariat notes that  "the Financial Services Agency remains the 
regulatory authority" in the insurance sector.  Cooperatives that supply insurance (also known as 
kyosai) have a major presence in the insurance sector .  Why are they not regulated by the Financial 
Services Agency, and how are equivalent regulator y treatment and enforcement as well as equivalent 
levels of consumer protection ensured as a result?  
RESPONSE 
 The kyosai cooperative societies are mutual-aid or ganisations established by people in the same 
geographical area or field of work. The member s invest their own capital and use the insurance 
services that the organisation provides. These services form part of a broad range of mutual-aid services available to the members (joint ventures, loans, welfare services, etc.). Because of their 
unique nature they need to be regulated separately,  and each of them operates within the scope of the 
law and under the supervision of the relevant government authorities. 
 In addition, mutual-aid activities being conducted by the agricultural coop erative society and the 
consumers' cooperative society are regulated und er the Agricultural Cooperatives Act and the 
Consumer Cooperatives Act which have provisions equiva lent to those applied to private insurers, so 
that soundness of the business and consumer protecti on are guaranteed by prudent supervision such as 
careful reviews on the method for calculating the mutual aid premiums and the liability reserve.  
UNITED STATES – 2
nd set 
 
RTAS 
 
Please explain Japan's exclusion from its RTAs of the products identified in the Secretariat's Report 
(WT/TPR/S/243-06), especially those cited in Table AII.3 under "Main products excluded from 
liberalization," in light of Japan's obligations under GATT Article XXIV.  
 
RESPONSE 
 
Japan's EPAs cover more than 90% of trade volume between the parties, keeping consistency with 
Article 24.8 of the GATT., while excluding some pr oducts, taking into consideration possible adverse 
impacts on domestic industries.   Japan excludes large percentages of  agricultural products from tariff elimination under its RTAs.  Just 
as one example, under Japan's Economic Partners hip Agreement with the Philippines, Japan 
eliminates duties on only 64.8 percent of agricultura l duties compared to the Philippines's figure of 
99.2 percent.  Basing an assessment of coverage on current volume of trade could be misleading since 
restrictions could be in place that prevent current  trade. How is Japan's selective coverage of 
agricultural goods trade-creating and not trade-distorting?   Moreover, in Japan's view, what are the effects of Japan's systematic protection of its  agricultural sector through exclusion of many 
agricultural products from its RTAs on the multilateral trading system? WT/TPR/M/243/Add.1 
Page 308  
 
  RESPONSE 
 
Japan is promoting its FTA/EPAs for trade-creating purposes in general, while taking into account of 
the possible impacts on the domestic agricultural in dustry and excluding some products from tariff 
elimination. 
 
With regard to the effects on the multilateral tr ading system, all Japan's EPAs keep maintain 
consistency with the requirements for of the free trade agreement under the Article 24 of the GATT, 
i.e. liberalization of substantially all the trade.  WTO Pharmaceuticals Agreement 
 
(2) Japan is a Member of the WTO Pharma ceuticals Agreement, which confers MFN 
duty-free treatment to pharmaceutical products  and identified chemical intermediates 
used in the production of pharmaceuticals.  In May 2010, Participants concluded 
negotiations for the 4th Update to lists of  products eligible for duty-free treatment 
under the Agreement.  In January 2011, all Parties to this Agreement, implemented 
the negotiated tariff commitments from the 4t h Update, with the exception of Japan.  
With all the other Parties having already implemented the Update effective January 
2011, can Japan provide an update on its pl ans to implement the 4th Update to the 
WTO Pharmaceuticals Agreement, including wh ether it will do so in an expeditious 
manner? 
 
RESPONSE 
 
The Government of Japan endeavors to submit the modified tariff Schedules to the Diet as early as possible. 
 Does Japan intend to submit the modified tariff Schedules to the Diet during its current (2011) 
Ordinary Session?  Please clarify Japan's intended timeframe. 
 
RESPONSE
 
 The Government of Japan endeavors to submit the m odified tariff Schedules to the Diet as early as 
possible. 
 
Wood 
 Page 31, paragraph 5, Page 45, paragraph 52, and Page 63, paragr aph 116:  The Secretariat's Report 
states:  "It would appear that Japan will start gi ving preferences for the use of domestic wood in 
public procurement."  On page 45, paragraph 52, Th e Secretariat's report further states that in 2010 
the Government of Japan announced its intentions to promote the use of domestic wood "with a target 
of covering more than half of domestic demand fo r wood with domestic supply".  The Secretariat's 
report furthermore points out on page 63, paragra ph 116, that in Japan's Growth Strategy, Japan 
appears to be adopting a policy whereby Japan may "'pick winners,' such as preferential use of 
domestic wood."  (1) Please explain how the Government of Japan plans to implement this policy of promoting the 
use of domestic wood. 
 (2) Will the programs for promotion of domestic wood be applied in procurement that Japan 
covers under the Agreement on Government Procurement? 
  WT/TPR/M/243/Add.1 
 Page 309 
 
 
  (3) Please describe any preferences that will be a pplied to promote the use of domestic wood in 
the construction of public buildings, such as for the construction of traditional school gymnasiums. 
 (4) Has Japan communicated with (or notified) Members regarding the eligibility of imported 
woods for these initiatives? 
 
(5) Does Japan intend to provide subsidies as an incentive under this initiative, and if so, are any 
conditions applied that would re quire the use of domestic wood? 
 
RESPONSE 
 
((1)~(5)) "The Act for the Promotion of Use of W ood in Public Buildings" was established to boost 
the use of wood as a whole in public buildings, regard less of its country of origin. Therefore, there are 
no programs, such as those indicated in (1), (2) and (3), which only promote the use of domestic 
wood, nor does Japan stipulate eligibility of im ported woods. The Act and other Japanese timber-
related policies, including subsidy policies, will be operated without distinction between domestic and 
imported woods. 
 
Materials from the Forestry Agency of the Government  of Japan related to the "Act for the Promotion 
of Use of Wood in Public Buildings" clearly state that the key aim of the law is to contribute to the expansion of demand for "domestic wood" or "local region wood."  See, for example: 
 
http://www.rinya.maff.go.jp/j/kouhou/k ouhousitu/jouhoushi/p df/rinya7-14.pdf 
http://www.rinya.maff.go.jp/j/kouhou/merumaga/pdf/45.pdf  Please clarify how the intent identified through the stat ements in these materials is consistent with the 
statement provided that "The Act and other Japan ese timber-related policies, including subsidy 
policies, will be operated without distincti on between domestic and imported woods."   
 Furthermore, Forestry Agency materials indicate th at it is "necessary" for en tities seeking to receive 
subsidies to join prefectural committees, which are to include local associations as well as forestry 
associations, wood producers/supp liers, and others.   (See e.g. http://www.rinya.maff.go.jp/j/ 
kouhou/kouhousitu/jouhoushi/pdf/r inya7-14.pdf) Please explain how these associations do not de 
facto  promote the use of domestic wood in a manner that effectively discriminates against foreign 
suppliers.  How can foreign suppliers participate in  such groups in a manner that does not require a 
physical presence in Japan?    RESPONSE  
Japan would like to make clear that materials from the Forestry Agency men tioned in the U.S. follow-
up questions are quotations from of the ones related to the "Green Industry Revitalization Project" and 
are not related to the "Act for the Promotion of U se of Wood in Public Buildings". The GIR Project is 
a part of stimulus measures taken amid the econo mic crisis in the 1st supplementary budget for 
JFY2009 and it is a three-year temporary programme. On  the other hand, as stated in the Secretariat's 
report, the Act was established in May 2010.  The ma terials which the U.S. mentioned were released 
in 2009 and thus were not prepared in relation with the Act.  "Chiiki-zai," means "local region wood" that are di stributed in the Chiiki (region), regardless of its 
origin, i.e. including both domestic and imported wood. It is clearly stated that "the purpose of this 
project is to promote the use of Chiiki-zai, with th e aim of contributing to the expansion of demand of 
Kokusan-zai (domestic wood) and vitalization of ru ral areas" in the materials US quoted. In this 
context, those terms "Kokusan-zai" and "Chiiki-zai" are differentiated.  WT/TPR/M/243/Add.1 
Page 310  
 
  Contribution to the expansion of demand for Koku san-zai (domestic wood) as stated in the U.S. 
follow-up question is one of the expected effects through promotion of Chiiki-zai as a whole, both domestic and imported. As stated above, "Chiiki-zai " and "Kokusan-zai" are two different terms, and 
the target of the GIR Project is the usage of "Chiiki-zai" and not "Kokusan-zai (domestic wood)". 
Japan would like to reiterate that there is no pref erential treatment for domestic wood in the Project 
described in the material s mentioned by the U.S. 
 For the GIR Project, a central-government-sourced fund is established under the prefectural committees and the subsidies are paid from the co mmittees' funds. Therefore, those who seek to 
receive the subsidies for the GIR Project are re quested to join the prefectural committee. The 
membership in the committee is open to foreign entities, even if they do not have a commercial 
presence in Japan, and a non-discriminatory principl e is secured. Moreover, as stated above, granting 
of the subsidies is for the use of Chiiki-zai, whic h includes domestic wood, but is not limited to 
domestic wood.  Intellectual property rights  
 
Page 65, paragraph 125:  The Secretariat indicates that the Intellectual Property Strategic Programme 
(IPSP) 2010 was adopted by the IP Headquarters on May 21, 2010.  We understand that the Bunkacho 
Advisory Council is hosting several subcommittee  meetings in January 2011 to discuss various 
matters related to the Copyright Law, includi ng possible studies and possible new legislative 
initiatives.  Is any consideration being given to limitations and exceptions proposed under Japanese 
copyright law?  How do any such proposals for new statutory exceptions comport with the three-step 
test in TRIPS Article 13?   
RESPONSE 
 
The Subcommittee on Copyright of the Council for Cultural Affairs concluded in January 2011 that 
there is great necessity in introducing "general provision on limitations of rights" to respond to 
emerging technological development.  The "general provision on limitations of rights" is more comprehensive than existing individual 
provisions on restrictions, which indicate each pur pose of usage under the current Japanese copyright 
law.  Specifically, the Subcommittee on Copyright of th e Council for Cultural Affairs deemed that 
Types A, B and C below should be subject to the "g eneral provision on limitations of rights" under the 
consideration of Japan's current situation and the le gality principle. (These ar e not the exact words of 
the provisions.)  (Type A) Incidental exploitation  (Type B) Exploitation in the preliminary stage prior to a lawful exploitation of a work 
 
(Type C) Exploitation not enjoying an expression of a work   "an exploitation that is not deemed to be aimed to perceptually enjoy an expr ession of a work in light 
of the type and the usage of the work as well as the purpose and the manner of the exploitation" 
On the basis of the report of the Subcommittee on Copyright of the Council for Cultural Affairs, the 
Government of Japan is preparing to amend the c opyright law, but a specific schedule has not been 
determined as yet.   WT/TPR/M/243/Add.1 
 Page 311 
 
 
  With regard to complying with the three-step test of TRIPS Article 13, legal experts discussed it in the 
Subcommittee on Copyright of the Council for Cultu ral Affairs and concluded that the 3 types above 
comply with the three-step test.  Moreover, even when carrying out the work of ame nding the copyright law, the Government of Japan 
is carefully keeping consistency with the th ree-step test of TRIPS Article 13 in mind. 
 Japan's response regarding "Type C" refers to "Exploitation not
 [emphasis added] enjoying an 
expression of a work".  Could Japan please clarify or elaborate upon the nature of an exploitation that 
would  be permitted under the description provided in "Type C" of the government's response and 
provide an example of what would not be permitted?  
 
RESPONSE  
 
In the report of the Copyright Subcommittee of th e Council for Cultural Affairs (January 2011), type 
C is explained as follows. 
 For example, in cases of developing technology for th e playback of films and music, or copying films 
or music within the extent necessary to verify the technology, as long as the reproductions are simply 
being used as materials for technology developmen t or verification with no perceived intention of 
enjoying the expression of work, this is regarded as falling under type C. 
 
Even in cases of showing the film (enjoying the e xpression of work) in the process of developing and 
verifying technology, as long as the purpose of the repr oduction of the film is for the development and 
verification of technology, if it is not deemed to be the enjoyment of an expression of work, such as of 
a film, carried out in a manner of exploitation, it is regarded as falling under type C. 
 
That is, in the process of research and development,  if the reproduction is essential to various acts of 
technology development, or especially is an act of development or provision of services in the 
information network industry for which the reprod uction is unavoidable, this is regarded as falling 
under type C. 
Moreover, in order to come under type C, not in the manner of exploitation, it is necessary for the 
materials to be seen objectively to be used for th e development and verification of technology. If the 
use of the materials is simply superficially re ferred to as the development or verification of 
technology, it will not fall under type C.  
Butter TRQ 
 Page 79, paragraph 11 and Page 116 Table AIV.1  Tariff quota and in -quota imports, FY 2005-2008:  
The Secretariat's report describes the difference between  in-quota fills, in particular the low quota-fill 
of 13% for butter and butter oil compared to othe r quota products.  How does Japan account for this 
wide difference?  RESPONSE  
Each TRQ is appropriately managed based on the ch aracteristics of each dairy product, consistent 
with WTO agreements including Jap an's tariff schedule of concessions. In-quota imports of butter and 
butter-oil have been under-filled because their dome stic consumption, relating to these TRQs, has 
been declining. 
 The United States notes that the STE ALIC (Agricu lture and Livestock Industrial Corporation) 
handles butter imports under Japan's WTO TRQ for "designated dairy products for general use" WT/TPR/M/243/Add.1 
Page 312  
 
  (137,202 tons).  However, MAFF handles imports under Japan's WTO butter-specific quota 
(1,873 tons).   According to Japan's current tariff schedule, by Cabinet order, MAFF manages the allocation of 581 tons for butter imports only for specific uses.  If ALIC does not handle imports 
under the WTO butter specific TRQ and MAFF manages only 581 tons-- with restrictive use--; how 
does Japan allocate the remaining tonnage under the WTO butter TRQ (1,873-581= 1,292 tons)? 
Which entity is responsible ALIC, MAFF, other?  C ould the reason for the low fill rate be related to 
the 1,000 tons of TRQ left unallocated?  What  are Japan's plans to change its butter TRQ 
administration and provide trading partners with  the access agreed under Japan's WTO market access 
concessions?   
The quota quantities for butter and butter oil include quantities available for products for consumption 
on international maritime vessels and internationa l airlines (29 tons of butter) and for outward 
processing trade (1,263 tons of butter and butter oil) . These are clearly written in Note 1 to Section I-
B of part 1 of the Schedule of Japan.  
These access opportunities are maintained as equivalent  to the existing terms, by the bounded system. 
 Each TRQ is appropriately managed based on the ch aracteristics of each dairy product consistent with 
WTO agreements including Japan's tariff schedule of concession. In-quota imports of butter and butter 
oil have been under-filled because their domestic consumptions related to these TRQs have been 
declining. 
 
Japan will continue to operate the TRQs according to  the schedule, and has no intention to change the 
system.  
 
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