RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/243 
11 January 2011  
 
(11-0038) 
Trade Policy Review Body Original:  English 
   
 
  
 
TRADE POLICY REVIEW 
 
Report by 
 
JAPAN 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by Japan is attached. 
 
 
Note: This report is subject to restricted circul ation and press embargo until  the end of the tenth 
session of the meeting of the Trade Policy Review Body on Japan. Japan WT/TPR/G/243 
 Page 3 
 
 
CONTENTS 
    Page 
I. OVERVIEW  OF JAPAN’S  ECONOMIC  RELATIONSHIPS 5 
 (1) The Multilateral Trading System 5 
 (2) Regional and Bilateral Trade Policy 5  
II. TRADE
 AND  ECONOMIC  POLICY  ENVIRONMENT 6 
 (1) Japan's Economic Environment 6 
 (2) Trends in Foreign Trade 6 
 (3) Trends in Foreign Direct Investment 7  
III. JAPAN
 IN THE  DOHA  DEVELOPMENT  AGENDA (DDA) 8 
 (1) Agriculture 8 
 (2) NAMA   8 
 (3) Services  8 
 (4) Rules  9 
 (5) TRIPS  9 
 (6) Environment 9 
 (7) Trade Facilitation 9 
 (8) DSU  10 
 (9) Development 10  
IV. JAPAN'S
 MULTILATERAL  ACTIVITIES 10 
 (1) Strengthening Global Food Security 10 
 (2) OECD  10 
 (3) Generalized System of Preferences (GSP) 11  
V. JAPAN'S
 REGIONAL  ACTIVITIES 11 
 (1) ASEAN+3 11 
 (2) Japan, China, Korea 12 
 (3) East Asia Summit 13 
 (4) Asia-Pacific Economic Cooperation (APEC)  13  (5) Asia-Europe Meeting (ASEM) 14 
 
VI. JAPAN'S
 BILATERAL  ACTIVITIES 15 
 (1) FTA/EPAs  15 
(2) Japan's Bilateral Activities outside of FTAs 17  
VII. BASIC
 POLICY  ON  COMPREHENSIVE  ECONOMIC  PARTNERSHIPS 20 
 (1) Promotion of High Level Economic Partnerships 20  (2) Concrete Action to Strengthen Comprehensive Economic Partnerships 20 
 
VIII. AID
 FOR  TRADE  20 
 (1) Japan’s Development Initiatives for Trade 21 
 (2) Assistance to the One Village, One Product Movement  21  
IX. JAPAN'S
 DOMESTIC  POLICIES 22 
 (1) Regulatory Reform 22 
 (2) Intellectual Property Rights  22 
 (3) Financial Reform 23  (4) Agricultural Reform 24 
 (5) Competition Policy 24
 Japan WT/TPR/G/243 
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 I. OVERVIEW OF JAPAN'S EC ONOMIC RELATIONSHIPS 
1. Since Japan's trade policy review in  2009, Jap an has taken various measures to promote the 
international liberalization of trade.  Together  with utmost efforts to promote the ongoing Doha 
Round negotiations, Japan has also made forward bilateral negotiations on  Economic Partnership 
Agreements (EPAs), which have made positive st eps and complemented the multilateral trading 
system. 
(1) The Multilateral Trading System 
2. As one of the largest trading economies in the world, and as a firm supporter of the free trade 
system for the growth of the world economy and the benefit of developing countries, Japan maintains 
its strong support of the non-discriminatory and rule-based multilateral trading system under the WTO.  Japan has made efforts to lower trade barriers under that system, which has led to the 
expansion of world trade and has created opportu nities for all countries to enjoy the fruits of 
international trade.  
3. Japan has made various efforts to move forward the Doha Round negotiations and has 
participated actively in every negotiating pro cess under multiple configurations.  As the host 
Economy of APEC 2010, Japan strongly supported  the progress of negotiations through the 
Ministerial and Official level meetings.  Japan also renewed its full commitment to the successful 
conclusion of the Doha Round negotiations , building on the progress already made. 
4. While a rise of protectionism was expected af ter the economic and fina ncial crisis of 2008, 
Japan, having undertaken  foreign and domestic econom ic policies for recovery, has made a concerted 
effort with other countries to resist protectionism .  In particular, taking advantage of the APEC 
process in 2010, Japan has contributed to consistently  delivering Leaders' and Ministerial messages to 
fight against protectionism. 
(2) Regional and Bilateral Trade Policy 
5. Japan is currently a party to eleven Economic Partnership Agreements (EPAs) which include 
elements of Free Trade Agreements and institu tion-building covering areas such as investment, 
competition, intellectual property rights and human re sources development.  Japan is also involved in 
several on-going negotiations for EPAs.  Japan belie ves that these agreements will serve as building 
blocks to reach higher trade liberalisation at the multilateral level.  
6. At the same time, Japan will actively participate in and make contributions to various studies 
on possible frameworks for economic partnership in East Asia and the Asia-Pacific region, such as the Comprehensive Economic Partnershi p in East Asia (CEPEA), the East Asia Free Trade Agreement 
(EAFTA) and the Free Trade Area of the Asia-Pacifi c (FTAAP).  In doing so, Japan will take into 
consideration their possible influences on the WT O system and the world economy, as well as the 
policies of the countries in the region. 
7. On 9 November 2010, the Government of Jap an adopted a "Basic Policy on Comprehensive 
Economic Partnerships"
1 by cabinet decision. 
                                                      
1 http://www.mofa.go.j p/policy/economy/fta/ policy20101106 .html. WT/TPR/G/243 Trade Policy Review 
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 II. TRADE AND ECONOMIC POLICY ENVIRONMENT 
(1) Japan's Economic Environment 
8. After a severe economic slowdown following the fi nancial crisis in the autumn of 2008, the 
Japanese economy began expanding in the spring of 2009, mainly reflecting an increase in exports 
and the effects of a series of policy packages. In  2010, corporate profits have been improving, and 
household incomes are apparently sound and steady.  However, Japan's economic recovery recently 
appears to be pausing, and its economy remains in  a difficult situation as the high unemployment rate 
shows. In addition, judging from the recent price tr ends in Japan, the Japanese economy is in a mild 
deflationary phase. 
9. In order to overcome our long-stagnant economy and remove the fear of continuing future 
stagnation among the people, our administration has started initiatives to achieve a "Strong 
Economy", a "Robust Public Finances" and a "Strong Social Security System" in an integrated 
manner.  In June 2010, the government issued a "New Growth Strategy, Blueprint for Revitalizing 
Japan" and a "Fiscal Management Strategy, for the Security and Hope of the People", which contain 
concrete measures for achieving the above-mentioned three targets. 
(2) Trends in Foreign Trade 
10. Trade statistics showed that Japan's trade surp lus considerably decreased in 2008 and slightly 
increased in 2009. In 2008, Japan's imports dramatica lly increased due to a sharp rise in the price of 
crude oil, thus decreasing our trade surplus to ¥2.06 trillion. In 2009, Japan 's exports and imports 
drastically decreased due to the world economic crisis . A decrease in imports slightly exceeded that of 
exports. As a result, the total trade surplus in creased slightly to ¥2.67 trillion (an increase of 
¥0.61 trillion from 2008).  
11. The total value of exports from Japan in 2009 amounted to ¥54.17 trillion (a decrease of 
33.1% from 2008)  
- Regional trends in the total value of exports in 2009 (compared to 2008) 
 China down by 21.0% 
 NIEs (inc. Korea;  Singapore;  Hong Kong,  China;  and Chinese Taipei) down by 28.9% 
 Association of South East Asian Nations down by 30.1% 
 United States down by 38.6%  European Union (EU) down by 41.0%  Middle East down by 42.6% 
12. The total value of imports to Japan in 2009 amounted to ¥51.49 trillion (a decrease of 34.8% 
from 2008) 
- Regional trends in the total value of  imports in 2009 (compared to 2008)  
 China down by 22.9% 
 European Union (EU) down by 24.3%  NIEs (inc. Korea;  Singapore;  Hong Kong,  China;  and Chinese Taipei) down by 29.5% 
 United States down by 31.4% 
 Association of South East Asian Nations down by 34.4% 
 Middle East down by 50.2% Japan WT/TPR/G/243 
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 (3) Trends in Foreign Direct Investment 
13. The amount of FDI stocks steadily increased until 2008. That in CY2008 was ¥18.5 trillion 
(3.6% of GDP) and that in CY2009 was ¥18.4 trillion (3.9% of GDP). As the Ministry of Internal 
Affairs and Communications reports, the situation of employment in foreign companies in Japan, 
according to the "2006 Establishment and Enterp rise Census", approxima tely 750,000 regular 
employees were employed by companies which have more than 1/3 of foreign equity.  
14. In June 2010, the Cabinet issued its "New Growth  Strategy". From that strategy, it is noted 
that Japan will double employment and double direct incoming investment by inviting foreign firms 
which bring high value-added pro ducts and services into Japan. Some items related to this are given 
below: 
- For the purpose of strengthening the compe titiveness of companies operating in Japan 
and encouraging more foreign companies to set up business bases in Japan, the 
effective corporate tax rate will be reduced  to the levels of other major countries, 
taking into consideration the need to sec ure tax revenue sources by expanding the tax 
base. 
- With the aim of enabling Japan to revive as an Asian industrial center, an incentive 
system containing taxation measures will be c onsidered to invite foreign firms to set 
up their Asian head offices and R&D bases in Japan, which are linked with the degree 
of their contribution to the employment of highly-skilled personnel. It is aimed to put 
this system into operation from the FY2011.2 
- 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. This program will 
include reforms to systems and other meas ures to ensure smooth flows of people, 
goods and funds, with the aim of maki ng Japan's business environment more 
appealing. 
2009 Outward FDI3 
15. 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).  The major characteristics of Japan's outward FDI in CY2009 were as follows: 
- In Industry:  In CY2009, FDI in manufacturing industries decreased to 
¥3,083.1 billion (i.e. by 33.7%).  The transportation equipment sector decreased 
sharply.  On the other hand, the food sector increased.  FDI in non-manufacturing 
industries decreased to ¥3,906.5 billion (i .e. by 54.5%).  The finance & insurance 
sectors decreased most sharply, and al most all other sectors also decreased. 
- By Region:  In CY2009, the amount of outward FDI to North America decreased by 
77.8% to ¥1,020.7 billion, to Western Europe by 30.2% to ¥1,596.6 billion, and to Central & South America by 45.7% to ¥1,627.2 billion. 
                                                     
 
2 FY2011:  April 1, 2011 – March 31, 2012. 
3 Source:  Balance of Payments. WT/TPR/G/243 Trade Policy Review 
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 2009 Inward FDI
4 
16. In CY2009, the FDI flow to Japan (Inward FDI) decreased to ¥1,117.1 billion, which 
represents a decrease of 55.8% from CY2008 (a decrease of ¥1,407.5 billion).  The major 
characteristics of inward FDI flow to  Japan in  CY2009 were as follows: 
- In Industry:  In CY2009, the inward FDI fl ow in the manufacturing industries slightly 
increased (from ¥234.6 billion in CY2008 to ¥328.9 billion), but in the non-
manufacturing industries it decreased sharply (from ¥2,524.6 billion in CY2008 to 
¥788.2 billion).  The finance & insurances sectors which had occupied the largest 
share, decreased sharply. 
 - By Region:  In CY2009, the amount of in ward FDI from North America and Central 
& South America decreased sharply;  on the other hand, that from Asia increased 
slightly. 
III. JAPAN IN THE DOHA DEVELOPMENT AGENDA (DDA) 
17. Since the inception of the DDA negotiations, Japan  has been continuously and most actively 
participating in all negotiating processes, subm itting a number of negotiating proposals and working 
documents in the various areas, commensurate with its weight in the world trade. 
(1) Agriculture 
18. As the world's largest net importer of agri cultural products, Japan is committed to an 
ambitious and balanced outcome in agricultural negotiations.  To achieve this objective, Japan 
considers it necessary that differences in tariff st ructures, the multifunctionality of agriculture, and 
food security are fully taken into account.  In particular, Japan attaches great importance to 
strengthening the existing disciplines on export prohib itions and restrictions in order to ensure the 
particular interests of food importing countries are taken into account. 
(2) NAMA 
19. The Doha Round's NAMA negotiations need to deliver commercially meaningful market 
access gains for all Members.  Jap an believes that improved market access is a key booster for the 
sound economic development of developing countries, taking the important role of South-South trade 
into account.  To achieve this objective, Japan will continue to contribute actively to these 
negotiations and is doing its utmost  to ensure the early and successful conclusion of the Round. 
(3) Services 
20. Japan remains strongly committed to the liberalisati on of trade in services and believes that its 
firm commitment to the DDA negotiations has been  demonstrated in various forms on a number of 
occasions including the "Signaling Conference" held in  July 2008, while Japan actively contributed to 
the positive outcome of Members offer intention. The basic principle of Japan in services negotiations 
is that the achievement of the comprehensive liber alization of trade in services is to benefit all 
Members including developing countries, by attr acting further investment on the one hand and 
through the results of their in creased competitiveness, production capacity, export and employment 
opportunities.  Mindful of the fact that the sch eduled commitments provide legal certainty and 
                                                      
4 Source:  Balance of Payments. Japan WT/TPR/G/243 
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 predictability, Japan continues to attach importance to the improvement  of the level of, as well as to 
the achievement of a higher degree of transparency and clarity of the scheduled commitments of the Members. 
(4) Rules 
21. Japan has also been actively participating in th e negotiations on rules.  In the negotiations on 
anti-dumping, Japan, as a core member of the so-called "Friends of Anti-Dumping (FANs)", 
consisting of 15 Members, has been contributing to discussions by submitting proposals on issues 
such as zeroing, sunset, and public interest to cl arify and strengthen the disciplines of the Anti-
dumping Agreement.  With regard to the negotiatio ns on fisheries subsidies, Japan, Korea and the 
Separate Customs Territory of Taiwan, Penghu, Ki nmen and Matsu submitted a revised joint proposal 
on the legal draft in June 2007.  In this proposal, a ttempts were made to inco rporate the considerations 
on (i) practicable and workable discipline, (ii) equity among members, and (iii) opportunities for 
international collaboration. To ma ke the discussions more accurate based upon scientific data, Japan 
attaches importance to cooperation with the FAO, utiliz ing its expertise and experience in the field of 
world-wide fishery activities. 
(5) TRIPS 
22. Japan has actively participated  in the discussions of the TRIPS Council, recognizing the 
importance of the development dime nsion and role of intellectual pr operty protection.  Japan believes 
that a global regime for the adequate and effectiv e protection of intellectual property will benefit all 
countries by fostering an environment conducive to technological innovation.  Regarding the 
negotiations on the establishment of a multilateral system of notification and registration of 
geographical indications for wines and spirits, Jap an seeks to establish a system that would not 
impose excessive burdens upon Members.  Japan will continue to engage in discussion in a 
constructive way to establish a multilateral system acceptable to and practicable for all Members. 
(6) Environment 
23. With a view to enhancing the mutual suppor tiveness between trade and the environment, 
Japan has participated actively in negotiations on environment.  In the negotiations in CTESS, Japan 
has submitted its proposal on product list of enviro nmental goods, which is contributing to the in-
depth discussions about the scope of these products.  
(7) Trade Facilitation 
24. The expansion of world trade now more than ever needs smooth, fair, transparent and 
efficient cross-border procedures for the movement of goods in order to strengthen the multilateral 
trading system.  In this regard, Japan has b een vigorously engaged in negotiations on Trade 
Facilitation by submitting proposals, together with co -sponsoring Members, to promote discussions in 
the negotiating group.  Japan has also contribut ed to the needs assessment activities of several 
developing Member countries led by the WTO Secret ariat by assigning experts as facilitators.  In line 
with our past contribution, and in cooperation with the WTO Secretariat, Japan will be the host 
country of the regional workshop on trade facilitation in  the Asia Pacific area, with the aim of sharing 
experience on the implementation of various trade facilitation measures that are being discussed in the 
negotiations.  Japan continues to contribute to ne gotiations in a constructive manner for a successful 
conclusion and also continues to actively provide technical assistance for capacity building in this 
area, in cooperation with relevant international organizations such as the WCO in the belief that trade WT/TPR/G/243 Trade Policy Review 
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 facilitation plays an important role in promoting in ternational trade, thereby benefiting all trading 
parties, including the private sectors and governme nts of developed and developing countries. 
(8) DSU 
25. Japan continues to seek improvements to and clarifications of the DSU which will serve 
Members' shared interests by enhancing complian ce with trade rules and ensuring the integrity and 
credibility of the rule-based trade system.  Japan  attaches importance to the achievement of a 
successful outcome of the DSU negotiations.  It ha s actively contributed to the negotiations with a 
view to accomplishing such an outcome. 
(9) Development 
26.  Japan has been actively participating in th e discussions related to various development 
agenda such as Special and Deferential Treatment , Aid for Trade, PTA's transparent mechanism, 
recognizing that the DDA should contribute to ensuring the growth and the development of 
developing ones, especially the least-developed co untries. In addition, Japan has contributed to 
enhancing trade-related assistance through bilateral, regional and multila teral frameworks  in order to 
enable developing countries to be fully integrated  into the multilateral trad ing system. Japan believes 
that an early conclusion to the accession negotiatio ns with LDC applicants, in accordance with WTO 
rules, is important in order to facilitate their in tegration into the multilateral trading system.  Japan 
continues to play a leading role in supporting th e accession process of such future members of the 
WTO. 
IV. JAPAN'S MULTILATERAL ACTIVITIES 
(1) Strengthening Global Food Security 
27. Open trade flows play a positive role in strengthening global food security. In this regard, 
export restrictions and export taxes on agricu ltural products reduce the food supply in the 
international market thus exacerbating soaring of fo od prices, which particularly affects the lives of 
people in food-importing countries and threatens global food security. 
28. Japan has proposed restraint on th e export restrictions of food in many fora.  In the WTO 
negotiations, Japan proposed a scheme through wh ich food-importing countries would be able to 
express their views upon the imposition of export restric tions and to require clarification of rules for  
on what conditions these restrictions can be imposed . Moreover, removing food export restrictions has 
gained wide support among members of the Food and Agriculture Organization of the United Nations 
(FAO), which, at the World Summit on Food S ecurity hosted by the FAO in November 2009, 
declared that they would remove food export rest rictions and would consu lt and notify in advance 
before the imposition of any new restrictions. 
(2) OECD 
29. Over the last few years, Japan has been playi ng a major role, in terms of both intellectual and 
organisational contributions, in various OECD activities. 
30. Recognising the significance of cross-border investment flows as a tool for economic 
development in the global community, Japan propo sed, in the Ministerial Council in 2003, a new 
initiative on 'Investment for Development', which aimed at ambitious results ranging from policy 
recommendations on the improvement of investment  climates (Policy Framework for Investment:  Japan WT/TPR/G/243 
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 PFI) , including trade policy as one of the key components, to analyses and self assessment on 
synergies between FDI and ODA by conducting a peer  review among developing nations.  Japan has, 
based on this project, been engaged in the OE CD initiative to introduce and apply the PFI to 
Viet Nam, for improving trade policy among other thi ngs.  Japan has also been an active contributor 
to the OECD's regional investment initiative such  as the NEPAD-OECD Investment Initiative and the 
MENA-OECD Investment Programme as well as the ASEAN-OECD Investment Policy Conference.  
(3) Generalized System of Preferences (GSP) 
31. In order to improve market access for developi ng countries, Japan introduced a preferential 
tariff treatment under the GSP scheme and has re-e xamined it several times since 1 August 1971.  
Furthermore, under the scheme, Japan has granted sp ecial preferential treatment to LDCs since 1980, 
including additional products for which preferences are granted only to LDCs.  As a result of 
incomings and outgoings, currently 140 developing  countries and 14 territories, including all LDCs, 
enjoy the benefits of the GSP scheme.  This schem e has been vastly improved over the last several 
years, especially in 2001, 2003, and 2007. In th e comprehensive "Development Initiative for Trade" 
launched on 9 December 2005, Japan announced its commitment to providing duty-free and quota-
free (DFQF) market access for essentially all products originating from LDCs.  Japan is fully 
committed to implementing the above initiative thus complying with the decision adopted in the 
Hong Kong Ministerial Declaration. In reali zation of the above-mentioned commitment, on 
1 April 2007Japan started improved DFQF treatment  of LDCs by adding a variety of items to the 
treatment.  The number of agricultural and fisher y products originating fro m LDCs, which receive 
DFQF preferential treatment, increased from 497 to 1,523 and that of industrial products increased 
from 4,185 to 4,244.  Consequently, treatment covera ge which was previously approximately 86% has 
risen to approximately 98% as defined at the tariff line level. 
V. JAPAN'S REGIONAL ACTIVITIES 
32. As East Asia has been enjoying rapid ec onomic growth and increasing interdependence, 
momentum has become stronger than ever for c ountries in the region to advance cooperation among 
themselves in economic fields in addition to that achieved through multilateral fora.  Japan has been 
making efforts for the further development of a ll regional cooperative frameworks, including ASEAN 
Plus Three (Japan, China and the Republic of Korea), ASEAN-Japan, Japan-China-Korea tripartite 
cooperation and the newly established East Asia Summ it (EAS), along with larger organisations such 
as APEC and ASEM.  Japan has consistently calle d upon the states in the region to reaffirm their 
commitment to internationally recognized rules and norms, including market economy principles and 
the WTO Agreement, in the course of  advancing regional cooperation. 
(1) ASEAN+3 
33. The Heads of State/Governments of Japan,  China, and Korea and ASEAN adopted the 
Second Joint Statement on East Asia Cooperation an d the ASEAN Plus Three Cooperation Work Plan 
for 2007-2017 at the ASEAN+3 Summit Meeting in November 2007. 
34. In terms of the cooperation on trade and inv estment referred to in the Work Plan, the 
countries of ASEAN+3 agreed:  to promote the idea of region-wide FTAs considering the 
recommendations of various studies that have been completed or are currently being undertaken;  to 
jointly pursue the successful conclusion of the ne gotiations of the Doha Development Agenda;  to 
strengthen the role of the East Asia Busi ness Council (EABC);  to consider conducting 
comprehensive studies on the possible establishment of  an East Asia Investment Area;  to promote WT/TPR/G/243 Trade Policy Review 
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 cooperation between investment promotion agencies and facilitate the mutual investment promotion 
missions of the respective business communities;  a nd to facilitate the understanding of each other's 
policies, regulations and legislati ons pertaining to trade, competition policy, services, investment and 
industry as well as the sharing of experiences and best practices among ASEAN+3 countries. 
35. With respect to economic cooperation ASEAN+3 leaders issued a Joint Press Statement on 
the Global Economic Crisis in June 2009. At the ASEAN Summit held on 24 October 2009 in 
Thailand, the leaders welcomed the decision of ASEAN+3 Economic Ministers to task the Senior 
Officials to discuss and consider the recommendations  in the Phase I and II reports of the East Asia 
Free Trade Area (EAFTA) in the areas of Rules of Or igin, tariff nomenclature, customs-related issues 
and economic cooperation. At the ASEAN+3 su mmit held on 29 October 2010, the heads of 
ASEAN+3 countries welcomed the progress made by the four ASEAN Plus Working Groups that 
were tasked to look into the recommendations of  the studies on the East Asia Free Trade Area 
(EAFTA) and the Comprehensive Economic Partnershi p in East Asia (CEPEA) in Parallel and tasked 
relevant officials to recommend specific targets and timelines to complete consolidation work, 
relevant to their respective Terms of Reference. 
(2) Japan, China, Korea 
36. The heads of Japan, the People's Republic of China and the Republic of Korea reached a 
consensus to launch a joint research on economic c ooperation, especially on the effect of China's 
accession to the WTO, among the three countries at  the ASEAN+3 Summit held in Manila in 
November 1999.  Based on this decision, the institu tes representing the three countries, the National 
Institute for Research Advancement (NIRA) for Japan (from 2009, Japan External Trade Organization 
(JETRO)), the Development Research Centre of th e State Council (DRC) for China and the Korean 
Institute for International Economic Policy (KIEP)  for Korea undertook a Trilateral Joint Research 
Project from November 2000 to provide policy recommendations to the three governments. 
37. Since February 2003, the focus of this joint r esearch has shifted to the economic effects of a 
possible Japan-China-Korea trilateral FTA.  Governme nt officials from the three countries have also 
been participating in joint research workshops  as observers since March 2007.  The study was 
completed in 2009.  Further to the instructions of th e leaders of the three countries during the trilateral 
Summit in Beijing, China on 10 October 2009, and pursuant to the joint statement of the three countries during the trilateral Economic and Trade Ministers' Meeting in Hua Hin, Thailand on 
25 October 2009, the Joint Study Committee (JSC) fo r an FTA among the People's Republic of China, 
Japan and the Republic of Korea was launched and held its first meeting in Seoul, Korea on 6 and 
7 May 2010. The second meeting was held in Tokyo, Japan in September 2010.  
38. The leaders of Japan, China and Korea deci ded to launch negotiations for a trilateral 
investment agreement at the trilateral Summit in  January 2007.  The three countries have been 
conducting negotiations to concl ude a trilateral agreement for the promotion, facilitation and 
protection of investments in order to further lib eralise investment and strengthen protection for 
investors in the three countries.  The latest nego tiations were held in Gyeongju, Korea in June-
July 2010. 
39. The leaders of Japan, China and Korea deci ded to launch a mechanism for improving the 
business environment at the trilateral Summit in November 2004.  Under this mechanism, the 
three countries made public the Action Agenda for the improvement of the business environment in 
December 2008.  The latest consultations for the improvement of the business environment were held 
in Tokyo in April 2010, as the same time as the ne gotiations for the trilateral investment agreement. Japan WT/TPR/G/243 
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 (3) East Asia Summit 
40. Since its establishment in 2005, EAS has rapidl y developed as a strategic forum for regional 
cooperation and strategic discussion on regional and international issu es and an important component 
of the evolving regional architecture.  As an open,  transparent and inclusive forum, EAS has made 
progress in finance, energy, education, avian flu pr evention, disaster management and other key areas. 
It has reviewed its progress and achievements record ed over the past five years, re-emphasising the 
importance of EAS, and adopted and issued the "H a Noi Declaration" in October 2010. Japan will 
continue to make contributions to enhancing c oncrete regional cooperation through the framework of 
EAS so as to consolidate EAS as one of the important  regional fora towards building, in the long run, 
an "East Asian community". 
41. With regard to economic cooperation, the EAS leaders issued a Joint Press Statement on the 
Global Economic and Financial Cris is in June 2009.  At the 4t h EAS held on 25 October 2009 in 
Thailand, the EAS Leaders welcomed the decision of EAS Economic Ministers to task the Senior 
Economic Officials to discuss and consider the reco mmendations in the Phase 1 and 2 reports of the 
Comprehensive Economic Partnership in East Asia (CEPEA) in the areas of Rules of Origin, tariff 
nomenclature, customs-related issues and economic c ooperation. Japan proposed its concept paper on 
"Initial Steps towards Regional Integration in East  Asia: A Gradual Approach" to Economic Ministers 
in August, which is to be assessed and considered  in the ASEAN Plus Working Groups' activities. At 
the 5th East Asia Summit held on 30 October 2010,  the heads of ASEAN+6 countries welcomed the 
progress made by the four ASEAN Plus Working Groups that were tasked to look into the 
recommendations of the studies on the East Asia Free Trade Area(EAFTA) and the Comprehensive 
Economic Partnership in East Asia (CEPEA) in Para llel, and tasked relevant officials to recommend 
specific targets and timelines to complete consolida tion work, relevant to their respective Terms of 
Reference. The Leaders noted the decision of Economic Ministers to refer to the proposals made by Japan to the ASEAN Plus Workin g Groups.  The Economic Research Institute for ASEAN and East 
Asia (ERIA), established in 2008, contributes to re gional cooperation by doing useful research and 
providing practical recommendations.  ERIA submitte d a "Comprehensive Asia Development Plan" to 
the 17
th ASEAN Summit in October 2010.  The Informal EAS Finance Ministers Meeting took place 
in Tashkent on 2 May 2010. Two workshops on trad e finance were held in 2009 and 2010 with a view 
to enhancing cooperation in trade finance. 
(4) Asia-Pacific Economic Cooperation (APEC) 
42. Japan has been making efforts in APEC fo r its progress, together with the member 
economies, in achieving the APEC's common goal of  free and open trade and investment known as 
the "Bogor Goals" which industrialized economie s were committed to achieve no later than the 
year 2010. As chair of APEC 2010, Japan took th e lead in assessing progress toward achieving the 
Bogor Goals by the five APEC industrialized eco nomies (Australia; Canada; Japan; New Zealand; 
and the United States), as well as eight volunteer developing economies (Chile; Hong Kong, China; China;  Korea; Malaysia; Mexico; Peru; Singapo re and Chinese Taipei). The assessment concluded 
that while more work remains to be done, these thirteen economie s have made significant progress 
toward achieving the Bogor Goals. Japan, as the host economy of 2010, believes that the promotion of economic cooperation in the Asia-Pacific region th rough APEC vitalizes world trade and contributes 
to the development of the global economy. 
43. In order to support a prompt conclusion to th e Doha Development Agenda and to resist 
protectionism, Japan, as the host economy of APEC, made various efforts, including making a stand-
alone statement on supporting the multilateral tradi ng system and resisting protectionism at the WT/TPR/G/243 Trade Policy Review 
Page 14 
  
 Meeting of APEC Ministers Responsible for Trade in June 2010 and at the APEC Ministerial Meeting 
in November 2010.
5  The statement at the latter meeting includes strong messages from Ministers to 
resist protectionism such as "To refrain from raisi ng new barriers to investment or to trade in goods 
and services, imposing new export restrictions, or implementing WTO-inconsistent measures in all 
areas, including those that stimulate exports, until the end of 2013." 
44. As chair, Japan took the lead in exploring a range of possible pathways to achieve a Free 
Trade Area of the Asia-Pacific ( FTAAP). At the APEC Economic L eaders' Meeting in Yokohama in 
November 2010, APEC leaders agreed that an FT AAP 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, amon g others. APEC leaders also reached a consensus 
that an FTAAP should do more than achieve liberalization in its narrow sense; it should be 
comprehensive and high quality, and incorporate a nd address "next generation" trade and investment 
issues. 
45. To strengthen regional economic integration in  the Asia-Pacific region, APEC focuses on 
promoting a common basis in key sectors, includi ng in investment, services, trade facilitation, 
standards/technical barriers to trade, rules of  origin, intellectual property rights (IPR) and 
environmental goods and services (EGS). Japan is ta king the initiative in various efforts in the above-
mentioned sectors. 
46. APEC endorsed its Supply-Chain Connectivity Framework Action Plan, which prescribes 
concrete measures to address eight priority chokep oints, in order to improve the flow of goods, 
services, and business travellers within the region.  APEC has set an APEC-wide target of a 10% 
improvement by 2015 in supply-chain performance,  in terms of reducti on of time, cost, and 
uncertainty of moving goods and services through the As ia-Pacific region. Japan is taking the lead in 
implementing the action plan for a chokepoint, whic h addresses inefficiency in the clearance of goods 
at the border and lack of coordination among border agencies. 
47. APEC's second Trade Facilitation Action Plan (TFAP II) was formulated in 2007 after the 
successful completion of TFAP I in 2006, aiming at  the reduction in trade transaction costs by a 
further 5% by 2010. TFAP II was developed in four  areas namely: customs procedures, standards and 
conformance, business mobility and electronic comme rce. Japan took the lead in developing and 
implementing the action plans of customs procedures. 
(5) Asia-Europe Meeting (ASEM) 
48. Japan believes that the economic dialogue and co operation between Asia and Europe through 
ASEM will promote enhanced mutual understanding between the two regions on various economic 
issues, which could lead to increased trade and inv estment between Asia and Europe, as well as to the 
improved coordination of world ec onomic issues of mutual concern relating to the WTO, RTA/FTA, 
IPR, etc, thereby contributing to the development of the global economy.  
49. Japan attaches great importance to the ASEM  Trade Facilitation Action Plan (TFAP). Japan 
led the revision of TFAP on Customs Procedures as the Asian Facilitator and an updated plan for the 
period 2010-2012 was adopted at the Eighth ASEM Customs Directors General-Commissions Meeting in Heraklion, Greece in 2009.  It also has a strong interest in the fields of standards and 
                                                     
 
5 http://www.apec2010.go.jp/en/docs/. Japan WT/TPR/G/243 
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 conformity assessment, customs procedures, e-commerce and intellectual property rights 
enforcement, and has made various contribu tions at the TFAP meetings in these areas. 
VI. JAPAN'S BILATERAL ACTIVITIES 
(1) FTA/EPA S 
50. Maintaining and strengthening the multilatera l trading system under the WTO has been a 
main pillar of Japan's external economic policy.  At the same time, Japan has also promoted its 
regional and bilateral trade policies as a means of complementing the multilateral trading system, 
particularly through Economic Partnership Agreem ents including elements of Free Trade Agreements 
and institution-building. 
51. The data concerning the Economic Partnership Ag reements is summarized in the table below. 
Table 
Economic Partnership Agreements to which Japan is a party 
Country Date of the entry into  force Additional information 
Singapore 
(The Japan-Singapore Agreement 
for a New Age Economic 
Partnership) 30 November 2002  - From 2001 to 2008, the trade volume between the 
two countries increased by 46%. 
- From 2001 to 2009, investment by Japanese companies in 
Singapore also increased by 203%. 
- The third Supervisory Joint Co mmittee was held in January 
2007. 
- Joint Committees on Customs Procedures, Paperless 
Trading, Mutual Recognition, Mutual Recognition of Professional Qualifications, In tellectual Property, Financial 
Services Cooperation, ICT, Science and Technology, Trade and Investment Promotion,  SMEs, Broadcasting, and 
Tourism have been held to date. 
- The amended Agreement came into effect in 
September 2007. 
- The partial amendment of the Annex (IIA "Product-Specific 
Rules" and IIB "Minimum Data Requirement for Certificate of Origin") came into effect in January 2008. 
Mexico 
(The Agreement be tween Japan and 
the United Mexican States for the 
Strengthening of the Economic 
Partnership) 1 April 2005 - From 2004 to 2008, the trade volume between the two 
countries increased by 79%. 
- From 2004 to 2009, investment of Japanese companies in 
Mexico also increased by 11%. 
- The fifth Joint Committee was held in May 2010.  - Sub-Committees on Trade in Goods, SPS Measures, 
Technical Regulations, St andards and Conformity 
Assessment Procedures, Rules of Origin, Certificate of 
Origin and Customs Procedur es, Cross-Border Trade in 
Services, Entry and Temporary Stay, Government Procurement, Cooperation in the Field of Trade and 
Investment Promotion, Cooperation in the Field of 
Agriculture, Cooperation in the Field of Tourism, and also the Special Sub-Committee on Steel Products and the Committees for the Improvement of the Business Environment have been held to date. 
Table (cont'd) WT/TPR/G/243 Trade Policy Review 
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 Country Date of the entry into  force Additional information 
Malaysia 
(The Agreement be tween Japan and 
the Government of Malaysia for an 
Economic Partnership) 13 July 2006 - From 2005 to 2008, the trade volume between the two 
countries increased by 37%. 
- From 2005 to 2009, investment of Japanese companies in 
Malaysia also increased by 17%.   
- The second Joint Committee was held in December 2008. 
- Sub-Committees on Trade in Services, Improvement of 
Business Environment, Cooperation and Rules of Origin, Intellectual Property, Sanitary and Phytosanitary and 
Investment have been held to date. 
Chile 
(The Agreement be tween Japan and 
the Republic of Chile for a Strategic 
Economic Partnership) 3 September 2007 - From 2006 to 2008, the trade volume between the two 
countries increased by 14%. 
- The second Commission was held in April 2009. - Committees on Trade in Goods, Improvement on Business 
Environment and working groups on fish and fish products 
have been held to date. 
Thailand 
(The Agreement be tween Japan and 
the Kingdom of Thailand for an 
Economic Partnership) 1 November 2007  - From2006 to 2008, the trade volume between the two 
countries increased by 12%. 
- The second Joint Committee was held in November 2008. - Sub-Committees on Trade in Services, Rules of Origin, 
Small and Medium Enterpri ses, Paperless Trading, 
Enhancement of Business Environment, Customs Procedures, Tourism, Agriculture, Forestry and Fisheries, 
Trade in Goods, and Movement of Natural Persons have 
been held to date. 
Indonesia 
(The Agreement be tween Japan and 
the Republic of Indonesia for an 
Economic Partnership) 1 July 2008  - From 2007 to 2008, the trade volume between the two 
countries increased by 12%. 
- The first Joint Committee was held in November 2008. - Sub-Committees on Rules of Origin, Trade in Goods, Trade 
in Services, Movement of Natural Persons, Cooperation, 
and Investment have been held to date. 
Brunei 
(The Agreement be tween Japan and 
Brunei Darussalam for an 
Economic Partnership) 31 July 2008 - From 2007 to 2008, the trade volume between the two 
countries increased by 58%. 
- Sub-Committees on Trade in Services have been held to 
date. 
ASEAN 
(The Agreement on Comprehensive 
Economic Partnership among Japan 
and Member States of the Association of Southeast Asian Nations) 1 December 2008 
(Lao People's Democratic 
Republic, Myanmar, 
Singapore, Viet Nam) 
1 January 2009 (Brunei) 1 February 2009 (Malaysia) 
1 June 2009 (Thailand) 
1 December 2009 
(Cambodia) 
1 July 2010 (The Philippines) - From 2007 to 2008, the trade volume between ASEAN and 
Japan increased by 6%. 
- The fourth Joint Committee was held in October 2010. 
- Sub-Committees on Rules of Origin, Trade in Services, 
Investment and Economic Cooperation have been held to 
date. 
- The Agreement is a legally  independent agreement in 
relation to the bilateral EPAs between Japan and individual 
ASEAN Member States and thus the entry into force of the 
Agreement will neither nullify nor  integrate those bilateral 
EPAs. 
The Philippines 
(The Agreement be tween Japan and 
the Republic of the Philippines) 11 December 2008 - The second Joint Committee was held in December 2009. 
- Sub-Committees on Trade in Goods, Trade in Services, 
Investment, Movement of Natural Persons, Improvement of 
Business Environment, and Coope ration have been held to 
date. 
Switzerland 
(The Agreement on Free Trade and 
Economic Partnership between 
Japan and the Swiss Confederation) 1 September 2009 - From 2008 to 2009, inve stment by Japanese companies in 
Switzerland has increased by 34%. 
- The Sub-Committee on Promotion of Closer Economic 
Relationship has been held to date. 
Viet Nam  1 October 2009 - Sub-Committees on Movement of Natural Persons have 
been held to date. 
Table (cont'd) Japan WT/TPR/G/243 
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 Country Date of the entry into  force Additional information 
GCC  (Gulf Cooperation Council) Under negotiation (Formal 
negotiations commenced in 
September 2006, and the second round of negotiations 
was held in Riyadh in 
January 2007)  
The Republic of Korea  Under negotiation (The 
negotiations commenced in December 2003, and 
six rounds of negotiations 
have been held) - Although no negotiations have been held since the end of 
the sixth round held in November 2004, four rounds of the working-level consultation were held by December 2009 to 
consider and create a favourable environment for the resumption of negotiations. A director-general level consultation for the FTA wa s held in September 2010. 
India  Conclusion of negotiations 
(The negotiations 
commenced in January 2007, the fourteenth round of 
negotiations was held in 
Tokyo in September 2010. An Agreement-in-Principle 
was reached in September 
2010, and the conclusion of negotiations was announced by the two Prime Ministers in October 2010.)  
Australia  Under negotiation (The 
negotiations commenced in 
April 2007, and the eleventh round of 
negotiations was held in 
Canberra in April 2010.)  
Peru Conclusion of negotiations 
(The negotiations commenced in May 2009, 
and the seventh round of negotiations was held in 
Lima from October through 
November 2010. The conclusion of negotiations 
was announced by the Prime 
Minister of Japan and the President of Peru in November 2010.)  
(2) Japan's Bilateral Activities Outside of FTAs 
52. Besides negotiations on FTAs, Japan is i nvolved in economic initiatives with several 
countries.  Through such bilateral frameworks, Japan  aims to deepen the understanding of each other's 
trade and economic policies, to prepare a channel which will help to troubleshoot potential trade 
problems, to stimulate deregulation and liberalisati on in both directions, and to create the political 
momentum to liberalise trade, which will help to  complement and reinforce the multilateral trading 
system. 
(i) The United States 
53. Under the "Japan-U.S. Economic Partnership fo r Growth" (hereinafter referred to as the 
"Partnership"), established by then-Prime Minister  Koizumi and President Bush in June 2001, Japan 
and the United States have been engaging in comprehensive and cons tructive dialogue.  The 
Partnership consists of six fora:  Sub-cabinet  Economic Dialogue, the Private Sector/Government 
Commission, the Regulatory Reform and Compe tition Policy Initiative (hereinafter called the WT/TPR/G/243 Trade Policy Review 
Page 18 
  
 "Reform Initiative"), Financial Dial ogue, the Investment Initiative, and the Trade Forum.  Under these 
frameworks, a number of meetings have been held to  work on a wide variety of issues that contribute 
to promoting sustainable growth of not only the two countries but also the entire world economy. 
54. Japan and the US hold constructive dialogu es on bilateral and multilateral trade and 
investment. The two countries held dialogues unde r the Regulatory Reform and Competition Policy 
Initiative, which covered cross-sectoral a nd sectoral (such as information technology, 
telecommunications, medical devices/pharmaceuticals) issues to improve the business environment of 
both sides, both in 2008 and 2009. 
55. In addressing the threat of transnational te rrorism, the international community faces the 
challenge of securing the global supply chain with out hindering the efficient movement of goods. 
Japan and the United States have been working togeth er to increase secure and efficient trade between 
the two countries, within the Asia-Pacific region, an d throughout the world. One of the approaches is 
the Megaports Initiative.  Japan and the United States share a common concern for the need to 
increase efforts to detect, deter and interdict illic it trafficking in nuclear and other radioactive 
material, including terrorist attempts to disrupt global trade and to abuse commercial shipping to 
further terrorist schemes.  To address this concern,  Japan started a pilot project under the Megaports 
Initiative in 2009, with the United States' support to  monitor cargo containers for nuclear and other 
radioactive material, by installing radioac tive materials detection equipment in 2008. 
(ii) European Union 
56. With regard to the economic relati ons between Japan and the EU, the 18
th and 19th Japan-EU 
Summit Meetings were held respectively on 4 May 2009 and on 28 April 2010.  At the 18th Summit, 
leaders agreed to put focus on "a few specific non-ta riff issues," which are expected to bring concrete 
outcomes in a mutually beneficial way over a s hort period, with a view to strengthening the 
integration of their economies.  At the 19th Summit, leaders decided to establish a joint High-Level 
Group, which would conduct a joint examination of  the options for comprehensive strengthening and 
integration of the Japan-EU economic relationship.  On various occasions including the annual Japan-
EU Regulatory Reform Dialogues, with a view to improving the business e nvironment and promoting 
bilateral trade and investment, both sides conducte d consultations on wide-ra nging economic issues.  
The Japan-EU High-Level Consultations were held  on 25 February 2009 and 26 February 2010 in 
Brussels to exchange views on the progress of c ooperation and dialogue across a wide range of 
economic areas.  
(iii) China 
57. The economic interdependence between Japan and China is growing deeper.  In 2009, China 
was Japan's largest trading partner.  The mutu al trade amount in 2009 reached US$232.2 billion.  
According to China's statistical data, Japan was China's third largest trading partner in 2009.  
Regarding foreign direct investment in China, Jap an invested US$4.1billion in 2009.  According to 
China's data, 25,796 Japanese enterprises conduct busin ess in China as of the end of 2008.  Japan has 
bilateral economic agreements with China in the areas of trade, air transportation, maritime 
transportation, trademark protection, tax, investme nt, fisheries and mutual customs cooperation.   
58. Japan has expressed a view that China's economi c development should be  an opportunity for 
the world economy.  In April 2002, Japan and Chin a decided to establish the Japan-China Economic 
Partnership Consultation for the purpose of identifyi ng possible areas of economic disagreement at an 
early stage and preventing disputes between the two countries, as well as further strengthening Japan WT/TPR/G/243 
 Page 19 
 
 
 mutually complementary bilateral economic relations. Such consulta tions have been continuously 
held each year.  In these consultations, both sid es exchanged views regarding bilateral economic 
issues, such as on intellectual property rights (i ncluding damages resulting from counterfeit goods), 
trade and investment issues, agriculture and quarantine, and Japan-China cooperation in the 
international economy. 
59. In 2007, for strategic economic dialogue at the mi nisterial level, Japan and China decided to 
establish the Japan-China High-Level Economic Dialogue .  The first meeting was held in Beijing in 
December 2007, the second meeting was held in T okyo in June 2009 and the third meeting was held 
in Beijing in August 2010.  Both leaders expressed views to strengthen exchanges and cooperation in 
the fields of trade, investment, and protection of intellectual property rights, among other areas. 
60. Japan will continue to make efforts to deve lop bilateral economic relations with China 
founded on a "mutually beneficial relations hip based on common strategic interests". 
(iv) Africa 
61. Japan considers the acceleration of economic grow th for the prosperity and stability of Africa 
quite important.  Expansion of the volume of trade and investment will largely contribute to achieving 
this goal.  With this in mind: 
62. Japan announced at TICAD IV that it end eavours to assist in doubling Japanese private 
investment in Africa by 2012.  
63. For example, Japan dispatched a Public and Private sector Joint Mission to three Southern 
African countries from August to September 2010 with a view to promoting trade and investment in Africa.  Japan further promoted the "One V illage, One Product (OVOP)" movement all over the 
African continent with capacity building designed for the purpose of expanding the volume of trade 
between Japan and Africa.    
64. Japan considers that stimulating Japanese invest ment in Africa will be a key factor for 
African development.  Japan also set up the Afri can Investment Facility in April 2009 for financial 
assistance to Japanese private companies.  In addition to that, trade and investment insurance is to be 
extended more flexibly and partnership between pr ivate companies' projects and ODA is encouraged. 
In total, up to US$2.5 billion will be provided as financial support over five years from TICAD IV. 
65. In addition, Japan finds it important to promot e intraregional trade in Africa. In May 2010, 
Japan announced that it intends to make even greater  use of ODA loans than in  the past and execute 
infrastructure projects worth up to two billion US dollars over the next two years. 
66. Private sector development is also important to make African sustainable development 
possible.  In this context, Japan provided US$300 million to the AfDB (African Development Bank) 
for projects to enhance the capacity of SMEs in Africa. 
(v) MERCOSUR 
67. In order to strengthen the Japan-MERCOSUR ec onomic relationship and also to ensure its 
future development, the sixth Japan-MERCOSUR Se nior Official Meeting was held in Japan in 
June 2004 and the seventh in Argentina in April 2006.  During these meetings, various views were 
exchanged on trade and investment promotion, a nd economic and technical cooperation. In June 2009 
the first meeting of Working Group of Senior  Official Meeting was held in Paraguay. WT/TPR/G/243 Trade Policy Review 
Page 20 
  
 VII. BASIC POLICY ON COMPREHENSIVE ECONOMIC PARTNERSHIPS 
68. Regarding the Japan's FTA/EPAs, the Government adopted a "Basic Policy on 
Comprehensive Economic Partnerships" in N ovember 2010. The details are as follows. 
(1) Promotion of High Level Economic Partnerships 
69. Japan will promote high-level economic partners hips with major trading powers that will 
withstand comparison with the trend of other such relationships. At the same time, it will first press 
ahead with fundamental domestic reforms in order to  strengthen the competitiveness it will need for 
economic partnerships  of this kind. 
70. Japan will play a leading role in actively promoting bilateral Economic Partnership 
Agreements (EPAs) within the Asia-Pacific regi on, broader regional econom ic partnerships, and 
sectoral approaches in the APEC, and will take in itiatives to formulate trade and investment rules 
designed for the twenty-first centu ry in the Asia-Pacific region. 
(2) Concrete Action to Strengthen Comp rehensive Economic Partnerships 
71. Japan, while taking into consideration the sensitiv ity of trade in certain products, will subject 
all goods to negotiations for trade liberalization and, through such negotiations, pursue high-level 
economic partnerships.  
72. Japan will increase its efforts to conclude th e ongoing EPA negotiations with Australia, and to 
resume the currently suspended Japan-Korea EPA ne gotiations. At the same time, Japan will work 
towards the realization of regional economic partne rships such as the China- Japan-Korea FTA, East 
Asian Free Trade Agreement (EAFTA) and Compre hensive Economic Partnership in East Asia 
(CEPEA) which are being studied at present, and commence EPA negotiations with Mongolia, with 
which it is now undertaking a joint study, as soon as possible.  
73. In addition, in parallel with improving domes tic environment, Japan will actively promote 
bilateral EPAs with major countries/regions in the Asia-Pacific region with which Japan has not yet 
started negotiations. Concerning the Trans-Pacific Pa rtnership (TPP) Agreement, the only path to the 
FTAAP where negotiations have actually begun, it  is necessary to act through gathering further 
information, and Japan, while moving expediti ously to improve domes tic environment, will 
commence consultations with the TPP member countries. 
74. Japan is currently conducting a joint examinati on with the European Union (EU), its largest 
trading partner outside the Asia-Pacific region, and it will expedite arrangements to enter into 
negotiations with the EU at an early date. For this  purpose, the Government will accelerate efforts to 
reform its domestic non-tariff measures. In add ition, it will make efforts to facilitate ongoing 
negotiations with the Gulf  Cooperation Council (GCC).  
75. Japan will work actively to strengthen economic  partnerships, includi ng conclusion of EPAs, 
with other Asian countries, newly emerging po wers, and resource-rich countries, based on a 
comprehensive assessment from economic as well as diplomatic and strategic viewpoint. 
VIII.  AID FOR TRADE 
76. In order for developing countries including LDCs to reap further benefits of the multilateral 
trading system, trade liberalisation alone is not sufficient.  Enhancing capacities on the supply side Japan WT/TPR/G/243 
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 and encouraging assistance for this purpose is i ndispensable.  Japan belie ves that Aid for Trade 
initiatives contribute to enhancing the trade capacities of developing countries, and Japan continues to 
provide various measures of AfT to this end, as well as promoting the "One Village, One Product" 
movement. 
(1) Japan's Development Initiatives for Trade 
77. Japan announced the "Development Initiative fo r Trade", prior to the WTO Ministerial 
Conference in Hong Kong in December 2005. This Initiative contained: (a) implementation of Duty-
Free and Quota Free Market Access for essentially a ll products originating from LDCs, (b) provision 
of US$10 billion of financial assistance including tr ade, production and distribution infrastructure for 
three years (2006-2008), and (c) as parts of (b), th e exchange of a total of ten thousand trainees and 
experts in trade-related fields ove r the same period, targets of which were fully achieved. During the 
designated period (2006-2008) of the Initiative, th e total sum of financial assistance amounted to 
US$17.66 billion, which reached 177% of the target . The total sum of technical assistance consisting 
of dispatching experts and receiving trainees for the period (2006-2008) amounted to close to fifty 
thousand persons, which achieved nearly five times as much as the targets. 
78. Upon the successful results of the above-menti oned first initiative, Japan announced a new 
AfT strategy, 'Development Initiative for Trade 2009' in  July 2009. Its main pillar is US$12 billion of 
financial assistance for trade-related projects includi ng technical assistance for 40 thousand persons in 
total for 3 years from 2009 to 2011. The 2009 initiativ e also consists of reviewing the Generalized 
System of Preference (GSP) as a whole, im proving AfT implementation and achieving the 
commitments made at the G20 London Summit in April 2009 in the area of trade finance. 
79. Japan is executing not only quantitative co mmitment but also qualitative commitment under 
the Initiative 2009 which aims for improvement in effi ciency of AfT. For instance, Japan has been 
fully involved in the AfT Asia-Pacific RTG (Reg ional Technical Group) since its inception in 
March 2009. The purpose of the RTG is to discuss th e successful and rich experience of aid activities 
in the region, to extract some elements of effec tive aid and to share them with other regions. Japan 
hosted the 3rd RTG meeting in Tokyo in May 2010 in order to further promote its activities and is to 
share the information by submitting a RTG report to  the WTO and other relevant international 
organizations.6 
(2) Assistance to the One Village, One Product Movement 
80. The One Village, One Product (OVOP) is one of the typical approaches under this initiative. 
OVOP is a movement which supports local econom ies through the development, improvement and 
promotion of local products (foods, beverages, tex tiles & garments, etc.) with the participation of 
local people.  This movement was first initiated in a southern prefecture in Japan in the late 1970s and 
later spread to the other prefectures.  It has been introduced and has contributed to the development of 
local economies in other Asian countries.  
                                                      
6 Japan also has been contributing to the Standards and Trade Development Facility (STDF) since 
2009, with donations of approximately US$278,000 and 252 ,000, respectively. The STDF is a joint initiative of 
WTO, World Bank, OIE and FAO in order to help developing countries improve their expertise and their 
capacity to analyze and implement in ternational standards on sanitary and phytosanitary (SPS) measures, and 
works closely with the Enhanced In tegrated Framework for Least-Develo ped Countries and Aid for Trade. 
Japan believes that enhancing food safety and controlling pl ant and animal diseases in developing countries will 
benefit developing countries and eventually the whole world, therefore, cooperation among donors and relevant 
international organizations is highly important. WT/TPR/G/243 Trade Policy Review 
Page 22 
  
 81. Japan supports this movement, especially the exports of developing countries and least 
developed countries through technical cooperation such  as the dispatch of experts, educational and 
training programs to create competitive products, an d support through international organizations.  In 
addition, Japan has held exhibitions and trade fair s inviting buyers and has also opened shops (OVOP 
markets) in some Japan's international airports in order to introduce products and encourage shopping 
since 2006.  
IX. JAPAN'S DOMESTIC POLICIES 
(1) Regulatory Reform 
82. The Council for the Promotion of Regulatory Reform (CPRR) was established in 
January 2007 as an advisory body to the Prime Minister for the purpose of accelerating regulatory 
reforms.  The CPRR investigated and deliberated on reform issues and reported the outcomes to the 
Prime Minister while keeping close ties with the Headquarters for the Promotion of Regulatory 
Reform. The Cabinet authorized and revised "The  Three-Year Program for Promoting Regulatory 
Reform" in line with the reports delivered by the CPRR and each ministry took measures in accordance with the program. The CPRR  was terminated in March 2010. 
83. In March 2010, the Subcommittee on Regulator y and Institutional Reform was established 
under the Government Revitalization Unit. It has three working groups which are the (1) green 
innovation working group (environment and energy), (2) life innovation working group (medical and 
elderly care services), and (3) agriculture working group. The subcommittee and three working groups 
investigate and deliberate existing regulations an d systems mainly in those areas. Based on the 
proposals made by the subcommittee and working groups, the subcommittee delivered "the First 
report by the Subcommittee on Regulatory and Institutional Reform" to the Government 
Revitalization Unit in June 2010. The report dealt w ith reform issues such as  re-examination of the 
range of mixing medical treatments that are covered by health insurance with treatments that are not, and re-examination of relevant regul ations to promote recycling rare metals. The Cabinet authorized 
"policy on regulatory and institutional reform" accordingly. 
84. The next series of the subcommittee and work ing groups will be held from October 2010 to 
March 2011. The agriculture, forestry and regi onal development working group replaced the 
agriculture working group. The subcommittee and its working groups  will review regulations and 
systems relevant to the "New Growth Strategy " (Cabinet decision in June 2010) and others. 
85. In September 2010, as a part of the "The Thr ee-Step Economic Measures for the Realization 
of the New Growth Strategy", the "Regulatory Refo rm 100 to Revitalize Japan" program was decided. 
Under the program, the Government will strenuously  implement regulatory and institutional reforms 
that are highly effective in creating demand and jobs, in  five 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 promo tion of tourism; and econom ic strategies to open 
Japan to overseas.  
(2) Intellectual Property Rights 
86. The Intellectual Property Strategy Headquart ers, which was established in March 2003 under 
the Basic Law on Intellectual Property,  achieved the following major results: Japan WT/TPR/G/243 
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 - Establishment of the Intellectual Property High Court (April 2005) 
- Acceleration of patent examining/ sharp increases in the number of examiners (an 
increase of around 500 in the five years from FY2004 to FY2008) 
- Inauguration of many university-based in tellectual property headquarters and rapid 
increases in the number of patent applications 
- Initiative pressing for conclusion of Anti-Counterfeiting Trade Agreement (ACTA) 
- Amendment of Copyright Law (2009). 
(3) Financial Reform 
Insurance sector 
87. In February 2008, the Financia l Services Agency of Japan (JFSA) released a draft version of 
"Key Aspects for the Revision of the Solvency Margin Ratio (SM Ratio)". The draft included the 
enhancement of risk factors, and comments from the public were called for. Taking into consideration 
the bankruptcy of Yamato Life in October 2008 and lessons learned from the current financial crisis, 
the JFSA reviewed the draft. In April 2010, the J FSA implemented amendments of related rules that 
included (1) tightening the definition of the solvency  margin, which is the numerator of the SM Ratio 
and (2) tightening and elaborating risk measuremen ts, which form the denominator of the SM Ratio. 
The new SM ratio will be used as an indicator for prompt corrective action from March 31, 2012. 
88. In view of lessons learned from the current fi nancial crisis and international discussion on 
financial regulatory reforms, the JFSA has introdu ced prudential standards for solvency purposes on a 
fully consolidated basis (a) to capture groups ' financial positions as a whole to recognize the 
possibility of contagion risk resulting from deterior ation in the management of other entities within 
the same group, and (b) to take actions, where necessary, including prompt corrective actions based 
on its positions, which lead to the protection of policyholders. The new prudent ial standard will take 
effect within two years after the amendm ent of relevant laws and regulations. 
Banking and securities sectors 
89. Considering the serious economic and employ ment situation of our country, the Act 
Concerning Temporary Measures to Facilitate Fina ncing for Small and Medium-Sized Enterprises 
(SMEs), etc. was enacted, and it entered into force in December 2009. The Act is a temporary 
legislation which expires in March 2011. The pu rpose of the Act is to facilitate the smooth 
intermediary function of financial institutions for SMEs or residential mortgage borrowers. 
Furthermore, the relevant cabinet ordinance, cabin et office order, inspection manual and supervisory 
guidelines were revised in line with  the enforcement of the Act. 
90. The Act stipulates (1) the responsibility of financ ial institutions (when requested by SMEs or 
residential mortgage borrowers to ease the debt burden, financial institutions strive as much as 
possible to revise the loan terms, etc.), (2) the obligations of financial institutions (financial 
institutions are obliged to develop internal sy stems for fulfilling the above responsibilities and to 
disclose information on the implementation of su ch responsibilities and on the development of 
internal systems, etc.), (3) administrative measu res (financial institutions are obliged to report the 
information on their implementation to the supervis ing agencies; the JFSA will summarise the reports 
and publish summaries on a regular basis), and (4 ) further support measures (the credit guarantee 
system shall be further enhanced, etc.). WT/TPR/G/243 Trade Policy Review 
Page 24 
  
 91. In view of international discussions based on the recent global financial crisis and the 
situation in Japan's financial and capital market , the JFSA compiled a document titled "Development 
of the Institutional Frameworks Pertaining to Financ ial and Capital Markets" in January 2010. Based 
on this document, the bill for amendment of the Fi nancial Instruments and Exchange Act, etc. was 
submitted to the Diet and enacted in May 2 010. The main points of the amendment include 
(1) mandatory use of central counterparties for clear ing over-the-counter derivatives transactions, etc., 
and (2) strengthening group-wide regulation and supervision of financia l instruments business 
operators, etc. The aims of the amendment are to improve the stability and transparency of Japan's 
financial system and to ensure the protection of investors. 
(4) Agricultural Reform 
92. In March 2010, the new Basic Plan on Food, Agri culture and Rural Areas was decided by the 
Cabinet.  The Plan envisages a society where the agriculture and rural ar eas 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  
i) introduction of a new income support direct pa yment to farmers,  ii) conversion to a production 
system more responsive to the consumers' demand s for quality and safety, and  iii) promotion of 
farmers' initiatives to expand their businesses in to food manufacturing and retailing sectors making 
use of their products which would bring more income opportunities to rural areas.  
93. Concerning the direct payment scheme above, a p ilot program is being carried out in FY2010, 
under which producers who participate in a production ad justment scheme in paddy fields are eligible 
to receive payments. Based on the evaluation on th is tentative measure, the new direct payment 
scheme will be introduced in FY2011. 
(5) Competition Policy 
94. The bill to amend the Antimonopoly Act (AMA) was submitted to the 171st ordinary session 
of the Diet on February 27, 2009. The bill passed the House of Representatives on April 27, 2009, and 
the House of Councillors on June 3, 2009, and w as approved on the same day. The amendment act 
was promulgated on June 10, 2009, and came into  force on January 1, 2010. The amendment act 
includes expansion of types of conduct subject to su rcharge payment orders, revision of the surcharge 
rate for unreasonable restraint of trade, revision of the Leniency Program, and revision of the 
notification and reporting system stipulated in Chapter 4 of the AMA. 
95. Since the amended AMA expanded the scope of conduct subject to surcharges to include 
exclusionary private monopolization, the Japan Fair Trade Commission (JFTC), to ensure the 
transparency of its enforcement and enhance th e predictability for businesses by clarifying its 
interpretation of the requirements that need to be satisfied to constitute vi olating conduct, published 
"The Guidelines for Exclusionary Private Monopolization under the Antimonopoly Act" on 
October 28, 2009. Furthermore, the JFTC revised and published "The Guidelines Concerning Unjust 
Low Price Sales under the Antimonopoly Act" on December 18, 2009. 
96. The bill to amend the AMA, which includes a bolition of the JFTC's hearing procedure for 
administrative appeal and development of provisions for procedures of hearings implemented prior to 
issuing cease and desist orders, was submitted to  the 174th ordinary session of the Diet on 
March 12, 2010. Japan WT/TPR/G/243 
 Page 25 
 
 
 97. The JFTC has been taking rigorous legal actions  against violations of the AMA. The number 
of legal cases against such violations amounted to  21 in 2008 and 24 in 2009.  Details of these cases 
can be found below.  
 2008 2009 
Private monopolization 0 1 
Bid-rigging 9 9 
Cartels (excluding bid-rigging) 8 9 
Unfair trade practices 4 5 
Others 0 0 
Total cases 21 24 
98. The amount of surcharge payment orders issued by the JFTC was estimated at a total of 
approximately ¥6,010.58 million in 2008 and ¥54,321.81 million in 2009.   
99. The JFTC has adopted a proactive policy on fili ng criminal complaints to seek penalties for 
violations of the AMA.  In 2008, the JFTC filed complaints in one case. 
100. In order to reinforce the JFTC's role as a gua rdian of the market, the JFTC increased the 
number of personnel in the JFTC to  791 in 2010, with most of them assigned to the investigation 
section. 
 
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