WORLD TRADE  
ORGANIZATION  G/MA/W/77 
6 September 2006 
 
 (06-4305) 
Committee on Market Access Original:   English 
  
 
CHINA'S TRANSITIONAL REVIEW MECHANISM  
 
Communication from Japan
 
  
 The following communication, dated 6 September 2006, is being circulated at the request of 
the Delegation of Japan.  
_______________ 
 
 
Questions and Comments of Japan on the Implementation by China 
 
of its Commitments on Market Access  
  Japan welcomes that, in the fifth year afte r accession, the implementation by China of its 
commitments on market access has made progress and entered into a cruising phase. In a transitional 
period of evolution of regulation, the importance of  regulatory transparency, predictability, stability 
and consistency is paramount. The value of market access commitments and the efforts to implement 
them could be easily clouded by the insufficiency of such elements either in the regulations themselves or in their application. The Transitional Review Mechanism could be useful to make those 
transitional efforts more efficient and productiv e, and Japan is delighted to make a positive 
contribution to this process. 
  In this context, China is fu rther invited to take the necessar y steps to ensure a regular and 
effective application of public comments procedures,  an early publication of laws and regulations, a 
predictability of regulatory changes, and a clear demarcation of departmental responsibilities among 
the different departments involved, as well as be tween central and provincial authorities, etc. 
 
 In accordance with Paragraph 18 of the Protoc ol on the Accession of the People’s Republic of 
China, which states that “China shall provide releva nt information to each subsidiary body in advance 
of the review”, and in the spirit of cooperati on to render the TRM process more efficient and 
effective, Japan requests China to  provide in advance of the meeting of the Committee on Market 
Access, the responses and relevant informati on to the following questions and comments. 
 
1. Customs duty regarding “Complete Automobile Feature” 
(a) The "Customs General Administration Joint Bu lletin No. 38" dated 5 July 2006, announced 
that it had decided to postpone implementing the customs rule that would allow authorities to 
impose higher tariffs on imported auto parts if cars made in China contain a certain 
percentage or certain combination of these imported parts. 
(b) In this context, Japan would like China to  clarify whether the implementation of all 
provisions/requirements in “the Rules for the Administration of the Importation of Automotive Parts and Components Constituting Co mplete Vehicles (Decree No. 125, issued 
28 February 2005)” have been fully postponed  until 2008. In particular, Japan is very G/MA/W/77 
Page 2  
 
  interested if China clarifies that it will not impose the higher tariff on imported auto parts until 
2008. 
(c) Even if China has fully postponed its impl ementation, Japan is concerned that undue 
circumstances still exist that force auto manufactu rers to raise the local content ratio before 
2008. Therefore, Japan strongly urges China to fu lly repeal “decree 125” and all other related 
regulations. 
2. Tariff rates on photographic products 
(a) At the time of its accession to the WTO, China committed to the schedules of tariff 
concessions of photographic products (HS37) based on ad valorem  duties. However, for 
37 items of photographic products, China h as imposed specific duties (levied on a 
yuan/square metre basis) far exceeding the committed concession rates.  
 Japan and China have had several bilateral meetings to exchange views on the duties. 
Although China has maintained its use of sp ecific duties in 2006, th e tariff of several 
photographic items had been lowered. But some  items, more specifically, the half-finished 
products of photographic items, are subjected to a specific duty of 3.7 yuan/m
2 which is 
equivalent to more than twice th e assumed committed rate (1.7 yuan/m2), using the 
calculation method which China has explained. Th erefore, Japan raised the following requests 
in the meeting of Japan-China Economic Partnership in July 2006. 
  First, China should adopt ad valorem  duties as China has committed. If it is difficult to adopt 
them immediately, China should adopt the system of “ceiling” or “cap” on the level of duty 
applied, whereby the duties actually applied would not exceed the ad valorem  duties in the 
Schedule, in order to ensure compliance with GATT Article II.  Second, China should submit 
to the WTO Secretariat its complete trade data for the IDB. 
  To the first request, China insi sted that the adoption of specific duties is consistent with its 
commitment to the WTO since it is based on the feature of the goods. It also explained that it 
is difficult to adopt the system of “ceiling” or “cap” because of its potential repercussions on 
the statistics and the administration cost of the Customs. To the second request, China insisted 
that it had already submitted its trade data to the WTO Secretariat. 
  Japan thinks that China’s explanation is not satisfactory. 
 
(b) In this context, Japan would like to urge China 
- to adopt ad valorem  duties. Because other countries, like the EU, have actually 
applied it on photographic products, Japan requests China to adopt ad valorem  duties. 
- if it is difficult to adopt it immediately, to adopt the system of “ceiling” or “cap”., 
which China has already adopted for other items. 
- to provide import data of photographic products in 2004. 
3. Import prohibition of used goods 
(a) China implements an across-the-board prohib ition on imports of used goods including 
second-hand clothing on the grounds of the necessity “to protect human, animal or plant life 
or health.” However, Japan is greatly co ncerned about the consistency of the import 
prohibition with the WTO rules, especially GATT Article XI.  G/MA/W/77 
 Page 3 
 
 
  (b) Second-hand clothing exported from Japan has not caused any hygiene-related problems with 
any other importing countries because recycling co mpanies check and sort it. The appropriate 
trade of such second-hand clothing contributes toward the sustainable use of resources and, 
the protection of the global environment. Th erefore, Japan considers that the import 
prohibition measure imposed by China is not justified under the WTO rules, including GATT 
Article XX. 
(c) In this context, Japan would like to urge Chin a to abolish such an import prohibition measure. 
Japan would like to know China’s view, if an y, on what measures exporters should take 
concretely before expor ting second-hand clothing. 
4. Export Restrictions 
(a)  Japan understands that China implements expor t licensing on exports of cokes. Because not 
enough licenses were issued two years ago, the export price of Chinese cokes soared and has 
left the market disrupted. Japan is greatly concerned about the issuance plan. Since this 
measure is not made effective in conjuncti on with restrictions on domestic production or 
consumption, Japan considers that it is not c onsistent with GATT Article XI and cannot be 
justified under GATT Article XX (g) regardi ng the conservation of exhaustible natural 
resources. 
(b) China explained the measures to restrict dom estic production and consumption of cokes. 
However, it is unclear whether those measures  have effectively reduced the production and 
consumption of coal, which is an ingredient of  cokes. Japan requests China to show us the 
quantitative effect of those measures on the domest ic production and consumption of coal.  If 
there are any plans to reform the export licensi ng measure, we would like to know the details. 
__________