WORLD TRADE  
ORGANIZATION  WT/TPR/M/211 
6 May 2009 
 (09-2217) 
Trade Policy Review Body 
18 and 20 February 2009  
 
 
 
TRADE POLICY REVIEW 
 
JAPAN 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mr. Yonov Frederick Agah (Nigeria) 
 
   Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3 
II. OPENING STATEMENT BY THE REPRESENTATIVE OF JAPAN 4 III. STATEMENT BY THE DISCUSSANT 6 IV. STATEMENTS BY MEMBERS 9 
V. REPLIES BY THE REPRESENTATIVE OF JAPAN AND ADDITIONAL 
COMMENTS 16 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 22 
 
 
 
Note:   Advance written questions by WTO Me mbers and the replies provided by Japan are 
reproduced in document WT/TPR/M/211/Ad d.1 and will be available online at 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. 
   WT/TPR/M/211 
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  I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The ninth Trade Policy Review of Japan wa s held on 18 and 20 February 2009.  The 
Chairperson (H.E. Mr. Yonov Frederick Agah) welcomed the delegation of Japan, led by 
H.E. Mr. Jun Yokota (Ambassador, Interna tional Trade and Economic Relations) and 
Ambassador Kitajima, and the discussant  H.E. Mr. John Gero (Canada).  As usual, the discussant 
would speak in his personal capacity and not as a representative of his country.   
2. The Chairperson recalled the purpose of the Trad e Policy Reviews and the main elements of 
the procedures for the meeting.  The report by Japan was contained in document WT/TPR/G/211 and 
that of the WTO Secretariat in WT/TPR/S/211.  The Member under review should provide written 
answers, by the beginning of the review meeting, to  questions submitted at least two weeks before the 
meeting.  Questions posed subsequently should be answ ered, to the extent possible, before the start of 
the second session of the meeting.  Questions left  unanswered at the end of the second session should 
be answered in writing no later than one month after the meeting.  Questions by the following 
delegations had been submitted in writing at least tw o weeks in advance of the meeting and had been 
transmitted to the delegation of Japan:  Brazil;  Chin a;  Mexico;  Switzerland;  Republic of Korea;  
India;  Chinese Taipei;  Colombia;  the Europe an Communities;  Peru;  Hong Kong, China;  
Singapore;  Canada;  Australia;  Norway;  Argentina;  Costa Rica;  Chile;  Pakistan;  and the United States.  Copies of these questions and of the answers provided by the delegation of Japan were available in the meeting room.  New Zealand;  Mala ysia;  Ecuador;  Turkey;  Thailand;  Indonesia;  
and Guatemala had submitted written questions afte r the two-week deadline.  These questions had 
also been transmitted to the delegation of Japan;  copies of these questions and of the answers 
provided by the delegation of Japan were availabl e in the meeting room.  Copies of all advance 
questions, as well as the responses received from the delegation of Japan, are reproduced in WT/TPR/M/211/Add.1. 
3. The Chairperson noted that despite macroeconom ic policy measures and continued pursuit of 
structural reforms, Japan's growth had slowed cons iderably, a situation that had been exacerbated by 
the onset of the global financial crisis.  Under such  circumstances, it had become even more important 
for WTO Members, including Japan, to keep their markets open, not only in their own national 
interest, but also to contribute to the recove ry of the global economy.  The Chairperson was 
encouraged, however, that the Government recognized  the need for further re forms and believed that 
the TPRB would be interested in knowing how Japan  intended to cope with the current economic 
situation.   
4. While Japan remained committed to the multilateral trading system and had strongly 
supported the Doha Development Agenda, it had also  intensified its pursuit of bilateral/regional 
free-trade agreements.  The Report by Japan explai ned that these agreements were intended to serve 
as building blocks to higher trade liberalization at the multilateral level;  the Chairperson believed that 
Members would be interested in learning more  about how Japan hoped to accomplish this goal. WT/TPR/M/211 
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  II. OPENING STATEMENT BY THE REPRESENTATIVE OF JAPAN 
5. The representative of Japan
, H.E. Mr. Jun Yokota, stated that that the Japanese economy had 
not been spared from the acute downturn in the globa l economy.  In spite of the difficulties, Japan had 
maintained its traditional trade policy of openness and ha d continued to strictly adhere to WTO rules.  
Japan would make whatever contribution possible to  the quick recovery of the world economy.  The 
economic crisis the world was facing highlighted the need to restore the function of, and improve, the 
financial markets.  Japan's experience had taught it a need during the time of crisis for a prompt and 
accurate recognition of losses, swift removal of t oxic assets from the balance sheet, and bold injection 
of public funds.  Many Governments had already don e, or were on the way to doing this.  Japan had 
called for the strengthening of the function of the International Monetary Fu nd, and had offered to 
lend up to US$100 billion to the Fund.  Japan w as advocating increased international collaboration 
concerning the supervision and regul ation of financial institutions. 
6. It was vital that countries avoided succumbing to  the temptation of protectionism in the area 
of trade.  He confirmed that Japan had refrained fro m raising "new barriers to investment or to trade 
in goods and services" in keeping with the co mmitments made in November at the Summit on 
Financial Markets and the World Economy held in Washington D.C. 
7. Japan had announced measures in support of trade finance, including a commitment to 
establish the "Asian Pacific Trade Insurance Network", which would promote reinsurance 
cooperation, information sharing, and human resource development. 
8. As Prime Minister Aso had announced in January  2009 in Davos, Japan was ready to provide 
Official Development Assistance of not less than ¥1.5 trillion (US$17 billion) with the aim of 
strengthening the growth potential and expanding the domestic demand of countries in Asia.  The 
emphasis on Asia was because it wa s home to approximately 40% of  the world's population and had 
grown at an average of roughly 4% in recent years. 
9. The Japanese economy was bleak and being ser iously affected by the global economic 
downturn. The real GDP growth in FY2008 was estim ated to be approximately negative 0.8% and 
that of FY2009 was predicted to be around 0.0%. 
10. The Japanese yen, which was valued at around ¥120  to US$1 at the time of the last TPR of 
Japan, was being traded at around ¥90 per dollar now, an appreciation of 25%.  While appreciation against the euro had been about th e same, the speed at which it had occurred was far greater, and this 
had done great damage to the value of Japanese exports. 
11. Even with the interest rate at practically 0%, the private sector was not making much capital 
investment.  Given the fact that there was little room  for a monetary stimulus, Japan was introducing a 
large fiscal package of an unprecedented size;  a part  of this was already being implemented and the 
rest was in the course of obtaining approval from th e Diet.  The stimulus package in the form of 
two supplementary budgets to the FY2008 b udget and the budget for FY2009 amounted to 
approximately ¥75 trillion (US$840 billion), of which, the tota l expenditure through the combination 
of fiscal spending by the Government and tax re ductions for individuals would reach ¥12 trillion 
(US$135 billion), which was equiva lent to about 2% of GDP. 
12. The representative also stated th at Japan wished to reform regulations concerning temporary 
labour and establish a fund of ¥400 billion (US$4.5 billion) for the purpose of creating new jobs in 
areas where there was growth potential, such as nu rsing or care services for the elderly.  Japan's 
objective was to be among the first countries to emerge from the recession making use of these bold 
measures.  WT/TPR/M/211 
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  13. Japan's trade policy basically remained the same  relative to the last TPR.  Maintaining and 
strengthening the multilateral trading system under the WTO remained the core of Japan's trade 
policy.  Japan would continue to participate ac tively in the DDA negotiations and would be making 
contributions towards a balanced outcome, based on the progress that had been made.  To achieve 
this, countries needed progress not only in the areas of agriculture and NAMA but also in other areas 
of negotiations, in line with the single undertaking principle.  
14. In the face of a worsening global food supply a nd demand situation, Japan needed to improve 
the productivity of its agricultural sector and increase its present precariously low rate of self-sufficiency.  Japan was determined to carry out  agricultural policy reform in order to establish 
sustainable agricultural production. 
15. Since Japan's last Trade Policy Review, there ha d been numerous developments in the area of 
bilateral and regional EPA/FTAs.  Six such agreements (with Chile, Thailand, Indonesia, Brunei, 
ASEAN, and the Philippines) had entered into force.   An agreement with Viet Nam had been signed 
in December 2008, and one with Switzerland woul d be signed on 19 February 2009.  When 
negotiating bilateral or regional EPA /FTAs, Japan had always made sure that they conformed to WTO 
rules and obligations, so that these agreements wo uld be complementary to the multilateral trading 
system.  Japan intended to continue negotiation for such agreements both in a bilateral and regional 
context and would also continue to pursue furt her liberalization through the APEC framework. 
16. Japan's "Development Initiative for Trade", la unched in 2005, covered not only border 
measures but addressed each of the three stages that comprised trade, from the production stage, to the 
intermediary stage, to the end market stage.  For each of these stages, Japan had made available a set 
of tools for economic assistance, which would be  employed through close consultation with the 
recipient governments.  On announcing this initiative, Japan had pledged, inter alia,  financial 
assistance of US$10 billion and the dispatching and acceptance of a total of 10,000 experts and trainees, respectively, over three years.  Japan ha d also pledged to allow duty-free quota-free market 
access for essentially all products originating from LDCs.  Soon after announcing the initiative, Japan 
had mobilized all of its embassies in developing Me mbers to look into possibilities for cooperation.  
Three missions comprising ministerial-level gove rnment officials and business people had visited 
Africa in 2008 to promote trade and investment betw een Africa and Japan.  Japan was well on its way 
to surpassing its pledge.  The amount of financia l assistance in 2006 and 2007 was US$4.6 billion and 
US$4.4 billion, respectively, making it certain that  the US$10 billion mark would be surpassed during 
the third year.  With respect to capacity building,  2,003 experts had been dispatched from Japan to 
developing countries and 11,482 trainees accepted from those countries in 2006, just a year after the 
initiative had started. 
17. Approximately 98% of all products origina ting from LDCs since 1 April 2007 were given 
duty-free quota-free market access.  Imports from LDCs had risen only slightly in 2007, compared to 
2006, but rose by 36.1% in 2008, compared to 2006.   The Japanese ODA programme was not charity 
in another guise, but required ownership by the recipient country and emphasized areas that would 
lead to economic growth.  WT/TPR/M/211 
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  III. STATEMENT BY THE DISCUSSANT 
18. The discussant
 (H.E. Mr. John Gero) stated that he would be offering his remarks as 
discussant in his personal capacity.  He stated that Japan had been, and was, firmly committed to the 
multilateral system.  It was an active and invol ved participant, across the board in the DDA 
negotiations, as well as in the ongoing work of the Organization.  It had also been a significant 
contributor to the aid for trade initiative. 
19. Japan's commitment to the multilateral trading sy stem also extended to its taking this Trade 
Policy Review process (its ninth) very seriously.  It was perhaps because of its familiarity with the 
Trade Policy Review process that Japan had made a number of operational suggestions in the recent 
third appraisal of the Trade Policy Review process.   Most of these suggestions had been accepted by 
other Members as practical and useful improvements to the system. 
20. Japan had underscored the importance of stre ngthening the multilateral system, contributing 
to global welfare and re-orienting the economy to wards greater reliance on domestic rather than 
export demand.  Nonetheless, the reality was more complex.  Despite apparent efforts, progress 
remained slow in a number of structural refo rms designed to achieve effective market access 
improvements.  Among these reforms were de regulation, import promotion, streamlining 
administrative practices, improving transparency and otherwise strengthening the market mechanism. 
21. The assessment of the Canadian discussant at the third Trade Policy Review of Japan, in 
1995, included a number of issues that were also high lighted in the Secretariat's report for the current 
TPR.  These included:  Japan's regulatory reform, and how effective it had been to remove barriers to the efficient functioning of the marketplace;  st andard setting, and the movement towards greater 
harmonization with international st andards;  the merits of import promotion schemes compared with 
eliminating or reducing current trade barriers that impeded access of competitive imports;  competition policy;  structural initiatives to facilita te imports including customs clearance procedures; 
and agriculture policies to encourage domestic pr oduction and promote greater self-sufficiency in 
agriculture.  It might be worthwhile to look at the evolution of Japan's trade policy regime with this 
longer lens, to see how far Japan had come, and wh at areas needed the most urgent attention. 
22. While taking the longer view coul d provide Members with some perspective, it was important 
to recognize the depth of the current difficulti es facing Japan.  These were exacerbated by the 
financial and economic crisis, w ith the plunging of exports in 2008 (down 35% from December 2007 
to December 2008);  this could be attributed partly to the significant appreciation of the yen.  Japan had faced difficult economic circumstances before (e.g . in the 1990s).  Measures Japan had taken at 
that time might have helped to position it to we ather better the current economic crisis.  Such 
measures included a programme of structural refo rm, de-regulation, reduced intervention in key 
sectors such as financial services, telecommunications , and retailing, as well as measures to increase 
competitive pressures in the domestic economy.  He w as interested in Japan's perspective on this.   
23. He commended Japan for resisting any move  towards protectionist measures in recent 
months. 
24. He noted that Japan ranked, as before, among th e world's largest traders and was the world's 
fourth largest exporter and importer;  until recent months, net exports had grown more quickly than 
imports over the last five years.  The pattern of  Japan's trade had changed somewhat, with greater 
market diversification and growth in regional trad e and integration with its  neighbours in South East 
Asia, while the United States remained a key export market.  
25. While firmly committed to the multilateral syst em, Japan had, like others, moved towards 
negotiating more FTAs.  Since its last Review in 2007, four more FTAs, with Chile, Thailand,  WT/TPR/M/211 
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  Indonesia, and Brunei, had entered into force and a further, one with ASEAN, had been signed.  
Questions had been raised by a number of Memb ers about the extent to which these FTAs met the 
standard of covering "substantially all trade" wh en many products, including many agricultural 
products and some industrial goods (e .g. leather products and footwear), had been excluded.     
26. Japan had become more dependent on trade, with exports of goods and services accounting 
for around 16% of GDP and imports 11%.  The ra pid growth in exports reflected the positive 
contribution that external demand, more than domestic demand, had made to Japan's economic 
growth over the last few years.  This had meant,  however, that the current financial and economic 
crisis had affected Japan particularly hard, since e xport-led growth had been the one of the first areas 
to suffer in the current financial crisis. 
27. Japan's economic challenges were well known:  high public debt;  the need for tax reform of 
both the corporate and personal tax regimes to broa den the tax base;  an aging population that would 
place increased demands on government services in future  years;  lagging productivity, particularly in 
the large and growing services sector , as well as in agriculture;  an d growing disparities in the labour 
market between regular and "non-regular" temporary workers.   
28. It was unfortunate that the Secretariat's report suggested that changes in many of these areas 
were moving too slowly, from the debate on a funda mental reform of the taxation system, to a 
slowing of the pace of regulatory reform.  He asked how the authorities planned to manage the 
economy to steer Japan through the recession, and what  measures were being considered that would 
contribute towards addressing the long-term structural challenges that Japan faced. 
29. In Japan's economy as a whole, labour producti vity lagged behind that of other major 
industrialized countries, particularly in the non-manufacturing sector.  He asked what measures Japan 
had envisaged to address this productivity gap, which would become increasingly important given 
Japan's demographic situation.  With the current  weakness in exports, strengthening domestic demand 
would take on renewed importance.   He asked how the Government intended to ensure that domestic 
demand could contribute meaningfully  to Japan's future growth.   
30. Many of the questions from Members had focused  on the need for further and more effective 
regulatory reform.  The Government's report and the Secretariat's report included an impressive count of the number of recommended regulatory reform measu res implemented.  However, the true test was 
whether the changes were effective.  Japan had undertaken a succession of regulatory reform plans 
since the mid 1990s, each with its own catalogue of me asures to be implemented.  He asked whether 
Japan had undertaken studies to determine whether its regulatory reforms were having their intended 
effect of opening up the domestic market place, how any lessons learned from these studies had been 
applied in undertaking further reform, and what plan s there were to extend any reforms to the country 
as a whole, not just in the "special zones". 
31. The Government was aiming to double the ratio  of inward FDI to GDP to around 5% by 
2010.  Increasing inward FDI would play a key ro le in increasing the competitive pressures within 
Japan's domestic economy as well as in enhancing la bour productivity.  Removal of domestic market 
impediments to doing business in Japan, further and mo re effective regulatory reform, particularly for 
professional services, enhanced transparency, labour market reforms, tax reforms, and improved trade 
facilitation measures including customs clearance pro cedures, would likely encourage more inward 
foreign direct investment, and perhaps be more ef fective than direct promotional activities in support 
of FDI.  He asked for more info rmation on the recent revisions to the "Program for the Acceleration 
of Foreign Direct Investment in Japan", referred to in the Government's report. 
32. There had been progress in Japan's trade po licies since its last Trade Policy Review, 
particularly in regulatory reform and strengthe ned competition policy, although progress had been WT/TPR/M/211 
Page 8  
 
  slow.  He asked about sectors that were considered as priorities for further regulatory reform, and why 
these had been chosen and how refo rms in these sectors would contribute to a more open market place 
in Japan and enhance competitiveness. 
33. Concerning government procurement, he was c oncerned that the share of foreign suppliers 
was low, and had been falling.  He asked if Japan could explain why the share of foreign suppliers of 
goods and services in government procurement was so  low, and regarding the measures adopted in 
November 2007 to improve competitiveness and transpar ency in procurement practices, what effect 
these would have on increasing the share of foreign suppliers. 
34. He commended Japan for the meaningful progr ess that had been made in harmonizing 
Japanese Industrial Standards;  53% were comparable  to international standards and, of these, 96% 
were aligned with the international stan dards compared with only 10% in 1995. 
35. With respect to agriculture, Japan had long been criticized for the level of support and 
protection it afforded to its producers.  The proble ms in agriculture were structural and long term, 
with small land-holdings, an aging producer populati on, and low productivity.  While there had been 
some reforms, the pace of change was slow, and its effectiveness was unclear since the level of border 
protection remained high and a range of factors impeded increases in the scale and efficiency of 
farming operations.  He commende d Japan for moving away from price support measures towards 
income support, first for rice in 2004, and then for wheat, potatoes, and sugar in 2007.  He asked to 
what extent these measures had imp acted the structural problems in agriculture, whether any further 
movement away from price support to direct inco me support was envisaged, and what other steps 
Japan had taken to directly affect structural  problems and to address the low productivity in 
agriculture. 
36. The Government had identified the obstacles to  increasing the scale of agricultural operations 
as the instability of income for agricultural households and prices of  products, dispersed farmland 
ownership, and the tendency to hol d farmland as assets rather than for use in production.  He asked 
Japan to identify and explain the measures taken to meet the objective set in April 2007 by the Task 
Force on Agriculture for:  "agrarian reform which c oncentrates on the farmland of principal farmers in 
order to strengthen the stru cture of Japanese agriculture". 
37. He noted that Japan had targeted the services sector  for further regulatory reform, particularly 
in light of the low level of labour productivity.   Financial services had been improved through both 
regulatory reforms and measures to improve transparen cy in the system.  The privatization of Japan 
Post was a major development since the last TPR, a nd further privatizations in the financial sector 
were expected.  However, the policy framework  on telecommunications had remained largely 
unchanged during the review period, despite concer ns that international communications charges 
remained relatively high, and that the Japanese market for fixed and mobile telecommunications 
services was characterized by "monopolistic situations".   He wished to know what additional reforms 
were envisaged in the sector, what the outstanding issues were in terms of further market opening for 
Japan's services sectors, and how the Government was tackling the issue of low productivity in this 
sector. 
38. The number of questions Japan had received from a wide range of Members was testament to 
the importance of Japan in the multilateral trading system, and its importance as a market and as a 
supplier of goods and services to other Members.  WT/TPR/M/211 
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  IV. STATEMENTS BY MEMBERS 
39. Members thanked the Japanese Government and th e Secretariat for their reports, and for the 
prompt replies by Japan to questions posed.  Many  Members noted that their bilateral trade and 
investment ties with Japan had been strengthene d over the recent period, although some expressed 
concern over their bilateral trade deficits with Japan and the one-way nature of foreign direct 
investment.  
40. Members looked forward to a quick and complete  recovery of Japan's economy.  They felt 
that Japan's recovery was intertwined with the gl obal recovery as Japan was the world's second largest 
economy, and hoped that the recovery would be le d by domestic demand, which was important for 
global trade growth.  Members commended Japan for not introducing any new protective trade-policy 
measures since the onset of the financial crisis in  September 2008.  Members also recognized that the 
multilateral trading system, by keeping markets open to Japan's exports, had contributed positively to 
its economy in recent years, and urged that this openness should be maintained notwithstanding the 
current difficult economic environment.  While welc oming Japan's continued progress with regard to 
transparency and progress in regulatory reforms, Members hoped for further reforms to enhance 
competition, through improved market access, and thereby improved produc tivity, especially in 
agriculture and services, where productivity, and thus competitiveness, was relatively low.  Members also appreciated the progress in privatizing public co rporations, particularly the establishment of the 
new Japan Post companies.   
41. Members welcomed Japan's active role in the multilateral trading system, particularly its 
strong support for the early conclusion of th e Doha Development Agenda.  Many members 
commended Japan for its role in the Rules nego tiations.  Members also commended Japan for its 
financial and technical assistance, including Official Development Aid, as well as various development initiatives related to trade and investment, particularly its contribution to Aid for Trade.  
Members appreciated Japan's support for the process of accession by future Members.  Certain 
Members welcomed Japan's recent initiative in support of Asian economies.  Members appreciated 
the improved preferential market access provided by Japan to developing and least developed 
countries, as well as its decision to expand duty-free and quota-free market acc ess accorded to LDCs.  
They urged Japan to further open its market to  these countries' exports.  Members noted Japan's 
increasing involvement in bilateral/regional trading arrangements, and urged Japan to ensure that 
these were compatible with the multilateral trading system.  
42. Members expressed their appreciation of Japan's relatively liberal and predictable trade 
regime as most applied MFN rates coincided with  the bound rates.  However, they expressed concern 
that Japan's tariff remained complex.  Although applied MFN rates for industrial products were 
generally low, products that were of export inte rest to developing countries, such as agricultural 
products, textiles and clothing, leather products an d footwear, encountered significant tariff peaks, 
which appeared to be concealed by non- ad valorem  rates, tariff escalation, tariff quotas, and/or state 
trading.   Members were also concerned about the intricate nature of tariff quotas and about the recent 
decline in foreign suppliers' share of Japan's gove rnment procurement, and encouraged Japan to 
facilitate greater foreign participation.  
43. While generally appreciating the steps taken by Japan to harmonize its standards and 
technical regulations with international norms , many Members expressed concern over the strict, 
rigid, and opaque nature of Japan's sanitary and phytosanitary (SPS) measures, technical regulations, 
and standards.  Some Members questioned the a ppropriateness of risk assessment regarding SPS 
measures, which they encouraged Japan to em ploy in the least trade-restrictive manner. 
44. On agriculture, Members welcomed Japan's m ove away from price to income support.  
Nonetheless, they expressed concern about border measures and the relatively high level of overall WT/TPR/M/211 
Page 10  
 
  domestic support for agriculture.  Many Members were  concerned about Japan's use of import quotas 
for fish and marine products.  On manufacturing,  Members were interested in plans to promote 
particular sectors.   
45. The representative of Brazil
 noted that that Japan, like othe r countries, had taken steps to 
stimulate its economy.  For example, the Law on Special Measure for Strengthening Financial 
Functions committed over US$100 billion for the r ecapitalization of banks and other financial 
institutions.  Japan had pledged US$2 billion to the Bank Recapitalization Fund, an initiative of the 
World Bank aimed at assisting the recapitalization of banks in small emerging markets economies, 
through direct financing and pr oviding advisory services.   
46. He asked for details and amounts of the government grant announced for the International 
Aircraft Development Fund (IADF), which would provide financial support to Japanese companies 
involved in civil aircraft projects, such as the Mitsubishi Rear Jet project.  He expressed regret that Japan maintained significant market access restri ctions in the services sector.  Only Japanese-flag 
vessels were allowed to carry passengers and ca rgo between Japanese ports, and the Japanese 
Government also provided incentives, such as tax break s for registration, to Japanese-flag carriers.  
With regard to energy, foreign entities that wished to  invest in electric and gas utilities in Japan could 
be denied permission by the Government, as had ha ppened in 2008, on grounds of "national security 
and public safety" or could be asked to alter their investment plans. 
47. A promising area that was yet to be developed to its full potential was bio fuels.  He 
encouraged Japan to move in the direction of fa vouring the introduction of bio fuels in its energy 
matrix. 
48. The representative of China
 expressed concern about whether further sound development of 
bilateral trade between China and Japan could be  maintained in the coming year, as the negative 
effects of the current crisis on the real economy b ecame increasingly felt.  Members should be vigilant 
to the revival of trade protectionism in counter ing the crisis.  China appreciated the Japanese 
Government's efforts not to introduce new trade meas ures since the onset of the global financial crisis 
in September 2008.  Developing coun tries had been struck most severely in the crisis and it was 
important for them to have sustained access to trad e finance, official development aid, and aid for 
trade.  The commitment of Japan as a major donor in this regard was most welcome.  He hoped that 
the Japanese Government would make further efforts in the context of its on going regulatory reform 
to address some of the Members' concerns on its  trade regime, such as the complicated quota and 
TRQ administration systems, and the high protection of its agriculture sector.  Steps forward on these 
aspects would provide Members with more market -access opportunities, which were of special 
importance in view of the current situation. 
49. The representative of Mexico  stated that in the current economic climate, which was 
characterized, among other things, by a strong drop in foreign demand and the appreciation of the yen, 
there was a need to achieve a balance between mone tary and fiscal politics together with structural 
reforms.  These reforms should be aimed at reduci ng the cost of trade activities, to increase the 
attractiveness of Japan as a recipient of FDI,  which in turn would increase competitiveness and 
productivity. 
50. The representative of Switzerland  noted that consumer confidence in Japan had fallen to its 
lowest ever level and that the economy was "worsen ing rapidly".  However, he was pleased that 
Switzerland and Japan were to sign a comprehensive Economic Partnership Agreement the next day.  
Under the agreement, most tariffs between the par ties would be dismantled and tariffs on more than 
99% of the total trade value would be eliminated .  With respect to services, the agreement went 
beyond GATS with regard to market access, na tional and most-favoured-nation treatment, and 
transparency provisions. It also provided for impr oved conditions for the establishment and protection  WT/TPR/M/211 
 Page 11 
 
 
  of investments, a framework for the promotion of  a closer economic relationship would also be 
created, giving the private sector an opportunity to  raise issues of concern within the institutional 
framework of the agreement. 
51. The representative of Korea  stated that Korea continued to register a large trade deficit with 
Japan and was always interested in ways to alleviate this recurring phenomenon.  Although the 
reasons for the trade deficit were diverse and thus a single 'miraculous' solution was not available, the 
situation could be alleviated (to a certain degree) if some of the "doing business" issues as well as the 
standards- and SPS-related issues were resolved amicably. 
52. The representative of India  highlighted two issues:  labour productivity and the fiscal deficit.  
Japan's "labour productivity was lower than that of other major industrialized countries.  Its fiscal 
deficit, which was around 3.4% of GDP in 2007, woul d be higher in the next two years due to the 
various stimulus packages.  This was also the case for public debt, which was 170% of GDP in 2007.  
Even if the stimulus packages had their desired effe ct, in the medium term, Japan had work to do in 
order to achieve fiscal consolidation and to im prove its economic efficiency through increased 
productivity. 
53. Indian producers of generic pharmaceutical products found it very difficult to enter the 
Japanese market.  The problems included:  mandato ry bio equivalence testing in Japan for each 
generic product;  the requirement for partnering with  Japanese trading companies for local marketing;  
and the requirement to keep product inventories for five years.  These requirements were substantially 
more stringent than in other developed countries a nd seriously hampered access for high-quality but 
reasonably priced Indian generic products in the Ja panese market.  He noted that Japan planed to 
expand the share of generic medicines in the pharmaceutical sector by around 30% by 2012.  He 
hoped that the procedures for the importation of ge neric medicines could also be streamlined to 
achieve this target.  Japan had excessive restricti ons in its services sector, especially in modes 1 and 4 
in areas of interest to India, such as professional and computer-related services, accounting, auditing, 
and book-keeping services, architectural services, engineering services, medical and dental services, 
advertising services, and services for telecommuni cation and audio-visual communication.  There 
were also continuing barriers in modes 1 and 4 with regard to trade in health services.  He hoped that 
Japan would take concrete and timely steps to address India's concerns.  
54. The representative of the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and Matsu  
encouraged Japan to import more of its products in future to help mitigate the long-standing bilateral 
trade imbalance.  In the advance written questi ons submitted by his delegation, they had already 
identified certain policy areas in which they had a pa rticular interest.  These included:  Japan's fiscal 
policy, which was aimed at stabilizing the debt-to- GDP ratio;  Japan's approach to FTAs and RTAs;  
its recent adoption of a "tonnage ta x" in international maritime tran sport;  and Japan's policies in the 
areas of energy, state-owned enterprises, and investments.   
55. The representative of Hong Kong, China  noted that on Rules, his delegation and Japan shared 
a common resolve to seek meaningful and pro-tr ade improvements to the WTO disciplines on anti-
dumping under the DDA negotiations.  He comme nded Japan's active pa rticipation in, and 
constructive contribution to, the anti-dumping negotia tions.  With respect to trade facilitation, he 
commended Japan's active contributions to the negotiations through the submission of various 
proposals on trade facilitation measures and the holding of workshops to promote discussion of these.    
56. Japan had simplified its port-related procedures and intended to further reduce lead times and 
charges under the latest Three-Year Programme for Promoting Regulatory Reform.  He stated that 
such initiatives would facilitate the development of  the maritime transport and logistics services 
sectors and, in turn, contribute to the efficient flow  of goods.  He was encouraged by such efforts to 
facilitate trade and hoped that the same spirit would motivate Japan to consider removing, in its next WT/TPR/M/211 
Page 12  
 
  services offer, the current MFN exemptions for th ree sub-sectors in this sector, namely cabotage, 
international freight forwarding, and international shipping services. 
57. The representative of Canada
 commended Japan's adoption of transparency measures 
regarding its trade policies;  this would enhan ce its accountability to the public.  However, she 
expressed concern about Japan's tariff barriers, especia lly those applied to vegetable oils (particularly 
canola).  Canada appreciated that , in December 2005, Japan had gran ted access for beef from animals 
twenty months and under.  Howeve r, Canada had been calling on all WTO Members to resume full 
trade in Canadian beef and cattle based on Canada's BSE "controlled risk" status as determined by the 
World Organization for Animal Health (OIE) in May 2007, and reaffirmed by the OIE in May 2008.  
Canada hoped to continue discuss ions with Japan on expanded beef  access consistent with OIE 
guidelines. 
58. The representative of Colombia  commended and thanked the Government of Japan for its 
commitments to continue increasing transparency with  regard to its laws, regulations, and standards 
applied in Japan.  The delegate stated that in additi on to publishing these in th e official gazettes, Japan 
had set up a project to translate into English all standards seen to be of great interest. 
59. The representative of Brunei Darussalam behalf of ASEAN countries  stated that Japan had 
been a provider of trade-related assistance schem es through multilateral, b ilateral, and regional 
frameworks.  Such schemes enabled developing and least developed countries, including those in 
ASEAN, to enjoy the benefits from the multilateral tr ading system.  Japan's contributions within the 
region were appreciated, including its recent pledge to inject US$17 billion to boost growth in Asian 
economies.  He also welcomed Japan's support in  the accession process of future members of the 
WTO, including that of Lao PDR.  He expressed a ppreciation to Japan for improving its GSP scheme. 
60. The representative of Norway  commended Japan for its efforts to improve further its 
investment environment and active promotion and provision of information regarding possibilities for foreign direct investment. 
61. The representative of Argentina
 noted that Japan was the largest net food importing country 
in the world and Argentina aspired to have a grea ter share of that market.  Argentina was a large 
recipient of Japanese investment, especially in  the area of automobiles and e-government. 
62. The representative of Costa Rica  commended Japan's leadership in the anti-dumping 
negotiations through its work in the FANS group. 
63. The representative of Chile  stated that Chile and Japan shared common aims in the 
Anti-dumping Agreement, so that this would not be  a tool for protectionism, and in services where 
both were seeking greater openness in markets.  Ho wever, there were other areas where their views 
differed, such as fishing subsidies and domestic re gulation in services.  Chile would welcome efforts 
by Japan towards clearer and strong er disciplines in both these areas. 
64. The representative of Pakistan  commended Japan's role in the provision of disaster relief, 
promotion of education, and pove rty alleviation.  However, he noted that Japan's policy and 
regulatory framework continued to favour manufactu rers over consumers;  this amounted to the 
protection of domestic manufacturers over foreign produc ts.  Non-tariff barriers also tended to restrict 
or at least delay imports of goods.  These measur es included standards excl usive to Japan, as well as 
extensive licensing powers conferred upon trade and industry associations , which had limited 
membership, strong market influence, and ability to control information. 
65. The representative of the United States  noted Japan's contributions to the multilateral trading 
system, which included continued support for open tr ade and investment goals through international  WT/TPR/M/211 
 Page 13 
 
 
  fora such as APEC, and through its work with the United States and othe r partners to improve 
intellectual property protection regimes and enforc ement, around the world.  Since its last Trade 
Policy Review, Japan had taken some domestic measures that might help encourage foreign 
investment in Japan.  For example, it had taken some  initial steps to help make the triangular merger 
tool available for foreign companies to merge with or acquire companies in Japan.  Other steps taken 
to improve its overall business environment include d measures to streamline customs procedures, 
liberalize the sale of insurance products throug h banks, and the improvement of the regulatory 
environment for the introduction of new and innova tive medical technologies.  These laudable steps 
would help reduce costs, open markets, and spur innovation.  
66. He urged Japan to take new, proactive meas ures to open its markets further in a manner 
commensurate with its position in and dependence upon global trade.  Ensuring level competition 
between Japan's publicly owned cor porations and the private sector, particularly in the insurance, 
banking, and express delivery sectors remained critical, as were further improvements in the 
communications, regulatory transparency, commerc ial law, and distribution/transportation. 
67. He expressed concern about the low level of Japanese government procurement that was 
awarded to foreign suppliers.  It was often very diffi cult for foreign suppliers to  participate in Japan's 
government procurement market due to a wide range of  barriers, which included lack of transparency, 
qualification requirements, bid-rigging, and the extens ive use of single tendering.  He urged Japan to 
take measures to provide for effective particip ation by foreign suppliers in its government 
procurement. 
68. The representative of New Zealand  stated that his country was particularly supportive of the 
Authorised Economic Operators programme, which c ould help facilitate trading links and further 
strengthen ties between customs agencies.  He urged Japan to seek comprehensive free-trade 
agreements, including with respect to agricultu re.  New Zealand was interested in knowing the 
potential that Japan saw in free-trad e agreements with food exporters .  New Zealand believed that an 
approach that involved a greater focus on consumer s rather than producers would be Japan's best 
insurance policy for food security, and that it would also make an important contribution to enhancing 
the overall coherence of Japan's trade policy.  New Zealand was also interested in Japan's growing 
focus on building the competitiveness of its food exports. 
69. The representative of Ecuador  recognized Japan's efforts to reduce export support, especially 
export credits in the medium and long term;  th ere had been a considerable reduction between 2004 
and 2005. 
70. The representative of Turkey  stated that firms in Turkey ha d been very happy to work with 
their Japanese counterparts in a number of global  contracting projects.  He hoped that such 
partnerships would continue to be supported in the future. 
71. The representative of Australia  stated that Australia and Japan enjoyed a strong and highly 
complementary trading relationship.  The two were al so close partners in tackling the global financial 
crisis in the G20.  She welcomed the opportuni ty to continue to work with Japan on trade 
liberalization, which was vital to any effective solution to stimulate world economic growth.  She 
encouraged Japan to remain open to foreign inv estment.  Australia's experience had shown that 
foreign investment could not only stimulate the ec onomy, but also spur reforms through promotion of 
international best practice. 
72. The Australia-Japan Free Trade Agreement (FTA) was a key trade policy priority for 
Australia and would deliver significant economic be nefits for both countries, as well as strengthening 
their strategic relationship.  Australia was comm itted to concluding a high-quality, comprehensive and WT/TPR/M/211 
Page 14  
 
  WTO-consistent FTA.  Steady progress had been made  with seven rounds of negotiations having been 
held so far, with the eighth round scheduled for Tokyo in March. 
73. The representative of Guatemala
 stated that in 1997, 2002, 2003, and 2004 Japan and 
Guatemala had held bilateral cooperation policy dial ogues to define areas of priority for cooperation 
in accordance with Guatemala's inte rest and needs.  The last such dialogue was held in June 2008 
when a number of areas of priority for cooperati on were defined in rural development, sustainable 
economic development, and cons olidation of democracy.  Like Japan, Guatemala felt that 
development should go hand in hand with preserving th e environment.  In this regard, during the 
Summit on Climate Change and the Environment in May 2008, Guatemala welcomed the "Cool Earth 50" as well as the "Cool Earth Promotion Pr ogramme" proposed by the Japanese Government. 
74. The representative of Singapore
 stated that Singapore full y associated itself with the 
statement by ASEAN.  Close economic relations between Singapore and Japan were reflected in the Japan-Singapore Economic Partnership Agreement, signe d in 2002.  This was Japan's first bilateral 
economic partnership agreement and one of Singapore's earliest with a major trading partner.  
Regionally, Japan played an important role in th e wider Asian economy, while in the ASEAN context, 
Japan's continued efforts towards enhancing trad e and investment relations with ASEAN were 
exemplified by initiatives such as the ASEAN-Japan Comprehensiv e Economic Agreement, and the 
development of the wider regional architecture.  
75. The representative of the European Communities
 urged Japan to keep pushing forward its 
agenda of structural reforms to enhance th e competitiveness of its economy and market access, 
including for foreign direct investment, to secure lo ng-term sustainability of public finance, and to 
maintain a healthy financial and banking system , which were all crucial for restoring economic 
growth.  He asked Japan to share some further vi ews on its policy goals this regard.  Noting Japan's 
expanding network of bilateral a nd regional free-trade agreements, he stated that the Review 
coincided with the announced signing of the Economi c Partnership Agreement with Switzerland.  He 
hoped that Japan would share information with Me mbers on:  the provisions of this agreement, 
especially on issues such as treatment granted to Sw iss chocolate, wines, cheese, and GIs;  the new 
system that Japan would introduce to implement an origin declaration by an approved exporter;  and 
ways found to maximize access to government procurement. 
76. Japan had already made efforts to accelerate FDI,  but there remained substantial potential for 
increasing the inward flow of FDI through regulato ry reforms.  This would facilitate gains in 
productivity and competitiveness for Japan while cr eating new opportunities for European and other 
foreign businesses, which had an interest in the Japanese market but had so far found it difficult to 
penetrate.  He welcomed the establishment of a Corporate Governance Study Group by Japan's METI 
in December 2008 and hoped that it would lead to  important regulatory improvements from the FDI 
perspective in the near future.  
77. He expressed concern with regard to pharmaceuticals and medical devices, for example, the 
shelf life of products was often shorter than the ti me required for Japanese authorities to approve these 
products.  He also asked Japan to provide deta ils about its approach to environmental policy 
initiatives which could have trade implications. 
78. The representative of Uruguay  noted that the financial crisis had been very harsh on Japan 
and its GDP had shrunk considerably.  The fall in production had been due to the effects of foreign 
trade, of the re-evaluation of the yen, and the decline in foreign demand for products exported from 
Japan because of the global financial crisis.  WT/TPR/M/211 
 Page 15 
 
 
  79. Within the social claims  that had been put forward over the last few months, there had been a 
request not to discriminate against workers and empl oyers that had come from abroad and worked in 
Japan.  This was a new and positive phenomenon.  
80. The representative of Nigeria  commended Japan for its bold initiatives for promoting trade 
and investment in Africa, through several channels  including the Tokyo International Conference on 
African Development and Africa-Asia Business Forum.  Two countries had agreed to create the 
Nigeria-Japan Special Partnership Forum to di scuss issues that would strengthen the existing 
relationship and would cover:  trade, investment , and development coopera tion;  information and 
communication technology;  human resources developmen t;  environment, oil, and gas cooperation;  
and democracy and good governme nt.  In addition, Nigeria pl anned to establish a trade and 
investment centre in Japan.  He acknowledged and appreciated Japan's continued development 
assistance to Nigeria, in such vita l areas as water supply, agriculture,  healthcare delivery, education, 
and rural electrification.  He also acknowledged Japan's commitment to an ambitious and balanced 
outcome in the agriculture negotiations, wh ich were central to the DDA negotiations.  
81. The representative of El Salvador  shared Japan's view that regional and bilateral free-trade 
agreements were also important and complemented multilateral trade liberalization.  On intellectual 
property developments, the delegate noted that Japan had participated actively in deliberations in the 
TRIPS Council, and recognized the significant deve lopment dimension of TRIPS and the role of 
intellectual property protection. 
82. The representative of Honduras  noted that unemployment in Japan had been declining.  The 
pace of the reforms appeared to have slowed down and the reforms varied from one sector to the 
other;  it appeared that the Government's recen t priorities included agriculture, medical services, 
nursing services, and air transport.  During the revi ew period, six new free-trade agreements, regional 
and bilateral, had entered into force.  The agreem ents with countries that were major exporters of 
agricultural products tended to exclude many of th ese agricultural products.  They also excluded some 
industrial products, such as leat her and footwear, which in the view of the Japanese authorities were 
sensitive products. 
83. The representative of the Dominican Republic  welcomed Japan's continued structural 
reforms;  Japan had adopted measures aimed at libera lizing further its trade and investment regimes.  
Japan had continued with the reform of standards,  and had strengthened competition policy;  it had 
reduced tariffs and modified a number of laws on intellectual property rights aimed at strengthening IP protection.  It was important to implement fisc al stimulus measures and vigorous means in order to 
increase domestic demand, given the sharp decrease in foreign demand, and give stimulus to the 
productive sector. WT/TPR/M/211 
Page 16  
 
  V. REPLIES BY THE REPRESENTATIVE OF JAPAN AND ADDITIONAL 
COMMENTS 
84. The representative of Japan
 expressed his gratitude for the warm welcome his delegation had 
received as well as for the many positive comments di rected towards Japan for what it had been doing 
as well as what it had not been doing in the current economic environment.   
(i) Economic environment. 
85. He was encouraged by the positive comments that had been made about Japan's firm 
commitment not to take protectionist measures in the area of trade and investment as well as about its efforts in the international financial arena to deal w ith the crisis.  He invited other Members to join in 
the effort to overcome the current unprecedented economic turmoil. 
86. Concerning the Japanese economy, the Japanese people were the first to want it restored to a 
healthy and vibrant condition.  Under normal circum stances, monetary and fiscal tools were available 
to stimulate the economy.  However, with inter est rates close to zero, there was little room for 
monetary policy.  With regard to fiscal policy, Japan  had a very large deficit.  For these reasons, Japan 
had been implementing other measures, such as st ructural reform, regulatory reform, and promotion 
of FDI, to stimulate the economy, in addition to fiscal and monetary policy.  Japan still intended to 
achieve fiscal consolidation in the mid-term, but fo r the short-term a certain amount of flexibility was 
needed to respond to the current economic conditions.   
87. Members had expressed concern that the pace of structural reforms was slowing;  he 
wondered under what measure they considered the p ace to be slowing down.  This was certainly not 
Japan's view.  Japan viewed structural reform as  one tool to revitalize the economy and therefore 
intended to continue down this path.  It was working to specify structural reform plans with a view to 
adopting a cabinet decision on "Economic and Fiscal  Reform 2009".  Innovation was regarded as 
another means to enhance growth pote ntial, especially in the face of a declining and aging population.   
88. Many Members referred to the lagging labour productivity, especially in the 
non-manufacturing sector.  Japan was conscious of the need to improve labour productivity in a 
number of sectors.  The Council of Regulatory Re form, a body directly attached to the Prime 
Minister, had recommended the medical services s ector as a candidate area, among others;  the 
possibility of improving productivity through more extensive use of information technology, for 
example, was being examined. 
89. Members had also raised the issue of the low le vel of FDI penetration.  Japan considered FDI 
as a positive impetus for the Japanese economy.  Acco rding to a survey conducted by the Japanese 
Government, the problem that was pointed out by the largest number of foreign affiliates was the high 
cost of developing business activities in Japan.  Am ong business costs, personnel expenses were cited 
as being very high in the manufacturing sector.  The meticulousness of the Japanese customers with regard to product quality was ranked second.  Japan  had made efforts to promote both inward and 
outward investments.  The programme establishe d for this purpose aimed to double the ratio of 
inward FDI stock to GDP by 2010.  The programme had been reviewed periodically and when 
necessary, it had been revised.  The last revision in  December had aimed at facilitating M&As.  Many 
Members had appreciated Japan's efforts aimed at transparency through, among other things, the 
translation of major Japanese laws and regulations in to English;  this could facilitate foreign capital 
investment in Japan. 
90. Some Members referred to the case of a foreign investor wishing to increase its share in an 
electric utility company;  the denial of this pla nned investment was quoted as an example of how FDI 
was not welcomed in Japan.  He urged Members to put  this case into perspective.  This had been, thus  WT/TPR/M/211 
 Page 17 
 
 
  far, the only case in which a planned investment was denied for reasons of "public order, public safety 
and national security" among the tens of thousands of cases that had been notified.  Therefore, it was 
wrong to cite this case as representative of the cond itions surrounding foreign direct investment in 
Japan. 
(ii) Trade policy by measure 
91. Questions were raised about whether the FTA s Japan had concluded met the standard of 
covering substantially all the trade.  Although a certain number of products were excluded from 
preferential treatment, the statement that significan t sectors had been excluded was not substantiated 
by fact.  There had been significant increases in tr ade with countries with which Japan had concluded 
EPA/FTAs.   
92. With regard to DDA negotiations, he appreciated the positive comments made by many 
delegations about Japan's role, especially in services, NAMA, trade facilitation and anti-dumping.  On fisheries subsidies, in line with the Hong Kong D eclaration, Japan had been participating actively in 
the discussion on the discipline of fisheries subs idies that contributed to overcapacity and 
over-fishing, and would be pleased to continue to do so in the future.  Japan encouraged and promoted 
the Trade and Environment negotiations so as to ensure their mutual supportiveness. 
93. Members had characterized Japanese border measu res with regard to agricultural products as 
protectionist, by pointing out that the average rate  of duty was 17.1%.  He urged Members to look at 
the complete picture. For example, talking about a simple average of tariffs masked the fact that 
around one quarter of the agriculture tariff lines we re at zero duty, which no doubt contributed to 
Japan maintaining its position as the biggest net impor ter of food in the world.  Moreover, applying a 
non-ad valorem  tariff in itself did not necessarily mean an additional burden on consumers.  He also 
pointed out that Japan's past effo rts to reduce its AMS had resulted in a situation where the current 
level was only 15% of Japan's allowed level.  Also , subsidies were given in pursuit of various policy 
objectives including ensuring sustainability of rural areas and the agricultural sector. 
94. On fisheries, Japan's import regime did not prevent it from becoming the largest fisheries 
product importing country in the world.  However, Japan applied quotas on several fisheries products, 
in conjunction with stringent control of local fish ing activity for conservation and for the purpose of 
management of fisheries resources, in a manner that  was fully consistent with the WTO agreements.  
95. Japan's policy was to take appropriate me asures in accordance with the SPS Agreement, 
based on scientific evidence and taking into account  relevant international standards.  Japan 
considered testing to be essential for generic medicine in order to ensure therapeutic equivalence.  In 
Japan, a certain number of conditions were imposed on companies in order to secure stable supply 
once a product was introduced into the market. 
96. Government procurement in Japan was basically conducted through open tendering 
procedures.  Except for very limited cases, such as  small and medium enterprises promotion policies, 
Japan did not have any laws or regulations gi ving preferences to Japanese goods or services for 
government procurement. While the share of cont racts awarded to foreign suppliers remained 
relatively limited, it was worth noting that the share of foreign equipment used in government 
procurement represented as much as 9% in terms of value. 
97. The EC had commented on the Japanese operati onal safety clause, the Japanese representative 
stated that only five areas fell within the scope of this operational safety clause, including supplies 
forming railway facilities, rolling stocks and th eir supplies, and supplies and equipment for 
maintenance, which meant that the carve-out from the GPA's coverage was very limited. WT/TPR/M/211 
Page 18  
 
  98. The Japanese market for industrial alcohol incl uding bio fuels had been liberalized since the 
abolition of the Alcohol Monopoly Law, and its a pplied tariff was being reduced to 10% by FY2010. 
(iii)  Sectoral issues 
99. Japan was re-examining its agricultural policy, gi ving careful consideration to such factors 
surrounding agriculture and rural areas, as strengthe ning of food supply capacity, promoting the rural 
economy, and securing food safety and consumer confid ence.  In FY2007, a major shift in agricultural 
policy had been achieved with the introduction of a policy aimed at encouraging large-scale efficient 
farmers to become even more efficient through a new direct payment system , instead of spreading 
help evenly.  In addition to this reform, Japan was considering amendments to relevant laws to tighten 
regulations on the conversion of farmlands to other uses with a view to preventing the unruly 
conversion of productive farmlands, as well as to review regulatory measures limiting leasing of 
farmlands with a view to allowing more varied types of producers, and to establish a system 
facilitating the merger/grouping of dispersed farmland. 
100. Japan's policies for the development of the manufacturing industry, including those towards 
the Mitsubishi Regional Jet project, were fully co mpatible with its obligations under the WTO 
Agreement.  Details on those subsidies could be  found in Japan's notification to the WTO.  
101. Some Members had emphasized the importance of ensuring equivalent conditions of 
competition between Japan's public corp orations and the private sector.  In general, Japan fully agreed 
with that point, and ensured it through various me asures, such as dominant regulations based on the 
Designated Telecommunications Facilities System for NTT's activities.  
102. Members had expressed an interest in market acc ess to Japanese maritime transport.  It was a 
well established world-wide practice that for sovere ignty and security reasons, maritime cabotage was 
to be reserved for national vessels.  With respect to preferential tax measure s, they applied only to 
ship owners, not to service suppliers.  These tax measures did not, therefore, result in any 
discrimination that contravened the national treatme nt obligations stipulated in the GATS.  In 
addition, an advisory body for the relevant Mini ster in 2007 examined whether the termination of 
anti-monopoly exemption for international shipping activities was appropriate.  The conclusion was 
that further consideration was needed with a view  to ensuring a competitive international shipping 
market as well as stable and reliable maritime transport. 
103. The discussant
 thanked the Japanese delegation for their written replies and statement.  Japan 
had responded in a specific and detailed manner to over 700 advance questions received from 
27 WTO Members.   
104. There was a clear recognition and appreciation from Members that Japan had refrained from 
raising new barriers to investment or to trade in goods and services in keeping with both the lessons of 
the past and the commitment it had made at the Summit on Financial Markets and the World Economy held in Washington in November 2008.  
105. Japan had implemented six new bilateral or re gional FTAs since its last Trade Policy Review, 
with two more at the point of signature.  This tr end had raised concerns among some Members for the 
impact on the multilateral trading system as a whol e, and concerns over the extent to which those 
FTAs were comprehensive in their product coverage.   
106. As the second largest economy, and as the world's fourth largest trader, Japan's economic 
circumstances and trade policies mattered to many Members;  their economic health and the economic health of others were inextricably linked.  WT/TPR/M/211 
 Page 19 
 
 
  107. The very wide range of questions and concerns  was striking:  from agriculture and fisheries 
through to pharmaceuticals, financial services, a nd transportation, and from tariffs, customs 
procedures, and standard setting through to invest ment, taxation, competition policy, and regulatory 
regimes.  However, despite the diversity of specifi c questions and concerns, there were a number of 
common threads.  
108. A significant number of Members expressed concern over the imbalance of their bilateral 
trade with Japan.  The imbalance was linked to hi gh levels of border protection, particularly in 
agriculture, as well as concerns over regulatory impediments and standards-related issues in 
agriculture, fisheries, and pharmaceuticals.  Members also noted an imbalance in the area of foreign 
direct investment:  outward FDI from Japan was signi ficant in their markets, while inward FDI into 
the Japanese economy was significantly smaller due to issues of corporate governance and regulatory 
barriers.  It was pointed out that increasing FDI could improve competitive conditions in the Japanese 
market as well as improved labour productivity. 
109. Japan had flagged that even with interest rat es practically at zero, there was little new capital 
investment from the private sector, and that the moneta ry stimulus had had little effect.  As a result, 
Japan was introducing a fiscal package of an unpreced ented size and tax reduc tions for individuals, 
which would total about 2% of GDP.  Japan had also proposed to reform regulations covering 
temporary labour and establish an employment fund in areas where there was growth potential. 
110. The present crisis could provide an incentive for Japan to re-invigorate its reform process, 
finding new ways to address effectively the sectors and issues of greatest concern.  Domestic demand could also be an engine of growth, and inward FDI could help in transforming sectors that were 
lagging in productivity relative to those sectors in other countries. 
111. He looked forward to seeing whether Japan had u sed this challenge and opportunity to move 
towards opening its domestic market more to impor ts and to inward FDI, as a closer two-way 
integration into the world economy coul d contribute towards that recovery. 
112. The representative of Thailand
 noted with appreciation the prompt and detailed manner in 
which Japan had responded to questions.  Thailand  had a follow up question on Japan's FDI policy 
and intellectual property laws, wh ich it would submit in writing. 
113. The representative of the European Communities  appreciated the answers provided by the 
Japanese delegation to the EC questions.  He had an additional question, relate d to the tariff regime 
for white spirits.  As part of its settlement with Canada, the EC, and the United States, of the liquor 
tax case, Japan had commited to apply a tariff of  zero from 1 April 2002 for spirits from the EC.  For 
brown spirits, Japan had implemented the zero ta riff on a permanent basis.  However, the duty 
exemption for white spiritis was s ubject to annual renewal.  He wi shed to know how Japan intended 
to approach this annual renewal of duty exempti on for white spirits, and whether it was considering 
making this duty exemption permanen t, as was the case for brown spirits. 
114. He also had some follow-up questions:  with re gard to question number 17 on the percentage 
of "eligible" imports of sensitive products that  actually fell under the ceiling and received GSP 
treatment, the information provided was only availabl e in Japanese.  He asked Japan to provide a 
short transcript or explanation of some key figures. 
115. The EC welcomed that Japan had realized upon its commitment to provide DFQF market 
access for at least 97% of products originating fro m LDCs.  He deduced from Japan's answer to 
question 18 that  only some 8% of LDC imports entered duty free.  The EC wished to know in what 
manner and timeframe Japan intende d to progressively build on the present 98% to achieve the 100% WT/TPR/M/211 
Page 20  
 
  coverage that was set out in A nnex F a) i) of the Hong Kong Decl aration.  He also asked for 
additional clarifications with rega rd to government procurement.  
116. The representative of the United States
 thanked Japan for its answers to the questions put to it.  
The United States had follow up questions on govern ment procurement, which would be sent to Japan 
in writing.  Regarding Japan's response to U.S. qu estion 22, Japan had stated that it did not believe 
that EMS and international express carrier services pr ovided the same service in the same market.  He 
asked how Japan explained this while a report by  the JFTC in April 2006 found many similarities 
between postal express services and private express  services, and found the international express 
market to include EMS and private express services.  With regard to question 6, Japan responded that 
many Members involved in RTA negotiations were under the general assumption that duty 
elimination needed to cover at least 90% of the tr ade between the parties.  Japan had not indicated a 
source for this assumption;  under Article 24 tariffs were  to be eliminated for substantially all trade.  
The United States did not see the relevance of the thr eshold as Japan had failed to reach it in any of its 
agreements.  Furthermore, the United States did not  concur that 90% duty elimination satisfied the 
Article 24 requirement.  He asked whether Japan e nvisaged steps to eliminate more duties.  With 
regard to questions 11 and 14-2, Japan only referred to its Accounts Law.  The United States repeated 
its request for a description of the procurement methods including qualification requirements and 
participation in the tendering procedure.  With re spect to question 23, he wished to know if the 
qualification requirements were the same fo r both open tendering and designated bidding. 
117. According to Japan's answer to question 23, it seemed that ex officio  authority only applied to 
trade marks and patents;  he asked Japan to clarify if the authority also applied to copyrights.  In 
response to question 32, Japan responded that Japan Post Insurance was privatized and taken over by 
Japan Post Holdings in October 2007.  The United States understood that Japan Post Holdings was a 
wholly government-owned entity;  if this was so , he asked how it was consistent with Japan's 
statement that Japan Post Insuran ce was privatized.  In Japan's re sponse to question 33, there were 
inconsistencies in the treatment ac corded to foreign insu rance companies incor porated in Japan and 
branches of foreign insurance companies in Japan.  He asked whether Japan planned to update its law 
to address this issue.  With respect to SPS issu es, he asked how Japan's zero tolerance policy 
complied with Codex guidelines.  He also asked Japan to explain how often domestic products were 
tested and how the Japanese Regulatory Agency ensu red that the organic products produced in Japan 
were completely free of residue.  The United States also asked Japan to explain how it justified its strict policy regarding the enforcement of maximum residue levels, which pena lized an entire industry 
in an exporting country due to a violation by a si ngle supplier from that country.  The United States 
asked how Japan justified its enforcement regime in  light of Article 5.6 of the SPS Agreement, and 
also how it justified subjecting dom estic and imported horticultural produc ts to different rules in light 
of Article 2.3 of the SPS Agreement.  The United St ates also asked Japan to provide details of the 
number of domestic pesticide tolerance viola tions that had occurred since January 2006. 
118. The representative of China
 appreciated answers provided by the Japanese delegation.  It 
seemed that Members and Japan had somewhat different views as to whether there was a 
slowing-down of the pace of the regulatory reform in Japan.  However, this would not be so important 
as long as the Japanese Government took concrete step s and measures, witnessed by all Members, in 
particular with regard to those sectors and issu es with which Members had long been expressing their 
concerns.  China looked forward to an acceleration of the Japanese Government's efforts in this 
regard.  He stated that China would subm it some additional questions in writing.  
119. The representative of Korea  had a follow-up question on the ac tivities of JETRO in attracting 
foreign investment.  The questi on would be conveyed in writing. 
120. The representative of Japan  thanked Members for their inte rventions and interest in the 
Japanese economy.  With respect to the question re garding DFQF access to LDCs, he wished to know  WT/TPR/M/211 
 Page 21 
 
 
  where the 8% figure came from.  Imports from LDCs had increased considerably since 2006.  With 
regard to the question regarding RTAs and their co verage to include substantially all trade as in 
Article 24 of the GATT, he pointed out that this w as a matter of interpretation.  Japan's RTAs had a 
revision clause.  The agreement with Mexico was unde r the process of being revised, while that with 
Singapore had already been revised.  Japan wished to take up issues on SPS in the forthcoming SPS 
committee meeting, while issues on EMS coul d be discussed on a bilateral basis.   
121. The Chairperson  informed Members of an update on progress in regard to the review of 
recent trade developments associated with the present financial and economic crisis.  At the end of the 
informal TPRB meeting on 9 February 2009, he had informed Members that he would ask the 
Chairman of the General Council to write to the Chairs of the WTO Councils and Committees 
requesting them to consult with Members on ways to improve the timeliness and completeness of 
notifications.  He had already sent such a letter.  In  addition, he would be meeting with the Chairman 
of the General Council, Ambassador  Matus, and the Chairman-elect of the TPRB, Ambassador Major, 
shortly to discuss the most effective way to follow up on the issues of the process and substance of the 
monitoring exercise that had been raised by some delegations at the meeting.  At the end of the 
informal meeting, he had asked the Director-Gener al to circulate to Members a document listing the 
relevant notification and transparency provisions in the WTO Agreements.  He was informed that this 
list was currently being prepared by the Secretariat.   The Secretariat was also regularly monitoring all 
possible sources to obtain relevant information on tr ade-related measures in order to update the DG's 
Report for mid-March. WT/TPR/M/211 
Page 22  
 
  VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
122. This ninth Trade Policy Review of Japan has gr eatly enhanced Members' understanding of its 
trade and related policies as well as the challenges Japan faces owing to the present global financial 
crisis.  Our discussions have benefited from the ac tive participation of the Japanese delegation led by 
Ambassador Yokota, from the insightful and tho ught-provoking contributions by the discussant, 
Ambassador Gero of Canada, and from the many inte rventions by Members.  Japan's response to the 
large number of questions, made available at the begi nning of this meeting, was much appreciated.    
123. Members looked forward to a quick and complete  recovery of Japan's economy.  In this 
context, Members considered that such a recovery, led by domestic demand, was important for the prosperity of the world economy and the expansion of international tr ade.  Members were encouraged 
that Japan had refrained from introducing new protec tive trade-policy measures since the onset of the 
financial crisis in September 2008.  Members also recognized that the multilateral trading system, by 
keeping markets open to Japan's exports, had contribut ed positively to its economy in the recent years;  
this openness should be maintain ed notwithstanding the current difficult economic environment.  
Members encouraged Japan to continue its reform process and improve its market access, particularly 
in agriculture and services, whose productivity, and thus competitiveness, is relatively low.  
124. Members welcomed Japan's active role in the multilateral trading system, particularly its 
strong support for the early conclusion of th e Doha Development Agenda.  Members commended 
Japan for its financial and technical assistance, including Official Development Aid, as well as 
various development initiatives related to trade and in vestment, particularly its contribution to Aid for 
Trade.  Members also commended Japan's support fo r the process of accession by future Members.  
Furthermore, Members expressed their appreciation of the improved preferential market access 
provided by Japan to developing and least develope d countries, and its deci sion to expand duty-free 
and quota-free market access accorded to LDCs;  they encouraged Japan  to open further its market to 
these countries' exports.  Members also noted Japan 's increasing involvement in bilateral/regional 
trading arrangements;  they urged Japan to ensure  that these arrangements are compatible with the 
multilateral system (by, for example, covering "substantially all trade").  
125. Members expressed their appreciation of Japan's st eps to liberalize further its trade regime.  
Most applied MFN rates coincide with the bound rates,  imparting a high degree of predictability to the 
tariff.  However, Japan's tariff remains complex.   Applied MFN rates for industrial products are 
generally low.  Nonetheless, products of export in terest to developing Memb ers, such as agricultural 
products, textiles and clothing, l eather products and footwear, encounter significant tariff peaks 
(somewhat concealed by non- ad valorem  rates), tariff escalation, tariff quotas (and their intricacies) 
and/or state trading.  Members expressed their c oncern about the recent drop in foreign suppliers' 
share of Japan's government procurement and en couraged Japan to facilitate greater foreign 
participation.  
126. While generally appreciating Japan's moves to harmonize its standards and technical 
regulations with international nor ms, many Members expressed concern over the complexity, and thus 
lack of transparency, of Japan's sanitary and phyt osanitary (SPS) measures, technical regulations, and 
standards.  Some Members questioned the appr opriateness of risk assessment regarding SPS 
measures, which they encouraged Japan to em ploy in the least trade-restrictive manner. 
127. Members noted Japan's continued enhancement of transparency and progress in regulatory 
reforms;  Members hoped for further reforms to enhance competition and thereby improve 
productivity.  Members looked forward to measures to  facilitate inward fore ign direct investment 
(FDI), which remains relatively low; in this cont ext, Members looked to measures (e.g. those related 
to mergers and acquisitions, and corporate governan ce) to improve Japan's business environment.  
Members appreciated the progress in privatizing public  corporations, particularly the establishment of  WT/TPR/M/211 
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  the new Japan Post companies;  they encouraged Jap an to ensure a level playing field in the markets 
concerned (e.g. banking, insuran ce, and express delivery services). 
128. On agriculture, Members welcomed Japan's move away from price to income support;  
nonetheless, they expressed concern about border m easures and the relatively high level of overall 
domestic support for agriculture.  Many Members were  concerned about Japan's use of import quotas 
for fish and marine products.  On manufacturing,  Members were interested in plans to promote 
particular sectors.  Members encouraged Japan to continue reforms to enhance competition in 
services.  
129. In closing, I would like to thank the Japanese de legation for its active participation in this 
Review, including its written responses  provided before and during the me eting;  we all look forward 
to receiving answers on outstanding questions.  The k een interest shown by Members in this Review, 
as reflected in the large number of advance wr itten questions, numerous interventions and high 
attendance, indicates the importance they attach to Japan's role in the multilateral trading system.  
This Review has clearly indicated that the TPRM is  an important element in ensuring a transparent 
multilateral trading system.  I am encouraged by  the statement by Japan that despite current 
difficulties, it has maintained th e openness of its economy and continued to adhere strictly to WTO 
rules.  Nevertheless, I do hope that Japan will ta ke to heart the concerns expressed by Members, 
particularly with regard to its policies regard ing agriculture, tariff and non-tariff measures, SPS 
measures, government procurement, and FDI. 
 
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