WORLD TRADE  
ORGANIZATION  WT/TPR/M/142 
1 April 2005 
 (05-1325) 
Trade Policy Review Body 
25 and 27 January 2005  
 
 
 
TRADE POLICY REVIEW 
 
JAPAN 
 
Minutes of Meeting  
 
Chairperson:  H.E. Mrs. Puangrat Asavapisit (Thailand) 
 
 
Page 
 
I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 3  
II. OPENING STATEMENT BY THE REPRESENTATIVE OF JAPAN 4  
III. STATEMENT BY THE DISCUSSANT 7  
IV. STATEMENTS BY MEMBERS 10  
V. REPLIES BY THE REPRESENTATIVE OF JAPAN AND ADDITIONAL 
COMMENTS 20 
VI. CONCLUDING REMARKS BY THE CHAIRPERSON 26  
 
 
 
     
 
    
 
    
 
  
Note:   Advance written questions by WTO Me mbers and the replies provided by Japan are 
reproduced in document WT/TPR/M/142/Add.1 and will be available online at: 
http://www.wto.org/english/tr atop_e/tpr_e/tp_rep_e.htm. WT/TPR/M/142 
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I. INTRODUCTORY REMARKS BY THE CHAIRPERSON 
1. The seventh Trade Policy Review of Japan  was held on 25 and 27 January 2005.  The 
Chairperson (H.E. Mrs. Puangrat Asavapisit) welc omed the delegation of Japan, led by Mr. Kaoru 
Ishikawa and Ambassador Oshima, and the discussan t  Mr. Tony Miller (Hong Kong, China).  As 
usual, the discussant would speak in his personal capac ity and not as representative of his country.  In 
accordance with the established proce dures, the discussant had made available, in advance, outlines of 
the main issues he intended to raise (document WT/TPR/D/118). 
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/142 and 
that of the WTO Secretariat in document WT/TPR/S/142.  Copies of advance written questions, 
submitted by the Separate Customs Territory of Ta iwan, Penghu, Kinmen and Matsu;  Switzerland;  
the Republic of Korea;  Canada;  Indonesia;  Tu rkey;  Singapore;  Hong Kong, China;  Chile;  
Argentina;  China;  New Zealand;  the United Stat es;  Australia;  India;  Colombia;  the European 
Communities;  Malaysia;  Mexico;  Brazil;  Norway ;  Costa Rica;  and Thailand had been transmitted 
to the Japanese delegation. 
3. The Chairperson was encouraged  by the recent recovery of Japan's economy, particularly 
compared with the previous decade of slow gr owth.  This recovery was due partly to the 
Government's own efforts involving macroeconomic policy measures and structural reforms.  WTO 
Members had also played an important role in making this improvement possible by keeping their 
markets open to Japan's exports;  indeed, exports ha d been one of the main sources of growth during 
the period under review.  This was witnessed by the sl ower strength of growth since the first quarter 
of 2004 due to a sharp drop in exports.  Thus, it re mained to be seen how the Government would 
address this challenge in order to sustain its economic recovery.  At the same time, while the economic growth had helped Japan with its st ructural problems, including non-performing loans 
(NPLs), the Government apparently recognized that  further reforms were required.  The TPRB would 
encourage the Government to pursue, and perhaps ev en strengthen, its agenda in this regard.   
4. While Japan remained committed to the multilateral trading system and had strongly 
supported the Doha Development Age nda, it had also intensified its pursuit of bilateral/regional free-
trade agreements.  The Government Report explained that these agreements were intended to serve as 
a building block to further liberalize trade at th e multilateral level;  the Chairperson believed that 
Members would be interested in learning more  about how Japan hoped to accomplish this goal. 
5. The Secretariat Report noted that many agricu ltural products benefited from relatively high 
ad valorem  equivalents (AVEs) of non- ad valorem  duties, and a complex tariff quota system.  In 
addition, the total value of assistance to agricu lture exceeded the sector's contribution to GDP, and 
most of the assistance seemed to consist of measure s that distorted production and trade.  She believed 
that Members would be interested in hearing about Japan's agricultural reform and its plan to reduce 
trade distortion in this sector. 
 WT/TPR/M/142 
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II. OPENING STATEMENT BY THE REPRESENTATIVE OF JAPAN 
6. The representative of Japan
, Mr. Kaoru Ishikawa, stated that Japan hoped to lead the well-
balanced growth of the world economy by secu ring its own sound economic condition, ensuring 
sustainable economic growth led by private sector demand and overcoming deflation in the process of 
structural reforms. 
7. The Government of Japan continued to promote st ructural reform in the belief that there was 
"no revitalization and development in Japan wit hout structural reforms".  The Government had 
declared the period between FY 2002 and FY 2004 as an  "intensive adjustment period" in reforms, 
and a period during which the problem of non-perform ing loans (NPLs) should be solved.  Thus it had 
been doing its best to overcome deflation a nd generate sustainable economic growth, without 
resorting to the expansion of public expenditure. 
8. The Government had been implementing a Pr ogramme for Financial Revival, with the 
objective of reducing the ratio of NPLs to outstandi ng loans at major banks from 8.4% in March 2002 
to 4% by March 2005;  in this regard, the ra tio had declined to 4.7% in September 2004.  
Accordingly, the amount of NPLs carried by ma jor banks had decreased by about ¥15 trillion in the 
past two and a half years, and the stock prices of banks and real estate companies had enjoyed steady 
gains. 
9. In the meantime, the active revitalization and restructuring of corporations was reflected in 
the increase of new businesses;  nearly 17,000 had em erged in the past one and a half years, under a 
tentative measure called the Special Regulations Governing Minimum Capital Requirements, which 
reduced the capital requirement for new corporations to ¥1.  This measure had been a success, and the 
Government planned to make  it a permanent regulation. 
10. Local governments had created 386 special zones since April 2003, when the Special Zones 
for structural reform had entered into effect.  The positive impact of the special zones was now 
expanding throughout the nation. 
11. With the progress in structural reforms, Jap an's economy had accelerated its recovery pace 
around the summer of 2003, led by private demand including private consumption and private fixed 
investment.  In FY 2004, the recovery had been spreading from manufacturing to non-manufacturing firms, from urban to regional economies. 
12. The representative emphasized that this economi c recovery showed a significant difference 
compared with the past two economic recoveries fo llowing the burst of the bubble economy.  First, 
this steady economic upturn did not depend on public expenditures;  second, the unemployment rate 
had decreased for the first time in 13 years;  a nd third, the reduction in the household income had 
come to a halt.  Even with the downside risks in the international economy, such as the surge in the 
crude oil prices and the gradual appreciation of forei gn exchange rates, it was anticipated that Japan’s 
economy would continue to recover in 2005.  It also appeared that the structural reforms had achieved 
a comprehensive result in removing the obstacles th at had depressed the Japanese economy for a long 
period of time. 
13. The recent development of price indices seemed to show that retail and consumer prices 
tended to remain unaffected by the surge in in ternational and domestic commodity prices, even 
though raw material and intermediary commodity pr ices were affected to a certain degree.  This 
phenomenon could be partly explaine d by the partial absorption of in creases in raw material prices, 
probably by reductions in wages and higher produc tivity.  Hence, while domestic corporate-goods 
prices had been on a slightly upward trend due to a rise in raw material prices, Japan was still 
experiencing moderate  overall deflation.  WT/TPR/M/142 
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14. Against this background, the Government and the Bank of Japan had stated that they would 
act in an integrated manner to overcome deflati on.  The Bank of Japan had announced its monetary 
policy commitment, that it would continue the current  policy until the year-on-year change in the CPI 
registered zero percent or higher on a sustainable basi s.  It was anticipated that, by facilitating market 
participants’ projection of future interest rates, th is policy commitment would stabilize market interest 
rates, and firms would enjoy a stable market envi ronment in which they could raise funds at low 
interest rates. 
15. With regard to the objectives of Japan’s stru ctural reform initiative, the Government had 
declared the period between FY 2005 and FY 2006 as a "concentrated consolidation period" 
following the "intensive adjustment period".  It was determined to establish a basis for sustained 
economic growth during this period, by focusing  efforts on accelerating structural reforms and 
ensuring a break away from deflation.  The Updated Structural Reform Programme, which was stipulated in the Cabinet's "Basic Policies for Economic and Fiscal Management and Structural 
Reform 2004", contained mid-term  policy challenges and required the Government to achieve a 
primary surplus by the early 2010s.  The first cha llenge was to implement reforms outlined thus far, 
such as the principle of "from Public Sector to Pr ivate Sector", and "from the State to the Regions".  
The privatization of postal services, regulatory re form, and Reform of the Three Major Policies fell 
into this category.  The second was to implement a reform of the government sector to construct an 
efficient and streamlined government with public  accountability, including through budgetary system 
reform and administrative reforms.  The third was to conduct a reform  to boost growth potential in the 
private sector and each region, by promoti ng active corporate and industry reorganization, 
streamlining market rules, enhancing innovative fi nancial sectors, revitalizing regions through the 
revival of regional industries, etc.  In addition, th e Government was to tackle such challenges as the 
enhancement of economic pa rtnerships in the context of globalization, the promotion of inward 
foreign direct investment, the implementation of stru ctural reforms in employment and education, and 
a comprehensive reform of the social security system.  The Government would also accelerate 
agriculture sector reform, by targe ting its support to core farmers. 
16. Japanese diplomacy in the economic field had sever al priority issues:  firstly, to participate 
actively in the creation of basic rules in the intern ational economy at global le vel, by maintaining and 
strengthening the multilateral trade system under the WTO;  secondly, to improve and expand 
multilayered economic relations at regional and b ilateral levels, by promoting regional economic 
partnership and cooperation thro ugh the conclusion of free-trade agreements and economic 
partnership agreements (FTA /EPAs), and frameworks including the Asia-Pacific Economic 
Cooperation (APEC);  and thirdly, to enhance economic security by addressing various issues such as 
energy security, and issues concerning ocean, fishery and food resources.  
17. Japan's high level of economic development ow ed much to the multilateral trade system, 
which had been formed in accordan ce with the GATT.  Under that system, Japan had benefited from 
the mutual reduction of trade barriers, including ta riffs.  Japan placed emphasis on the strengthening 
of the non-discriminatory and rules-based multilate ral trade system through the multilateral trade 
negotiations.  Based on a firm belief that a rules- based multilateral trade system would contribute to 
the enhancement of credibility for the world econom y, Japan had participated actively in the new 
round of negotiations, the DDA.  In this regard, Japan  was trying hard to contribute to the reform and 
liberalization of trade policies, the creation of new rules that could respond to the globalization, and 
facilitation of economic growth in developing co untries, through effective participation in the 
multilateral trade system. 
18.
 The representative stated that Japan would try its best to contribute constructively to the DDA 
negotiations in a wide range of initiatives, in cluding development, agriculture, non-agricultural 
market access (NAMA), services, rules, and trade facilitation.  Japan had pr ovided about one-fifth of 
Development Assistance Committee (DAC) members’ total Official Development Assistance (ODA) 
during the last decade.  The Government had la unched the initiative of the Tokyo International WT/TPR/M/142 
Page 6  
 
Conference on African Development (TICAD), in which Japan would make progress hand-in-hand with its equal partners while respecting the beneficiar ies’ ownership.  In this regard, Japan had held a 
TICAD Asia-Africa Trade and Investment Conferen ce in November 2004.  With such a process, 
Japan had established a scheme for expanding tr ade and direct investments among developing 
countries under the free market mechanism.  In a ddition, Japan had provided trade-related assistance 
for developing countries, including an annual contri bution to the DDA Global Trust Fund.  Japan co-
hosted an APEC Seminar on WTO Trade F acilitation with Thailand in November 2004
 in Bangkok;  
and was planning a "Round Table for Trade Facilita tion" in Geneva on 10 February 2005, with 
Australia, Canada, Malaysia, and the United States.   Japan firmly believed that the WTO was an 
incarnation of the equality, transparency, effici ency, and representation that the globalizing economy 
most aspired to have. 
19. While centering its efforts on the WTO and the DDA, Japan had been devoting considerable 
resources to regional and bilateral trade polici es, particularly FTA/EPAs in the process of 
globalization.  Its first EPA, the Japan-Singapor e Agreement for a New Age Economic Partnership 
(JSEPA) had entered into force on 30 November 2002.   Japan had signed the Japan-Mexico EPA, and 
had reached agreements in principle on major elemen ts of an EPA with the Philippines.  It had had 
several rounds of negotiations with the Republic of  Korea aiming to conclude the negotiations in 
substance within 2005, as well as with Malaysia  and Thailand aiming to conclude EPAs within a 
reasonable period of time.  In addition, Japan would commence EPA negotiations with ASEAN as a 
whole in April 2005.   
20. In this connection, the Government had adopted  a Basic Policy towards Further Promotion of 
Economic Partnership Agreements on 21 December  2004, which stipulated the essential points for 
promoting EPAs, including strategic priorities and cr iteria for identifying countries or regions with 
which to negotiate FTA/EPAs.  This basic policy t ouched on the current situation of the international 
economic environment.  While globalization had adva nced since the end of the Cold War, economic 
and political relations at the regional level were al so being strengthened.  Although such trends had 
not developed rapidly in Asia until the late 1990s, the network of  partnership arrangements had 
recently been growing.  Japan believed in the impor tance of regional stability and prosperity of an 
East Asian community;  it was also committed to  strengthening the multilateral trade system by 
concluding EPAs that complied with the WTO rul es.  The EPAs were designed to promote a free-
trade system and covered areas such as investme nt, competition, and intellectual property rights. 
Strengthening economic partnershi p through EPAs beyond the level currently attainable under the 
WTO negotiations would serve as a building block fo r higher liberalization at the multilateral level.  
Japan believed that EPAs promoted domestic structural  reform not only in Japan, but also in its EPA 
partner countries.  Further liberalization of trad e in goods and services, as well as facilitation of 
investment through EPAs, would contribute to a wide  range of structural and regulatory reform, so 
that domestic industries could sharpen their competit ive edge.  Such domestic reform would help to 
strengthen the multilateral trade system. 
21. FTA/EPAs were a means to complement th e multilateral trade system. While it was 
emphasized that further commitment toward lib eralization could be obtained through FTA/EPA 
negotiations, a trade environment flooded with FTA/EPAs could make tariff structures more 
complicated with disarrayed rules, resulting in an increase in the cost of global economic activities.  
Moreover, some objectives could only be fully achieved through a multilateral approach.  Most 
importantly, FTA/EPAs were not the only appropriate means to help countries that were marginalized 
and left out from globalization.  Japan was fully committed to the notion that multilateral 
liberalization could best help those countries bene fit from world trade and advance their level of 
development. Without sufficient multilateral liber alization and commitment,  the sound development 
of worldwide trade could not be achieved.  Japan was ready to further promote trade liberalization 
through vigorously advancing the DDA negotiations.  By placing the DDA as a centrepiece of its 
trade policy and FTA/EPAs as a complement to it, Ja pan was strongly committed to realizing a more 
stable world economy.  WT/TPR/M/142 
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III. STATEMENT BY THE DISCUSSANT 
22. The discussant (Mr. Tony Miller) stated that, in  the latter half of the twentieth century, as 
tariffs and other barriers had falle n and trade had flowed more freely, the wealth of the global 
economy had increased exponentially;  however, not all economies had grown at the same speed as 
Japan in the 1960s and 1970s.  Nevertheless, as e ach new entrant chose openness over autarky, all the 
other economies, "mature" and "immature", had to adju st;  internal flexibility was essential.  The more 
globalized the world economy, the more vulnera ble Members became to  policy mismatches and 
resulting misalignments elsewhere, in other words, th e more sensitive they must be to the potential 
external impact of domestic policy decisions. 
23. Since Japan's last Trade Policy Review, things appeared to have been improved, at least on 
the surface, notwithstanding an apparent easing of grow th in the last quarter of 2004, which raised 
concerns on the sustainability of the recent economic recovery.  Even before the last Review, Japan 
had loosened its monetary policy with a view to halti ng deflation.  By spring 2005, the ratio of NPLs 
to outstanding loans at major banks should be dow n to 4%, half of the level three years ago.  
However, discounting for deflation, real interest ra tes tended to be higher than nominal rates.  The 
discussant asked whether this, with the residual eff ects of NPLs, had stifled new corporate borrowing 
and investment. 
24. Many observers had noted that the combination of a high level of public debt and a rapidly 
aging population was not a healthy one.  The recent OECD report noted that, while the budget deficit had fallen from 6.25% of GDP in 2003 to 5% in 2004, gross debt stood at 160% of GDP.  The 
discussant asked whether the Government envi saged any measures under its "concentrated 
consolidation period" to ensure adequate long-term  fiscal revenues, and to reduce recurrent spending 
both in absolute terms and as a proportion of GDP.  He was concerned about the extent to which the 
problems were structural rather than cyclical.   
25. Much of the recent improve d economic performance was attributed to strong external 
demand.  Japan’s improved trade surplus reflected both an increase in the merchandise trade surplus 
and a decrease in the services deficit.  The increased  price of oil and the yen’s appreciation against the 
dollar would have an impact on this.  The discu ssant asked about what changes were likely to 
monetary policy measures.   
26. The discussant noted that Japan had been a firm supporter of the rules-based multilateral 
trading system since it joined the GATT some 50 y ears ago.  He welcomed the assurance that this 
remained the central pillar of its trade policy.   Japan had also been a supporter of the open-
regionalism espoused by the APEC.  The discussant aske d how Japan proposed to ensure that bilateral 
and regional arrangements would not undermine its commitment to the multilateral trading system.  
27. Japan had taken a number of measures since its last Trade Policy Review, aimed at further 
liberalizing its trade and investment regimes.  In  particular, progress had been made in improving the 
competitive environment, for example, in the te lecommunications and financial services sectors.  
28. Most imports entered Japan duty free or at low tariff rates;  the simple average applied MFN 
rate was 6.3% in fiscal year 2004.  There was little incentive to evade duties at that level, and the 
discussant assumed that the collection was fiscally efficient, meaning the cost of collection as a 
proportion of revenue collected was low.  However,  he doubted that the same would be true of the 
non-ad valorem  duties, which were a significant feature of  the import regime for agricultural goods.  
The simple average of all specific rates for which ad valorem  equivalents were available was 
approximately ten times that of purely ad valorem  tariff rates;  he suggested that a comparison of the 
collection cost for the two types might help  focus minds on the benefits of reform. WT/TPR/M/142 
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29. In agriculture, Japan had not notified any export subsidies to the WTO, but a number of 
financing, insurance, guarantee, and drawback schem es were available for exports, and the total value 
of the assistance to agriculture exceeded the sector’s contribution to GDP.  Ignoring the obvious 
transfer of wealth involved, casual observation sugg ested that most of thes e measures distorted both 
production and trade.  The current Round provided Japan with an opportunity to remedy their 
cumulatively negative internal and external effects.  
30. No preferences were granted to domestic suppliers for procurement covered by the 
Agreement on Government Procurement, but 86%  of goods and services procured  were supplied by 
Japanese firms.  Increasing the real openness of the system at every level of government might reduce the deficit.  The discussant asked whether any such measures were being considered. 
31. Roughly 92% of Japan Industrial Standards (J IS) were aligned to their international 
counterparts and Japan had taken further steps to  ensure acceptance of foreign test data and 
compliance assessment.  However, there was also  continuing anecdotal evidence of nugatory 
expenditure and time wasted on requests for re-a ssessment of products already accepted once, as 
reflected in the written questions of several delegations.  
32. The discussant was concerned about Japan's re form on corporate governance.  He wondered 
how confident Japan was that the reforms would ensure more transparency and more effective 
corporate governance, and what issues remained outstanding.   
33. There had been some developments in Japan's regulatory reform during the last two years.  
The Government had adopted a schem e to establish special zones fo r structural reforms in 2003, 
within which, exceptions to particul ar restrictions were to be granted according to each zone's specific 
circumstances.   The discussant asked for more inform ation in this regard, and noted that from China's 
experience, special zones had an impact well beyond their formal boundaries.  In March 2004, a Three-Year Programme for Promoting Regulatory Re form was adopted;  it listed some 762 measures, 
which, it was envisaged, would create new opportu nities for domestic and foreign businesses.  The 
discussant asked whether all 762 measures had been implemented, whether they were implemented 
nation-wide or only within some special zones, and what results had emerged for those that had been 
implemented.  
34. The discussant commended the improvements in th e competition environment, particularly in 
telecommunications and financial services, and asked  the Japanese delegation for an assessment, both 
of the real progress made in these areas, and th e work still to be done to secure a genuinely 
competitive environment.  Japan had increased the si ze and strengthened the status of its Fair Trade 
Commission (JFTC), but it was not clear whether this  had been paralleled by any down-sizing of the 
regulators, or whether the JFTC operated under a pr o-active mandate.  In this context, the discussant 
thought it would be useful for Members to understand better the role of competition policy in tackling domestic regulatory issues at the re gional or trade association level. 
35. The discussant considered that the clearest signa l that Japan took reform seriously had come 
in the spring of 2004, when the Prime Minister  had taken personal command of the Headquarters for 
the Promotion of Regulatory Reform.  In 2004, top priority had been accorded to the "opening of 
government-driven markets to the private sector".  Given that structural reforms had already been 
completed in respect of 133 of the 163 public corpor ations targeted for treatment in December 2001, 
this possibly indicated the Prime Minister's impa tience with what had been achieved so far.  
Particularly interesting was the singling out of Japan Post and its related life insurance arm for 
privatization, starting in 2007. 
36. 
While complimenting Japan's reform programme and privatization plans, the discussant drew 
attention to certain anomalies.  Considering that  such anomalies might be symptoms of unintended 
tension or blockages within the system, he highlig hted Japan's extraordinarily low level of inward  WT/TPR/M/142 
 Page 9 
 
 
investment.  The IMF showed that Japan’s ratio of inward FDI stock to nominal GDP was 2% in 
2002, compared with 19.3% in the United States, 26.3% in Germany, and 37.8% in the United Kingdom.  He asked whether foreign investment w as discouraged by a lack of transparency, or 
whether it was unintentionally discouraged by quirks of corporate law, fiscal policy or banking supervision.   
37. Experience indicated that privatization de pended in large degree on access to capital.  
However, if foreign investors felt excluded, or if th ey perceived that their post-privatization role was 
likely to be inhibited, the access to capital w ould be restricted and the chance of successful 
privatization would be correspondingly reduced.  This became particularly important when 
considering that one of the entities to be priva tized, Japan Post, managed some US$3,500 billion, the 
largest single pool of assets anywhere in the world.  Currently, it invested about 45% in public 
corporations and 30% in Japanese Government bonds , while 10% went to regional governments.  WT/TPR/M/142 
Page 10  
 
IV. STATEMENTS BY MEMBERS 
38. Members thanked the Japanese Government and the Secretariat for their reports.  They looked 
forward to receiving any outstanding replies to their advance written questions.  
39. Many Members noted that their bilateral trad e and investment ties with Japan had been 
strengthened over the recent period.  Members were encouraged by the recent recovery of Japan's 
economy, they attributed this largely to the stru ctural reforms Japan had implemented.  Members 
hoped that reform measures would aid sustainable economic growth.   
40. Members recognized that the multilateral trading system had contributed greatly to Japan's 
economic recovery, by keeping foreign markets open to Japan's exports.  They appreciated Japan's 
active role at the WTO, including its strong suppo rt for the Doha Development Agenda.  Some 
Members commended the authorities for offering tec hnical assistance and capacity building, and 
providing preferential market access to developing and LDCs, and urged Japan to open its market 
further for LDCs' products.  Many Members apprec iated efforts made by Ambassador Oshima, the 
Chair of the General Council in 2004, in helping to conclude the July Package, which had provided 
impetus to the DDA negotiations and laid the ground work for the next stage of the negotiations.   
41. Members noted Japan's in creased involvement with regional and bilateral trade agreements 
and urged WTO-compatibility in this regard.  They appreciated that many imports entered Japan either duty free or at low tariff rates.  Noneth eless, Members commented on Japan's complex tariff 
structure, including significant ta riff peaks (often involving non- ad valorem  tariffs), tariff escalation 
for some products, and tariff quotas (particularly in agriculture).   
42. Some Members were concerned about the complexity of Japan's standards, technical 
regulations, and sanitary and phytosanitary measures.  They urged Japan to bring its standards into 
line with international standards.  Many Members expressed their concern about the seeming lack of 
transparency in Japan's government procurement practices.   
43. Members pointed out the low level of inward FDI into Japan, and enquired about the reasons 
for this.  They appreciated Japan's progress in privatizing its public services, in particular the Japan 
Post.   
44. Members noted that the level of domestic support for agriculture seemed to exceed the 
sector's contribution to GDP.  While some Me mbers acknowledged the non-trade concerns in 
agriculture, they urged Japan to address these conc erns in a manner that would not unduly distort 
trade and production. 
45. The representative of the Separate Customs Te rritory of Taiwan, Penghu, Kinmen and Matsu
 
agreed that cultivating a multilateral trading system  to promote global economic welfare was the best 
way forward.  While recognizing Japan's commitmen t to the DDA, he was concerned about Japan's 
recent efforts in negotiating bilateral free-trade agreements;  as Japan was the leading economy in 
East Asia, the special trade terms it offered coul d have significant implications for non-parties. 
46. He was interested in learning more about Japan's  structural reforms, in particular measures 
that would enhance the market liberaliza tion under the multilateral trading regime.  
47. The representative of Switzerland  stated that the two countries often shared similar views on a 
broad range of areas under discussion at the WTO and in the Doha Round, such as the strong support for market access for non-agricultural products;  the common belief that agricultural policy should 
reflect the multifunctional nature of the sector;  a nd the support for new rules on trade facilitation.   WT/TPR/M/142 
 Page 11 
 
 
48. He thanked the delegation of Japan for its upda te in respect of Japan's experiences in FTAs 
and ETAs.  He sought the reasons for Japan's physi cal verification requirement for certain goods, and 
asked whether physical verification was applied also to other goods. 
49. The Programme for the Creation, Protection a nd Exploitation of Intellectual Property, of 
July 2003, stipulated that Japan would speed up examination of submissions, among others, in the 
field of patents, by further outsourcing and increasing the number of examiners.  However, 
registration delays were still considerable.  He  asked whether any specific measures would be 
introduced in the amendment of the Patents La w for the Promotion of Expeditious Patent 
Examination, to improve the situation.  
50. The representative of the Republic of Korea  welcomed Japan's recent economic recovery, 
which would strengthen Japan's role as an engine of growth for the Asian region and for the world.   
51. Korea and Japan had maintained very close economic and trade relations, although Korea 
faced a continued trade deficit with Japan.  This unbalance was largely due to structural reasons and 
the competitive differences of the industries of th e two counties.  However, there were many ways 
and means to attain a more balanced trade rela tionship, including reduction of both tariff and non-
tariff barriers;  tariff rates were relatively high in petrochemicals, clothes, and footwear.  Japan had 
begun a countervailing duty investiga tion against a Korean product;  Ko rea believed that the case was 
without merit and that it should be closed as s oon as possible.  Japan had recently enhanced the 
protection of intellectual property rights.  While this was a legitimate policy objective, measures to 
protect intellectual property should not unduly restrict trade.   
52. The representative of Canada  stated that a bilateral economic framework initiative was 
launched in January 2005;  it was supported by private companies, and could enhance the 
governments' ability to help companies to seek opport unities in each other's markets.  He emphasized 
the close cooperation between the two countries, for example, their joint chairmanship of APEC's 
WTO Capacity Building Group.  Canada also comme nded Japan for the attention and resources it had 
devoted to trade-related capacity  building and particularly for the organization of an APEC/WTO 
Roundtable on Trade Facilitation in  Geneva on 10 February 2005. 
53. Canada believed that Japan's efforts in negotiating more regional and bilateral trade 
arrangements would not diminish its commitment to th e WTO.  It applauded Japan's efforts to reduce 
impediments to inward FDI, and encouraged Japan to continue liberalizing its foreign investment 
regime through further reforms.   
54. Canada welcomed the elimination of r estrictions on foreign investment in 
telecommunications services (except in Nippon Te legraph and Telephone Co rporation), and the 
revision of the Basic Telecommunications Law;  a swif t conclusion of a Canada-Japan Social Security 
Agreement;  the progress in the alignment of Japan's domestic standards with international standards;  
the move towards performance-based standards for building products;  and the revised Food 
Sanitation Law.  However, problems remained a nd Canada encouraged Japan to modernize its 
regulatory regime, by, for example, clearly defini ng the scope for technical regulations, introducing 
more performance-based standards in fire codes,  and removing size restrictions in wood-frame 
housing.   
55. Canada appreciated reforms in Japan's financia l sector, in which foreign firms were playing 
an increasingly active role.  He en couraged Japan to increase transpar ency in regulatory regimes, to 
improve harmonization of complia nce requirements between regulatory bodies, and to promote  
internationally accepted practices in financial regulations.  He consid ered the privatization of Japan 
Post and its related companies would be particul arly critical to ensure a continuation of positive 
developments in the sector. WT/TPR/M/142 
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56. Canada was concerned about the relatively high ta riffs that Japan applied to vegetable oils 
(particularly canola), processed foods, wooden buildi ng products, red meats, fish, non-ferrous metals, 
and leather footwear.  Japan had higher tariffs against Canadian Spruce-Pine-Fir (SPF) lumber 
imports compared with some other lumber imports;  the removal of these tariff rates would help to 
reduce Japan's housing costs. 
57. Canada recognized that Japan ha d raised its import quota volumes for certain fish products in 
the past decade, and encouraged Japan to continue  its liberalization of the import quota regime, in 
particular with respect to scallops.  
58. The representative of Brunei on behalf of ASEAN
 stated that Japan and ASEAN had built 
close economic and trade relations through, for ex ample:  the ASEAN+3 m eetings;  the Framework 
for a Japan-ASEAN Comprehensive Economic Partne rship, signed in October 2003;  the EPA with 
Singapore, signed in 2002;  and the ongoing negotia tions at bilateral level with individual ASEAN 
countries.   
59. Japan was generally open to import competition in  respect of industrial goods, although tariffs 
could be relatively high for food and agricultural products, textiles and clothing, and footwear.  He 
encouraged Japan to continue to play a positive a nd constructive role in the agricultural negotiations, 
by lowering protection in this sector.  Japan's  non-tariff barriers, such as import quotas and SPS 
requirements were of concern, and he encouraged Japan to continue pursuing regulatory reforms, by 
strengthening competition laws and their enforcemen t, and further liberalizing key sectors such as 
energy, telecommunications, and financial services.   
60. The representative of Turkey  applauded Japan on its measures to further liberalize its trade 
and investment regime, but noted that potentially important barriers to competition remained in 
agriculture.  
61. The representative of Hong Kong, China stated that in addition to close trade and investment 
ties, Japan and Hong Kong, China had close relations in many sectors, for example, tourism.  Japan 
was the fourth most visited place for Hong Kong, Chin a visitors in 2004, and ranked third in terms of 
total visitors to Hong Kong, China.  
62. Japan had generally low industrial tariffs but n eeded to substantially reduce its tariffs in 
agriculture and to simplify the tariff structure.  
63. He commended Japan for refraining from using trade remedy measures, and applauded its 
efforts as the coordinator of the Friends of Anti- Dumping negotiations and its constructive role in 
Rules negotiations.   
64. Hong Kong, China and Japan shared the goal of achieving further liberalization in trade in 
services.  He appreciated Japan's progress in improving the competitive environment of certain services, in particular the infrastructural and telecommunication sectors.  He appreciated Japan's contribution to the ongoing negotia tions on financial services, such as its efforts to facilitate market 
access negotiations and to improve the disciplin e on domestic regulations under the GATS.   
65. He also applauded Japan for its active role in  technical assistance and capacity building, both 
in terms of financial contributions and particip ation in the Trade Related Technical Assistance 
Schemes, to facilitate the integration of devel oping Members and LDCs into the world economy.  
66. The representative of Chile
 stated that her country and Japan had worked together on 
improving and clarifying anti-dumping disciplines in  the multilateral trade negotiations.  She was 
concerned about the magnitude of Japan's subsid ies to agriculture.  Wh ile Japan's reforms in 
agriculture were encouraging, they were still in sufficient, and had not materialized in Japan's  WT/TPR/M/142 
 Page 13 
 
 
commitment in the agricultural negotiations.  Ch ile intended to cooperate with Japan in designing 
disciplines that would resolve the problem of fishing subsidies. 
67. She requested further information on safeguard measures, tariff quotas, and taxes since 2002.  
She also raised questions on maritime transpor t and professional services, such as what measures 
Japan intended to adopt to eliminate restrictions app lied to cabotage, particularly with regard to the 
nationality of ships;  and whether Japan would cons ider eliminating or reduc ing conditions pertaining 
to professional services.  A Joint Study Group was to start evaluating the feasibility of reaching a 
trade agreement between Chile and Japan on the 31 January 2005. 
68. The representative of the United States  applauded Japan for streamlining and reducing fees 
for customs processing, and maintaining low tariffs for industrial products.  However, she noted that 
high barriers remained in agriculture and footwear.   
69. Japan had made progress in structural and regulatory reform on many fronts, such as 
broadband utilization, reform in the energy sector, disposal of non-performing loans in the financial 
sector, efforts to help foreign banks enter Japan, the establishment of Special Zones for Structural 
Reform, and the plan to privatize Japan Post.  Sh e was pleased by the role of domestic demand in 
generating economic growth, which was an indication of  the influence of the structural and regulatory 
reform.  She encouraged Japan to continue its reform agenda, and welcomed the new Three-Year 
Programme for Promoting Regulatory Reform and e fforts to increase the authority and elevate the 
role of the Japan Fair Trade Commission. 
70. Tariffs and domestic support were high in agri culture, and the United States was concerned 
about Japan's use of non-science-based sanitary and phytosanitary measures, which restricted the 
importation of a broad range of agricultural produc ts, such as beef, poultry, and apples;  as a global 
leader in trade, Japan was expected to fulfil its  obligation under the WTO SPS Agreement and employ 
only the least trade-restrictive SPS measures.  The United States consid ered that the defensive posture 
on agriculture continued to hold Japan from being a more active player in the DDA negotiations.  It 
encouraged Japan to take a forward-looking st ance, by expanding market access on agricultural 
imports, cutting trade-distorting subsidies to farmers, and implementing SPS measures in an 
appropriate and science-based manner.  
71. The United States welcomed reform measures in  Japan's telecommunications sector, but was 
concerned that the sector remained dominated by one ma jor carrier group.  In addition, efforts to spur 
competition might be thwarted in the wireline sector by increasing interconnection rates.  High interconnection rates, as lack of transparency in  granting licences to additional operators, tended to 
hinder competition in the mobile phone sector.  The United States urged Japan to continue to take 
steps that would promote competition and benefit consumers. 
72. She noted the increasing role of single tenderi ng and the declining participation of foreign 
suppliers in Japan's government pr ocurement market.  She requested  more information on the reason 
for the small share of foreign supplie rs in Japan's procurement market.  
73. Japan's involvement in FTAs was increasing, and the United States recognized that FTAs 
could be a powerful force for trade liberalization.  However, to fully capitalize on their potential, and 
to be fully consistent with the rules of the WTO, preferential trade agreements should cover 
substantially all trade, and not exclude large pr otected sectors of the economy, such as agriculture, 
from liberalization.  She urged Japan to set a high standard in this regard.   
74. The representative of Argentina
 was concerned with the sustainability of Japan's recent 
economic recovery, which depended on  both internal factors and external factors, in particular the 
recovery pace of the world economy and increasing petroleum costs.  He encouraged Japan to 
continue its structural and other economic reforms, such as the disposal of non-performing loans, the WT/TPR/M/142 
Page 14  
 
reforms in the financial and corporate sectors, the pension system reform, and efforts to strengthen 
competition policy and further liberalize trade, particularly in agriculture. 
75. Considering the high degree of complementarity  between the two economies, bilateral trade 
was low compared with its potential, which could be attributed to market access problems, such as the 
SPS measures.  He urged Japan to implement the recognition of equiva lence of organic products from 
Argentina.  
76. While Japan had implemented reform measures in  energy and the services sector, agriculture 
had not undergone significant change in terms of trade liberalization.  Japan's domestic support to 
agriculture not only increased prices for Japanese consumers and producers, but also affected 
producers in developing countries.  He hoped agricultural policies would be corrected. 
77. The representative of China
 stated that the complementariti es of the economies of China and 
Japan had fostered further rapid growth of bila teral trade, and China's imports from Japan had 
contributed to Japan's recent economic recovery.  In bilateral economic and trade relations, China 
looked forward to a more enhanced mutual trust, which could help the two countries to contribute, 
together with other Members of the WTO, to the stability and prosperity of the world economy and 
trade in the long run. 
78. Japan's import quota system and import tariff-rate quota system were intricate, and the high 
tariff levels had impaired the bene fits to developing countries, including China, of the multilateral 
trading system.  He urged Japan to improve transp arency in the administration of the two systems, 
particularly the TRQ regime for rice imports. 
79. China was also concerned with Japan's in creasingly frequent application of TBT and SPS 
measures on agricultural imports.  Although it was the right of the Japanese government to apply 
these measures to the extent necessary to  protect the life and health of humans, plants, and animals, in 
many cases they had been applied far beyond the ex tent necessary.  Standards applied on imports 
were sometimes higher than international standa rds and higher than those Japan had set on its 
domestic products.  Inspections were carried out frequently on imports but rarely on domestic 
products. 
80. China appreciated the Reports prepared by Japan  and the Secretariat, but was concerned that 
the Report by Japan referred to some specific issu es concerning China's trade polices and measures  
rather than its own problems raised during the bila teral consultations between the two countries.  In 
China's view, this might leave an impression that  the review was on China rather than Japan.  
Noticing that the same issues were raised in the Secretariat's Report, and were described almost 
identically, China questioned the independence and ne utrality of the Secretariat, and requested an 
explanation from both the Japanese delegation and the S ecretariat.  The Secretariat spoke privately to 
the Chinese delegation. 
81. The representative of New Zealand  noted that Japan was placing more emphasis on regional 
and bilateral trade policies, and was conducting a ra nge of economic partnership negotiations, which, 
Japan had stated, would be complementary to the multilateral trading system and would not weaken 
the impetus to achieve progress under the WTO Doha  Development Agenda.  Given the significance 
of agricultural liberalization in the Doha Roun d, New Zealand encouraged Japan to pursue a 
comprehensive approach that would help strengt hen the multilateral trading system.  New Zealand 
also welcomed the attention Japan was according to  achieving structural reform of its agricultural 
sector, through a greater focus on fostering enhan ced levels of professionalism and competitiveness;  
internationally open and efficient markets in this sector would be compatible with achieving food 
security and promoting food production in Japan.  WT/TPR/M/142 
 Page 15 
 
 
82. The highly regulated approach and the high levels of domestic support to agriculture 
continued to undermine its international compe titiveness, to impose signifi cant costs to Japanese 
consumers, and to contribute to the distortion of domestic and international markets.  In providing 
future support to agriculture, Japan should pursue measu res that were decoupled, transparent, and 
targeted, and that did not distort production or trade. 
83. With its impressive manufacturing strength and gl obal trade reach, Japan clearly had major 
interests in a successful outcome to the non-agricultu ral market access negotiations in the DDA.  An 
outcome capable of meeting the range of WTO Members' interests would require meaningful trade liberalization covering the full range of sectors, including ones that might be sensitive for countries 
like Japan. 
84. While appreciating Japan's progress in deregula tion and international harmonization of its 
standards and technical regulations, and its adopt ion of mutual recognition arrangements, he was 
concerned with the low acceptance rate of ove rseas test reports and certification in Japan. 
85. He was encouraged by Japan's proposal in D ecember 2004 to expand its Non-Quarantine Pest 
List, including through adding a number of pests al ready existent in Japan but not under "official 
control".  
86. The Japanese Government attached importance to regulatory reform in the services sector, 
and he sought information on reform measures in  this sector, including in transport and postal 
services.  
87. The representative of Australia
 stated that bilateral economic and trade relations were strong 
and would be strengthened by the Australia-Jap an Trade and Economic Framework, signed in 
July 2003.  He noted Japan's recent economic recove ry and urged Japan to proceed with its structural 
and regulatory reform.  
88. He urged Japan to include trade reform as an intrinsic part of its reform agenda and to 
continue eliminating barriers to foreign investment .  He welcomed the opportunities Japan provided to 
trading partners to propose regulatory reforms through the Deregulation Promotion Programme.  
89. While Australia was pleased that Japan did not  adopt agricultural export subsidies, it was 
concerned with the high level of production-distorti ng supports to farmers, and the high tariffs and 
out-of-quota tariff rates on specific agricultural pro ducts.  Japan could secure its food supply by 
granting trade liberalization in this sector;  trade liberalization would improve productivity in Japan's 
domestic agriculture sector, raise efficiency of fa rm practices, help stabilize world markets, and 
encourage developing countries to become reliable food suppliers.  Together with targeted non-trade-
distorting supports, greater trade liberalization coul d fulfil agriculture's non-economic roles.  The high 
level of protection and subsidization in the fisher ies sector also needed to be addressed, and Japan 
needed to play a more leading role in the multila teral trade system on these issues, and to work 
towards ambitious outcomes in all area s of the Doha round negotiations.  
90. Since its previous Review, Japan had signed a free-trade agreement with Mexico, and was 
pursuing other bilateral/regional trade negotia tions.  Australia was following closely these 
negotiations and was interested in seeing how its pr otected agricultural sector would be covered and 
addressed in its FTAs and EPAs. 
91. The representative of India  noted that Indian exports to Japan had been affected by the 
stringent sanitary and technical standards enforced  by the Japanese authorities.   In some instances, 
these standards seemed to go beyond reasonable public  health and safety concerns.  The sanitary 
issues relating to exports of poultry meat and meat products, mangoes, grapes, and flowers had WT/TPR/M/142 
Page 16  
 
remained unresolved for a long period.   He urged the Japanese delegation to l ook into these concerns 
and take satisfactory remedial measures.  
92. Japan's agriculture was highly protected, and In dia looked forward to a reduction of subsidies 
in the ongoing reform process under the Japanese B asic Law on Food, Agriculture and Rural Areas. 
93. The representative of Colombia
 stated that even though bilateral trade with Japan had 
increased greatly, the application of sanitary po licy by the Japanese authorities had affected 
Colombia's exports to Japan's market, in particular  flowers, bananas, fresh fruits, and meat products.  
She welcomed Japan's increasing involvement in Colo mbia, both in investment and in trade;  Japan 
participated in the automobile industry, tran sportation, tourism, and raw materials.   
94. Japan had recently increased its involvement in bilateral/regional trade arrangements, such as 
the ongoing negotiations between Japan and some  Asian economies, and Chile.  She hoped Japan 
would consider other countries in Latin America as potential partners, for example, Colombia.  
95. While Japan had undertaken deregulation initia tives in trade and investment, its tariff 
structure remained complicated.  Colombia hoped th at this could be examined and solved in the 
ongoing negotiations.  With regard to Japan's substantial support to its agriculture sector, she was 
concerned about its commitment to the ongoing agricultural negotiations. 
96. The representative of the European Communities  noted the close economic and trade ties 
between the EC and Japan:  during the period 1999 – 03, the European Communities became one of 
the largest investors in Japan. 
97. The reform measures adopted by Japan were important to stop and reverse the negative 
economic trend with which it was faced.  Ongoing effort s were needed to continue the work in respect 
of competition, government procurement, trade f acilitation, and the strengt hening of the goods and 
services markets.  
98. A number of trade barriers remained in Japan, for example:  a safeguard system for imports of 
pork meat;  cumbersome administration of tari ff-rate quotas for a number of products;  import quotas 
for fish;  a lengthy evaluation and approval process e.g. for new drug applications, food additives, and 
plants;  and non-harmonization of regulatory appr oaches and requirements with its major trading 
partners in a number of areas, including cosmetics,  building materials, plants, vegetables and fruits, 
meat and poultry.  In services, examples included the different notions used to determine "the 
dominant operator" in the markets for fixed and m obile telephones;  restrictions on cabotage;  and 
licences for liquor retailers.  He en couraged Japan to take measures to further deregulate and open its 
economy to the outside world.   
99. Despite Japan's deregulation measures further sep arating the private and public sectors, public 
entities in Japan procured from domestic sources 100 % of goods in sectors such as agriculture, wood, 
textiles, stone, glass articles, iron and steel, non-ferrous  metals, and road vehicles.  He thought that 
one reason for this could be the system that required suppliers to apply for qualification to bid, but he 
was interested in learning other reasons.  
100. Japan's recent bilateral trade negotiations with partners in the region had slightly changed 
trade patterns towards the trilateral arrangement be tween Japan, Korea and China;  this was, to a 
certain extent, at the expense of other countries, not  least in the region.  He urged Japan to ensure 
these arrangements were supportive of the multilateral trading system.  
101. The representative of Mexico  stated that an agreement on economic partnership had been 
reached recently between the two countries.  It  would enter into force in April 2005 and would 
increase bilateral trade.    WT/TPR/M/142 
 Page 17 
 
 
102. The representative of Brazil  stated that his country attached great importance to the bilateral 
economic and trade relations with Japan;  the two coun tries also had strong cultural and social ties.   
103. He commended the progress made by Japan to improve the competitive environment, 
including telecommunications and financial services.  He also encouraged Japan to continue structural 
reforms, by further liberalizing its trade and inv estment regimes and introduc ing more competition in 
the domestic market, particularly in agriculture.  Japan's agriculture had re mained largely unchanged 
since its last Trade Policy Review, benefiting from a significant degree of protection:  in addition to the relatively high simple average applied MFN tariff, there were non- ad valorem  duties (often 
involving high ad valorem  equivalents);  the intricate tariff quota system;  and the high value of 
domestic assistance, containing measures that distor ted production and trade.  He urged Japan to 
improve market access for agriculture, through reducing or eliminating many barriers and trade-
distorting practices. 
104. The representative of Norway
 welcomed Japan's efforts to implement reforms in certain 
sectors, in particular banking.  Whether Japan coul d sustain its economic recovery was important not 
only for the country and the region, but also for the world.   
105. Japan had increased its participation in the FTAs,  and he asked for Japan's view on the future 
of economic relations in East Asia, and the consequent influence on the WTO. 
106. Japan and Norway were cooperating closely in  the current negotiations, for example, the 
cooperation in the G-10 and the anti-dumping negotiati ons, and the two countries shared the view that 
non-trade concerns in agriculture had to be  taken into account in the WTO negotiations. 
107. The representative of Costa Rica  stated that the two countries worked closely under the Doha 
programme, and shared similar views in areas su ch as anti-dumping, trade facilitation, and the 
Singapore issues.  He asked how Japan would ensure  that its domestic support for agriculture would 
not negatively affect the trade of developing countri es.  Considering Japan continued to apply tariffs 
on agriculture that were up to three times higher th an the simple average of MFN applied rates, he 
asked how such a tariff structure could be compa tible with the DDA in improving market access for 
developing countries and in developing a just and market-oriented trading system for agriculture. 
108. The representative of Pakistan  noted, with concern, Japan's increasing involvement in 
regional and bilateral trading arra ngements.  He considered that this trend would lead to the 
marginalization and exclusion of LDCs.   Recognizi ng Japan's generally low tariffs, he noted also the 
relatively high non-tariff barriers.   
109. The representative of Kenya  noted that Japan's progress in its reform measures since its last 
Review, by further liberalizing the trade and investment regimes and improving the competitive 
environment, had led to economic recovery with a positive impact on the level of unemployment and 
on export competitiveness.  She encourage Japan to  continue with its reform process, paying 
particular attention to areas that could constr ain the sustainability of the economic recovery. 
110. Trade had played an important role in Japan's economy, which underscored the importance 
that international trade could have in a country's economic development process;  it was particularly 
important in integrating developing countries to the world economy.   
111. She applauded the measures adopted by Japan to  encourage inflow of FDI into Japan, which 
remained relatively low by developed country standard s.  She also encouraged Japan to increase its 
outward FDI to developing countries,  and open up its agriculture sector in the context of the current 
WTO negotiations.   WT/TPR/M/142 
Page 18  
 
112. She appreciated Japan's Generalized System of Pr eferences and its extension to the year 2011.  
She urged Japan to introduce more measures that would further enhance its GSP scheme as a way to 
promote the integration of weaker economies into the multilateral trading system.  Kenya appreciated 
Japan’s technical assistance and looked forward to continued support, particularly at the critical 
implementation stage of the Doha Development Agenda. 
113. Kenya had close economic and trade relations w ith Japan:  it was the largest recipient in 
Africa of ODA from Japan, and Japan had been th e largest development assistance donor to Kenya 
since 1986.  She expressed her gratitude towards Japan  for actively taking part in development issues 
of Africa through the Tokyo International Conferen ce on African Development (TICAD);  initiated in 
1993, it was a unique framework for African Devel opment.  Kenya looked forward to continued 
partnership and dialogue within the TICAD framework. 
114. The representative of Rwanda
 commended Japan for its continuing engagement in providing 
funds to the WTO Trust Fund for Technical As sistance Activities and capacity building, which 
benefited developing countries and LDCs by integr ating trade and poverty reduction plans in these 
countries.   Rwanda also looked forward to Japan's  contribution to the implementation of the DTIS 
Action Matrix, and welcomed the Japanese GSP scheme, which was aimed at improving market 
access for developing countries, particularly for LDCs. 
115. He applauded Japan's commitment to developmen t in African countries, through many areas 
of activities aimed at achieving human-centred development, poverty reduction through economic 
growth and consolidation of peace, which were al so the main priorities of the TICAD and the New 
Partnership for Africa's Development (NEPAD).  W ith reference to the recent TICAD III meeting 
held in Tokyo in September 2003, he commended Ja pan's efforts to bring together knowledge and 
experiences of the international community to African  development, in support of the NEPAD.    
116. The representative of Sri Lanka  applauded Japan's GSP scheme, which had contributed to the 
industrialization process in developing countries.  Ho wever, he was also concerned by Japan's recent 
moves towards regional and bilateral arrangements, which he considered had the potential to negate 
the benefit accrued to developing  countries under the GSP scheme.  
117. Japan still maintained an array of SPS measu res on health grounds;  these measures should 
not be more than necessary to address its leg itimate concerns, and should not create unnecessary 
barriers to trade.  
118. The representative of Benin  applauded Japan's recent econom ic recovery.  He commended 
Japan for its effort to promote economic devel opment of developing c ountries and LDCs, and to 
incorporate them into world trade, through the TI CAD, and its support in the course of WTO regional 
workshops on cotton in 2004.  
119. The representative of Bulgaria  welcomed Japan's recent economic recovery, which was 
attributed to structural reforms.  Japan was the la rgest source of FDI from Asian countries in Bulgaria.  
Potential areas for Japanese investment included power engineering, information technology, 
electronics, purification and environmental prot ection systems, food processing, and tourism. 
120. She noted that 2005 marked the 50th anniversary of Japan's accession to GATT, and 
commended Japan's role as a strong supporter to the multilateral trading system.  Japan's contribution 
to the integration of developing a nd LDCs into the multilateral trading system was appreciated:  broad 
market opportunities were provided for products orig inating in these countries;  various types of 
assistance were extended with the ultimate goal of improving their economic growth and capacity 
building;  and Japan’s GSP scheme had been improved since 2001.    WT/TPR/M/142 
 Page 19 
 
 
121. The representative of Nepal  appreciated the assistance provided by Japan to developing 
countries and LDCs.  The development assistance expanded the trading capacity of developing or 
least developed countries, through investment in infrastructure.  Japan granted duty-free and quota-
free access to the products of LDCs, and covera ge had been expanded to about 5,000 items in 
April 2003.  He hoped Japan could expand further the coverage in ar ea of interest for LDCs, and 
remove NTBs.   
122. Nepal appreciated Japan's efforts in providing  TRTA and would be interested to see the 
coverage of TRTA expanded to  include LDCs.  These effort s could help to reverse the 
marginalization of LDCs in global trading system , and enhance their trading capacity, which would 
help them to benefit from the multilateral trading system.   
123. The representative of Mauritius  commended Japan on its agricultural reform programme.  She 
fully understood the difficulties of a reform pr ocess for countries not endowed with competitive 
agriculture, and yet agriculture had many non-trade concerns.  Mauritius shared similar views in the 
agricultural negotiations:  global agricultural libera lization needed to be progressive and should aim at 
achieving a balance of interests between exporting and importing countries. 
124. She appreciated Japan's efforts in providing technical assistance to developing countries.  It 
had been instrumental in promoting Africa's deve lopment through such initia tives as the TICAD.  She 
encouraged Japan to continue its efforts to prom ote trade and investment in African countries.  
125. She welcomed Japan's assistance in the fisher ies sector in Mauritius, and appreciated its 
sensitivities to the concerns of small developing co untries on various WTO issues, in particular the 
NAMA, the Rules negotiations, and the work programme on small economies.  
126. The representative of Uruguay  noted that external demand had contributed significantly to 
Japan's economic growth since 2002.   This gave hope to developing countries like Uruguay, that 
opening up to the multilateral trading system coul d lead to economic development.  Uruguay was 
working closely with Japan to help people unders tand the positive impact of market access, and the 
different disciplines and issues of the WTO.  Howe ver, the two countries had different approaches in 
agriculture;  she hoped to minimize these differences during negotiations.   
127. The representative of Nicaragua  considered that certain high levies in agricultural products, 
such as meat and rice, would be gradually reduced  as the result of the present round, and Japan's 
agriculture sector would be progressively liberalized.   WT/TPR/M/142 
Page 20  
 
V. REPLIES BY THE REPRESENTATIVE OF JAPAN AND ADDITIONAL 
COMMENTS 
128. The representative of Japan
 appreciated Members' deep and broad interest in Japan as 
expressed in the TPR exercise.  He was convinced  of the importance of the TPRM in enhancing 
global free trade.   
(i) Economic environment 
129. Japan's business sector continued to improve, le ading to better employment conditions and 
supporting consumer confidence.  GDP  growth had decelerated in the latter half of 2004, reflecting 
the slower growth of the world economy and an  inventory adjustment in information and 
communication technology (ICT) relate d goods, and the negative impact of the hike in oil prices.  
Nonetheless, the economic recovery had spread from corporate sectors to household sectors through 
the improvement in employment;  and income and private consumption were expected to follow a 
steady growth path.  As a conse quence, the Japanese economy was expected to continue a moderate 
recovery led by private demand. 
130. Under the principles of "no growth without refo rms," "leave to the private sector what can be 
done by the private sector," and "leave to local governments what can be done by local governments," 
as defined by Prime Minister Koizumi, the Government would continue to carry out the structural reforms in an integrated, consistent and swift manner.  This would bring out an eagerness for 
challenge from individuals, corporations, and local governments, and would help to achieve 
sustainable economic growth driven by private dema nd.  Within this context, the Government had 
reinforced the functions of the Japan Fair Trad e Commission, and was planning to privatize Japan 
Post.  At the same time, the Government and the Ba nk of Japan were working together to break away 
from deflation. 
131. Regarding the budget deficit a nd public debt, the Structural Reform and Medium-term 
Economic and Fiscal Perspectives, revised in Janua ry 2005, was aimed at keeping the size of the 
government (ratio of general gove rnment expenditure to nominal GDP) at the FY 2002 level until 
FY 2006.  Based on the assessment of public services  and expenditure levels, and on the status of 
economic revitalization and fiscal conditions, the G overnment would judge what tax measures were 
required.  After FY 2007, the Government would aim to achieve a surplus in the primary balance in the early 2010s, to improve fiscal balance and r ealize sustainable economic growth led by private-
sector demand.  As a consequence, gross government  debt was expected to be stable under 150% of 
nominal GDP.   
132. He welcomed questions addressing Japan's inwa rd foreign direct investment.  Foreign 
investors had invested actively in Japan's leadi ng industries, including the automobile industry, 
telecommunications, and financial services.  In some case s, foreign investors had played a vital role as 
a catalyst for revitalizing ailing companies by introducing new ideas for getting through the worldwide competition.   
133. The Government had taken measures to make Jap an an attractive investment destination for 
foreign firms in accordance with the Programme for the Promotion of Foreign Direct Investment in Japan.  Relevant ministries and agencies would cont inue to work together to implement measures to 
promote foreign direct investment, and to produce more effective measures for this purpose.  He 
referred to a recent article in The Economist, which i ndicated that in 2004, Japan ranked in the top ten 
in the "FDI confidence index".  Comparing Japan's FDI inflow with that of the EC, he pointed out that 
mutual FDI among individual member states of th e European Communities composed 70-80% of total 
inward FDI.  WT/TPR/M/142 
 Page 21 
 
 
134. Japan considered the WTO and MFN-based liberal ization to be the backbone of its economic 
diplomacy, not FTA/EPAs.  This conviction was based on Japan's own painful experience:  when Japan had joined the GATT in 1955, most c ountries applied GATT Article 35, which allowed 
Members not to apply the Agreement with particular  Members, such as Japan.  Japan had learnt from 
this experience, and was committed to the notio n that without global and MFN-based rules, 
international order and economic prosperity could not be sustained.  Thus although Japan was 
negotiating FTA/EPAs with Asian countries, it had no intention of creating an East Asia fortress, nor 
of launching an East Asia-centricity approach. 
135. The representative appreciated the warm comment s regarding TICAD, and stated that Japan 
would continue to facilitate the in tegration of African economies into the world economy, in the spirit 
of "equal partnership with the respect for the owners hip of African countries."  He was encouraged by 
a common philosophy between TICAD and NEPAD.   
136. The discussant
 highlighted two points from his opening remarks:  that trade was flowing more 
and more freely in the world;  and that there woul d be more interactions between countries in this 
increasingly globalized world.  Thus, as each new pl ayer benefited by opening up its markets, all 
others had to adjust;  and that process of adju stment was often more painful for those that had 
developed first and fastest.  Th e engagement in the global economy of large new players, such as 
India, China, and Brazil, clearly affected more keenly the more developed economies.  If these 
economies could become more flexible, it would be easi er for them to adjust, and to achieve further 
progress and development in their economies.   
137. He was encouraged by the progress made on non- performing loans, and the consolidation in 
the banking sector.  The Government had set up a firm  target to deal with the deficit, although 
keeping gross debt stable at just under 150% of GDP would still leave a large debt burden on society.  
He was concerned that the Government planned to  keep spending at around the same proportion of 
GDP in FY 2006 as in FY 2002;  this proportion had been quite high, and, until it could be reduced, 
the Government was pre-empting resources that c ould arguably be used more efficiently by the 
private sector.   
138. Nonetheless, he was impressed by the Prime Mi nister Koizumi's statements regarding the 
private sector and local governments.  He was also  encouraged by the minimum capital requirement 
of ¥1, which was a clear message that Japan was looking to the infinite resources of small and 
medium sized enterprises in reviving the economy.  
(ii) Trade policy by measure 
139. The representative of Japan  stated that Japan was properly implementing the Agreement on 
Government Procurement (GPA) and had adopte d non-discriminatory, transparent, and fair 
procurement procedures.  Japan was also implem enting  measures beyond the obligations under the 
GPA.  
140. On the issue of the low share of procuremen t from foreign suppliers, the ratio of foreign 
suppliers’ tenders (0.6% in 2002 in open tendering) ha d been lower than the ratio of awards to them 
(1.3%).  Thus, the low procurement ratio seemed to result from the low ratio of foreign tenders.  In 
addition, the share of foreign suppliers depende d on various factors, such as market trends, 
competitiveness of foreign firms, and their interest to join the market.  
141. An Intellectual Property Policy Headquarters, wh ich was established in the Cabinet chaired 
by Prime Minister Koizumi, had developed the St rategic Programme in July 2003 to make Japan an 
"intellectual-property-based nation".  The main aim w as for Japan to take leadership in the globalized 
world by further strengthening its internationally viable system.  The IP Policy Headquarters had reviewed the programme and established an "Int ellectual Property Strategic Programme 2004" in WT/TPR/M/142 
Page 22  
 
May 2004.  About 400 items for implementation were adopted, to promote the creation of, and 
reinforce the protection of intellectual properties.   Moreover, in 2004 Japan amended its Patent Law 
and other relevant laws;  Japan was confident th at the further outsourcing and increased number of 
examiners would reduce the number of pending une xamined patent applications.  Based on these 
experiences, Japan aimed to found a market infrast ructure based on intellectual property rules, not 
only domestically but also in foreign markets. 
142. The discussant
 believed that the existence of institu tional preferences and habits could easily 
affect government procurement procedures.  Govern ment procurement would never be easy and more 
liberal approaches to procurement depended on en couragement from Central Government and close 
supervision.   
143. The representative of the United States  noted that Japan attributed low rate of foreign 
procurement in Japan to low tender rate and perhaps the lack of interest by foreign suppliers in the 
Japanese market.  In his view, the interest of busin ess was usually linked with the chances of success.  
One signal of low chance of success was the use of single tendering, which had risen from 26% in 
1997 to 35% in 2003.  Another reason for the low tendering was the institutional preferences and 
habits, as pointed out by the discussant.  He asked Japan whether there were any plans to reduce the 
use of single tendering.  He sought information on the share of foreign suppliers in public works 
contracts, which used to be rather closed.  The in formation available suggested  that the foreign share 
of public works contracts in Japan was below 1%.  He asked whether Japan had any plans to address 
this issue, and requested more information on aw ards to foreign suppliers  of public construction 
contracts.  
144. The representative of Japan  replied that the relevant ministries and agencies had been 
providing information to companies, in particular fore ign firms, with a view to promoting the interests 
of foreign construction companies in Japan's market.   
145. He stated that the increase in the single tendering in the last two years could be attributed to a 
number of disasters in Japan during the period, wh ich had forced local governments, and sometimes 
the central Government, to rush to purchase equipment and services.   
146. He welcomed the discussant's recognition of the leadership of Japan's Prime Minister to 
reform.  He noted that the number of ministries had been reduced by half around seven years ago, 
reflecting the commitment of the Japanese Government to implement its regulatory reform.  He also 
reaffirmed Japan's commitment to ad just to the globalized world.   
(iii) Sectoral issues 
147. The representative of Japan  appreciated the various comments on agriculture, which he 
considered was a reflection of Japan's position as the largest net food importing country in the world.  
It was thus very open to overseas countries in terms of agricultural trade.  Japan imported about US$50 billion of food, corresponding to about 10% of total world food imports. 
148. In respect of Japan's high tariffs on agricultu ral products, he considered that agricultural 
tariffs should be based on the differences in pro ductivity derived from the natural, social and 
economic conditions in each country, and should reflect non-trade concerns.  Japan had reduced 
tariffs with the consecutive trade negotiations, including the Uruguay Round.  Japan's imports of 
many agricultural products had strongly increased as a result of the implementation of the URAA;  for 
example, imports of milk, dairy products, potato es, vegetables, and meats had increased by 20% to 
40% from 1994 to 2001.  In particular, agricultura l imports from developing countries had increased 
by about 50% from 1990 to 2001.   WT/TPR/M/142 
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149. Some Members had noted that Japan's agricultu re sector continued to receive substantial 
government support, and the share of total transf ers to agriculture in GDP exceeded the sector's 
contribution to GDP.  He considered that such an  OECD style statement set little attention on the 
ongoing Doha Round negotiations.  Members should ai m to reduce the trade-distorting domestic 
support, and Japan had decreased the total AMS leve l to about 18% of the commitment level in 2000, 
which was also much lower than those of other high ly industrialized countries.  In addition, Japan was 
continuing with its agricultural policy reform to co pe with the strengthened international disciplines 
on agriculture, including the continued reducti on of domestic support and border measures that 
resulted from the UR negotiations.   
150. Japan was fully committed to the Doha Mandate.  It had been calling for a balance between 
food importing countries and food exporting countr ies.  Thus, Japan had stressed a successful 
outcome to the negotiations that properly reflect ed non-trade concerns and the food sensitivities of 
food importing countries. 
151. Japan took sanitary and phytosanitary measures b ased on scientific evidence consistent with 
SPS agreement.  Regarding BSE issues, a Food Sa fety Commission was evaluating measures against 
BSE in Japan.  
152. In terms of market access for fisheries produc ts, Japan imported about one quarter of total 
world trade in fisheries products, which demonstr ated the openness of the Japanese market.  Japan 
applied import quota system on several fisheries products, in recognition of the importance of 
conservation and management of fisheries resources;   Japan considered that the import quota system 
was consistent with the WTO Agreements.  Subsidi es to fisheries were being discussed in the Rules 
negotiations;  Japan believed that these subsidi es undermined the conserva tion and management of 
resources, and should be prohibited.   
153. On financial services, in December 2004 Jap an established a "Programme for Further 
Financial Reform - Japan’s challenge:  Moving towards a Financial Services Nation".  This 
programme signalled the transformation of Japan's financial regulations from "financial system 
stability" to "financial system vitality", and was ai med at establishing a financial system led by the 
private sector.  Measures stipulated in the programme  included, the promotion of both a full check of 
current regulations and deregulations , in order to meet market partic ipants’ needs, to promote sound 
competition and the cultivation of new business;  and the active participation in negotiations for the 
liberalization of financial services at the WTO.   
154. Regulatory reform had proceeded in the telecommunications sector:  the amended 
Telecommunications Business Law, which entered into  force in April 2004, encouraged foreign and 
domestic carriers to enter the market;  and enable d carriers to operate telecommunications business 
with more flexibility and efficiency.  Consequent ly, Japan’s broadband market was one of the most 
pro-competitive markets in the world.  A variety of telecommunications services were provided at 
reasonable price and speed;  in particular, Japanese consumers enjoyed broadband services, such as 
DSL (digital subscriber line) services at the lowest cost in the world;  and FTTH (fibre to the home) 
services were becoming more common for mass consumers.  Japan aimed to use these broadband platforms to establish a ubiquitous network society by 2010 (in which anyone could be connected 
anytime, anywhere, with anything).  It expected  the global establishment of the ubiquitous network 
society to be one of the priority areas at the WS IS (World Summit on the Information Society), which 
was to be held this year.  
155. The Japanese Government was working with pr ivate sector to promote tourism by various 
measures, including the "Visit Japan Campaign".  Tour ism services, including travel agents and hotels 
in Japan, already had a high level of liberalization in terms of GATS rules.  Also, a great number of Japanese tourists (about 16 million in 2002) were tr avelling abroad every year, contributing to the 
promotion of mode 2 (consumption abroad) supply in GATS. WT/TPR/M/142 
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156. Japan had been participating in the Cosmetic s Harmonization International Cooperation since 
1999, which consisted of the regulatory authorities of the United States (FDA), the European Communities, Canada (Health Canada), and Japan. 
157. The discussant
 introduced two tests.  One was the "o range test", by which he measured the 
degree of openness of a country's agricultural sector.  This test looked at the variety of oranges 
available in that country's market:  there was a good variety of oranges in Japan, but at high prices.  
The other was a test represented by Japan Post.  The progress of reform in the financial sector, 
telecommunications services, and railway sector was an indication of the Government's determination, but the privatization of Japan Post w as an acid test of the Government's resolve.  Japan 
Post was not only a mail distribution organization, it also had savings and insurance functions.  Thus, 
the reform process in Japan Post was also a test of the ability of all vested interests to accept that these 
community savings should be allocated through th e market rather than through an organization 
controlled by the bureaucracy.  
158. He commended Ambassador Oshima's outstanding contribution to the multilateral trading 
system in his time as Chairman of the General Council.   
159. The representative of Australia
 remained concerned by Japan's agricultural import regime.  
Japan had made great efforts to answer the vast number of advance written questions, but the replies 
to some of Australia's questions had raised more doubts.  He asked whether the lack of a response to 
the question on fill rates for tariff-rate quotas for ag riculture indicated some protective feature in 
tariff-rate quotas.  On the question of calculating the ad valorem  equivalents for Japan's non- ad 
valorem  tariff lines, Australia noted Japan did not expl ore the use of alternative reference prices for a 
lot of its tariffs, which might indicate a lack of transparency.  He suggest ed that Japan should use 
reference prices in this instance. 
160. With regard to fish import quotas, Japan had re plied that the relevant information would be 
published in the Bulletin of the METI, and he asked  when this publication would appear.  On the 
question of telecommunications, Australia requested information on the review of universal services, 
and was concerned with any possible implications for the calculation of universal service charges, 
interconnection charges, etc.  He asked about th e timetable for consideration of measures, and 
whether foreign suppliers would have an opportunity to comment in the formulation of regulations.   
161.  The representative of China  thanked the Japanese delegation for its responses to the many 
advance written questions.  He was concerned by the replies to two of these questions.  He asked for a 
description of what appeared to be a country-specific quota volume in the rice import system.  In 
particular, he noted from the replies provided by the Japanese delegation, there seemed to be two 
competitive bidding schemes, one specified only the type  of rice, the other specified the type of rice 
and the producing countries.  Thus he asked Japan to  explain in more detail why it believed that it did 
not have a country-specific rice-quota system.  On the issue of import mark-up on rice, he asked why Japan's reply simply stated that data concerning this issue were not available.  
162. The representative of the United States
 applauded Hong Kong, China's openness in its 
agricultural sector;  referring to comments by the discu ssant, he stated that this was not much of a 
surprise since it had little ability to produce its ow n agricultural products.  While Japan was the 
world's largest net food importer, he  wondered how much this was due to  the limits of the arable land 
rather than openness.  He felt that further liber alization in the agriculture sector could promote 
consumers' benefits.   
163. With regard to the issue of beef, he asked wh ether Japan might use the increase in U.S. beef 
imports, once the ban on U.S. beef was removed, as a potential reason to adopt emergency safeguard 
measures.  He also asked whether Japan had any plans to simplify its complex import quota 
procedures.  Agriculture was an important issue in preferential trade agreements, and as Japan had  WT/TPR/M/142 
 Page 25 
 
 
omitted it in at least one of its preferential arra ngements, he was interested in knowing how Japan 
would handle this issue in future bilateral and re gional agreements, given that these were supposed to 
cover substantially all trade. 
164. The representative of Japan  emphasized the non-trade concerns in agriculture.  On the 
question of fill rates for tariff-rate quotas, he believed that fill rates ha d varied as a result of the shift 
in demand patterns.  On the question of non- ad valorem  tariffs, he noted that the ratio of non- ad 
valorem  tariff lines in total tariff lines was 18% in Jap an, compared with 14% in Australia, 30% in 
Canada, 46% in the EC-15, and 43% in the United States.   
165. On the question of telecommunications, the Information and Communications Council had 
started a study and would be expected to give answ ers in October 2005;  and relevant ministries might 
be able to promulgate the ministerial ordinances in March 2006.  On the question of the import quota 
system for rice, he stated that Japan did not em ploy a country-specific quota system.  Instead, Japan 
had two competitive bidding schemes:  one specified only the type of rice, the other specified the type 
of rice and the producing countries;  in both schemes, factors such as domestic demand and export country ability to supply rice were taken into account.  With regard to the privatization of Japan Post, 
this was planned to start in April 2007;  curren tly Japan Post was subject to the Anti-Monopoly Act 
and regulations by the Japan Fair Trade Commission.   
   WT/TPR/M/142 
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VI. CONCLUDING REMARKS BY THE CHAIRPERSON 
166. The seventh Trade Policy Review of Japan has been informative and open, thus contributing 
to a much improved understanding of recent developmen ts in Japan's trade and related policies.  In 
addition to the active engagement of the Japanes e delegation, our discussion has greatly benefited 
from the insightful and thought-provoking comm ents from our discussant and many thoughtful 
interventions by Members.  
167. Members were encouraged by the recent recovery  of Japan's economy, which is important for 
the prosperity of the world economy and the expa nsion of trade.  Members recognized that the 
multilateral trading system, by keeping foreign market s open to Japan's exports, contributed greatly to 
its recovery.  However, they enquired whether th e sustainability of Japan's recovery might be 
undermined by, for example, the combination of hi gh public debt and a rapidly aging population.  
Members encouraged Japan to continue its reform process and improve its market access, particularly 
in agriculture.  
168. Members welcomed Japan's active role in the multilateral trading system, including its strong 
support for the Doha Development Agenda negotiatio ns.  In this respect, Members commended Japan 
for providing technical assistance and capacity bu ilding to developing countries and LDCs.  Members 
also noted Japan's increasing invo lvement in bilateral/regional trad ing arrangements, and they urged 
Japan to ensure that these arrange ments are fully compatible with the multilateral system.  Some 
Members expressed their appreciation of the pr eferential market access provided by Japan to 
developing and least developed countries;  they encour aged Japan to open further its market in respect 
of LDCs' products.  
169. Members expressed their appreciation of steps ta ken by Japan to liberalize further its trade 
regime.  Many imports now enter Japan duty-free or at low tariff rates.  However, Japan's tariff 
structure remains complex, involving significant tariff peaks (often involving non- ad valorem  rates) 
and tariff escalation for some products, as well as intricate tariff quotas.  These mainly involve 
agricultural and food products, foot wear, and textiles.  Some Members urged Japan to simplify its 
tariff structure and improve the administration of  its import quotas and tariff-rate quota systems.  
Many Members also called for greater transparency in government procurement practices.  Steps to 
strengthen intellectual property rules and their en forcement were welcomed, although some Members 
voiced their concern over registration delays in this regard.   
170. While appreciating Japan's moves to harmonize its  standards and technical regulations with 
international norms, some Members expressed concer n over the complexity of Japan's standards, 
technical regulations, and sanitary and phytosanitary  measures.  They encouraged Japan to employ 
these measures in the least trade-restrictive manner.   
171. Members welcomed Japan's ongoing efforts to strengthen corporate governance and 
competition policy by increasing the status of the Fair Trade Commission and providing it with more 
resources.  Members also appreciated  the establishm ent of Special Zones for structural reform.  In 
addition, Members enquired about factors discouragi ng inward foreign direct investment (FDI) into 
Japan, which remains relatively low.  Members appr eciated the progress in privatizing public services; 
they were especially interested in the prog ress on the privatization of Japan Post.    
172. On sectoral issues, Members noted that the level of domestic support for agriculture 
seemingly exceeds the sector's contribution to GDP, and that the bulk of this support distorts trade and 
production.  Members encouraged Japan to address these concerns.  Members appreciated reforms in 
the energy and services sectors, in particular, in financial services and telecommunications.  Members 
expressed their belief that reform should continue with a view to enhancing competition not only in 
financial and telecommunications services, but also  in transportation, distribution, tourism, 
construction, legal, accounting, medical, and education services.   WT/TPR/M/142 
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173. Members sought clarification on a range of other issues, including:  
 - customs procedures;  
 - rules of origin;   - contingency measures, includi ng emergency safeguards;   
 - non-tariff border measures; 
 - state trading;   
 - export-related measures;    - taxation and tax-related assistance;  - agricultural reforms, trade arrangement s for rice, self-sufficiency, fisheries;  
 - market access for manufactured products; 
 - and e-commerce. 
174. Members expressed their appreciation of the or al and written responses to their questions 
provided by the Japanese delegation, and look forward to receiving any outstanding answers to questions.  
175. This successfully concludes our Review of Japan.  The keen interest shown by Members, with 
the large number of advance written questions, numer ous interventions and hi gh attendance, reflects 
the importance Members attach to Japan's key role at  the WTO.  In this context, I would encourage 
Japan to continue its strong support for the multilate ral trading system.  I also hope that Japan will 
take to heart the concerns expressed by Members,  particularly with regard to its policies on 
agriculture, sanitary and phytosanitary measures, government procurement, FDI, and competition. 
__________