In addition, the Japanese Government should publicly release the results of this survey and should make public any guidance it issues related to its findings. MITI also is considering implementing a variety of measures over the next two years to enhance the quality and efficiency of Japan's distribution system. MITI also is planning government-subsidized measures to build and reinforce links between the manufacturers, wholesalers, and retailers in the supply chain and develop a distribution information network that connects wholesale complexes nationwide. We will monitor the development and implementation of these measures closely to ensure that these linkages do not serve to impede foreign access to the Japanese distribution system as a whole and to the photographic film and paper sector in particular. The Japanese Government represented to the WTO panel that it prohibits practices that discourage the opening of large stores.
Large stores are a key and growing sales channel for foreign firms, including film manufacturers.
We urge Japan to abandon these policies, which serve to maintain the existing exclusionary distribution structure and to delay the efficiencies that would otherwise occur if the market were allowed to determine the most appropriate structure of the retail sector. To rationalize and open the distribution sector and allow for the growth of more efficient large stores, the U.S. Government long urged Japan to eliminate the Large-Scale Retail Store Law, including in the WTO film case and under the Enhanced Initiative. The Guideline covers noise, parking, traffic, and garbage. In response to MITI's solicitation in April 1999 of public comments on the draft Guideline, the U.S. Government provided MITI with extensive comments on May 20. The United States raised concerns that the Guideline, as drafted, could complicate or even discourage new retail store development and create a regulatory environment that is more burdensome than the current regime under the Large-Scale Retail Store Law.