WRITTEN QUESTION P-2480/96 by Willy De Clercq (ELDR) to the Commission (23 September 1996)

Subject: Barriers in the Japanese market for consumer photographic materials

After an extensive, year-long investigation, the United States has requested consultations with Japan in the World Trade Organization (WTO) regarding laws and measures which severely impede the ability of foreign producers to compete effectively in the market for consumer photographic materials. European exporters could benefit tremendously from a favourable precedent established in this case that would lead the government of Japan to open its economy and distribution network to foreign products. I understand that the Commission has been following this case closely.

1. What efforts has the Commission taken to date with respect to distribution and pricing barriers which restrict the ability of European and other exporters to compete equally in the Japanese film market?

2. What steps does the Commission plan to take that would lead the Japanese Government to dismantle laws and measures which discriminate against imports of film and other consumer products?

3. What does the Commission plan to do in the light of the WTO action initiated by the United States?

4. Does the Commission plan to participate in this action, and if so, in what capacity?

Answer given by Sir Leon Brittan on behalf of the Commission (1 October 1996)

1. The Commission has repeatedly requested the government of Japan e.g. in its deregulation proposals, to abolish or substantially amend the large scale retail stores law. Its liberalization is considered potentially beneficial for imports, and it should produce important structural changes in the Japanese distribution system which will be of benefit inter alia to European exporters of films.

2. The Commission supports the United States decision to pursue the issue of access to the Japanese market for photographic film and paper through multilateral channels. World trade organisation (WTO) activity on trade and competition is welcomed. The case confirms the link between trade and competition as set out in the recent communication on an international framework on competition rules ((COM(96) 284. )). The European interest is thus both systemic and economic. The Commission is at present studying how best to advance these interests.

3. The Commission requested on 4 July 1996 that it be allowed to join in the consultations concerning certain business practices in the Japanese consumer photographic film and paper markets that are considered to restrict competition in international trade by adversely affecting the channels of distribution and limiting price competition in the Japanese market, which the government of the United States requested with the government of Japan on 13 June 1996, pursuant to the decision on 'Restrictive business practices: arrangements for consultations' under the General agreement on tariffs and trade (GATT). The United States government has announced acceptance of the Community proposal to join these consultations. The Japanese government has not yet given its answer either to the United States or to the Community.

4. The United States trade representative has also announced that the United States will ask the WTO to establish two dispute settlement panels, one to review United States complaints under GATT regarding Japanese government barriers to market access in Japan for foreign photographic film and paper products, and a second under the General agreement on trade in services (GATS) regarding Japan's large scale retail stores law. As to participation in these panels, the decision will be taken once the panels have been established.