WRITTEN QUESTION E-0801/98 by Peter Truscott (PSE) to the Commission (26 March 1998)

Subject: Opening up of the Japanese market for consumer photographic materials

The US Government has made major steps in opening up the Japanese consumer photographic paper and film market. During the ensuing proceedings at the WTO, Japan made a number of specific commitments.

Considering that the EU is a major player in this market with companies such as Kodak based in my Hertfordshire constituency, what steps will the Commission be taking to monitor and ensure progress on the opening up of this market?

Answer given by Sir Leon Brittan on behalf of the Commission (15 April 1998)

The World trade organisation (WTO) panel concerning access for foreign companies to the Japanese market for photographic film and paper was established on 16 October 1996, on the request of the United States. The Community joined this panel as a third party in view of its economic interest in this market.

The final report of the WTO dispute settlement panel on Japan - Measures affecting photographic film and paper has been distributed to the parties (United States and Japan). It will be distributed to other WTO members in the coming weeks. According to information provided by the parties the panel dismisses the American claims, as no causal link between measures adopted by the Japanese government and an upsetting of the competitive relationship between domestic and imported products has been established.

The issue whether the structure of the Japanese market is competitive falls outside the scope of current WTO rules. Accordingly the panel has not made a judgement on this. Only through a multilateral framework of competition rules would the WTO be able to examine private practices that may have a market foreclosure effect. The case clearly underlines the need for a WTO framework of competition rules and their effect on market opening. The Commission intends to continue its efforts in the WTO working group on trade and competition and hopes that the case will lead to an intensified discussion on trade and competition issues and to the development of a framework of competition rules in the WTO.

During the dispute settlement proceedings on the Japanese market for photographic film and paper, Japan outlined its policy of ensuring non-discriminatory access to the Japanese distribution system and improving market access in the photographic film sector and other sectors. Japan did not make any specific commitments during the dispute settlement proceedings.

To ensure progress in the opening up of this market, as well as the Japanese market in general, the Commission will continue to track closely the implementation of the stated Japanese policy of improved market access. The Commission has urged Japan to undertake fundamental reforms in its distribution system so as to reduce the high costs of doing business in Japan, to improve market access for foreign exporters and service providers, and to provide more consumer choice. Recently the Commission sent more than 200 deregulation proposals to the Japanese government. These included suggestions in the field of distribution. The Commission proposals also requested that Japan strengthen competition policy enforcement. The implementation of the Japanese new three-year deregulation programme from April 1998 provides an opportunity for measures to be taken to facilitate access to the Japanese distribution system for foreign companies.