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WT/TPR/M/310
16 April 2015
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Trade Policy Review Body
9 and 11 March 2015
TRADE POLICY REVIEW
JAPAN
MINUTES OF THE MEETING
Chairperson: H.E. Mrs Mariam MD Salleh
CONTENTS
1 INTRODUCTORY REMARKS BY THE CHAIRPERSON ....................................................... 2
2 OPENING STATEMENT BY THE REPRESENTATIVE OF JAPAN ......................................... 3
3 STATEMENT BY THE DISCUSSANT ................................................................................ 7
4 STATEMENTS BY MEMBERS ........................................................................................ 13
5 REPLIES BY THE REPRESENTATIVE OF JAPAN AND ADDITIONAL COMMENTS ............ 52
6 CONCLUDING REMARKS BY THE CHAIRPERSON ......................................................... 61
7 ELECTION OF A NEW CHAIRPERSON FOR THE TPRB ................................................... 63
Note: Advance written questions and additional questions by WTO Members, and the replies
provided by Japan are reproduced in document WT/TPR/M/310/Add.1 and will be available online
at http://www.wto.org/english/tratop_e/tpr_e/tp_rep_e.htm.
WT/TPR/M/310 • Japan
-21 INTRODUCTORY REMARKS BY THE CHAIRPERSON
1.1. The twelfth Trade Policy Review of Japan was held on 9 and 11 March 2015. The Chairperson
H.E. Mrs Mariam MD Salleh (Malaysia) welcomed the delegation of Japan headed by Mr Tomochika
Uyama, Deputy Director-General, Economic Affairs Bureau, Ministry of Foreign Affairs; the rest of
the delegation, including H.E. Ambassador Yoichi Otabe, permanent Representative of Japan to the
WTO; other colleagues from the mission in Geneva; and the discussant, Mr Jean-Paul Thuillier
(France).
1.2. The Chairperson recalled the purpose of the Trade Policy Reviews and the main elements of
the procedures for the meeting. The report by Japan was contained in document WT/TPR/G/310
and that of the WTO Secretariat in WT/TPR/S/310.
1.3. The agenda also included the election of a new Chairperson of the Trade Policy Review Body
as set out in WT/AIR/TPR/1/Add.1 of 23 February 2015 at the end of the second day of the
meeting.
1.4. Japan had opted for the alternative timeline. Nearly 700 questions by the following
delegations had been submitted in writing at least four weeks in advance and had been
transmitted to the delegation of Japan: Australia; Switzerland; China; Mongolia; New Zealand;
Chile; Canada; Mexico; the Philippines; the United States; Costa Rica; Singapore; Turkey;
Norway; European Union; Chinese Taipei; the Philippines on behalf of ASEAN; Brazil; Hong Kong,
China; Guatemala; Ecuador; Argentina; and Indonesia. The following delegations submitted nearly
100 written questions after the four-week deadline: the Russian Federation; Oman; Thailand;
Colombia; Peru; India; Dominican Republic; Malaysia; Trinidad and Tobago; Republic of Korea;
and El Salvador.
1.5. Since its last review in 2013 Japan had been implementing an ambitious reform programme,
commonly known as "Abenomics", to overcome deflation and revitalize its economy. The
programme consisted of a "three arrows strategy": monetary easing; fiscal stimulus; and
structural reforms, including trade liberalization. In this respect, the Chairperson was sure that
Members would be interested in learning more about what other steps the authorities were taking,
or planning to take, to attain sustainable development, as well as their views on Japan's future
economic and trade prospects.
1.6. Both the Secretariat and Government reports noted that Japan believed that the multilateral
trading system (MTS) should play the leading role in the process of trade liberalization, and RTAs
should be a complement to the MTS. This view was of utmost importance for the MTS as Japan
was one of the biggest trading countries in the world. However, the Chairperson had noted that
Japan aimed to increase its trade under RTAs from around 19% in 2013 to 70% by 2018.
1.7. At the time of the previous TPR, Members had raised questions on: products of export
interest to developing countries, notably agricultural products, textiles and clothing, leather
products and footwear, which encountered significant tariff peaks, and state trading; the
complexity and lack of transparency regarding the development and application of technical
regulations and SPS measures; certain restrictions on foreign access to Japan's government
procurement; and the long-standing restrictions on Japan's domestic market for food, particularly
border measures and the relatively high level of overall domestic support for agriculture and the
level of its fisheries subsidies. Members had also encouraged Japan to continue reforms to
enhance competition in energy and services sectors. These concerns had also appeared in the
questions posed by Members in the ongoing Review. The Chairperson was sure that these and
many other themes would be touched upon in greater detail at the deliberations on the first and
second day of the meeting and they all looked forward to hearing Japan's responses to these and
other queries. Of course, Members could wish to ask other issues as well.
1.8. The Chairperson closed her introductory remarks by wishing Japan a very successful twelfth
Trade Policy Review. She looked forward to its active engagement in this TPR.
1.9. She informed that the podcast of this meeting could be accessed on the Members' website
after the first day of the meeting.
WT/TPR/M/310 • Japan
-32 OPENING STATEMENT BY THE REPRESENTATIVE OF JAPAN (MR. TOMOCHIKA UYAMA)
2.1. We would like to begin by thanking all the participants and particularly the Chairperson,
Her Excellency Ambassador Mariam Salleh. We would also like to thank the discussant,
Mr Jean-Paul Thuillier, Permanent Representative of France to the WTO, for preparing
the presentation.
2.2. We also thank Director of the TPR Division, Mr. Willy Alfaro and other Members of the WTO
Secretariat, especially Mr. John Finn and Mr. Ricardo Barba-Viniegra, for their tremendous efforts
to facilitate Japan's TPR. For this review, we received approximately 600 questions from
34 Members, and we are pleased to have been able to answer almost all of them, including those
that were submitted after the deadline.
2.3. The Trade Policy Review Mechanism (TPRM) has proved to be extremely effective in ensuring
the transparency of trade policies and practices of the WTO Members. Japan proposed the
establishment of the Mechanism during the Uruguay Round negotiations, and we note with a
particular sense of pleasure the role it has played as an essential part of the multilateral trading
system during the last two decades. Japan remains committed to this exercise, and looks forward
to continuing to work with other Members for its effective management. We call on other Members
whose reviews are overdue, to go through the process in the near future.
2.4. Japan is a nation that owes its economic prosperity to free trade, and as a major trading
nation, ranks fourth in terms of total trade volume, at 151 trillion JPY, or US$1.55 trillion for 2013.
2.5. At the last TPR, we presented a preview of Abenomics, announcing that Japan would
revitalize the economy under the leadership of Prime Minister Shinzo Abe, who had just been
reappointed at that time. Today, I am extremely pleased to have an opportunity to give an update
of our achievements over the past two years, and also touch upon future initiatives.
Abenomics: achievements and future initiatives
Achievements of Abenomics
2.6. Since the last TPR, which was conducted two years ago, Japan has implemented the so-called
three arrow strategy of Abenomics, namely: (1) "bold monetary policy"; (2) "flexible fiscal policy";
and (3) "growth strategies". These measures aim to relieve Japan from protracted deflation and
revitalize the economy. Let me give a few figures that illustrate how much we have achieved.
Corporate earnings have attained a record high, and wage growth, with the average monthly wage
up +2% has achieved the highest level in the past 15 years. The Nikkei Index at the Tokyo Stock
Exchange has risen to the highest level since 2000, while ROE, return on equity, for the listed
companies has risen 50% over the previous two years. Another priority area of Japan's growth
strategy is to create "a society in which all women shine". The number of female workers has
increased by more than 800 thousand during the past two years. As for the government sector, to
give an example, two Ministry Bureaus dealing with trade policies are now headed by two ladies,
maybe, familiar to many of you. I am working for one of them, fortunately.
2.7. The first of the three arrows is "Bold Monetary Policy": The Bank of Japan (BoJ) has pursued
monetary easing from April 2013. In October last year, the BoJ decided on further easing
measures. Given the recent positive indications towards overcoming deflation, we are expecting to
realize the price stability target of 2%.
2.8. Flexible Fiscal Policy is the second arrow: the Government has implemented flexible fiscal
policy in order to achieve both economic revitalization and fiscal consolidation. The Government
has decided to postpone raising the consumption tax rate to 10% by 18 months to April 2017,
taking into account the economic conditions and other factors in a comprehensive manner.
Moreover, the FY2014 supplementary budget, which has passed the Diet in this February, includes
3.5-trillion-yen expenditures for implementing the "Economic stimulus package" decided by the
Cabinet last December. In addition, based on the FY2015 draft budget, FY2015 fiscal consolidation
target is expected to be achieved. The Government is firmly committed to the target of achieving a
primary surplus by FY2020 and will formulate a concrete plan to achieve this target by this
WT/TPR/M/310 • Japan
-4summer. To formulate this plan, our deliberations will be based on the following three pillars, while
enhancing our current efforts to make progress in fiscal consolidation:
1. overcoming deflation and revitalizing economy;
2. reforming expenditure measures; and
3. reforming revenue measures.
2.9. Through these efforts, the Government aims to realize both economic revitalization and fiscal
consolidation.
Growth Strategy
2.10. In addition to these macro-economic policies, Japan has also focused on its growthstrategies as the third arrow. They are also generating results. The Cabinet first unveiled its Japan
Revitalization Strategy in June 2013 and a revised version in June last year, endeavouring to
overcome regulatory problems that have constrained the economy for several decades. Target
areas include agriculture, healthcare and other growth industries. Reforms are to be implemented
by measures such as the establishment of National Strategic Special Zones. Please allow me to
elaborate on a few examples.
2.11. First, as part of agricultural reforms, the adjusting mechanism for the amount of rice
production that has existed for more than 40 years will be reformed. In addition, Japan's
agriculture cooperatives, which have been in place over the last 60 years, will undergo
far-reaching reforms. Through reforms, the Government intends to urge the agricultural sector to
be more market-oriented and competitive.
2.12. Fundamental reform will be pursued also in the electric power sector for the first time in
60 years through bringing an end to regional monopolies and liberalization of the energy market.
2.13. Furthermore, the Government will take steps to create a better environment for FDIs.
Measures to strengthen corporate governance are already underway, and in June this year the
Government will implement a corporate governance code as part of reforms. Tax laws will also be
reformed to cut the effective corporate tax rate by 2.51% in FY2015, as a part of an ongoing drive
to reduce the rate below 30% while broadening tax base.
2.14. In this context, I should note that economic partnership or free trade agreements (EPA/FTA)
and investment agreements, which I will come back to later, also make up an important element
of the growth strategy; as they will serve as catalysts to promote structural reform inside Japan.
2.15. These are some examples of reforms that Japan is determined to pursue. Underlying such
unprecedented efforts is the fundamental concept of "challenge, transparency, and innovation". In
realizing these ideals, an open global economy, underpinned by the multilateral trading system
that is central to the work of the WTO, is essential for Japan's growth strategy to bear fruit.
Japan's Trade Policies
Enhancing the MTS under the WTO
2.16. This leads us to Japan's trade policies and our role in enhancing the multilateral trading
system. The multilateral trading system under the WTO is both a fundamental tenet of global trade
and a main pillar of Japan's trading policy. Japan remains committed to achieving the full
compliance of the WTO rules and disciplines by all the WTO Members. To this end, Japan continues
to actively engage in the regular work of the WTO, raising our concerns on trade distorting
measures in relevant Councils and Committees. Japan is also a heavy user of the dispute
settlement mechanism participating as a party to the dispute or as a third party. We reiterate our
commitment to these efforts to maintain and strengthen the MTS.
2.17. In addition, Japan has played an important role in the DDA negotiations, most recently in
particular towards the conclusion of the Bali package at the MC9. When the adoption of the
Protocol on the Trade Facilitation Agreement (TFA) was stalled, we exerted every effort through
opportunities such as APEC and the G-20 at the highest levels to bring the process back on track.
WT/TPR/M/310 • Japan
-5As I speak today, our legislature is in the process of approving the Trade Facilitation Agreement.
Together with other Members, we would like to aim to bring it into force by the 10th Ministerial
Conference in December this year. Japan attaches much importance to current efforts for the Post
Bali work programme and the conclusion of the DDA negotiations, bearing in mind its significance
for the credibility of the negotiation function of the WTO.
2.18. Plurilateral negotiations are at the same time important, such as negotiations for the
expansion of the Information Technology Agreement (ITA), Environmental Goods Agreement
(EGA), and Trade in Services Agreement (TiSA), all of which Japan endeavours to move ahead.
Moreover, the revised GPA, which entered into force in 2014, achieved further liberalization in the
area of government procurement among the parties. Japan played its part through significantly
improving its commitment.
Preventing Protectionism, Monitoring
2.19. Japan has demonstrated its commitment to refrain from protectionism, and is active in
international efforts to prevent its spread. Since the 2008 financial crisis, recognizing our
responsibility as a member of APEC and the G-20, Japan has been a vocal advocate to this end.
And here at the WTO, Japan has been active in TPRM to monitor policies and practices of the
Members.
Development and Aid for Trade
2.20. Japan is also firmly engaged in the area of development. Recognizing the profound merit of
having access to global trade, Japan remains committed to support early WTO accession of
developing countries, particularly least-developed countries.
2.21. Japan is the world's largest donor of "Aid for Trade" in 2013, and has provided
approximately US$26.9 billion in aid over the last three years. We recognize the varying needs of
each of the developing country Members and cultivate their capacities to become self-reliant,
through initiatives such as infrastructure development and capacity building. Via these initiatives,
we contributed to improve the trade and investment environment in many countries, which in turn
supports economic growth by promoting trade and investment and by establishing connections to
global and regional production networks. Recently, Japan has reviewed its ODA policy framework
for the first time in 12 years and, just last month, the new "Development Cooperation Charter"
was formed. Today, we are pleased to announce that tackling poverty reduction through "Quality
Growth" was placed as a central pillar, where improvement of trade and investment environment
is critical.
2.22. For African countries, Japan has led the process of Tokyo International Conference on
African Development (TICAD), a platform, led by the leaders, for supporting development of Africa
based on partnership and solidarity for more than 20 years. Increasingly, we are seeking ways to
support trade and investment through developing infrastructure and by mobilizing private sector
resources.
2.23. In the area of assistance related to trade facilitation, Japan has been providing technical
cooperation for developing countries in cooperation with international organizations, such as the
World Custom Organization (WCO), to promote trade facilitation through customs modernization.
Given that procedures by each Member required for the entry into force of the TF Agreement are
under progress, Japan will continue our active supports. On these and other Aid for Trade (AfT)
related topics, we would be pleased to provide further updates at the upcoming Fifth AfT Global
Review Meeting which will be held in June this year.
2.24. In the area of services, at the High-Level Meeting regarding the LDC Services Waiver, Japan
has indicated what can be provided for services and service suppliers of LDCs. Japan will submit a
notification to the Council of Trade in Services as soon as possible. Japan expects its endeavour
toward the operationalization of the waiver, which will facilitate the increased participation of LDCs
in trade in services, along with its continuous efforts of technical assistance and capacity building.
WT/TPR/M/310 • Japan
-6EPA/FTA and Investment Agreements
2.25. To complement the MTS, Japan is currently developing a network of WTO consistent EPAs
and FTAs, and through this network seeks to further promote trade liberalization. The
Japan-Australia EPA entered into force in January this year, which marked Japan's 14th EPA. And
in February this year, the Japan-Mongolian EPA was signed. Since the previous TPR, Japan has
started negotiations for the Trans Pacific Partnership (TPP), the Regional Comprehensive Economic
Partnership (RCEP), the Free Trade Agreement among Japan, China and Korea, the Japan-EU EPA
and the Japan-Turkey EPA. Presently, Japan is simultaneously negotiating eight different EPAs.
2.26. Japan is pursuing these EPA negotiations not only with the objective of liberalizing trade in
goods, but also in pursuit of the creation of comprehensive, high level economic partnerships that
encompass areas such as services, investments, intellectual property and government
procurement. Japan also supports appropriate capacity building within the framework of its EPAs
with developing countries. As for investment, Japan is actively pursuing investment agreements as
well as EPA/FTA that include investment chapters, and has concluded six investment agreements
and one EPA that includes an investment chapter since the last TPR. Presently Japan is engaged in
negotiations to conclude a total of 16 investment agreements or EPAs that include investment
chapters. Those will complement the WTO agreements in the age of global value chain.
Import restrictions on Japanese foods
2.27. Before drawing my statement to a close, let me briefly touch upon the developments
resulting from the Great East Japan Earthquake of March 2011. The earthquake and the following
tsunamis caused the accident at Tokyo Electric Power Fukushima Daiichi Nuclear Power Plant, and
in response, import of certain Japanese foods was restricted in a number of Members. By now,
many Members have lifted these restrictions based on scientific assessment. We strongly
appreciate their objective- and science-based approach to this issue. We would like to request
those Members still maintaining the restrictions also to take a science-based approach and to
eliminate or to ease their restrictive measures.
Closing Remarks
2.28. In closing, I wish to reiterate that Japan's economy has benefitted greatly from the
multilateral trading system, where the WTO plays a central role. This year, the 20th anniversary of
this Organization, also marks a particular moment in the history of our country, as the 60th
anniversary of Japan's accession to the GATT. Today the world economy is still struggling to
recover from the global financial crisis, and amidst such uncertainties, the role expected for the
WTO to provide the foundation of a strong trading system to drive growth and generate jobs is
important as ever. Our own experience in the WTO and the GATT is the source of our conviction
that further trade liberalization by all Members, now comprising 160 including many developing
countries, is significant as ever in such testing times. While numerous regional trade arrangements
have emerged, WTO rules clearly remain the backbone of the global trading system, and the
Organization is relevant today also owing to its robust dispute settlement mechanism, as the
unwavering custodian of the rule of law in the area of trade.
2.29. Japan is committed to further trade liberalization, and we look forward to actively working
with all Members to maintain and strengthen the MTS that is central to the work of the WTO.
WT/TPR/M/310 • Japan
-73 STATEMENT BY THE DISCUSSANT
3.1. It is an honour to have been appointed discussant for the 12th Trade Policy Review of Japan,
the world's third largest economy and a key partner for the WTO. Japan is undertaking essential
reforms in order to deal with an ageing population and to emerge from two decades of economic
stagnation, making the review a demanding and extremely interesting exercise.
3.2. I should first to like to greet Mr Tomochika Uyama, head of delegation, and the members of
his important delegation, as well as Japan's Permanent Representative to the WTO, Ambassador
Yoichi Otabe, with whom cooperation is always flawless. I would remind you that my introduction
and remarks are made strictly in my personal capacity.
3.3. As a developed Member, Japan has the opportunity to be the subject of a biennial review by
the Trade Policy Review Body. This review is especially relevant, coming one week after the review
by the OECD's EDR Committee, held in Paris on 2 March, and prior to the IMF's annual Article IV
mission, which traditionally takes place in June. The Japanese Government is thus able to take
advantage of this simultaneous review of all the components of its economic policy by the major
international organizations and of drawing the lessons and obtaining the support needed for its
reforms.
3.4. The previous review dates back to 2013. It was marked by the effects of the earthquake, the
tsunami, and the nuclear disaster at Fukushima (Members noted in this connection that the
reconstruction required had not led to protectionist measures), and the election of Prime Minister
Shinzo Abe in December 2012 had been too recent to allow the 2013 review to make a first
assessment of the radical reorientation of economic policy decided by the new Government. As the
representative of Japan indicated in his replies, the Japanese Government was acutely aware that
"other measures, especially belonging to the so-called third arrow category, namely, formulation
and implementation of a new growth strategy, including substantial structural reform should follow
in a timely manner".
3.5. The time has now come and my statement will focus on this aspect in order to evaluate the
progress made since 2013, calling on Members which wish to do so, as a complement to the
statements by the Chair and the representative of Japan, to look at the particularly enlightening
statement by my predecessor, Ambassador Jonathan Fried, on the importance of Japan
("Japan Matters") in the economy and world trade (third GDP at the global level, second overseas
investor worldwide, fourth exporter and importer in the world), as a leading actor at the WTO
involved in regional agreements consistent with the rules of the multilateral system, and as the
foremost exponent of Official Development Aid.
3.6. Bearing in mind these strong points, the Japanese Government is well aware of the structural
challenges raised by the decline in Japan's international ratings in terms of wealth, employment
and innovation which call for a certain number of in-depth reforms on which Mr Shinzo Abe's
Government, is working.
3.7. The economic environment has changed fundamentally since the previous review, with the
development of an ambitious reform programme.
3.8. Known as "Abenomics", the reform programme has had at least one outstanding success: the
media endorsement Prime Minister Shinzo Abe has received by putting his name to the reforms
like a trademark and by metaphorically returning to the familiar scenario of the
pre-Meiji civilization, the "way of the bow" ("Kyudo"), meditation in action, which means going
beyond oneself, with arrows directed towards three main objectives: a monetary policy that takes
account of quantitative and qualitative monetary easing, with a price stability target of 2% to
escape the trap of deflation, and in return a substantial increase in the monetary base; a second –
fiscal – arrow that combines a short-term recovery strategy with the objective of fiscal
consolidation in the medium term; and a third arrow intended to restore the potential for growth,
with a series of detailed structural reforms covering the labour market, the capital market
(regulatory framework, financial services, banking and insurance), the market for goods (notably
agricultural goods) and the market for services.
WT/TPR/M/310 • Japan
-83.9. In more detail, the "third arrow" has four targets in order to achieve precise objectives with
some key indicators:
-
revitalize the economy by promoting investment in terms of capital for production and
the creation of start-ups accompanied by regulatory and institutional reforms (the
target is 10% for business start-ups, as in the United States and the United Kingdom,
instead of the current rate of 5%);
-
meet the challenges of an ageing population by making better use of labour
resources: raise the rate of women's participation by 2020 (according to the OECD,
the employment rate for women is 21% lower than that for men, 43% of women with
a child have a job, women account for 70% of informal jobs, 3% of women sit on
boards compared to 20% in Canada or the United States), lower the number of those
unemployed for over six months over five years, double the number of foreign
students by 2020, from 60,000 to 120,000;
-
create new markets, particularly in the health sector, including the development
of medical research and the pharmaceutical industry, to accompany the aging of the
population by 2020;
-
lastly, to reinforce global economic integration in order to foster the expansion
of Japanese firms abroad, encourage FDI and promote regulatory reform by setting up
National Strategic Special Zones.
3.10. As to the fourth component of the third arrow, which most directly affects trade policy,
Members will note that the Government has adopted some key indicators to which we shall return
in our statement: raise the volume of trade covered by regional trade agreements to 70% by 2018
(as against 19% at present), double the volume of FDI by 2020, attract 30 million tourists
in 2030.
3.11. With regard to the existing network of preferential agreements, these are indicated in the
report by the Secretariat and the statement by Japan, but Japan's change of tack in terms of its
participation in the negotiation of mega regional preferential agreements such as the Trans-Pacific
Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP) and the Partnership
Agreement with the European Union should be noted.
3.12. Concerning the inflow of FDI and Japan's attractiveness, although it is the second biggest
investor in the world, the stock of FDI in Japan itself compared to GDP is the lowest among
OECD countries, and flows continue to be much lower than those recorded by other large
developed economies: according to UNCTAD, following negative figures for 2010 and 2011, the
inflow of FDI in 2014 was US$2.3 billion, whereas the United States and China recorded
US$188 billion and US$124 billion, respectively. The Revitalization Strategy sets a target
of doubling FDI by 2020. The challenge is clearly to move towards a situation in which the entry
of FDI from overseas is welcomed as a source of innovation rather than a threat, and to remove
the obstacles identified, such as the difficulty of setting up businesses and recruiting skilled
personnel, or the mergers and buy-outs regime. In this respect, the 2013 law on the creation
of National Strategic Special Zones (the Tokyo and Kansai zones as business and innovation hubs,
Niigata, Yabu and Fukuoka as reform centres for agriculture and employment, and Okinawa for
tourism) raises questions as to the value added to be expected from a zoning logic compared to
a policy of horizontal attractiveness applicable to the country as a whole, as well as what practical
benefits await investors deciding to set up there.
3.13. There is a consensus that the structural reforms combined with opening up of trade are
essential for accompanying the policies of monetary easing and fiscal stimulus.
3.14. Concerning the main macroeconomic indicators, the IMF, the OECD and the Secretariat all
highlight the mixed results at this stage of the monetary and fiscal measures launched since 2013
under the "first" and "second" arrows.
3.15. Although growth was stronger in 2012 and 2013 than in 2011, the results remain fragile
with the recession that occurred in the second and third quarters of 2014. The most recent
forecast by the OECD puts growth at 0.1% for 2014 (0.9% in the Secretariat report) with
WT/TPR/M/310 • Japan
-9an estimated 1.3% in 2015 and then 1.0% in 2016, far from the forecasts by the Government and
the Bank of Japan in 2013.
3.16. As far as the inflation target is concerned, the average annual rate of inflation was 0.4%
in 2013, rising to 1.1% in 2014 (excluding the higher consumption tax), with an estimate of 2%
for 2015 according to the IMF, consistent with the Bank of Japan's targets, but it could have an
impact on the sharp fall in the cost of importing energy and commodities. The price index,
excluding the consumption tax, fell by 0.5% in December 2014 and in a more recent forecast the
OECD is less optimistic with an inflation figure of 1.4% for 2014 (but only 0.5% according to the
underlying "core CPI" inflation indicator, excluding food and energy), to be followed by an estimate
of 1.1% and 1.6% for 2015 and 2016, respectively.
3.17. Fiscal stability remains a medium-term objective, with estimates for the primary deficit
(central government and regional authorities) of 6.9% for 2014, 5.9% for 2015 and 5.1% for
2016, making fiscal consolidation measures inevitable if the aim of a balanced budget by 2015 and
stabilization of public debt is to be achieved (estimates for 2016 show indebtedness of 233%
as against 226% in 2014).
3.18. The effects of the monetary easing ("the first arrow") on the trade balance have so far been
mixed, with a record deficit in 2013 (US$118 billion). According to the latest figures from the
Ministry of Finance (February 2014), Japan's current surplus has fallen once again compared to
2013 because of insufficiently strong exports needed to offset the higher cost of energy caused by
the depreciation of the Yen against the dollar (-38% in 2013 and 2014), the trade deficit being
offset by higher returns on Japanese investments overseas. The IMF (July 2014) notes the
combination of temporary and structural factors, tending to indicate the continuation of a trade
deficit in the medium term: a slow response to currency fluctuations, temporary capacity
constraints and the expansion of imports caused by the consumer rush before the tax increase,
but also the impact of energy imports, the effect of Japan's integration into global value chains
through FDI placed massively in Asia, with production and sales by Japanese subsidiaries
exceeding direct export, and the slowdown in demand for consumer goods from Japan. In this
connection, Members raised few questions concerning the impact of the weaker Yen on exports,
which denotes a clear understanding of the macroeconomic reasons for the policy of monetary
easing.
3.19. This indicates that the monetary and fiscal instruments are not enough unless they are
combined with reform. The IMF and the OECD agree that structural reforms are needed and that
trade and investment are the preferred two channels of transmission to ensure the medium-term
success of "Abenomics". In the first half of 2014, for example, the expected increase in the
consumption tax led to a boom in sales, followed by a predictable decline as salary increases did
not suffice, and external demand was unable to make up the gap. The growth strategy led to a
predictable outcome, namely that monetary easing and fiscal stimulus are not enough to revive
the economy in the long term. Such measures may have an impact in the short term but cannot
take the place of structural measures.
3.20. In order to remain dynamic and overcome internal resistance, including that within the
administration and the prefectures, in 2013 the Government introduced the Revitalization
Strategy, revised in June 2014, overseen by a so-called revitalization unit under the direct
authority of the Prime Minister, identifying ten key reforms. A large number of laws have been
adopted (reform of the anti-monopoly law, reforms of governance in enterprises, the intellectual
property framework, amendments to the government procurement regime, etc.), but basic
regulatory reforms still have to be made, and some objectives published in June 2014 as part
of the revised Revitalization Strategy aiming to make Japan a world-class business centre by
attracting large global companies may appear timid, especially as regards enhanced workforce
participation, particularly of women, use of foreign workers or the number of foreign students
(the target being to increase their number from 60,000 to 120,000 by 2020; just as an example,
in France there were 289,000 foreign students in 2012).
3.21. In this connection, although the population reaffirmed its support for "Abenomics" by a large
majority at the general elections in December 2014, called by the Prime Minister, it can be seen
that the Revitalization Strategy aims to complete a certain number of reforms by 2018-2020
rather than 2015. While bearing in mind the need for gradual progression that is inherent in any
structural reform, special attention should be paid to the risk of a time-gap in the launching of the
WT/TPR/M/310 • Japan
- 10 "arrows", dissociating monetary and fiscal measures with a short-term effect if the price-salary
ratio does not improve, from reforms likely to have the most long-term effects on the economy's
growth potential.
3.22. In addition, the major shift undertaken by Japan since 2012 in favour of mega regional
agreements has not yet reached the conclusion and implementation stage. The current network of
13 regional trade agreements noted in the Secretariat report has been completed by the
agreement with Australia signed in July 2014 and entered into force in January 2015. In order to
boost growth, opening up trade can be a catalyst for opening up Japan's economy (the
merchandise trade/GDP ratio is 28%, the share of goods and services is 16.9% and that of imports
19.5%). Nevertheless, the key indicator of 70% coverage of trade by FTAs by 2018 needs to be
spelled out because under the existing agreements a certain number of sensitive sectors are
excluded or are the subject of quotas and progressive liberalization, notably in agriculture (rice,
dairy products, meat, fish), but also other sectors such as leather and footwear. The Secretariat
also notes that these products are also often excluded from the autonomous GSP scheme or are
subject to higher rates (with an average of 13.9% for the GSP scheme compared to 14.9% MFN
rates for agricultural products).
3.23. At this stage, Japan's trade regime remains marked by considerable stability even though
the changes announced open up interesting possibilities as far as new orientations are concerned.
3.24. A more specific comment on the relationship between the trade policy framework and the
internal structural reforms identified as essential in the labour and agricultural spheres and in
some services (energy, transport, financial services) would be particularly enlightening for the
purposes of our review and for Members' understanding of the way in which Japan's authorities
intend to use the pressure and external leverage of trade negotiations to raise the growth potential
and move ahead with reforms, even if analysis of the implications of this programme for Members
is the responsibility of the next Trade Policy Review, planned for 2017.
3.25. Despite the ambitions of the "third arrow", the Secretariat notes the considerable stability
of trade practices as regards customs regulations and procedures, the MFN tariff structure, the
GSP schemes, the legislative and regulatory framework for contingency trade measures, the legal
framework for standards and technical regulations, sanitary and phytosanitary standards, labelling
of food products, export procedures and regulations.
3.26. Japan is an active Member of the WTO, giving priority to the agreement on trade facilitation
and taking an active part in the negotiations on concluding the Doha agenda, as well as in
plurilateral initiatives such as the Government Procurement Agreement, the Information
Technology Agreement and the negotiations on environmental goods. It has a predictable tariff
regime, with a large degree of binding and low average rates (5.8% in 2014 while bound rates
were 5.9%), although the highest rates and sometimes compound tariffs apply to agricultural
products (15.2%). Members often draw attention, however, to non-tariff barriers, either because
the regulatory framework is frequently stricter than international standards, or because the
practices of certification bodies are still complicated for foreign operators.
3.27. Moreover, Japan makes little use of trade defence measures (only one anti-dumping duty
in force and one investigation under way).
3.28. Among the important linkages between the trade policy framework and the reforms to be
covered in the debate, reflecting the questions raised by Members, I would like to draw attention
to the following in particular:
-
The impact of the current negotiations on mega regional agreements on the
regulatory framework in the goods sector, ranging from automobiles to agriculture,
and in the services sector: these comprise a large regulatory component and the
negotiations can facilitate the reform of some agencies, help in narrowing the gap
between Japanese and international standards and in mutual recognition of
conformity, while at the same time maintaining the level of public security and heath
(especially in the food sector), also constituting a response to aggressive interests (for
example, in automobiles, pharmaceuticals and medical equipment, or environmental
technology), and improving the consistency between regional preferential agreements
WT/TPR/M/310 • Japan
- 11 and the WTO, particularly the TBT and SPS components, as advocated in the Japanese
Government's report.
-
The ambitious trade agreements represented by the TPP and the EPA with the
European Union can boost structural adjustment in the agricultural sector by opening
it up. The sector is marked by a high level of tariff protection, with notable tariff peaks
for some products (the Secretariat notes that the standard deviation is 26.5 for
agricultural tariffs and the maximum ad valorem equivalent tariff is nearly 300%).
This sector raises the most questions and Members are fully aware of its political and
cultural importance, even if it only accounts for 1% of GDP. The Strategy calls for
an aggressive agricultural policy with the aim of doubling both farmers' incomes and
exports over ten years. This means raising productivity by restructuring the size of
farms (the average area was 2.12 hectares in 2013), putting demography to use
(according to the OECD, 56% of farming households are over 70 years of age) in
order to rejuvenate the sector and to encourage full-time farmers to set up (only 16%
of farming households engage in farming full time and 36% do not have any real
commercial activity), by reorganizing the cooperative system and financing, reforming
the Japan Agricultural Cooperatives Group (JA), whose cooperative organization is
sometimes presented as an obstacle to change in the sector by maintaining a
population of occasional farmers or those engaging in non-competitive part-time
farming, and whose financial arm JA-Zenchu (deposits of 100 billion yen) is
accompanied by tax and regulatory exemptions.
-
It is also essential to reform the controlled price scheme and price support
mechanisms: the OECD considers that income support for farmers' accounts for 56%
of total revenue, three times the OECD average.
3.29. It would be interesting if the representative of Japan could explain in more detail the
timetable for these reforms, their impact on the level of support, and their relationship to the
preferential negotiations.
-
The manufacturing sector is not mentioned in the Secretariat report or the statement
by Japan, although it accounts for 27% of GDP (2013). It has traditionally been a
strong point (automobiles, electronics, electrical equipment, transport systems,
pharmaceuticals, chemicals … ), showing Japan's important share of global FDI and its
integration into global value chains. Tariff protection in this sector is either low or
non-existent, except for a few peaks, but the need to encourage innovation,
modernize the enterprise framework, assist the creation of SMEs and forge stronger
links with international markets by fostering its opening up is an integral part of the
reform programme. The automobile sector is a reflection of Japan's excellence, and
could serve to illustrate the measures awaited as tariffs are 0%, combining fiscal
reform ("Kei-cars"), the zoning needed to build up a network of dealers and regulatory
harmonization ending specific approval procedures, about which Members posed some
questions.
-
Lastly, the services sector, which accounts for 72.6% of GDP, is the principal sector in
which converge the objectives of raising productivity, improving women's employment
and attracting foreign investment. The linkage between the reforms announced and
the leverage of trade agreements in strengthening economic integration will no doubt
be decisive. The previous report mentioned the wholesale trade sector, termed
"sclerotic" by Ambassador J. Fried, and telecommunications, in which technological
inconsistency resulted in lack of competition and high costs, as two sectors needing
in-depth reform in order to enhance growth potential, and wondered about the reform
of the energy sector following the Fukushima disaster. It would be helpful to hear the
Japanese delegation regarding the reforms carried out, as well as those in the
financial services and insurance sector, for which various reforms were announced in
2014 with the aim of making the Japanese economy more attractive and financing of
the economy more flexible. The question of postal services and the status of Japan
Post Bank and Japan Post Insurance raised by some Members in connection with the
2012 law on privatization of postal services remains posed as regards the timetable
for implementation.
WT/TPR/M/310 • Japan
- 12 3.30. As a complement to this statement, it may be of interest to read the reports for 2013
("the Fourth Arrow") and 2014 ("Taking Action") of the European Business Council in Japan.
For enterprises, time does not have the same meaning as for governments and economic spheres
are always impatient to see policies translated into their day-to-day business without delay, but
the representative of Japan and Members will note that many of their key recommendations
respond to certain aspects dealt with here: mutual recognition of standards, the adoption
of international standards, lowering non-tariff barriers, especially specific labelling requirements,
liberalization of competition and non-discriminatory treatment in some services sectors, broader
opening up to competition in government procurement, improved terms for foreign investment.
3.31. The Japanese Government is fully aware of the challenges to be met, the adjustments to be
made and the many advantages it has. I have no doubt that this review will help to give it further
clarification and will reinforce its determination to set Japan on the new paths it has itself traced
WT/TPR/M/310 • Japan
- 13 4 STATEMENTS BY MEMBERS
AUSTRALIA
4.1. Australia and Japan enjoy a strong and highly complementary trading relationship. We work
with Japan across a range of international bodies, including the WTO, to advance our respective
trade agendas. Australia and Japan are also close partners in the G-20 and we look forward to the
opportunity to work more closely with Japan on trade liberalization, and other economic stimulus
measures in 2015.
4.2. Japan is Australia's second-largest export market, and will remain a very important trading
partner for the foreseeable future. Japan is also Australia's third most important investment
partner.
4.3. Australia welcomes the Abe government's efforts to revitalize the Japanese economy, as
outlined in Japan's G-20 Comprehensive Growth Strategy and in the government's other recent
policy pronouncements. The Comprehensive Growth Strategy contains a number of ambitious
structural reform measures with implications for Japan's trade policy. These include not only the
goal of increasing the proportion of Japan's trade covered by free trade agreements, but, perhaps
even more importantly, reforms in areas of domestic economic policy such as agriculture,
infrastructure, healthcare and employment – these have the potential to significantly increase
Japan's external trade. Australia and many other countries have a major stake in the success of
these historic reforms, and we strongly encourage Japan to press ahead.
4.4. For Australia, finalization of the landmark Japan-Australia Economic Partnership Agreement
(EPA) in 2014 was one of the most important bilateral achievements for many years. We are very
pleased to report that the Economic Partnership Agreement recently entered into force, on
15 January 2015. The EPA is by far the most ambitious trade deal that Japan has ever concluded,
particularly in agriculture. Within ten years, more than 97% of Australia's exports to Japan will
receive preferential access or enter duty-free. We look forward to continuing to work with Japan
towards further liberalization on goods, services and investment in areas where market access
barriers remain, to maximize the benefits to Australian and Japanese consumers and producers.
These ongoing efforts will contribute to the continued vitality of the bilateral economic relationship.
4.5. Australia believes the EPA is also an important step towards the completion of other trade
negotiations, including the Trans-Pacific Partnership (TPP) and the Regional Comprehensive
Economic Partnership (RCEP) negotiations. We value the close working relationship we have with
Japan in both the TPP and RCEP. Ambitious, balanced, WTO-consistent TPP and RCEP agreements
will be good for Australia and for Japan and, together, will also provide a substantial step towards
realising the vision of a Free Trade Area of the Asia-Pacific.
4.6. Australia appreciates Japan's efforts to use trade negotiations to help drive agricultural
reform and we welcome the small, positive steps that have been taken on agricultural policy.
Despite this, and acknowledging Japan's good record of compliance with its WTO commitments in
agriculture, Japan's agriculture sector still remains highly protected, with prohibitive tariffs and
TRQs, high levels of domestic support spending, state-trading arrangements and many other
behind-the-border barriers. We look forward to more ambitious actions as part of the reform
process.
4.7. Australia and Japan are both strong supporters of the multilateral trading system. Australia
values the close cooperation we have with Japan here in Geneva, including in the post-Bali
discussions, ITA expansion, the Trade in Services Agreement negotiations and the Environmental
Goods Agreement. Australia also wishes to acknowledge the important work done by Japan in
support of trade facilitation in the Asia-Pacific region, particularly in South-East Asia. This includes
the technical assistance Japan has provided bilaterally and as part of APEC. This work has played
an important, positive role in facilitating trade flows in the region, as well has helping to bring the
Trade Facilitation Agreement to a successful conclusion.
4.8. We look forward to continued engagement and leadership by Japan in the WTO in the lead-up
to MC10.
WT/TPR/M/310 • Japan
- 14 4.9. Australia asked Japan many questions on a range of sectors and we would like to thank Japan
for its responses to these questions. We wish Japan a successful Trade Policy Review.
SWITZERLAND
4.10. At Japan's last Trade Policy Review in February 2013, we looked back over two years of
recovery after North-Eastern Japan's earthquake, tsunami and nuclear catastrophes with a severe
financial impact. At the same time, Japan engages in daring monetary and spending programmes.
The effects of these stimuli seemed to have tapered off during the course of last year as domestic
consumption weakened due to a tax rise and stagnating wages. Despite a relatively weak yen,
Japan's world- class export industry struggles with weak demand and has consecutively shifted
investment and production abroad. Meanwhile, other sectors of the domestic economy continue to
suffer from old structural weaknesses and a lack of competitiveness.
4.11. On the bilateral level, economic relations between Switzerland and Japan remain important,
even though the shift away from production in Japan means that many "Japanese" consumer
goods reach our market no longer from Japan. Here again, the changing patterns of value chains
show the shortcomings of bilateral trade statistics. My Government will continue to work closely
with the Government of Japan, not least through direct dialogue in the context of our bilateral Free
Trade and Economic Partnership Agreement.
4.12. Turning to the TPR at hand, Switzerland had submitted a series of questions in writing and I
would like to thank the Japanese delegation for the respective answers we have received last
week. We are currently examining them with great interest.
4.13. Switzerland's questions cover a broad range of topics. In the light of Japan's difficult
economic situation and very high debt-to-GDP ratio, we had asked questions regarding the
phasing out of the fiscal stimulus and the quite low income tax rates for individuals. Furthermore,
as the Japanese Government states the goal to double inward FDI by 2020, our questions covered
ways to remove obstacles to the cross-border movement of investments.
4.14. Switzerland believes that competition policy is an important instrument to provide a level
playing field among domestic and foreign competitors. We therefore raised questions regarding the
changes in Japan's Anti-Monopoly Act and the rather numerous and sometimes wide-ranging
exemptions from the prohibition of cartels.
4.15. A last set of questions relates to agricultural policy, a field where Switzerland and Japan
share similar interests. In particular, we are interested in Japan's considerations to open further
the extensive coverage of its GSP scheme to include certain products in which developing countries
would have a comparative advantage.
4.16. Before I conclude, I would like to highlight the important, active and constructive role of
Japan in the WTO. For exporters of high-value, high-technology goods and services like our two
countries, a strong rules-based system, as provided by the WTO, remains essential. We look
forward to pursuing and further enhancing our already very close cooperation in this regard.
CHINA
4.17. Japan remains one of the world's largest economies and also a major player of the WTO.
Since the last review, the Japanese Government has introduced expansionary fiscal and monetary
policies. While promoting growth of the Japanese economy in the short term to some extent, those
policies also aroused worrying problems. For example, in 2013, the share of public debt in its GDP
has reached 240%, ranking the first among developed economies. Moreover, the spillover effect
triggered by the sharp fluctuation in JPY exchange rate shall not be ignored.
4.18. We have noticed that the Japanese Government believes that the existing policies are
insufficient for strong and robust economic growth, and it is necessary to solve the structural
problem by means of structural reform. We expect the Japanese Government to adopt effective
policies to expedite economic growth and make positive contributions to the regional and global
economic recovery.
WT/TPR/M/310 • Japan
- 15 4.19. Japan is an important Member of the WTO. In its Government statement, Japan states that
it will endeavour to implement the Trade Facilitation Agreement (TFA). We hope that the Japanese
Government could take TFA as an impetus to further liberalize trade and investment, and make its
contributions to the conclusion of Doha Round.
4.20. With regard to Japanese measures and regulations on trade and investment, we would like
to highlight the issues that the Chinese industries have greatest concerns. These are about Japan's
TBT and SPS standards. International regulations and standards in Japan are adopted at a
relatively low level compared with other developed Members. Only about half of Japanese
Industrial Standards (JIS) are based on the existing international standards, and requirements set
by some domestic standards are much more rigorous than those of international practices, which
has brought negative effect on trade. In light of provisions as required by the TBT and SPS
agreements, we expect Japan to use the international standards as a basis for its technical
regulations, otherwise sufficient rationale and scientific basis should be provided, so as to remove
the unnecessary obstacles to international trade while protecting safety of consumers.
4.21. China and Japan are important trade and investment partners to each other. China has been
the biggest trading partner of Japan since 2007, and Japan was the second largest trading partner
of China in 2013. However, there are still a range of problems less favourable for the bilateral
economic and trade cooperation. Taking this opportunity, we'd like to draw your attention to a
couple of them.
4.22. With regard to export control imposed by Japan on China, during the recent years, Japan
has introduced the so-called CATCH-ALL system in its export control regime and even some goods
outside the export control list were subject to this new system. At present, Japan includes
17 Chinese entities into its export control list. This practice largely affects these Chinese entities
doing commercial business with their counterparts in Japan. These measures are unfavourable for
long-term development of the bilateral economic and trade relation, and we urge Japan to revoke
this unilaterally applied regime.
4.23. The second point is business visa facilitation. For staffs of the enterprises with Chinese
investment in Japan, the formalities for visa application, especially multiple-entry visas, are very
complicated, with high thresholds for the applications, which has restrained China's investment
expansion in Japan. Japan is strongly advised to extend facilitation to employees of these
enterprises, and build a more favourable business environment. .
4.24. We thank the Japanese delegation for their reply to the questions raised by China, which we
will go through carefully.
4.25. Last but not least, I would like to express my sincere gratitude for the effective work and
great contribution Madam Mariam Salleh has made, as the Chair of TPR body in the previous year.
We really appreciate it.
REPUBLIC OF KOREA
4.26. I am pleased to note that the bilateral economic relations between Korea and Japan remain
strong. The bilateral trade volume has expanded 400% compared to fifty years ago. In 2013,
Japan and Korea were each other's third largest trading partner, with bilateral trade reaching
US$94.7 billion. With respect to FDI, Japan was the second largest investor in Korea with
US$2.7 billion, and Korea's outbound investment to Japan amounted to US$690 million US dollars.
All these figures demonstrate a very close economic partnership that will continue to grow and
develop in the future.
4.27. Turning to Japan's overall economic performance during the period under review, I wish to
note that Japan's GDP showed positive growth in 2012 and 2013. I also commend the efforts of
Japan towards revitalizing its economy amid the overall global economic downturn and increasing
vulnerability, including a general slowdown in the Eurozone and emerging markets as well as
vulnerability in some oil producing countries stemming from lower oil prices. I would also like to
underline that, in order to get the global economy back on track, major economies including Japan
must regain their full strength and vitality as soon as possible.
WT/TPR/M/310 • Japan
- 16 4.28. Now, I wish to refer to the observation of the Secretariat report that Japan's expansionary
economic policies alone have been insufficient to achieve strong economic growth. In this context,
we recognize that Japan has carried out substantial structural reforms since 2013. While sharing
the view that far-reaching structural reforms are necessary to address Japan's long-standing
problems such as high public debt, a rapidly aging population, high cost of doing business and
regulatory barriers, it would be advisable for Japan to continue to take steps toward structural
reform, including further trade and investment liberalization and measure to stimulate
competition.
4.29. In addition, I share the concern expressed in major international fora, including the G-20
summit held in Brisbane last year that given the interconnected nature of the global economy
through financial and trade linkages, due attention should be given to the so-called spillover or
reverse-spillover effects of monetary policies.
4.30. We have submitted advance written questions to Japan. The questions posed by my
delegation range from Japan's monetary policy to some of its new policies on foreign investment,
corporate tax and competition policy. Our questions also touch upon TBT and SPS-related issues,
including the JIS mark requirement for domestic sales and the JAS mark management system. We
thank the Japanese delegation for providing answers to those questions, which we will review
carefully.
4.31. Japan's overall simple average MFN tariff rate was as low as 5.8% in 2014, which further
declined from 6.3% in 2012. Despite this apparently liberal tariff regime, Korean exporters, even
including globally competitive ones, have experienced significant difficulties in accessing to the
market of the world's third biggest economy, due to Japan's NTBs, just as discussant Ambassador
Thuillier mentioned.
4.32. We note that Japan's NTBs range from strict and complicated domestic regulations, TBT and
SPS measures and business practices to more explicit forms like import quotas on Korea's export
interests such as seaweed and fishery products. Korea remains keen to work with Japan to address
those issues surrounding NTBs and the persistent trade deficit.
4.33. Finally, my delegation also notes with satisfaction Japan's commitment to the multilateral
trading system embodied in the WTO, and its strong support for and participation in the current
Doha round of negotiations. Korea has been and will continue to work closely with Japan in the
areas of the DDA and plurilateral negotiations. With this, I would like to conclude by expressing my
sincere appreciation to the Japanese delegation for its hard work and wishing Japan every success
in its TPR.
MONGOLIA
4.34. We thank the delegation of Japan for submitting reply to our question on Japan's SPS and
TBT requirements.
4.35. Japan is an important and long-standing trading partner of Mongolia. The Government of
Mongolia attaches a great significance to further vitalizing the bilateral cooperation with Japan in
trade and economic areas.
4.36. Japan is the fifth-largest source of imports for Mongolia, after China, Russia, the United
States and the Republic of Korea.
4.37. Mongolia and Japan have been maintaining closer and ever expanding economic relations.
Bilateral trade volume between the two countries has been growing in the recent four decades
reaching US$392.2 million in 2014.
4.38. In Mongolia the import from Japan was US$367.7 million as of last year, Mongolia's export
to Japan was only US$24.4 million. Taking this into account, our two countries stress the
importance of promoting two-way trade flow. Japan provides preferential access to imports from
Mongolia under their Generalized System of Preferences arrangements.
WT/TPR/M/310 • Japan
- 17 4.39. A significant step has been made recently between the two countries to strengthen bilateral
economic relations. In February, 2015 Japan and Mongolia have signed a free trade agreement Japan-Mongolia Partnership Agreement (EPA) - after having several rounds of productive
negotiations. The EPA is the first free trade agreement for Mongolia. Mongolia believes that
establishment of this agreement provides a significant opportunity for Mongolia to join the regional
economic integration as well as to enhance the liberalization and facilitation of bilateral trade and
investment with Japan in a range of important sectors.
4.40. Mongolia is pleased to see Japan's leading and constructive role in the multilateral trading
system. We hope that today's TPR will provide a good opportunity for both Japan and its trading
partners, including Mongolia, to assess the progress and impact of Japan's trade policy on the
functioning of the multilateral trading system.
4.41. We also would like to express our appreciation again to the delegation of Japan for their
hard work in preparing for this TPR.
4.42. On behalf of Mongolia I would like to wish a very productive and successful Trade Policy
Review to Japan.
NEW ZEALAND
4.43. New Zealand welcomes this opportunity to participate in the Trade Policy Review of Japan.
New Zealand is fortunate to have Japan as one of its longest standing and most important trading
partners. Our trade is highly complementary and forms the basis of a strong, bilateral economic
relationship. Given this background, New Zealand takes a close interest in Japan's trade policy and
ongoing reform agenda.
4.44. New Zealand welcomes Japan's policies for economic revival and liberalization and
congratulates Japan on its decision to undertake such far reaching reforms. Under Abenomics,
embedded economic structures are being reformed with the aim of revitalizing the Japanese
economy. This is clearly a difficult process. The end goal, however, should produce tangible
economic benefits for both Japan and its international economic partners.
4.45. New Zealand has also appreciated the greater attention Japan has placed on regional and
bilateral trade negotiations, such as the TPP and RCEP negotiations. The successful conclusion of
such high quality agreements offer participating countries such as New Zealand and Japan deep
economic benefits, which will best be realised through a high quality, comprehensive agreement.
New Zealand remains optimistic that positive liberalisation experiences under such RTAs will give
momentum to our work here in Geneva and support global trade reform rather than be seen as a
direct alternative.
4.46. New Zealand values our cooperation with Japan across the work of the WTO. While we
inevitably do not always see eye to eye on all issues, Japan's constructive approach in both the
regular work of the WTO and in the past 14 years of DDA negotiations has helped to move the
work of the organisation forward. As one of the world's largest economies, Japan carries a key
responsibility to show leadership within the WTO, and with the deadline for conclusion of the postBali Work Programme looming we look forward to benefiting further from this leadership in the
coming months.
4.47. New Zealand has posed a number of advance written questions to Japan, and is considering
its responses carefully. Our questions covered a number of areas including agriculture and
fisheries issues.
4.48. New Zealand encourages Japan to intensify its efforts on agricultural reform. Population
decline in rural areas, the increasing average age of farmers, and continued high subsidisation of
agricultural sectors all paint a worrying picture for the future of Japanese agriculture.
4.49. We welcome Japan's efforts to reform land tenure and cooperative structures, as a means of
removing some significant constraints on agricultural productivity. The challenge is to create an
environment where the agricultural industry can apply the same ingenuity and efficiency that
Japan's industrial and manufacturing sectors have become so renowned for. The lesson from
WT/TPR/M/310 • Japan
- 18 Japan's success in other industries is that exposing agriculture to market mechanisms and global
competition can spur competitiveness and innovation. This would reduce the fiscal burden of
agricultural support, raise incomes in rural areas, and turn agriculture into a competitive growth
sector than can contribute to the wider economy and compete on the global stage.
4.50. New Zealand has a long record of engagement with Japan in primary industries. As Japan's
agriculture sector embarks on a period a change, New Zealand seeks to deepen its collaboration.
Our two Prime Ministers' commitment to a "Partnership in Food" in July 2014 has already borne
fruit.
4.51. Japan is a significant global player in the fisheries sector, as an importer, a consumer, a
fishing nation and in terms of the subsidies it provides to its sector. New Zealand appreciates the
reporting of Japan's programmes affecting fisheries under the SCM Agreement and its engagement
on Members' related questions. New Zealand notes, however, that the income stabilization
measure and a cost reduction measure that cover the fisheries sector, introduced in 2011 and
2010 respectively, have yet to be notified. It is not clear to us from Japan's response to our
questioning when these will be notified.
4.52. Given the context of the 2012 Rio+20 commitment to further improve the transparency and
reporting of existing fisheries subsidies programmes through the WTO, and the WTO Secretariat's
recent invitation to Members to submit new and full notifications by 30 June, we feel it timely for
Japan to include these two measures in its upcoming notification.
4.53. Despite the many challenges that Japan has faced over the last five years, we are
encouraged by Japan's perseverance and commitment for economic change and revival. We
further welcome the contribution Japan has made to the multilateral trading system to date and
look forward to it continuing to play a leading role in global trade.
CHILE
4.54. Chile's bilateral relationship with Japan is Chile's oldest and most institutionalized
relationship with Asia, since it dates back to 1897. It is both strong and deep in the political,
economic, trade and cooperation spheres.
4.55. In the political sphere, bilateral ties at the highest level have grown stronger. More recently,
in
July 2014,
a
second
meeting
was
held
between
Prime
Minister
Abe
and
President Michelle Bachelet, both of whom are in their second term of office.
4.56. There are many areas of cooperation with Japan, including energy, mining, and science and
technology research. Of special note is our cooperation in the field of natural disasters, which
is covered by a Memorandum of Understanding and includes a joint earthquake and tsunami
prevention and early warning project.
4.57. As regards trade, the relationship has been driven by our Strategic Economic Partnership
Agreement, which entered into force on 3 September 2007 and was the first to be signed between
Japan and a South American country. We are pleased to report that an inter-sessional
meeting of the Committee on Trade in Goods was held this past January to deepen the coverage
of the Agreement.
4.58. In 2014 trade between Chile and Japan totalled US$10.035 billion.
4.59. Japan is the fourth largest investor in Chile. Between 1973 and September 2014, Japanese
investment in Chile totalled US$10.225 billion. While nearly 85% of Japanese capital has been
invested in the mining industry, the sectors receiving investment have become more diversified
in recent times.
4.60. Regarding this trade policy review, we are pleased to note that the Japanese economy
remains robust, open and transparent.
WT/TPR/M/310 • Japan
- 19 4.61. As regards the reports submitted today for consideration by the TPRB, the Secretariat's
finding that progressive improvements to the Authorized Economic Operator scheme have led
to a significant reduction in the release time for import cargoes is very interesting.
4.62. We would, however, like to point out some elements that we believe merit further attention
from the Member under review. For example, the report indicates that of the 104 highest tariffs,
96 had non-ad valorem rates. With regard to the tariff lines subject to tariff quotas, 150 are
out-of-quota tariffs whose average rates differ considerably, and the quota allocation method and
process remains somewhat intricate.
4.63. Moreover, tariffs are higher for agricultural products than for other products, and they vary
considerably among agricultural products.
4.64. Japan therefore has a relatively complex tariff structure which could create an element
of unpredictability for business operators.
4.65. Concerning agriculture, the Secretariat report notes that "a high degree of government
support and protection has meant that small-scale farming remains profitable", although it goes
on to add that the result is an inefficient agricultural sector.
4.66. The report refers to OECD indicators and states that despite changes in agricultural
programmes, the support and protection given to agriculture in Japan is high compared to other
countries and is provided by a comprehensive set of policies, including market price support which,
along with other transfers based on output and inputs, is classified as potentially one of the most
production- and trade-distorting forms of support.
4.67. Given the singularities and sensitivities surrounding this sector, we hope that Japan will
consider further liberalizing its agricultural sector. This will undoubtedly lead to increased
competitiveness and benefits for domestic consumers.
4.68. In terms of the economy and international trade, our two countries share common views
on the importance of market liberalization for development and prosperity. This is the spirit
in which we both became founding Members of this Organization and signatories to the GATT.
In this Organization we have taken on a number of initiatives together, most recently the
challenge of advancing an agreement on trade facilitation that would result in further market
opening and facilitate the integration of SMEs in global value chains.
4.69. Chile hopes that within the current WTO context Japan will continue playing a constructive
and leading role, with its typical pragmatism, patience and perseverance, in the completion
of the work programme, with a view to making the next Ministerial Conference in Nairobi the
success we all want.
CANADA
4.70. I welcome the succinct review of recent developments provided by Japan in its Government
report.
4.71. The thorough analysis in the Secretariat report, Ambassador Thuillier's insightful comments,
and the written questions raised by various Members cover much of the ground, so permit me to
focus only on what I consider to be a few key considerations.
4.72. Since Japan's last Trade Policy Review, the policies of Abenomics have indeed sought to
stimulate private investment, consumer consumption, and economic growth. And with the first two
arrows of Abenomics in motion, expansionary monetary policy and flexible fiscal policy, there have
been some positive signs of economic recovery, including record corporate earnings and the lowest
unemployment rate in almost 20 years. But these short term measures cannot mask the need in
the medium and long term to achieve fiscal consolidation to tackle Japan's still-growing debt to
GDP ratio, in accordance with the Government's target to achieve a primary surplus by 2020.
4.73. I know Japan's decision-makers are acutely aware of more fundamental, longer-term
challenges as well. Japan's declining and rapidly aging population will impact the broader economic
WT/TPR/M/310 • Japan
- 20 outlook, social security system, and Japan's relationship with the rest of the world. Canada
supports efforts underway to increase female participation in the labour market and to increase
the percentage of leadership positions held by women. These measures will help address a
looming labour shortage. The easing of immigration policies, starting in the Special Economic
Zones, also has the potential to mitigate Japan's demographic and economic challenge. Speaking
from experience, immigration has greatly enriched Canada's social fabric, and has contributed to
our long term prosperity and economic growth.
4.74. But our focus is on trade policy where the "third arrow" is key. Most observers say this set
of policies is lagging. Canada urges Japan to pursue structural reform without delay by
implementing planned reforms in areas such as agriculture and energy, and addressing looming
labour shortages. For example, in agriculture, while recent steps toward reform, including to
adjust the structure and powers of Japan's Association of Agriculture Cooperatives (JA), or
Zen-Noh, can help enhance productivity and competitiveness by allowing more flexibility at the
local level, much more can be done to reduce restrictions, including by reducing agricultural tariffs
to ensure the highest quality and greatest variety of goods to Japanese consumers at competitive
prices.
4.75. In procurement, while Japan has ratified the Revised WTO Agreement on Government
Procurement, current procedures and practices favour companies physically present in Japan.
Canada encourages Japan to further facilitate international competition in its government
procurement market. For example, the standardization of technical requirements would help spur
greater competition from foreign firms, resulting in more choice and lower costs. A more open
government procurement system would also support the Government's goal to double inward FDI
stock by 2020.
4.76. As for services, Canada and Japan share a common objective in the context of the Trade in
Services Agreement (TISA) negotiations: to conclude a high-quality and forward-thinking
agreement on trade in services that would provide our services suppliers with increased access to
and legal stability in TISA markets. Liberalization in such areas as professional services, and the
development of rules on telecommunications and financial services, can help spur the domestic
consumption and job creation that Japan seeks.
4.77. Permit me also to highlight three positive trade policy developments over the last two years.
First, we note the work Japan has undertaken, as set out in its Intellectual Property Policy Vision,
to raise awareness of the importance of IP within small and medium-sized enterprises, and to
provide support for IP activities and acquisition of rights for their use overseas. We are similarly
committed to enhancing the Canadian Intellectual Property Office's business services that raise IP
awareness, and we value the recent dialogue between our respective IP agencies to share our
experiences in these areas.
4.78. Secondly, we view the conclusion of Japan's Wood Use Points Program in September 2014
as a positive step, and look forward to learning more about how Japan plans to implement its
"Aggressive Agriculture, Forestry and Fisheries" initiative.
4.79. Thirdly, we note the goal Japan has set itself in the "Japan Revitalization Strategy" to raise
the percentage of its trade covered by free trade agreements to 70% by 2018. We welcome
Japan's embrace of an ambitious programme of multilateral and bilateral trade negotiations,
including key WTO initiatives. Japan is a constructive partner in negotiations on the expansion of
the WTO Information Technology Agreement; as I mentioned on the Trade in Services Agreement;
and on the Environmental Goods Agreement.
4.80. With respect to regional and bilateral negotiations, we are firmly committed to working with
Japan and other partners to conclude an ambitious, comprehensive, and high-standard TPP
agreement as soon as possible. We are equally committed to accelerating our bilateral Economic
Partnership Agreement (EPA) negotiations with Japan, which offers an important vehicle to achieve
liberalization tailored to our bilateral relationship, particularly in areas of mutual interest such as
energy and natural resources, agriculture and agri-food products, and manufactured products.
4.81. As Canada's former Ambassador to Japan, I can attest to the fact that since the
establishment of our diplomatic relations over 85 years ago, the Canada-Japan friendship has
WT/TPR/M/310 • Japan
- 21 grown into a strong and dynamic partnership based on shared values, significant two-way
investment, and strong bilateral flows of technology, knowledge, goods and people. Canadian and
Japanese citizens share rich people-to-people ties thanks to diverse commercial, cultural and
academic exchanges. In recent years, Canada and Japan have deepened their cooperation in a
wide range of areas including energy, peace and security, aid and development, as well as
humanitarian and disaster response. Japan also continues to be our largest source of Foreign
Direct Investment (FDI) from Asia, and our fifth largest bilateral merchandise trading partner in
the world.
4.82. Canada is looking forward to a constructive exchange of views on all aspects of Japan's
economy, and we wish the Japanese delegation well in this review.
MEXICO
4.83. Mexico is pleased to note Japan's efforts to overcome the adverse effects of the
tragic natural disasters that took place in 2011, which have hampered but not halted its
economic development.
4.84. Trade is one of the cornerstones of the Japanese economy, accounting for approximately
30% of its GDP and making Japan one of the world's leading markets. Its endeavours to promote
foreign trade are reflected in its prominent position as one the five largest importers and exporters
of goods and services worldwide. Since the previous review, Japan has implemented a number
of trade facilitation measures, including the common portal for the next generation single window
and mutual recognition arrangements on authorized economic operator programmes. As a result,
the World Bank ranks Japan 20th out of 189 economies in terms of ease of trading across borders.
4.85. It is worth noting the impressive development of Japan's telecommunications sector
in terms of mobile broadband and optical fibre penetration and its migration towards new
technologies. We commend Japan for its strategy, revised in 2014, to make it the world's most
advanced country in the field of information and telecommunications.
4.86. Mexico welcomes the ambitious reform programme (Abenomics) implemented by Japan
to revive the economy. The programme is based on a "three arrows" strategy: monetary easing,
flexible fiscal policy and structural reforms. We have full confidence in Japan's ability to achieve
its objectives.
4.87. While Japan ranks as the world's third largest economy, its real GDP growth rate over the
past three years has been 1.5% or less, and rates of 0.9% and 0.8% are forecast for 2014 and
2015, respectively. The main challenges that triggered Japan's "lost decade" in 1990, namely the
rigidity of the labour market, demographic factors and public debt, are still present today. Japan
should adopt new policies, such as those outlined below, in order to reverse sluggish growth
and increase productivity.
Stabilizing the labour force
4.88. Japan's labour force, that is, persons between the ages of 15 and 64, is decreasing by just
over one million people per year. Some forecasts suggest a decline of 17% by 2030 and of almost
40% by 2050. In order to mitigate this problem, it is important for Japan to increase the
participation of women and foreign workers. According to some economists, if in 20 years there
is an equal representation of men and women1, labour supply will decrease by only 5%.
Improving the business environment
4.89. According to the World Bank, Japan ranks 120th out of 189 economies for starting
a business, which reflects its low business dynamism. While efforts to encourage young people
to set up farm businesses are important, these businesses have to be internationally competitive
and present no significant barriers to trade. Japan should improve its corporate governance
by promoting labour market flexibility and mobility and revitalizing risk capital investment in order
to support business creation and innovation.
1
The current rates of male and female participation in the workforce are 84% and 63%, respectively.
WT/TPR/M/310 • Japan
- 22 Reviving foreign investment flows into Japan
4.90. Inward FDI stock fell from 4.2% of GDP in 2008 to 3.5% in 2013, i.e. the lowest among
OECD countries. Hence it is important to review, inter alia, the high level of income tax applied
to corporations and the rigidity of the labour market.
Increasing SME efficiency
4.91. While SMEs accounted for 74% of employment and more than 50% of value added
in 2012, they currently suffer from low productivity and profitability. The net profit margin is only
1.5%, compared to 6.2% for large businesses.
The agricultural sector
4.92. The Japanese agricultural sector is one of the most protected. Average tariffs in the
agricultural sector are almost five times higher than in the industrial sector (15.2% vs. 3.7%) and
Japan ranks 85th among countries with the highest average applied tariff in this sector. Support
remains among the highest, focusing on market price support programmes, which are some of the
most production- and trade-distorting forms of support. SPS and TBT requirements are often more
strict than international standards, meaning that the costs of meeting Japan's quality and safety
standards can be high.
4.93. Japan's participation in mega-regional trade agreements could help its agricultural sector
move towards a system that is more in line with market rules.
Public debt
4.94. We believe that the measures provided for under the second arrow of Abenomics
(reducing public debt) are a step in the right direction. However, the VAT increase from 5% to 8%
in 2014, and the planned increase to 10% in 2017 in order to increase government revenues and
control government debt, will affect demand and hence economic growth, as shown by the
estimated GDP growth rate of 0.9% for 2014.
4.95. Before concluding, we would like to thank Japan for its answers to our questions and wish
the Japanese delegation a successful conclusion to this review.
THE PHILIPPINES ON BEHALF OF ASEAN
4.96. ASEAN notes the Secretariat's observation on Japan's persistent trade deficit since 2011
with the biggest annual trade deficit in 2013, due to the highest level of imports ever recorded
partly on fossil fuels being a major factor as they replaced energy from nuclear power following
the Fukushima incident and the subsequent shut-down of other nuclear power plants. Even so, this
has not lowered Japan's ambitions and they remain to be an open and transparent economy,
which shows as they have continued to pursue concluding and enhancing their FTAs, in particular
the signing of their FTA with Australia and Mongolia as well as their active participation with other
RTAs, where in the case of ASEAN, Japan is a part of the Regional Comprehensive Economic
Partnership Agreement (RCEP) negotiations. Also, not forgetting to mention Japan's dynamic role
in the work of the WTO.
4.97. ASEAN and Japan continue to be important trading partners, particularly as Japan is third
largest trading partner for ASEAN, down one spot from being ASEAN's second largest trading
partner in 2012. As of December 2014, total trade amounted to about US$240 billion from
US$300 billion in 2011. Positive trends also continue in other areas such as total inward
investment in ASEAN and we hope these positive figures continue.
4.98. ASEAN and Japan signed the ASEAN-Japan Comprehensive Economic Partnership in
April 2008 which covers trade in goods, trade in services, investment and economic cooperation.
ASEAN and Japan marked the fortieth anniversary of ASEAN-Japan Dialogue relations by holding a
Commemorative Summit in December 2013 in Tokyo, Japan, where Leaders adopted a Joint
Statement and an Implementation Plan that serves to further strengthen cooperation to support
the ASEAN Community-building and contributes to the ASEAN Community Post-2015 Vision.
WT/TPR/M/310 • Japan
- 23 4.99. At the 17th ASEAN-Japan Summit, held in Nay Pyi Taw, Myanmar last year, our Leaders
reiterated our commitment to double trade and investment flows by 2022, attaching the
importance to the ASEAN-Japan Economic Forum, the Commemorative Summit, held on
15 December 2013 mentioned earlier and recognised the important contribution of industry and
academia to the ASEAN-Japan 10-year Economic Cooperation Roadmap.
4.100. ASEAN is happy to note that Japan remains an active participant in the multilateral trading
system and has been supportive of the need to push forward towards a successful conclusion of
the DDA negotiations. ASEAN would particularly like to thank Ambassador Otabe and his
delegation for their tireless efforts and constructive engagement with delegations, including
individual ASEAN Members, here in Geneva. We look forward to working closely with the
delegation of Japan to realise the post-Bali Work Programme and a successful outcome for MC10.
4.101. Finally, some ASEAN member States have submitted written questions to Japan's
delegation and would like to thank them in advance for their written responses.
4.102. In conclusion, on behalf of ASEAN member States, we would like to express our
appreciation for Japan's continued and constructive partnership and we wish them every success in
their Twelfth Trade Policy Review.
THE PHILIPPINES
4.103. Since 2012, Japan has been implementing an ambitious reform programme to overcome
deflation and revitalize its economy after more than a decade of sluggish performance. The
programme consists of a "three arrows strategy" that includes: monetary easing; fiscal stimulus;
and structural reforms in areas such as agriculture, energy and healthcare.
4.104. The first of the three "arrows" was a fiscal boost of ¥10.3 trillion yen, followed by another
spending package worth ¥5.5 trillion yen in April 2014. Now, the other facets of "Abenomics" are
being exploited. After all, an expanding Japan is in the best interest of the Philippines while a
growing Philippines is in the best interest of Japan.
4.105. In 2013, Japan was the Philippines top trading partner. Japan was the Philippines top
export market contributing to 21.25% share of total Philippine exports. Conversely, Japan was
ranked as the third largest import source comprising 8.37% share in total Philippine imports. In
terms of investments, Japan contributed the largest share for the year 2014 accounting for 19.1%
of total FDI.
4.106. The Philippines and Japan mutually participate in both countries' renewal following the
disasters that occurred. The Philippines is an important source of products and services related to
Japan's reconstruction while Japan supported the Philippines' priority development initiatives,
including the development of Mindanao.
4.107. The past years also marked significant progress in Philippine–Japan trade cooperation. Let
me go through some of them:
(1)
People-to-people connectivity has been greatly enhanced with the signing of the
Philippines-Japan bilateral Air Services Agreement. The Philippines is more than ready for
this vigorous people-to-people exchange with over 14 daily flights between Manila and
Tokyo and other major Japanese cities already in place. My government recognizes this
development with interest and looks forward to Japan's relaxation of its visa entry
requirements for Philippine nationals.
(2)
The Philippines supplies Japan's caregiving requirements for its aging population through
access to nursing and caregiving practice through our Economic Partnership Agreement.
We hope that more consideration will be afforded to our trainees to facilitate an
immediate fulfilment to this important demand in the Japanese market.
(3)
Sending IT Professionals to Japan is something the Philippines would like to encourage
and this could be greatly facilitated if the approval cycle of the certificate of eligibility
(COE) would take a shorter time.
WT/TPR/M/310 • Japan
- 24 (4)
The Philippines would appreciate cooperation on the implementation of the SPS
Agreement, particularly through a Mutual Recognition Arrangement (MRA), so Philippines'
export products can fulfil Japan's SPS standards.
4.108. The Philippines recognizes the mutual benefits gained from the implementation of the
Philippines-Japan Economic Partnership Agreement and shares the need to continue our efforts
towards the General Review of the Agreement this year.
4.109. In view of the above, I am happy to convey that the "three arrows" that Prime Minister
Abe had fired extended not only to Japan but also to the Philippines.
4.110. The Philippines congratulates Japan for its 12th trade policy review and would like to wish
the delegation, led by Mr Tomochika Uyama, Deputy Director-General of the Economic Affairs
Bureau, a successful Trade Policy Review. Our appreciation also goes to the Secretariat for
preparing a comprehensive report and H.E. Mr Jean-Paul Thuillier (France) for his insightful
comments as discussant.
4.111. In closing, Madame Chair, I would like to join others in congratulating you for your efforts
as Chair of the TPRB.
UNITED STATES
4.112. Japan is a vital strategic and economic partner to the United States, and a key figure in the
global trading system. We welcome Japan's commitment to pursuing ambitious, high standard
international trade rules, as exemplified more prominently in its participation in Trans-Pacific
Partnership talks. In addition, Japan's strong role as a member of APEC further supports our
mutual interest in promoting a broad trade liberalization agenda.
4.113. Within the WTO, the United States highly values its close working relationship with the
Government of Japan and Japan's long-time support for the rules-based multilateral trading
system embodied by the WTO. We also note Japan's continued contributions to working through
WTO institutions to ensure that unilateral introduction of new protectionist measures does not
undermine the important progress the WTO has made in opening markets around the world.
4.114. We also appreciate the strong working relationship with our teams on the ITA expansion
negotiations, and share the view that the negotiations should be finalized as soon as possible, so
that we can move on to the important work of implementing an agreement and gaining its
benefits. We also note Japan's important leadership role in the TiSA negotiations.
4.115. In the two years since the last Trade Policy Review, Japan has continued to bring new
Economic Partnership Agreements into force, most recently with Australia. However, we note the
low level of ambition reflected in the agricultural component of its new agreement with Australia.
The same could also be said of Japan's most recent EPAs with Peru and India. As a global leader
with important responsibilities within the world trading system, we look to Japan to demonstrate a
higher level of ambition in future free trade agreements, particularly the Trans-Pacific Partnership.
4.116. The United States greatly appreciates Japan's efforts to undertake structural reforms that
will boost domestic growth to the benefit of Japan and the entire global trading community. In
particular, the United States commends Prime Minister Abe's efforts to reform the Japanese
agriculture sector. As he succinctly explained, "Sweeping reforms of agriculture policy can wait no
longer." Indeed, the reforms of agriculture cooperatives that he has proposed are historic—if
successfully implemented, they will be the first in six decades. These long-awaited domestic
reforms coupled with agriculture market liberalization steps taken through the Trans-Pacific
Partnership create the prospect of a new era for Japanese agriculture.
4.117. Meaningful structural reforms in Japan will lead to increased productivity, provide a
renewed engine for economic growth, and help ameliorate global trade imbalances. The Prime
Minister has highlighted a number of other areas for reform, including ones relating to corporate
governance, medical care, taxes, government reorganization, and labour markets. With regard to
regulatory reforms, the Prime Minister has recognized that bold regulatory reform will boost
Japan's productivity and raise Japan's global competitiveness.
WT/TPR/M/310 • Japan
- 25 4.118. We applaud the Prime Minister's vision and commitment, and support his efforts to
promote reform and mutually beneficial economic expansion. In this context, Japan's participation
in the Trans-Pacific Partnership negotiations could substantially contribute to Japan's objectives for
economic reform and growth, including the success of the Prime Minister's "third arrow," the
objective of which is to advance structural reform of the Japanese economy. The Prime Minster
himself recently noted the TPP's importance, explaining that completion of trade and investment
deals such as the TPP "are among the most urgent tasks we face." And in 2013, he observed that
the TPP is a framework that promises "prosperity in the future" in the Asia-Pacific.
4.119. With a renewed electoral mandate, we remain hopeful that the Abe administration will
continue to undertake ambitious domestic regulatory reforms and other structural measures to
stimulate competition and new economic opportunities. Renewable energy is also an area where
we hope to see increased market access. Further, although Japan's industrial tariffs are generally
low, significant non-tariff barriers remain. As a result, the United States continues to look to Japan
to take new, bold steps to increase transparency, reduce unnecessary regulation, and remove
other non-tariff barriers to trade.
4.120. From this perspective, one key priority that the United States continues to urge Japan to
address is to ensure a level playing field and equivalent conditions of competition between Japan
Post and the private sector in the insurance, banking, and express delivery sectors. We will watch
closely the privatization of Japan Post as it unfolds later this year. Another priority area is for
Japan to ensure that its SPS measures are based on science and consistent with international
standards. The United States also urges Japan, among other steps, to remove non-tariff barriers
that impede foreign automotive manufacturers' ability to compete on a level playing field with their
Japanese competitors; take actions to ensure Japan's information technologies and
communications market is open and promotes fair competition; ensure transparent and fair
opportunities for foreign companies to compete for government procurement contracts; and
ensure equivalent access for foreign companies to qualify for government-funded fiscal and
incentive programs offered in specific sectors.
4.121. The United States appreciates Japan's support for expanding global trade and its
commitment to the multilateral trading system. The United States looks forward to continued close
cooperation with the Government of Japan in working towards a more open trading system.
COSTA RICA
4.122. Costa Rica finds it very interesting to participate in this TPR of Japan, which is one of its
major trading partners in Asia. Indeed, Japan is our country's second largest source of imports
from that region and the fourth largest consumer of our exports.
4.123. Costa Rica also wishes to acknowledge the important role played by Japan at the WTO,
its firm support for the multilateral trading system, its commitment to ensuring the successful
conclusion of the Doha Round negotiations and its valuable contribution to the WTO's Aid-for-Trade
programme. Like Japan, Costa Rica is also engaging in initiatives such as the expansion of the
Information Technology Agreement (ITA), the Trade in Services Agreement (TiSA), and the
Environmental Goods Agreement (EGA). Costa Rica and Japan also have common interests
in other areas, such as strengthening the WTO rules, especially in the areas of anti-dumping,
reviewing the Dispute Settlement Understanding, promoting green growth and examining
global value chains.
4.124. Both the Secretariat report and the policy presentation made by the Japanese Government
refer to the fact that the measures adopted to revive the Japanese economy have started to take
effect, but that to achieve strong economic growth, further progress still has to be made in dealing
with its major structural problems, which include increasing women's share in employment and
addressing its ageing population. We therefore think that it would be very useful during this review
to learn about the Japanese Government's future plans to address these structural problems,
especially measures aimed at liberalizing trade, boosting competition and attracting more foreign
direct investment, all key issues which have been referred to in previous statements.
4.125. The high level of protection afforded to the agricultural sector through different measures
including high tariffs, tariff quotas, domestic support policies and non-tariff measures, despite the
WT/TPR/M/310 • Japan
- 26 changes introduced over the past few years, remains striking. As a result, according to the
Secretariat report, domestic prices remain higher than world prices. Furthermore, the Secretariat
report shows that although Japan has continued to move towards income support, market price
support is still the main component of support for the agricultural sector. We will therefore closely
follow the steps that Japan is taking towards market-oriented agricultural trade and to increase the
sector's competitiveness and productivity in the long term.
4.126. For this trade policy review, Costa Rica submitted a set of questions to Japan concerning
various elements of its macroeconomic and trade policy. We are grateful for the attention given
to these questions by Japan, and I would like to conclude by wishing Japan a successful
trade policy review.
SINGAPORE
4.127. Singapore-Japan economic relations are underpinned by the Japan-Singapore New-Age
Economic Partnership Agreement (JSEPA). The JSEPA was Japan's first-ever EPA and one of
Singapore's earliest FTAs with a major trading partner. This speaks volumes of the strength of our
bilateral relationship and economic links, which has only grown stronger since the JSEPA entered
into force in 2002. Last year, Japan was Singapore's 9th largest trading partner, with bilateral
trade reaching US$34 billion.
4.128. Bilateral investment flows also continue to be substantial. As of end 2013, Japan was
Singapore's 3rd largest cumulative investor with cumulative direct investment totalling
US$52 billion whilst Singapore was Japan's 4th largest source of cumulative investments. Japanese
companies have been operating in Singapore for a long time, and are increasingly using Singapore
as their global trading headquarters and as a centre for talent and business development.
Similarly, Singapore companies have also actively invested in Japan, particularly in the real estate,
hospitality and logistics sectors and more recently, in the food services, chemicals, electronics and
precision engineering sectors. As we commemorate the 50th anniversary of Singapore-Japan
diplomatic relations next year, Singapore looks forward to the completion of the on-going JSEPA
review, which will ensure that the JSEPA remains relevant to business needs and pave the way for
stronger bilateral economic linkages.
4.129. Singapore also cooperates closely with Japan in regional integration initiatives such as the
Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership (RCEP) and the
ASEAN-Japan Comprehensive Economic Agreement (AJCEP). These initiatives reflect Japan's
continued commitment towards increasing trade and investment relations in the region and also
underscore Japan's pro-liberalisation stance. According to the Japanese Government's report,
Japan's exports to and imports from ASEAN increased by 4.8% and 11.5% respectively in 2013
compared to 2012. Singapore looks forward to continuing our close cooperation with Japan to
strengthen regional economic integration.
4.130. At the WTO, Singapore greatly appreciates Japan's commitment to trade liberalization and
role as a defender of the MTS. Singapore welcomes the lowering of Japan's overall simple average
applied MFN tariff rate from 6.3% in 2012 to 5.8% in 2014. Japan has faced persistent domestic
economic challenges, including a growing trade deficit and the economic impact of the 2011
earthquake, tsunami and nuclear incident. However, Japan has commendably not raised tariffs and
continues to be a leading voice against protectionism and trade restrictive measures, not only at
the WTO, but also at other international fora such as the G-20 and APEC. Japan has also been a
strong and consistent supporter of development initiatives. Singapore looks forward to working
closely with Japan to further trade liberalisation in the WTO through, inter alia, the post-Bali Work
Programme, Information Technology Agreement (ITA) expansion and Environmental Goods
Agreement (EGA). We also look forward to Japan's speedy ratification and deposit of the
instrument of acceptance for the Trade Facilitation Agreement.
4.131. As the world's 2nd largest foreign direct investor, third largest economy and fourth largest
importer and exporter of goods, Japan's continued economic health is vital to global economic
recovery and the viability of global value chains worldwide. Singapore hopes that Japan will
continue to stay the course with reforms in its financial and capital markets, as well as its efforts
to reduce the ratio of public debt to GDP, encourage inward FDI, and improve productivity,
WT/TPR/M/310 • Japan
- 27 especially in the services sector. We also encourage Japan to continue in its efforts to liberalize its
agriculture sector.
4.132. Here in Geneva, the Singapore delegation enjoys a close working relationship with
Ambassador Yoichi Otabe and his team of extremely capable and dedicated colleagues. We look
forward to continuing this close collaboration and advancing our common goal of a post-Bali work
programme by July and a successful 10th Ministerial Conference in Nairobi. Singapore thanks
Japan for their responses to our written questions and wishes Japan a very successful 12th Trade
Policy Review.
TURKEY
4.133. Japan has a significant importance for the global economy and trade. Being the third
biggest economy in the world, Japan's level of success and means of strategy in overcoming
deflation and revitalizing her economy will also have great implications for the other WTO
Members.
4.134. Japan has been implementing a comprehensive reform program to support domestic
demand in the recent years. Taking into account the prolonged period of stagnation, the negative
effects of the earthquake and tsunami of 2011 and the global crisis, Japanese GDP growth of 1.5%
in 2012 and 2013 was then pretty enough to be optimistic about the success of the program. But,
relatively low level of growth (0.9%) in 2014 and weak expectation for 2015 (0.8%, IMF) show us
that there is still some way to drive for Japan to achieve satisfactory growth.
4.135. Besides low economic growth, the highest ratio of public debt to GDP in the world and the
volatility of the Japanese yen against foreign currencies are the two areas of additional concern.
We think that a good balance between a sustainable economic growth and these two issues can
only be reached if the Japanese Government puts the challenging and even painful structural
reforms into effect with the optimum fiscal and monetary policy mix. Fortunately, there is also
enough reason for us to believe in the capacity and the willingness of the Japanese Government to
do so.
4.136. Japan has continued to be an active supporter of the ruled-based multilateral trading
system during the review period. Japan's transparent and predictable trade policy based mainly on
the customs tariffs and its little use of trade remedies are appreciated.
4.137. We are also pleased from Japan´s commitment and leadership to help LDCs through
comprehensive programs such as "Development Initiative for Trade", "One Village One Product"
and the GSP.
4.138. At this point, let me also thank to our Japanese colleagues who work at the Permanent
Mission to the WTO for their hard work and valuable contribution to the daily activities under this
roof.
4.139. Japan is a valuable partner for Turkey. We also enjoy a good cooperation with Japan within
the G-20 and in various plurilateral agreements such as TISA, ITA and EGA. Turkey and Japan
have always enjoyed an excellent political relationship. Unfortunately, as we also stated in Japan's
last review, our trade volume (US$3.5 billion in 2014) is still far away from both reflecting the
potential of our economies and mirroring our good political relations. In addition, it should be
mentioned that our bilateral trade is remarkably in favor of Japan, which we believe has to move
towards a balance.
4.140. In terms of foreign direct investment, although Japan is one of the leading investor
countries in the world, Japanese FDI in Turkey in the last decade was limited to US$1.5 billion,
whereas Turkey was able to attract an FDI inflow of US$117 billion globally in the same period. In
this framework, Turkey also wants to attract more foreign direct investment from Japan as well as
increase her traditional trade in goods and services.
4.141. Concerning the agricultural sector which is heavily regulated, I would like to underline in
particular the application of strict SPS measures by Japan, which unfortunately prevents Turkey
from exporting some important agricultural products. We hope that Japan will complete the
WT/TPR/M/310 • Japan
- 28 necessary procedures soon, and make it possible for allowing these products to be present in the
Japanese market.
4.142. As mentioned in the Secretariat report, Japan and Turkey have started to negotiate an
Economic Partnership Agreement during the review period. The first round of the negotiations was
held in December, 2014. The Agreement will cover a broad range of areas including trade in goods
and trade in services, customs procedures, investment, e-commerce, intellectual property rights,
and competition. We believe this Economic Partnership Agreement will help us to strengthen and
further develop our bilateral economic and trade relations.
4.143. Finally, I would like to express my appreciation Mme Chair for your able conduct of the
TPRB during your term.
NORWAY
4.144. Four years have passed since the devastating Great East Japan Earthquake struck Japan
on 11 March 2011, causing tremendous human and economic suffering and Norway would like to
praise the Japanese people for its efforts and sacrifices throughout the recovery process.
4.145. First, a few remarks on the bilateral trade relationship between Norway and Japan. Japan
is the third largest trading partner for Norway in Asia. Norwegian imports of goods from Japan
have increased during the last years. The total trade in goods between Norway and Japan has
been relatively unchanged, despite the downturn in other markets. Trade in services between
Norway and Japan is considerable, one third of this trade being in the maritime sector.
4.146. Fresh fish is among the major Norwegian export products, in particular fresh salmon and
mackerel, and Norwegian seafood has become an important part of Japanese food culture.
Furthermore, we notice that Japanese companies play and increasingly larger role in the marine
produce value chain, further underlining our common interest in an open and transparent market
with predictable rules for the trade in fish and seafood.
4.147. Maritime transport is an important facilitator of world trade, and Norway gives high priority
to this sector. Better access to and supply of maritime transport services on open and equal
market conditions is beneficial to all WTO Members and crucial to economic development. Norway
believes improved offers and binding commitments in the WTO are important for fair competition
and economic growth. Japan is a major maritime actor with the world's second largest fleet, and a
key player in this regard.
4.148. Japan is the world's third largest economy, and Norway has high expectations for the
reconstruction and the economic reform process that Japan is currently going through. We hope
Japan will succeed in the Abenomics effort to create sustainable economic growth after years of
deflation, for example through energy market reforms and by better including the female
population into the labour market.
4.149. Allow us also to mention that Norwegian exporters of maritime equipment have indicated
concerns about difficulties to enter the Japanese market. As a major shipbuilding nation, Japan is
of particular interest. Our products are used extensively in other markets, but it would seem that
shipyards and ship owners have a preference for Japanese products when contracting, building and
equipping ships and that certain customs rules may impede import and installation and/or
replacement of parts needed on foreign vessels. Against this background, we would like to ask if
there are any legislative measures, customs regulations, schemes related to financing or other
measures that may hinder shipyards and ship owners from buying foreign maritime equipment.
We would ask the Japanese delegation to look into this problem and get back to us with a
clarification of present practices and rules in order to facilitate access to the important Japanese
market.
4.150. To facilitate international trade and integrate the Japanese market better into world trade,
more harmonization and mutual recognition of standards, product certifications and marketing
authorizations, as well as adoption of international standards in Japan would be highly welcomed.
We have noted the need for such harmonization with international standards, in particular in the
energy sector, health/welfare and medical equipment, offshore installations, environmental
WT/TPR/M/310 • Japan
- 29 technology, consumer products and food, including a harmonization of Japanese rules pertaining to
food safety. We would therefore enquire whether the Japanese delegation could respond to this.
4.151. With reference to chapter 2 in the report by Japan, we are pleased to note that Japan is
actively engaging in the plurilateral negotiations in relation to the Information and Technology
Agreement (ITA), Trade in Services Agreement (TISA) and the Environmental Goods Agreement
(EGA). It is important that Japan, as one of the largest trading economies in the world, plays an
active role together with other WTO Members in pursuing multilateral trade liberalization.
4.152. Norway welcomes Japan's increased focus on bi- and multilateral trade agreements, which
can further promote international free trade while complementing the engagement within the
WTO.
4.153. Japan is a very close partner for Norway in the WTO, and plays an important role in the
WTO in general. We would like to give credit to Japan for its constructive and positive contributions
when it comes to negotiations on rules in particular. Agreement on rules, along with e.g. NAMA
and services, is important for a result in the DDA negotiations.
4.154. In conclusion, we are confident that this review will be useful both for Japan as well as for
the other participants. We look forward to receiving your response to our comments here today,
and we are grateful for answers given to our written questions which we will study in detail.
EUROPEAN UNION
4.155. Needless to say that Japan is a strategic partner for the EU on many issues that include,
but are not limited to trade and investment.
4.156. Since the last review in 2013, Japan has put in place an ambitious reform programme to
overcome deflation and to revitalize its economy after more than a decade of slow performance.
The EU, while appreciating the package of reforms in its entirety, looks with a particular interest to
the measures that will be implemented to further open the Japanese economy to foreign trade and
investment. The EU is fully aware that the reforms and measures are not easy to push through,
but we can only encourage Japan to pursue the good work undertaken.
4.157. A word on our bilateral relationship with Japan. The trade and economic relationships
between the EU and Japan date back in time and have gradually developed into multiple policy
dialogues that are helping foster closer cooperation between two like-minded partners. The EU and
Japan now work closely on a wide range of issues ranging from economic, trade and investment
matters to regional security, development, disaster relief and management, human rights, energy
and environment, social policy and science and technology.
4.158. The EU is willing to further intensify its relations with Japan and in this respect negotiations
aiming at conclusion of a Free Trade Agreement (FTA) and a Strategic Partnership Agreement
(SPA) are on-going. The conclusion of an FTA between the two of the world major economies must
result in more transparent and open markets in Japan. Moreover, the EU remains convinced that
the issues currently being negotiated under the FTA would complement the "third arrow" of
Abenomics aimed at structural reform.
4.159. I also wish to convey the EU's appreciation for the constructive role played by Japan in
putting the WTO back on the negotiation track. The EU trusts Japan will continue to be fully
engaged to the multilateral trading system as expressed in its report and shares with Japan the
willingness to assess the possibility of reflecting the outcomes of the bilateral and plurilateral
initiatives in the multilateral trading system.
4.160. Despite Japan's efforts to reform its economy, there are a number of barriers to trade in
goods, services, investment and public procurement that continue to hinder exports in sectors
where demands for European products and services would be otherwise high. The EU hopes that
Japan's commitment to regulatory reform will remain unaltered and, if anything, strengthened
under the renewed government of Prime Minister Abe.
WT/TPR/M/310 • Japan
- 30 4.161. In particular, the EU notes that the FDI restrictions have been in place for a long time and
have led to a very low level of inward FDI in Japan compared to other major world economies. In
its report Japan mentions measures to attract FDI. The EU is interested to know more which
measures Japan will adopt to encourage FDI.
4.162. Then, turning to the EU questions, let me stress that the issues we raised are considered
and confirmed by EU operators as obstacles to trade. Today, I will only focus on a few of them:
4.163. Regarding Public Procurements, the EU notes that the procurement market remains
difficult to access for foreign bidders. The EU welcomes Japan's reply stating that voluntary
measures to ensure non-discriminatory, transparent, fair, competitive and open public sector
procurement procedures have been implemented and hopes that these measures will allow a
larger opening of its procurement market in the near future. The same way, the EU hopes that
on-going policy developments on government procurement such as green procurement or
measures in favour of SMES will be conducted on the basis of objective criteria and a nondiscriminatory approach.
4.164. Regarding services, the EU has submitted to Japan several questions showing the EU
concerns for the insufficient liberalisation of the services sector. The EU considers that further
liberalisation of services is needed for enhancing competition and fair and equal treatment of all
companies, both domestic and foreign, for example in the postal and courier sector.
4.165. Finally, in the field of sanitary and phytosanitary measures, the EU would like to reiterate
its call on Japan to align its domestic standards with the international ones such as the OIE in case
of regionalisation and on beef and bovine products in case of import conditions. Concerning the
additive and pesticide approvals, the EU similarly hopes to see that alignment with international
standards leads to accelerated approval procedures while maintaining an adequate balance
between security concerns and legitimate trade.
4.166. Concluding, I thank the delegation of Japan for your kind attention. The EU looks forward
to Japan's responses to the questions that have been put forward today and that have been
submitted previously in writing.
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU
4.167. The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu and Japan have
enjoyed a close and mutually beneficial trading relationship for many decades. Japan has for long
been our third largest trading partner and a major source of foreign investment. Since 2011, our
bilateral cooperation has been strengthened even further by the signing of various agreements, or
MOUs, in areas such as investment, open skies, the mutual recognition of inspection results,
industrial cooperation, E-commerce and tourism, as well as financial supervision and intellectual
property.
4.168. With such a close bilateral relationship, and given Japan's leading role in the Asia-Pacific
region, we naturally attach great importance to Japan's new economic reform programme and its
impact on the Japanese economy.
4.169. We see from the Secretariat report that the expansionary monetary and fiscal policy
measures adopted by Japan since the last review have provided support to the economy, but not
enough to achieve strong economic growth. In 2013, Japan's economy grew by 1.5%, supported
by strong industrial production, retail sales and consumer spending, while real GDP growth in 2014
is estimated at just 0.9%. The consumption tax increase from 5 to 8% had a negative effect on
domestic demand.
4.170. Japan's trade deficit reached a record high in 2013, and despite its exports increasing in
U.S. dollar terms, imports also grew to their highest level ever. We look forward to the full
implementation of Japan's revised Growth Strategy which includes a number of far-reaching
structural reforms, and hopefully it will help re-boost the economy.
4.171. On the multilateral front, we recognize the leading role of Japan in the regional and
multilateral trade forums, such as APEC and the WTO. We hold similar positions to Japan in the
WT/TPR/M/310 • Japan
- 31 WTO negotiations on Agriculture, Services, GI registers and Rules, and we are both part of the
plurilateral negotiations on ITA expansion, EGA and TiSA.
4.172. In specific sectors, Japan provides preferential access under the GSP to 144 countries. The
GSP scheme is revised every ten years, with the next revision due in 2021. In fact, we find Japan's
GSP graduation requirements to be less strict than some other developed Members. Therefore, we
encourage Japan to review the GSP graduation requirements in order to maintain fair competition
in its internal market.
4.173. In addition, we do have some concerns over Japan's Customs procedures and
requirements. The Advance Filing Rules (AFRs) on fresh products imported into Japan were
adopted by Japan's Customs on the 1st of March 2014. These rules require a vessel operator to
electronically submit information to the Japan Customs on the maritime container cargoes to be
loaded onto any vessel intending to enter a port in Japan, in principle no later than 24 hours
before departure of that vessel from the port of loading. This means that all fresh products from
neighbouring countries, including fruits and flowers, have to be harvested or processed 24 hours
at least in advance of the vessel leaving the port. Freshness and quality is therefore harder than
usual to maintain and guarantee. We raised this issue bilaterally last year. Hopefully, Japan can
recognize the need to take measures to counteract our trade concerns.
4.174. Finally, I'd like to express my appreciation to Ambassador Otabe and his capable team for
their active roles and contribution to the WTO. I wish Japan a most successful and constructive
Trade Policy Review.
BRAZIL
4.175. It is a special opportunity for me to participate in the twelfth Trade Policy Review of Japan,
a country I have always admired, but now feel closer to after serving as Brazil's Ambassador in
Tokyo for almost three years up to October 2013.
4.176. We all know that Japan, the third largest economy worldwide and the fourth global trader,
has a crucial role in the recovery of the world economy by means of increased productivity and
enhanced competitiveness. In the WTO context, it has been committed to the successful
conclusion of the DDA and the preparation of the Post-Bali Work Program.
4.177. The Secretariat report notes that despite many challenges, including the devastating
earthquake in March 2011 – I was there at the time, four years ago on Wednesday – Japan
attained economic growth in 2013 and 2014, with a positive forecast for 2015. Growth that is
linked to the "Three Arrows Strategy" of reform, which encompasses monetary easing, fiscal
stimulus and structural transformation in areas such as energy, healthcare and agriculture.
4.178. The issue of agriculture is particular interest for Brazil. Farm reform is long overdue and
unavoidable if Japan really wants to pursue economic reforms on a sustainable footing.
Notwithstanding some steps taken over the past few years, support and protection provided to
agriculture remains significantly high when compared to other countries.
4.179. Japan's domestic support level is higher than the OECD average. Market price support, the
distinguishing feature of Japanese farm policy, is considered by experts one of the most production
and trade-distorting forms of support. Administered prices, particularly in pork and beef, heavily
affect developing countries exporters, such as Brazil, not to mention Japanese consumers.
4.180. Though declining, the average agricultural tariff stands at 14.9%, far higher than duties
imposed on industrial goods. A closer look indicates a rather complex picture in agriculture: tariff
peaks are found in 6.6% of the lines, some of which are close to 300%; the fill rates of tariff
quotas, covering around 200 lines, are considerably uneven.
4.181. On SPS, Japan often imposes more restrictive requirements than those internationally
practised or agreed upon, prompting unnecessary rises in compliance costs for exporters. In light
of all these considerations, Brazil welcomes and encourages the decision of the Japanese
government to implement structural farm reform, and urges that it do so as ambitiously and as
expeditiously as possible.
WT/TPR/M/310 • Japan
- 32 4.182. As regards the industrial sector, Brazil has been continuously and attentively monitoring
support related to the development of the first and, now, the second generation of the Mitsubishi
regional jet project. For the sake of transparency, we have consistently raised this issue bilaterally
and at the relevant WTO committee. Unfortunately, the replies provided by the Japanese
government until now, including those last week, have been vague, especially given the need that
the compliance of such support with WTO rules be ascertained. We urge the Japanese Government
to show greater engagement and provide satisfactory response as promptly as possible.
4.183. Brazil and Japan have forged a strong bilateral relation in investment and trade. Japan
ranks as the third largest FDI source in Brazil, with a preeminent position particularly in the
shipbuilding, mining, automotive and agribusiness industries.
4.184. On trade in goods, Japan is our sixth trade partner globally, and the second in Asia.
Although dynamic, Brazilian exports to the Japanese market are highly concentrated on basic
products (iron ore, coffee, soybeans), whereas our imports are quite diverse and largely composed
of manufactured goods, such as machinery, automobiles and chemicals. Brazil remains open to
working with Japan to diversify two-way trade flows.
4.185. One concrete measure could be the resumption of our exports of thermally processed beef
to Japan, suspended since 2012 due to two atypical cases of BSE. The ban runs counter to a
resolution of the World Organisation for Animal Health, which classifies Brazil's sanitary risk as
"insignificant", the lowest in the risk scale. Japanese consumers certainly stand to gain from
broader access to Brazilian beef, known for its high quality and sanitary safety worldwide. We look
forward to an expeditious resolution to this matter.
4.186. In 2015 Brazil and Japan are celebrating 120 years since the establishment of bilateral
diplomatic relations. On the occasion of Prime Minister Shinzo Abe's visit to Brazil last year, our
relationship was further strengthened and upgraded to the level of Strategic Global Partnership.
4.187. It goes without saying that our ties transcend trade and diplomacy. Brazil hosts the largest
community of Japanese descendants abroad, with around 1.6 million people, while Japan is home
to the third largest contingent of Brazilians living outside our borders.
4.188. Bilateral cooperation has been developed and continuously deepened, especially in
investment, technical cooperation, including in agriculture, education, health, energy, science and
technology. The successful partnership in the Digital TV Project is viewed nowadays as a
demonstration of the ability of our countries to join forces and deliver in the international arena,
including on behalf of developing countries.
4.189. For those less familiar with Brazil-Japan relations, their intensity may appear
counter-intuitive, given the geographic distance and differences in stereotypes between our two
countries. The fact, however, is that our relations are close and strong, beginning with the deep
human bonds that unite our two peoples. We owe it to them – and to our international partners –
to further and quickly develop our partnership upon such a solid basis.
4.190. Before concluding, we thank the written replies to our questions that address issues such
as subsidies, SPS, IP, TBT and investments. They were forwarded to our capital for examination
and follow-up.
HONG KONG, CHINA
4.191. Hong Kong, China (HKC) has a close economic relationship with Japan. Japan has been one
of our top three trading partners for decades. Last year, our total bilateral trade value exceeded
US$54 billion, of which US$37 billion was imports from Japan. On the goods side, HKC has been
the top destination for Japanese exports of foodstuff since 2004, while on the services side, we see
steady growth in recent years, particularly in sectors such as transport services and travel
services.
4.192. Japan is also one of our major sources of inward direct investment. The Japanese business
community we host is one of the largest in the Asia-Pacific region. They include 1 400 Japanese
companies, of which 240 are regional headquarters and 465 are regional offices.
WT/TPR/M/310 • Japan
- 33 4.193. In the years ahead, we hope to foster even closer economic and trade cooperation
between HKC and Japan, especially in expanding services trade and promoting bilateral
investments.
4.194. Let me now turn to specific aspects of trade policies and measures. On tariff, we appreciate
that Japan has bound 98.3% of its total tariff lines, and that the difference between the average
bound MFN tariff (5.9%) and the average applied MFN tariff (5.8%) in 2014 was negligible,
reflecting a high degree of predictability in Japan's tariff regime. However, simple average applied
MFN tariffs were relatively high for footwear and headgear (32.6%) and prepared foods (18.3%);
and international tariff peaks still applied to 7.4% of all tariff lines. We would encourage Japan to
make improvement in these aspects.
4.195. As regards trade policies in agriculture, we note that the level of support and protection
given to Japan's agricultural sector remain high. The trade measures protecting the sector include
tariffs, special safeguard and tariff quotas. On domestic support, the trend for Amber box support
has been going upwards since 2007. The Secretariat report notes that market price support is the
main component of Japan's domestic support programmes and that this, along with other transfers
based on output and input, is potentially one of the most production- and trade-distorting forms of
support. While we appreciate that agriculture is a sensitive sector for Japan, we encourage Japan
to review its measures, with a view to moving towards a more liberalized trade regime .
4.196. On trade facilitation (TF), we note that Japan has already implemented the provisions of
the TF Agreement with the current domestic laws and regulations. Indeed, following progressive
improvements in its Authorized Economic Operators (AEO) scheme, the release time for AEO
import cargoes has been reduced significantly. We hope such good efforts would continue. We also
look forward to working closely with Japan and other WTO Members to accelerate the entry into
force of the TF Agreement, so as to realise the benefits as soon as possible.
4.197. HKC, together with Japan and some other WTO Members, are also actively engaged in
plurilateral negotiations to expand the product coverage of the Information Technology
Agreement, and to liberalise trade in environmental goods. Both HKC and Japan are staunch
supporters of the multilateral trading system. We hope to conclude these negotiations in a timely
manner, to bring about a balanced and commercially significant outcome which can be shared
multilaterally with all Members of the WTO.
4.198. Finally, I would like to commend the Japanese delegation in Geneva led by Ambassador
Otabe for the active and constructive role they play in various aspects of WTO work. I would also
like to thank Japan for adopting the alternative timeline for this review and for providing replies to
our written questions in advance, so that we can have a more interactive discussion today. May I
wish the Japanese delegation a very fruitful and successful Trade Policy Review.
ECUADOR
4.199. It is most interesting for Ecuador to participate in this trade policy review. On the one
hand, we acknowledge the programme of structural reforms that Japan is currently implementing
to revitalize its economy after a decade of sluggish performance, a programme which has reforms
in agriculture, energy and healthcare as one of its areas of focus; and on the other, we welcome
the adoption of a number of measures aimed at increasing the country's productivity and
competitiveness, and at attracting foreign investment.
4.200. My delegation would like to highlight the primary target of doubling FDI by 2020 set by the
authorities in the Japan Revitalization Strategy, as well as the measures implemented since
2011 which aim to turn Japan into an Asian Business Centre. The support offered includes location
subsidies, tax incentives and reduced patent fees for R&D sites, which will undoubtedly achieve the
expected results if they are applied consistently over time.
4.201. One source of concern to my country relates to Japan's agricultural policies providing
domestic support and protection for the Japanese agricultural sector, which remain high compared
to other countries, despite changes in agricultural programmes, and are therefore potentially
destabilizing factors for global production and trade.
WT/TPR/M/310 • Japan
- 34 4.202. Ecuador notes with interest the systemic protection given to certain farm products such
as rice, as evidenced, for example, by the special programmes designed to encourage production
limitation for rice, the payments to encourage conversion from rice production, government
contributions to compulsory insurance premiums for rice, the farm income support payments for
rice, the allocation of all Blue Box spending to the rice income stabilization programme, the
exclusion of rice from regional trade agreements and the generalized systems of preferences, and
a tariff of ¥341/kg, which results in nominal protection of over 800%.
4.203. As regards sanitary and phytosanitary matters and technical barriers to trade,
the Secretariat report notes the rigorous application of quality and safety standards and the
potentially high costs of meeting them. This is a source of concern for Ecuador as the standards
applied by Japan are certainly a lot stricter than current international standards.
4.204. At present our country is working on the requirements laid down for the entry of
Ecuadorian mangoes into Japan. The Ecuadorian Agency for Agricultural Product Quality Assurance
(AGROCALIDAD) asked the Japanese Phytosanitary authority for information in July 2014 in order
to continue the market access process. Ecuador looks forward to receiving a response on this topic
in the near future.
4.205. Last November, Ecuador's Minister for Foreign Trade visited Japan as a show of high-level
willingness to strengthen bilateral relations, which will reach their 100 th anniversary in 2018.
The medium-term objective is to conclude a trade agreement that will eliminate barriers to trade
such as tariffs and stricter requirements and, above all, focus on complementarity and respect for
the sensitivities of both parties.
4.206. We also welcome the changes introduced by the Japanese Government to its government
procurement framework, and the progress made in relation to services through the introduction
of new regulations in the financial services sector, such as the amendment of rules on large
exposures in line with international standards.
4.207. Ecuador recognizes Japan's role in the WTO negotiations and trusts that it will step up its
efforts with a view to the successful conclusion of the Doha Development Agenda in the very
near future.
4.208. We hope that this trade policy review of Japan will lead to a greater understanding of and
hence better access to its market, particularly for agricultural products from developing countries;
a review of stimulus and domestic support programmes; and a reconsideration of its technical
standards and sanitary and phytosanitary measures.
4.209. Lastly, Ecuador would like to emphasize its endorsement of the economic and trade
progress made by Japan, highlighting the country's recovery from serious natural disasters such
as the earthquake and tsunami in 2011, and from the Fukushima tragedy. These events affected
production throughout the country, particularly in the export sector. Despite these obstacles and
its relatively weak economic performance over the past few years, Japan is one of the richest
countries in the world.
4.210. To conclude, we would like to thank the delegation of Japan in advance for its answers
to the questions concerning certain aspects of its trade policy that we have forwarded to the
Secretariat, which will provide important inputs for strengthening bilateral relations in the area
of foreign trade.
ARGENTINA
4.211. We are pleased that after six months of negative growth in 2014, the Japanese economy
is showing signs of slight recovery.
4.212. We are also pleased to note that, as mentioned in the report by Japan, this Member
remains committed to trade liberalization under the WTO-based multilateral trading system. We
hope that Japan's commitment will be reflected in the ongoing negotiations on agriculture, a sector
which, as you know, still lags far behind the industrial sector in terms of openness and the
elimination of distorting policies.
WT/TPR/M/310 • Japan
- 35 4.213. In this connection, Argentina welcomes the recent initiative put forward by Prime Minister
Shinzo Abe at the 189th session of the Japanese Diet on 12 February of this year. We also
welcome Prime Minister Abe's statement that "we should not be afraid of change in the face
of tradition" and that "change is the only eternal". We hope that this move towards reform
in Japan will also help in reforming the multilateral trading system, which depends on a successful
conclusion to the Doha Round in accordance with its mandate.
4.214. Japan's protectionist agricultural policies have always been a source of concern to
Argentina. The Japanese agricultural sector is still highly distorted and not very market oriented,
owing to an unusual combination of: (i) extremely high tariff barriers, a large percentage of which
are non-ad valorem duties; (ii) tariff quotas, governed by complex methods of allocation, as the
Secretariat acknowledges in its report; (iii) para-tariff barriers; (iv) special safeguard measures;
(v) production restrictions; (vi) domestic support in the form of income support, and
particularly price support, which, as stated in the Secretariat report, "is potentially one of the most
production- and trade-distorting forms of support"; and (vii) imports by state-owned enterprises.
4.215. These protectionist policies exacerbate the imbalance in our bilateral trade and prevent
Argentina from increasing its value-added agricultural exports. Mention should also be made
of Japan's sanitary and phytosanitary measures and the lengthy procedures required in order
to access the Japanese market. Given the amount of time it takes to complete each negotiation,
these constitute a real restriction on importing products of Argentine origin into Japan.
4.216. On the tariff side, although Japan's average tariff was 5.8% in 2014, according
to Table A3.1 in the Secretariat report, and had declined from 6.3% in 2012 (albeit because
of higher prices for agricultural products), average tariffs remain high in sectors of special interest
to developing countries such as Argentina, with a few tariff peaks that make it prohibitive for such
products to enter the Japanese market.
4.217. We should also add that Japan has historically provided substantial domestic support for
the fisheries sector, irrespective of the current emergency aid provided to address the needs
arising from the tsunami in March 2011.
4.218. We are concerned about the deadlock in the negotiations on fisheries. We would hope for
a higher level of commitment by Japan in the negotiations on fisheries subsidies. The only
contribution that the WTO can make to trade and the environment is to implement the mandate
of the Doha Round in this respect, as reaffirmed in paragraph 173 of the outcome document of the
2012 United Nations Conference on Sustainable Development (Rio+20).
4.219. We would therefore urge Japan to make the necessary efforts to implement the
Doha mandate relating to fisheries subsidies as well, and to give the matter the high priority
it deserves. The reform process initiated by Prime Minister Abe places considerable importance
on the environment. His initiative is an opportunity not to be missed, either by Japan or in terms
of the mandate on fisheries subsidies.
4.220. In light of its particular economic weight, Japan plays a leading role in global trade and
hence in the negotiations being conducted in this Organization. We believe that it could assume
a decisive leadership role in the Doha Round; for that purpose it needs to demonstrate greater
flexibility in its trade policies, particularly those concerning agriculture and fisheries, which affect
developing country Members of this Organization in particular.
4.221. Lastly, we thank Japan for its responses to Argentina's written questions, which are being
analysed by our authorities. New questions were submitted last week, which we hope will also
be answered. We wish Japan every success in the 12th review of its trade policies.
INDONESIA
4.222. At the outset, Indonesia would like to associate itself with the statement made by the
Philippines on behalf of ASEAN.
4.223. We are pleased to be here today for participating in the Trade Policy Review of one of the
key players in the WTO. We appreciate Japan's contribution in the WTO forum. We believe Japan
WT/TPR/M/310 • Japan
- 36 has a strong commitment to give its best efforts to ensure a successful Post-Bali Work Programme
and to conclude the DDA negotiations. We note with positivity that Japan has performed well with
its generally open trade policies.
4.224. At the end of last January, our Trade Minister had the opportunity to meet with Prime
Minister Abe and the Minister of Economy, Trade and Industry, H.E. Mr Yoichi Miyazawa. Aside
from sending a good signal, the meeting also laid down the groundwork for better relationship
between our two countries, particularly in trade and investment, in the future. This is a
continuation of or decades-long relationship, which culminated in 2007 with the establishment of
the Indonesia-Japan Economic Partnership Agreement, or IJEPA. The Agreement has helped bring
closer cooperation between our two countries and we are now in the process of reviewing the
Agreement to bring even greater benefits to both countries. Accordingly, we encourage Japan to
determine a meeting schedule for the discussion of the next General Review of IJEPA.
4.225. I want to emphasize that Japan is indeed a very important trading partner for Indonesia.
Japan is the second largest export destination for Indonesia as well as the second largest investor
in Indonesia.
4.226. Nevertheless, trade balance between both countries has been decreasing in the last two
years. Trade balance between Indonesia and Japan in 2014 was around US$40.17 billion which
was 13.37% lower compared to 2013. Indonesia's export to Japan in 2014 was around
US$23.16 billion or 14.47% lower compared to 2013. Meanwhile, imports from Japan have
decreased from around US$19.28 billion in 2013 to US$17 billion in 2014. Overall Indonesia's
trade balance with Japan has seen a surplus of US$6.15 billion in 2014, albeit a 21% decrease
compared to 2013 (US$7.8 billion).
4.227. Although our trade balance has decreased, I remain confident that our countries' economic
partnership will grow again in the future.
4.228. Having said that, Indonesia would like to note some of Japan's trade policies that
undermine the legitimate interest of our exports to Japan. Our Government is confident that
Japan, as one of the most developed Members of the WTO, will ensure that its trade-related
policies are in line with the WTO rules. We also believe that Japan should be a role model to all
WTO Members by avoiding the implementation of any measures more strictly than necessary, both
in tariff and non-tariff forms, particularly for agricultural and fishery products. For example, SPS
and TBT requirements that are more strict than international standards and very costly to fulfil by
our exporters.
4.229. We have submitted a number of specific questions to clarify individual points on these and
other issues. We thank the delegation of Japan for answering our questions. We will study those
responses with great interest and we will seek further clarification when and as necessary.
RUSSIAN FEDERATION
4.230. The Russian delegation welcomes the 12th Trade Policy Review of Japan. We fully support
this important mechanism which enables us to exchange views on the trade policy of the WTO
Members.
4.231. Japan is Russia's seventh largest trading partner. The Russian Federation and Japan have a
long history of friendly relations and have developed broad, deep and robust bilateral cooperation
spanning vast economic, trade and investment areas.
4.232. Today we would like to highlight some of Japan's trade and investment measures that, we
believe, need more attention. Russia has submitted a number of questions for this review
regarding TBT measures of Japan related to wood industry regulation (the Wood Use Points
Program (WUPP)), as well as agricultural policy and SPS measures which are of particular interest
to us.
4.233. We appreciate the fact that the answers have been provided by Japan in advance of this
meeting. However, some of them lack sufficient justification and need further explanations.
WT/TPR/M/310 • Japan
- 37 Therefore, we would like to flag our intention to continue the dialogue with the Japanese
delegation on the issues mentioned above.
4.234. Let me also express our deep concern with a number of trade restrictive measures
imposed by Japan in respect of the Russian Federation. We believe that these measures are not
compatible with WTO rules and we urge Japan to remove them.
4.235. One more comment for the Japanese TPR deals with the negotiations to advance and
conclude the Trans-Pacific Partnership (TPP) agreement. We regret to note the lack of
transparency in these negotiations. We would welcome more information to be made publicly
available on this regional initiative in order to assess the compatibility of this preferential trade
agreement with the rules of the WTO and the multilateral trading system as a whole.
4.236. In conclusion, we would like to thank the delegation of Japan, the Secretariat and of course
our esteemed Discussant, for their hard work done so far. We wish our Japanese partners a
successful Trade Policy Review.
OMAN
4.237. Oman has close economic and trade relations with Japan which we value greatly.
4.238. Japan is one of the major economies of the world and is among the four or five top traders
globally in both goods and services. Its economic and trade policies have a bearing on the world
economy and on international trade.
4.239. The economy of Japan, like the economies of many developed countries, has been facing
problems and difficulties of slow growth and deflationary pressures. However, Japan is in the
process of implementing an ambitious reform programme to overcome deflation and revitalize its
economy. This reform programme embraces monetary and fiscal measures as well as reduction of
budget deficits.
4.240. These are appropriate measures and Oman wishes Japan success in its endeavours to put
its economy on a healthy growth track.
4.241. We are pleased to note that Japan follows an open, liberal and transparent trade regime.
Its overall average tariff is quite low, though it must be noted that the average tariff for
agricultural products is rather high as compared with average tariff for non-agricultural products.
Another notable feature of Japan's tariff is the negligible difference between average bound MFN
tariff and the average applied MFN tariff, which provides for predictability in conditions of market
access.
4.242. The delegation of Oman commends Japan for almost no use of trade remedies such as
countervailing and safeguard measures, and only one anti-dumping measure.
4.243. While appreciating Japan's open and transparent trade regime and given that Japan used
to be a champion of MFN treatment. We are surprised to note that it now aims to increase its trade
under RTAs from around 19% in 2013 to 70% by 2018.
4.244. Oman has previously submitted in writing a question regarding the percentage of Japan's
tariff lines that have been bound out of the total tariff lines. And we are thankful to Japan for
providing a response.
4.245. We are happy to note that maintaining and strengthening the multilateral trading system
under the WTO is a main pillar of Japan's external economic policy. Japan's commitment to
support the system is laudable. We hope Japan would lend its support to the early completion of
the DDA negotiations to fulfil the objectives of the Doha Ministerial Declaration.
4.246. Finally, the delegation of Oman wishes the delegation of Japan a very successful Trade
Policy Review.
WT/TPR/M/310 • Japan
- 38 THAILAND
4.247. Thailand is pleased to participate in the twelfth Trade Policy Review of Japan today and
would like to associate ourselves with ASEAN's statement previously delivered by
Ambassador Conejos of the Philippines.
4.248. Japan has been Thailand's major trading partner for the past decades and currently is the
second largest. In 2014, our bilateral trade value stood at US$57.5 billion, accounting for 12.7% of
Thailand's total global trade. Japan ranked as our third export destination and second import
source. On the other hand, Thailand is Japan's seventh trading partner, sixth export destination,
and thirteenth import source. We note that since 2012 our bilateral trade has been decreasing, but
we do hope that our fundamentally strong relationship will help enhance these statistical numbers.
4.249. Despite the slump shown in the figures, the qualitative side of the trade and commercial
relationship between Japan and Thailand has been solid and meaningful. We appreciate our trade
through Japan-Thailand Economic Partnership Agreement or JTEPA, effective since
November 2007, and ASEAN-Japan Comprehensive Economic Partnership, since June 2009. The
private sectors of the two countries are also actively engaged in the cooperation under
Japan-Thailand Trade and Economic Committee, which was last met in May 2012. In February this
year, our Prime Minister paid an official visit to Tokyo and had "fruitful discussions" with Prime
Minister Abe, including the future development of the east-west rail link, which would traverse
Thailand from the Cambodian border on the east to the Burmese border on the west.
4.250. In terms of investment, Japan is our significant foreign investor, and Thailand has been the
biggest manufacturing hub for Japanese companies in Southeast Asia. Although in 2014 the
statistics for investment showed the similar trend as that of trade in goods, we expect that this
slack will pick up the speed this year.
4.251. In the multilateral trading system, especially in this Organization, Thailand is grateful for
Japan's leadership in many forums, including towards the success of the Trade Facilitation
Agreement. We also appreciate Japan's constructive roles in other forums, such as the ITA
expansion, of which we hope to see a similar accomplishment in the near future. Japan's
commitments in the WTO are valuable to all Members, and, with Japan's continuous positive role
as one of the key Members, Thailand looks forward to intensive and constructive negotiating work
in the WTO to achieve a meaningful work programme by July and the successful tenth Ministerial
Conference this year.
4.252. The TPR reports indicate that Japan's economy has been sluggish due to some severe
shocks to the economy over the past few years. However, Japan still maintains its exemplary role
in the global trade by remaining an open economy, having only negligible difference between the
average bound and applied MFN tariffs, and applying only few trade remedies. Its current
ambitious reform programmes in order to overcome economic stumbling blocks have been
recognized by all Members, including Thailand. We support this tireless and constructive effort as
Japan's healthy economy would positively contribute to the same for the international trading
community.
4.253. In this review, Thailand submitted several questions to Japan, covering the policies and
measures of our interests regarding standards and labelling of agricultural and forestry products,
intellectual properties, tariff peaks and low fill rates of some TRQ products, and incentives to
attract foreign investment under the National Strategic Special Zones. We thank Japan for its
responses provided to us last week, which we are carefully studying with great interest.
4.254. In conclusion, Thailand would like to express its appreciation to the Japanese delegation
from Tokyo for today's presentation and responses to our questions. We are thankful for the close
cooperation with Japan in every level, including that between our Geneva-based delegations. We
wish Japan every success in this twelfth trade policy review.
COLOMBIA
4.255. The period covered by this trade policy review has been particularly interesting from the
standpoint of Japan's economic development. Long-standing structural economic growth problems,
WT/TPR/M/310 • Japan
- 39 high public debt and a protracted period of deflation have been compounded by the need to tackle
the aftermath of the earthquake and tsunami in 2011, which affected both private consumption
and supply chains, and this in turn had a direct impact on export sectors.
4.256. As reported, the Government is addressing these challenges by means of a "three-arrows"
economic strategy known as "Abenomics", which consists of monetary easing, flexible fiscal policy,
and a variety of structural reforms. The Japan Revitalization Strategy has underpinned further
actions in support of these goals.
4.257. As regards the first arrow, we can see that the strategy is already beginning to show
results and that the economy is overcoming deflation. For 2015, the IMF expects inflation of 2%, a
figure which appears to be within reach considering the results achieved in recent months.
Regarding the second arrow, the consumption tax rate increase in 2014 had a negative impact on
domestic demand, but the parallel fall in oil prices has helped to mitigate its effects.
4.258. The unemployment rate is gradually falling. It was 4% in 2013 and has continued to
decline. In spite of this, the strategy has not yet reached the objective of sustaining strong
growth, which appears to be the overarching goal for the coming years.
4.259. Some of the more interesting developments covered by this trade policy review are to be
found under the third arrow. I shall refer to three of these in particular, namely increased efforts
to attract foreign investment; actions aimed at achieving further economic integration through the
network of trade agreements; and reforms to the agricultural sector.
4.260. One of the pillars of the Japan Revitalization Strategy is to increase annual inflows of
foreign investment, the aim being to double the amount of FDI, which is far below that of other
developed economies, by 2020. This is an important factor in achieving strong growth, based on
greater private investment and enhanced business productivity and competitiveness.
4.261. Structural reforms are to be carried out in the areas of agriculture, energy and health care.
According to the Government report, progress has been made over the past year in compiling
a report on challenges to promote investment and in establishing the Council for Promotion
of Foreign Direct Investment as a cross-ministerial coordination body for the promotion
of investment, with responsibility for spearheading the necessary institutional reforms. We also
note the aim of enhancing the ratio of business start-ups to exceed the ratio of business closures
from the current rate of 5% to above 10%.
4.262. As regards the second point, it is particularly interesting to note that the strategy involves
an endeavour to advance processes aimed at opening markets and increasing trade and
investment flows, as a tool in support of the country's economic growth and job creation.
4.263. The arrow relating to structural reforms also involves a substantial effort on the part
of Japan to increase its economic integration worldwide by extending and deepening its
trade agreements. As emphasized in the Government report, and as was mentioned earlier today,
one of the objectives of the Japan Revitalization Strategy is to increase the country's FTA trade
coverage ratio to 70% by 2018 from the current figure of 19%.
4.264. As we can see, although Japan is a generally open economy - in spite of recent difficulties,
particularly in the agricultural sector - Japanese trade under trade agreements is relatively
modest. In addition, the country's current account surplus has clearly declined in recent years,
owing to a substantial increase in imports, which reached record levels in 2013. Conversely,
exports did not grow at the same pace, which further highlights the importance of securing better
conditions for Japan's international trade.
4.265. The Secretariat report provides ample evidence of progress made towards this objective,
as Japan pursued an intense trade negotiations agenda, including with Colombia, during the
period under review.
4.266. However, this does not in any way diminish the importance of its endeavours in the
multilateral sphere, under the WTO. On the contrary, Japan sees these as complementary.
WT/TPR/M/310 • Japan
- 40 The country has sent strong signals in support of developing the post-Bali work programme, which
we hope will bring us closer to completion of the Doha Round.
4.267. Japan has also played a prominent role in the negotiation of the recently adopted
Trade Facilitation Agreement and in the overall preparation of the Bali Package.
4.268. We are all aware of Japan's participation in the plurilateral negotiations under the WTO,
including those on the expansion of the Information Technology Agreement (ITA) and the
negotiations on environmental goods (EGA), which are MFN-based negotiations that will provide
benefits for all Members. Lastly, it should be recalled that the Agreement on Government
Procurement, as amended last year, has entered into force for Japan.
4.269. Turning to the structural reform component, we note that Japan's agricultural policy
underwent some important changes during the review period. We have taken special note of the
Plan for Creating Dynamism through Agriculture, Forestry, and Fisheries and Local Communities
and its four pillars, aimed at strengthening the production side by reducing production costs,
establishing an original direct payment scheme to revitalize rural communities, establishing food
value chains, and increasing food demand. We have submitted questions about these
changes in Japan's agricultural programmes and will carefully examine the much appreciated
answers we receive.
4.270. As regards trade facilitation, we particularly wish to emphasize the progressive
improvements in Japan's Authorized Economic Operator (AOE) scheme, which is already
beginning to show significant results. Given Japan's prominent role in the negotiations on the
Trade Facilitation Agreement, we are sure that Japan will likewise continue to support the
Membership's endeavours to ensure its prompt entry into force and proper implementation.
4.271. Lastly, as I was preparing this statement I came across a Japanese saying that I thought
was appropriate in these times when, in the midst of the negotiating process, we would like
to achieve results as soon as possible and are worried about time flying by so quickly. And that
saying - please forgive my pronunciation - is this: Keizoku wa chikara nari, which, in my language,
could translate as "all things come to him who waits".
4.272. Although this is not part of agenda of the meeting, I cannot pass up this opportunity
to thank you, Ms Chairperson, for the impeccable way in which you have conducted the work
of the TPRB over the past year. That brings me to the end of my statement. Colombia wishes
Japan a profitable trade policy review, which we hope will yield recommendations and suggestions
that may prove useful.
PERU
4.273. By way of introduction to my statement, I would like to emphasize that 2015 marks the
142nd year of official diplomatic relations between Peru and Japan – 142 years of sound and fruitful
work most recently illustrated by the meeting between the President of the Republic of Peru and
Japan's Prime Minister during the APEC Leaders Summit in Beijing in November 2014.
4.274. Given that economic and trade matters are clearly one of the key components
of Peruvian-Japanese relations, I would like to point out that Japan is the fifth largest destination
of Peruvian exports and our second largest trading partner in Asia. In geographical terms, our ties
stem from our common membership in the Pacific Rim, a region in which we share not only
extensive trade but also a growing relationship in forums such as APEC, where countries from both
sides of the Pacific are involved in building the world's largest economic area.
4.275. Peru and Japan have signed important trade and investment agreements, such as the
Agreement on the promotion, protection and liberalization of investment, which came into force
in December 2009, and their Economic Partnership Agreement, in effect since March 2012.
The latter was a turning point in Peru's economic and trade relations with Japan, since it provides
a stable and predictable legal framework for harnessing and considerably expanding trade and
investment opportunities.
WT/TPR/M/310 • Japan
- 41 4.276. Over the past 10 years, bilateral trade has more than doubled, totalling more than
three and a half billion US dollars in 2013. Although the bulk of Peru's exports to Japan are
traditional products, there has been an increase in non-traditional exports, particularly exports
of agro-industrial products, which could well grow further still once the sanitary protocols on which
our two countries have been working have been finalized.
4.277. As stated in the Secretariat report, it should be emphasized that although Japan has
suffered a period of weak economic performance and major complications for the Japanese
economy, the latter remains open and transparent. Japan has introduced changes to the
agricultural sector, although it does maintain potentially production- and trade-distorting support.
4.278. In this connection, we also wish to underscore the Japanese Government's efforts
to implement an ambitious "three-arrows" reform programme, centred on monetary easing, fiscal
stimulus and structural reforms in a number of areas.
4.279. Peru welcomes Japan's endeavours to conduct negotiations with countries in various parts
of the world in order to expand trade under regional trade agreements, which it hopes to increase
to 70% by 2018. We would also highlight Japan's active participation in the work of the WTO and
commend it for its domestic reforms aimed at enhancing the competitiveness of its economy.
We hope that Japan's achievements will be consistent with the legal framework of the
multilateral trading system.
4.280. Peru regards this exercise of reviewing Japan's trade policy as a significant opportunity
to obtain valuable information of benefit to all. We wish Japan a most successful outcome
of this review.
4.281. Peru has submitted questions on various aspects of Japan's trade policy that are
of particular interest to my country, and I would like to take this opportunity to thank the
Japanese authorities for their replies, which will be forwarded to the Peruvian authorities
for assessment and follow-up.
INDIA
4.282. With the nominal GDP estimated at about US$5 trillion and the merchandise trade of over
US$1.55 trillion, Japan remains one of the key drivers of the global economy. Overcoming the
sluggish economic performance of more than a decade, since end 2012, the Japanese economy
has shown signs of modest recovery. In order to end the prevalent deflation and to revitalize its
economy, the Japanese Government embarked on an ambitious reform programme, centered
around the "three arrows" strategy: bold monetary policy, flexible fiscal policy and growth strategy
that promotes private investments. As noted in the Secretariat report, while the expansionary
monetary and fiscal policy measures adopted since the last review have been helpful, these have
not been sufficient to register strong economic growth. The Japanese government continue to
confront challenges such as very high public debt (gross debt to GDP ratio exceeds 200%), rapidly
aging population among others. Looking ahead, we note that Japan's real GDP is estimated to
grow by 0.8 % in 2015. We wish the Japanese Government every success as it addresses
long-standing structural challenges confronting its economy through a series of reform measures.
A strong Japanese economy is crucial not only for the Asian region but also the global economy.
4.283. India and Japan are Asia's two largest and oldest democracies. Today, we collaborate
across diverse sectors within the framework of our special global and strategic partnership. Trade
and investments constitute a central pillar of our rapidly expanding partnership. Our bilateral trade
has been expanding steadily, with trade volume of about US$16.5 billion in 2013-14. The
conclusion of the India-Japan Comprehensive Partnership Agreement in 2011 has given a new fillip
to bilateral trade and economic partnership. We are also engaged within the framework of RCEP.
While Japan has maintained trade deficit in its global merchandise trade, it enjoys a trade surplus
with India. We hope to expand bilateral trade in a balanced manner, harnessing existing
complementarities. On the investment front, the Japanese FDIs into India have been growing in
recent years, and more than 1000 Japanese firms are present in the Indian market. The flagship
bilateral infrastructure projects such as Delhi-Mumbai Industrial Corridor, Dedicated Freight
Corridor hold immense promise to usher into a new era of collaborative industrial, technological
and infrastructure development projects for mutual benefit.
WT/TPR/M/310 • Japan
- 42 4.284. In terms of its trade policy, while Japan broadly remains an open economy, as brought out
in the Secretariat report and noted by several delegations, it provides significant support and
protection to the agriculture sector through a comprehensive set of policies such as high tariff,
non-ad valorem duties, complex TRQ administration, and the trade distorting domestic support. Its
regulatory regime, technical regulations and SPS measures, which in many cases are more
stringent than international standards, result in excessive cost burden to exporters.
4.285. We thank the Japanese delegation for replies to some of the questions we had posed to
them. These would be reviewed by my authorities. However, let me underline some specific
concerns, which particularly affect India's exports to Japan. In the pharmaceutical sector, Indian
companies are unable to access the Japanese market due to stringent and time consuming
regulatory requirements, including requirement for an Indian company to have joint venture with a
Japanese company and the need for commercial presence for applying to Pharmaceuticals and
Medical Devices Agency. The stringent maximum residue levels for chemical products, including
agro-chemicals, additives for food products act as market entry barriers for our exporters. In the
IT services market in Japan, the Keiretsu model makes it difficult for Indian IT firms to directly
approach customers in Japan. As a result, they often end up as tertiary service providers despite
their competitive strengths in this sector. We request Japan to review these requirements to make
them simpler, and reduce regulatory barriers to trade, consistent with international norms and
standards.
4.286. Before I conclude, I would like to underscore the positive role played by Japan in the WTO
and in the ongoing DDA negotiations. We look forward to working with Ambassador Yoichi Otabe
and his team as well as other partners in ensuring balanced outcomes in the ongoing negotiations
to help conclude the Doha Round. With these words, my delegation would like to wish Japan a
successful Trade Policy Review.
DOMINICAN REPUBLIC
4.287. First, we would like to commend the Government of Japan for its efforts to revive the
Japanese economy. According to the Secretariat report, Japan has been implementing
an ambitious reform programme since the previous review of its trade policy, in order to overcome
deflation and revitalize its economy after more than a decade of sluggish performance.
The programme consists of a "three-arrows strategy": monetary easing (2% inflation target
to be achieved at the earliest possible time mainly through the expansion of the monetary base);
fiscal stimulus (about US$100 billion in January 2013 and an extra US$53 billion in
December 2013 in an attempt to boost growth); and structural reforms in areas such
as agriculture, energy and healthcare which will take longer to be implemented, not least because
the reforms require legislative and administrative changes that take time to prepare.
4.288. The expansionary monetary and fiscal policy measures adopted since the last review have
supported Japan's economy but have been insufficient to achieve strong economic growth. Indeed,
Japan's real GDP growth is estimated at 0.9% for 2014 (down from 1.5% in both 2012 and 2013).
The authorities recognize that far-reaching structural reforms are necessary to address
long-standing structural problems and achieve sustainable growth in the future. We concur with
the Secretariat report that while some steps have been taken in this regard, more is needed,
including further trade and investment liberalization measures, in order to boost private
investment, increase productivity and enhance competitiveness. All of this is crucial if Japan
is to succeed in addressing its persistent trade deficit.
4.289. As regards trade policy, Japan has not made any major changes since the review of its
trade policy two years ago.
4.290. According to the Secretariat report, the tariff continues to be Japan's main border
restriction. Japan has bound 98.3% of its tariff (159 lines remain unbound). The difference
between the average bound MFN tariff (5.9%) and the average applied MFN tariff (5.8%)
in 2014 was negligible, which reflects a high degree of predictability in the tariff. However,
the average bound rate remains considerably higher for agricultural products (15.2%) than
for non-agricultural products (3.7%).
WT/TPR/M/310 • Japan
- 43 4.291. We welcome the fact that Japan applies few contingency measures. On the other hand,
we do note that, according to the Secretariat report, Japan's SPS and TBT requirements are often
more strict than international standards and the cost of meeting Japan's quality and safety
standards can be high. We urge the Japanese Government to review these standards in order
to facilitate access to the Japanese market for the developing countries in particular.
4.292. We note with concern that the agricultural sector continues to receive substantial
government support including, for example, a relatively high average applied MFN tariff rate
compared to other sectors, tariff quotas, income support and production control measures.
According to the Secretariat report, the main support component is market price support, which,
along with other transfers based on output and inputs, is potentially one of the most productionand trade-distorting forms of support. We encourage the Japanese Government to introduce the
reforms needed to further liberalize the agricultural sector.
4.293. The Dominican Republic has submitted several questions to Japan relating to services and
state trading enterprises. We would like to end by congratulating Japan and urging it to continue
implementing the structural reforms needed to improve the functioning of its economy. We wish
it every success in this trade policy review and for the future.
MALAYSIA
4.294. Malaysia is pleased to take part in this 12th Trade Policy Review of Japan and associates
itself with the statement made by the Philippines on behalf of ASEAN.
4.295. We would like to commend Japan for actively promoting trade liberalization towards
strengthening the multilateral trading system. On the other hand, while we recognize the
leadership role assumed by Japan, we believe that Japan is in a position to contribute more. This is
so as we work towards producing a post Bali work programme. We are confident that Japan, with
other key Members, will be able to strongly contribute towards a meaningful outcome of the Doha
negotiations that will consequently bring a positive impact to international trade.
4.296. While welcoming the trade initiatives and further liberalization undertaken by the Japan
over the review period, Malaysia is also concerned over a number of measures that could be
regarded as barriers to trade. In particular, we remain concern on structural adjustment in
agriculture sector including Japanese wood programme as well as imposition of various
requirements for standards and technical regulations through Japan Industrial Standards and
Japan Agricultural Standards. Thus, we encourage Japan to review these measures with a view to
simplify the procedures and not to be burdensome to our traders.
4.297. On the bilateral front, we are pleased that the bilateral economic relations between
Malaysia and Japan remain strong and vibrant. In 2014, Japan was Malaysia's 3rd largest trading
partner and our bilateral trade increased by 1.4% from the year before, amounting to
US$42 billion. In terms of investment, Japan continues to be Malaysia's top source of foreign direct
investments (FDI) since 1980. From January to September 2014, a total of 47 manufacturing
projects were approved with total investments amounting to US$3.26 billion.
4.298. Since 2006, the Malaysia-Japan Economic Partnership Agreement (MJEPA) has enhanced
bilateral economic relations between Japan and Malaysia in creating opportunities for bilateral
collaboration in various areas. We look forward to increased economic cooperation projects with
Japan under MJEPA. Both countries are also negotiating the Trans-Pacific Partnership Agreement
(TPP) as well as Regional Comprehensive Economic Partnership (RCEP) that will further intensify
Malaysia and Japan bilateral and regional partnership.
4.299. Finally, we would like to take this opportunity to thank the delegation of the Japan for
responding to our questions and these are being examined at the Capital. In addition, we will also
be submitting additional questions and we look forward to receiving feedback.
EL SALVADOR
4.300. The Secretariat report shows that Japan has a generally open trade regime. It is the
world's fourth largest exporter and importer of goods, and it ranks fifth and fourth among world
WT/TPR/M/310 • Japan
- 44 exporters and importers, respectively, in services trade. Its main activities are in the
manufacturing sector, specifically machinery and transport equipment, boosted by the country's
strong automotive industry.
4.301. We also note that Japan has taken a series of initiatives to attract foreign direct investment
and aims to double the current amount of FDI through tax incentives. It is the world's second
largest outward investor, chiefly investing in finance and insurance, communications, mining and
wholesale and retail trade.
4.302. El Salvador and Japan are united by strong ties of friendship and cooperation and last year
celebrated 80 years of diplomatic relations. El Salvador was one of the first Latin American
countries to open its market to Japanese products by importing Japanese vehicles.
4.303. Japan has in turn provided support for a number of social and development projects
in El Salvador, thus contributing to the country's economic growth.
4.304. Japanese investment in El Salvador amounted to US$38 million in 2014, centred on the
electronics market (e.g. electronic components, home appliances and computer peripherals,
cable and harnesses assembly) and medical apparatus.
4.305. In trade terms, El Salvador's exports to Japan were worth US$37 million in 2013,
a 13% increase over the previous year, while imports in that same year amounted
to US$177 million, up by 3% over 2012.
4.306. It should be emphasized that trade between Japan and El Salvador is relatively
complementary, since our main exports are coffee, made-up textile products and footwear,
while our imports are chiefly iron and steel products, vehicles and tyres.
4.307. In the multilateral negotiations under the WTO, we have received support from Japan
for the various initiatives promoted by El Salvador as a small, vulnerable economy, and would like
to take this opportunity to thank Japan for its sustained support.
4.308. In view of the above, we will conclude by congratulating Japan and wishing it every
success in this trade policy review.
BENIN
4.309. This 12th review of Japan's trade policy gives us an opportunity to fully appreciate the steps
taken by Japan to promote a robust economy and an attractive business climate.
4.310. Since the country's previous review in 2013, the Japanese Government has implemented
economic policies that have helped to boost economic recovery and overcome deflation, and the
economy is now growing at a firm pace.
4.311. In order to consolidate the results achieved and chart new courses, the
Japanese Government has initiated bold initiatives in a variety of areas such as agriculture,
intellectual property, banking and securities, and insurance, consistently taking into account
the gender approach aimed at promoting the active participation of women in the country's social
and economic life.
4.312. In agriculture, appropriate action is being taken with a view to raising annual exports
of Japanese agricultural, forestry and fisheries products and foods to ¥1 trillion by 2020 and
thereafter to ¥5 trillion by 2030.
4.313. Moreover, the "Aggressive Agriculture, Forestry, and Fisheries" initiative aims to make
these three sectors competitive whilst preserving natural resources in general and land (as regards
the agricultural sector) in particular.
4.314. In the intellectual property sphere, Japan's endeavours are focused on building
up an attractive and innovative intellectual property system that contributes, among other things,
to usefully enhancing industrial competitiveness.
WT/TPR/M/310 • Japan
- 45 4.315. In the financial sphere, a monitoring system has been established, comprising, amongst
other tools and mechanisms, measures to enhance the overall attractiveness of Japan's financial
and capital markets.
4.316. It is also important to highlight the enactment of the Act for Amendment of the Insurance
Business Act, which includes measures to ensure the reliability of insurance and develop
the insurance market.
4.317. Japan remains committed to the multilateral trading system and takes an active part in the
negotiations on the various topics covered by the Doha Development Round.
4.318. Turning to bilateral cooperation, the delegation of Benin particularly welcomed the
Fifth Tokyo International Conference on African Development (TICAD V), held in Yokohama
in June 2013.
4.319. It hopes that the recommendations, resolutions and decisions contained in the
2013 Yokohama Declaration and the Yokohama Action Plan 2013-2017 will continue to be properly
monitored with a view to their effective implementation, in particular the aid programme for Africa.
4.320. As regards least developed countries, Benin welcomes the fact that a growing number
of products from these countries are being granted duty- and quota-free access to the Japanese
market, a scheme under which treatment coverage has risen from 86% to approximately 98% of
tariff lines.
4.321. The delegation of Benin commends Japan for its leadership and active involvement
in building a strong multilateral trading system, centred on the core issue of development.
NEPAL
4.322. Since the inception of the GATT and later on WTO, Japan has been playing very
constructive and supportive role in strengthening and further advancing rule-based multilateral
trading system. As one of the largest economies and one of the leading exporting countries, Japan
has a profound responsibility to fulfil to promote multilateral trading system. It is of course a
matter of appreciation that despite having its own challenges in maintaining desired economic
growth and stability, Japan continues its support for the upliftment of poor and vulnerable
economies of the world.
4.323. The ambitious reform package also known as "Abenomics" that Japan has been
undertaking since its previous TPR, has been found effective in revitalizing its economy. The
reform package-based on a "three arrows strategy" i.e. flexible monetary policy, expansionary
fiscal policy and structural reforms in areas such as agriculture, energy and healthcare, has started
recovering Japanese economy gradually from the decade-long stagnant growth, though desired
level of progress is yet to be made.
4.324. It is interesting to note that Japan continued to be the world's fourth largest exporter and
importer of goods during the review period while in services trade, it ranked fifth and fourth
among world exporters and importers, respectively. Similarly, it is worthwhile to note that Japan is
the second-largest outward direct investor in the world, with US$136 billion in 2013.
4.325. Japan has been a longstanding development partner of Nepal. The Government of Japan
has been providing assistance to the Government of Nepal since early 1960 through various
programmes implemented by Japan International Cooperation Agency (JICA).The assistance
provided in the form of grant and loan have been very useful in the development of some of the
key infrastructures such as hydro power generation and road construction in Nepal.
4.326. On trade and investment front, Japan has been one of the major investors and one
important trading partners of Nepal both in terms of export and import. As a small LDC economy,
Nepal suffers persistent trade deficit with Japan over the years, which, needs to be rectified in the
coming days through mutual efforts.
WT/TPR/M/310 • Japan
- 46 4.327. On the front of services trade, many Nepalese technical interns have benefitted from the
programme being implemented by Japan International Training Cooperation Organization (JITCO).
JITCO programme has been found very effective to enhance technical knowhow of Nepalese
interns and providing them with decent jobs in Japan and elsewhere. As it has been useful for
countries like us, we urge the Government of Japan to increase quota for trainees under JITCO
programme.
4.328. Nepal has been a popular destination for many Japanese tourists for different purposes
including sight-seeing, mountaineering expedition and trekking. The number of tourists visiting
Nepal has been increasing over the years. We expect more visitors from Japan in the days ahead.
4.329. Japan currently provides DFQF facility to LDCs in approximately 98% of its defined tariff
lines. In April 2011, Japan extended the effective period of the GSP scheme up to 31 March 2021,
which is a welcome move. However, as some of the agriculture and manufactured products of
LDCs interests are still excluded from the scheme, there remains some room for further
improvement. Likewise, preferential rules of origin applicable to Japan's GSP remain more or less
the same as in 1970s. It calls for further improvement and simplification in line with Bali Ministerial
decision to facilitate LDCs' export.
4.330. Japan has one of the most liberalized trade regimes with an average rate of 5.8% applied
MFN tariff. However, for agricultural products as the average bound rate remains considerably
higher i.e.15.2%, LDCs are still facing difficulty to penetrate agriculture market of Japan. Besides,
as Japan applies a very high standard of SPS and TBT measures on imported goods, meeting some
of those stringent standards for LDCs are beyond their capacity. As a result, LDCs are facing
challenges to enhance their export to Japan despite availability of DFQF for 98% tariff lines.
Hence, we call upon Japan to provide 100% DFQF for LDCs' agro and manufactured products with
flexible and reasonable SPS and TBT standards.
4.331. As indicated in High Level meeting in February this year, and reiterated by delegation of
Japan in its introductory remarks this morning, we encourage Japan to submit its notification of
preferences to be provided to LDCs services and services supplier at the earliest possible, to ease
LDCs services and services supplier for the enhancement of their trade in service sectors.
4.332. Lastly, we wish Japan a successful and productive Trade Policy Review.
URUGUAY
4.333. Uruguay has historically maintained friendly and constructive relations with Japan in the
various spheres covered by our bilateral relationship, both at policy, economic and trade levels and
in matters relating to cooperation and culture.
4.334. Uruguay welcomes and appreciates the technical and community cooperation provided
by the Japanese Government in matters relating to the environment, health, social welfare and
training, as well as Japan's economic and financial cooperation. The scholarship programmes for
studying in Japan and the Senior Volunteer Programme are extremely important to Uruguay.
4.335. As regards bilateral trade in goods, the balance of trade between Uruguay and Japan
has recorded a deficit in recent years, as a result of the decline in Uruguayan exports during
that period.
4.336. Uruguayan imports from Japan have also diminished in the past few years. The key
imports have higher value added than Uruguayan exports, and include vehicles, rubber and rubber
articles, machinery, nuclear reactors and electrical equipment.
4.337. Japan's agricultural trade deficit amounted to US$58 billion in 2013. Uruguay annually
exports some US$12 million worth to Japan, chiefly primary goods, which means that, in principle,
Japan is a most interesting market. Uruguay's main exports to Japan are wool tops (42%),
wool grease and lanolin (14%), soybeans - which have undergone an extraordinary increase
in recent years, rising from US$52,000 worth in 2011 to over US$2 million in 2014 (9%) -,
frozen fish (8%), meat extracts and preparations (5% and 2.3%, respectively), cigars (5%),
mandarin orange juice (2.8%), and wood in the rough (2.3%). It would be worth exploring with
WT/TPR/M/310 • Japan
- 47 the Ministries concerned the actual opportunities and key problems involved in increasing sales of
these products, which already have access to the Japanese market. In any event, after reading the
Secretariat report we have a number of questions which may be of interest in giving further insight
into Japan's policies. The following written questions will accordingly be submitted to Japan:
(1)
As regards authorized economic operators (AEOs), paragraph 3.3 of the Secretariat report
states that on maritime cargoes, the release time is 6 minutes for AEOs as against
156 minutes (26 times longer) for non-AEOs. Could Japan briefly outline the customs
procedures for AEOs that chiefly explain this difference (formalities and pre-arrival
submission of information, release prior to the final determination of customs duties, etc.)?
(2)
Japan has 159 unbound tariff lines, relating mainly to fisheries, petroleum oils, and wood
and articles thereof (para. 3.19). Does Japan intend to bind these lines in the near future?
Why are the unbound products concentrated in these three sectors?
4.338. The third question is the following:
(3)
Could Japan briefly describe the key changes introduced by the Basic Policy for Fruit
Industry Promotion of 2010 compared to the previous policy? What are the main fruits,
defined as "more valuable fruits", to which Japan is seeking to convert on-farm production?
4.339. There are numerous opportunities for increasing existing trade and for trading new
products and services. In this respect, it is important to highlight the concrete developments in our
economic agenda as a result of the good level of dialogue between our two countries. Indeed,
Uruguay and Japan signed an agreement in Montevideo on 26 January 2015 with a view
to expanding bilateral trade and promoting the liberalization, promotion and protection
of investment. The aim was to supplement the current legal framework, provide legal certainty,
build up capacity, facilitate access to resources and attract investment.
4.340. This agreement will undoubtedly serve as a catalyst for increasing trade and further
leveraging Japanese investment in Uruguay.
4.341. A further development which the delegation of Uruguay would like to mention is the recent
technical mission conducted by the Japanese Ministry of Agriculture, Forestry and Fisheries as part
of the process for the approval of exports of boneless beef to Japan, which is still being finalized.
4.342. Lastly, we would like to reaffirm our two countries' interest in joining forces to seek
a successful conclusion to the Doha Development Round and to strengthen a multilateral trading
system based on predictable, transparent and balanced rules.
4.343. Uruguay wishes Japan every success in the 12th review of its trade policies.
HONDURAS
4.344. We are pleased to note that the Japan Revitalization Strategy sets the target of doubling
FDI by 2020 by expanding the use of public-private partnerships, a mechanism which my country
is also seeking to develop.
4.345. According to the Secretariat report, the Anti-Monopoly Act was amended
in December 2013 with a view to ensuring expertise, enhancing procedural fairness and abolishing
the hearing procedure of the Japan Fair Trade Commission (JFTC) for administrative appeals.
The aim is that any appeal regarding decisions of the JFTC will be subject to the exclusive
jurisdiction of the Tokyo District Court.
4.346. We acknowledge and welcome Japan's efforts to strengthen copyright protection in the
digital environment, introduce trademark protection for non-traditional marks and improve the
efficiency of the patent system, as well as the judicial decision on the protection of standard
essential patents.
WT/TPR/M/310 • Japan
- 48 4.347. As regards our bilateral trade in 2014, our imports were worth around US$62 million,
mostly motors, electric generators, tractors and rubber. Our exports of products such as coffee,
beans and tubers amounted to more than US$30 million.
4.348. We wish to highlight the 17th Japan-Central America (SICA) Forum for Dialogue and
Cooperation, which underscored the importance of using the existing cooperation mechanism
of attracting Japanese firms to the region in order to increase trade and boost investment and job
creation in Central America.
4.349. We also welcome the signing of a grant agreement with Honduras for an investment
of L 16 million in community education and health projects in five departments in the country.
4.350. In 2015, Honduras and Japan will be celebrating 80 years of bilateral relations and the ties
of friendship between Japan and Latin America, including Honduras, are growing steadily stronger.
This is a very significant year for Japan's International Cooperation Agency (JICA) in Honduras,
because the agreement between the Honduran and Japanese Governments concerning Japan's
Overseas Cooperation Volunteers was signed 40 years ago, in 1975.
4.351. Lastly, I would like to reiterate our thanks for this renewed opportunity to exchange
views and examine Japan's trade policies and practices. We wish the authorities a successful
trade policy review.
KINGDOM OF SAUDI ARABIA
4.352. Over the period of review, the "Abenomics" have supported the overall improvement of
Japan's economy. Despite a challenging environment, these policies are on the verge of ending the
endemic deflation and revitalizing the Japanese economy. The Kingdom of Saudi Arabia trusts that
the additional reforms recently adopted, including the "Basic Policies for the Economic and Fiscal
Management and Reform 2014", the "Revitalization Strategy 2014" and the "Regulatory Reform
Implementation Plan" will continue to support the improvement of Japan's economic performance
and the efforts undertaken to reduce the budget deficit. The Kingdom of Saudi Arabia commends
Japan for remaining transparent and keeping its economy open even in difficult times and for
promoting the continued development of an open and fair trading environment creating
opportunities benefiting developing and developed countries alike. These efforts have certainly
contributed to the recovery of Japan economy, through increased export opportunities and more
competitive imports.
4.353. This year marks the 60th anniversary of the establishment of diplomatic relations between
the Kingdom of Saudi Arabia and Japan. Over this period, both countries have significantly
developed their political, economic and trade relationships and have grown into major trading and
investment partners. On the occasion of the visit of King Salman bin Abdulaziz Al Saud to Japan in
2014, the Saudi and Japanese Governments issued a joint statement on their determination to
strengthen the "Comprehensive Partnership - From Energy to Synergy" in all fields. This visit will
reinforce future cooperation and exchanges between the two countries.
4.354. Japan is the Kingdom of Saudi Arabia's main trading partner. In 2013, exports from the
Kingdom of Saudi Arabia to Japan, which mainly consisted of crude oil and petroleum products,
amounted to almost US$50 billion. With exports of about 1.16 million barrels of crude oil a day,
the Kingdom of Saudi Arabia is the most important exporter of crude oil to Japan and supports its
efforts to secure sufficient energy production after the Fukushima disaster. The Kingdom of Saudi
Arabia imports, mainly automobiles, machinery and equipment and metals, for US$6.8 billion from
Japan.
4.355. Over the period of review, Japan has continued to play a central role in the reinforcement
of the multilateral trading system and has been active in bilateral and plurilateral trade
negotiations. On many occasions, Japan reasserted its commitment to trade liberalization under
the auspices of the WTO and its support for the conclusion of the DDA. Japan has constructively
engaged in the negotiations that led to the successful conclusion of the Bali Ministerial, including in
the negotiations on the Trade Facilitation Agreement.
WT/TPR/M/310 • Japan
- 49 4.356. The Kingdom of Saudi Arabia looks forward to continuing the very close working
relationship with Japan, in and outside this organization, to reinforce bilateral and global trade in a
fair and inclusive manner.
NIGERIA
4.357. At the time of its eleventh TPR in 2013, Japan was recovering from the earthquake and
tsunami of 2011 which resulted in sharp declines in private consumption and stock-building and
widespread supply chain disruptions affecting production across the country, particularly in
export-led sectors such as automobiles and electronics. Production had also been affected by the
shutdown of nuclear power plants following the accident in Fukushima in 2011. Moreover, Japan
confronted other key challenges, notably very high public debt, rapidly aging population, and
nearly two decades of deflation and low growth. Nigeria is pleased to note that since then, Japan
has been implementing an ambitious reform programme known as Three Arrow Strategy aimed to
overcome deflation and revitalize the economy thereby achieving economic growth of
approximately 3% in nominal terms and approximately 2% in real terms on average.
4.358. The inward FDI in Japan is far below that of other major developed economies. The
continued low level of FDI is attributed to factors such as the relatively high cost of doing business
in Japan; strict and complicated domestic sector regulations; limited availability of risk capital;
regulatory barriers; the difficulty involved in hiring qualified employees; and impediments to
mergers and acquisitions. As indicated in the Secretariat report, Japan aims to double the
outstanding amount of FDI by foreign companies to ¥35 trillion by 2020. To achieve this, tax
incentives to stimulate investment and private-demand-led growth are also being discussed. A cut
in corporate tax (currently 30%) is considered as the initial major step. It would be interesting if
Japan would share with us the sectors they are targeting for the inward FDI.
4.359. The report of the Secretariat states that government policy also affects sales of the
processed products. Although tobacco products are subject to excise duties, some brands, all
owned by Japan Tobacco, are subject to lower rates. Furthermore, importers, wholesalers, and
retailers of cigarettes are required to register with the Minister of Finance who must approve final
retail prices. Nigeria would like to know if such policy is consistent with the national treatment.
4.360. The Government report states that Japan has maintained and strengthened the multilateral
trading system under the WTO as the main pillar of Japan's external economic policy. At the same
time, Japan has also promoted its regional and bilateral trade policies as means of complementing
the multilateral trading system, particularly through Economic Partnership Agreements which
include elements of Free Trade Agreements and institution-building. Nigeria would like to know
how the regional and bilateral policies help in promoting multilateral trading system.
4.361. The bilateral relations between Nigeria and Japan dates back to 1964 when Nigeria
established diplomatic ties with Japan, and the relations have been growing steadily in political,
economic and socio-cultural spheres. The relations have been characterized by cooperation and
trust between the leaders of our two countries, and owe a great deal to the desire of our two
countries to forge ahead in addressing the important issues that would make the world a better
and more secure place to live. In this context, Nigeria and Japan have intensified their bilateral
relationship and cooperation through exchange of visits at the highest level of our Governments.
4.362. Japan has over the years promoted an active cooperation with Nigeria in the educational
and technical fields, through the Japan International Cooperation Agency (JICA), which sponsors
educational exchange programmes, build schools and offer grants to scholars for specific studies in
Japan. JICA, which has an office in Abuja, has also helped Nigeria in the field of rural electrification
and agricultural projects, such as rice production and milling in Edo and Imo States.
4.363. Presently, Marubeni Corporation of Japan is involved in the development of the Nigeria's
energy sector. The Corporation rehabilitated the Egbin Thermal Station in Lagos and is still very
much engaged in other power projects in Nigeria. Other companies like the Chubu Electric and
Mitsubishi Company of Japan are also involved in power projects in Nigeria.
WT/TPR/M/310 • Japan
- 50 4.364. Finally, as an important Member of the WTO, Japan has remained a supporter of the
multilateral trading system. In this context, we wish to acknowledge the constructive and
proactive engagement of the delegation of Japan in Geneva.
MALI
4.365. We have noted with interest the major actions being undertaken or planned by the
Japanese Government with a view to stepping up the process aimed at opening trade and taking
a more active part in the facilitation of trade between Japan and the rest of the world.
4.366. We also appreciate Japan's efforts towards greater transparency, which are greatly helping
to increase the level of foreign trade. The results already achieved, which are reiterated in the
report by Japan, are remarkable.
4.367. Mali thanks Japan for the excellent level of political, economic and trade relations that have
prevailed between the two countries since Mali's independence and have grown even closer today.
As an example of the benefits of this exemplary cooperation, the Government of Japan has
provided a working capital grant for several years now in order to facilitate access for Mali's
economic operators to the financing needed for imports from Japan.
4.368. The southern segment of the Dakar-Bamako corridor, which plays a large part in opening
and promoting trade between Mali and the rest of the world, became operational in part thanks
to the building of four bridges, including one over the Faleme River, on the border between
Mali and Senegal.
KENYA
4.369. We take this opportunity to acknowledge the fact that Japan is a key partner of Kenya
particularly in the area of trade and investment.
4.370. We commend Japan for implementing an ambitious reform programme since
December 2012 aimed at addressing deflation and revitalization of its economy after more than a
decade of sluggish performance. The implementation of the reforms has so far supported the
economy of Japan. In this connection, we encourage Japan to sustain the process of
implementation of the reforms which we believe will contribute to achieving a strong economic
growth in the long run.
4.371. The multilateral and regional trade agreements supported by domestic reforms to improve
competitiveness have played a critical role in boosting trade and making Japan an open
transparent economy. However, we are concerned that support and protection remains high in
some areas particularly agriculture. In the context of the current DDA negotiations, we encourage
Japan to further liberalize and open its agriculture sector to international competition.
4.372. We also note that Japan's SPS and TBT requirements are often more stringent than
international standards. The cost of meeting such stringent standards can be burdensome
particularly for developing and least developed countries and therefore act as barrier to exports
from these groups of countries.
4.373. At bilateral level, Japan, over a long period, has extended Technical Cooperation to Kenya
in the form of Loans and Grants through its flagship: Japan International Cooperation Agency
(JICA) in key sectors such as energy, infrastructure, agriculture and rural development, and
health.
4.374. We also commend Japan for supporting capacity development for trade facilitation projects
at border posts and international trade facilitation in the Eastern African Region.
4.375. Finally, we express our appreciation to Japan's strong support to the multilateral trading
system and especially the commitment to Aid for Trade initiative.
WT/TPR/M/310 • Japan
- 51 QATAR
4.376. Even as there has been much change in Japan, and in the global economy, since Japan's
last Trade Policy Review, certain fundamental factors remain unchanged. Japan remains a key
player and partner in the international trading system. Japan also has been vigilant in helping
avoid a substantial slip backwards into protectionism within the global trading system.
4.377. For the State of Qatar, Japan remains our largest trading partner. We are confident that
the current trade policies in Japan will accelerate the recovery process of the world economy.
4.378. We wish Japan a successful Trade Policy Review.
JAPAN
4.379. I would like to thank the discussant, Mr Jean-Paul Thuillier, for his very thoughtful
presentation and I would also like to thank all the delegations who submitted statements. Some
comments assessed positively Japan's policy and efforts and others posed questions. We thank all
Members for the keen interest and high expectations for Japan in addressing its current and future
challenges.
4.380. The responses to the statements will be made on Wednesday but I would like to make a
brief additional remark on Japan's structural reform, the third arrow of Abenomics, taking into
account the strong interest expressed by some delegations today. The economic reform has been
a pillar and has set policies since the last start of the Abe Administration. As I have explained in
my opening statement, the reform has resulted in a number of achievements. These achievements
and the orientation for sustained reforms continue to receive strong support from Japan.
4.381. Future challenges in the current growth strategy include various specific targets in foreign
areas: to continue to promote investment in Japan, including encouraging business start-ups; to
continue to strengthen utilization of human resources, enhancing female participation at the work
place, and increasing the number of international students; to create new jobs by expanding the
market in various sectors, including health care; and to promote global economic integration by
further increasing EPAs and FDIs, as well as attracting international tourists.
4.382. In addition, the Government of Japan aims to advance through the reforms which will be
reflected in the revision of the global strategy expected in the middle of this year. As the world
economy continues to become interdependent, Japan remains committed to be open to the world
as a supporter of the multilateral trading system. We appreciate the Members' continued support
and understanding.
WT/TPR/M/310 • Japan
- 52 5 REPLIES BY THE REPRESENTATIVE OF JAPAN AND ADDITIONAL COMMENTS
5.1. As many people may be aware, today is the 11th of March which marks the fourth
anniversary of the catastrophic Great East Japan Earthquake, which claimed so many precious
lives in the same fleeting moments and inflicted such extensive damage across wide areas of the
nation. Taking this opportunity, we wish to reiterate our heartfelt gratitude for helping hands
kindly extended to Japan from all over the world.
5.2. Coming back to TPR, I recall a fruitful discussion on Monday and would like to express my
appreciation to Madame Chair, Mr Thuillier as a discussant, and so many delegations who
expressed their views on Japan's trade policy. In particular, I was very much encouraged by the
supports referring to the fact that Japan maintained free trade policy despite the damages from
the earthquake. I also took note of some Members' positive evaluation toward the high
predictability of Japanese tariffs as the gap of MFN applied rate and MFN bound rate in Japan is
significantly low. Some also praised Japan's position of not frequently resorting to trade remedy
measures.
5.3. We also would like to thank many Members who highly evaluated our policies such as the
"Three Arrow Strategy" reforms of Abenomics, Japan's active roles in various activities of the WTO,
including the Doha Round negotiations, Japan's active engagement in plurilateral negotiations,
such as ITA, EGA, TiSA and GPA, Japan's EPA/FTA policies that complement the WTO, Aid for
Trade, GSP and so on.
5.4. I also heard a number of interventions that raised questions and comments. I am pleased to
take this opportunity to deliver responses to them. I would like to cover the concerns which were
raised on Monday to the extent possible within the given time limit. We would like to provide our
written responses to the rest.
Macroeconomic policies
Public debt
5.5. A question was raised on Japan's effort to reduce public debt.
5.6. While Japan's fiscal situation is extremely severe as its public debt has cumulatively
increased, the Government aims to achieve both economic revitalization and fiscal consolidation in
order to secure the trust from markets and also from the international community.
5.7. As I mentioned on Monday, the Government of Japan will formulate a concrete plan by the
summer of 2015 for achieving a primary surplus of the central and local governments by FY2020.
Monetary Policy
5.8. Some Members referred to Japan's monetary measures including its potential spillover effect.
The aim of the BOJ's monetary policy and monetary measures is to ensure the relief from deflation
and to achieve an economic virtuous circle and sustainable growth. I would like to reiterate that
these measures do not target exchange rates. Japan has been committed to the agreements on
exchange rates in G-20 and G-7.
FDIs
5.9. Many delegations expressed interests in how Japan intended to increase FDIs from abroad.
5.10. With the Council for Promotion of Foreign Direct Investment in Japan as the control tower,
Japan is carrying out necessary institutional reforms as well as efforts to search and encourage
specific FDI projects.
5.11. For the prompt improvement of investment climate in Japan, the Council is working to
identify priority tasks, which include strengthening multi-language services and nurturing
personnel with global perspectives.
WT/TPR/M/310 • Japan
- 53 5.12. In addition, Japan is considering to enhance the function of attracting investment through
the coordination of relevant Ministries, agencies and local governments, and to implement
investment promotion events focused on promising sectors where growth and/or revitalization of
domestic market is expected.
Trade Policies
WTO
5.13. Issues on fisheries subsidies were raised. As is described in Japan's proposal in 2011,
TN/RL/GEN/171, Japan has committed itself to the long-term conservation and sustainable use of
fisheries resources and has made various efforts for this goal in a number of international fora
including WTO. Japan will continue to be engaged in this area.
5.14. Regarding the question of the notification of fisheries subsidies to the WTO, we recognize
the importance of transparency, and we are currently considering what programme needs to be
notified.
FTAs/EPAs
5.15. With respect to the question on how RTAs contribute to the multilateral trading system,
Japan considers that bilateral and regional trade agreements promote trade liberalization, and that
they are complementary to the WTO. Japan considers that this understanding has been widely
shared among the WTO Members.
5.16. With regard to the request for enhancing transparency of RTAs negotiations, in particular
TPP, there are natural limitations to what parties can provide on the details of ongoing RTA
negotiations. Information will be fully available after the conclusion of such negotiations.
Customs Procedures
5.17. There was a request for information on the requirements and the benefits to be an AEO
(Authorized Economic Operator).
5.18. Under the current Japanese laws and regulations, main requirements for AEOs include:
(1) the establishment of an internal compliance program including security standards; (2) having a
capability of conducting proper and reliable business operations; and (3) having no legal violation
records for a certain period of time.
5.19. The major benefit of becoming an AEO is described in paragraph 3.2 of the Secretariat
report which includes: (1) to allow goods to be released before filing the customs duty declaration;
and (2) to import declarations can be filed in advance of cargo arrivals. In addition, there is a
benefit of a decline in the frequency of documentary examinations and physical inspections of its
import and export cargoes.
5.20. There was a request for the review of the Customs requirement for advance cargo
information.
5.21. The Japan Customs introduced the Advance Filing Rules on Maritime Container Cargo
Information in March 2014, with a view to responding to the need for ensuring enhanced security
of the global supply chains after the 11 September terrorist attacks in 2001.
5.22. The rules are in line with the "WCO SAFE Framework of Standards to Secure and Facilitate
Global Trade", which is a guideline for Customs administrations developed by the WCO (World
Customs Organization) for the purpose of ensuring supply chain security while maintaining the
facilitation of trade. We understand that Customs rules, including a similar requirement of advance
information have been implemented by other Members as well.
WT/TPR/M/310 • Japan
- 54 Agriculture
5.23. Japan appreciates the many comments on Japan's agricultural policy. Today, I would like to
highlight the following four main points.
5.24. First, the food security. While maintaining basic foundation for agricultural production in the
country, Japan imports a large amount of agricultural products. Specifically, net imports of
agricultural products in 2011 were US$65.2 billion, which was the largest in the world, thus
significantly contributing to the economies of food exporting Members.
5.25. Given the importance of food security in the current interdependent world, ensuring food
import is crucial for countries like Japan. In this light, Japan has been advocating rules on export
restrictions in various fora including the WTO. We have achieved concrete results in some EPAs
already.
5.26. Second, agriculture is one of the major target areas of Japan's structural reforms and its
growth strategy of Abenomics. The current strategy, which is consistent with WTO obligations,
includes:
(1)
increasing the ratio of farmland used by leading farmers to 80% in the next 10 years;
(2)
reducing the cost of rice production by leading farmers by 40% in the next 10 years
compared with the current national average cost;
(3)
increasing exports of agricultural, forestry and fisheries products and foods to one
trillion yen by 2020; and
(4)
regarding the reform of the Central Union of Agricultural Co-operatives, the
Government of Japan will aim to submit relevant bills during the current ordinary Diet
session.
5.27. Third, Japan's existing trade measures on agricultural products, including tariffs of various
levels, TRQ administration, and domestic support are consistent with the WTO Agreements.
5.28. Fourth, Japan recognizes that agriculture is an important part of trade liberalization
negotiations in the WTO or in FTAs/RTAs negotiations. Japan actively participates in those
negotiations. Trade negotiations where each party has both defensive and offensive interests, are
concluded as a package and agriculture is an important part of it. Whenever agreements have
been achieved, Japan implements them in a good faith.
SPS/TBT
SPS
5.29. There was a concern raised on Japan's SPS measures and relevant regulations. Japan's SPS
measures are, in general, based on relevant international standards, or based on scientific risk
assessment, where its measures do not conform to relevant international standards, in accordance
with the SPS Agreement.
5.30. Regarding the import restriction on beef, the Ministry of Health, Labour and Welfare (MHLW)
first collects information about the country concerned on its BSE control, and then the MHLW
requests risk assessment to the FSC (Food Safety Commission). The MHLW considers relaxation of
the beef import requirement based on the result of the risk assessment made by the Food Safety
Commission on a scientific basis.
5.31. When approving food additives or establishing Maximum Residue Levels (MRLs) for
pesticides including insecticides, Japan takes Codex standards into consideration. Efforts are being
made to accelerate the safety assessment process through enhancing the communication between
the MHLW and FSC and facilitating the work in each of the two agencies.
WT/TPR/M/310 • Japan
- 55 TBT
5.32. Comments were also raised on Japan's TBT measures. When establishing its TBT measures,
Japan uses the relevant international standards, such as ISO standards, Codex standards, UN
Regulations (1958 Agreement) and UN Global Technical Regulations (1998 Agreement), as a basis
wherever possible.
5.33. Regarding Japanese Industrial Standards (JISs) and Japan Agricultural Standards (JASs)
which have corresponding international standards, I would like to share with Members that 97%
and 77% of them have already aligned with relative international standards respectively.
NAMA
Pharmaceutical Sector
5.34. Difficulties were pointed out by Members in access to the Japanese generic pharmaceutical
sector. In Japan, when a foreign company wishes to export a drug manufactured outside of Japan,
and if there is a cooperation with another company in Japan with the authorization on
manufacturing and selling pharmaceuticals, the drug can be applied for approval through such a
company in Japan. A foreign company is not necessarily required to have a joint venture with a
Japanese company or to establish its own branch office in Japan.
5.35. On the other hand, authorization holders are responsible for a wide range of measures
related to manufacturing and selling pharmaceuticals appropriately and safely in Japan, such as
managing the issues of quality, effect and adverse effect of the pharmaceuticals concerned.
Therefore, such authorization holders are required to establish an office in Japan to fulfil such
responsibilities.
Tobacco
5.36. With respect to the question regarding the preferential tax treatment for certain cigarettes,
Japan has decided to phase out the preferential tax treatment for "former third class cigarettes"
and has already submitted a relevant bill to the Diet.
Business practices
5.37. Some Members expressed concerns about Japan's business practices that may hinder a
foreign company's entry into the Japanese market. Other Members expressed difficulties in
exporting certain products, like maritime equipment, to Japan. We are not aware of any specific
government measures that hinder such exports to Japan. However, the Government is ready to
consult with those Members individually to find problems, if any, and to seriously explore possible
solutions.
Visa
5.38. Regarding the request of easing visa requirements from some Members, Japan is now
exerting all its efforts towards becoming a tourism-oriented nation with the ambitious goal of
attracting 20 million foreign visitors in Japan. In this regard, we have implemented a strategy
relaxing visa requirements for a number of Members mainly for foreign tourists that are expected
to increase greatly in the future. We would like to explore further relaxation, giving due
consideration to the status of measures already taken.
Energy
5.39. Many Members touched upon Japan's energy policy.
5.40. Japan submitted bills to the current Diet Session on electricity and gas system reforms.
Through a bold and well-designed deregulation and unbundling, we will transform the conventional
energy industry into a new, attractive one, which is open to all players. Again, this is part of the
third arrow of Abenomics.
WT/TPR/M/310 • Japan
- 56 5.41. Concerns were pointed out regarding foreign companies' entry into the Japanese market of
renewable energy. We believe that the Japanese market is already open. Statistics of Japan
Photovoltaic Energy Association (JPEA) shows that solar panels that are supplied by foreign
companies from April to December 2014 account for approximately 30% of its Japanese market
share. Also, in the Japanese domestic market of wind power generators, the share of the products
of foreign companies amounts to around 70% at the end of FY2013, according to the statistics of
New Energy and Industrial Technology Development Organization (NEDO).
Japan Post
5.42. Some Members touched upon Japan Post, referring to insurance, finance and postal
services.
5.43. The bank and the life insurance company under the Japan Post are subject to the same laws
and regulations as other banks and life insurance companies respectively. In addition, in the
course of privatization of Japan Post and its subsidiaries, the regulations under the Postal Services
Privatization Act apply to these two financial companies, as "add-on regulations" including
measures such as approval requirement for starting new business.
5.44. With regard to EMS and express delivery services in Japan, respective authorities on each
service regulate suppliers based on relevant laws and regulations.
Government procurement
5.45. Some Members made comments on improving transparency and liberalization of Japan's
Government procurement.
5.46. With the entry into force of the "Protocol Amending the Agreement on Government
Procurement" on 16 April 2014, Japan expanded its government procurement market access. For
example, it lowered its thresholds for goods and services (excluding construction engineering
services) from 130,000 SDR to 100,000 SDR for central government entities. It expanded the
scope where the covered designated cities have increased from 12 to 19 cities, and an additional
16 services are newly covered. This is a result of the negotiations within the GPA Parties, taking
into account the overall balance of market access. With the 120 entities listed in Annex 3 of
Japan's schedule, Japan considers its market access level is fairly ambitious compared to other
parties.
5.47. Moreover, as a part of Japan's efforts to increase opportunities for foreign suppliers, the
Government has established, as a voluntary measure, non-discriminatory, fair, and transparent
procedures that surpass those stipulated in the revised GPA.
Development
GSP
5.48. There was a question on the application criteria for GSP graduation.
5.49. Generally speaking, as regards the application criteria for GSP, it is essential to consider
various factors, such as the level of economic development of beneficiaries or the application
criteria of other GSP providers.
5.50. In addition, the Government of Japan applies objective criteria in its operation of the GSP
scheme for the purpose of promoting economic growth in the developing world. Considering the
situations on each domestic industry, Japan has not included certain products in Japan's GSP
scheme.
LDC-DFQF, Service Waiver
5.51. We appreciate positive comments on Japan's efforts on providing duty-free, quota-free
(DFQF) for LDCs. We will need careful examination on the possibility of further expanding the
product coverage of DFQF.
WT/TPR/M/310 • Japan
- 57 5.52. Regarding the LDC Services Waiver as I mentioned on Monday, Japan will submit a
notification to the Council of Trade in Services as soon as possible.
Conclusion
5.53. Due to the time limit as well as the technical nature on some of the questions, there may be
a few questions to which I did not respond in the meeting today. However, we are ready to discuss
the remaining specific concerns in a bilateral context. We also received a number of follow-up
written questions from some Members. We will answer them in writing in due course.
5.54. As I mentioned on Monday, Japan will continue its efforts for the reform, including structural
reform under the open multilateral trading system. We are looking forward to sharing our
achievements in the next TPR.
5.55. I would like to conclude my remarks by thanking you Ambassador Mariam Salleh, as well as
our discussant, Mr. Jean-Paul Thuillier, the Secretariat team and all the Members for their
contributions to make this 12th review of Japan a productive one. I hope our humble efforts will
contribute to maintenance and strengthening of the multilateral trading system.
DISCUSSANT
5.56. I would like to begin by thanking Mr Tomochika Uyama, head of delegation, and
Ambassador Yoichi Otabe, Japan's Permanent Representative to the WTO, for the important work
carried out on the occasion of the 12th Trade Policy Review of Japan. Japan's role in the global
economy and world trade has been highlighted by the large number of statements (I have counted
40, mainly by ambassadors from developing Members, LDCs, small and vulnerable economies,
recently acceded Members, large agricultural exporting countries and developed Members) and
questions (almost 700) addressed to the Japanese delegation. The interest shown by Members in
the trade policy directions relating to the general economic framework of "Abenomics" was
reflected by the supplementary statement made by Mr Uyama late in the afternoon of 9 March,
which provided further details of the economic component of the third arrow of "Abenomics".
5.57. I have drawn two conclusions from this review:

The first, relating to the current trade policy framework, is a general assessment of Japan's
commitment to the WTO and its prominent role in world trade. In this regard, I would say
that the review held no surprises for Japan;

The second, concerning the way in which Japan plans to escape deflation and resume
growth in the coming years, may give current policy directions the air of a transitional trade
regime. In this respect, I am tempted to say that I very much look forward to 2017, the
date of Japan's next TPR, when it will be possible to assess what has been achieved.
5.58. Regarding the existing framework, I have noted the importance that is given by all
Members, without distinction, to Japan's role in world trade, and the concentration of questions on
well-known aspects.
5.59. Japan is a leading partner in the multilateral trading system. Its commitment to moving the
Doha Agenda forward in the multilateral negotiations and to engaging in plurilateral negotiations is
commended by one and all. There is no doubt as to Japan's respect for its commitments, and
several Members have praised the country for not taking protectionist measures in the difficult
years following the disasters of 2011. Its trade regime ensures stability and predictability.
5.60. Many Members, both developing and developed, have also spoken of the importance of their
bilateral relations, whether based on preferential regional agreements, bilateral cooperation
agreements or technical assistance and financial support programmes, which show the extent of
Japan's foothold and influence in the world economy.
5.61. This commitment to forming part of a network of free trade agreements complements
Japan's trade liberalization and increases transparency. The country's commitment to cooperation
WT/TPR/M/310 • Japan
- 58 agreements illustrates, including in the Africa related initiatives welcomed by various Members
from that continent, Japan's prominent role in the area of development assistance.
5.62. Regarding the Members' questions, and to complement the Secretariat's report, my overall
conclusion is that border barriers are less problematic than behind the border barriers. This is
consistent with the reforms that have been identified as necessary to change the economic model,
although agriculture is perhaps the exception owing to the combination of both types of barrier.
5.63. Although I have not been able to analyse the frequency of the questions posed by Members,
those relating to agriculture appear to have been by far the most common, whether from
developing Members, developed Members, Members enjoying preferential relations through
regional agreements, Members without preferential relations, Members benefiting from Japan's
generalized system of preferences or certain LDC Members benefiting from the DFQF regime,
which asked that the regime covering 98% of products be extended to cover all goods. Regarding
agriculture, Members noted that tariff protection is combined with a level of support that several
Members have described as distortive, as well as with a regime of sanitary and phytosanitary
standards that certain Members consider an additional restriction on market access. In particular,
there have been calls for alignment with international standards and improved transparency as
regards approval practices. Some Members have also mentioned the importance of fisheries
subsidies.
5.64. Turning to other issues, I noted that standards and conformity procedures were frequently
presented as a barrier to the entry and establishment of FDI, an objective pursued by the
Japanese government within the framework of the "third arrow". Opening up to further
competition has also been mentioned, as has the importance of properly understanding the current
reform of the competition framework and the opening up of certain services sectors (postal,
professional and financial services, telecommunications, and maritime transport), as well as
government procurement in respect of which certain Members have noted the importance of
reforming current practices and the interest that greater openness would have for Japan.
5.65. The number and importance of these comments do not of course overshadow the positive
aspects, such as the announcement of the launch of a unanimously supported agricultural policy
reform or the importance given to intellectual property and SMEs. However, there were no
surprises whatsoever in any of the Members' questions, and I take this opportunity to thank the
Japanese delegation for having started to reply to these questions, orally and in writing, and for
having undertaken to continue the dialogue with the Members concerned at a later stage.
5.66. My second conclusion relates to the Japanese government's projection in respect of the third
arrow of "Abenomics", which paves the way for a transitional trade regime and prompts me to say
how much I look forward to 2017.
5.67. "Abenomics" goes beyond the trade policy framework that this Organization was mandated
to examine. The link between the three "arrows" has nevertheless been emphasized by many
Members which have referred to Japan's crucial role in the recovery of world growth and the fact
that the escape from deflation or the recovery of productivity would undoubtedly have an impact
on their trade. Several Members, while satisfied with the intensity of their bilateral relations, have
noticed a reduction in bilateral trade volumes in recent years and expressed their desire for
revitalization.
5.68. The issue of sustainable reform implementation was also raised, given the obvious link
between the announcement of certain reforms in the areas of competition, investment, services
and sectors and Japan's trade regime, whether in relation to the objective of 70% trade coverage
in FTAs, the link between internal reforms and trade liberalization, or the possible impact of
regulatory reform on market access.
5.69. However, as I noted in my presentation, the monetary easing policy seems to have been
clearly understood by Members and in any case has not been questioned using a mercantilist
approach. On the other hand, the time-lag between the three arrows has raised a number of
questions and is likely to reduce the medium term impact of the three "arrows" or to delay certain
necessary adjustments.
WT/TPR/M/310 • Japan
- 59 5.70. With general support from the Membership, Japan may rest assured that the Government's
orientations are considered very positive. Nevertheless, the challenges in shifting to a model of
increased openness and domestic reform that is capable of revitalizing the economy in a globalized
world remain considerable.
5.71. The Japanese authorities have nevertheless created considerable expectations among their
partners, and this is why the 2017 review will be just as exciting as that of 2015, but even more
crucial.
5.72. By 2017 we hope, for the sake of Japan and the rest of the Membership, that the Doha
Agenda will have been – or be in the process of being concluded, that the regional mega
agreements (TPP, RCEP and EPA with the European Union) will be signed and under
implementation, and that Japan's trade policy will be one of the driving forces for renewal.
CHINA
5.73. Thank you for giving me the floor and thanks for our Discussant's insightful conclusions, as
well as the responses from Japan this morning.
5.74. Like other Members, China attaches great importance to this TPR and yesterday we
submitted our follow-up questions. We expect the replies in due time.
5.75. Regarding Japan's economic trade and investment environment, I would like to take this
opportunity to highlight some of our concerns. On foreign direct investment, we hope that Japan
takes measures in a more constructive manner so as to meet its FDIs by 2020. With regard to
technical regulations and SPS measures, Japan is expected to reduce some of them in order to
further facilitate trade on a level playing field.
5.76. As its Government report states, the economic interdependence between Japan and China is
going deeper. We believe that a sustainable and robust trade relationship will contribute greatly to
regional and global prosperity.
5.77. Last but not least, China is willing to work closely with Japan, as well as other Members to
proceed with the post Bali work and achieve meaningful results at the MC10, sharing these
common objectives of strengthening the multilateral trading system.
5.78. To conclude, I would like to congratulate the Japanese delegation on the success of its TPR.
KINGDOM OF BAHRAIN
5.79. We just wish to congratulate Japan, as one of our major trading partner, for the conclusion
of its successful Trade Policy Review. We are happy to see that despite the economic and national
crisis, Japan has still been able to maintain a strong, open and transparent economy, and that the
trade policies have remained stable despite the challenges faced.
5.80. We would like to thank you, Madam Chair, and the discussant, Mr Thuillier, for conducting
this active review, and the Secretariat for providing us an excellent report. We would like to wish
Japan the best and we look forward to a strong economic relationship.
THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU
5.81. I would like once again to welcome Mr. Uyama and his delegation to Geneva. I want to
thank Japan, the Secretariat and the discussant for the constructive and efficient work for this
review. Chinese Taipei attaches great importance to this Trade Policy Review.
5.82. We very much appreciate Japan for the prompt reply on the issues of our concern raised on
Monday, in particular regarding AFR issue. We will continue to work with Japan on the bilateral
front to seek a mutual satisfactory solution.
WT/TPR/M/310 • Japan
- 60 5.83. We submitted several follow-up written questions to the Secretariat on the recent financial
measures adopted by the Japanese Government and very much look forward to receiving the
replies in writing from Japan.
5.84. Finally, I wish Mr Uyama and his delegation from Tokyo a nice journey back home.
EUROPEAN UNION
5.85. Let me first express our appreciation to the Japanese delegation for the timely replies they
have provided and for the extensive presentation given on Monday as well as this morning.
5.86. The EU appreciates that Japan has opted for the alternative timeframe which gives more
time to Members to study the replies in advance of the meeting.
5.87. The EU notes that this review of Japan's economy and trade policy has been helpful for
better understanding Japan's reform agenda and expects that Japan will take into due account the
concerns expressed by several Members, in particular with reference to the "behind the borders"
barriers, services and government procurement.
5.88. While the EU has no follow-up questions to pose, we will follow closely the on-going reforms
and, in particular, the measures that Japan will implement to encourage FDIs.
UNITED STATES
5.89. I would also like to express thanks to the Japanese delegation on the replies they have
provided. The United States had a few follow-up questions that we submitted to the Secretariat
and to Japan. We appreciate the efforts that Japan has put in to advance in many trade initiatives,
bilaterally, plurilaterally and multilaterally, and we look forward to continue to work with Japan to
deepen its efforts.
JAPAN
5.90. We would like to thank all the Members and also those who put forward their follow-up
questions. We will respond to them in due course.
WT/TPR/M/310 • Japan
- 61 6 CONCLUDING REMARKS BY THE CHAIRPERSON
6.1. The twelfth Trade Policy Review of Japan has given us a good opportunity to examine the
trade, economic, and investment policies of Japan and how they have developed since the last
Review in March 2013. The large number of questions submitted before the meeting and the
number of delegations that posed those questions and intervened during our two days of
discussions highlight the importance attached to Japan's trade and investment policy and its role
as one of the biggest economies and trading nations in the world. Our discussion was greatly
helped by the statement from the head of the delegation of Japan, Mr Tomo Uyama, the Deputy
Director-General in the Economic Affairs Bureau in the Ministry of Foreign Affairs, and by the
well-researched and comprehensive comments and insights from the Discussant, the Permanent
Representative of France to the WTO, Mr Jean-Paul Thuillier.
6.2. Members welcomed Japan's efforts to overcome protracted deflation, revitalize the economy,
and continue reconstruction following the Great East Japan Earthquake of 2011 through the "three
arrows" of monetary measures, fiscal flexibility, and structural reform known as "Abenomics". At
the time of the last Review, implementation of the first two arrows had started. Since then, the
structural reform arrow was launched under the Japan Revitalization Strategy of 2013, which was
revised in 2014.
6.3. The first two arrows are focused primarily on increasing domestic demand, although they
have had significant trade-related implications through their effects on interest rates and the
exchange rate. However, the third arrow of structural reform was recognized as probably being of
most direct interest to the Trade Policy Review Body because it includes plans and programmes to
increase investment, improve productivity, and thus enhance trade. Members urged Japan to
pursue these structural reforms without delay, including trade and investment liberalization
measures, to achieve strong economic growth, encourage private investment, increase
productivity, and enhance competitiveness. This would also help Japan address its long-standing
structural problems including an ageing population, labour shortages, and relatively low FDI
inflows. Furthermore, as several delegations and the discussant noted, the first two arrows are
short-term stimuli, but it is the third arrow which will provide the basis for long-term sustainable
growth.
6.4. Members appreciated Japan's active role in the WTO and its constructive participation in the
negotiations leading to the Trade Facilitation Agreement, as well as negotiations on services,
environmental goods, and expanding the scope of the Information Technology Agreement. They
also noted Japan has made relatively little use of contingency trade remedies. Several delegations
commended the support provided by Japan for technical cooperation which ranged from assistance
to improving customs procedures, to education and training, to aid for agricultural improvements,
to support for aid for trade.
6.5. Members remarked that Japan has a network of 14 RTAs in force, one more than in 2013
because of a new bilateral agreement with Australia, and has recently signed an agreement with
Mongolia. Furthermore, they noted that Japan is currently negotiating several trade agreements,
including mega preferential agreements, notably the Trans Pacific Partnership and the Regional
Comprehensive Economic Partnership Agreement or RCEP. Through these negotiations and its
domestic reforms, Japan aims to increase the proportion of trade under regional trade agreements
from 19% to 70% by 2018 and double FDI by 2020.
6.6. Several of the points raised during the meeting have been raised in previous Reviews of
Japan while the new issues raised are related mostly to the reform process which is under way
through the Japan Revitalization Strategy. Areas for attention brought up by Members during the
Review, either through the question and answer process or through their statements, include the
following:

Customs procedures: The improvements to the Authorized Economic Operator (AEO)
programme and its impact on the release time for imports were noted but concerns
remained about customs procedures, particularly for some agricultural products;

Technical barriers to trade and sanitary and phytosanitary measures: Several
delegations noted that a significant proportion of Japan's TBT and SPS measures do not
WT/TPR/M/310 • Japan
- 62 correspond to international norms and the requirements to show compliance with Japanese
requirements are often complex and costly;

Government procurement: Although Japan is a party to the revised Government
Procurement Agreement, some delegations stated that access to public tenders was more
complicated for foreign enterprises than for those present in Japan;

Competition policy: The reform of the Anti Monopoly Act in 2013 was noted but concerns
remained about the number of exemptions to the Act and to its implementation;

Business environment: Concerns were raised about visa requirements for various
categories, including business travellers, IT professionals, trainees, and health care workers;

Agriculture: Support and protection for agriculture remains high relative to other OECD
countries. Although there have been several policy developments and the Government
intends to increase productivity and competitiveness, the sector is still protected by high
tariffs and supported by policies linked to prices or to production or to both. Furthermore, at
the moment, Japan's regional trade agreements and its generalised system of preferences
scheme provide only limited coverage to agricultural, as well as textile, footwear and
clothing products;

Fisheries: Several delegations posed questions about different programmes and subsidy
levels for fisheries in Japan and noted that Japan has several unbound tariffs on fisheries
products; and

Services: Opening of some services sectors, such as electricity, telecommunications,
maritime, and courier services, to greater competition would benefit investment and could
reduce business costs. In addition, questions were raised about Japan Post, its privatization,
and the need for a level playing field in insurance.
6.7. Japan's wealth is based on trade and as a global economic power it has an important role to
play in maintaining a rules-based trading system which is vital to the current and future prosperity
of trading nations. Japan remains very competitive in several sectors and, in general, it is open to
trade with transparent laws, regulations, and trading practices. However, Japan faces key
challenges and Members have raised concerns about some sectors and issues which are important
to them. Therefore, I would encourage Japan to continue its efforts to further liberalize trade and
investment for its own benefit and that of its trading partners.
6.8. In closing, I would like to thank Deputy Director-General Uyama and the rest of the Japanese
delegation, all the other delegations, the Discussant, Mr Thuillier, and the Secretariat for this very
successful twelfth review of the trade policies of Japan.
WT/TPR/M/310 • Japan
- 63 7 ELECTION OF A NEW CHAIRPERSON FOR THE TPRB
7.1. As indicated in the order of the first day of this meeting, we now move to the election of the
Chairperson for the TPRB for 2015. At its meeting on 20 February 2015, the General Council noted
the consensus on the slate of names of Chairpersons for WTO bodies, including Ambassador
Atanas Atanassov Paparizov as the Chairperson of the Trade Policy Review Body.
7.2. Under its rules of procedure, the Trade Policy Review Body is now invited to elect
Ambassador Paparizov as the Chairperson for 2015. I would like to suggest that Members of the
TPRB confirm their support for his election with a round of applause.
7.3. On a personal note, it has been my pleasure and duty to have chaired the reviews of
20 Members through 14 meetings of the TPRB as well as our meetings to consider the
Director-General's reports on trade policy developments, including the annual overview of
developments in the international trading environment.
7.4. This past one year has been a valuable experience and certainly educative for me, with the
opportunity to gain detailed information and analysis of Members' trade policy measures provided
by the reports and from your comments in this peer review process.
7.5. The process provides a deep insight of the concerted efforts made by all Members under
review to improve their trade and investment regimes and to pursue continued economic growth,
amidst the varied challenges faced. Besides national priorities, Members under review, in my view,
do take into consideration your constructive comments in improving policy measures so as to be in
compliance to WTO rules.
7.6. You the Members of this body have therefore played an important role in ensuring this
process of Members' review is successful and has the expected impact or intended impact.
7.7. My one wish is to see many more Members participate in this TPR of Members big and small,
or at least by representatives of regional groupings given the limited resources of smaller
Members.
7.8. I would like to sincerely thank everyone, the delegates, both those based in Geneva and
those that came from capitals, for the constructive collaboration at all these meetings. I thank the
Secretariat for all their hard work in producing the excellent analytical reports, right on schedule
and going out of their way to support me as the Chairperson this past year. I would also like to
thank my colleagues, fellow ambassadors who readily came forward to be discussants, taking time
from their busy schedule to give their personal insights on the policy measures of the respective
Member under review. And last but not least, the interpreters for offering to stay on every time we
ran out of schedule.
7.9. I wish Ambassador Paparizov every success in the year ahead as the new Chairperson of the
Trade Policy Review Body.
7.10. I now hand over to Ambassador Paparizov.
AMBASSADOR PAPARIZOV
7.11. Thank you Ambassador Mariam Salleh. It has been really an honour for me, distinguished
delegates, to be elected to this important Chairmanship in the WTO. I think that all the efforts
exercised by Mariam and my other predecessors at this Body over the years had established itself
as a very important place for the exchange of views of policies, and of the need to develop
macroeconomic and trade policies. This has been a very good basis for countries to enrich their
visions about solving problems.
7.12. I was very much impressed by the Trade Policy Review of Japan, by the discussions, by the
number of delegations and by the number of issues that have been raised. The role of the
discussant has been very important and I hope that the quality of the discussants will continue all
over the process under my Chairmanship.
WT/TPR/M/310 • Japan
- 64 7.13. I thank you once again and assure you that I will try to leave up to the responsibility that
you have given to me and try to organize, together with the Secretariat, the work of this Body at
the level that has been typical for this Institution.
__________