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TRADE POLICY REVIEW: JAPAN
6 and 8 November 2002

Concluding remarks by the Chairperson

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See also:
Press release: Structural reforms needed to achieve sustainable recovery


This Meeting has involved a very informative exchange of views, stimulated by the full and open engagement of the Japanese delegation, highly analytical and insightful comments by the discussant, and Members' active involvement in the discussion. This exchange has contributed to a much better understanding by Members, and thus their collective evaluation, of Japan's trade and trade-related policies. The outcome, I believe, has been a highly successful 6th Review of Japan's trade policies, practices and measures.

Members were encouraged by signs of moderate economic recovery in Japan, whose economic health is important for the prosperity of the world economy and the expansion of trade. Members recognized that the multilateral trading system by keeping foreign markets open to Japan's exports, had contributed to the improved economic outlook for Japan. While commending Japan's recent efforts to implement and accelerate structural reforms, including the removal of barriers to foreign businesses in various sectors, Members encouraged Japan to press ahead with reforms, through inter alia further financial and corporate restructuring, improved market access (particularly in agriculture), and stronger competition policy, particularly implementation.

Members congratulated Japan on its active role at the WTO, including its strong support for the Doha Development Agenda and commended the authorities for their active engagement in properly reflecting the interests of developing countries in the ongoing negotiations and work. However, some Members expressed concerns about the nature of Japan's proposal in agriculture. Members also noted Japan's increased involvement with regional and bilateral trade agreements; in this regard, they encouraged the WTO compatibility of these agreements, notably on product and sectoral coverage. While expressing their appreciation of preferential market provided by Japan to developing and least-developed countries, some Members encouraged Japan to liberalize further its market in respect of LDCs' products.

On trade and trade-related policies, Members remarked in particular on Japan's complex tariff structure, including tariff quotas, significant tariff peaks and tariff escalation for some products, and the fact that non-ad valorem tariffs tended to involve relatively high applied rates. Some Members voiced concern over the complexity and seeming lack of transparency of government procurement practices. Furthermore, while recognising Japan's right to pursue legitimate policy objectives with regard to the protection of human, animal and plant life or health, many Members expressed concern over the complexity of Japan’s standards, technical regulations, and sanitary and phytosanitary measures, including quarantine procedures (and long delays therein), and encouraged Japan to employ these measures in the least trade-restrictive manner. In addition, pointing to the low level of inflows of foreign direct investment (FDI) into Japan, Members welcomed Japan's efforts to open further its FDI regime.

On sectoral issues, Members noted that the level of domestic support for agriculture seemingly exceeds the sector's contribution to GDP. Although generally acknowledging the importance of non-trade concerns in agriculture, some Members urged Japan to address these concerns in a manner that would not unduly distort production or trade. Members recognised that substantial reforms had been undertaken in the financial services and telecommunications, but expressed their belief that reform should continue with a view to enhancing competition in these and other services, such as transportation, education, legal and medical services.

Members also sought clarification on several specific issues including:

  • transparency of regulatory procedures;

  • contingency measures, including emergency safeguards;

  • state trading;

  • export-related measures;

  • special economic zones;

  • business practices;

  • regulations and business costs in telecommunications market; and

  • maritime transport restrictions.

Members expressed their appreciation of the oral and written responses and explanations provided by the Japanese delegation; they looked forward to receiving written answers on outstanding questions.

This brings us to the conclusion of our 6th Trade Policy Review of Japan. The large number of advance questions, numerous interventions and the high level of attendance indicate the importance Members attach to Japan's leadership at the WTO. In this context, I would encourage Japan to continue its strong support for the multilateral trading system. I also hope that Japan will take to heart the concerns expressed by Members, particularly with regard to its policies on agriculture, sanitary and phytosanitary measures, government procurement and competition.