Further structural reforms can contribute to a sustained recovery
The seventh Trade Policy Review of Japan has been informative and
open, thus contributing to a much improved understanding of recent
developments in Japan's trade and related policies. In addition to the
active engagement of the Japanese delegation, our discussion has
greatly benefited from the insightful and thought-provoking comments
from our discussant and many thoughtful interventions by Members.
Members were encouraged by the recent recovery of Japan's economy,
which 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,
contributed greatly to its recovery. However, they inquired whether
the sustainability of Japan's recovery might be undermined by, for
example, the combination of high public debt and a rapidly aging
population. Members encouraged Japan to continue its reform process
and improve its market access, particularly in agriculture.
Members welcomed Japan's active role in the multilateral trading
system, including its strong support for the Doha Development Agenda
negotiations. In this respect, Members commended Japan for providing
technical assistance and capacity building to developing countries and
LDCs. Members also noted Japan's increasing involvement in
bilateral/regional trading arrangements, and they urged Japan to
ensure that these arrangements are fully compatible with the
multilateral system. Some Members expressed their appreciation of the
preferential market access provided by Japan to developing and
least-developed countries; they encouraged Japan to open further its
market in respect of LDCs' products.
Members expressed their appreciation of steps taken by Japan to
liberalize further its trade regime. Many imports now enter Japan
duty-free or at low tariff rates. However, Japan's tariff structure
remained complex, involving significant tariff peaks (often involving
non-ad valorem rates) and tariff escalation for some products as well
as intricate tariff quotas. These mainly involve agricultural and food
products, footwear and textiles. Some Members urged Japan to simplify
its tariff structure and improve the administration of its import
quotas and tariff-rate quota systems. Many Members also called for
greater transparency in government procurement practices. Steps to
strengthen intellectual property rules and their enforcement were
welcomed, although some Members voiced their concern over registration
delays in this regard.
While appreciating Japan's moves to harmonize its standards and
technical regulations with international norms, some Members expressed
concern over the complexity of Japan's standards, technical
regulations, and sanitary and phytosanitary measures. They encouraged
Japan to employ these measures in the least trade-restrictive manner.
Members welcomed Japan's ongoing efforts to strengthen corporate
governance and competition policy by increasing the status of the Fair
Trade Commission and providing it with more resources. Members also
appreciated the establishment of Special Zones for structural reform.
In addition, Members inquired about factors discouraging inward
foreign direct investment (FDI) into Japan, which remains relatively
low. Members appreciated the progress in privatizing public services;
they were especially interested in the progress on the privatization
of Japan Post.
On sectoral issues, Members noted that the level of domestic support
for agriculture seemingly exceeds the sector's contribution to GDP and
that the bulk of this support distorts trade and production. Members
encouraged Japan to address these concerns. Members appreciated
reforms in the energy and services sectors, in particular, in
financial services and telecommunications. Members expressed their
belief that reform should continue with a view to enhancing
competition not only in financial and telecommunications services, but
also in transportation, distribution, tourism, construction, legal,
accounting, medical and education services.
Members sought clarification on a range of other issues, including:
– customs procedures;
– rules of origin;
– contingency measures, including emergency safeguards;
– non-tariff border measures;
– state trading;
– export-related measures;
– taxation and tax-related assistance;
– agricultural reforms, trade arrangements for rice, self-sufficiency,
– market access for manufactured products;
– and e-commerce.
Members expressed their appreciation of the oral and written responses
to their questions provided by the Japanese delegation, and looked
forward to receiving any outstanding answers to questions.
This successfully concludes our Review of Japan. The keen interest
shown by Members, with large number of advance written questions,
numerous interventions and high attendance, reflects the importance
Members attach to Japan's key role 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, FDI, and competition.