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The eighth Trade Policy Review of Japan has been informative and open,
thus contributing to a much enhanced understanding of Japan's trade
and related policies. Our discussions have greatly benefited from the
active engagement of the Japanese delegation led by Ambassador Yokota,
from the insightful contributions by the discussant, Ambassador Valles
Galmés, and from thoughtful interventions made by a large number of
WTO Members.
Members were encouraged by the continued growth of Japan's economy
(second largest in the world), 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 economic growth.
However, they enquired 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, particularly its strong support for the Doha Development
Agenda. In this respect, Members commended Japan for providing
trade-related technical assistance and capacity building initiatives
to developing and least developed countries, as well as financial
assistance with respect to “aid for trade”. Members also expressed
their appreciation of the preferential market access provided by Japan
to developing countries and LDCs, and its commitment to provide
duty-free and quota-free market access for products from LDCs; they
encouraged Japan to open further its market in respect of exports of
these countries. Members also noted Japan's increasing involvement in
bilateral/regional trading arrangements; they urged Japan to ensure
that these arrangements are fully compatible with the multilateral
system.
Members expressed their appreciation of steps taken by Japan to
liberalize further its trade regime. Many imports enter Japan
duty-free or at low tariff rates and most applied rates coincide with
the bound rates, imparting a high degree of predictability to the
tariff. However, Japan's tariff structure remains complex, involving
significant tariff peaks (often involving non-ad valorem rates) and,
for some products, tariff quotas. These mainly involve agricultural
and food products, textiles and clothing, and leather and leather
products. Members expressed their concern about the recent decrease in
the share of overseas goods and services in Japan's government
procurement and encouraged Japan to promote foreign participation in
its government procurement. Steps to strengthen intellectual property
rules and to expedite registration procedures for patents were
welcomed.
While appreciating Japan's moves to harmonize its standards and
technical regulations with international norms, and further accepting
foreign test results, many Members expressed concern over the level of
complexity and transparency in Japan's sanitary and phytosanitary (SPS)
measures, technical regulations and standards. Some Members raised
questions on national treatment with regard to the application of SPS
measures. They encouraged Japan to employ these measures in the least
trade-restrictive manner.
Members welcomed Japan's recent strengthening of competition policy.
Members also appreciated continued enhancement of transparency and
progress in regulatory reforms, as provided for in the Government's
three year programme and the Special Zones for regulatory reform. In
addition, Members enquired about factors discouraging inward foreign
direct investment (FDI), which remains relatively low. Members
appreciated the progress in privatizing public services, particularly
Japan Post; they encouraged Japan to ensure a level playing field in
the markets concerned (e.g. banking, insurance).
On agriculture, Members were interested in Japan's plan to move away
from price support to income support; at the same time, they were
concerned that the level of domestic support for agriculture was
apparently as large as the sector's contribution to GDP. Many Members
were concerned about Japan's use of import quotas on fish. On
manufacturing, Members were interested in Japan's plans to promote
particular sectors. Members appreciated reforms in the energy and
services sectors, particularly, in financial services,
telecommunications and legal services. Members expressed their belief
that reforms should continue with a view to enhancing competition not
only in these services, but also in transport, medical and educational
services.
In closing, I would like to thank the Japanese delegation for the oral
and written responses provided during the meeting; we all look forward
to receiving answers on outstanding questions. The keen interest shown
by Members in this review, with the large number of advanced written
questions, numerous interventions and high attendance, reflects the
importance that Members attach to Japan's role in the multilateral
trading system. It also demonstrates the value of the TPRM even for
Members which, like Japan, maintain relatively open and transparent
trade and investment regimes. This review has highlighted a number of
possible improvements to Japan's trade regime, many of which could be
brought about as part of the DDA negotiations. In this regard, I am
encouraged by the statement by Japan that its long run economic
interests have been very well served by its commitment to 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, tariff and non-tariff measures, sanitary and
phytosanitary measures, government procurement, and FDI.
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