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TRADE POLICY REVIEW:

Concluding remarks by the Chairperson

See also:
Trade Policy Review: Japan
  

This ninth Trade Policy Review of Japan has greatly enhanced Members’ understanding of its trade and related policies as well as the challenges Japan faces owing to the present global financial crisis. Our discussions have benefited from the active participation of the Japanese delegation led by Ambassador Yokota; the insightful and thought-provoking contributions by the discussant, Ambassador Gero of Canada; and from the many interventions by Members. Japan’s response to the large number of questions, made available at the beginning of this meeting, was very much appreciated.

Members looked forward to a quick and complete recovery of Japan’s economy. In this context, Members considered that such a recovery, led by domestic demand, was important for the prosperity of the world economy and the expansion of international trade. Members were encouraged that Japan had refrained from introducing new protective trade-policy measures since the onset of the financial crisis in September 2008. Members also recognized that the multilateral trading system, by keeping markets open to Japan’s exports, had contributed positively to its economy in the recent years, and urged that this openness should be maintained notwithstanding the current difficult economic environment. Members encouraged Japan to continue its reform process and improve its market access, particularly in agriculture and services, whose productivity, and thus competitiveness, is relatively low.

Members welcomed Japan’s active role in the multilateral trading system, particularly its strong support for the early conclusion of the Doha Development Agenda. Members commended Japan for its financial and technical assistance, including Official Development Aid, as well as various development initiatives related to trade and investment, particularly its contribution to Aid for Trade. Members also commended Japan’s support for the process of accession by future Members. Furthermore, Members expressed their appreciation of the improved preferential market access provided by Japan to developing and least-developed countries, and its decision to expand duty-free and quota-free market access accorded to LDCs. They encouraged Japan to further open its market to these countries’ exports. Members also noted Japan’s increasing involvement in bilateral/regional trading arrangements. They urged Japan to ensure that these arrangements are compatible with the multilateral trading system.

Members expressed their appreciation of Japan’s relatively liberal trade regime. Most applied MFN rates coincide with the bound rates, imparting a high degree of predictability to the tariff regime. However, Japan’s tariff remains complex. Applied MFN rates for industrial products are generally low. Nonetheless, products of export interest to developing countries, such as agricultural products, textiles and clothing, leather products and footwear, encounter significant tariff peaks, which appear to be concealed by non-ad valorem rates, tariff escalation, tariff quotas (and their intricacies) and/or state trading. Members expressed their concern about the recent drop in foreign suppliers’ share of Japan’s government procurement and encouraged Japan to facilitate greater foreign participation.

While generally appreciating the steps taken by Japan to harmonize its standards and technical regulations with international norms, many Members expressed concern over the complexity, and thus lack of transparency, of Japan’s sanitary and phytosanitary (SPS) measures, technical regulations, and standards. Some Members questioned the appropriateness of risk assessment regarding SPS measures, which they encouraged Japan to employ in the least trade-restrictive manner.

Members noted Japan’s continued enhancement of transparency and progress in regulatory reforms. Members hoped for further reforms to enhance competition and thereby improve productivity. Members looked forward to measures to facilitate inward foreign direct investment (FDI), which remains relatively low. In this context, Members looked to measures (e.g. those related to mergers and acquisitions, and corporate governance) to improve Japan’s business environment. Members appreciated the progress in privatizing public corporations, particularly the establishment of the new Japan Post companies. They encouraged Japan to ensure a level playing field in the markets concerned (e.g. banking, insurance, and express delivery services).

On agriculture, Members welcomed Japan’s move away from price to income support. Nonetheless, they expressed concern about border measures and the relatively high level of overall domestic support for agriculture. Many Members were concerned about Japan’s use of import quotas for fish and marine products. On manufacturing, Members were interested in plans to promote particular sectors. Members encouraged Japan to continue reforms to enhance competition in services.

In closing, I would like to thank the Japanese delegation for its active participation in this Review, including its written responses provided before and during the meeting. We all look forward to receiving written answers to outstanding questions within one month. The keen interest shown by Members in this review, as reflected in the large number of advance written questions, numerous interventions and high attendance, indicates the importance they attach to Japan’s role in the multilateral trading system. This Review has clearly indicated that the Trade Policy Review Mechanism is an important element in ensuring a transparent multilateral trading system. I am encouraged by the statement by Japan that despite current difficulties, it has maintained the openness of its economy and continued to adhere strictly to WTO rules. Nevertheless, I do hope that Japan will take to heart the concerns expressed by Members, particularly with regard to its policies regarding agriculture, tariff and non-tariff measures, SPS measures, government procurement, and FDI.

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