25 and 27 January 2005

Concluding remarks by the Chairperson

See also:
> Press release: 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, fisheries;
– 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.