TRADE POLICY REVIEW:
Concluding remarks by the Chairperson
- Trade Policy Review: Japan
The 15th Trade Policy Review of Japan has provided us with a good opportunity to assess and enhance our understanding on the wide range of trade policies and practices of Japan since its last Review in 2020 and acknowledge the challenges it faces.
The review has benefitted from the constructive and informative participation of Japan's delegation, headed by Mr. Akihiro OKOCHI, Deputy Assistant Minister, Economic Affairs Bureau, Ambassador in charge of Economic Diplomacy, Ministry of Foreign Affairs; from the insightful comments of the discussant, H.E. Ambassador João AGUIAR MACHADO, Permanent Representative of the European Union to the WTO; and from the 56 delegations that took the floor during this meeting. I would like to thank them all for their contribution to this exercise.
Members stressed the importance of Japan to world trade and economic prosperity, praising its recovery from the Covid-19 pandemic despite the disruption of global supply chains, challenges posed by the war in Ukraine, and the adverse impact of climate change in the form of more frequent and intensified natural disasters.
Many Members stated that Japan was one of their top trading and investment partners, and often their main export/import market. With national security in economic and trade policies gathering more relevance and momentum, Members were concerned with some measures envisaged under Japan's Economic Security Promotion Act which is considered a centerpiece of the Japanese economic policy. Japan has been encouraged to clarify the process and criteria by which it determines what is a "key product", "essential infrastructure services", and "advanced critical technology" and which types of enterprises are eligible for the subsidies mentioned in the Act.
Members appreciated that Japan's FDI framework continues to be liberal, with only few sectoral restrictions. However, they have raised concerns about the screening requirements for FDI, measures to attract FDI and FDI restrictions in some sectors. Some members were concerned about the sustainability of Japanese fiscal policy given its increasing ratio of public debt to GDP and the impact of Japan's declining and ageing population.
Members commended Japan for its active participation in upholding the multilateral trading system including its contribution to the MC12 outcomes, its participation in WTO reform, as well as its constructive contribution to JSIs discussions on e-commerce, investment facilitation for development, the establishment of a WTO informal working group for the MSMEs, and services domestic regulation. Japan was applauded for being the first donor to the WTO Fisheries Funding mechanism, aimed to help developing and least-developed countries implement the Agreement on Fisheries Subsidies. They also appreciated Japan's continued development and trade related technical assistance in various fields, including the implementation of the Trade Facilitation Agreement; and the extension of the GSP scheme to 31 March 2031. Some Members invited Japan to join the Multi-Party Interim Appeal Arbitration Arrangement (MPIA).
Some Members commended Japan for its bilateral economic cooperations via Japan's Economic Partnership Agreements, and its active engagement in regional frameworks such as the Asia-Pacific Economic Cooperation (APEC), and the Indo-Pacific Economic Framework (IPEF). Some other Members requested more details on the role of the IPEF and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), GSP utilization and eligibility, a bilateral agreement with the United States, and Japan's plans for future RTAs.
Regarding trade policy, while lauding the high degree of predictability in Japan's tariff regime, some Members were concerned about the complexity of the Japanese tariff regime and the plans to simplify the tariff; the provision of missing ad valorem equivalents; regulations for customs brokers; export control regulations; export restrictions related to semi-conductors; export support measures; SPS measures deviating from international standards; government procurement procedures; and numerous intellectual property right matters. Japan was encouraged to reduce the complexity and peaks of its customs tariff especially in agriculture. Although Japan was also commended for its trade facilitation efforts, including the digitalization and automation of customs procedures amid the economic turmoil, it was encouraged to further increase transparency, reduce unnecessary regulation, and remove other barriers to trade.
In term of sectoral trade policies, some Members hailed Japan for its decarbonization policy (net-zero greenhouse gas by 2050), the place dedicated to MSMEs, and the strong export and import recovery. Other Members requested additional information on: domestic support for agriculture in general; conditions and criteria for direct payments; methods of tariff quota allocation and fill rates; agricultural self-sufficiency targets; plans and incentives to promote renewable energies and decarbonize the economy; support for "critical products and materials", specifically for producers of chips and semi-conductors; foreign participation in financial services; the role of the Digital Agency; and rules for data storage and transfer.
In total, Japan has received 787 advance written questions from 34 delegations for this Review, out of which 700 were sent within the established deadline, covering a broad range of topics. In addition, 6 more additional and 105 follow-up questions were submitted after the first day. Prior to this meeting, Japan already provided written replies to most questions.
Japan's delegation has clearly demonstrated that it places a high value on the Trade Policy Review Mechanism and the Multilateral Trading System with its active engagement over the two-day meeting and its ability to respond to a very high number of advance written questions. This reflects the importance of Japan in the multilateral trading system and the interest of Members in engaging with Japan on its trade and related policies.
The above points are some of the key issues that emerged in our discussion over the past days. I hope that Japan's delegation will consider and further reflect on these issues and on the many constructive comments that it received during the Review. Members look forward to receiving answers to any outstanding and follow-up questions within the customary one month, at which time this Review will conclude.