Trade Policy Review of Japan – U.S. Statement

Trade Policy Review of Japan

Statement by David Shark
Charge d’Affaires, U.S. Mission to the WTO

Geneva, February 18, 2009

Thank you, Chair. On behalf of the United States, I welcome this opportunity to participate in Japan’s ninth Trade Policy Review. I also wish to welcome members of the Japanese delegation, led by Ambassador Jun Yokota, as well as Japan’s Permanent Representative to the WTO, Ambassador Shinichi Kitajima. We would also like to thank the Secretariat for its comprehensive and excellent report as well as the discussant, Ambassador John Gero, for his important contributions to this review.

Japan is a vitally important member of the international trading community, and remains an important trading partner of the United States. Our two-way goods trade totaled $206 billion last year, and Japan is still our fourth largest trading partner. As such, the United States welcomes those measures taken by Japan since its last Trade Policy Review in 2007 that have helped support the global trading system.

Noteworthy contributions include Japan’s broad continuing support for open trade and investment goals through international fora such as APEC, and through its work with the United States and other partners to improve intellectual property protection regimes and enforcement around the world.

Domestically, some new steps have been taken since Japan’s last Trade Policy Review that may help encourage foreign investment in Japan. For example, Japan took some initial steps to help make the triangular merger tool available for foreign companies to merge with or acquire companies in Japan.

Other steps taken by Japan to improve further its overall business environment include measures to streamline customs procedures, liberalize the sale of insurance products through banks, and improve the regulatory environment for the introduction of new and innovative medical technologies. These laudable steps will help reduce costs, open markets, and spur innovation.

At the same time, as the Secretariat’s report also makes clear, the pace of Japan’s own structural and regulatory reform efforts appears to have slowed significantly since the last review — even as reform remains as vital as ever to Japan’s long-term growth and economic prospects. We agree with this observation in the Secretariat’s report and look to Japan to re-invigorate its policies of growth-oriented reform and not leave it to the side as Japan turns its focus to other pressing priorities.

Particularly at this time, the United States continues to urge Japan to take new, proactive measures to open further its own markets in a manner commensurate with its position in and dependence upon global trade. Ensuring level competition between Japan’s publicly owned corporations and the private sector – particularly in the insurance, banking, and express delivery sectors – remains critical, as are further improvements in the areas of communications, regulatory transparency, commercial law, and distribution/transportation, to name just a few.

We are also concerned with the very low level of Japanese government procurement that is awarded to foreign suppliers. As we have repeatedly noted, it is often very difficult for foreign suppliers to participate in Japan’s government procurement market due to a wide range of barriers, including lack of transparency, qualification requirements, bid-rigging, and the extensive use of single tendering. We urge the Government of Japan to take measures to provide for effective participation by foreign suppliers in its government procurement.

Recognizing that the protection of the food supply for consumers in any country must be a high priority, the United States also looks to Japan to address a range of extremely burdensome restrictions impacting imports. We are concerned with Japan’s use of non-science-based SPS measures that are not in accordance with international standards, including for beef and beef products. As a global leader in trade and established stakeholder, Japan is expected to fulfill its obligations under the WTO SPS Agreement and employ the least trade-restrictive SPS measures.

The Secretariat also has pointed out areas where Japan’s own trade regime, including through Japan’s dependence on tariffs and other measures, serves to keep large sections of its agriculture sector protected from imports. These measures have unfortunately inhibited Japan’s ability to show more leadership and play a more constructive role in bilateral, regional, and multilateral trade negotiations.

The United States notes Japan’s active participation in the Doha Development Round of negotiations. We have valued Japan’s constructive role, particularly in the NAMA and services negotiations. But we are nonetheless disappointed by positions Japan has taken in the negotiations on agriculture. We are perplexed by the defensive positions taken by Japan in the fisheries subsidies negotiations, given the tragic state of fish stocks worldwide and the need for strong disciplines commensurate with the Hong Kong mandate. Japan has frequently referred to the needs of its small, aging coastal communities, but has so far failed to identify the specific types and amounts of subsidies for which it is seeking flexibilities.

In addition, as Japan continues to pursue bilateral and regional trade agreements, we hope that Japan will put a stronger priority on ensuring that its agreements do not simply continue to institutionalize protection for a wide number of tariff lines as has frequently been the case in the past. Several of these cases are outlined in the Secretariat’s report in some detail. It is incumbent upon Japan to move beyond its current levels of protection by more fully opening its markets through its free trade agreements.

In closing, the United States appreciates the importance that Japan places on continuing to ensure that the global trading order remains open. I wish to express my Government’s expectation that as it moves forward, Japan will continue to pursue further reforms and open markets that enable Japan to continue to contribute to expanding global economic opportunity and growth.

Thank you.