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U.S. Statement on the Trade Policy Review of Japan
February 20, 2013

WTO Trade Policy Review of Japan
Statement delivered by Ambassador Michael Punke
U.S. Permanent Representative to the WTO

February 19, 2013

Thank you, Chair.  On behalf of the United States, I am pleased to participate in Japan’s eleventh Trade Policy Review.  We wish to welcome members of the Japanese delegation, led by Ambassador Yokota.  We would also like to recognize Ambassador Otabe who, throughout his career both on bilateral and WTO issues, has worked hard to advance Japan’s trade liberalization agenda.  We have the highest respect for him.  Thanks as always to the Secretariat and to our discussant, Ambassador Fried.

Japan faced a major, historic challenge immediately following its last Trade Policy Review in 2011 when the Great East Japan Earthquake and tsunami struck off the coast of northern Japan.  The ensuing tragedy created lasting impacts for Japan’s economy.  In the immediate aftermath of the disaster, the United States Government mobilized all available resources to come to the aid of our friends in Japan as countless Americans offered their support and their prayers.

Despite this enormous challenge, Japan has moved forward with its recovery and continues to be a key player in the international trading system and an important partner of the United States.  In the Asia-Pacific region, the foundations of an ambitious trade liberalization agenda within APEC made substantial progress while Japan served as host of APEC in 2010, working to further update APEC as an institution and to advance our mutual goals of broadening trade and investment opportunities in the Asia-Pacific.  Japan has continued to be an important proponent of driving this agenda forward.

Within the WTO, the United States has valued our close work with the Government of Japan and our WTO partners to strengthen and to build upon the WTO’s rules-based and cooperative foundation.  We commend Japan’s long-time support for the non-discriminatory and rules-based multilateral trading system embodied by the WTO.  We also note Japan’s steadfast commitment to ensuring that the important progress made in recent decades, in opening markets around the world, does not suffer a setback as a result of the unilateral introduction of new protection measures within the global trading system.

Looking ahead, the United States welcomes the opportunity to work with Japan and nineteen other partners on negotiations for a new agreement on international trade in services.  We believe this agreement will be instrumental in promoting services trade and economic development now and into the future.  We also appreciate the strong working relationship between our teams on the ITA expansion initiative, particularly as negotiations intensify.  We look forward to continuing our cooperation in the coming months as we work to push an agreement across the finish line this year.

In the two years since the last Trade Policy Review, Japan has continued to bring new Economic Partnership Agreements into force, most recently with India and Peru.  However, as the Secretariat highlighted, Japan will only liberalize 59.6 percent of its agricultural tariff lines as part of its new agreement with India, and only 61.6 percent of agricultural tariff lines as part of its agreement with Peru.  When looking at these two FTAs, together with Japan’s other FTAs, it becomes apparent that as a global leader with important responsibilities within the world trading system, it remains incumbent upon Japan to do more to set a higher standard of tariff elimination in future free trade agreements.

Prime Minister Abe, in a speech to the Japanese Diet just last month, said that the “greatest issue…for Japan is the revival of the economy.”  We are hopeful that the new Abe Government will pursue a trade policy that incorporates the high standards necessary to promote mutually beneficial economic expansion.

In this regard, should Japan be ready to pursue this path through participation in the Trans Pacific Partnership negotiations, it would be an important step that could substantially contribute to meeting Japan’s goal for economic growth.  This is an important decision for Japan to make, and it is a decision that only Japan can make.

As the new Abe Government further develops its policies and priorities, we are hopeful that Japan will undertake ambitious domestic regulatory reform and other structural measures to stimulate competition and new economic opportunities.  In the area of agriculture, Japan’s high tariffs and other barriers to trade in this sector remain a major impediment.  This is a sector where discussions of reform continue within Japan.  Renewable energy is also an area where we hope to see increased market access.  And although Japan’s industrial tariffs are generally low, significant non-tariff barriers remain.  As a result, the United States continues to look to Japan to take new, bold steps to increase transparency, to reduce unnecessary regulation, and to remove other non-tariff barriers to trade.

From this perspective, one key priority that the United States continues to urge Japan to address is to ensure a level playing field between Japan Post and the private sector in the insurance, banking, and express delivery sectors.  Another priority area is for Japan to ensure that its SPS measures are based on science and brought into consistency with international standards.  The United States also urges Japan, among other steps, to remove non-tariff barriers that impede foreign automotive manufacturers from competing on a level playing field with their Japanese competitors; to take steps to ensure Japan’s information technologies and communications market is open and promotes fair competition; to ensure transparent and fair opportunities for foreign companies to compete for government procurement contracts; and to ensure equivalent access for foreign companies to qualify for government-funded fiscal and subsidy programs offered in specific sectors.

In closing, the United States appreciates the steps taken by Japan to promote the expansion of global trade, and its commitment to the multilateral trading system.  The United States values our close work with the Government of Japan, and looks forward to working with the new government to continue these efforts to make substantial progress on our mutual areas of concern.

Thank you.