Trade policies and practices by measure Introduction



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  1. trade policies and practices by measure

    1. Introduction


            1. Since its previous Trade Policy Review, Japan has continued to liberalize its trade and investment regimes. Progress has been made in improving the competitive environment, including in telecommunications and financial services; however, potentially important distortions to competition are still evident in some sectors, particularly agriculture. Recognizing the continued need to promote competition, the authorities seemingly attach high priority to further regulatory reform and sound competition policy.

            2. The tariff is Japan's main trade policy instrument. Most imports enter Japan duty free or are subject to low tariff rates. In fiscal year 20021, the simple average applied MFN tariff was 6.9%. Nearly 99% of tariff lines are bound and most applied tariff rates coincide with bound rates, thereby imparting a high degree of predictability to Japan's tariff schedule. At the same time, non-ad valorem duties are an important feature of the tariff, particularly in agriculture. Such duties, which account for 7.0% of all lines, are indicated clearly in Japan's tariff schedule; they tend to involve high ad valorem equivalents (AVE). Moreover, the bound tariff rates that exceed applied rates mainly pertain to non‑ad valorem duties. The Japanese authorities have provided the Secretariat with AVE estimates for these non-ad valorem duties; these estimates show that 95 of the top 100 tariffs entailed non-ad valorem duties with AVEs ranging from 47.2% to 1,739% and that the simple average of all specific rates for which AVEs were available was roughly ten times the simple average of purely ad valorem tariff rates. The allocation of tariff quotas varies by product and can be intricate.

            3. Japan has few non-tariff border measures. Those currently applied involve some import prohibitions, import licensing and quantitative import restrictions, for example, on certain fish and silk. Imports of certain goods are subject to licensing requirements in order to ensure national security, safeguard consumer health and well-being, or preserve domestic plant and animal life and the environment. Like tariff quotas, certain aspects of the import quota system can be intricate.

            4. Japan implemented its first safeguard measures in April 2001, imposing provisional emergency tariffs on three agricultural products; these expired in November 2001. One anti‑dumping measure is currently in force in Japan. Japan has never taken countervailing actions.

            5. Japan maintains certain export controls on the grounds of national security and public safety and to ensure adequate domestic supplies of certain agricultural and other primary products. Japan has not notified any export subsidies to the WTO, indicating their absence. Export finance, insurance, guarantees, and drawback schemes are available.

            6. Various forms of assistance are provided by central and local governments, particularly to agriculture. The total value of assistance to agriculture exceeds the sector's contribution to GDP; most of the assistance seems to consist of measures that distort production and trade (Chapter IV(2)(iii)).2

            7. No preferences are granted to domestic suppliers on government procurement covered by the Agreement on Government Procurement. The share of foreign suppliers in the total value of government procurement was 6.9% in 2000 (up from 5.7% in 1998).

            8. Japan continues to bring its standards into line with international standards; about 90% of Japan Industrial Standards (JIS) were aligned to their international counterparts as of 31 March 2001, compared with about half in FY 1997. It has also taken further steps to ensure acceptance of foreign test data and conformity assessments.

            9. Japan has continued to participate in multilateral and regional discussions for agreements to promote international harmonization of regimes protecting intellectual property rights (IPRs).

            10. The Three-Year Program for Promoting Regulatory Reform (TPPRR), first adopted in March 2001 and revised in March 2002, is aimed, inter alia, at creating "a free and fair socio-economic system fully open to the international community". The TPPRR also contains measures to increase competition. Nonetheless, it remains unclear whether the existing enforcement measures available to Japan's antitrust enforcement agency, the Japan Fair Trade Commission (JFTC), are sufficient to constitute an effective deterrent to violations of Japan's competition law, which is commonly referred to as the Anti-Monopoly Act (AMA). The Government has made efforts to increase the JFTC's budget and staff, however, thereby facilitating investigation of AMA violations.
    2. Measures Directly Affecting Imports

      1. Customs clearance


            1. The average time between import declaration and import permission decreased between 1998 and 2001, from 5.6 to 4.9 hours for sea cargo and from 0.7 to 0.6 hours for air cargo. Likewise, the average time between cargo arrival and import permission dropped from 3.6 to 3.1 days for sea cargo and from 31.5 to 25.7 hours for air cargo.3

            2. Since March 2001, the Government has introduced "simplified import procedures", which are intended to facilitate importation for authorized importers by reducing the number of data requirements attached to the importation, allowing declarations to be filed in electronic format, and allowing actual importation before declaration for duty payment.

            3. No legislative changes regarding complaint and appeal procedures have taken place since 2000.4
      2. Rules of origin


            1. Japan is to introduce preferential rules of origin under the Japan–Singapore Economic Agreement for a New Age Partnership (JSEPA), in addition to those under the Generalized System of Preferences. Both preferential rules have lists of exceptions for some goods; the exceptions involve specific criteria for some goods, such as processing rules and value added on a product-by-product basis.5 To apply MFN tariff rates, the country of origin for imported goods is defined as the country in which the goods have last undergone substantial transformation that results in a new essential characteristic being conferred on the goods. The change of tariff classification at the HS 4‑digit level is generally used as a reference point for such transformation. Detailed information on Japan's rules of origin is publicly available.6
      3. Tariffs

        1. Main features


            1. Japan's FY2002 tariff schedule consists of 9,304 tariff lines at the Harmonized System (HS) 9-digit level.7 The main features of the schedule concerning MFN tariffs are captured by the summary indicators for 2000, 2001, 2002, and the full implementation of the Uruguay Round reported in Table III.1.
        2. MFN tariff bindings


            1. In FY2002, 1.1% of Japan's HS 9-digit tariff lines are unbound. These lines involve a number of "sensitive" items, notably certain fisheries products (including seaweed), certain wood products, and petroleum. By and large, bound and applied rates coincide, thereby ensuring a high degree of tariff predictability.8 Bound rates exceed applied rates only on certain agricultural items, food products, alcohol beverages, tobacco, chemicals, and petroleum, which are largely subject to non-ad valorem duties.
        3. Duty-free items


            1. In FY2002, about 37% of Japan's tariff lines (at the 9-digit level) bore a zero rate. This proportion is expected to rise to 41.2% once the Uruguay Round is fully implemented, in 2009.9
        4. Non-ad valorem duties


            1. In FY2002, non-ad valorem duties accounted for 7.0% (651 lines) of all Japan's tariff lines (6.9% (628 lines) in FY2000), at the HS 9-digit level. Non-ad valorem duties consist of compound duties10, alternate duties11, differential duties12, and sliding duties13, all of which include specific rates. The authorities maintain that such duties are generally intended to provide consistent levels of protection to domestic products facing fluctuations in import prices.

Table III.1

Structure of applied MFN tariffs in Japan

(Per cent)









FY1998a

FY1999b

FY2000c

FY2001c

FY2002c

U.R.cd

1.

Bound tariff lines (% of all tariff lines)

98.9

98.9

98.9

98.9

98.9

98.9

2.

Duty free tariff lines (% of tariff lines)

37.7

36.6

36.7

36.8

36.7

40.6

3.

Non-ad valorem tariffs (% of all tariff lines)

6.8

7.3

7.2

7.2

7.0

6.3

4.

Tariff quotas (% of all tariff lines)

2.0

2.0

2.0

2.0

2.1

2.1

5.

Non-ad valorem tariffs with no AVEs (% of all tariff lines)

6.8

2.0

3.6

3.6

3.5

3.3

6.

Simple average bound rate

5.6

8.0

8.8

8.6

8.5

8.4




Agricultural products (HS01-24)

12.4

24.5

27.2

27.0

26.6

26.6




Industrial products (HS25-97)

4.1

4.1

4.3

4.1

4.1

3.9

7.

Simple average applied rate

5.4

6.7

7.1

6.9

6.9

..




Agricultural products (HS01-24)e

11.8

17.5

18.9

18.8

18.6

..




Industrial products (HS25-97)

3.9

4.0

4.1

4.0

3.9

..

8.

Domestic tariff "spikes"f

6.8

5.5

4.7

5.7

6.0

3.8

9.

International tariff "spikes"g

7.4

7.7

7.5

7.4

7.6

7.5

10.

Overall standard deviation (SD) of tariff rates

7.6

24.8

33.4

33.1

32.4

59.9

11.

Coefficient of variation (CV) of tariff rates

1.4

3.7

4.7

4.8

4.7

7.2

.. Not available.

a Not including AVEs, but taking into account the ad valorem part of compound and alternate rates.

b Using 1999 AVEs, as available, provided by the Japanese authorities. In case of unavailability, the  ad valorem part is used for compound and alternate rates.

c Using 2000 AVEs, as available, provided by the Japanese authorities. In case of unavailability, the  ad valorem part is used for compound and alternate rates. For FY2001, FY2002, U.R. and bound rates, the 2000 AVEs have been adjusted accordingly (e.g. a specific tariff line's MFN applied rate equals 100 yen/kg. in 2000. The given 2000 AVE equals 50%. For the same line the bound rate equals 150 yen/kg. in 2000 and in 2001 its applied rate equals 75 yen/kg. Their AVEs become 75% and 37.5%, respectively. Japan's tariff schedule has been based on HS Nomenclature 2002 since January 2002.

d Based on FY2002 tariff schedule.

e Under the definition used in the WTO Agreement on Agriculture the simple average applied tariff on agricultural imports is 20.1% in FY2002.

f Domestic tariff spikes are defined as those exceeding three times the overall simple average applied rate (indicator 7.).

g International tariff spikes are defined as those exceeding 15%.



Note: Indicators 1,3 and 4 are calculated taking into account all tariff lines (i.e. in-quota and out-of-quota tariff lines). Each of the other indicators exclude in-quota lines. FY2002 is based on HS 2002; FY1998-01 is based on HS 1996 nomenclature.

Source: WTO calculations, based on data provided by the Japanese authorities.

            1. Japan's non-ad valorem duties apply mainly to agricultural products (Chart III.1). Non‑ad valorem duties are indicated clearly in Japan's tariff schedule and the Japanese authorities have ensured the transparency of roughly half of these duties by providing estimates of their AVEs.14 These official estimates show that 95 of the top 100 tariffs entailed non-ad valorem duties with AVEs that ranged from 47.2% to 1,739%, indicating that specific duties can result in high ad valorem equivalents. The simple average of all specific tariff rates whose AVEs were available was 44.2%, which is roughly ten times the simple average of purely  ad valorem tariff rates, which was 4.5%. It should be noted that every method of calculating AVEs is subject to bias and that AVEs can vary widely depending on the import prices of the products involved; these tend to be partly determined by exchange rate changes.15






            1. As a result of the considerable decline in Japan's import prices during the period under review (2000-02), real protection for some products subject to specific duties may have increased, notwithstanding cuts in their applied rates.16
        1. Tariff quotas


            1. In FY2002, tariff quotas covered 2.1% (2.0% in FY2000) of all tariff lines (at the 9-digit level).17 Less than 25% of the out-of-quota rates were ad valorem, compared with 100% of the in-quota rates. The simple average in-quota MFN tariff rate is estimated to be 18.3%; the corresponding average out-of-quota MFN tariff was 125.5% (including AVEs of non-ad valorem duties).

            2. The quota allocation method tends to be intricate. In the case of tanned leather, the in-quota amount is divided into a "general quota" (95% of the annual quota amount) and "reserved quota" (remaining 5%). A corporation or an individual undertaking the production, sale or import of tanned leather or related goods is eligible for quota allocation. The general quota is allocated to applicants who were licensees in the previous year or two. When the total requested amount exceeds the quota, each applicant is allocated a pro rata share. The reserved quota is allocated to those who did not apply for either the general or reserved quota in the previous year. Quotas not filled by any of the above applicants, as well as those returned unused are reallocated to applicants on an "equal basis". In the case of agricultural products, quota allocation is based upon historical imports and current and future plans for imports.18 The in-quota amount is divided into sub-quota amounts according to end-use requirement; those eligible for quota allocations must undertake the production or sale (to particular end-users) of the agricultural products concerned. Tariff quotas may not be allocated to applicants that currently import substitutes for the items subject to the quota (e.g. corn other than the types subject to a tariff quota). Any part of the allocated quota not used by importers must be returned to the Minister of the MAFF with written certification; unused quotas are not reallocated, except for some products such as evaporated milk, for which tariff quotas have been subject to reallocation since 2002; and transfer of quotas is not permitted.
        2. Tariff averages


            1. In FY2002, the overall simple applied MFN tariff average was 6.9%, down from 7.1% in 2000. HS categories of products with the highest simple tariff averages were footwear and headgear agricultural products and prepared food (Chart III.2).19




        1. Tariff dispersion


            1. In addition to the 36.7% of tariff lines that are duty free, 27.6% lines are subject to applied tariff rates of 5% or less (Chart III.3). Tariff spikes, that is rates exceeding three times the simple applied MFN average, affect 6.0% of all tariff lines in FY2002.
        2. Tariff escalation


            1. Tariff escalation is present in a number of subsectors, most notably leather products (Table AIII.1). Tariff escalation means that the level of effective tariff protection increases as goods in these sectors undergo further processing; it thus tends to promote primary and semi-finished goods, thereby possibly slowing the industrialization of developing countries, if not mitigated by the GSP. Full implementation of the Uruguay Round will not change this situation.




        1. Tariff reduction and exemptions


            1. Customs duty reductions and exemptions for FY2001 amounted to about ¥186.0 billion, which accounted for about 21% of total tariffs collected.20
        2. Tariff adjustments


            1. Tariff changes implemented by Japan in FY2001 included a ten-year extension of the GSP, enlargement of duty-free and quota-free market access under the GSP for LDC's exports, and the reduction or elimination of tariffs on certain corn and chemical products. The FY2002 tariff changes included an increase of tariff rates on refined salt, in response to the abolition of state trading requirement for salt imports, and reduction of tariff rates on certain petroleum products.
      1. Non-tariff border measures


            1. Since the previous Trade Policy Review of Japan in 2000, there has been little change in its import prohibitions, import licensing, and quantitative restrictions.21

            2. There has been no change either in the list of prohibited imports22, or in the licensing and approval procedures since 2000.23 Since January 2000, changes in the list of items requiring import approval have included the addition of bluefin tuna from Equatorial Guinea, swordfish from Belize, diamonds from Sierra Leone and Liberia, chemicals falling under the Chemical Weapons Convention Schedule 2, and bigeye tuna from Equatorial Guinea, Belize, Cambodia, Honduras, and Saint Vincent.24 Bluefin tuna from Honduras, which had been on the list since 1997, and swordfish from Honduras, which had been on the list since 2000, were deleted from the list in June 2002.
        1. Import quotas


            1. Japan maintains import quotas on various items, including certain fish products, certain organic chemicals, pharmaceuticals, explosives, rubber adhesives, military equipment and firearms, and silk yarn and silk fabric shipped from China and South Korea (Table AIII.2). Since 2000, cod has been separated from the fish and shellfish quota in the list of import quotas (Table AIII.3); there has been no change in the quota allocation method since 2000.25
        1. Import surveillance


            1. Changes since 2000 in Japan's import surveillance system include a customs confirmation requirement for southern bluefin tuna (fresh or chilled); prior confirmation requirement for patagonian toothfish, southern bluefin tuna (frozen), and African elephant imported from South Africa; and the elimination of the import confirmation requirement for alcohol in 2001.26
      1. Contingency measures


            1. Japan implemented its first safeguard measures in April 2001 by imposing provisional emergency tariffs on three agricultural products: Welsh onions, Shiitake mushrooms and tatami‑omote imported mainly from China.27 Following the expiry of these measures, on 8 November 2001, after 200 days of application, Japan is continuing its surveillance of imports of these items. A non-governmental council of agriculture trade has been established consisting of agri-industries in Japan and China; its aim is to exchange information on market demand trends, product quality, and the means of achieving "orderly trade" in the three products.28 According to the authorities however, participants in the council merely exchange information on market trends and improvements in the quality of the three items. Government officials of the two countries have participated in the Council's meetings, which were held several times in the first half of 2002.

            2. In April 2001, Article 9 of Cabinet Order Relating to Emergency Duties was amended; the amendment formally allowed any Minister seeking initiation of a safeguard procedure to submit to the MOF and the METI relevant data that may be required for judging whether there is sufficient evidence to initiate an investigation. Following a request by the MAFF for initiation of safeguard procedures for tomatoes, bell peppers, and onions, the competent authority concluded in 2000 that there was not sufficient evidence to initiate investigations and that further examination was required.

            3. Japan has in place one anti-dumping measure, which was imposed on certain polyester staple fibre from the Republic of Korea and Chinese Taipei on 26 July 2002. To date, Japan has never taken countervailing actions.

            4. In response to safeguard measures imposed by the United States on imports of certain steel, Japan notified the WTO that it had proposed to suspend the application of substantially equivalent concessions or other obligations by imposing a duty increase on selected products imported from the United States. However, to date, Japan has postponed the proposed suspension of concession.29

            5. Japan is to introduce domestic legislation, in accordance with safeguard provisions stipulated in the Japan–Singapore Economic Agreement for a New Age Partnership (JSEPA), which would allow an emergency tariff increase on a duty-free item bound in the JSEPA within the level of the general tariff for the item concerned.
      2. Government procurement


            1. According to the OECD, Japan's total government procurement amounted to about 16.8% of GDP in 1998.30 Japan is a signatory to the WTO Agreement on Government Procurement (GPA).31 Its GPA coverage encompasses all central government entities, all 47 prefectures, all "designated cities", and certain public corporations.32 Japan notified the WTO Committee on Government Procurement of the removal of three railway companies from the "List of Entities" and from the "List of Entities which procure the services, specified in Annex 4" following their recent privatization.33

            2. In FY2001, the Government started to provide integrated procurement information through the Internet.34 In January 2001, the Government also unified the qualification for participating in competitive contracts (excluding procurement involving public works) with central government entities, and established a unified list of qualified suppliers; a supplier may now submit an application to any central government entity, and the qualification obtained is effective for all central government entities.35 The Government plans to allow the opening and submission of tenders through the Internet by the end of FY2003. Since October 2001, opening and submission of tenders for part of public works under the jurisdiction of the Ministry of Land, Infrastructure and Transport (MLIT) has been made possible though a government website.36 The MLIT also started publicizing prospects of orders and information on tenders and contracts for public works through its website in April 2001.37

            3. The Government carries out annual reviews of its voluntary measures under, inter alia, the 1994 Action Program on Government Procurement Procedures, as amended.38 The Voluntary Review Meeting under the Action Program on Government Procurement, held every year, is conducted to provide domestic and foreign suppliers an opportunity to raise opinions on the implementation of the voluntary measures, to ensure transparency, fairness and competitiveness in procurement procedures, and to facilitate market access of domestic and foreign suppliers. At each annual meeting, an Initiative on Future Management of Government Procurement is confirmed. Procurements under the Action Plan on Reform of Bidding and Contracting Procedures for Public Works are not subject to this Voluntary Review Meeting. The authorities state that government procurement is conducted without restriction on suppliers' nationality or on the origin of products or services, based on the principle of non‑discrimination, and that all relevant entities have thoroughly implemented the GPA; no price or other kind of preferences are granted to domestic suppliers in tenders covered by the GPA.

            4. For procurement above the threshold level of SDR 100,000 specified under the 1994 Action Program, excluding procurement involving public works, open tendering accounted for 67.6% of the total procurement value of ¥1.04 trillion in 2000; procurement of overseas goods and services accounted for 14.7% (17.4% for goods only) of the total (Table III.2). According to the authorities, no data exist on the shares of open, selective, and single tendering, and shares of foreign suppliers in public works contracts; almost all public works projects valued at or above the threshold of the WTO Agreement on Government Procurement are subject to open competitive bidding. The share of selective tendering fell to 1.6% in 2000, while that of single tendering rose to 30.8%, compared with 3.6% and 26.7%, respectively, in 1997.39 Procurement from foreign suppliers, which has always been low, rose in 2000, to 6.9% and 2.7% in value and contract terms, compared with 5.6% and 2.1%, respectively, in 1998. The shares of foreign suppliers in contracts resulting from open, selective, and single tenders were 1.7%, 0.0%, and 3.2% in 2000 (the ratios in 1998 were 1.8%, 0.4% and 2.7%).40

Table III.2

Procurement composition by product and by origin, 2000

(¥ 100 million and per cent)



No.

Products

Total value

Share

Domestic

Foreign

1.

Products from agriculture, and from agricultural and food processing industries

1.3

100

0

2.

Mineral products

181.5

9.4

90.6

3.

Products of the chemical and allied industries

29.4

73.1

26.9

4.

Medicinal and pharmaceutical products

269

68.9

31.1

5.

Artificial resins and plastic materials, cellulose esters and ethers, and articles thereof; rubber, synthetic rubber, factice, and articles thereof; raw hides and skins, leather, furskins and articles thereof, other than articles of apparel and clothing accessories of leather, saddlery and harness, articles of animal gut

29.5

82.7

17.3

6.

Wood and articles of wood; wood charcoal; cork and articles of cork; paper making material; paper and paperboard and articles thereof; manufactures of straw of esparto and of other planting materials, basketwork and wickerwork

160

100

0

7.

Textiles and textile articles, footwear, headgear, umbrellas; sunshades; walking sticks, whips, riding crops and parts thereof; travel goods; hand-bags and similar containers; articles of apparel and clothing accessories, of leather or composition leather

125

99.4

0.6

8.

Articles of stone, plaster, asbestos, mica and similar materials; ceramic products, other than sanitary fixtures; glass and glassware, other than illuminating and signalling glassware and optical elements of glass, not optically worked nor of optical glass

5.5

99.6

0.4

9.

Iron and steel and articles thereof, other than boilers and radiators for central heating, air heaters and hot air distributors not electronically heated

130.8

99.4

0.6

10.

Non-ferrous metals and articles, other than lamp and lighting fittings

78.7

99.6

0.4

11.

Power generating machinery and equipment

14.8

92.9

7.1

12.

Machinery specialized for particular industries

89.5

95.8

4.2

13.

General industrial machinery and equipment, and machine parts

77.5

94.8

5.2

14.

Office machines and automatic data processing equipment

2,106.5

88.8

11.2

15.

Telecommunications and sound recording and reproducing apparatus and equipment

1,388.6

85.9

14.1

16.

Electrical machinery, apparatus and appliances, and electrical parts thereof

243.5

90.8

9.2

17.

Road vehicles

412.5

99.9

0.1

18.

Railway vehicles and associated equipment

104

48

52

19.

Aircraft and associated equipment

103.8

1.6

98.4

20.

Ships, boats, and floating structures

59.2

96.5

3.5

21.

Sanitary, plumbing, and heating equipment

3.5

100

0

22.

Medical, dental, surgical and veterinary equipment

685.6

63.5

36.5

23.

Furniture and parts thereof

77.7

98.7

1.3

24.

Professional, scientific and controlling instruments and apparatus

1,007.1

80.6

19.4

25.

Photographic apparatus, equipment and optional goods; watches and clocks

119.5

80.8

19.2

26.

Miscellaneous articles

388.1

95

5




Total

7,892.1

82.6

17.4

Source: Information provided by the Japanese authorities.

            1. Data provided by the Japanese Fair Trade Commission (JFTC) show that most cases of proven infringement of Japan's Anti-Monopoly Act (AMA) continue to involve bid rigging (section (5)(vii)). To preventing bid-rigging and other improper actions, the Act for Promoting Proper Tendering and Contracting for Public Works entered into force in April 2001. The Act introduced, inter alia, an obligation on entities procuring public works to publicize information on tendering and contracts and to inform the Fair Trade Commission of improper actions (e.g. bid rigging).41 Infringement of the requirements may result in disqualification from the particular bid; no other penalty may necessarily be entailed unless legal measures under the AMA are taken by the JFTC.

            2. The Office of Government Procurement Review (OGPR), headed by the Chief Cabinet Secretary, processes complaints concerning procurement procedures by the Central Government and public corporations. The Government Procurement Review Board, an independent examining body, considers complaints.42 The procuring entity is expected to follow the recommendations voluntarily. Since the previous Review of Japan, five complains have been filed.43 For local governments covered by the GPA, complaints may be addressed to the contact points set up in each local government.
      1. State trading


            1. State trading activities in Japan involve leaf tobacco, opium, alcohol, rice, wheat and barley, milk products, and raw silk.44 On 31 March 2002, the Salt Industry Centre of Japan ceased its role of state trading enterprise owing to the deregulation of salt business.45 METI's monopoly on the production and distribution of certain industrial alcohol was taken over by the new Energy and Industrial Technology Development Organization (NEDO) on 31 March 2001; NEDO's monopoly is to be granted as a temporary measure for about five years.
      2. Standards, and sanitary and phytosanitary measures

        1. Standards, testing, and conformity assessment


            1. Japan has moved toward increased deregulation and international harmonization of its standards and technical regulations and the adoption of mutual recognition arrangements. The Three‑Year Program for Promoting Regulatory Reform (TPPRR), as revised on 29 March 2002, includes self-certification on telecommunications equipment and relaxation of mandatory technical regulations on electric appliances. Japan's voluntary standards, mandatory technical regulations, and sanitary and phytosanitary (SPS) regulations are summarized in Table III.3.
Voluntary standards

            1. Voluntary standards in Japan comprise Japan Industrial Standards (JIS) and Japan Agricultural Standards (JAS), with 8,932 and 351 standards, respectively, at the end of May 2002. Japan continues to bring its standards into line with their international counterparts. About 90% of JIS were aligned with international standards as at 31 March 2002, compared with about 50% in FY1997. The MAFF is currently in the process of reviewing JAS.

Table III.3

Major standards and technical regulations in Japan, May 2002




Number of standards or regulations

Percentage corresponding to international standardsa

Percentage equivalent to international standards

Percentage acceptance of overseas certificationb

Percentage acceptance of overseas test datab

A. Mandatory technical regulations
















Pharmaceuticals Affairs Law

2,602

..

..

..

..

Food Sanitation Law

505

..

..

..

..

Electrical Appliance and Materials Safety Law

452

..

..

..

..

Consumer Product Safety Law

5

0

0

0

..

High Pressure Gas Safety Law

2

..

..

..

100

Building Standard Lawc

..

..

..

..

..

Safety Regulations for Road Vehicles

277

15

0

18

20

Law concerning the Safety Assurance and Quality Improvement of Feedd

153

n.a.

n.a.

n.a.

100

Law concerning Examination and Regulation of Chemical Substances and Regulation of their Manufacture

5

..

..

..

100

Telecommunications Business Law

..

..

..

..

..

Radio Lawe

..

..

..

..

..

Fertilizer Control Law

141

n.a.

n.a.

n.a.

100

B. Voluntary standards
















Japan Industrial Standards (JIS)

8,932

44

90

..

..

Japan Agricultural Standards (JAS)

351

38f

18f

0.6

n.a.

Total

..

..

..

..

..

.. Not available.

n.a. Not applicable.

a Defined as "primary aspects sharing a common scope".

b Where applicable.

c Building Act Code.

d As of December 2001.

e According to the authorities, the number of mandatory technical regulations is not available because the scope and definition of mandatory technical regulations is ambiguous; the technical conditions of radio stations in Japan generally comply with ITU-R Recommendations and Radio Regulations, and international harmonization is given consideration. Regarding the system for the certification of radio equipment, the Radio Law was amended to establish the system for accepting foreign test results and foreign certification (promulgated in 1998 and went into effect in 1999).

f As of October 1998. Only JAS for processed foods.



Source: Information provided by the Japanese authorities.

            1. As of 31 March 2002, about 13,000 domestic and more than 400 foreign factories, in 22 countries, had received approval to affix JIS marks. The JIS marking system covers about 630 products. The authorities maintain that domestic and foreign factories are treated in the same manner with regard to approval of affixing JIS marks. As of 1 May 2002, six Japanese organizations were accredited as JIS mark certification bodies, and two foreign bodies were accredited, by METI. For the JAS system, a new grading system for foreign products was introduced in June 2000 in accordance with the 1999 amendment to the JAS Law. Foreign producers or manufactures certified by Registered Certification Organizations (RCOs) or Registered Foreign Certification Organizations (RFCOs) can conduct their own grading and append the JAS symbols to their products.46 Only products graded under the JAS system may affix JAS symbols.
          1. Mandatory technical regulations

            1. In 2001, approximately 20% of all JIS were quoted in Japanese Laws and government/ministerial ordinances as mandatory technical regulations. Changes in technical regulations since 2000 include the introduction of mandatory labelling requirements concerning place of origin of eight food items47, and of genetically modified food. Currently, seven inspection bodies, two foreign, are designated by METI for testing based on the standards and certification systems listed in Table III.3 under the jurisdiction of METI.
          2. Bilateral, regional, and multilateral arrangements

            1. A Mutual Recognition Agreement (MRA) between Japan and the European Community was signed on 4 April 2001 and entered into force on 1 January 2002. The agreement, which is Japan's first MRA with its trading partners, applies to products subject to conformity assessment procedures set out in the laws, regulations, and administrative provisions detailed in four sectoral annexes to the agreement; it covers telecommunications terminal equipment and radio equipment, electrical products, good laboratory practice (GLP) for chemicals, and good manufacturing practice (GMP) for medicinal products.

            2. The agreement between Japan and the Republic of Singapore for a New-Age Economic Partnership (JSEPA), signed on 13 January 2000, includes provisions concerning mutual recognition of the results of conformity assessment procedures. It covers telecommunications terminal equipment and radio equipment, and electrical products specified in two sectoral annexes to the agreement. Japan has been holding consultations with the United States in regard to MRAs on medical devices, pharmaceutical products, and building standards.
        1. Sanitary and phytosanitary measures


            1. Since Japan's previous Trade Policy Review, regulations under the Food Sanitation Law have been revised. The revision, which was implemented in April 2001, introduced specifications and standards for genetically modified foods, and prohibited their importation unless approved under the Law.

            2. On 1 April 2001, the Ministry of Health, Labor, and Welfare (MHLW) established a "food with health claims" category, consisting of two subcategories: food for specified health use; and food with nutrient function claims. The former requires individual permission or approval by the MHLW per product to be on the market, while the latter are only required to meet the established standards and labeling rules.48

            3. To avoid the introduction of injurious pests due to insufficient import quarantine inspection, through workloads in excess of inspection capacity, Japan introduced in April 2001 indices of maximum inspection capacity per day.49 The authorities maintain that the indices are intended as a guideline for proper and consistent inspections at each regional Plant Protection Station; they are not intended to be used to limit the number of inspections or to conduct the import inspections too rigidly.

            4. On 1 March 2002, the United States requested consultations with Japan with respect to restrictions on Japan's imports of apples.50 In a previous dispute between Japan and the United States on import quarantine measures on eight products, including apples, the two countries reached agreement on the new quarantine methodologies in August 2001.51

            5. Other changes in Japan's SPS measures since its previous Trade Policy Review include the entry into force of: the Enforcement Ordinance of the Law for Prevention of Infectious Diseases and on Medical Service and the amendment of the Enforcement Ordinance of the Rabies Prevention Law on 1 April 199952; the amendment of the Regulations for the Enforcement of the Domestic Animal Infectious Disease Control Law on December 200053; the amendment of the animal quarantine measures for BSE on 1 January 2001, 1 April 2001, and 11 June 200154; and the amendment of the animal quarantine measures for BSE on 4 October 2001.55
        2. Labelling and packaging requirements


            1. To label food as "organic" accreditation is needed from an authorized accreditation body that the food meets certain JAS requirements. Only accredited food may carry an Organic-JAS Mark label.56 Mandatory labelling regarding genetically modified organisms (GMOs) was applied to soybeans, corn, potatoes, rapeseed, cotton seed, and some processed foods mainly made of soybeans or corn according to the Genetically Modified Food Labelling Standard. The Ministry of Health and Welfare does not permit the importation of GMOs that do not meet its safety requirements. Labelling requirements for rice were also reinforced by the JAS law. The Agricultural Products Inspection Law requires mandatory inspections of rice, wheat, and barley as well as soybean. Apart from mandatory labelling requirements, the JFTC's guideline on misleading representations may lead to the establishment of de facto standards.57



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