Import Policies
(1) Tariffs
Before the Uruguay Round agreement, Japan made substantial cut in tariffs on corn grits intended for use in the manufacture of corn flakes in accordance with the result of the Japan-United States Trade Talks on Starches and other Agricultural Products. In addition, as a result of the Uruguay Round, Japan is in the process of gradually reducing its tariffs on corn grits used for other purposes, such as breakfast cereals; this process will be completed by the year 2000.
(2) General Food Products
Reference is made to Japan agreeing to convert all import bans and quotas to tariffs (with a delayed conversion for rice). Here it should be noted that the treatment of special measures for rice after the year 2000 will be discussed during negotiations to be held in the year 2000. Thus, any forecast of rice tariffication is not based on fact.
Reference is also made to safeguard measures for beef and pork. There is a risk that these measures could be interpreted as WTO Agreement safeguard measures, or as Agreement on Agriculture special safeguards. However, a more precise understanding would be that they are emergency measures restoring tariff rates, which had been lowered by Japan voluntarily, to a level that Japan agreed upon as a result of the Uruguay Round, when Japanese import of such products concerned increased radically.
(3) Wood Products
Japan has been faithfully implementing the Wood Products Measures. Furthermore, although the value of imports of wood products from the United States to Japan was approximately US$3.6 billion in 1989 prior to the Japan-U.S. Trade Talks on Wood Products, it has increased approximately 15% to US$4.2 billion in 1995. (In the same period, U.S. exports of wood products to the rest of the world increased from US$11.1 billion to US$15.7 billion.) Japan is also reliant on overseas markets to supply 80% of its lumber. Thus, the Japanese market is quite sufficiently open, and it is our basic understanding that there are no special problems with regard to trade in wood products.
Therefore, the watch-listing of Japan's wood product industry under Super 301 in September of last year lacks justification, and the Government of Japan is having extreme difficulty in understanding why it was continued. Japan strongly requests the removal of wood products from the watch-list.
Regarding the various issues related to wood products trade, there have been constructive discussions in various fora, such as the Japan-U.S. Wood Products Subcommittee, the JAS Technical Committee, and the Building Experts Committee. The United States also agrees that these discussions have been fruitful. It is important to continue discussions at the official level.
On the issue of lumber export restrictions by the United States, the restrictions on lumber culled from federal- and state-owned forests are in place ostensibly to protect the environment. However, there are no restrictions on the domestic supply of lumber. Hence, discriminatory measures which regulate lumber exports while not regulating the lumber supplied to domestic markets should be abolished.
(4) Fresh Agricultural Products
Each country is permitted to implement plant quarantine operations which are conducted based on scientific and technical standards to avoid invasion of pest and disease from other countries. Such implementation is also in accordance with the International Plant Protection Convention. Therefore, these quarantine regulations are not unfair restrictions. Whether or not a particular imported item is cleared (from a plant quarantine perspective) is a determination which should be left to specialists basing their decisions on scientific evidence. Regarding operations of plant quarantine, the United States also has measures which prohibit the importing of many fresh agricultural products. This is especially true for the importing of Japanese Unshu oranges, the import of which has been prohibited in Florida and four other states. Since the reason for the original import prohibition has disappeared, the United States have requested Japan to set new quarantine measures to be put in place. This sort of reaction is regrettable, and import prohibitions should be removed at the earliest date.
Japan has placed prohibitions on importation of various fruit varieties, due to pest-killing processes that may work with one fruit variety, but are not necessarily proven effective on others.
In coordination with the United States, Japanese inspectors have been sent to the U.S. in sufficient numbers to confirm the disinfection of agricultural products at sites of origin.
Regarding quarantine measures on pests and diseases existing in Japan, a revised version of the Plant Quarantine Law, which defines variety of pests and diseases to be subject to the quarantine, has been submitted to the most recent Session of the Diet.
(5) Feedgrains
Since 1992, as a result of Japan-U.S. negotiations, corn used to produce starch for "new uses" has been regulated under a tariff quota, instead of under an import quota. Furthermore, the "new uses" framework for 1995 has been established based on the results of Japan-U.S. negotiations. (The actual allotment for the "new uses" framework was set at 90% of what it had been for the previous agreement. This was done because Japanese importers' requested amount, which was equal to the actual allotment, was less than the level negotiated by Japan and the U.S.)
Most of Japan's domestic demand for feed corn has been met by importing corn from the U.S. and other countries. Measures were instituted, not to raise feed corn prices, as alleged by the NTE, but only as a minimum necessary requirement to prevent the diversion of feed corn products into starch production. As for mixed feed, blending requirements were relaxed from April 1996, as a part of deregulation measures. It was also pointed out that the complexity of procedures related to tariff-rate quotas (TRQ) was hindering the spread of TRQ. Since this system was only recently established, there have been numerous livestock farmers interested in it; however, the low number of actual users indicates a much more cautious response by farmers.
(6) Distilled Spirits
Japan's taxation on distilled liquor does not have the aim of affording protection to domestic production of shochu. The aim of tax distinction among categories of distilled liquors is to make the taxation more neutral and equitable by setting specific tax rates with reference to the average net-of-tax price of each category. The taxation does not have the effect of affording protection to domestic production of shochu, either. First, the level of tax burden (tax/price ratio) on domestic shochu is roughly equal to that on imported distilled liquors of other categories such as whisky. Second, directly competitive or substitutable relationship does not exist between domestic shochu and imported distilled liquors of other categories. Third, Shochu is produced outside Japan in large quantities and distilled liquors of other categories are produced in Japan in large quantities. Japan's taxation on distilled liquor has neither the aim nor effect of affording protection to domestic production and thus is consistent with relevant provisions of GATT 1994.
(7) Racehorses
It has been suggested that the Japan Racing Association (JRA) is authorized by the Government to restrict the participation of foreign-bred horses in Japanese races. However, horse racing in Japan is conducted as a national pastime (entertainment) by the JRA and other horse racing sponsors. Therefore, programming and other operations are decided on by sponsors themselves. In other words, the Government cannot regulate program contents by guiding their formation or approving them.
The Government has urged the JRA to steadily carry out the Plan for Opening Races to Foreign Horses by FY1999, and to conduct prompt discussions on registration of horses owned by foreign residents. At the present time, the JRA is steadily carrying out the aforementioned Plan, and has established an investigative committee on the horse-owners registry which is researching the current state of affairs overseas.
(8) Import Clearance Procedures
(a) The United States is claiming that importers who have taken steps for pre-arrival processing have not gained any benefits in faster processing or clearance. However, according to a study conducted between 1991 and 1993, importers who take the pre-arrival processing method manage to clear their cargo extremely quickly, requiring less than half the time for import clearance procedures and between arrival of cargo and clearance.
Therefore, the indication that there are no benefits for importers who submit their data early is contrary to the facts.
Furthermore, for air cargo which has had its arrival confirmed and has been processed as requiring no physical examination after the submission of data, the Immediate Release System through the Nippon Automated Cargo Clearing System (NACCS) has been introduced since April 1996. Clearance time will be further reduced for those that use this system.
(b) The NTE is written as if U.S. Customs fully utilizes pre-arrival processing while Japan does not. This is contrary to the truth, as the Government of Japan has conducted promotional measures, such as explaining the pre-arrival process at meetings and drafting PR pamphlets. Furthermore, the NTE indicates that U.S. Customs notifies the importer prior to the arrival of the cargo if there is no need to inspect it, and further points out that Japan does not have such a system. However, the Government of Japan not only notifies the importer if there is no need for inspection, but also conducts pre-arrival document examination on papers which require it, and notifies the importer when the examination is completed. This is more than is carried out by the United States.
(c) The United States indicates in the NTE that Japan had "promised" to shorten the import processing time to under 24 hours. However, in the Final Conference Report of the Japan-U.S. Structural Impediments Initiative which took place in June 1990, the aim was set to shorten the time required for the process from import submission through import authorization (customs clearance time) to under 24 hours. Therefore, if the United States believes that the time necessary for the entire import process (from the arrival of the cargo through import authorization) was promised to be under 24 hours, then its belief is contrary to the facts. The aforementioned aims were achieved in 1992 (0.8 days for sea cargo and 1.6 hours for air cargo), and the clearance time for sea cargo was 0.5 days in 1993.
(d) Furthermore, the United States indicates that the overall import processing time for air cargo in Japan takes 1.7 days; this number includes time other than that taken by the Government process, such as the physical inspection of the cargo and the payment of tariffs. Therefore, it is not appropriate to compare the time with a number such as that mentioned in the NTE ("U.S. Customs clears over 90% of air cargo within 30 minutes of arrival") because the basis of calculation differs.
(e) The United States has indicated that there has been no progress in automating the work of Japanese agencies other than customs. However, in the Deregulation Action Program adopted in March 1995 (which addresses programs until FY1997), the automated systems for animal quarantine (Ministry of Agriculture, Forestry and Fisheries) and food sanitation (Ministry of Health and Welfare -- U.S. Customs does not conduct confirmation) are to be interfaced with the NACCS, with the process currently ongoing. Through these measures, approximately 83% of cargo that requires processing other than customs clearance will be covered.
Back to Index