Standards, Testing, Labeling and Certification

Reference is made to Japanese industry's support for safety and other standards that are said to be unique and to restrict competition. Here it should be stated that Japan's standards are in line with the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) and the Agreement on Technical Barriers to Trade, and are designed so that they do not unnecessarily hamper international trade. Furthermore, these Japanese standards are drafted to harmonize with international standards, when such international standards exist. Thus, it is not correct to say that Japanese standards are unique, or that they restrict competition.

(1) Pharmaceuticals and Medical Devices

Since the beginning of FY1996, the Government of Japan has considered reviewing the food product and pharmaceutical sectors, in accordance with the March 1995 Deregulation Action Program. Another matter being considered is expansion of the use of hard gelatin capsules for nutritional supplements. Regulations with regard to such use do not represent a barrier to U.S. pharmaceutical manufacturers entering the Japanese market.

Price setting for special treatment materials (STM) closely considers factors, including cost price (which, as indicated, includes costs inherent in development) and insurance costs. In addition, comprehensive discussions are held with applicants prior to price setting. The Government of Japan is convinced that STM price-setting in Japan is conducted in an appropriate manner, with the full understanding and cooperation of all concerned.

The Central Social Insurance Medical Council has decided to gradually reduce the "Reasonable Zone" (R-Zone) for pharmaceutical prices. Because there is reason to believe that the same treatment should be accorded STM, and because in many cases STM prices have been much higher than those in foreign countries due to the previous practice of providing reimbursements that are calculated on purchase prices paid by medical institutions, there is a need to ensure reasonable price levels. The Government of Japan therefore believes the "R-Zone" for STM should be reduced, but this is a matter that should be deliberated upon by the Central Social Insurance Medical Council, and does not mean that a decision has been taken in favor of reduction.

(2) Food Additives

With regard to the designation of new food additives and revision of standards for use of food additives, on 22 March 1996, the Government of Japan established guidelines indicating the documentation required for application procedures and required it to be attached to applications. We hope that applications will be made according to these guidelines.

Although provisions found in the WTO-SPS Agreement were taken into consideration when Japan's Food Sanitation Law was revised in 1995 to modify regulations on food additives, WTO-SPS Agreement does not directly specify adoption of a positive list for food additives.

(3) Pesticides Residue

As a short-term goal, the Government of Japan intends to draw up residue standards for at least 200 pesticides by the year 2000. Steps are also being taken to provide the Japanese people with relevant information by, for example, releasing the results of safety assessments which the subcommittee of the Food Sanitation Investigation Council makes for each pesticide.

(4) Fresh Fruits and Vegetables

(The following to be added to comments on fresh agricultural products, which appear in 1.(4) above.) Phytosanitary measures are not taken against dead pests.