Other Barriers
(1) Aerospace
The reason why Japan becomes major supplier of parts and components to foreign aircraft assemblers is steady accumulation of technology through international joint development with foreign aircraft makers. Thus, the significant transfer of U.S. aerospace technology to Japan is not valid explanation.
In the case that the Japan Defense Agency procured aircraft by licensing production, the agency is to implement with permission of the U.S. Government.
(2) Autos and Auto Parts
The Government of Japan is actually considering earnestly the conclusion of the Global Agreement on harmonization of vehicle regulations.
As for a vehicle registration system, the Government of Japan is considering a possibility to introduce "one stop service" and will have a conclusion of this consideration within this year.
(3) Civil Aviation
- As for 1998 MOU, some clarification should be added to relevant part of NET as follows; one of the major objectives of 1998 MOU is to ensure equalized opportunities for airlines of two countries. Moreover, the MOU provides formulae for Fifth Freedom operations of passenger services by incumbent combination airlines. In addition, if no agreement is reached as a result of a next round of negotiation which is to start no later than January 1, 2001, so called safety net clause will become effective.
- With regard to the comments on third-country codeshare agreement, in fact, we have received no application for third-country code-sharing from any airline to date.
(4) Direct Marketing
The second paragraph of this section seems to refer to what came to pass between Japan Consumer Information Center (JCIC) and a certain U.S. company operating in Japan, but facts of the matter do not support the description provided. JCIC issued a request for operational reform to the company in May 1998, on the basis of complaints and inquiries it and local consumer information centers received from around Japan and of detailed survey done on the issue including hearing sessions. In response to this, the company announced a set of improvement measures in October 1998. JCIC is closely following the effects of the measures.
(5)Electrical Utilities
The issue raised in the report concerns procurement activities on the part of private sector corporation and is therefore outside of the scope of government involvement. In procuring materials, power utility companies adopt in principle a process of competitive estimate submission by several companies and maintain open access to foreign companies.
(6) Flat Glass
Japan has steadily been implementing the 1995 Measures Regarding Flat Glass. Although need of U.S. suppliers' efforts is referred to in the Measures, efforts of U.S. suppliers seem insufficient, taking it into account that number of sales personnel and the product circulation/processing facilities of the U.S. suppliers is still stagnating at low level. And the foreign product is losing its price advantage, because of weakening of Japan's flat glass market. (The market price of flat glass in Japan is now approximately one third of that in the U.S. and major European countries.)
No doubt has been raised to date that Japan's flat glass businesses are conducting actions to prevent new suppliers' market access, which violates the Anti-Monopoly Law.
(7)Paper and Paper Products
The report refers to "weak enforcement of Japan's Antimonopoly Law" and "existence of exclusionary business practices". However, the Government of Japan finds no problem in Japanese paper market and there has been no indication of specific concerns from US. Therefore, involvement of the government is unnecessary and inappropriate. We should leave it to market mechanism.
(8) Consumer Photographic Film and Paper
Regarding the problem disputed in the WTO Panel on access to film market in Japan, it was confirmed through dispute settlement procedures that our measures have no problem under GATT. Review by "the monitoring and enforcement committee" is one-sided and conducted just as domestic measures by the U.S.. This issue has been settled in the WTO.
(9) Sea Transport and Freight
The report's description concerning the prior consultation system contains fundamental misunderstandings. The interim report in December 1998 notes that the deregulation measures should be aimed to be implemented by year 2000 at major 12 ports which deal with most of Japanese sea cargo. The comment submitted by the U.S. Government will be studied, and final report will be issued by June 1999. Then, the current law will be revised as necessary.
The Government of Japan regards the sanction imposed by the Federal Maritime Commission on three Japanese shipping carriers as an act of violation of the Treaty of Friendship, Commerce and Navigation between Japan and the United States and urges the FMC for the complete withdrawal of the sanction.
(10) Motorcycles
In a present traffic condition on express ways in Japan that a proportion of death casualties among motorcycle accidents is much higher than a proportion of other types of motor vehicle accidents, cautious consideration is required to lift a ban of tandem riding on express ways. As for the result of research provided by the Embassy of the United States in Japan, the Government of Japan sent a written inquiry and requested a explanation to some statistical data provided whose meaning is unclear and which have ambiguous evidence. The Government of Japan is conducting a research and considering whether a speed limit for motorcycle can be set at 100 Km/h on express ways.
(11) Steel
Much of growth in Japan's export to the US last year resulted from Japanese mill's response to demand/supply situation in the U.S. market. Unlike the United States, given the fact that the Japan has the ability for domestic production enough to fulfill the internal demand, the steel import in Japan has already reached considerable level. The Government of Japan does not recognize that steel mills in Japan have conducted anti-competitive practice or have entered into any such arrangement with foreign counterparts. Japanese steel industries also denied the U.S. mills' allegation. It is inappropriate for the NTE to take up only the U.S. mills argument without any concrete findings.
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