III. MEASURES TO EXPAND PURCHASES OF
FOREIGN PARTS BY JAPANESE FIRMS IN JAPAN AND
THROUGH THEIR TRANSPLANTS

A. Measures to be Taken by the Government of Japan

1. For the purpose of promoting relationships between Japanese vehicle manufacturers and auto parts suppliers, the Government of Japan will support the Japanese vehicle manufacturers' activities to:
   1. expand research and development ("R&D"), design, engineering and supplier support and outreach capabilities in foreign countries;
   2. increase suppliers' sales opportunities in Japan and other countries where they are located, without adverse discrimination based on capital affiliation; and
   3. continue to open design-in and procurement processes to foreign parts suppliers in Japan and to suppliers in other countries through the use of fair, competitive, transparent and non-discriminatory procedures.
2. To support the importation of foreign auto parts into Japan, the Government of Japan is to:
   1. provide financial support to JETRO for the following activities:
      1. conducting exhibitions of foreign auto parts in Tokyo, Osaka, Nagoya, Sapporo, Fukuoka and other cities to promote transactions between foreign auto parts suppliers and Japanese vehicle manufacturers and to familiarize Japanese consumers with foreign aftermarket products;
      2. facilitating design-in training by Japanese vehicle manufacturers and first-tier auto parts manufacturers for foreign auto parts engineers;
      3. sponsoring auto parts conferences to facilitate and expand relationships between the Japanese automotive industry and foreign auto parts suppliers; and
      4. assisting auto parts selling missions with foreign auto parts suppliers.

      JETRO is expected to implement the activities set out in this subparagraph a. with the cooperation of relevant organizations and foreign firms upon request and as necessary.

   2. provide wide-ranging financial incentives to promote the importation of foreign auto parts, including:
      1. import promotion financing from the Japan Development Bank that is designed to provide low interest loans for activities such as constructing and equipping facilities for inspections and improving product features when a foreign company sets up a sales base in Japan that will facilitate importation and sale of foreign manufactured products, including auto parts, in Japan;
      2. product import financing from the Export-Import Bank of Japan that provides funds to increase imports of manufactured products; and
      3. loans to facilitate import sales from the Small Business Finance Corporation and People's Finance Corporation that will provide the financing needed to increase sales of imported products.

B. Measures to be Taken by the Government of the United States

1. The Government of the United States will provide support to U.S. auto parts suppliers and the appropriate organizations in their activities to promote the sale of U.S. auto parts to Japanese vehicle manufacturers and the sale of U.S. auto parts to Japanese transplant vehicle manufacturers.
2. The Government of the United States will provide support to U.S. auto parts suppliers' activities to promote continued competitiveness of their goods through appropriate measures.
3. The Government of the United States will encourage the U.S. auto parts suppliers to continue to provide competitive products under competitive terms and conditions.