Final Conclusion and Overview of
the Japan-United States Autos and
Auto Parts Consultations

August 24, 1995

I. Details of the Successful Conclusion to the Japan-United States Autos and Auto Parts Consultations

The Japan-United States Autos and Auto Parts Consultations were successfully concluded with: (1) the conclusion of the consultations held under the Japan-United States Framework Talks (Measures by the Government of Japan (GOJ) and the Government of the United States of America (USG) Regarding Autos and Auto Parts); and (2) joint announcements regarding the three categories of consultations held outside of the Framework Talks. As for (1) above, principle agreement was reached as of 28 June and, as a result of the consultations thereafter aiming toward the finalization of draft documents between Japan and the United States, on the morning of 23 August (Eastern standard time), the final documents were signed and exchanged between Ambassador to the United States Takakazu Kuriyama, representing the GOJ, and United States Trade Representative Mickey Kantor and Secretary of Commerce Ronald Brown, representing the USG, thereby bringing these consultations to successful and final conclusion.

II. Details of the Final Documents under the Framework Talks

[Reaffirmation of the basic principles of the Framework Talks, including the principles of most-favored nation treatment and exclusion of numerical targets]

1. Measures to encourage imports and to facilitate market access for foreign vehicles

a) Support from and issuance of notifications by the GOJ related to announcements from relevant business organizations regarding all the dealers' freedom to sell competing motor vehicles

b) Designation of contact persons in the GOJ and USG (both governments are also pleased to note that companies of both countries selected contact persons as well.)

c) Financial support by the GOJ to Japan External Trade Organization (JETRO) for exhibitions of foreign vehicles, and financial incentives and other facilitation measures by the GOJ for import promotion activities

d) Support by the USG for efforts made by U.S. companies to expand exports to Japan and enhance their competitiveness

2. Measures to expand opportunities for purchasing auto parts

a) Support by the GOJ for activities undertaken by Japanese auto manufacturers to promote relations with auto parts suppliers

b) Financial support by the GOJ to JETRO for exhibitions of foreign auto parts, and financial incentives and other facilitation measures by the GOJ for import promotion activities

c) Support by the USG for efforts made by U.S. auto parts suppliers to expand exports to Japan and enhance their competitiveness

3. Measures by the GOJ on auto-related regulations

a) Deregulatory measures regarding disassembling repair requirements (critical parts requirements)

b) Deregulatory measures regarding the certification and designation of repair garages including the establishment of a certification system for specialized service and repair facilities, and measures to increase the number of independent repair garages

c) Deregulatory measures related to modification inspection requirements

d) Implementation of a campaign to provide notifications of regulatory changes and to ensure non-discriminatory treatment of foreign auto parts

e) Measures with a view to promoting further imports of foreign-made replacement parts; including support for creation of an information network on foreign replacement parts, and for the establishment of permanent contact points for auto parts distributors

4. Assessing implementation of measures and objective criteria

a) An assessment will be made on the efforts made by both the GOJ and USG through qualitative and quantitative criteria regarding implementation of these measures and progress achieved thereby. With this in mind, bilateral consultations will be held annually. However, objective criteria do not include numerical targets. (Note: assessments focus on implementation of these measures and progress achieved thereby, and will never be used to verify unilateral estimates and forecasts made by the United States.)

b) Examples of objective criteria -change in the number and value of new foreign vehicles sold -change in the value of imports of foreign auto parts -efforts made by foreign suppliers to increase competitiveness

III. Details of the Successful Conclusion of Consultations Held Outside of the Framework Talks

1. Two joint announcements regarding dealerships

a) First joint announcement: the GOJ and USG are pleased to note that the U.S. auto sector has announced that it will make efforts to expand the presence in the Japanese market of their products, while the Japan Automobile Dealers' Association (JADA) has announced that it will conduct a survey to identify dealers interested in handling foreign motor vehicles.

b) Second joint announcement: The USG is forecasting a certain specific increase in retail outlets of U.S. auto manufacturers. On the other hand, the GOJ clearly expresses that such a forecast goes beyond the scope of government responsibility, that the GOJ has no involvement whatsoever in such a forecast, and thus such a forecast is made only by the USG.

2. Two joint announcements regarding autos and auto parts

a) First joint announcement: The GOJ and USG welcome announcements of voluntary plans by Japanese auto manufacturers targeting the entire world, which consists of efforts to increase overseas production, ensure localized procurement of parts, increase purchases of competitive foreign auto parts, and ensure transparency in procurement procedures; and the both governments are pleased to note that U.S. auto manufacturers have expressed their plans and intent to expand their presence in the Japanese market by offering competitive products and service. At the same time, both governments clearly state that the plans announced by both Japanese and U.S. auto firms are not commitments, and are not subject to any trade remedy laws. Furthermore, the GOJ and USG express that the realization of these plans may be affected by changes in market conditions, and that these measures are outside of the Framework Talks.

b) Second joint announcement: Based on voluntary plans of individual corporations, the United States Trade Representative estimates purchase volume of U.S. parts and production volume of U.S. autos. On the other hand, the GOJ unequivocally states that such a calculation goes beyond the scope of government responsibility, that the GOJ has no involvement whatsoever in such estimates, and thus those estimates are made only by the USG.

3. Joint press statement on competition policy

a) Minister of International Trade and Industry Ryutaro Hashimoto and United States Trade Representative Mickey Kantor shared the view that strong competition policy and enforcement to ensure fair market access are important. Minister Hashimoto confirmed the intention of the GOJ to pursue strengthening of the Japan Fair Trade Commission (FTC), in terms of its organization and staff resources, subject to, as appropriate, the approval of the Japanese Diet.