WASHINGTON, D.C. – Deputy United States Trade Representative Josette Sheeran
Shiner presented the Japanese Government today with extensive reform
recommendations designed to help sustain Japan’s recent return to growth and
open markets for U.S. companies. These recommendations build on significant
progress achieved in recent years to reduce the myriad of regulations in Japan,
including measures that have substantially lowered customs processing fees at
Japan’s international airports for express delivery services, reduced rates for
calling mobile phones, and increased consumer choice in innovative
"An open, competitive market is critical for our trade relationship with
Japan, and regulatory reform is key to achieving that. Our continuing work with
Japan to clear away the thicket of regulations that has clogged commerce and
hindered growth in that country has worked to create a significantly improved
business environment and expanded market access opportunities," Shiner said.
"Successful regulatory and structural reform cannot be achieved with quick
fixes, but instead requires a relentless commitment to change and the
determination to challenge the status quo. We particularly welcomed Prime
Minister Koizumi’s October 12 statement to the Diet that ‘there can be no
rebirth and development for Japan without structural reforms,’" Shiner said.
Submitted under the U.S.-Japan Regulatory Reform and Competition Policy
Initiative (Regulatory Reform Initiative), the recommendations presented to the
Japanese Government today cover key areas such as information technologies,
telecommunications, medical devices and pharmaceuticals, energy, and competition
In this year’s recommendations, the United States is placing a special focus
on Japan’s plans to privatize key government entities. In particular, Prime
Minister Koizumi is carrying out a bold plan to privatize Japan’s postal
businesses, a process that has important implications for fair competition in
the banking, insurance, and express delivery sectors. "Japan Post privatization
should be market-oriented and carried out in a transparent way that establishes
a level playing field for all participants in the market," said Shiner.
The United States also applauds the work of the Council for the Promotion of
Regulatory Reform (which has played a central role in advancing Prime Minister
Koizumi’s ambitious economic reform agenda) and commends the progress Japan has
made to establish deregulation zones around the country to stimulate local
growth. In addition, the 64-page document includes key recommendations in the
· Information Technologies: Strengthen protection of intellectual property
rights by extending the term of protection for sound recordings and other works,
and by implementing stronger measures to stop online piracy of digital content;
remove regulatory barriers to e-commerce and enhance the security of online
transactions; reform e-government procurement to improve market access.
· Telecom: Reform Japan’s interconnection regime for both fixed and mobile
services to bring interconnection rates to competitive levels; make Japan’s
spectrum management and wireless licensing regime more flexible, transparent,
and reliant on objective regulatory criteria.
· Medical Devices and Pharmaceuticals: Speed the approval processes for
medical devices and pharmaceuticals to provide patients with timely access to
advanced products; stimulate innovation through pricing reforms.
· Energy: Increase the competitiveness of Japan’s gas and electricity markets
and help reduce energy costs by providing greater opportunities for third-party
access to transmission grids, pipelines, and gas terminal facilities.
· Competition Policy: Bolster antitrust enforcement by increasing
administrative fines on Antimonopoly Act violators and by introducing a
corporate leniency policy for whistleblowers; strengthen penalties against
government officials who instigate bid rigging.
· Transparency and Other Government Practices: Improve Japan’s public comment
process to give the private sector more meaningful opportunities to input into
the development of regulations; remove technical barriers that impede the import
of agricultural goods.
· Commercial Law Reform: Permit modern merger techniques (i.e. triangular and
cash mergers), and facilitate their use by affording them appropriate tax
· Legal System Reform: Facilitate resolution of legal disputes in Japan by
promoting effective Alternative Dispute Resolution (ADR) processes that would
include allowing non-lawyers to act as neutrals in ADR proceedings.
· Financial Services: Enhance Japan’s no-action letter system; allow foreign
banks to engage in trust and banking businesses on equal footing with domestic
banks; permit lenders to satisfy disclosure requirements under Japan’s Money
Lending Business Law through e-notification.
· Distribution: Lower the cost of doing business in Japan by reducing landing
and user fees at Japan’s major international airports, which are among the
highest in the world.
Deputy USTR Shiner presented the recommendations to Deputy Foreign Minister
Ichiro Fujisaki in Washington, D.C. today. Each year, the two Governments
exchange reform recommendations in the fall under the Regulatory Reform
Initiative, which was launched by President Bush and Prime Minister Koizumi in
2001 as a key component of the U.S.-Japan Economic Partnership for Growth. The
recommendations serve as a basis for an annual report to the two leaders,
specifying reform measures to be taken by each Government. USTR is the lead
agency for the U.S. Government for this Initiative while the Ministry of Foreign
Affairs takes the lead for the Japanese Government.
Building on progress achieved over the past three years, the Working Groups
will begin meeting this fall to consider this year’s reform proposals. These
initial meetings will be followed by a deputies-level meeting early next