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  • Public Release of the “2015 Report on Compliance by Major Trading Partners with Trade Agreements – WTO, FTA/EPA, and IIA” and “METI Priorities Based on the Report”

Public Release of the “2015 Report on Compliance by Major Trading Partners with Trade Agreements – WTO, FTA/EPA, and IIA” and “METI Priorities Based on the Report”

Today, METI published the “METI Priorities” based on the “2015 Report on Compliance by Major Trading Partners with Trade Agreements” adopted by the Industrial Structure Council’s Subcommittee on Unfair Trade Policies and Measures.

1. Background

(1) What is the “Report on Compliance by Major Trading Partners with Trade Agreements”?

Since 1992, the report has been annually published in order to identify trade policies/measures of major trading partners that may not be consistent with international rules and regulations, such as those stipulated in WTO agreements, and to urge those partners to improve such trade policies/measures.

The 2015 edition is the 24th in this series, and was approved at the Subcommittee on Unfair Trade Policies and Measures under the Trade Policy Committee of the Industrial Structure Council (Chair: Shujiro Urata, Professor of the Graduate School of Asia-Pacific Studies, Waseda University).

(2) What are the “METI Priorities Based on the Report”?

METI has released its list of priority issues and related action plans in the form of a report called the “METI Priorities Based on the Report” in conjunction with the Subcommittee’s publication of the Report.

2.Overview of the 2015 Report

(1) Reports on 132 policies/measures (18 countries/territories are covered)

(2) The 2015 Report newly addressed the following 9 policies/measures.

(The 2014 Report: 8 newly addressed policies/measures).
China AD Measures on Japanese Optical Fiber Preforms
Banking IT Equipment Security Regulation
Administrative Measures on Cosmetic Labelling
Regulations on Chemicals
Indonesia Regulations on Toy Safety that Function as Entry Barriers for Foreign Companies
Philippines Export Regulations on Unprocessed Ore
Israel Regulations on Tires
Ecuador Regulations on Total Automobile Import
Others (China, Malaysia, etc.) Inconsistency with ITA Concerning Flat Panel Displays

(3) As features of the 2015 Report, the following new columns were published:

  • Recent Issues Concerning Customs Valuation
  • China Rare Earths case and WTO Rules
  • Possibility of Considering Policy Objectives under Agreement on Subsidies
  • Excess Production Capacity in Steel Industry, etc.

3.METI Priorities Based on the 2015 Report

In this fiscal year, METI will place priority on addressing the following 14 policies/measures based on the 2015 Report.

(1) Issues to be resolved through bilateral/multilateral consultations with possible use of the WTO Dispute Settlement Mechanism

China Correction of inappropriate regulation/implementation of anti-dumping (AD) investigations
Correction of Banking IT Equipment Security Regulation (newly added)
Indonesia Elimination of export restrictions on mineral resources (i.e. nickel, etc.) and related local content requirements
Ensuring the enforcement of the New Industries Act, the New Trade Act, and other related regulations (including franchise and retail regulations that provide local content requirements) in conformity with WTO agreements
United States Improvement of sunset review practice and early termination of inappropriate long-standing AD duty orders on Japanese products
Russia Violation of Tariff Concessions mainly caused by mixed duties (combination of ad valorem duty and specific duty)
Brazil Correction of discriminatory systems/implementation of the Industrial Product Tax (IPI) and other tax measures

(2)  Issues Already Referred to the WTO Dispute Settlement Mechanism

China Elimination of AD duty measures on high-performance stainless steel seamless tubes originated in Japan
Ukraine Revocation of safeguard measures against automobiles

(3)  Issues on which Japan Urges Prompt Implementation of the WTO Recommendations

China Elimination of export restrictions on raw materials (i.e. rare earths, etc.)
United States Confirming the abolition of zeroing
Halt of the distribution of duty revenues collected through anti-dumping (AD) and countervailing duty measures on U.S. companies based upon the Byrd Amendment
Prompt implementation of the WTO recommendations on AD duty measures on hot-rolled steel products from Japan
Argentina Elimination of import restrictions on a wide range of items

Updates from the 2014 Priorities

  • With regard to the issue “Elimination of Export Restrictions on Raw Materials (i.e. Rare Earths etc.)” for China, which was listed as one of the “Issues Already Referred to the WTO Dispute Settlement Mechanism” last year, the WTO Appellate Body determined on August 7, 2014 that the restrictions were inconsistent with WTO agreements. Accordingly, the export quotas and the export duties were eliminated on January 1 and May 1, 2015, respectively. In the future, Japan will pay close attention to China’s policy in the area of rare earths, and if necessary, will ensure that China’s policies are consistent with WTO agreements.
  • With regard to the issue “Elimination of Import Restrictions on a Wide-Range of Items” for Argentina, which was listed as one of the “Issues Already Referred to the WTO Dispute Settlement Mechanism” last year, the WTO Appellate Body determined on January 15, 2015 that the restrictions were inconsistent with WTO agreements, and in the future, Japan will urge, together with US and EU, prompt implementation of the WTO recommendation.
  • With regard to the issue “Abolition of Local Content Requirements in Ontario’s Feed-in Tariff Program for Renewable Energy” for Canada, which was listed as one of the “Issues on which Japan Urges Prompt Implementation of the WTO Recommendations” last year, the revised Electricity Act was enacted in Ontario on July 24, 2014, and the Minister of Energy issued a directive to prohibit the local content requirements for new contracts. Thus, Canada has already fundamentally implemented the WTO recommendation.

(Reference) Process to Resolve Problems Caused by Trade Measures

Reference

Release date

May 27, 2015

Division in Charge

  • Office for WTO Compliance and Dispute Settlement, Multilateral Trade System Department, Trade Policy Bureau
  • International Legal Affairs Office, Trade Policy Bureau
Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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