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Statement by Ambassador Michael Punke at the WTO Trade Policy Review of Japan

WTO Trade Policy Review of Japan - Statement by the U.S. Ambassador to the WTO Michael Punke

Geneva, Switzerland
March 9, 2015

*As Delivered*

"Thank you, Chair.  On behalf of the United States, I am honored to participate in Japan’s twelfth Trade Policy Review.  I would like to welcome the Japanese delegation, led by Deputy Director-General, Mr. Tomochika Uyama.  And of course, the United States is thankful on a daily basis for the contributions in Geneva of Ambassador Otabe and his talented team. Finally, we appreciate the remarks by our discussant, Ambassador Thuillier.

"Japan is a vital strategic and economic partner to the United States, and a key figure in the global trading system.  We welcome Japan’s commitment to pursuing ambitious, high standard international trade rules, as exemplified more prominently in its participation in Trans-Pacific Partnership talks.  In addition, Japan’s strong role as a member of APEC further supports our mutual interest in promoting a broad trade liberalization agenda.

"Within the WTO, the United States highly values its close working relationship with the Government of Japan and Japan’s long-time support for the rules-based multilateral trading system embodied by the WTO.  We also note Japan’s continued contributions to working through WTO institutions to ensure that unilateral introduction of new protectionist measures does not undermine the important progress the WTO has made in opening markets around the world.     

"We also appreciate the strong working relationship with our teams on the ITA expansion negotiations, and share the view that the negotiations should be finalized as soon as possible, so that we can move on to the important work of implementing an agreement and gaining its benefits.  We also note Japan’s important leadership role in the TiSA negotiations.

"In the two years since the last Trade Policy Review, Japan has continued to bring new Economic Partnership Agreements into force, most recently with Australia.  However, we note the low level of ambition reflected in the agricultural component of its new agreement with Australia.  The same could also be said of Japan’s most recent EPAs with Peru and India.  As a global leader with important responsibilities within the world trading system, we look to Japan to demonstrate a higher level of ambition in future free trade agreements, particularly the Trans-Pacific Partnership.

"The United States greatly appreciates Japan’s efforts to undertake structural reforms that will boost domestic growth to the benefit of Japan and the entire global trading community.  In particular, the United States commends Prime Minister Abe’s efforts to reform the Japanese agriculture sector.  As he succinctly explained, 'Sweeping reforms of agriculture policy can wait no longer.'  Indeed, the reforms of agriculture cooperatives that he has proposed are historic—if successfully implemented, they will be the first in six decades.  These long-awaited domestic reforms coupled with agriculture market liberalization steps taken through the Trans-Pacific Partnership create the prospect of a new era for Japanese agriculture. 

"Meaningful structural reforms in Japan will lead to increased productivity, provide a renewed engine for economic growth, and help ameliorate global trade imbalances.  The Prime Minister has highlighted a number of other areas for reform, including ones relating to corporate governance, medical care, taxes, government reorganization, and labor markets.  With regard to regulatory reforms, the Prime Minister has recognized that bold regulatory reform will boost Japan’s productivity and raise Japan’s global competitiveness.

"We applaud the Prime Minister’s vision and commitment, and support his efforts to promote reform and mutually beneficial economic expansion.  In this context, Japan’s participation in the Trans-Pacific Partnership negotiations could substantially contribute to Japan’s objectives for economic reform and growth, including the success of the Prime Minister’s 'third arrow,' the objective of which is to advance structural reform of the Japanese economy.  The Prime Minster himself recently noted the TPP’s importance, explaining that completion of trade and investment deals such as the TPP 'are among the most urgent tasks we face.'  And in 2013, he observed that the TPP is a framework that promises 'prosperity in the future' in the Asia-Pacific.

"With a renewed electoral mandate, we remain hopeful that the Abe administration will continue to undertake ambitious domestic regulatory reforms and other structural measures to stimulate competition and new economic opportunities.  Renewable energy is also an area where we hope to see increased market access.  Further, although Japan’s industrial tariffs are generally low, significant non-tariff barriers remain.  As a result, the United States continues to look to Japan to take new, bold steps to increase transparency, reduce unnecessary regulation, and remove other non-tariff barriers to trade. 

"From this perspective, one key priority that the United States continues to urge Japan to address is to ensure a level playing field and equivalent conditions of competition between Japan Post and the private sector in the insurance, banking, and express delivery sectors.  We will watch closely the privatization of Japan Post as it unfolds later this year.  Another priority area is for Japan to ensure that its SPS measures are based on science and consistent with international standards.  The United States also urges Japan, among other steps, to remove non-tariff barriers that impede foreign automotive manufacturers’ ability to compete on a level playing field with their Japanese competitors; take actions to ensure Japan’s information technologies and communications market is open and promotes fair competition; ensure transparent and fair opportunities for foreign companies to compete for government procurement contracts; and ensure equivalent access for foreign companies to qualify for government-funded fiscal and incentive programs offered in specific sectors.  

"The United States appreciates Japan’s support for expanding global trade and its commitment to the multilateral trading system.  The United States looks forward to continued close cooperation with the Government of Japan in working towards a more open trading system.  Thank you."