USTR Schwab Calls for Reinvigoration of Regulatory Reform in Japan

July 05, 2008



WASHINGTON, DC – U.S. Trade Representative Susan C. Schwab
today announced the results of this year’s work under the U.S.-Japan Regulatory
Reform and Competition Policy Initiative. 
She also urged Japan to devote greater attention to
promoting new structural and regulatory reform measures.

“An aggressive and continuous commitment to regulatory
reform is vital for Japan’s ability to boost economic
growth and open its economy for the benefit of all Japanese citizens,” Ambassador
Schwab said.  “Increasingly,
however, new ideas to remove unnecessary regulation or improve
Japan’s business environment are
being challenged by defenders of the status quo.  It is critical for Japan to redouble its focus and implement new
economic reforms that respond to Prime Minister Fukuda's call at Davos to
further open and liberalize Japan’s

In the Initiative’s Report to the Leaders released
today, the United States
welcomed Japan’s latest initiatives to improve
the environment for foreign direct investment.  If translated into concrete actions,
recent policy pronouncements such as those made by Japan’s Council on Economic and Fiscal Policy
could bring important new progress in the coming months, such as improvements to
the rules relating to new mergers and acquisitions in Japan.  Separately, the report identifies the
following specific new steps that Japan is already

• Liberalizing the sale of insurance products through
banks, thereby enabling insurance providers to improve convenience and choice
for consumers;

• Hiring more staff to review product applications for
new medical devices and pharmaceuticals and giving candidates more opportunities
to discuss their applications with regulators, helping to further reduce delays
in bringing medical products to market in Japan;

• Eliminating overtime service charges and streamlining
customs clearance procedures, thus making the customs declaration process more

• Approving new food additives for use in Japan that are
already accepted throughout the world, facilitating further trade in safe
agricultural products and processed food;

• Affirming that equivalent conditions of competition
should always be ensured in expanding the business scope of Japan’s postal
financial institutions;

• Agreeing to eliminate mobile handset subsidies that
Japan's dominant mobile phone carrier has sought to recover from interconnecting
operators, which should help reduce high mobile termination rates that have
impeded competition;

• Committing to review comprehensively in
FY2008 the administrative examination system of Japan's
competition policy body with a view to ensuring procedural fairness;

• Promoting the adoption of innovative health IT systems
by increasing incentives for the use of picture archiving and communication

The United
States was strongly disappointed by Japan’s failure
to implement a science-based approach consistent with international standards
and requirements to fully resolve several agricultural issues, including
improving its enforcement regime for maximum residue limits.  The same concern extends to
Japan’s beef market. 

“Japan’s unwillingness to fully open its market to U.S.
beef and beef products, despite scientific evidence and international standards
that underscore the safety of U.S. beef, remains a great concern,” Ambassador
Schwab said.  “I look to
Japan to take quick action to fully
resolve this issue.”


This Report to the Leaders is the seventh under the
U.S.-Japan Regulatory Reform and Competition Policy Initiative.  Established in 2001, the Initiative has
been a key forum for the United
States and Japan to promote changes that improve
the business climate and enhance opportunities for trade and commerce between
the two countries.  This year’s
Report is being released on the eve of President Bush’s meeting with Prime
Minister Fukuda on the margins of the G-8 meeting in Hokkaido, Japan. 

A fact sheet on the Initiative along with a summary of
additional steps Japan has taken, as well as a full
copy of the Report to the Leaders, can be found at

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