Trade barriers

Government authorities

What government office handles complaints from domestic exporters against foreign trade barriers at the WTO or under other agreements?

The government offices that handle complaints from domestic exporters against foreign trade barriers at the WTO or under other agreements are METI, the MoF and other ministries responsible for the specific industry in Japan.

In particular, METI publishes a ‘Report on Compliance by Major Trading Partners with Trade Agreements - WTO, FTA/EPA and IIA’ and ‘METI Priorities Based on the Report’, for the purpose of improving compliance among major trading partners whose trade policies and trade measures might not be consistent with the international rules of the WTO etc. The Multilateral Trade System Department and Office for WTO Compliance and Dispute Settlement, Trade Policy Bureau within METI has a webpage dedicated to dealing with enquiries regarding trade policies and measures of foreign countries that are faced by companies and business operators. This office will consider whether the foreign government’s measures are consistent with WTO and other international rules and provide advice, including, in some circumstances, assisting with the launch of WTO dispute settlement procedures.

Complaint filing procedure

What is the procedure for filing a complaint against a foreign trade barrier?

The Japanese government takes the approach of using the WTO and other international trade rules to settle disputes regarding international economic issues. When a company, export cooperative or other interested party is faced with a foreign trade barrier and brings the matter to the attention of the ministry responsible for that particular industry, the ministry will interview the interested parties to ascertain the facts. If necessary, the ministry will collaborate with METI and other relevant ministries to handle the matter consistently from the Japanese government’s perspective, which can include requesting discussions with the relevant foreign government, and failing a satisfactory outcome through such negotiations, filing a complaint through dispute resolution procedures under the WTO or the relevant EPA.

Grounds for investigation

What will the authority consider when deciding whether to begin an investigation?

When a company, export cooperative or other interested party is faced with a foreign trade barrier and brings the matter to the attention of METI, the MoF and other Japanese ministries responsible, the Japanese government will look at the evidence provided and decide whether to begin an investigation based on whether the foreign government’s actions are in violation of WTO or other international rules.

Measures against foreign trade barriers

What measures outside the WTO may the authority unilaterally take against a foreign trade barrier? Are any such measures currently in force?

Japan also uses international trade rules outside the WTO to resolve disputes relating to international economic matters.

If the relevant government authority determines that there is a foreign trade barrier that is against an international trade rule, the Japanese government will conduct bilateral negotiations with the other country and take other appropriate measures, such as investor-state arbitration (where a bilateral investment treaty or BIT exists) and other EPA or BIT dispute settlement processes.

The 2018 edition of the Government White Paper on Unfair Trade noted that, in recent years, due to market distortionary measures by some emerging-market countries, there have been growing concerns that the competitive basis or function of the markets underlying the multilateral free trade system may be being distorted, and there is also a warning that in some developed countries there is a swing back to the ‘result-oriented’ concept, which evaluates the trade policies and measures of other countries as unfair based only on the disadvantageous result of trade with specific partners.

In contrast, METI is promoting comprehensive efforts to secure a level playing field through the Trilateral Trade Ministers’ Meeting among Japan, the US and the EU, and so on, and for reciprocal countermeasures that do not conform to the WTO rules that will not benefit any country, the ministry is responding to the structural issues faced by the multilateral free trade system, such as by improving the WTO dispute resolution procedures and working on the importance of maintaining and strengthening it in various places; in addition, for individual projects the ministry has indicated that it will actively seek solutions while continuing to make use of bilateral and multilateral consultations and WTO dispute resolution procedures etc.

In December 2017, 70 WTO member countries and regions announced the ‘Joint Ministerial Statement on Investment Facilitation for Development’, and called for the start of discussions with the aim of developing a multilateral and regional framework on investment facilitation. However, since there is a history of the launch of negotiations being postponed, negotiations on investment rules in the WTO have never been agreed; also in these discussions, given that market access, investment protection and Investor State Dispute Settlements (ISDSs) are excluded from the debate, and that negotiations in the WTO cannot proceed without consensus among all member states and regions, methods outside the WTO, such as bilateral agreements and multilateral discussions, are even now still considered more effective.

Private-sector support

What support does the government expect from the private sector to bring a WTO case?

If an industry wishes to bring a WTO case, it must discuss the case with the relevant government authority in detail. As a part of this consultation process, the industry would be required, at its own cost, to collect data, conduct research and provide necessary information in order to enable the authority to determine whether or not to begin an investigation and bring a WTO case.

Notable non-tariff barriers

What notable trade barriers other than retaliatory measures does your country impose on imports?

Under the Customs Act, any person wishing to import goods must declare them to Customs, obtain an import permit and make payment of customs duty and excise taxes after necessary examination of goods (Import Declaration).

The Customs Act prohibits the importation of the following goods:

  • heroin, cocaine, MDMA, opium, cannabis, stimulants, psychotropic substances and other narcotic drugs (excluding those designated by Ministry of Health, Labour and Welfare Ordinance);
  • firearms (pistols etc), ammunition (bullets) thereof and pistol parts;
  • explosives (dynamite, gunpowder etc);
  • precursor materials for chemical weapons;
  • germs that are likely to be used for bio-terrorism;
  • counterfeit, altered or imitation coins, paper money, banknotes or securities, and forged credit cards;
  • books, drawings, carvings and any other goods that may harm public safety or morals (obscene or immoral materials, eg, pornography);
  • child pornography;
  • goods that infringe upon intellectual property rights; and
  • goods that constitute unfair competition under the Unfair Competition Prevention Law.

The Foreign Exchange and Foreign Trade Act and other laws and regulations control the import of cargoes that have an adverse impact on the economy, industries, sanitation, health, public safety or public morals etc in Japan by requiring permits, approvals etc or inspections by administrative agencies or satisfaction of other conditions on the import of such cargoes. For example, imported plants are required to go through plant quarantine, and the importation of certain plants from specific areas, harmful plants and animals such as insects, mites or bacteria, and soil and plants to which soil is attached is banned unless permission is obtained for use in testing and research etc (Plant Protection Act). Also, in order to prevent the invasion of infectious animal diseases from overseas, imports of cloven-hoofed animals such as cattle, pigs and sheep, equine animals and fowl are banned unless a certificate of import quarantine is obtained upon inspection by the Animal Quarantine Service of the Ministry of Agriculture, Forestry and Fisheries or a permit is obtained from the Minister of Agriculture, Forestry and Fisheries (Act on Domestic Animal Infectious Diseases Control).

The importing of endangered animals and plants is subject to restrictions under the Convention of International Trade in Endangered Species of Wild Fauna and Flora (Convention) and it is necessary to obtain an export permit issued by the government authority as stipulated by the Convention, as well as an import licence issued by METI.