Customs administration is a third area of concern. There is no workable appeals procedure in practice in Japan. It would seem advisable to establish a Court of Customs Appeals in Japan such as exists in the United States. This court or similar body could be authorized to handle matters of customs classification as well as customs valuation (the Customs Valuation Code requires such a tribunal). Finally, efforts should also be exerted to minimize the number of ambiguities and "miscellaneous" listings in the Tariff Tables since miscellaneous categories are notorious for creating misunderstandings. RECOMMENDATIONS As indicated above, the GPC is aware that the Japanese and U.S. governments issued a Joint Statement on improving import procedures, including standards and testing procedures, on December 7, 1979 (see Appendix B for full text). We also understand that the governmentbusiness Manufactured Products Import Council on December 21, 1979 presented recommendations to the Japanese government for the im provement of the testing system for imported goods. We welcome these efforts made by the two governments and by private circles. Although some of the following recommendations may be similar to those already put forth by organizations outside of the TSG, because of their importance we have included them in our recommendations. 1. Invite foreign scholars, experts and representatives of interested parties to present their views to JISC and other official standardswriting bodies whose decisions may in any way affect foreign products in the Japanese market. Japanese standards must be continuously compared to similar foreign standards in order that the former may reflect international trends over time. The electrical appliances case provides an example of what can be done in other industries. 2. Publicly announce standards changes sufficiently in advance so that comments from all interested parties may be reflected in final standards. Work with JETRO, the U. S. Department of Commerce and ACCJ in ensuring that such notices get the widest possible dissemination among interested foreign parties. 3. Make JIS and JAS readily available to foreign manufacturers. To ensure availability of JIS and JAS as a practical matter, it will be necessary to develop a means of qualifying and periodically inspecting. foreign factories, or of relying on some official or private foreign organization for this purpose. 4. Provide a periodical publication containing up-to-date information about changes in laws, regulations and procedures affecting exporters to Japan, indexed in a manner readily understandable by foreigners. 5. Develop a system whereby foreign manufacturers will not be prevented from making a free choice of agents and importers because of the Japanese system of awarding product import approvals to importers only. 6. Permit use of foreign test results wherever possible. 7. Develop and implement a customs valuation system based on "transaction value" in accordance with the GATT Customs Code as soon as possible. 8. Create new customs classifications where necessary to cover newly developed foreign products. 9. Increase transparency of quota administration, particularly with respect to indicating actual quotas currently held by trading comparies and others. * 10. Revitalize the appeals system for customs matters. Mere existence of applicable laws and statutes is insufficient. The regulations must be accompanied by an open, impartial and quick-responding implementing system staffed by people with sufficient expertise to bring about practical and authoritative settlements. It may be worth considering the establishment of a Central Court of Customs Appeals within the judicial branch of the Japanese governSuch a court would have the authority to adjudicate matters of customs classification and valuation, and could be freely utilized by domestic and foreign firms alike. ment. 11. Create an advisory center to which foreign firms can go to seek information, advice and assistance with respect to any problem they may have concerning Japanese regulations, procedures or practices. 12. Expeditiously pass and implement the necessary legislation to comply with the new GATT Code agreed to as part of the MTN agreements. Japanese authorities take the position that it is inappropriate to disclose quotas held by individual importers. This information is considered confidential information relating to the business concerned. The GATT and the Agreement on Import Licensing Procedures explicitly provide that such disclosure is not required. FUTURE PROGRAMS Aside from continuing to analyze specific problem areas such as those outlined above, and providing assistance to the various Products' task forces, the GPC regards the compilation and provision to all interested foreign parties of comprehensive and up-to-date information about existing Japanese laws, regulations and procedures as one of its most important future tasks. * In this regard, there is a crying need for reference sources, including written materials and a reference center, from which a potential exporter can learn about Japanese regulations and procedures affecting the marketability of his product in Japan. The written materials need not be so comprehensive as to provide all such regulations and procedures in detail, but should be sufficient to alert the manufacturer to conduct a more thorough investigation in certain specific areas prior to attempting market entry. The GPC believes that such reference sources would assist the Japanese government in complying with sections 10 and 11 of the Standards Code. We look forward to working with JETRO, appropriate officials of the Japanese government and other concerned parties in creating them. Financial resources for translation and printing are presently inadequate. The existence of "transparent standards" will accomplish little if American industry remains "blind" due to the language problem. INTRODUCTION PRODUCTS PROGRAM COMMITTEE The Products Program Committee is charged with studying and analyzing the marketability of specific products and services with particular attention to any visible or invisible trade barriers. Currently, the Committee has established Products' task forces in various fields. Task force progress reports presented here discuss electrical appliances, automobiles, forest products, agricultural chemicals, processed foods, health care products, and trade finance. These areas have been chosen for study as we became aware of specific problems. In many other areas, there appear to be no specific impediments to trade, or at least the companies operating in those areas have not come forward with problems. Some of the material in the task force reports refer to the same kinds of problems described in the preceding section on generic problems. Even though it involves some repetition, we have left such material in the Products' task force reports because it illustrates the impact of generic problems on specific product areas. There is a considerable variance in tone and emphasis among the tas force reports. This is because they were prepared by a variety of industrial groups who, for various reasons, may have somewhat differeat outlooks towards their business problems in Japan. For the most part, there has been very little Japanese participation in our task forces to date. However, we welcome the participation of Japanese businessmen with knowledge of specific products, so that we can broaden our approach and accomplish our objectives. BACKGROUND ELECTRICAL APPLIANCES TASK FORCE During 1978, its first year, the Electrical Appliances Task Force identified various issues related to the problems U. S. manufacturers encounter in entering the Japanese market. These problems were identified by comparing the standards and testing procedures set by the Underwriters Laboratories (UL), which Japanese manufacturers use to obtain product approval for the U. S. market, and those established under the Japanese Electrical Appliances Control Law, administered by the Ministry of International Trade and Industry (MITI), with which American manufacturers must comply to enter the Japanese market. Comparison revealed that the UL offered several advantages to Japanese manufacturers over what MITI offered to American manufacturers. Thus, the Task Force has been discussing three basic issues with MITI: 1. 2. 3. Lack of acceptance by MITI of U. S. test data for type approval Lack of adequate access by U. S. manufacturers to Japanese Lack of adequate information by U. S. manufacturers on Japanese standards. EARLY PROGRESS The first sign of progress was MITI's decision, announced at a November 1978 TSG meeting, to translate all technical standards for electrical appliances and materials into English. MITI also agreed to allow U.S. manufacturers of electric appliances to apply directly for MITI's entrusted test approval through Japan Electric Testing Laboratories, and to allow suitably qualified U. S. manufacturers' representatives to sit on the various committees of the Japan Electric Association. Current Status: Although the above agreements became effective on April 1, 1979, there were some delays in printing and distribution of the English version of the related material. However, the material is cow available.* Japan's Legal Requirements for Electrical Appliances and Materials |