[Federal Register Volume 60, Number 129 (Thursday, July 6, 1995)]
[Notices]
[Page 35253]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16737]



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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-93]


Termination of Investigation: Barriers to Access to the Auto 
Parts Replacement Market in Japan

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of determination to terminate the investigation pursuant 
to sections 301(b) and 304(a)(1)(B) of the Trade Act of 1974, as 
amended (Trade Act) (19 U.S.C. 2411(b) and 2414(a)(1)(B)) and notice of 
monitoring pursuant to section 306 of the Trade Act (19 U.S.C. 2416).

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SUMMARY: On May 10, 1995, the United States Trade Representative (USTR) 
determined pursuant to section 304(a)(1)(A) of the Trade Act that 
certain acts, policies and practices of Japan are unreasonable and 
discriminatory and burden or restrict U.S. commerce. Having reached a 
satisfactory resolution of the issues under investigation, the USTR has 
determined pursuant to sections 301(b) and 304(a)(1)(B) that the 
appropriate action in this case is to terminate this investigation and 
to monitor compliance with this Agreement in accordance with section 
306 of the Trade Act.

EFFECTIVE DATE: This investigation was terminated effective June 28, 
1995.

ADDRESSES: Office of the United States Trade Representative, 600 17th 
Street, N.W., Washington, D.C. 20508.

FOR FURTHER INFORMATION CONTACT:
David Burns, Senior Advisor for Japan, (202) 395-5050, or James 
Southwick, Assistant General Counsel, (202) 395-37203.

SUPPLEMENTARY INFORMATION: On October 1, 1994, the USTR initiated an 
investigation pursuant to section 302(b) of the Trade Act to determine 
whether specific barriers to access to the auto parts replacement and 
accessories market (``after-market'') in Japan are unreasonable or 
discriminatory and burden or restrict U.S. commerce. See 59 FR 52034 
(October 13, 1994). On May 10, 1995, the USTR, pursuant to section 
304(a)(1)(A)(ii) of the Trade Act, determined that the practices under 
investigation were unreasonable and discriminatory and burden or 
restrict U.S. commerce and requested comment on a proposed action. See 
60 FR 26745 (May 18, 1995). The USTR found that the Japanese market for 
replacement auto parts is restricted by a complex system that is not 
reasonable or justifiable. This system channels most repair work to 
government-certified garages that uses very few foreign parts, and the 
system restricts the development of other garages more likely to carry 
and use foreign parts. In addition, even minor additions of accessories 
to motor vehicles require a full vehicle inspection and tax payment, 
which severely limits opportunities for U.S. automotive accessories 
suppliers.
    On June 28, 1995 after extensive negotiations, the United States 
and Japan reached agreement on measures to deregulate the replacement 
parts and accessories market in Japan. Specifically, Japan has agreed 
to: (a) Immediately deregulate the following items on the critical 
parts list--struts, shocks, power steering, and trailer hitches, (b) 
conduct a one-year review of the critical parts list with the goal of 
deregulating any parts that are not central to health and safety 
concerns; (c) implement a petition procedure under which the Ministry 
of Transport will respond within 30 days to requests that a critical 
part be removed from the list; (d) with respect to accessories, no 
longer require Ministry of Transport (MOT) inspection for modifications 
attached to autos by any means other than welding and riveting; (e) 
issue regulations to establish a ``specialized certified garage'' 
system for garages that specialize in the repair of any combination of 
vehicle systems on the critical parts list and not require repairs by 
these garages to be subject to MOT inspection; (f) reduce the number of 
government-approved mechanics for ``designated'' garages from 3 to 2 
and for ``certified'' garages from 2 to 1; and (g) permit ``certified'' 
garages with 5 mechanics to conduct the periodic inspections as 
``special designated garages.''
    On the basis of the commitments contained in this Agreement and in 
the expectation that these commitments will be fully implemented, the 
USTR has decided to terminate this investigation. Consequently, 
although the acts, policies, and practices under investigation are 
unreasonable and discriminatory and burden or restrict U.S. commerce 
and would have warranted action in response if an agreement had not 
been reached, the USTR has decided that the appropriate action is to 
terminate the investigation. Thus the action proposed in the May 18, 
1995, notice will not be taken. The USTR will monitor Japan's 
compliance with this Agreement pursuant to section 306 of the Trade 
Act.
Irving A. Williamson,
Chairman, Section 301 Committee.
[FR Doc. 95-16737 Filed 7-5-95; 8:45 am]
BILLING CODE 3190-01-M