[Federal Register Volume 60, Number 130 (Friday, July 7, 1995)]
[Notices]
[Pages 35447-35448]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16742]



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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE

[Docket No. 301-99]


Initiation of Investigation Pursuant to Section 302 Concerning 
Barriers to Access to the Japanese Market for Consumer Photographic 
Film and Paper; Request for Public Comment

AGENCY: Office of the United States Trade Representative.

ACTION: Notice of initiation of investigation under section 302(a) of 
the Trade Act of 1974, as amended (19 U.S.C. 2412(a)), and request for 
written comments.

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SUMMARY: The United States Trade Representative (USTR) has initiated an 
investigation under section 302(a) of the Trade Act of 1974, as amended 
(the Trade Act), with respect to certain acts, policies and practices 
of the Government of Japan with respect to barriers to access to the 
Japanese market for consumer photographic film and paper. The USTR 
invites written comments from the public on the matters being 
investigated and the determinations to be made under section 304 of the 
Trade Act.

DATES: This investigation was initiated on July 2, 1995. Written 
comments from the public are due on or before noon on August 8, 1995.

ADDRESS: Office of the United States Trade Representative, 600 17th 
Street NW., Washington, DC 20508.

FOR FURTHER INFORMATION CONTACT:Byron Sigel, Director for Japanese 
Affairs, (202) 395-5070, or Irving Williamson, Deputy General Counsel, 
(202) 395-3432.

SUPPLEMENTARY INFORMATION: On May 18, 1995, the Eastman Kodak Company 
filed a petition pursuant to section 302(a) of the Trade Act alleging 
that certain acts, policies and practices of Japan deny access to the 
market for photographic film and paper in Japan and are unjustifiable, 
unreasonable and discriminatory and actionable under section 301. In 
particular, the petition alleges that Japan maintained formal 
restrictions on inward investment prior to 1976, in violation of the 
U.S.-Japan Friendship Commerce and Navigation Treaty and the 
Organization for Economic Cooperation and Development's (OECD) Code of 
Liberalization of Capital Movements. The petition further alleges that 
the Government of Japan instituted trade and capital liberalization 
counter-measures to maintain the effects of investment and trade 
restrictions after they were formally lifted. The following 

[[Page 35448]]
government-directed liberalization countermeasures are claimed to have 
affected Kodak: Ministry of International Trade and Industry (MITI) 
administrative guidance to domestic banks to increase shareholdings, 
MITI administrative guidance to restructure the distribution system, 
and MITI intervention with the Japan Fair Trade Commission (JFTC) on 
behalf of Japan's photographic materials producers. The Japanese 
toleration of the anticompetitive market structure resulting from the 
countermeasures is alleged to be inconsistent with Japan's obligations 
under the OECD's Declaration on International and Multinational 
Investment and Multinational Enterprises (``National Treatment 
Instrument''). The foregoing acts are alleged to be justifiable under 
section 301.
    The petition also alleges that MITI and the JFTC have tolerated 
systematic anticompetitive practices and have actively encouraged and 
reinforced them and that this toleration is unreasonable and 
discriminatory under section 301. In particular, the petition alleges 
that:
    (a) Fuji has established a distribution system that utilizes 
various anticompetitive elements as a mutually reinforcing means to 
exclude Kodak from the market;
    (b) The following Fuji practices are inconsistent with Japan's 
Antimonopoly Law: (1) Resale price maintenance; (2) vertical non-price 
restraints such as exclusionary dealing arrangements; (3) dealings on 
restrictive terms; (4) refusals to deal; and (5) group boycotts;
    (c) The JFTC has failed to enforce Japan's Antimonopoly Law (AML) 
against Fuji's anticompetitive practices;
    (d) The JFTC actively strengthens the system by enforcing ``Fair 
Competition Codes'' in a manner which discourages discount and 
promotional sales;
    (e) MITI tolerated theses anticompetitive practices; and
    (f) The toleration is egregious in light of numerous Japanese 
government policy initiatives and international undertakings to 
increase AML enforcement.
    The petition further alleges that the barriers cited in the 
petition pose a burden or restriction on U.S. commerce because, by 
restricting Kodak's access to Japan's photographic film and paper 
markets, they have caused Kodak to forego export revenue and have 
created a profit sanctuary in Japan for Fuji which significantly 
affects the global competition between Kodak and Fuji.
    Section 302(a) of the Trade Act authorizes the USTR to initiate an 
investigation under chapter 1 of Title III of the Trade Act (commonly 
referred to as ``section 301''), in response to the filing of a 
petition pursuant to section 302(a)(1). Matters actionable under 
section 301 include, inter alia, acts, policies, and practices of a 
foreign country that are unjustifiable, unreasonable or discriminatory 
and burden or restrict U.S. commerce. An act, policy or practice is 
unjustifiable if it is in violation of, or inconsistent with, the 
international legal rights of the United States. An act, policy or 
practice is unreasonable if the act, policy or practice, while not 
necessarily in violation of, or inconsistent with, the international 
legal rights of the United States, is otherwise unfair or inequitable. 
Unreasonable acts, policies or practices include, inter alia, denial of 
fair and equitable market opportunities, including the toleration by a 
foreign government of systematic anticompetitive activities by 
enterprises or among enterprises in the foreign country that have the 
effect of restricting, on a basis that is inconsistent with commercial 
considerations, access of United States goods or services to a foreign 
market.
    On July 2, 1995, the USTR determined that an investigation should 
be initiated to determine whether certain acts, policies or practices 
of the Government of Japan with respect to access to the Japanese 
market for consumer photographic film and paper are actionable under 
section 301.

Consultations

    Pursuant to section 303(a) of the Trade Act, the USTR has requested 
consultations with the Government of Japan concerning the issues under 
investigation. USTR will seek information and advice from the 
appropriate representatives provided for under section 135 of the Trade 
Act in preparing the U.S. presentations for such consultations.

Public Comment: Requirements for Submissions

    Interested persons are invited to submit written comments 
concerning the issues raised in the petition and any other submissions 
to USTR in this investigation. In particular, comments are invited 
regarding (i) the acts, policies and practices of the Government of 
Japan that are the subject of this investigation; (ii) the amount of 
burden or restriction on U.S. commerce caused by these acts, policies 
and practices; (iii) the determinations required under section 304 of 
the Trade Act; and (iv) appropriate action under section 301 which 
could be taken in response.
    Comments must be filed in accordance with the requirements set 
forth in 15 CFR 2006.8(b) (55 FR 20593) and are due no later than noon 
on Tuesday, August 8, 1995. Comments must be in English and provided in 
twenty copies to: Sybia Harrison, Staff Assistant to the section 301 
Committee, Room 223, Office of the United States Trade Representative, 
600 17th Street, NW., Washington, DC 20508.
    Comments will be placed in a file (Docket 301-99) open to public 
inspection pursuant to 15 CFR 2006.13, except confidential business 
information exempt from public inspection in accordance with 15 CFR 
2006.15. Confidential business information submitted in accordance with 
15 CFR 2006.15 must be clearly marked ``BUSINESS CONFIDENTIAL'' in a 
contrasting color ink at the top of each page on each of 20 copies, and 
must be accompanied by a nonconfidential summary of the confidential 
information. The nonconfidential summary shall be placed in the file 
that is open to public inspection.
    Copies of the public version of the petition and other relevant 
documents are available for public inspection in the USTR Reading Room. 
An appointment to review the docket (Docket No. 301-99) may be made by 
contacting Brenda Webb at (202) 395-6186. The USTR Reading Room is open 
to the public from 10 a.m. to 12 noon and 1 p.m. to 4 p.m., Monday 
through Friday, and is located in Room 101, Office of the United States 
Trade Representative, 600 17th Street NW., Washington, DC 20508.
Irving A. Williamson,
Chairman, Section 301 Committee.
[FR Doc. 95-16742 Filed 7-6-95; 8:45 am]
BILLING CODE 3190-01-M