[Federal Register Volume 61, Number 118 (Tuesday, June 18, 1996)]
[Notices]
[Pages 30929-30930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-15436]
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OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
[Docket No. 301-99]
Section 304 Determinations: Barriers to Access to the Japanese
Market for Consumer Photographic Film and Paper
agency: Office of the United States Trade Representative.
action: Notice of determinations.
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summary: On June 13, 1996, the Acting United States Trade
Representative (USTR) determined, pursuant to section 304(a)(1)(A) of
the Trade Act of 1974, 19 U.S.C. 2414, (the Trade Act) that certain
acts, policies, and practices of the Government of Japan with respect
to the sale and distribution of consumer photographic materials in
Japan are unreasonable and burden or restrict U.S. commerce.
Specifically, the USTR found that the Government of Japan established
and tolerated a market structure that impedes U.S. exports of consumer
photographic materials to Japan, and in which practices occur that also
impede U.S. exports of these products to Japan, thereby denying fair
and equitable market opportunities. The USTR also concluded that there
is reason to believe based on strong evidence that certain Japanese
Government liberalization countermeasures, including inter alia,
distribution guidelines and related measures, the Law Pertaining to
Adjustment of Business Activities of the Retail Industry for Large
Scale Retail Stores (LSRS Law) and the Law Against Unjustifiable
Premiums and Misleading Representations (Premiums Law) contravene
Japan's obligations under the Multilateral Trade Agreements annexed to
the Marrakesh Agreement Establishing the World Trade Organization
(WTO), and nullify or impair benefits accruing to the United States
under the WTO agreements. As provided by the Trade Act, the United
States will invoke the dispute settlement procedures of the WTO with
respect to these measures and their application. The United States also
will request consultations with the Government of Japan under a WTO
provision for consultations on restrictive business practices. As
appropriate, the USTR will determine what further action under section
301 is warranted.
effective date: June 13, 1996.
for further information contact: Barbara Weisel, Director of Policy
Planning for Japan and China, (202) 395-5070; or, for legal issues,
Joanna McIntosh, Associate General Counsel, (202) 395-7203, Office of
the U.S. Trade Representative, 600 17th Street, N.W., Washington, D.C.
20508.
supplementary information: In July 1995, the USTR initiated an
investigation under section 302(a) of the Trade Act with respect to
certain acts, policies, and practices of the Government of Japan
affecting access to the Japanese market for consumer photographic film
and paper. Upon initiating the investigation, the United States
requested bilateral consultations with the Government of Japan. At an
October 3, 1995 meeting in Tokyo, U.S. Government officials were
prepared to discuss the substance of the issues involved in the
investigation, and they solicited the views of and information from
Japanese officials concerning those issues. However, at that meeting
and throughout the course of the investigation, the Government of Japan
unreasonably refused to consult on the substance of the matters under
investigation, despite repeated U.S. attempts to engage in
consultations.
As a result of the investigation conducted by USTR and USTR's
review of all of the information submitted by the petitioner and other
parties, and in the absence of rebuttal from the Government of Japan,
the USTR determined that, pursuant to section 304(a)(1)(A) of the Trade
Act that certain acts, policies, and practices of the Government of
Japan with respect to the sale and distribution of consumer
photographic materials in Japan are unreasonable and burden or restrict
U.S. commerce. Specifically, the USTR found that the Government of
Japan established and tolerated a market structure that impedes U.S.
exports of these products to Japan, and in which practices occur that
also impede U.S. exports of these products to Japan, thereby denying
fair and equitable market opportunities.
The USTR found that when the Japanese Government gradually withdrew
its formal restrictions on imports and inward investment following
international pressure beginning in the late 1960s, it simultaneously
implemented liberalization countermeasures designed to restrict access
of foreign capital and goods to the Japanese market. The capital and
import liberalization countermeasures implemented beginning in the
1960s, included measures to block or limit foreign direct investment in
both new and established enterprises with the intent and effect, inter
alia, of limiting market access for imported products. Because of the
perceived need to protect the Japanese photographic materials industry
from foreign products, the consumer photographic materials sector was
among the last to be liberalized. Restrictions on foreign investment in
existing enterprises remained in effect until the early 1980s. During
the period of capital and import liberalization countermeasures, the
Government of Japan, in particular the Ministry of International Trade
and Industry (MITI), took steps to restructure the distribution sector
to prevent foreign products from making inroads into the Japanese
market. For example, MITI promulgated distribution guidelines for
photographic film, and the market structure and practices established
under and promoted by these guidelines fostered a dependent and
exclusionary relationship among Japan's major photographic materials
manufacturer, the primary wholesalers (tokuyakuten), secondary
wholesalers, and retailers. The distribution structure, retail sales
environment, and business relationships in this sector that were
established as a result of MITI's protection of the sector remain in
place today.
USTR also uncovered significant evidence of anticompetitive
activities that warrants full and thorough examination.
The USTR determined that these acts, policies and practices should
be addressed comprehensively as follows.
(1) Having concluded that there is reason to believe based on
strong evidence that certain Japanese Government liberalization
countermeasures, including inter alia, distribution guidelines and
related measures, the LSRS Law, and the Premiums Law, violate Japan's
obligations and commitments under the WTO agreements and nullify or
impair benefits accruing to the United States under those agreements,
the United States immediately will seek recourse to the dispute
settlement procedures of the WTO to challenge these measures and their
application, as provided by the Trade Act and in accordance with
[[Page 30930]]
Article 23 of the WTO Dispute Settlement Understanding (DSU). If, at
the conclusion of dispute settlement proceedings, the WTO Dispute
Settlement Body finds that Japanese government acts, policies or
practices violate, or are inconsistent with, the provisions of, or
otherwise deny benefits accruing to the United States under, any of the
WTO agreements, and, unless Japan is taking satisfactory measures to
grant the rights of the United States under the WTO agreements, has
agreed to eliminate or phase out the affected act, policy or practice,
or agreed to an imminent satisfactory solution to the burden or
restriction on U.S. commerce, or provided satisfactory compensatory
trade benefits, the United States shall take action under section 301
in accordance with the DSU.
(2)(a) The United States will request consultations immediately
with the Government of Japan pursuant to arrangements for consultations
on restrictive business practices adopted by the GATT Contracting
Parties in 1960 and carried forward into the WTO; (b) in light of Prime
Minister Hashimoto's statements of his personal commitment and the
series of commitments made by the Government of Japan under the
Structural Impediments Initiative and the Joint Statement on the U.S.-
Japan Framework for a New Economic Partnership to strengthen the Japan
Fair Trade Commission (JFTC) and enforcement of Japan's competition
laws, the United States (i) is requesting that Kodak provide
information for submission to the JFTC concerning certain
anticompetitive practices in the Japanese consumer photographic
materials market, and (ii) will provide information to the JFTC to
enforce competition laws in the consumer photographic materials
markets; (c) the Department of Justice will seek to cooperate with the
JFTC in its review of evidence of anticompetitive practices in the
Japanese market and in consideration of remedial actions, as
appropriate, and USTR will consult with the Department of Justice in
assessing efforts of the JFTC to enforce competition laws in Japan's
photographic materials market; and (d) the United States will study the
extent to which Japan's market structure for consumer photographic
materials distorts competition or causes economic harm in the United
States and in third markets and consider any appropriate responses.
At the appropriate time, based on developments in these
consultations and proceedings, the USTR will consider what further
action needs to be taken to ensure that barriers in the Japanese
consumer photographic materials sector are eliminated.
Irving A. Williamson,
Chairman, Section 301 Committee.
[FR Doc. 96-15436 Filed 6-17-96; 8:45 am]
BILLING CODE 3190-01-M