WT/TPR/M/397/Add.1 7 October 2020 (20-6882

WT/TPR/M/397/Add.1

7 October 2020

(20-6882) Page: 1/286

Trade Policy Review Body Original: English/anglais/inglés 6 and 8 July 2020 Spanish/espagnol/español

TRADE POLICY REVIEW

JAPAN MINUTES OF THE MEETING Addendum Chairperson: H.E. Mr. Harald Aspelund (Iceland)

This document contains the advance written questions and additional questions by WTO Members, and replies provided by Japan.1

Organe d'examen des politiques commerciales 6 et 8 juillet 2020

EXAMEN DES POLITIQUES COMMERCIALES

JAPON COMPTE RENDU DE LA RÉUNION Addendum Président: S.E. M. Harald Aspelund (Islande)

Le présent document contient les questions écrites communiquées à l'avance par les Membres de l'OMC, leurs questions additionnelles, et les réponses fournies par le Japon.1

Órgano de Examen de las Políticas Comerciales 6 y 8 de julio de 2020

EXAMEN DE LAS POLÍTICAS COMERCIALES

JAPÓN ACTA DE LA REUNIÓN Addendum Presidente: Excmo. Sr. Harald Aspelund (Islandia)

En el presente documento figuran las preguntas presentadas anticipadamente por escrito y las preguntas adicionales de los Miembros de la OMC, así como las respuestas facilitadas por el Japón.1

1 In English only./En anglais seulement./En inglés solamente.

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Contents COSTA RICA ...... 4 ISRAEL ...... 8 HONG KONG, CHINA ...... 10 INDIA ...... 12 CHILE ...... 41 UNITED STATES ...... 50 BRAZIL ...... 69 EUROPEAN UNION ...... 83 CHINA ...... 98 ARGENTINA ...... 118 NORWAY ...... 119 INDONESIA ...... 120 MEXICO ...... 123 UNITED KINGDOM ...... 131 UKRAINE ...... 136 COLOMBIA ...... 142 PHILIPPINES ...... 153 CHINESE TAIPEI ...... 165 SWITZERLAND ...... 176 REPUBLIC OF KOREA ...... 180 CANADA ...... 187 RUSSIAN FEDERATION ...... 204 DOMINICAN REPUBLIC ...... 210 MALAYSIA ...... 211 THAILAND ...... 218 NEW ZEALAND ...... 223 AUSTRALIA ...... 229 PERU ...... 234 DOMINICAN REPUBLIC ...... 235 PHILIPPINES ...... 236 GUATEMALA ...... 239 ICELAND ...... 241 RUSSIAN FEDERATION ...... 242 TURKEY ...... 243 UNITED KINGDOM ...... 256 MEXICO ...... 258 EU FOLLOW-UP QUESTIONS ...... 262 CHINA FOLLOW-UP QUESTIONS ...... 266 CANADA FOLLOW-UP QUESTIONS ...... 276 WT/TPR/M/397/Add.1

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UNITED STATES FOLLOW-UP QUESTIONS ...... 277

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COSTA RICA

A. Informe de la Secretaría

Página 47, párrafo 2.37

2.37. Under the 2012 Act for the Promotion of Japan as an Asian Business Centre, incentives are provided to encourage investment in establishing R&D and regional headquarters. Personal income tax benefits are provided under the Act on Special Measures Concerning Taxation. Other investment incentives are: assistance for fund raising by the Small and Medium Business Investment and Consultation Co. Ltd., applicable to SMEs (this also covers small and medium-sized stock companies with capital not less than JPY 300 million); acceleration of patent examinations; shortened investment procedures; and acceleration of the status of residency examinations. As indicated by the authorities, an evaluation has not been undertaken on the effectiveness of these incentive schemes.

(1) Pregunta • Según lo indicado, no se ha llevado a cabo una evaluación para saber la efectividad de los incentivos, ¿planean realizar una evaluación pronto? ¿Cómo determinan que dichos incentivos sí están funcionando?

RESPONSE There are no plans to conduct an evaluation immediately. A commissioned survey was conducted in FY2018 and evaluated in the report. (Japanese: https://www.meti.go.jp/meti_lib/report/H30FY/000193.pdf). The evaluation of the incentive system will be considered in the future.

Página 54, párrafo 3.11

3.11. As mentioned in the previous Review, advance rulings may be requested by importers or other interested parties on: tariff classification, customs valuation, the origin of goods, and duty relief/exemption for goods due for import. In principle, advance rulings are issued within 90 days of request for customs valuation, and within 30 days for other requests. Advance rulings are binding on Customs.

(2) Preguntas • ¿Se puede solicitar una resolución anticipada en el marco del SGP de Japón? • ¿La solicitud de una resolución anticipada se puede realizar en línea? En caso afirmativo, agradecemos nos faciliten el enlace para realizar esta gestión.

RESPONSE (1) Advance Ruling provides tariff classification, customs tariff rates (including GSP rates) and origin of goods. (2) Advance rulings can be requested and issued manually in principle. Electronic procedures are also available through the network system called NACCS.

Página 114, párrafo 3.210

3.210. Accelerated and super-accelerated examination programmes reduced average FA pendency to 2.3 months and 0.7 months, respectively, for qualifying applications in 2018. Accelerated examination is available upon request for applications made by SMEs, applications that have been filed in more than one country, and applications for inventions that have already been put into practice. Accelerated examination for inventions involving environment-related technologies is under trial. A pilot super-accelerated examination may be requested for "highly important" applications, including inventions already put into practice by either a start-up or an applicant who has filed for patent protection abroad. The JPO outsources prior art searches, plans to employ AI technology to improve speed and quality, and has introduced design-driven management principles to improve the quality of its services to users.

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(3) Preguntas • Costa Rica reconoce los esfuerzos de Japón para agilizar los trámites relacionados con patentes. ¿Podría Japón ampliar sobre la prueba que están realizando para invenciones relacionadas con tecnologías ambientales? • ¿Cuáles criterios se tomarán en consideración para definir si se continuará aplicando el procedimiento expedito a este tipo de solicitudes? • ¿Cuál es el promedio anual de solicitudes recibidas para invenciones relacionadas con tecnologías ambientales?

RESPONSE The revision of the condition for accelerated examination on environment-related technologies is not planned at this time. The number of requests for acceleration could be one of the possible reasons for a future revision. Since patent applications are not categorized according to involving environment-related technologies, the number of such applications has not been counted. When applicants request the accelerated examination, they explain that the application involves environment-related technologies in the request form and examiners determine whether the request meets the condition.

Página 121, párrafos 3.244 y 3.245

3.244. Counterfeiting and piracy continue to cause meaningful losses to the Japanese economy. A 2018 fiscal year report commissioned by the JPO estimates JPY 111 billion as the total profit lost by all industrial property right holders, based upon survey data. The METI reports recent signs of improvement. During the review period, the JPO continued to conduct annual surveys on losses suffered by Japanese enterprises caused by counterfeiting and piracy. 24.1% of respondents reported losses in the 2018 report, an increase of 1.7% over the prior year. Online piracy, in particular, has been referred to as a "rampant problem" that could significantly impair the rights of copyright holders.328 The Content Overseas Distribution Association estimates that piracy costs Japanese publishers JPY 400 billion per year.

(4) Preguntas • Costa Rica reconoce la labor de Japón en materia de observancia, particularmente en relación con la falsificación y piratería. ¿Además de los datos existentes sobre el monto estimado de pérdidas económicas para los titulares de la industria, existen datos sobre las pérdidas en términos fiscales para el Estado?

RESPONSE Counterfeiting and piracy continue to cause meaningful losses to the Japanese economy. A fiscal year 2018 report[1] commissioned by the JPO, estimates JPY111,044 million as the total profit loss amount (not circulating amount) of all industrial property right holders to the JPO based upon the questionnaire survey data. But none of the authorities surveyed the impact for national financial income, so there are no such data. [1] The report is a questionnaire survey sent to a random sample of 4,663 Japanese companies out of 165,627 companies that registered as industrial property right holders with the JPO in fiscal year 2017. And 2,370 companies out of 4,663 companies responded. The report estimates its total profit loss based on the profit loss of the 37 Japanese companies who answered their profit loss in its survey.

3.245. Japan Customs is responsible for enforcing IPRs at the border, and seizes infringing goods. The majority of suspension cases are brought by right holders, although Japan Customs is empowered to act ex officio when it suspects infringing goods. There were no changes to the Customs Law during the review period that materially impact the process, availability, or protections associated with IPR enforcement at the border.

(5) Preguntas • Costa Rica reconoce el trabajo de Japón para contrarrestar los efectos de la falsificación y piratería de bienes, en particular el rol de las aduanas. ¿Podría Japón indicar la cantidad de casos de suspensión que corresponden a actuaciones de oficio en el 2019? • ¿Para qué tipo de bienes se actúa en mayor medida de oficio? • ¿Existe algún convenio o espacio de cooperación o coordinación entre las aduanas y los titulares de la industria para facilitar la identificación de mercancía falsificada? WT/TPR/M/397/Add.1

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• ¿Qué tan activa es la participación de la industria en los procesos relacionados con la violación a normas de propiedad intelectual?

RESPONSE (1) We have no statistics only about ex-officio cases. (2) We have no statistics only about ex-officio cases. (3) Customs cooperates with right holders to verify the products, for example: ・information to Customs through application for suspension; ・trainings for Customs officers; and ・ claims and evidence from right holders which support Customs decision making procedure (verification procedure). (4) The main procedures in which right holders can be involved are the following: ・filing an application for suspension; ・submission of claims and evidence in verification procedure; and ・sample inspection.

Página 179, párrafo 4.236

4.236. The commitments for aircraft repair and maintenance under the GATS and under the positively listed FTAs of Japan reflect the applied regime, i.e. the existence of an economic needs test. That situation is echoed in all of Japan's negatively listed FTAs.

(6) Pregunta • ¿Podría Japón brindar más información sobre la prueba de necesidades económicas que aplica a los servicios de reparación y mantenimiento de aeronaves, y aclarar si esta se extiende para los proveedores que brindan el servicio en el extranjero (modo 2)?

RESPONSE Relating to ENT, one of the requirements that is imposed on an MRO (Maintenance, Repair and Overhaul) which intends to operate in Japan is that "the capability of manufacturing or repairing aircraft or specific equipment shall not become notably excessive based on given permission" (provisional translation), according to Article 2-5 of the Aircraft Manufacturing Industry Act. Such requirements are imposed equally both on domestic and foreign MROs. Therefore, the requirements are imposed on foreign MRO suppliers which intend to operate in Japan as well (Mode 3). Regarding Mode 2, the Aircraft Manufacturing Industry Act is not applied.

Página 182, Sección 4.4.5 - Servicios Medioambientales

[La pregunta se refiere a toda la sección]

(7) Pregunta • Costa Rica ha leído con gran interés esta sección y reconoce el amplio desarrollo normativo de Japón en la materia, así como sus compromisos en el Modo 3. ¿Podría Japón referirse brevemente al régimen aplicable a la prestación de servicios mediante otros modos de suministro como el 1 y el 4; específicamente en cuanto a consultorías en servicios medioambientales?

RESPONSE There is no specific regime applicable.

Página 188, párrafo 4.275

4.275. Similarly, there are no GATS-type restrictions on e-commerce. There is no specific general regulatory framework for e-commerce. The main relevant laws deal with consumer protection and e-payments. The most significant among them is the Act on Special Provisions to the Civil Code on Electronic Consumer Contracts and Electronic Acceptance Notice (Act No. 95 of 29 June 2001). This Act provides special provisions to the Civil Code (Act No. 89 of 1896) in cases where there are certain mistakes in the elements comprising an electronic consumer contract, or where an electronic acceptance notice is dispatched by a consumer under a contract made at a distance.109 The Consumer Contracts Act (Act No. 61 of 12 May 2000) permits a consumer to rescind his/her intention to offer or accept a contract when s/he has misunderstood, or was distressed by, certain acts of the WT/TPR/M/397/Add.1

- 7 - business operator. It also nullifies any clauses (in whole or in part) that exempt business operators from liability for damages, or that otherwise unfairly harm the interests of consumers.

(8) Pregunta • Costa Rica ha leído con mucho interés sobre la forma en que se regula el comercio electrónico en Japón. ¿Podría Japón proporcionar más información sobre las razones que han llevado al país a optar por no tener un marco regulatorio específico para el comercio electrónico?

RESPONSE Although Japan has no specific regulatory frameworks for electronic commerce, since 2002, the relevant ministries, academic experts and the business community have evaluated and clarified how the Civil Code and other relevant laws are applied to various legal issues related to electronic commerce. The outcomes of the evaluation are revised and released annually in "Interpretative Guidelines on Electronic Commerce and Information Property Trading." The guideline is expected to enhance predictability for concerned parties and contributing to the facilitation of business activities.

Página 190, párrafo 4.284

4.284. Based on the Act on Special Measures concerning the Handling of Legal Services by Foreign Lawyers (Law No.66 of 1986), foreign lawyers may engage in legal services in relation to home- country law and international law, if they register with the Japan Federation of Bars Association. They can do so if they meet the following requirements: be qualified as a lawyer in their home country, and have practiced three years in their home country or abroad (this delay is reduced to two years for pure advice activities). In addition, Registered Foreign Lawyers may establish a Registered Foreign Lawyer Corporation.

(9) Pregunta • ¿Podría Japón aclarar si existe un requisito de presencia local para que los abogados extranjeros presten servicios relacionados con legislación de su país o derecho internacional a consumidores japoneses?

RESPONSE A foreign lawyer must be recognized as "Gaikoku-Ho-Jimu-Bengoshi (Registered Foreign Lawyers)" by the Minister of Justice and register with the Japan Federation of Bar Associations. Commercial presence is required.

B. Informe de Gobierno

Página 6, párrafo 2.13

2.13. Maintaining and strengthening the multilateral trading system under the WTO has been a main pillar of Japan's external economic policy. At the same time, Japan has also promoted its regional and bilateral trade policies as a means of complementing the multilateral trading system, particularly through Economic Partnership Agreements that include elements of Free Trade Agreements and institution-building.

(10) Pregunta • ¿Podría Japón aclarar o brindar algunos ejemplos sobre lo que denomina institucionalidad ("institution-building")?

RESPONSE EPAs cover not only trade in goods and services but also rules in various economic areas such as investment, movement of natural persons and protection of intellectual property.

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ISRAEL

2 TRADE AND INVESTMENT REGIMES 2.3 Trade Agreements and Arrangements 2.3.2 Regional and preferential agreements 2.3.2.1 Regional trade agreements (RTAs) 2.16

Paragraph 2.16 of the Secretariat Report notes: "In September 2019, Japan signed the Japan-United States Trade Agreement to eliminate or reduce tariffs on certain agricultural and industrial products, and the Japan-United States Digital Trade Agreement, which is intended to establish high standard rules in this area"

Question 1 Israel would like to understand if Japan considers the Japan-United States Trade Agreement as an FTA? If yes, could Japan explain how does it conform with Article 24 of GATT? If not, will the concessions included in the Agreement be given on an MFN basis?

RESPONSE Paragraph 1 of Article 5 of the Japan-US Trade Agreement provides: "Further to the existing commitments by each Party under the WTO Agreement, unless otherwise provided for in this Agreement, each Party shall improve market access in accordance with Annex I or Annex II." By the implementation of this provision, the tariff elimination covering substantially all the trade between the two countries will be achieved. On that basis, Japan is of the view that the Japan-US Trade Agreement is consistent with Article XXIV of GATT.

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.3 Measures Directly Affecting Production and Trade 3.3.2 Standards and other technical requirements 3.99

Paragraph 3.99 of the Secretariat Report notes: "Japan has MRAs concerning standards, technical regulations and conformity assessment procedures in force with the European Communities, Singapore, the Philippines, Thailand, the United States, and Chinese Taipei."

Question 2 Israel would appreciate if Japan could elaborate on its decision-making process for signing MRAs: What are the criteria? What is the internal process in Japan? How are the sectors and partners for MRAs are prioritized?

RESPONSE Mutual recognition agreements (MRAs) stipulate that a partner country should accept the results of conformity assessment (certification, testing, etc.) for particular products conducted by conformity assessment bodies (CABs) of other partner countries. Regarding to decision making process for signing MRAs, countries generally take into account the trade volume of the product, equivalence of regulatory system and the needs from national industries to reduce administrative and economic burden with a view to promoting bilateral trade in the product fields. After considering these factors in a comprehensive manner, Parties would go through informal discussions between regulatory authorities and formal negotiations between Governments of the Parties to conclude MRAs.

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.3 Measures Directly Affecting Production and Trade 3.3.2 Standards and other technical requirements 3.3.2.1 Legal and institutional framework

Question 3 Please explain which standards are mandatory in Japan and which are voluntary, if any. Does Japan adopt ISO or other international standards?

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RESPONSE The main laws on standards and technical regulations are listed in Table 3.14 of the Secretariat report. (1) All the Japanese Industrial Standards (JIS) are voluntary standards, while some acts refer to JIS in their technical regulations. 97 % of all the JIS that have corresponding international standards are harmonized with the international standards. (2) All the Japanese Agricultural Standards (JAS) are voluntary standards except for the JAS for Organic Plants and the JAS for Organic processed food of organic plants. Some acts refer to JAS in their technical regulations. 78% of all the JAS that have corresponding international standards are harmonized with the international standards.

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.3 Measures Directly Affecting Production and Trade 3.3.2 Standards and other technical requirements 3.3.2.4 Conformity assessment and inspection 3.115

Paragraph 3.115 of the Secretariat Report notes: "The METI has designated 24 inspection bodies, of which 7 are foreign. They include: 7 bodies under the Consumer Product Safety Act, 14 under the Electrical Appliances and Materials Safety Act, 2 under the Act on the Securing of Safety and the Optimization of Transaction of Liquefied Petroleum Gas, and 1 under the Gas Business Act."

Question 4 Israel would appreciate if Japan could provide additional information on its process of designating foreign inspection bodies.

RESPONSE Based on the application from the laboratories which are hopeful of becoming conformity assessment bodies, Japan confirms the capability and then designates after having the investigation conducted by the National Institute of Technology and Evaluation as necessary.

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HONG KONG, CHINA

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT

Trade Policies by Sector

Financial services (WT/TPR/S/397, Pages 166-167, paras 4.156-4.157)

The Financial Services Agency (FSA), the supervisory body of all financial services in Japan, revised its 2014 Stewardship Code for Institutional Investors which aimed at enhancing corporate governance and improving investment returns. By subscribing to this voluntary Code, investors commit to disclosing how they exercise their stewardship activities. By August 2019, 256 investors had adopted the Code.

Question 1. What is the rate of adoption of this voluntary Code? Are there any incentive measures to promote a higher adoption rate?

RESPONSE As of 14 February 2020, 277 institutions, including both domestic and foreign institutions, have accepted Japan's Stewardship Code. However, since it is difficult to identify the total number of institutional investors, the adoption rate is currently not calculated. The Japan FSA incentivizes the institutional investors by updating and publishing the list of institutional investors when it receives the notification of acceptance of the Code from them.

(WT/TPR/S/397, Page 167, para 4.161)

The privatization process of Japan Post Bank (JPB) is dependent on that of the mother company, Japan Port Holdings (JPH). The Japanese Government must own at any time one third of JPH shares by law. The Government had sold 19.5% and 23.6% share of JPH in 2015 and 2017 respectively. A third sale (which would cover at most 23.5% of the shares) has not been decided yet.

Question 2. What are the timelines for the selling of the shares of JPH and the privatisation of JPB?

RESPONSE (1) As for the timelines for the selling of the shares of Japan Post Holdings (JPH), please refer to Para 4.161 in the Trade Policy Review Report by the Secretariat.

(2) The timing of the selling of the shares of Japan Post Bank (JPB) held by JPH will be decided by JPH. The shares, however, are scheduled to be sold as early as possible with an aim to sell all the shares while considering the business conditions of JPB, the impact on the fulfillment of universal service obligations, etc.

Banking services (WT/TPR/S/397, Page 168, para 4.169)

To support innovative projects improving user convenience and/or productivity of companies, the FSA established the FinTech Proof of Concept (PoC) Hub. A special working team in cooperation with relevant authorities and/or industry associations will be set up as necessary for each selected PoC project, to give advice on issues related to compliance and supervision, etc.

Question 3. Are foreign companies eligible to join this programme? What are the selection criteria and whether foreign companies are subject to the same criteria as local companies?

RESPONSE Foreign companies can also apply for FinTech PoC Hub. The FSA determines whether the PoC project is suitable for the Hub based on the following criteria: 1. Clarity: Details of the PoC project and the legal issues and/or concern regarding the laws and regulations of the PoC project must be clear. WT/TPR/M/397/Add.1

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2. Social significance: If the service is put to practical use, the improvement of user convenience and/or corporate productivity in Japan must be expected. 3. Innovativeness: The service must be innovative enough. 4. User protection: In case general service users are involved in the PoC project, appropriate protective measures, including explanations for such service users, must be taken. 5. Feasibility: Resources, such as finance and personnel, must be ensured to execute the PoC project.

The same criteria are applied to foreign companies.

Telecommunication services (WT/TPR/S/397, Pages 170-172, paras 4.182-4.189)

The government policy regarding telecommunications during the period under review was essentially focused on consumer protection and lowering of costs linked to the use of mobile handsets. Under a plan approved by the communications ministry's panel, Japan's four main mobile phone operators and the Mobile Virtual Network Operators will be obliged to cut cancellation charges by 90%, to JPY 1,000 or less from the current JPY 9,500, enabling users to switch companies more easily.

Question 4. Why only the four main operators are involved? Is there any plan to extend the obligation to other operators?

RESPONSE The rules in the Telecommunications Business Act for completely separating communication charges and terminal charges, and correcting excessive enclosure such as term-bound contracts apply to all Mobile Network Operators (MNOs), and all the Mobile Virtual Network Operators (MVNOs) that are specific affiliates of MNOs, and MVNOs that exceed a certain market share. Currently, there are 24 telecommunications operators subject to these rules.

Postal, courier and express services (WT/TPR/S/397, Pages 172-173, Box 4.6; Page 174, para 4.199)

The conditions for application of "general correspondence services" require complete territorial coverage, the installation of "correspondence collection boxes" evenly throughout the country, according to the populations of municipalities, a six-days-a-week delivery frequency, the guarantee of secrecy of correspondence, and an adequate business plan. While the service is liberalised, no private provider has applied for a licence. The only operator is the Japan Post.

Question 5. Is there any plan to relax the application conditions to encourage the participation of private operators and introduce competition in the sector?

RESPONSE Requirements for participation in the general correspondence delivery service are kept to the minimum necessary in order to prevent cream skimming, which provides services only to highly profitable customers such as companies and persons in urban areas, ensure the universal service of correspondence delivery, and safeguard the secrets of correspondence. Currently, there is no specific plan to relax the application conditions.

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INDIA

Questions based on Secretariat Report (WT/TPR/S/397)

Page 10, Para 1

Question 1 Kindly elaborate on the inflation targeting strategy of Bank of Japan?

RESPONSE The Bank of Japan sets the "price stability target" at 2 percent in terms of the year-on-year rate of change in the consumer price index (CPI) – a main price index. The Bank commits itself to expanding the monetary base until the year-on-year rate of increase in the observed consumer price index exceeds the price stability target of 2% and stays above the target in a stable manner ("inflation-overshooting commitment").

Page 10, Para 2

Question 2 India requests Japan to provide the details of trade related structural reforms in the area of labour market policies and taxation.

RESPONSE Please refer to both "1.2.4.1" and "1.2.4.4" in the Trade Policy Review Report by the Secretariat.

Page 10, Para 5

Question 3 India requests Japan to provide an insight of some of the key domestic policy objective/changes with a view to develop free, fair and high-level trade rules.

RESPONSE With CPTPP, the Japan-EU EPA and Japan-U.S. Trade Agreement, together encompassing about 60 per cent of the world economy, Japan is at its center of this vast free economic area. Under such circumstances, Japan has steadily implemented measures based on the "Comprehensive TPP- Related Policy Framework", which was revised last December. These measures are intended to encourage Japanese businesses and producers including SMEs to seize new markets overseas, and to strengthen the competitiveness of domestic industries.

Page 11, Para 6

In this paragraph, the report states that the structure of the MFN applied tariff remains complex, with a total of 272 tariff rates (same as in FY2016); there are 136 different ad valorem rates, 75 different specific rates, 29 different alternate rates and 24 different compound rates, as well as 8 different other types of duty.

Question 4 Does Japan have any plans to simplify the presently complicated structure of the MFN applied tariff?

RESPONSE Japan does not have such a plan.

Question 5 Kindly specify the reason behind keeping the simple average tariff rate for agricultural products at 17.9% compared with 3.5% for non-agricultural products.

RESPONSE With a huge population and limited farmland, Japan remains one of the world's largest importers of food. As the food production of trade partners may fluctuate, a certain level of domestic production should be secured in order to address food security concerns. To this end, Japan applies import duties consistent with the WTO rules while importing a considerable amount of agricultural products.

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Question 6 In this paragraph, the report mentions that 7.1% of Japan's tariff lines are non-ad valorem and all the highest tariffs have non-ad valorem rates. Could the Japan please inform us the reason for keeping non-ad valorem rates for all the highest tariffs?

RESPONSE Japan set an appropriate tariff rate on each product, taking into consideration the situations of domestic sectors, which is consistent with WTO Agreements.

Question 7 Does Japan have any plans to convert non-ad valorem rates to ad valorem rates in order to simplify and enhance transparency of its trade regime?

RESPONSE Japan does not have such a plan.

Page 11, Para 7

Question 8 Kindly elaborate the new principle on cargo reporting undertaken with regard to simplify the custom procedure.

RESPONSE The "new principle on cargo reporting" mentioned here is that the electronic reporting of advance information on air cargo through the computer system called NACCS became mandatory. The new principle was introduced as one of the counterterrorism measures, not intended to simplify the customs procedures.

Page 11, Para 8

Question 9 What is the quantity and value of import and export of marine products since 2015?

RESPONSE The quantity and value of import and export of marine products since 2015 are shown in the following table.

Export Export Import Import Year Tonnes USD million Tonnes USD million 2015 556,151 2,278 2,488,065 14,181 2016 537,187 2,434 2,380,732 14,704 2017 595,085 2,452 2,478,679 15,835 2018 749,791 2,747 2,383,690 16,202

Source Trade Statistics of Japan.

Page 11, Para 9

Question 10 Does Japan have any plans to remove the definitive duties on polyethylene terephthalate anytime in the near future?

RESPONSE The Government of Japan imposes anti-dumping duties on Polyethylene terephthalate with a high degree of polymerization originating in the People's Republic of China from December 28, 2017 until December 27, 2022 in accordance with the Cabinet Order and relevant WTO agreements.

Page 11, Para 5

Question 11 what are the changes that were made to the framework for graduation from Japan's GSP scheme?

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RESPONSE Please refer to 2.3.2.2 in the Trade Policy Review Report by the Secretariat.

Question 12 On what basis does Japan determine giving GSP benefits and the continuation or withdrawal of such benefits?

RESPONSE Please refer to 2.3.2.2 in the Trade Policy Review Report by the Secretariat.

Page 11 Paragraph 9

Questions 13 Can Japan provide the details of its amendment to the legislation on anti-dumping?

RESPONSE Please refer to 3.1.7.1 in the Trade Policy Review Report by the Secretariat.

Page 11, Para 10

Question 14 India requests Japan to apprise on the various changes made to its export control regime.

RESPONSE The requested information is available on the website of the Ministry of Economy, Trade and Industry ("METI") as follows (Japanese): https://www.meti.go.jp/policy/external_economy/trade_control/index.html; https://www.meti.go.jp/policy/anpo/ (English): https://www.meti.go.jp/english/policy/external_economy/trade_control/index.html

Page 11, Para11

Background: Domestic support to production and trade remains in place. It is available to foreign and domestic companies through tax incentives, grants and loan schemes.

Question 15 In light of abovementioned backgrounddoes Japan agree to the fact that domestic support to production and trade is equally available to the domestic as well as foreign companies without any discrimination? In case the Answer is NO then please explain the circumstances.

RESPONSE These supports are implemented in accordance with the relevant WTO Agreements.

Page 11, Para 10

Question 16 Please explain the changes made by Japan to its export control regime with respect to goods and destinations.

RESPONSE Please refer to pages 70-72 of the Secretariat Report.

Page 11, Para 11

Question 17 Does the domestic support tax incentives, grants and loan schemes undertaken by Japan are WTO- complaint?

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RESPONSE Assuming that the question is asking about the WTO-consistency of Japan's domestic support, tax incentives, grant and loan schemes, these measures are undertaken in compliance with relevant WTO Agreements.

Page 12, Para 16

Question 18 How much revenue is earned from Intellectual Property rights that have increased exponentially in recent years?

RESPONSE Balance of payments statistics (Preliminary) show that the receipt of "Charges for the use of intellectual property n.i.e." was 5,107.7 billion yen in 2019.

Question 19 Kindly elaborate on the functions/role of the Integrated Innovation Strategy Promotion Council.

RESPONSE The government established the Integrated Innovation Strategy Promotion Council chaired by the Chief Cabinet Secretary, as an organization to coordinate relevant councils on innovation, namely, the Council for Science Technology, and Innovation (CSTI), IT Strategic Headquarters, Intellectual Property Strategy Headquarters, Headquarters for Healthcare Policy, Space Development Strategy Headquarters, and Headquarters for Ocean Policy, and implement the Integrated Innovation Strategy.

Page 12, Para 17

Question 20 What is the reason for running a trade deficit in agriculture goods despite relatively high support to agricultural sector (0.84% of GDP in 2018)?

RESPONSE With a huge population and limited farmland, Japan remains one of the world's largest importers of food. As the food production of trade partners may fluctuate, a certain level of domestic production should be secured in order to address food security concerns. To this end, Japan supports the agricultural sector consistent with the WTO rules while importing a considerable amount of agricultural products.

Page 12, Para12

Question 21 India requests Japan to provide the details of amendments made to the standard legislation.

RESPONSE

Regarding the details of amendments made to Japanese Industrial Standards (JIS), Japanese Agricultural Standards (JAS) and Food labelling standards, we would like you to see the following websites or the following part of Secretariat Report respectively. [Japanese Industrial Standards] Website: https://www.meti.go.jp/english/policy/economy/standards_and_conformity/pdf/20200226.pdf [Japanese Agricultural Standards] Website: https://www.maff.go.jp/j/jas/h29_jashou_kaisei.html (Japanese Site) [Food labelling standards] Website (Japanese language): https://www.caa.go.jp/policies/policy/food_labeling/food_labeling_act/#laws or see the following part of Secretariat Report, 3.118 and 3.119.

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Page 12, Para13

Question 22 What are the key amendments made to the Food Sanitation Act?

RESPONSE Please refer to paragraph 3.128 in the Trade Policy Review Report by the WTO secretariat.

Background: It has been mentioned that Japan sets some standards on food additives and maximum residue limits (MRLs) that are different from Codex standards and MRLs; these are apparently based on scientific evidence.

Questions 23 In the context of above background India requests Japan to clarify whether the MRLs for the aforesaid are higher than the codex standards?

RESPONSE Japan takes into account the Codex standards whenever reviewing Maximum Residue Limits (MRLs) for agricultural chemicals, in accordance with Article 3.1 of the WTO SPS Agreement. Japan, when necessary, sets MRLs different from Codex standards based on scientific evidence which are higher or lower than the Codex standards.

Page 13, Para 18

Question 24 What is the reason behind declining figures of fisheries production, fishing fleet, number of fishermen and fish consumption?

RESPONSE The reasons may include the ageing of fishermen, and Japanese society in general, as well as the loss of fishing grounds.

Page 13, Para 20

Question 25 In this paragraph, the report states that during the review period, certain manufacturing policy developments, including artificial intelligence, robotics and related plans interlinked with services, were undertaken. Kindly elaborate on the various plans mentioned in the report.

RESPONSE The Future Vision towards 2030s aims to use technological advances, including IoT, big data, artificial intelligence, and robots to address societal challenges and promote economic growth. Japan will harness these technologies to carry out reforms in the fields of healthcare, mobility, infrastructure, and FinTech. With these advances, Japan aims to achieve Society 5.0, a super-smart society and the product of the fourth industrial revolution. Additional information about Society 5.0 can be found here: https://www.japan.go.jp/abenomics/_userdata/abenomics/pdf/society_5.0.pdf.

The various plans mentioned in the report can be found using the links below:

The Future Vision towards 2030s- https://www.meti.go.jp/english/press/2017/0530_003.html Connected Industries Initiative- https://www.meti.go.jp/english/press/2017/1002_004.html 2017 Artificial Intelligence Technology Strategy- https://www.nedo.go.jp/content/100865202.pdf Robot Strategy- https://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/robot_honbun_150210EN.pdf

Question 26 Does Japan have any plans to reduce the peak rates (AVEs) for footwear and silk products?

RESPONSE Japan doesn't have such a plan.

Question 27 Which industrial items were subject to anti-dumping duties? WT/TPR/M/397/Add.1

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RESPONSE Please refer to Table 3.7 in the Trade Policy Review Report by the Secretariat.

Page 13, Para 18

Background: Japan amended its Fisheries Act in 2018 to adopt the system of individual quotas, transferrable under certain conditions, within a Total Allowable Catch system, and to open the sector to private investors in addition to cooperatives by reforming the allocation of fishing rights. In the light of above background India requests Japan to:

Question 28 Explain under what conditions individual quotas are transferable?

RESPONSE In the case the quota is transferred together with the fishing vessel to which the quota is allocated, such transfers are allowed upon authorization either by the Minister of Agriculture, Forestry and Fisheries, or the prefectural governor.

Question 29 What is the specific limit under total allowable catch system?

RESPONSE Based on the results of the assessment, the total catch limit for each stock allowable in the management period (i.e. one fishing year) is set under the system.

Page 13, Para 19

Question 30 India requests Japan to provide the details of major reforms that has taken place in electricity and gas sectors.

RESPONSE  Since the Great East Japan Earthquake followed by the nuclear accident, many issues of the existing electricity system have been revealed. The Cabinet decided "The policy on Electricity System Reform" on April 2, 2013 which specified objectives and schedules of the reform. The drastic institutional reform is being implemented according to three stages scheduled by the cabinet decision.  The first bill to revise the Electricity Business Act for expanding the cross-regional coordination for transmission operators and for determining the process of the electricity system reform by 2020 was enacted as the first stage on November 13, 2013.  Moreover, the bill to revise the Electricity Business Act for introducing full retail competition was enacted as the second stage on June 11, 2014.  The third bill to revise the Electricity Business Act for legal unbundling of transmission and distribution sectors was enforced as the third stage on June 17, 2015.  Through the series of revision of the act, "full liberalization of electricity retail entry" was enforced in April 2016 so that competition was activated with the implementation and there were more than 600 entries. Moreover, the legal unbundling of transmission and distribution sector from retail and power generation sectors will be implemented in April 2020.  Regarding as city gas businesses, please take a look at the attached document that shows gas market structure details and full liberalization of retail market.

Page 13, Para 20

Question 31 India requests Japan to provide a detailed insight on manufacturing policy development specifically for Artificial Intelligence and Robotics that were undertaken.

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2017 Artificial Intelligence Technology Strategy at: https://www.nedo.go.jp/content/100865202.pdf; Robot Strategy at: https://www.meti.go.jp/english/press/2015/pdf/0123_01b.pdf.

Page 13, Para 20

Question 32 India would request Japan to apprise on the fact that whether domestic support for the non-industry specific scheme has been continued for anything beyond what has been mentioned in para 20.

RESPONSE Please refer to the paragraph 4.145 and 4.153.

Page 13, Para 21

Question 33 India request Japan to provide an insight on how the high-speed trading is regulated in Japan and also mention the changes if any during the review period.

RESPONSE As described in para 4.6-1, section 4.3 of WT/TPR/G/397, FSA has introduced measures including registration requirement on high speed trading, by the amendment of the Law for Partial Revisions of the Financial Instruments and Exchange Act etc. (entry into force on April 1, 2018).

Page 14, Para 27

Background: The practice of legal services is not reserved for nationals but, with respect to the practice of Japanese law, a Japanese qualification is required. Foreign firms can establish and employ Japanese lawyers to practice Japanese law.

Question 34 Against the aforementioned background does Japan agree to the fact that if a foreign lawyer is practicing International Law or advising on any such transaction bereft of Japanese law and legislation they can establish a firm and employ lawyers for their firm sans/ without Japanese qualification within the territory of Japan?

RESPONSE Although Japan fails to see the point of the question, the Registered Foreign Lawyer System in Japan is as follows. ・ A foreign lawyer must be recognized as "Gaikoku-Ho-Jimu-Bengoshi(Registered Foreign Lawyers)" by the Minister of Justice and register with the Japan Federation of Bar Associations to provide legal services in Japan. ・The professional duties of a Registered Foreign Lawyer isto provide legal services concerning the laws of the state of primary qualification. Practice of international law is permitted, provided that the international law is or was in force in the jurisdiction of Japan. ・Any Registered Foreign Lawyer who conducts duties illegally beyond the scope of the above duties is subject to disciplinary action. In addition, criminal penalties can be imposed if the violation is serious. ・Commercial presence is required for Registered Foreign Lawyers to provide legal services. ・ A Registered Foreign Lawyer may establish a Registered Foreign Lawyer Corporation. A Registered Foreign Lawyer or a Registered Foreign Lawyer Corporation can employ Lawyers, Registered Foreign Lawyers or Foreign Lawyers.

Page 16, Table 1.1 Selected macroeconomic indicators, 2014-18

Question 35 What is the reason behind the reduction in percentage change of Exports of goods and services from 6.8 % in 2017 to 3.3% in 2018?

RESPONSE In the latter half of 2018, factors such as the gradual slowdown of China's economic growth, leveled off demand for ICT goods that was previously increasing, and impacts of trade disputes between the WT/TPR/M/397/Add.1

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United States and China, such as tariff increases, caused the growth rate of exports, which were mainly to China, to slow down.

Page 17, Para 1.3

Question 36 What is the impact of the consumption tax rate hike from 8% to 10% on its economy?

RESPONSE The Japanese economy has decelerated in the October-December quarter of 2019 due to a combination of factors, including the slowdown of the global economy, the consumption tax rate hike, and natural disasters. Domestic demand has declined due to the effects of the consumption tax rate hike and natural disasters, but it is predicted to follow an uptrend. Overall, the negative impact of tax hike on the growth rates for FY 2019 and 2020 is expected to be smaller than for the tax rate hike in FY 2014 due to various factors, including measures implemented by the Government. Concerning short-term prospects, weakness remains for the time being, but the economy is expected to continue recovering, supported by the effects of the policies, while employment and income situation are improving. Also, the Bank of Japan releases additional information about these measures and the economic impact (the Bank of Japan's Outlook for Economic Activity and Prices, https://www.boj.or.jp/en/mopo/outlook/box/index.htm/.)

Page 17, Para 4.13 Background From the Government Report -The maximum levels of radioactive caesium in food were set to meet the intervention exemption level of the Codex Alimentarius Commission (Codex), 1mSv/year, considered as safe for the public, and in consideration of the released nuclides and with highly conservative and hypothetical assumptions, including that 50% of the food intake is contaminated. Accordingly, the maximum level for food in general is set as 100 Bq/kg in Japan, while the corresponding Codex guideline level is 1,000 Bq/kg (CXS 193-1995).

Question 37 Is Japan applying requirement of 100 Bq/kg for radioactive caesium in food for the products imported into Japan from other territories?

RESPONSE A. Japan sets the maximum levels for radionuclides in food as follows: ✓ 10 Bq/kg for drinking water ✓ 100 Bq/kg for food in general ✓ 50 Bq/kg for milk ✓ 50 Bq/kg for infant food

The levels are applied to all foods distributed in Japan, therefore, they are also applied to imported foods.

Question 38 Does Japan have any timeline for review for the requirement of 100 Bq/kg for radioactive caesium in food?

RESPONSE Japan's maximum levels for radionuclides in food* has been set not to affect human health when foods are taken daily for a long period. At this stage, Japan does not have a plan to reconsider the levels. *Note: See Question 37. WT/TPR/M/397/Add.1

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Page 23, Para 1.14

Question 39 What are those airport operation concessions which were granted?

RESPONSE Airport concession in Japan is, under the Private Utilization Airport Operation Act, to conduct integrated operations of both aeronautical business and non-aeronautical business under private management, while the public sector, including the government of Japan, retains ownership of land and runways. The purposes of airport concession are to realize an integrated management leveraging the private sector's originality and ingenuity, to enhance aviation network through flexible setting of landing fees, and to revitalize the local community by expansion of personal interaction both domestic and international. Specific outsourcing methods to the private sector are as follows: First, the airport concessionaire conducts operation of runways etc. under the operation right of public facilities granted by the government, and also conducts operation of terminal building etc. by acquiring shares of semi-public corporation etc. Second, the airport concessionaire sets and receives landing fees and other revenue, and covers the operation cost by such income.

Page 25, Para 1.9

Question 40 What factors led to the increase in current account surplus from 3.1% of GDP in 2015 to a peak of 4.1% in 2017?

RESPONSE One of the main factors of the increase in the current account surplus was the shift in the trade balance from deficit to surplus.

Page 29, Para 1.26

Question 41 What percentage of private investment in Japan is financed by foreign players?

RESPONSE Japan does not have such data asked by India.

Page 30, Para 1.27

Question 42 India requests Japan to provide the details of its major capital exports.

RESPONSE Please refer to (Table 1.5 Inbound and outbound flows of direct investment, by activity, 2014-18) in the report or the following URL. URL： https://www.mof.go.jp/english/international_policy/reference/balance_of_payments/ebpfdii.htm

Page 34, Para 2.2

Question 43 Kindly elaborate on the steps Japan is adopting to achieve sustainable growth?

RESPONSE Japan aims to achieve sustainable growth by implementing reforms to pioneer Society 5.0. Reforms are in progress in the following areas:

1. Innovation in Societal Structures 2. Diversity and Empowerment of People 3. Smart Regulations and Laws 4. Attractive International Opportunities WT/TPR/M/397/Add.1

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5. More Competitive Business

Additional information about steps being taken to achieving sustainable growth can be found at: https://www.japan.go.jp/abenomics/_userdata/abenomics/pdf/2001_abenomics.pdf.

Page 34, Para 2.3

Question 44 In this paragraph, the report states that initiatives were undertaken for 10 Strategic Public-Private Joint Projects (an initiative to cultivate new markets and for knowledge- and strategy-sharing between the public and private sectors). Could Japan provide a list of 10 Strategic Public-Private Joint Projects?

RESPONSE The list of 10 Strategic Public-Private Joint Projects is as follows. (1) Promotion of the fourth industrial revolution (IoT, Big Data, artificial intelligence) (2) Promotion of world-leading healthcare nation (3) Overcoming environment-energy constraints and expansion of investments (4) Transformation of Sports sector to a growth industry (5) Revitalization of existing housing and housing-renovation market (6) Improvement of productivity in service industry (7) Renovation of mid-ranking companies, SMEs and microenterprises (8) Promotion of proactive agriculture, forestry and fishery and strengthened export (9) Promotion of tourism nation (10) Stimulation of consumer appetite by public-private collaboration

Page 34, Para 2.3

Question 45 Kindly elaborate on the role of new entities such as the Public-Private Council for the Fourth Industrial Revolution, the Artificial Intelligence Technology Strategy Council; and the Council for Promoting Human Resource Development to Respond to the Fourth Industrial Revolution.

RESPONSE 1. Public-Private Council for the Fourth Industrial Revolution The Future Investment Council plays the role of the Public-Private Council for the Fourth Industrial Revolution in the Japan Revitalization Strategy 2016. The Council was established under the Headquarters for Japan's Economic Revitalization (a committee in which all Ministers participated for overcoming the strong yen and deflation and revitalizing a strong economy in cooperation with the Council on Economic and Fiscal Policy) as the headquarters of growth strategies. It promotes bold investments in fields contributing to future growth, including the Fourth Industrial Revolution, through public-private partnerships.

2. Strategic Council for AI Technology Based on instructions issued by the Prime Minister in the Public-Private Dialogue towards Investment for the Future in April 2016, Japan established the Strategic Council for AI Technology, which was reorganized to the AI Strategy Expert Meeting for Strength and Promotion of the Innovation in 2018, and the discussion of AI strategy was taken on by the expert meeting. In 2019, Japan established the AI Strategy 2019 based on the proposal of the expert meeting.

3. Council for Promoting Human Resource Development to Respond to the Fourth Industrial Revolution Based on the Japan Revitalization Strategy 2016 (decided at the Cabinet Council on 2 June 2016), Japan created the Council for Promoting Human Resource Development to Respond to the Fourth Industrial Revolution in December 2016 and held five conferences up to April 2017. The Council discussed the type of human resources that would be demanded in the Fourth Industrial Revolution era and policies necessary to develop such human resources. Japan incorporated the results of these discussions in the Investment for the Future Strategy 2017 (decided at the Cabinet Council on 9 June 2017), which specified revision of the indicator (IT skill standards) that systemized and clarified the necessary practical ability, system reform and policy support for higher education institutions such as universities to become important players in "IT and data skill training", implementation of IT/data education, such as programming in primary and secondary education, and so on. WT/TPR/M/397/Add.1

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Page 37, Para 2.11

In this paragraph, the report mentions that Japan supported the Buenos Aires Joint Declaration on Trade and Women's Economic Empowerment.

Question 46 What is Japan's policy stand on including women empowerment related provisions in Trade Agreements?

RESPONSE At this point, the Government of Japan does not have such intention.

Page 41, Para 2.16

Question 47 What is the impact of the first protocol amendment of Agreement on the ASEAN-Japan Comprehensive Partnership? Will this help Japan to deepen its integration with the ASEAN countries?

RESPONSE Japan and ASEAN countries are important partners of investment and trade with each other. Upon its conclusion, the First Protocol to Amend the Agreement on Comprehensive Economic Partnership among Japan and Member States of ASEAN is expected to further enhance trade in service and investment and strengthen cooperation between Japan and ASEAN countries.

Page 41, Para 2.17

Question 48 What is the reason behind postponing the negotiations with Gulf Cooperation Council?

RESPONSE After official declaration of the launch of the FTA negotiations between Japan and the Gulf Cooperation Council in 2006, multiple rounds of negotiations were held. However, since the GCC started reviewing its FTA policies as a whole, the negotiations have been suspended since 2009.

Question 49 Kindly elaborate on the reason behind suspending the negotiations with the Republic of Korea?

RESPONSE The EPA negotiations between Japan and Korea were launched in 2003 but were suspended after the 6th round of negotiations in 2004. On the other hand, Japan and Korea are now aiming at the realization of regional economic partnerships through the negotiations of RCEP and the Japan-China- Republic of Korea FTA.

Page 43, Para 2.20

Question 50 Which products are subject to Tariff rate quotas in Japan agreement under CPTPP?

RESPONSE Please refer to Section B "TPP Wide TRQs (TWQs)" and Section C "Country-Specific TRQs (CSQs)" of ANNEX 2-D "Tariff Commitments" APPENDIX A, "Tariff Rate Quotas of Japan". https://www.mfat.govt.nz/assets/Trans-Pacific-Partnership/Annexes/2-D.-Japan-Appendix-A- Tariff-Rate-Quotas.pdf.

Page 42-43, Para 20

Question 51 Can Japan please explain how does it apply the Tariff Rate Quota (TRQ) which is country specific?

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RESPONSE Please refer to Section C, "Country-Specific TRQs (CSQs)" of ANNEX 2-D "Tariff Commitments" APPENDIX A. Please note that "Tariff Rate Quotas of Japan", in which CSQs for the U.S. are not effective. https://www.mfat.govt.nz/assets/Trans-Pacific-Partnership/Annexes/2-D.-Japan-Appendix-A- Tariff-Rate-Quotas.pdf.

Page 43, Para 2.26

Question 52 How does Japan determine giving GSP benefits at varying degrees to the countries as well as for the specific products?

RESPONSE Japan's GSP scheme, which started in August 1971, designates beneficiary countries/territories, beneficiary products, and their respective duty rates under the Temporary Tariff Measures Law and the Cabinet Order for Enforcement of the Temporary Tariff Measures Law. For more information, please refer to the following URL: https://www.customs.go.jp/english/c-answer_e/imtsukan/1501_e.htm.

Page 45, Para 2.31

Question 53 How does Japan visualize the next generation trade and investment issues within the fold of its future RTA's?

RESPONSE Japan envisages that APEC should work on both the Next Generation Trade and Investment Issues (NGeTIs) and areas such as digital trade, labour and state owned enterprises(SOEs), which are defined as the Potential Next Generation Trade and Investment Issues (NGeTIs) and also are not included in the Next Generation Trade and Investment Issues (NGeTIs), towards the realization of high quality and comprehensive FTAAP. TPP11, a "pathway" for the realization of FTAAP, can be seen as a model for 21st century trade and investment rules due to its high quality and comprehensiveness. Japan will continue to strive for steady implementation and expansion of such rules with other economies.

Question 54 India requests Japan to provide a detailed account of works it has done specifically in the domain of digital economy be it regulatory, legislative or monetary policy measures?

RESPONSE APEC agreed on the Work Plan for advancing "Facilitating Digital Trade for Inclusive Growth" as a Potential Next Generation Trade and Investment Issue in 2015. Based on Leaders' instruction included in their 2015 Declaration, in 2016, the Collective Strategic Study on Issues Related to the Realization of the FTAAP (CSS) included digital trade as a potential next generation trade and investment (NGeTI) issue, while without prejudice to possible future work on FTAAP. For the eventual realization of FTAAP, digital trade/e-commerce elements are indispensable and should address the business needs and the latest trends of international trade and the global economy. Japan proposed the following Work Plan to advance discussion on digital trade/e- commerce as one of the key elements for the eventual realization of FTAAP and endorsed it at the APEC CTI2 meeting in May 2019.

Objectives/Work Plan The proposed Work Plan aims to achieve the following objectives: 1) Take stock of digital trade/e-commerce elements in FTAs/RTAs, assess convergence and divergence, and examine current situations and new trends. 2) Assess digital trade and e-commerce related initiatives in APEC (CTI, DESG, TEL, including the APEC Internet and Digital Economy Roadmap, APEC Cross-Border E-Commerce Facilitation Framework, etc.) and initiatives in other international fora including the WTO. 3) Building on 1) and 2), conduct experience-sharing and capacity building activities for enhancing members' understanding of digital trade/e-commerce elements of FTAs/RTAs and their capacity to negotiate comprehensive, high-quality FTAs/RTAs. WT/TPR/M/397/Add.1

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4) Consider next steps on the issues related to the eventual realization of FTAAP taking into account the above-mentioned assessments and capacity building activities. Through the process, cooperation with other international fora will be explored for conducting the Work Plan. Without prejudice to possible future work on FTAAP, the above-mentioned exercise could be helpful in the context of economies' further discussions on the FTAAP.

Japan presented the progress/update on the Work Plan at CTI1 in February 2020. The presenter briefed that Japan will circulate a questionnaire to all APEC economies on e-commerce (e.g. Particular factors to consider when setting new e-commerce provisions in new FTAs), Government strategies (e.g. Political stance) etc. and that each economy will be requested to respond by the end of March. The results of this questionnaire will be fed back to each APEC member economy during CTI2 in April.

Page 45, Para 2.31

In 2016, APEC leaders adopted the Lima Declaration on the Free Trade Area of the Asia Pacific (FTAAP), which envisages negotiations on a comprehensive RTA which would include "nextgeneration trade and investment issues".

Question 55 Kindly elaborate on the next generation trade and investment issues adopted under the Lima Declaration on the Free Trade Area of the Asia Pacific (FTAAP).

RESPONSE As stated in the Collective Strategic Study on Issues Related to the Realization of the FTAAP finalized by APEC members in 2016 and served as a basis of the Lima Declaration on FTAAP(2016), GSCs, SME, innovation policy, transparency in RTAs/FTAs and manufacturing related services are endorsed as the Next Generation Trade and Investment Issues (NGeTIs) and its works related to these areas are being undertaken. Japan envisages that we should work on areas such as digital trade, labour and state owned enterprises (SOEs), which are defined as the Potential Next Generation Trade and Investment Issues (NGeTIs) and also not included in the Next Generation Trade and Investment Issues (NGeTIs) towards the realization of high quality and comprehensive FTAAP.

Question 56 What strategy will the APEC members follow to progress on the areas such as the digital economy; building a seamless and comprehensively connected and integrated Asia-Pacific by 2025; increasing the APEC's competitiveness in the services sector by 2025; developing policies to take advantage of global value chains; advancing economic, financial and social inclusion; and ensuring food security and sustainability.

RESPONSE Japan has been and will continue to working on the areas referred in the question, following the respective APEC strategies. ▪ APEC Internet and Digital Economy Roadmap (AIDER) (2017) ▪ APEC Cross-Border E-Commerce Facilitation Framework (2017） ▪ APEC Connectivity Blueprint for 2015-2025(2014） ▪ APEC Services Competitiveness Roadmap (2016-2025) (ASCR) (2016) ▪ APEC Strategic Blueprint for Promoting Global Value Chains 2020-2025 (2019) ▪ APEC Action Agenda on Advancing Economic, Financial and Social Inclusion in the APEC Region (2017） ▪ APEC Food Security Roadmap 2020 (2014)

Furthermore, APEC is currently working on creating an "APEC Post 2020 Vision", which will follow the Bogor Goals, towards the completion of this year.

Page 46-47, Para 2.36 Background: In 2017, the FEFTA was amended, inter alia, to expand the scope of a prior checking of unlisted stock transfers between foreign investors, and to introduce a provision that foreign investors investing in Japan without being registered may be subject to executive orders, including WT/TPR/M/397/Add.1

- 25 - orders to sell their holding stocks; these measures were taken in order to protect Japan's essential security.58 There have been no further amendments since 2017.

Question 57 Against the above background from the wording "without being registered" can it be deciphered that foreign investors may be exempted or would be treated at par with the Japanese investors in case of executive orders including the orders to sell their stocks?

RESPONSE Ordering measures concerning investors 'without being registered' are issued for foreign investors who have obligation to notify the inward direct investment or equivalent action, or the specified acquisition.

Page 49, Para 2.43

Japan is ranked in 39th place out of 190 economies in the World Bank's 2019 Doing Business report; it scores well in the areas of resolving insolvency, getting electricity, dealing with construction permits, and registering a property. Its poorest rankings are for: starting a business, getting credit, and protecting minority investors.

Question 58 What steps Japan is following in order to improve on the rankings for starting a business, getting credit, and protecting minority investors.

RESPONSE Japan regularly explained by video conferences and letters its improvement of related system and an erroneous assumption of the facts to the World Bank. In addition, Japan held the Business environment improvement liaison meeting of the ministry concerned and efforts to strengthen its improvement of related system.

Question 59 Are there any recent initiatives taken to improve the poorest ranking? If yes, kindly elaborate on the same.

RESPONSE Please refer to the answer of Question 58 of India.

Page 52, Para 3.2

Question 60 Could Japan please provide an account of the new principle it has integrated regarding reporting on matters related to cargoes in electromagnetic records?

RESPONSE As answered in Question 8, the "new principal on cargo reporting" mentioned here is that the electronic reporting of advance information on air cargo through the computer system called NACCS became mandatory.

Page 55, Para 3.22

Question 61 Does Japan have any plans for tariffication of the 648 lines which are non-ad valorem?

RESPONSE Japan does not have such a plan.

Page 57, Para 3.23

Question 62 What is the reason behind keeping high non-ad valorem duties for Fats and oils?

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RESPONSE Japan's tariff structure for fats and oils (HS code chapter 15) is set out in Japan's WTO schedule, which reflects the outcome of negotiation.

Page 57, Para 3.24

Question 63 Kindly specify the reason behind protection of agriculture sector by using high import duties?

Page 57, Para 3.24

Question 64 The highest rates, which are out-of-quota AVE rates, are 499.7% for certain broad and horse beans peas, followed by 389.8%. In this regard, what is the reason behind using non-ad valorem rates which are promoting non-transparency in the tariff regime?

RESPONSE Japan's tariff structure for agricultural products is fully transparent and predictable, and is set out in Japan's Tariff Schedule (publicly available).

Question 65 Does Japan is considering the options to reduce non-ad valorem rates through free trade agreements/preferential trade agreements?

RESPONSE It generally depends on the outcome of each trade negotiation whether customs duties, including non-ad valorem tariffs on individual goods, are reduced.

Page 58, Para 3.25

Question 66 Why Japan is protecting its food, beverage and tobacco industries by using highest average tariffs?

Question 67 What is the total production capacity of food, beverage and tobacco industry in Japan?

RESPONSE According to data available in FAOSTAT, the value of agricultural production for food was USD 85,866 million in 2016 and that for agriculture was USD 87,344 million in 2016. There is no data available for "beverage."

Question 68 What is the export capacity of food, beverage and tobacco industry?

RESPONSE The total export value of food and agricultural products in 2018 is 906.8 billion JPY. Since there is no category for the export capacity of food nor beverage, there is no data available.

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Page 63, Para 3.36

Question 69 Kindly elaborate on the cases where Japan has used its Retaliatory tariff system?

RESPONSE Please refer to 3.1.4.5 and footnote 33 in the Trade Policy Review Report by the Secretariat. As the footnote states, the most recent occasion when Japan applied a retaliatory tariff was with respect to certain goods originating in the United States in relation to the Byrd Amendment. Although a retaliatory tariff has not been applied since September 2014, Japan has notified the WTO that it retains the right to impose this tariff.

Page 63, Para 3.39

Question 70 Does the exceptions to import prohibition applies to both natural and the juridical person(s)?

RESPONSE Exceptions to some import prohibitions can apply to natural persons and juridical persons.

Page 70, Para 3.61

Question 71 Japan is requested to provide the link of websites of the Animal Quarantine Service and the Plant Protection Station where export prohibitions in place for sanitary and phytosanitary purposes are available.

RESPONSE We note this Secretariat Report, including its paragraph 3.61, was elaborated by the WTO Secretariat on its own responsibility. While the TPRM (Trade Policy Review Mechanism) provides for that the WTO Secretariat should seek clarification from members, this particular paragraph was added without consultation with government of Japan and hence it is erroneously written. The government of Japan confirms that there is no export prohibition for sanitary and phytosanitary purposes. Japan is contacting the WTO Secretariat to correct the Secretariat Report accordingly.

Page 93, Para 3.151

Question 72 India requests Japan to provide the details of changes and salient feature of the amendments made to its leniency programme.

RESPONSE The amendment act of the Antimonopoly Act, which was promulgated in June 2019, introduced a system which allows the JFTC to reduce the amount of surcharges when enterprises submit information and documents which contribute to the fact-finding of the case, in addition to the reduction according to the order of application. Specifically, under the amended Antimonopoly Act, JFTC will become able to reduce the amount of surcharges calculated based on the amount of sales of goods or services subject to cartels and predetermined rates by up to 40% for violators who apply for the leniency programme before the investigation start date, and up to 20% for violators who apply for the leniency programme on or after the investigation start date, in addition to the reduction according to the order of application. The amended Antimonopoly Act has also abolished the current limitation on the number of enterprises who can apply for the leniency programme. To be specific, while five enterprises can apply for the leniency programme under the current system, after the revision of the Antimonopoly Act, all the enterprises under the investigation will have the opportunity of cooperating in JFTC's investigation voluntarily.

Page 105-106, Para 3.176-3.177 Background IP is of vital importance to the economy. The Japan Patent Office (JPO) found a correlation between patent rights and operating profits on sales for SMEs, which account for more than 99% of all businesses in Japan. Over the five-year period ending in December 2017, revenue from IP increased WT/TPR/M/397/Add.1

- 28 - by over 74%, and exceeded JPY 50,000 billion in 2018. According to OECD international trade statistics, Japan ranks third, behind the United States and the European Union, regarding charges for the use of IP (i.e. royalties and licensing revenue). These charges constituted 22% of Japan's services exports in 2017. According to the Bank of Japan, Japan generated a trade surplus of JPY 2.6 trillion in charges for the use of IP in 2018.

Question 73 Kindly provide a complete break up in terms of different IPRs (including patent, trademark, undisclosed information among others) contribution in revenue generated from IP.

RESPONSE Please refer to the attachment. There are no further data available.

（100 million Yen） Charges for the use of intellectual property n.i.e.（a+b） Credit Debit Net balance 2019 51,077 28,153 22,924 (Preliminary) Charges for the use of industrial property n.i.e.(a) Credit Debit Net balance 2019 45,025 10,538 34,487 (Preliminary) Charges for the use of copyrights n.i.e.(b) Credit Debit Net balance 2019 6,053 17,615 -11,562 (Preliminary)

Page 108-109, Para 3.188-3.189 Background

SMEs may also avail themselves of comprehensive IP Support Service Counters in all 47 prefectures, which provide free-of-charge assistance from experts on legal matters, branding, business development, agriculture, and GIs. An IP Finance Portal Site helps SMEs to evaluate the business potential of their IP, along with financing and management support from financial institutions. The Global IP Producers programme offers support for establishing and protecting IPRs overseas, and JPO offers SMEs an insurance scheme, for which it pays half of the premium, which covers the cost of overseas IP litigation.

In 2018, the JPO established the "IP acceleration programme for start-ups", which dispatches expert teams of venture capitalists, business consultants, and attorneys to provide hands-on support in the early stages of development to selected start-ups. The JPO also offers "super-accelerated examination" to start-ups, so they can obtain patent rights within one month for inventions that are already being worked. Most recently, the JPO launched IP Base, an online community providing essential information on IP strategies, JPO support, event information, and access to IP experts for start-ups. Start-ups can also expect to benefit from government procurement programmes, set forth in the 2018 IP Strategy Vision, to promote partnerships between start-ups and existing businesses.

Question 74 Kindly provide a list of measures taken (with concerned laws) by Japan to provide easy and affordable access of technology to SMEs.

RESPONSE Information on Support Measures for Small and Medium-Sized Enterprises: Japan Patent Office (JPO) provides small and medium-sized enterprises with easy-to-understand information on the overall support measures implemented by the JPO and INPIT (National Center for Industrial Property Information and Training), such as the Intellectual Property Comprehensive Help Desk, the seminar on IP rights systems, reduction and exemption of patent fees, etc., the dispatch of global intellectual property producers, the subsidy for filing foreign applications which subsidizes the costs required for foreign applications, and support measures for overseas expansion, such as fee reduction systems for charges related to PCT international applications, etc. In addition, the JPO has opened an IP Finance Portal Site that evaluates the business potential of small and medium-sized enterprises utilizing IP, and introduces initiatives that will lead to financing and WT/TPR/M/397/Add.1

- 29 - management support from financial institutions (IP finance). Incidentally, these support measures are not provided under certain laws.

Page 109, Para 3.190 Background Japan is adapting its IP regime and associated processes to the development of Big Data, artificial intelligence (AI) technologies, and the Internet of Things (IoT). Standard essential patents (SEPs), which are essential to implement standards in fields such as wireless communications, have become critical to the development and implementation of new technologies, and licences are increasingly sought by companies in previously distinct industries with diverse sets of technical knowledge and corporate cultures. In response to increasing disputes over SEPs, Japan launched several initiatives during the review period.

Question 75 Has Japan come up with specific patent examination guidelines for Big Data, artificial intelligence (AI) technologies, and the Internet of Things (IoT)? Please provide details.

RESPONSE Computer software related inventions including big data, AI or IoT related inventions are examined in compliance with Annex B, Chapter 1 of "Examination Handbook for Patent and Utility Model in Japan" as well as general patent examination guidelines. https://www.jpo.go.jp/e/system/laws/rule/guideline/patent/handbook_shinsa/document/index/ap p_b1_e.pdf. The JPO also provides a lot of case examples concerning AI or IoT related inventions in Annex A of "Examination Handbook for Patent and Utility Model in Japan". https://www.jpo.go.jp/e/system/laws/rule/guideline/patent/handbook_shinsa/document/index/ap p_a_e.pdf.

Page 114, Para 3.210 Background Accelerated and super-accelerated examination programmes reduced average FA pendency to 2.3 months and 0.7 months, respectively, for qualifying applications in 2018. Accelerated examination is available upon request for applications made by SMEs, applications that have been filed in more than one country, and applications for inventions that have already been put into practice. Accelerated examination for inventions involving environment-related technologies is under trial. A pilot super-accelerated examination may be requested for "highly important" applications, including inventions already put into practice by either a start-up or an applicant who has filed for patent protection abroad. The JPO outsources prior art searches, plans to employ AI technology to improve speed and quality, and has introduced design-driven management principles to improve the quality of its services to users.

Question 76 What falls into "highly important' applications? What is the procedure followed for them?

RESPONSE "Highly important" applications are applications for inventions "that have already been put into practice and that are also filed in one or more other countries," or "that are applied by startups and that have already been put into practice." A request for a super-accelerated examination will be made by submitting a form of "Written explanation of the needs of the super-accelerated examination." It is necessary to describe the circumstances related to a filing of a super-accelerated examination, disclosures of the prior art documents and explanations of the comparisons with the invention and the prior art, etc. in the form of "Written explanation of the needs of the super- accelerated examination."

Page 114, Para 3.212 Background Although domestic patent applications have declined overall since 2007, applications in the fields of business methods, biotechnology, mechanical parts, and control/robotics experienced growth from 2013 to 2014 (latest available data). A 2019 JPO study also found that, although small in absolute terms, the number of domestic patent applications filed annually for AI-related inventions is growing rapidly, with a 65% increase between 2016 and 2017 alone. Question 77 WT/TPR/M/397/Add.1

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What are the criteria's enumerated for granting patents in the field of Business Methods?

RESPONSE No special criteria are required for granting patents in the field of Business Methods. Note, if the business methods depend on computer software technologies, the business methods as computer software related inventions are examined in compliance with Annex B, Chapter 1 of "Examination Handbook for Patent and Utility Model in Japan" as well as general patent examination guidelines. (See the answer to the question 75)

Page 115-116, Para 3.216 Background Japan's approach to parallel imports and compulsory licensing did not change during the review period. Japan maintains that parallel imports promote price competition, and submits that the Anti- monopoly Act prohibits their obstruction in certain circumstances. Section 92 of the Patent Act can permit compulsory licenses for the improvement of inventions, but its application has been limited by a bilateral agreement with the United States, in effect since 1995. No legislative or regulatory action was taken on the proposal in the Intellectual Property Strategic Programme 2017 for an alternative dispute resolution system for SEPs, which some viewed as introducing compulsory licences.

Question 78 In Japan, are parallel imports allowed for all the IP rights? Please indicate the rights for which parallel import are not allowed.

RESPONSE In Japan, parallel imports are not always allowed for all the IP rights in the same manner. Regarding patent rights and trademark rights, parallel imports could be allowed if they fulfill certain conditions. Regarding copyrights, parallel imports are allowed except in certain cases.

Page 116, Para 3.218 Background Except for an adjustment to the calculation of infringement damages, discussed in Section 3.3.7.12, there were no significant amendments to the Utility Model Act or the process for registering an UM, during the review period. Applications and registrations of UMs continued their decades-long decline. Almost all applications lead to grant (Table 3.27) and are registered faster than patents since there is no substantive examination.

Question 79 Has there been any study by Japanese Govt. authorities to analyse reasons behind the decade long decline in application and registration of utility patents even when almost all applications lead to grant and are registered faster than patents? Kindly provide details.

RESPONSE Patents are registered through substantive examinations, and the patent term is 20 years from the filing date. On the other hand, utility models are registered without substantive examinations, and the term of the right is 10 years from the filing date. In terms of the enforceability, Applicants may prefer patent to utility model.

Page 117, Para 3.226 Background Although the number of trademark applications submitted to the JPO decreased slightly in 2018, the number of applications had been growing at annual rates from 6%-18% since 2014 (Table 3.29). Non-traditional trademarks, including motions, holograms, colours, sounds, and positions, have been registrable in Japan since 2015. As at December 2018, non-traditional trademarks had been registered, from 1,746 applications (mostly combinations of colours and devices/words).

Question 80 Kindly provide the details about the type of non-traditional trademarks given including sound, smell and touch marks. The Japanese trademark system protects five types of non-traditional trademarks introduced in WT/TPR/M/397/Add.1

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2015: sound marks, color per se marks, position marks, motion marks, and hologram marks.  Sound marks Marks consisting of music and/or sounds, which are recognized by auditory perception  Color per se marks Marks consisting solely of a single color or a combination of colors  Position marks Marks consisting of characters and/or figures, which are placed on products in specific positions  Motion marks Marks, in which characters and/or figures change as time passes  Hologram marks Marks consisting of characters and/or figures which display different, changing images depending on the angle at which they are viewed In addition, smell and touch marks are not protected in Japan.

Page 119, Para3.236 Background The Unfair Competition Prevention Act (UCPA) protects trade secrets and prohibits unfair competition. A METI study group, tasked with identifying an IP system that is responsive and supportive of the Fourth Industrial Revolution, reported, in 2017, that then-existing measures were insufficient to prevent the unfair use of data. Accordingly, 2018 amendments to the UCPA, which took effect on 1 July 2019, establish civil remedies for the wrongful acquisition, disclosure, and use of "data for limited provision" – information that is valuable to business and society but does not qualify as a trade secret or for copyright protection. This includes technical or business information accumulated in a reasonable amount, managed by electronic or magnetic means, and regularly provided to specific persons. The law is reportedly the first in the world to attempt to protect Big Data. The METI published new Guidelines on Protected Data on 23 January 2019, which offer practical guidance on the amendments, including examples of targeted behaviours.

Question 81 Whether Unfair Competition Prevention Act (UCPA) has settled the question of ownership of data? Whether raw data also comes under the protected data under the statute? Kindly provide details.

RESPONSE The UCPA does not stipulate an ownership of data. In order to develop an environment where data can be exchanged with confidence, the UCPA defines "protected data" as data that satisfies three requirements, that is, "limited provision", "electromagnetic management" and "significant accumulation". Also, the UCPA defines unauthorized acquisition, use and disclosure of "protected data" as unfair competition and provides civil measures such as claims for injunctions and claims for compensation for loss or damages against unauthorized acquisition, use, disclosure, etc. of protected data. Raw data such as machine operation data or consumption trend data could be "protected data" as long as the data satisfies the above three requirements and claim for injunctions and compensation against unfair competition of "protected data" under the UCPA is available.

The definition of "protected data" is as follows: Article 2(7) of the UCPA The term "protected data" as used in this Act means technical or business information that is accumulated in a reasonable amount by electronic or magnetic means (meaning an electronic form, magnetic form, or any other form that is impossible to perceive through the human senses alone; the same applies in the following paragraph) as information provided to specified persons on a regular basis and that is managed (excluding information that is kept secret).

Page 120, Para 3.239-3.240 Background The Copyright Act enumerates an exclusive list of circumstances in which unauthorized use is permissible (rights restrictions provisions). New flexible limitations were introduced, to respond to digitization and networking. The provisions aim to promote information technology innovation and the development of AI technologies by permitting, inter alia, certain unauthorized uses that either do not impair or cause only minor harm to the copyright owner's interest and further a service or other function that uses Big Data. More specifically, the amendments permit the free use of a copyrighted work when necessary to (i) test technology for the use of the copyright work; (ii) analyse information; or (iii) process information using a computer without human recognition. Unauthorized WT/TPR/M/397/Add.1

- 32 - use is also now permitted, as required, to ensure the smooth or efficient use of a copyrighted work in a computer. Minor use as part of a computer's information processing and provision of corresponding results also does not require authorization. The revision also facilitates the use of copyrighted materials in computerized education, promotes the use of copyrighted works in archives, and enhances opportunities for persons with disabilities to access information. Copyright term was extended from 50 years to 70 years after the author's death.

Question 82 What flexibilities have been introduced to ensure public accessibility of copyrighted works in order to balance with the significant increase in duration of protection of copyrighted works? Kindly provide details.

RESPONSE In order to protect copyrights and neighboring rights appropriately and encourage the fair exploitation of copyrighted works, for example, from the view point of promoting the use of orphan works, Japan repeatedly improves the compulsory license system for the legal use of the works where the copyright owner is unknown, etc.

Page 121, Para 3.244 Background Counterfeiting and piracy continue to cause meaningful losses to the Japanese economy. A 2018 fiscal year report commissioned by the JPO estimates JPY 111 billion as the total profit lost by all industrial property right holders, based upon survey data. The METI reports recent signs of improvement. During the review period, the JPO continued to conduct annual surveys on losses suffered by Japanese enterprises caused by counterfeiting and piracy. 24.1% of respondents reported losses in the 2018 report, an increase of 1.7% over the prior year. Online piracy, in particular, has been referred to as a "rampant problem" that could significantly impair the rights of copyright holders. The Content Overseas Distribution Association estimates that piracy costs Japanese publishers JPY 400 billion per year.

Question 83 What measures have been undertaken by Japan to counter the counterfeit and pirated goods distributed through e-commerce platforms? Kindly explain.

RESPONSE One of the characteristic countermeasures for online IPR infringement in Japan is a private sector initiative; because EC platformers do not infringe any IPR directly, it is difficult to impose responsibility for management of internet IPR infringement on them from public initiative as for now. For example, an IPR protection group, consisting of EC platformers and brand owners, voluntarily patrols the EC site, deletes counterfeit and pirated sites and reports to the relevant authorities. Recently, public-private collaboration in order to combat trafficking in counterfeit and pirated goods has become more common.

Page 119, Para3.232 Background The 2014 Act on Protection of the Names of Specific Agricultural, Forestry and Fishery Products and Foodstuffs introduced a sui generis system of protection for GIs of foods, beverages, and agricultural and marine products. It prohibits direct or indirect use of a GI on a non-originating product and applies the level of protection required by Article 23 of the TRIPS Agreement to all registered GIs (not only wine and spirits). The Act was amended in 2016 and 2018 to conform with Japan's international commitments.

Question 84 Please indicate whether GI protection is given to goods other than agriculture goods. Please give details whether this is done through a sui generis protection?

RESPONSE GI protection for non-agricultural forestry and fishery products such as handicrafts is not provided through a sui generis system in Japan. In the meantime, the Unfair Competition Prevention Act provides legal means, which are based on the Article 22.2 of the TRIPS Agreement. The Act provides civil and criminal means against an act, as one of the types of unfair competition, which misleads the public as to the place of origin, quality, content etc. of goods (see Article 2(1) (20) of the Act). WT/TPR/M/397/Add.1

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Article 2(1) (20) The term "Unfair Competition" as used in this Act means any of the following: (20) the act of using an indication on goods or services, in an advertisement thereof, or in trade documents or electronic correspondence thereof, in a way that is likely to mislead as to the place of origin, quality, content, manufacturing process, purpose, or quantity of the goods, or the quality, content, purpose, or quantity of the services, or the act of transferring, delivering, displaying for the purpose of transfer or delivery, exporting, importing, or providing through a telecommunications line goods so indicated, or the act of providing services so indicated

Background Many countries are introducing mandatory data sharing requirements on the private sector, especially in the e-commerce sphere, to spur domestic innovation. The aim of this question is to get more information about the Japanese framework on this (if any).

Question 85 Does Japan have any mandatory data-sharing requirement between businesses? If yes, Japan is requested to share the relevant details of such requirement(s).

RESPONSE Japan has no mandatory data-sharing requirements between businesses to spur domestic innovation.

Page 121, Para 3.246 Background With respect to import seizures, Japan Customs statistics do not distinguish between seizures undertaken following complaint and ex officio. The number of total annual cases fluctuated in recent years. The number of articles seized annually had also been declining since 2014, before nearly doubling in 2018, following the seizure of a large shipment of pharmaceuticals (Chart 3.8). Most cases and articles relate to trademark infringement, although the numbers related to patents and designs grew during the review period. Bags, apparel, and footwear accounted for more than half of import seizure cases, but pharmaceuticals, housewares, and appliances were seized in the greatest quantities. More than 80% of the cases and articles were traced to China. Advances in cross-border e-commerce increased the rate of infringing goods imported by post

Question 86 Japan is requested to provide the following details as per document CAC/GL 25-1997 of the Codex "GUIDELINES FOR THE EXCHANGE OF INFORMATION BETWEEN COUNTRIES ON REJECTIONS OF IMPORTED FOOD" on the refusals and seizures of all goods: 1. Which is the Japanese web site providing detail of refusals and seizures, as directed by the guideline of Codex? 2. How different is the Japanese web page, in terms of content and information, does it provide the value and quantity of such imported consignments? 3. Is it similar to others like OASIS, RASFF and RAPEX? India requests the availability of such information on an urgent basis for analysing the market access under the Japan-India CECA – in tariff lines wherein the Japan has provided preferential access.

RESPONSE 1. Please see the following website and its section of Recent Cases of Violation of the Food Sanitation Act from the view of the safety of imported foods. https://www.mhlw.go.jp/stf/seisakunitsuite/bunya/kenkou_iryou/shokuhin/yunyu_kanshi/index_0 0017.html. 2. While the website above does not include the quantity of each imported food of violation of the Food Sanitation Act, the following website (Statistics of Imported Foods Monitoring) provides total quantity of foods of violation by each country per fiscal year (2018 Fiscal Year: 1 April 2018 – 31 March 2019). https://www.mhlw.go.jp/content/000571850.pdf. However, Japan does not have information on value of such consignments of violation from the view of the safety of imported foods. 3. If one needs to see the similarity of other like OASIS, RASFF and RAPEX, please see the above websites. Page 11, Para 7 Background WT/TPR/M/397/Add.1

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Since 2017, there have only been minor changes to Japan's customs procedures. These include the introduction of: tougher penalties for failure to obtain the required import/export permissions; a new principle on cargo reporting; and flexibility to authorized economic operators to lodge their import/export declarations at any customs office, not just the one where their imports/exports are stored.

Question 87 Japan is requested to provide the exemptions provided for the firms who fail to obtain the required import/export permissions. 1. Has the implementation of the regulation analysed? 2. Is this regulation a unique feature of Japanese custom procedure? 3. Is the regulation forcing Japanese firms to perform/perish? 4. Has this modification (since 2017) been analysed in terms of improvements or enhanced inventory management? India requests Japan to provide the following information and concern raised.

RESPONSE (1) The effects of the amended provision have been analyzed. (2) The amendment to the Customs Law in 2018 raised the amount of fines from "not exceeding 5,000,000 yen" to "not exceeding 10,000,000 yen or five times the value of goods pertaining to the offence" for those who fail to get Customs clearance for export/import goods. It is not sure whether this provision is unique to Japan or not. (3) Any persons, including Japanese companies, who fail to get Customs clearance for export/import goods are subject to this penalty. (4) The amendments to the Customs Law since 2017 do not relate to inventory management.

Page12, Para 17 Background Agricultural policy goals, inter alia, include making agriculture a growth industry, with greater private-sector participation, increasing exports, and reaching certain self-sufficiency targets. Support to the agricultural sector (0.84% of GDP in 2018) remains relatively high and was estimated to be over double the OECD average.

Question 88 Japan is requested to provide justification to maintaining a high level of support to farmers and the agricultural sector in general. 1. What is the relevance of the agricultural sector in the GDP (2017) when it accounts for only 1% and the manufacturing (30%) and lastly the service sector (69%)? 2. Is the Japanese agricultural sector efficient? Are the Japanese fearing food security concerns? 3. Are all the support provided to the agricultural notified to the WTO under the AOA? Please provide answers to the following two questions.

RESPONSE 1. With a huge population and limited farmland, Japan remains one of the world's largest importers of food. As the food production of trade partners may fluctuate, a certain level of domestic production should be secured in order to address food security concerns. To this end, Japan applies domestic supports consistent with the WTO rules while importing a considerable amount of agricultural products. 2. In accordance with various socio-economic changes, there have been continuous efforts to seek efficiency in agriculture. 3. All the necessary notifications have been made as required in the WTO rules.

Document –WT/TPR/S/351

Page 108, 109, Para4.81, 4.85-4.91 Background Regarding banking, the 1947 Banking Act and its subordinated legislation were amended in June 2013, with entry into force of the amendments in April 2014. Some of the amendments deal with the regime applicable to domestic banks or to all banks, while others are specific to foreign banks. The amendments specific to foreign banks are discussed in the subsequent paragraphs 4.85-4.91. Question 89 WT/TPR/M/397/Add.1

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Japan is requested to inform how the discriminatory amendments specific to foreign banks are compatible with its GATS National Treatment commitments in Financial Services.

RESPONSE Japan understands India's question 89 is the same question which Japan received from India, as question 37, in the previous TPR process (Japan TPR 2017). For your information, Japan's previous response is as follows:

"The partial relaxation of requirements in respect of agency services and intermediary services (para. 4.85) is to cover a domestic bank conducting business as an agent or intermediary of a foreign bank outside of Japan. The revised licensing standards (para. 4.87 and 4.88) are equivalent to the standards for domestic banks. The information obligation newly imposed (para. 4.89) is based on the fact that enrolment of foreign bank branches are not enrolled into the deposit insurance system and it is necessary to specify information on the risks for depositors in the unlikely event that a foreign bank fails. The obligation to maintain assets in Japan (para. 4.90) is equivalent to the one for domestic banks. The Act on Special Measures for Reorganization (para. 4.91) has been applied to domestic banks, and the revision in 2013 extended the scope of application to foreign bank branches. Therefore, the amendments described in para 4.85 to 4.91 are consistent with the GATS National Treatment commitment."

Page 112, Para 4.96 Background Regarding the mobile interconnection regime, based on the Japan Revitalization Strategy (Cabinet decision in June 2013) and the report by the Information and Communications Council (December 2014), the Telecom Business Act was amended in May 2015 (with entry into force of the amendments in May 2016) so as to promote fair competition and encourage the entry of new mobile virtual network operators (MVNO). The amendments impose an unbundling obligation on mobile network operators, which under the previous MIC guidelines could decide to what extent they would interconnect, and which expenses would be charged at production costs.

Question 90 Japan is requested to provide the details of the unbundling obligations. Japan is also requested to inform if there exist any limitations pertaining to data localization, server localization and access to source code.

RESPONSE In the Japanese mobile telecommunications market, when mobile network operators (MNOs) to which radio waves are allocated install equipment of certain scale, MNOs are obliged to formulate "general conditions of contracts for interconnection" on interconnection charges and the terms and conditions of interconnection for connecting with the equipment to notify the Minister of Internal Affairs and Communications in advance. MNOs are also obliged to uniformly apply the filed "general conditions of contracts for interconnection" when concluding a connection agreement with other carriers. Interconnection charges shall be calculated as not exceeding "a reasonable cost plus reasonable profits under efficient management." The Ministry of Internal Affairs and Communications conducts verification on the charges based on the calculation, and this process ensures the appropriate level of calculation. For unbundling, which enables competitors such as MVNOs to use only the necessary part of network by subdividing it, the setting of "unbundling function" is stipulated. In the MVNO guidelines, "unbundling function" is required to be set when the following requirements are satisfied. ① There is a request from another carrier regarding unbundling of functions. ② Unbundling is technically feasible. ③ Unbundling does not place undue financial burden on Category II designated operators. ④ "Unbundling function" is a function related to services that are highly necessary and important. At present, "unbundling function" includes the following functions according to the ministerial ordinance. ① Voice transmission switching function ② Data transmission switching function ③ Number portability transfer function ④ Short message transmission switching function WT/TPR/M/397/Add.1

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The calculation method for "unbundling function" is determined by the ministerial ordinance, in which it is required to set interconnection charges for each function according to this method. With regard to access to source code, Japan has regulatory measures which may require access to source code in some areas including competition policy, financial services and medical devices.

Page 116, Para 4.107 Background Public assistance to the sector, including by local governments, is relatively limited. There are no tax incentives for film production, and subsidies by local film commissions are minimal, except to a certain extent for those provided by the Okinawa film commission.

Question 91 Japan is requested to provide the details of the subsidy schemes/programs available for the Audio- Visual Services. Which of these schemes/programs are available only to domestic companies and not to foreign companies?

RESPONSE Regarding the promotion of Japanese content abroad, Ministry of Economy, Trade and Industry (METI) provides the subsidy for subtitles and participation in foreign markets. This subsidy is only available to domestic companies and their overseas subsidiaries. The Agency for Cultural Affairs (Bunka-cho) provides subsidies to production of Japanese films and International co-production films (a total of \740 million, FY2019), and also subsidizes subtitles and participation in foreign film festivals. These programs are only available to domestic companies.

Page 122, Paragraph 4.133 Background Chart 4.15 describes the evolution over the last decade of so-called "registered foreign personnel with medical status", i.e. foreign personnel having qualified either through Japanese examinations or through recognition and that have remained in Japan to practice.

Question 92 Japan is requested to provide the details of the process and conditions for recognizing foreign medical degrees.

RESPONSE Advanced clinical training is a system that aims to contribute to the progress of international exchange in the medical industry and the improvement of medical levels of developing countries. This system specially permits foreign medical practitioners visiting Japan for medical training to perform medical treatment on this training in order to completely achieve its objective. Foreign medical practitioners are permitted to perform medical treatment services under the tuition and supervision of clinical instructors at hospitals or clinics designated by the Minister of Health, Labour and Welfare. *Foreign medical practitioners: Physicians, Dentists, Midwives, Nurses, Medical Radiology Technicians, Dental Technicians, Clinical Laboratory Technicians, Physical Therapists, Occupational Therapists, Orthoptists, Clinical Engineers, Prosthetists, Speech Therapists, Emergency Life-saving Technicians. "Medical Services" is the status of residence regarding medical occupations that must not be undertaken without Japanese legal qualifications. In particular, the status of residence of "Medical Services" is granted to foreign nationals whose activities are to engage in medical treatment services, with the legal qualifications as physicians, dentists, pharmacists, public health nurses, midwives, nurses, assistant nurses, dental technicians (shikaeiseishi), medical radiology technicians, physical therapists (rigakuryouhoushi), occupational therapists (sagyouryouhoushi), orthoptists (shinoukunrenshi), clinical laboratory technicians (rinshoukougakugishi), or prosthetists (gishisougushi). On the other hand, advanced clinical training (rinshoushuren), in which foreign medical practitioners or foreign dental practitioners with foreign qualifications equivalent to Japanese physicians or dentists engage with permission from the Minister of Health, Labour and Welfare of Japan, does not fall under the category of the status of residence of "Medical Services."

Page 129, Para4.151 Background In both instances the authorities will check the fulfilment of the technical requirements (Article 27 of the Medical Treatment Act). Even if the planned clinic satisfies the technical requirements, the WT/TPR/M/397/Add.1

- 37 - authorization will be granted only if the number of beds in hospitals and clinics in the region concerned does not exceed the standard fixed by the prefecture government (Articles 30-4 and 30- 7 of the Medical Treatment Act). This standard applies to both Japanese-owned and foreign-owned clinics.

Question 93 Could Japan inform the details of the standards fixed by the prefecture government for clinics?

RESPONSE When establishing a clinic, the establisher shall notify the prefectural governor of the area in which the clinic is located within ten days of its establishment. The essential items include the name and address of the establisher, the name of the clinic, the location of the clinic and so on.

Page 167, Para4.163

Question 94 India requests Japan to explain the specific expansion to the final Basel III (commonly known as Basel IV) standards to cover a wider range of capital requirements by 2022.

RESPONSE Japan has been working on implementing Basel standards as shown in the progress report issued by BCBS. For further details, please look at para 4.163 and para 4.164 in the Secretariat report.

Page 168, Para 4.166 Background Regarding e-payments, Japan has been relatively slow to switch to cashless payments, and credits cards, for instance, are much less used than by other OECD countries. However, this is now changing very rapidly, due to e-payments (notably by mobile phones) and more marginally to cryptocurrencies. The Government set an objective of 40% of cashless payments by 2025.

Question 95 Japan is requested to provide details of regulations pertaining to e-payments and cryptocurrencies. What are the steps taken by it to increase cashless payments?

RESPONSE Regarding the e-payments, while there is no sole definition of e-payments, business operators have to comply with the relevant regulations subject to its type of business. The regulations include the following: [E-money] Under the "Payment Services Act", e-money (electronic money) and issued for prepaid/pre-loaded values fall within the category of prepaid payment instruments. Prepaid payment instruments are classified into the following two types: (1) those which can be used for purchase of goods and services only from the issuer of prepaid payment instruments (prepaid payment instruments for own business); and (2) those other than (1) (prepaid payment instruments for third-party business). *If the total amount of the outstanding balance of the prepaid payment instruments for one's own business prescribed in (1) exceeds 10 million yen on the record date (on March 31 and September 30 every year), the issuer shall give notification to the Local Finance Bureau within two months from the record date. *The issuer of the prepaid payment instruments for third-party business prescribed in (2) shall register with the Local Finance Bureau in advance. [Funds Transfer Service] When a person/entity engages in exchange transactions equivalent to one million yen or less in the course of trade, registration as a funds transfer service provider is required. For exchange transactions exceeding one million yen, a license for banking business pursuant to the "Banking Act" is required. Funds transfer service providers are subject to certain regulations, particularly those in which they are required to preserve not less than 100% of the outstanding amount of funds that are in the middle of being transmitted or are pending by means of deposits.

WT/TPR/M/397/Add.1

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Regarding regulations about crypto assets (cryptocurrencies), the "Payment Services Act" stipulates that the following business activities are considered as "virtual currency exchange services," in which a service provider is required to register with the JFSA: (1) Exchange between a virtual currency and a fiat currency, or exchange between a virtual currency with another virtual currency; (2) Intermediary, brokerage, or agency services for the business activities prescribed in (1); or (3) Management of users' money or virtual currency in connection with the business activities prescribed in (1) or (2). For user-protection and anti-money laundering, a registered virtual currency exchange service provider is under obligations including, but not limited to, the following: - To provide prior explanation and information to service users about the characteristics of a virtual currency, such as facts that (i) it is not a fiat currency; (ii) it is not backed by a fiat currency and its value may fall below the purchased price; and (iii) its value is not guaranteed; - To establish a system risk management framework; - To manage the money and virtual currency deposited by service users separately from its own money and virtual currency, as well as to undergo an audit by a certified public accountant or an audit firm, with regard to the state of segregation management; and - To perform the obligations under the "Act on Prevention of Transfer of Criminal Proceeds" such as customer identification at the time of transaction, preparation and keeping of transaction records, and reporting of suspicious dealings to the authorities. Whether certain electronic data falls under "Virtual Currency" under the "Payment Services Act" will be determined on a case-by-case basis pursuant to Article 2 (5) of the "Payment Services Act." Please look at para 4.4 of WT/TPR/G/397 for further details on recent regulatory changes. The Japanese government introduced a new policy, "Cashless Payment Promotion Program," which provides support to small and mid-sized business operators by giving points back to consumers who use cashless payments at these small and mid-sized business operators during a certain period after the consumption tax increase on October 1, 2019.

Page 168, Para4.167 Background Examples of smartphone-based e-payment apps using QR codes include Line Pay by a messaging company, which launched its code payment service in June 2018; J-Coin Pay, launched by Mizuho Bank in cooperation with 56 banks in March 2018 and which has a target of 6.5 million or more users in five years; Rakuten Pay, developed by an Internet company; and PayPay, a joint venture between a mobile operator, Softbank, and an Internet company, Yahoo!Japan. Some foreign operators, such as Paypal, have registered, and operate in Japan.

Question 96 Kindly inform what are the conditions for entry and operations of foreign players for e-payment services? Are there any discriminatory barriers?

RESPONSE Please refer to Japan's response to question 95 for registration requirements for entry of relevant business. There are no discriminatory barriers against foreign companies for the entry.

Page 170, Para 4.183 Background Consumer protection rules were enhanced and strengthened by an amendment of the Telecommunication Business Act, promulgated in May 2016. New obligations were introduced, such as the issuing of documents after the signing of a contract, the initial contract cancellation system, the prohibition of mis-statement, the prohibition of continued solicitation, and the provision of guidance to agents. The Ministry of Internal Affairs and Communications (MIC) has been actively monitoring the implementation of these new rules, notably through regular meetings of the Consumer Protection Rules Monitoring Study Group, established under the aegis of the ICT Safety and Security Study Group.

Question 97 Has Japan come up with specific regulations for unsolicited mails and messages? If yes, how effective are these regulations?

RESPONSE Yes, Japan has. WT/TPR/M/397/Add.1

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In 2008, Japan revised the Act on Regulation of Transmission of Specified Electronic Mail (Enforcement date: December 1, 2008). Article 3 of the Act provides that, when sending electronic mails as a means of advertisement for their own or other's sales activities, in principle, the sender shall not send the electronic mails except when a person has notified the sender of the request or the consent to send the mails prior to the transmission thereof. Since this revision, the number of unsolicited electronic mails has been, by and large, on the decline through warnings and ordering measures based on the Act against the violators.

Page 174, Para 4.201 Background The requirements for application for a licence are quality-based. The applicant company must guarantee the protection of secrecy of correspondence and present an adequate business plan. Needs are assessed on the basis of the estimate of business revenues. There are geographical limitations on delivery within three weeks. Permission to operate is given by the MIC and is perpetual. As at July 2019, 538 operators were licensed, none of them foreign. Their total sales amounted to JPY 19.3 billion in FY2018.

Question 98 Japan is requested to inform whether foreign service providers are allowed to provide such kind of services? Are there any discriminatory barriers?

RESPONSE There are no restrictions on foreign investment under the Act on Correspondence Delivery by Private Business Operators, thus, foreign service providers can also participate in the market with the necessary permission as specified in the Act.

Page 174, Para 4.201

Question 99 Can Japan explain the reason behind the fact that out of 538 operators licensed, none of them is foreign?

RESPONSE Since there are no restrictions on foreign participation, whether or not to participate in the business is solely based on the business decision of each operator.

Page 177, Para 4.224 Background The second objective of the third Basic Plan on Ocean Policy is to strengthen coastal shipping operators, to develop advanced coastal ships, and to secure a sufficient number of national seafarers, in line with the June 2017 MLIT Plan for the Future of Coastal Shipping. The Plan sets the target of increasing the average coastal tonnage of cabotage vessels from 715 tonnes in FY2015 to 858 tonnes in FY2025. The Coastal Shipping Tentative Measures Programme/Scrapping Incentives, instituted in FY199892 and the Coastal Shipping Joint Ownership Scheme under the Japan Railway Construction, Transport and Technology Agency (JRTT)93, instituted in 1957, remain unchanged. The Basic Plan on Ocean Policy also foresees the maintenance of the present cabotage regime, i.e. the reservation of the national flag, save exceptions foreseen in the Friendship Commerce and Navigation treaties with Denmark, the United Kingdom and Norway, or under reciprocity conditions.

Question 100 Japan is requested to inform if it provides training facilities for foreign seafarers and are there any bilateral agreements in this regard that Japan has signed.

RESPONSE Japan does not provide any training facilities only for foreign seafarers and has no bilateral agreement in this regard.

Page 178, Para 4.230

Question 101 Can Japan provide the basis /selection criteria by which it selects the operators of container terminal? WT/TPR/M/397/Add.1

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RESPONSE A company must meet requirements (i) - (iv) to be designated as a port operating company. (i) the business content for operation of the group of wharves must be in conformity with the port planning of the container hub port; (ii) the company must have an appropriate and reliable plan for the business of operating the group of wharves, beyond as set forth in the preceding item; (iii) the company must have a sufficient financial basis to operate the group of wharves; (iv) if the company operates a wharf at the container hub port that is not a part of the group of wharves, its integrated operation of the wharf and that group of wharves as one unit must contribute to the efficient operation of the group of wharves at the container hub port.

Page 188, Para 4.275 Background Similarly, there are no GATS-type restrictions on e-commerce. There is no specific general regulatory framework for e-commerce. The main relevant laws deal with consumer protection and e-payments. The most significant among them is the Act on Special Provisions to the Civil Code on Electronic Consumer Contracts and Electronic Acceptance Notice (Act No. 95 of 29 June 2001). This Act provides special provisions to the Civil Code (Act No. 89 of 1896) in cases where there are certain mistakes in the elements comprising an electronic consumer contract, or where an electronic acceptance notice is dispatched by a consumer under a contract made at a distance.109 The Consumer Contracts Act (Act No. 61 of 12 May 2000) permits a consumer to rescind his/her intention to offer or accept a contract when s/he has misunderstood, or was distressed by, certain acts of the business operator. It also nullifies any clauses (in whole or in part) that exempt business operators from liability for damages, or that otherwise unfairly harm the interests of consumers.

Question 102 Japan is requested to inform about the protection of consumers doing online transactions. Are the grievance mechanism and dispute resolution available online?

RESPONSE The Cross-border Consumer center Japan (CCJ) operated by the National Consumer Affairs Center of Japan supports the resolution of disputes over transactions between Japanese consumers and businesses outside Japan. Japanese consumers can file complaints to CCJ online.

Page 189, Para 4.278 Background Legal services accounted for around 0.1% of GDP in 2017. There are over 36,000 lawyers (bengoshi), employed mostly in small-scale firms. The Attorney Act of 1949 grants them the exclusive right to provide legal services, unless explicitly stated otherwise. However, their right to appear in court is shared under certain conditions with some other legal professions, such as judicial scriveners.

Question 103 Japan is requested to provide details of the MRAs signed for recognition of qualification and experiences pertaining to legal services.

RESPONSE There are no MRAs for Attorneys-at-law (Bengoshi) so far.

WT/TPR/M/397/Add.1

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CHILE

WT/TPR/S/397 – Japón (informe de Secretaría OMC)

RESUMEN Párrafo 19, página 14 "La contribución del sector de las industrias extractivas al PIB y al empleo se ha mantenido en niveles mínimos (0,1% en 2017). La explotación de los recursos minerales se realiza en el marco de acuerdos de concesión. El Japón importa todavía cerca del 92% de su suministro energético, por lo que sigue siendo vulnerable a las fluctuaciones de los precios mundiales. El Plan Estratégico de Energía del Japón para 2018 está llamado a incrementar la proporción de energía renovable de producción local (incluida la energía nuclear) en el suministro total, que pasaría del 12% de 2017 a un 24% en 2030, a restablecer la capacidad nuclear, a cumplir los objetivos nacionales de reducción de las emisiones de gases de efecto invernadero, a desarrollar vehículos eléctricos y de hidrógeno, a promover la autonomía energética de las viviendas y a aumentar la eficiencia energética, entre otros objetivos. Durante el período examinado, el Japón ha proseguido la liberalización y la reforma de los sectores de la electricidad y el gas. Se ha liberalizado por completo la entrada de ambos sectores en el mercado minorista y está en marcha la siguiente fase, que consiste en la desagregación de los servicios públicos regionales integrados verticalmente. Los precios al por menor de la electricidad siguen estando regulados".

Pregunta 1 El párrafo 19 menciona objetivos del Plan Estratégico de Energía 2018, entre los cuales se encuentra desarrollar vehículos eléctricos y de hidrógeno. Al respecto, Chile agradecería a Japón compartir más información respecto a las políticas, estrategias, acciones, y metas que ha diseñado para el desarrollo de vehículos de hidrógeno.

RESPONSE The target for the number of Fueled Cell Vehicles (FCV) is mentioned in Basic Hydrogen strategy which was formulated in 2017. To achieve the target, cost target is mentioned in The Strategic Road Map for Hydrogen and Fuel Cells which was revised in March 2019. In addition, technology development items are specified in Strategy for Developing Hydrogen and Fuel-Cell Technologies which was formulated in September 2019.

2 REGÍMENES DE COMERCIO E INVERSIÓN 2.1 Marco General Párrafo 2.3, páginas 35-36 "En el marco de la estrategia de ejecución del programa "Abenomics" se está aplicando la Estrategia de Revitalización del Japón de 2016. Esta lleva aparejadas reformas encaminadas a: impulsar nuevos mercados prometedores; gestar una revolución de la productividad para reducir las limitaciones de oferta y los problemas de inminente escasez de mano de obra; y mejorar la capacidad de las personas para facilitar la transformación industrial. Se están llevando a cabo las siguientes iniciativas: la puesta en marcha de los 10 proyectos estratégicos de cooperación público-privada (una iniciativa orientada a la promoción de nuevos mercados y al intercambio de conocimientos y estrategias entre los sectores público y privado); la introducción de un método basado en una hoja de ruta para el análisis retrospectivo de objetivos; reformas normativas para reducir los gastos de administración de las empresas; reformas relacionadas con la educación, las competencias y la mano de obra; el fomento de la investigación conjunta por parte de la industria y el mundo académico; la introducción de un permiso japonés de residencia y trabajo para profesionales extranjeros altamente cualificados (véase infra); la prestación de apoyo a las empresas para que implanten tecnologías de la información y robots; la promoción de la tecnología en los ámbitos sanitario, medioambiental y energético; la creación de una cadena de suministro del hidrógeno a gran escala (para 2030); la promoción del sector del deporte de cara a los Juegos Olímpicos de 2020; medidas encaminadas a aumentar la productividad del sector de servicios (sección 4.4); la continuación de la reforma del sector agrícola (sección 4.1); medidas para fortalecer e impulsar el turismo; el fomento del uso de las zonas especiales estratégicas nacionales (véase infra); reformas en materia de gobernanza empresarial (véase infra); medidas que propicien unos mercados financieros y de capitales pujantes (sección 4.4.1); y el aumento de la participación privada en los servicios y activos públicos. Con el fin de orientar algunas de estas iniciativas se establecieron varias nuevas entidades, entre ellas, el Consejo Público-Privado para la Cuarta Revolución Industrial, el Consejo de la Estrategia de Tecnología de Inteligencia Artificial y el Consejo de Promoción del Desarrollo de los Recursos Humanos en Respuesta a la Cuarta Revolución Industrial". WT/TPR/M/397/Add.1

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Pregunta 2 En relación con las reformas relacionadas a la aplicación de la Estrategia de Revitalización del Japón de 2016, el párrafo 2.3 menciona la creación de una cadena de suministro del hidrógeno a gran escala (para 2030). Al respecto, Chile agradecería a Japón compartir mayor información acerca de las políticas, estrategias, acciones, y metas que Japón ha diseñado y/o implementado para la creación de una cadena de suministro internacional del hidrógeno.

RESPONSE Japan aimed the reduction of hydrogen cost through the development of large-scale supply chain in Basic Hydrogen Strategy which was formulated in 2017. Furthermore, the targets for specification of the techniques for the development of hydrogen supply chain and the details of the cost are decided in The Strategic Road Map for Hydrogen and Fuel Cells which was revised in March 2019. In December 2019, the world's first liquefied hydrogen pilot carrier was launched.

2.4 Régimen de inversión 2.4.1 Marco de inversión Párrafo 2.34, página 50 "El Sistema de Asignación de Asesores de Inversión ha estado en funcionamiento desde 2016; establece el marco y las condiciones en que los ministros de Estado designados pueden asesorar a las empresas que hayan realizado desde el extranjero inversiones importantes en el Japón".

Pregunta 3 El párrafo 2.34 señala que el Sistema de Asignación de Asesores de Inversión ha estado en funcionamiento desde 2016, y que establece el marco y las condiciones en que los ministros de Estado desinados pueden asesorar a las empresas que hayan realizado desde el extranjero inversiones importantes en el Japón. Al respecto, Chile agradecería si Japón pudiera indicar si existe un umbral para calificar a la inversión como importante, o en su defecto, cuáles son los criterios para calificar a la inversión como tal, y qué asesoría en particular se presta a las empresas que hayan realizado desde el extranjero inversiones importantes.

RESPONSE For the specific definition of "important investments", following three conditions which we used in the bid of Investment Advisor Assignment System in 2016 can be referred. (i) The company has a record of (a) a direct investment of 20 billion yen or more in Japan and (b) 500 or more regular employees in Japan. (ii) The company operates in one of the strategic areas listed in the Strategic Market Creation Plan under the Japan Revitalization Strategy (see below) and is carrying out sound business activities. https://www.kantei.go.jp/jp/singi/keizaisaisei/pdf/zentaihombun_160602_en.pdf. (iii) The company contributes to the invigoration of the Japanese economy through the introduction of new business models into Japan, R&D activities regarding cutting-edge technologies and so on. For the advices to the company which is planning "important investments", please see the following website: http://www.invest-japan.go.jp/en_index.html.

3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.1 Medidas que afectan directamente a las importaciones 3.1.1 Procedimientos y requisitos aduaneros, y valoración en aduana Párrafo 3.2, página 57 "La Ley de Aduanas sigue siendo el principal texto legislativo sobre la documentación y los procedimientos aduaneros. En el período objeto de examen, la Ley de Aduanas se modificó en 2017 y 2018 para, entre otras cosas, incorporar un nuevo principio relativo a la declaración por medio de registros electromagnéticos de las cuestiones relativas a la carga, así como para endurecer las sanciones por no haber obtenido los permisos de exportación e importación en el momento debido. Otras normas que rigen los procedimientos aduaneros son: la Orden del Consejo de Ministros Nº 150 de 1954 (Orden de Aplicación de la Ley de Aduanas) y la Orden del Ministerio de Hacienda de Aplicación de la Ley de Aduanas (Nº 55 de 1966)".

Pregunta 4 En relación con la Ley de Aduanas y sus modificaciones mencionadas en el párrafo 3.2, Chile agradecería a Japón compartir información respecto a si la ley mencionada contiene procedimientos particulares para la importación de hidrógeno. En relación con ello, Chile también agradecería a Japón indicar cual es la documentación requerida aplicable a la importación de hidrógeno.

WT/TPR/M/397/Add.1

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RESPONSE (1) Amendments to the Customs Act mentioned in paragraph 3.2 of the Report by the Secretariat do not include any specific import procedures of hydrogen. (2) For import declarations, documents such as the invoice and packing list specified in Article 61 of the Order for Enforcement of Customs Act are required to be submitted. In addition, for importing hydrogen, the process in Article 22 of the High Pressure Gas Safety Act (No. 204 of 1951) shall be followed. Please see the URL below. http://www.japaneselawtranslation.go.jp/law/detail_main?re=01&vm=04&id=1974.

3.1.6 Prohibiciones, licencias y contingentes de importación 3.1.6.2 Licencias (aprobaciones) y contingentes de importación Párrafo 3.42, páginas 71-72 "Las mercancías sujetas a aprobación de importación con arreglo a la Orden de Control del Comercio de Importación se especifican en el cuadro 3.4. Las modificaciones en lo que respecta a los productos incluidos en esa lista se publican en la Gaceta Oficial como "avisos de importación". Las aprobaciones de importación normalmente tienen una validez de seis meses. Durante el período examinado se eliminaron las prescripciones en materia de licencias de importación respecto de los productos siguientes: i) las ballenas y sus preparados, en julio de 2019, debido a la denuncia por el Japón de la CBI; y ii) las armas y otros artículos procedentes de Eritrea, ya que las sanciones aplicadas se retiraron en virtud de una resolución del Consejo de Seguridad de las Naciones Unidas y, por tanto, se suprimieron las restricciones."

Pregunta 5 Respecto a la información indicada en el párrafo 3.42, Chile agradecería a Japón confirmar que la importación de hidrógeno no se encuentra sujeta a licencias o contingentes de importación.

RESPONSE Hydrogen is not subject to import quotas or import approval under the Import Trade Control Ordinance.

3.1.7 Medidas antidumping, compensatorias y de salvaguardia 3.1.7.1 Medidas antidumping Párrafo 3.50, páginas 76-77 "Las investigaciones antidumping pueden iniciarse cuando el Gobierno lo considere necesario, cuando una rama de producción nacional formule una solicitud de investigación al Ministro de Hacienda o cuando existan pruebas suficientes. El Ministro de Hacienda da a conocer la decisión mediante la publicación de un aviso público en la Gaceta Oficial. Las investigaciones están a cargo de un equipo integrado por funcionarios de la Oficina de Asuntos relacionados con los Recursos Comerciales del Ministerio de Hacienda, la Oficina de Investigaciones sobre Recursos Comerciales del METI y el ministerio con competencias sobre la rama de producción de que se trate. La decisión definitiva de imponer un derecho antidumping se dicta como Orden del Consejo de Ministros. No podrán aplicarse medidas provisionales antes de transcurridos 60 días desde la fecha de iniciación de la investigación. En principio, las medidas provisionales se aplican durante un máximo de cuatro meses, aunque el plazo puede prorrogarse a petición de exportadores que representen un porcentaje significativo del comercio de que se trate. Los exportadores pueden comprometerse a revisar los precios o a poner fin a las exportaciones para eliminar el efecto perjudicial que el dumping causa a la rama de producción nacional. Los derechos antidumping pueden imponerse por un período no superior a cinco años, prorrogable posteriormente previo examen. Cada una de las prórrogas no excederá de cinco años".

Pregunta 6 En párrafo 3.50 se indica que las investigaciones antidumping pueden iniciarse cuando el Gobierno lo considere necesario, cuando una rama de producción nacional formule una solicitud de investigación al Ministro de Hacienda o cuando existan pruebas suficientes. Al respecto, Chile agradecería a Japón informar sobre la diferencia entre la primera y tercera alternativa (entre cuando el Gobierno lo considere necesario y cuando existan pruebas suficientes). En este sentido, sería muy útil si Japón pudiera dar ejemplos de estos casos, además de proveer de la normativa pertinente.

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Enough evidence is required in both cases. Please refer to the provisional translation of paragraphs 4 and 5 of Article 8 of Customs Tariff Law (G/ADP/N/1/JPN/2). So far, no ex officio investigation has been initiated.

3.3.2 Normas y otras prescripciones técnicas

Cuadro 3.14 Principales leyes relativas a las normas y los reglamentos técnicos, página 93

Legislación/organismo Objetivo Ley de Normalización Industrial, Se aplica a todos los productos salvo los medicamentos, los productos de 1949/METI químicos agrícolas y empleados como fertilizantes, los hilados de seda, los productos alimenticios, los productos agrícolas y los productos forestales; los datos; los servicios; y los sistemas de gestión. En virtud de la Ley se establece el Comité de Normas Industriales del Japón (JISC), el sistema de marcas JIS y el marco jurídico para las normas, la certificación y la acreditación de los organismos y laboratorios de certificación. Ley de Seguridad de los Productos Establece prescripciones relativas a: 1) una pequeña serie de productos de Consumo, de 1973/METI que deben cumplir determinadas prescripciones técnicas; y 2) determinados productos de mantenimiento (algunos tipos de calentadores de agua para uso doméstico y de electrodomésticos), que deben entregarse con información sobre su mantenimiento. Establece asimismo el marco jurídico para comunicar información sobre los accidentes con los productos de consumo. Ley de Garantía de la Calidad, Regula la fabricación, importación y venta de productos farmacéuticos Eficacia e Inocuidad de Productos y dispositivos médicos, productos para terapias regenerativas y Farmacéuticos, Dispositivos celulares, productos para terapia génica y cosméticos. Médicos, Productos para Terapias Regenerativas y Celulares, Productos para Terapia Génica y Cosméticos, de 1960/Ministerio de Salud, Trabajo y Bienestar Social Ley de Normas Agrícolas del Japón, Se aplica a los productos alimenticios, bebidas, aceites y grasas, así de 1950/MAFF como a otros productos agrícolas, forestales, ganaderos y pesqueros y sus productos derivados, con excepción de las bebidas alcohólicas, los productos farmacéuticos, los cosméticos y los medicamentos para terapias regenerativas. Establece el marco jurídico de las normas agrícolas del Japón (JAS) y los criterios de adopción de normas, gradación de la calidad, certificación y acreditación de los organismos de certificación, los laboratorios y los inspectores. Ley de Normas de Construcción, Se aplica a los edificios y a su construcción. Dispone el establecimiento de 1950/Ministerio de Ordenación de normas para la construcción de edificios, incluidas las relativas a la Territorial, Infraestructura, seguridad contra incendios y los procedimientos de inspección, Transporte y Turismo certificación y homologación de edificios. Ley de Seguridad de los Aparatos y Se aplica a los aparatos y materiales eléctricos. La Ley regula la Materiales Eléctricos, de 1961/METI fabricación y venta de aparatos eléctricos, y dispone que sus fabricantes e importadores deben inscribirse en el registro del METI y velar por la conformidad de los aparatos con las prescripciones técnicas. Ley de Mediciones, de 1992/METI Establece las unidades del Sistema Internacional de Unidades (SI) como las unidades de medición en el Japón y el marco jurídico para su aplicación y verificación y para la certificación de los aparatos de medición. Ley de Etiquetado de Productos Asegura la aplicación de un sistema de etiquetado de productos Alimenticios, de 2013/Oficina de alimenticios unificado mediante el establecimiento de normas y la Asuntos del Consumidor indicación de otra información necesaria para el etiquetado de productos alimenticios destinados a la venta (véase infra).

Pregunta 7 En relación con las leyes relativas a las normas y reglamentos técnicos del cuadro 3.14, Chile agradecería a Japón indicar cuales son las normas y reglamentos técnicos aplicables a la importación de hidrógeno.

RESPONSE It is provisioned at Article 22 of the High Pressure Gas Safety Act (No. 204 of 1951). Please see the below website: http://www.japaneselawtranslation.go.jp/law/detail_main?re=01&vm=04&id=1974. WT/TPR/M/397/Add.1

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3.3.4 POLÍTICA DE COMPETENCIA Y CONTROLES DE PRECIOS 3.3.4.1 Política de competencia Párrafo 3.144, página 104 "El principal cambio normativo que ha tenido lugar en este ámbito en el período objeto de examen ha sido la modificación de la Ley Antimonopolio, por la que se introdujeron los procedimientos de compromiso previstos en el CPTPP (sección 2.3.2.1.1 e infra). La Ley Antimonopolio modificada entró en vigor el 30 de diciembre de 2018, en la misma fecha que el CPTPP. El objeto de los procedimientos de compromiso es establecer un sistema para resolver las supuestas infracciones de la Ley Antimonopolio por consentimiento entre la JFTC y la empresa de que se trate; al final de octubre de 2019 no se habían hecho progresos ni planes para el establecimiento del sistema. De conformidad con los procedimientos de compromiso, cuando se sospecha la existencia de una infracción distinta de un cártel intrínsecamente nocivo -por ejemplo, un caso de cártel de precios o de manipulación de licitaciones-, la JFTC y la empresa pueden celebrar consultas y determinar medidas correctivas suficientes para eliminar la infracción. Si la JFTC aprueba las medidas correctivas y estas se aplican correctamente, la JFTC no dicta ninguna orden. Se considera que los procedimientos de compromiso facilitarían la pronta resolución de las preocupaciones relacionadas con la competencia y contribuirían a una aplicación eficaz y eficiente de la Ley Antimonopolio mediante la cooperación entre la JFTC y los presuntos infractores. Para asegurar la transparencia y la previsibilidad en la aplicación, la JFTC también ha establecido normas y políticas, como las Normas relativas a los procedimientos de compromiso de la Comisión de Comercio Leal, en 2017, y las Políticas relativas a los procedimientos de compromiso, en 2018."

Pregunta 8 En párrafo 3.144 se habla sobre las medidas correctivas suficientes para eliminar una infracción (distinta de un cártel intrínsecamente nocivo). Al respecto, Chile agradecería a Japón compartir mayor información sobre cómo hace seguimiento del cumplimiento de las medidas correctivas. En particular, en el caso de que las empresas no cumplan, si existen sanciones u otras formas de disciplina.

RESPONSE In order to ensure that competition order is restored or that the act will not be repeated in the future, the content of remedies (Commitment Measures included in the Commitment Plan) is required to satisfy the following requirements: (i) they are sufficient to eliminate the Suspected Violation or to ensure that the Suspected Violation has been eliminated and (ii) they are expected to be reliably conducted. The report of the state of implementation of each Commitment Measure to the JFTC by the enterprise or an independent third party to whom the enterprise has entrusted with monitoring its performance of Commitment Measures (only if said third party has been approved by the JFTC) is one of the typical examples of Commitment Measures. The JFTC will monitor enterprise's performance of Commitment Measures according to these reports, and take the necessary measures, such as ordering to report and to submit documents pursuant to the provisions of Antimonopoly Act. The JFTC must render a decision to rescind the approval of a Certified Commitment Plan when the JFTC finds that the Approved Commitment Measures have not been implemented or that the Approved Enterprise obtained the approval of the Commitment Plan based on false or wrongful facts. When an Approved Commitment Plan has been rescinded, the approval shall no longer be in effect and the investigation made prior to the Notice of Commitment Procedures will resume. (*All the words starting with a capital letter are defined in the "Policies Concerning Commitment Procedures.")

4 POLÍTICAS COMERCIALES, POR SECTORES 4.1.2 Pesca 4.1.2.6 Medidas en frontera y de ayuda interna Párrafo 4.86, página 168-169. "El Japón ha reorganizado la presentación de sus programas de subvenciones en su notificación. En su anterior notificación a la OMC, de 2017 (que abarcaba los ejercicios económicos de 2014 y 2015), solo notificó dos programas nacionales: la Subvención de los Intereses del Fondo de Modernización de la Pesca y el Fondo para la Medida destinada a la Recuperación de los Recursos Pesqueros. En el cuadro 4.15 figuran los programas de ayuda a la pesca que el Japón notificó a la OMC en julio de 2019.55 La cuantía total de las subvenciones ha aumentado significativamente. En el ejercicio económico de 2016 ascendió a JPY 73.200 millones y en el de 2017 a JPY 68.700 millones, datos que contrastan con los de los ejercicios económicos de 2014 (JPY 1.700 millones) y 2015 (JPY 1.300 millones). Según las autoridades, este aumento puede explicarse por el hecho de que, en aras de la transparencia de las negociaciones en curso sobre las subvenciones a la pesca, el Japón WT/TPR/M/397/Add.1

- 46 - notificó programas que, a su juicio, posiblemente no constituyen subvenciones en el sentido del artículo 1 del Acuerdo SMC o no son "específicos" en el sentido del artículo 2 del mismo Acuerdo".

Pregunta 9 En relación con la política de subsidios a la pesca de Japón, en el párrafo 4.86 se indica que "la cuantía total de las subvenciones ha aumentado significativamente". Al respecto, Chile agradecería a Japón conocer cómo la actual política pesquera de Japón se enmarca con el compromiso asumido en el objetivo 14.6 de los Objetivos de Desarrollo Sostenible (ODS), donde las partes acuerda "…prohibir ciertas formas de subvenciones a la pesca que contribuyen a la capacidad de pesca excesiva y la sobreexplotación pesquera, eliminar las subvenciones que contribuyen a la pesca ilegal, no declarada y no reglamentada y abstenerse de introducir nuevas subvenciones de esa índole…".

RESPONSE Japan submitted a wider range of notification in 2019 in order to enhance transparency in light of the notification obligation set out in paragraph 2 of Ministerial Decision in the 11th Ministerial Conference. This notification includes certain fisheries related government expenditures that may not constitute "subsidies" under Article 1 of the ASCM or may not be "specific" under Article 2 of the Agreement. This is why the total amount of Japanese fisheries subsidies appears to be increased than before.

Pregunta 10 Adicionalmente, Chile agradecería a Japón indicar informar si sus programas de subsidios a la pesca contravienen el objetivo ODS mencionado. En caso de que la respuesta sea afirmativa, ¿qué medidas de mitigación Japón estaría considerando implementar?

RESPONSE Japan's fisheries subsidies do not contribute to IUU fishing, nor to overcapacity and overfishing. Please also refer to the answer No.9.

4.2 Minería y energía 4.2.2 Energía Párrafo 4.107, página 174 "En el nuevo SEP se establece como objetivo para el año 2050 la instauración de la "sociedad del hidrógeno", ya que este elemento es una fuente de energía eficiente sin emisiones de gases de efecto invernadero. Por lo tanto, el Japón tiene previsto proseguir las investigaciones ya iniciadas en esta esfera. A tal efecto, el Consejo Ministerial de Energías Renovables, Hidrógeno y Cuestiones Conexas, un órgano especial de coordinación creado en abril de 2017 para tratar asuntos relativos a las energías renovables, adoptó la Estrategia Básica del Hidrógeno en diciembre de 2017 (acerca del programa de subvenciones para vehículos con pilas de combustible, véase la sección 3.3.1.3)".

Pregunta 11 En relación con el nuevo Plan Estratégico de Energía (SEP) y el objetivo de instaurar en para el año 2050 una "sociedad del hidrógeno", Chile agradecería a Japón compartir información respecto a las políticas, estrategias, acciones y metas que se han implantado (o implementarán) para alcanzar el objetivo de instaurar una "sociedad del hidrógeno".

RESPONSE The target for the cost of hydrogen is mentioned in Basic Hydrogen strategy which was formulated in 2017. To achieve the target, specification targets are determined in The Strategic Road Map for Hydrogen and Fuel Cells which was revised in March 2019. In addition, technology development items are specified in Strategy for Developing Hydrogen and Fuel-Cell Technologies which was formulated in September 2019.

Pregunta 12 Chile agradecería a Japón indicar si existe (o planea) implementar algún procedimiento para certificar la huella de carbono del hidrógeno exportado y/o consumido en Japón. Adicionalmente, Chile agradecería si Japón pudiera indicar si exigirá a las naves que llegarán transportado hidrógeno, propulsión con algún combustible determinado.

RESPONSE Japan doesn't have official procedure and plan regarding to the certification of the origin of hydrogen at this point. For the development of future international trade, various cooperation plans with WT/TPR/M/397/Add.1

- 47 - related countries, such as technology development, are under consideration. In Hydrogen Energy Ministerial Meetings held in last September, the importance of actions toward the development of hydrogen trading market was mentioned in "Global Action Agenda" which is a chair's summary. As for the fuel for hydrogen transportation carrier, various options for the future are on the discussion table.

Pregunta 13 Chile agradecería a Japón indicar si existe (o se planea implementar) una diferenciación regulatoria entre hidrógeno "gris", "azul" y "verde". En caso de ser la respuesta negativa, Chile agradecería a Japón aclarar si será entonces un aspecto que definirán las partes al momento de la compraventa internacional.

RESPONSE Japan does not have any regulations regarding to the origin of hydrogen. For the development of future international trade, various cooperation plans with related countries, such as technology development, are under consideration.

Pregunta 14 Chile agradecería a Japón informar si existe – o se espera implementar en el futuro- alguna política de fomento de las inversiones japonesas de proyectos de hidrógeno en el exterior.

RESPONSE There are financial support programs that demonstrate some overseas projects in the field of new energy and energy conservation, including hydrogens.

Pregunta 15 Chile agradecería a Japón indicar si tienen considerado crear una política de inventarios de seguridad de hidrógeno (como lo que se hace con los combustibles líquidos, por ejemplo).

RESPONSE It is mentioned in Basic Hydrogen Strategy that the utilization of hydrogen will diversify energy supply sources, and contribute to energy security.

4.4 Servicios 4.4.4 Servicios de transporte 4.4.4.1 Transporte marítimo 4.4.4.1.2 Evolución de la normativa Párrafo 4.224, páginas 202-203 "El segundo objetivo del tercer Plan Básico de Política Oceánica es reforzar a los operadores que se dedican al transporte marítimo de cabotaje, armar embarcaciones avanzadas para este tipo de transporte y asegurar un número suficiente de marineros nacionales, de conformidad con el Plan para el Futuro del Transporte Marítimo de Cabotaje del MLIT, de junio de 2017. El Plan establece como objetivo aumentar el tonelaje medio de los buques de cabotaje de 715 toneladas en el ejercicio económico de 2015 a 858 toneladas en el ejercicio económico de 2025. El Programa de Medidas Provisionales de Transporte Marítimo de Cabotaje y de incentivos al desguace, establecido en el ejercicio económico de 199892, y el Régimen de propiedad compartida en el sector del transporte marítimo de cabotaje, mantenido con el Organismo de Construcción, Transporte y Tecnología Ferroviarios (JRTT) y establecido en 1957, no han experimentado cambios. El Plan Básico de Política Oceánica prevé asimismo el mantenimiento del actual régimen de cabotaje, es decir, su reserva a los buques de pabellón nacional, salvo en el caso de las excepciones previstas en los tratados de amistad, comercio y navegación firmados con Dinamarca, el Reino Unido y Noruega, o en condiciones de reciprocidad".

Pregunta 16 El párrafo 4.224 indica que existen algunas excepciones para el transporte marítimo interno en el Plan Básico de Política Oceánica, las que incluyen a Dinamarca, Reino Unido, Noruega y otros cuando haya condiciones de reciprocidad. Al respecto, Chile agradecería si Japón pudiera explicar con mayor detalle cuáles son las excepciones que se indican en dicho párrafo.

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RESPONSE In Japan, foreign-flagged vessels cannot transport between internal ports in principle. However, there may be exceptions in the internal maritime transport when the Minister of Land, Infrastructure, Transport and Tourism gives special permission.

Párrafo 4.227, página 203 "El régimen de acceso a los mercados aplicado no ha experimentado ningún cambio. El Japón no discrimina contra la participación de extranjeros en los servicios marítimos internacionales y les otorga el trato nacional".

Pregunta 17 El párrafo 4.227 indica que Japón no discrimina contra la participación de extranjeros en los servicios marítimos internacionales y les otorga el trato nacional. En relación con ello, Chile agradecería si Japón pudiera explicar si esta política de no discriminación y trato nacional también se aplica al cabotaje. Si no se aplica, Chile agradecería a Japón compartir cuáles son los requisitos para proveer servicios de cabotaje marítimo.

RESPONSE In accordance with article 3 of the Ship Law, foreign-flagged vessels cannot transport between internal ports in Japan in principle.

Párrafo 4.229, páginas 203-204 "En cuanto a los puertos, durante el período objeto de examen se introdujeron importantes cambios normativos. En primer lugar, el tercer Plan Básico de Política Oceánica, adoptado por el Consejo de Ministros en mayo de 2018, incluye un componente relativo a los puertos. El objetivo de ese componente es mantener y ampliar las principales rutas marítimas, con escalas portuarias en el Japón e infraestructuras sísmicas adaptadas a los buques portacontenedores de gran tamaño, los grandes buques graneleros y los transportistas de automóviles, mediante la recaudación de fletes, el establecimiento de fletes y la mejora de la competitividad portuaria. El Plan prevé asimismo la construcción de terminales de logística internacionales y de terminales nacionales adaptadas a las necesidades de transporte de las principales industrias (como el reciclaje de automóviles en los puertos), y también se fomentará la creación de instalaciones de aprovisionamiento de combustible destinadas específicamente a los buques que transportan gas natural licuado, incluso en el extranjero (por ejemplo, en Singapur)".

Pregunta 18 El párrafo 4.229 indica que el tercer Plan Básico de Política Oceánica incluye dentro de sus componentes relativos a la infraestructura de los puertos, ampliar las infraestructuras sísmicas adaptadas para los buques portacontenedores de gran tamaño. Al respecto, Chile agradecería si Japón pudiera dar más detalles sobre los requerimientos que existen para participar de la construcción de dicha expansión. En particular, ¿existen limitaciones a la nacionalidad de las empresas que participan en esas obras?

RESPONSE The requirements for participation in the tender for participation in the construction are stipulated in the WTO Agreement on Government Procurement, and are also determined by the client for each individual construction work. There are no special restrictions on the nationality of participating companies.

4.4.5 Servicios ambientales 4.4.5.1 Servicios de distribución de agua, tratamiento de aguas residuales y alcantarillado Párrafo 4.252, página 209 "La principal novedad en materia de reglamentación fue la modificación de la Ley de Abastecimiento de Agua de 1957 (Modificación Nº 92/2018, de 12 de diciembre de 2018), que permite a los municipios transferir a empresas privadas, mediante un contrato de concesión, la gestión completa de la distribución de agua durante un período de hasta 20 años. Esta modificación se introdujo en aplicación del plan anual de asociación público-privada/Iniciativa de Financiación Privada (PFI) de 2018."

Pregunta 19 El párrafo 4.252 establece que, respecto de los servicios de distribución de agua, la Ley de Abastecimiento de Agua de 1957, permite a los municipios transferir dichas competencias a WT/TPR/M/397/Add.1

- 49 - empresas privadas. Al respecto, Chile agradecería si Japón pudiese indicar porcentualmente la participación de empresas extranjeras en la entrega de estos servicios.

RESPONSE The revised water supply law was approved in December 2018 and came into force on October 1, 2019. In the water supply service sector in Japan, a concession system under the PFI law or the revised water supply law has not introduced at this time.

Párrafo 4.255, página 210 "Los servicios de tratamiento de aguas residuales y alcantarillado se rigen por la Ley de Aguas Residuales (Ley Nº 79 de 1958), que atribuye a los municipios las competencias para prestar servicios de alcantarillado. Los municipios pueden a su vez delegar en empresas privadas parte o toda la gestión del sistema y las instalaciones de alcantarillado, utilizando para ello diversos tipos de acuerdos contractuales. Un porcentaje no inferior al 90% de la explotación de las instalaciones de alcantarillado se ha delegado en el sector privado."

Pregunta 20 El párrafo 4.255 establece que, en lo relativo a los servicios de tratamiento de aguas residuales y alcantarillado, el 90% de la explotación de las instalaciones de alcantarillado se ha delegado al sector privado. Al respecto, Chile agradecería si Japón pudiese señalar qué porcentaje de ese 90% de empresas privadas son empresas extranjeras, junto con indicar la nacionalidad de los principales distribuidores extranjeros en ese nicho.

RESPONSE Local governments are responsible for sewerage services, and many of them commission the management of sewerage facilities to private entities. The ministries do not have comprehensive data on the private entities to which local governments have commissioned, thus Japan cannot provide the proportion or the main nationalities of foreign private entities, to which local governments have commissioned.

4.4.6 Servicios de distribución centrados especialmente en el comercio electrónico Párrafo 4.275, página 215 "Tampoco se aplican restricciones del tipo previsto en el AGCS al comercio electrónico. No existe un marco reglamentario general que se aplique específicamente a este tipo de comercio. Las principales leyes pertinentes se refieren a la protección de los consumidores y los pagos electrónicos. La más importante de ellas es la Ley de Disposiciones Especiales sobre el Código Civil en materia de Contratos de Consumo Electrónicos y Avisos de Aceptación Electrónica (Ley Nº 95, de 29 de junio de 2001). Esta ley contiene disposiciones especiales sobre el Código Civil (Ley Nº 89 de 1896) que se aplican a los casos en que hay determinados errores en los elementos constitutivos de un contrato de consumo electrónico, o cuando un consumidor envía un aviso de aceptación electrónica en virtud de un contrato concluido a distancia. La Ley de Contratos de Consumo (Ley Nº 61, de 12 de mayo de 2000) permite al consumidor desistir de ofrecer o aceptar un contrato en los supuestos en que haya malinterpretado determinados actos de un operador comercial o se haya visto afectado por ellos. También anula (total o parcialmente) toda cláusula que exima a los operadores comerciales de la responsabilidad por daños y perjuicios, o que vulnere injustamente de otro modo los intereses de los consumidores".

Pregunta 21 El párrafo 4.4.6 indica que, en cuanto a los servicios de distribución centrados en el comercio electrónico, no existe un marco reglamentario general que se aplique específicamente a este tipo de comercio. Al respecto, Chile agradecería si Japón pudiese señalar si existen medidas administrativas para regular en mayor detalle los servicios proveídos a través del comercio electrónico y en caso de ser afirmativa la respuesta, en qué consisten dichas medidas.

RESPONSE There are no administrative measures which specifically regulate the services provided through electronic commerce. WT/TPR/M/397/Add.1

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UNITED STATES

Questions based on the Secretariat Report (WT/TPR/S/397)

1 ECONOMIC ENVIRONMENT 1.2 Recent Economic Developments 1.2.4.1 Tax reform Page 23, paragraph 1.12: The Secretariat report references the "creation of Forest Environment Tax (provisional) and Forest Environment Transfer Tax (provisional)." 1. Please provide details on how the revenue generated from these taxes will be used. 2. Will this tax revenue be used to support Japan's forestry industry and Japan's goal of increasing the domestic wood supply from 30 million cubic meters to 40 million cubic meters by 2025?

RESPONSE 1. The ways of using the revenue are prescribed by the "Act on Forest Environment Tax and Forest Environment Transfer Tax". Under this Act, municipalities shall expense the Tax for undertaking and promoting forest management, and prefectures shall expense it mainly for supporting municipalities' activities. 2. The Forest Environment Transfer Tax does not aim at increasing the domestic wood supply. Instead, the tax aims at maintaining and enhancing the multiple functions of forests for the public benefits that result in achieving the greenhouse gas emissions reduction target under the framework of the Paris Agreement and protecting citizens from disasters.

2 TRADE AND INVESTMENT REGIMES 2.3 Trade Agreements and Arrangements Page 41, paragraph 2.14: The Secretariat Report states Japan is aiming for the swift conclusion of Regional Comprehensive Economic Partnership (RCEP) negotiations. 3. Please provide an update on the current status of the negotiations.

RESPONSE Japan has been working towards the signing of an RCEP Agreement by 16 countries by the end of this year, following the Joint Leaders' Statement on the RCEP adopted on 4 November 2019 in Bangkok, Thailand.

Page 41, paragraph 2.17: The Secretariat Report states negotiations on a free trade agreement between Japan, China, and the Republic of Korea are ongoing. 4. Please provide an update on the current status of these negotiations.

RESPONSE For the current status of abovementioned negotiations, please refer to the table below. (Also, please refer to Q.3 for the current status of the RCEP negotiations.)

Title The last official negotiation Japan-Turkey October 2019 (17th round of negotiations) Japan-Colombia September 2015 (13th round of negotiations) Japan-China-Republic of Korea November 2019 (16th round of negotiations)

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1.1 Customs procedures, valuation, and requirements Page 52, paragraph 3.4: According to the Secretariat Report, "There are no registration requirements for importers." Section 4.51 on page 140 states, "Importers, wholesalers, and retailers of cigarettes are required to register with the Minister of Finance."

5. Can Japan clarify its import registration requirements?

RESPONSE Those who intend to sell tobacco products imported by themselves as a business shall be registered by the Minister of Finance.

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3.1.4.3 Tariff reductions and exemptions Page 61, paragraph 3.31: According to the Secretariat Report, "Article 12 of the Customs Tariff Law provides for duty reductions/exemptions in cases where the prices of imported daily necessities have increased (to prevent price increases of daily necessities, such as food and clothing), to maintain stability in people's everyday lives. The merchandise goods currently subject to such duty reductions/exemptions are imported rice, hulled or unhulled; barley; wheat foodstuffs; apparel; and other goods which are closely related to people's daily lives."

6. Please provide details regarding duty reductions/exemptions on imported rice.

RESPONSE The article states Japan can reduce or exempt the tariff on rice by issuing a cabinet order in the following cases: (1) In case where the price of imported rice is higher than that of home-grown rice (2) In case of necessity caused by emergencies such as lean crops, natural disasters, or incidents.

Page 61, paragraph 3.32: According to the Secretariat Report, under Article 13 of the Customs Tariff Law, "customs duties may be reduced or exempted on imported raw materials, to develop domestic industries manufacturing specific products, or to maintain stability in people's everyday lives ("end-use concessions"). The merchandise goods currently subject to such duty reductions/exemptions are: (i) mixed feeds: kaoliang and other grain sorghums; maize (corn); rye; powdered banana; sugar (with a specified sucrose content); molasses; manioc or sliced and half- dried sweet potatoes (including powder or pellets of manioc and sliced and half-dried sweet potatoes); (ii) unmixed feeds: kaoliang and other grain sorghums and maize (corn); and (iii) groundnut oil and groundnut."

7. Please provide details regarding duty reductions/exemptions on imported corn.

RESPONSE The duty of imported corn used for formula feed is exempted in order to stabilise formula feed supply with good quality and to maintain lower prices for livestock producers and aquaculture producers.

3.2 Measures Directly Affecting Exports 3.2.4 Export support and promotion Page 73, paragraph 3.69: According to the Secretariat Report, Japan has no export subsidy programmes in place; over the review period, it notified the WTO Committee on Agriculture that it had not provided export subsidies for the fiscal years 2016 and 2017. In the WTO Committee on Agriculture the United States has asked questions regarding Japan's program called "Subsidies for the Creation of Production Areas". Specifically, the United States has asked about eligibility criteria for receiving payments. Japan responded generally in AGIMS91158 that "The eligibility of products and the levels of payment to farmers are determined by the criteria which local agricultural councils decide, including those in the prefectures cited in the question. Those criteria are established based on their individual situations, regardless of the unit amounts of funding allocation set by the national government, and payment is made according to such criteria."

8. Please provide specific criteria used by major rice producing prefectures, such as Niigata, Hokkaido, and Akita.

RESPONSE A variety of criteria are set forth under "Grants for Production Areas". Payments are made to farmers in accordance with the eligibility of products and the levels of payments which local agricultural councils establish on their own initiative in their respective plans with other requirements reflecting diverse agricultural situations in the major rice producing prefectures cited in the questions.

9. For what duration is this program authorized and upon expiration, will it be eligible for renewal or automatically terminated?

RESPONSE MAFF's budget, including the expenditure on the program "Grants for the Production Area," is considered in the annual budget compilation process. The draft budget for FY2020 includes the allocation to the program and is currently under parliamentary discussions for approval.

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3.2.4.4 Export promotion Page 79, paragraph 3.89: In the Secretariat Report, Japan details multiple subsidy and assistance programmes, including for the following activities and sectors: crafts; mining and energy; beverages (sake and shochu); agriculture; fisheries; leather; and R&D for next-generation technology. Between 2017 and 2019, Japan allocated three billion Japanese yen a year in its supplemental budget to the Subsidiary Program for Structural Transition of Field Crops (畑作構造転換事業). This program provided financial support to farmers transitioning to growing different varieties, including pest-resistant varieties, and supported purchases of agricultural equipment.

10. What proportion of the budget was expended and how between 2017 and 2019? Is the program expected to continue in 2020?

RESPONSE The annual budget of the Program for Structural Transition of Field Crops was 3 billion yen in FY2017, FY2018 and FY2019 respectively. The implementation of the program in FY2020 has not yet been decided.

11. How much overlap in terms of beneficiaries and objectives is there between this Subsidiary Program and the Act on Farming Income Stabilization (Page 139, paragraph 4.44)?

RESPONSE There is no overlap between the objectives of those programs, although it is possible for the farmers to be eligible for both. The Program for Structural Transition of Field Crops aims at supporting rural areas' environment- friendly efforts in seeking a proper crop rotation balance and introducing pest-resistant varieties in order to improve soil quality, which will contribute to conserving soil environment and then achieve sustainable agriculture. The payment under the Act on Farming Income Stabilization aims at compensating the gap between production costs and sales prices of field crops.

12. Is the funding used for remediation in potato-growing areas infested with cyst nematodes?

RESPONSE Yes. The program includes support for the introduction of the pest-resistant varieties against cyst nematodes at the potato production areas.

3.3. Measures Directly Affecting Production and Trade 3.3.2.2 Standards Page 83, paragraph 3.109 and page 84, paragraph 3.112: The Secretariat Report lists the "JAS Organic Livestock and Organic Livestock Products" as a mandatory JAS since 2018.

13. Can Japan confirm that domestic implementation of this standard has not begun as of January 28, 2020?

RESPONSE The JAS for Organic Livestock and for Organic Livestock Products are supposed to be enforced on 16 July 2020 as technical regulations. As the date in the report is wrong, we have asked the WTO Secretariat to correct it.

Page 83, paragraph 3.109: According to the Secretariat Report, "For non-compulsory JASs, a 30- day public comment period is provided for."

14. Does Japan offer an English translation of proposed non-compulsory JASs during the public comment period?

RESPONSE For non-compulsory JAS, only the Japanese version is available.

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3.3.2.5 Labelling requirements Page 85, paragraph 3.117: The Secretariat Report recognizes concerns that Japan's classification of chemical substances as pesticides or food additives based on the time of application "places more burden on trading partners than on Japanese producers." Yet, Japan continues to classify post- harvest fungicides (PHF) as food additives that require labeling. The same chemical applied pre- harvest is not required to carry such labeling

15. Please explain the scientific basis for Japan's designation of PHF as food additives?

RESPONSE The reason why so-called post-harvest, which is used for the purpose of preventing mold on harvested crops, is designated as a food additive is based on the Japanese legal system. The Food Sanitation Act stipulates that food additives are "substances which are used by being added, mixed or infiltrated into food or by other methods in the process of producing food or for the purpose of processing or preserving food."

3.3.3.1 SPS measures Page 87, paragraph 3.124: According to the Secretariat Report, Japan has started reviewing the portion of commodities to which MRLs apply, with a view to harmonizing them with Codex standards.

16. Can Japan provide examples of portions of commodities to which MRLs apply that are harmonized to Codex standards?

RESPONSE For example, MRLs of some agricultural products such as Satsuma mandarin were set only for the pulp excluding peels. Japan has begun to establish MRLs for these agricultural products for whole commodities, including peels, for each pesticide.

Page 87, paragraph 3.124: The Secretariat Report notes that risk assessments undertaken by the Food Safety Commission of Japan (FSCJ) are available on its website. However, most risk assessments are only available in Japanese. Also, the Secretariat Report notes that since the last TPR, Japan has allowed beef imports from Austria and the United Kingdom, and lifted age restrictions to beef imported from Canada, Ireland, and the United States. However, the import requirements for U.S. beef are still not aligned with the OIE recommendation that the United States is negligible risk for BSE.

17. Will the FSCJ conduct another risk assessment to consider the removal of remaining BSE-related restrictions on U.S. beef (including those related to specified risk materials)?

RESPONSE MHLW has already requested risk assessment on review of the range of specific risk materials for domestic beef to FSCJ. For imported beef including from the U.S., MHLW will consider it based on the result of the risk assessment for domestic beef.

3.3.3.2.2 The Food Sanitation Act Page 88, Paragraph 3.128: Japan notes that amendments were made to the Food Sanitation Act (the Act) during the review period, and that new provisions directly related to imports and exports include: (iv) tightened sanitary regulations for utensils, containers and packaging for food and food additives.

18. Will Japan provide a transition period for these tightened sanitary regulations?

RESPONSE Japan plans to provide a transition period for 5 years after the enforcement of the provision targeted to improve the regulation of apparatus, containers, and packaging for food and food additives; to introduce the Positive List system for the apparatus, containers, and packaging made of synthetic resins. During the period, apparatus, containers and packaging made of synthetic resins which are considered to be the same as those marketed in Japan at the point of the effective date, are allowed to be sold, produced or imported even if the substances used in those apparatus, containers and packaging are not listed in the Positive List. WT/TPR/M/397/Add.1

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Page 87-88, Paragraph 3.128 and Box 3.2: Japan cites to the summary of the amendment to the Food Sanitation Act, which describes a council composed of relevant parties of the national and local governments that the Minister of Health, Labour and Welfare (MHLW) may establish to prevent occurrence and expansion of interregional food poisoning cases. 19. Please provide further details on: (1) the authority and coordination of this council; (2) how local and national governments will cooperate; and (3) how this council will interact with the listed agencies responsible for SPS measures in Box 3.2.

RESPONSE (1) Food Inspection and Safety Division, Pharmaceutical Safety and Environmental Health Bureau, Ministry of Health, Labour and Welfare (2) Local governments participate in the council as its members. (3) The relevant ministries and agencies will attend the council as needed and collaborate and cooperate.

Page 88, paragraph 3.129: The Secretariat Report notes that when violations of MRL standards are found in imported foods, Japan clarifies the increased surveillance measures for the targeted food and the requirements for lifting them. In doing so, it takes into consideration the test results and the status of control for pesticide residues in the exporting country; measures are based on the relevant Codex guidelines and try to minimize the burden on the exporting country.

20. Can Japan explain how any increased inspection and testing measures are risk- based?

RESPONSE As for the reinforcement of inspections of residual agricultural chemicals, in order to grasp the level of the use of agricultural chemicals, etc. by the exporting country, the MHLW will carry out monitoring inspections on a higher proportion for the imported food and inspection item of concern so that violations of the Food Sanitation Act may be detected with a certain level of reliability from statistical viewpoint. The enhanced monitoring inspection will be lifted when the MHLW determines that there is no longer a fear that the food violating the Act will be exported into Japan Also, in principle, when more than one violations have been detected with regard to residual agricultural chemicals as a result of the monitoring inspection of the imported food manufactured/processed by the same manufacturer/processor from the same exporting country, all or part of the imported food in question will be subjected to an inspection order, taking into account the regulations and sanitary controls being implemented in the exporting country, the historical compliance record and other factors. The inspection order will be lifted when the MHLW determines that there is no longer a fear that the food violating the Act will be exported into Japan.

3.3.3.2.4 Act on Livestock Infectious Diseases Control Page 89, Paragraph 3.136: We recognize that Japan maintains a Third Free Countries List which catalogues the countries/areas considered to be free from various livestock diseases and are, hence, eligible to export to Japan.

21. Why is the United States not included on the list for cloven-hoofed animals and meat given its BSE negligible-risk status at the OIE?

RESPONSE In Japan, there are two types of list of countries eligible for exporting ruminant products. One is the list of countries free from Rinderpest, Foot and Mouth Disease and BSE. The other list includes countries free from Rinderpest, Foot and Mouth Disease but with BSE. The US falls under the 2nd list of eligible countries for exporting beef and sheep meat to Japan.

3.3.3.2.5 Agricultural Chemicals Control Act Page 90, Paragraph 3.138: Japan states that the Agricultural Chemicals Control Act was amended in 2018 and that amendments include the introduction of a re-evaluation system and the revision of evaluation for registration. Japan also states that, starting in April 2020, Japan will introduce risk assessment for pesticide operators and honeybees, and that target species of animals and plants will be added for ecological risk assessment.

22. Please verify whether the proposed measures will apply when establishing maximum residue limits for domestic use only or will they also apply for imported products. WT/TPR/M/397/Add.1

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RESPONSE Pesticides are regulated under the Agricultural Chemicals Control Act if produced, imported, distributed or used in Japan. If the pesticide in question is registered in Japan, risk assessment will be conducted according to the domestic use in the re-evaluation program, which should be based on new scientific data. As a result, the MRL of the pesticide, including that for imported products, may be altered. If the pesticide is not registered in Japan and its MRL is set only for imported products, the revision of the Act does not affect the MRL.

23. Please explain which specific species of animals and plants requiring ecological risk assessment are to be added in April 2020 to Japan's risk assessment for agricultural chemicals. What is the scientific basis for adding these species?

RESPONSE Freshwater aquatic plants (duckweed) and birds will be added in April 2020 for the ecological risk assessment under the Agricultural Chemicals Control Act. Experts concluded that the former are important habitats for fish and crustaceans and have sensitivity to pesticides different from that of freshwater microalgae, while the latter have the risk of being exposed to pesticides through food intake. The testing methods for these species have been established by the OECD, and many countries, including the United States, require the ecological risk assessment for these species.

3.3.4 Competition policy and price control 3.3.4.2 Price controls Page 95, paragraph 3.154: According to the Secretariat report, the scope of the price- maintenance premium (PMP) was narrowed to drugs deemed "truly innovative".

24. What criteria is used to determine whether a drug is "truly innovative"?

RESPONSE The price maintenance premium (PMP) rewards truly innovative and beneficial drugs. The eligibility criteria for the PMP are as follows: ・orphan drugs ・drugs developed based on recruitment for applicant to address unapproved drugs of high medical need ・drugs with innovation/beneficial premium ・drugs with a new mechanism of action (limited to innovative or benefit-bringing product) In addition to the above, the following drugs will be added to the eligibility criteria from April 2020: ・drugs for anti-microbial resistant infections ・drugs that have received SAKIGAKE designation ・drugs which obtain an additional indication with a new mechanism of action (limited to innovative or benefit-bringing product)

Page 95, paragraph 3.154, footnote 173: According to the Secretariat report, Japan will soon implement a new Health Technology Assessment.

25. When will the Japanese government implement the new Health Technology Assessment (HTA)?

RESPONSE Japan has formally implemented the cost-effectiveness evaluation system as a new Health Technology Assessment (HTA) in April 2019.

26. What criteria will be used to determine whether a drug is cost-effective under the new HTA process?

RESPONSE Incremental cost-effectiveness ratio (ICER) threshold is set at 5 million yen per quality-adjusted life- years (QALY). If the ICER is less than 5 million yen per QALY for a product, the price is not adjusted. If the ICER is between 5 million yen and 7.5 million yen per QALY (between 7.5 million yen and 10 million yen per QALY), the price adjustment rate increases stepwise. Finally, if the ICER is over 10 million yen per QALY, the price is adjusted at the maximum rate.

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3.3.6 Government procurement Page 101, paragraph 3.168: The Secretariat's report notes that it has no restrictions on the place of origin of products or the nationality of suppliers in government procurement. 27. How does Japan determine country of origin when the government procures goods and services?

RESPONSE Under the voluntary measures, Japan's methodology on the determination and estimation of the country of origin is as follows: The country of origin of goods is determined based on the information provided by the suppliers. Such information includes countries of origin as indicated on the label attached to the procured goods and those described in the contract notes or other documents such as import invoices, producer's invoices and B/Ls. The country of origin of services is determined based on the nationality of winning tenderers. A company whose foreign ownership is over 50% is regarded as a foreign business operator, and the nationality of the company determines the country of origin of services.

28. Is there a specific law or regulation that promulgates a methodology that all government agencies must follow when determining origin?

RESPONSE Under the voluntary measures, the origin is determined according to the guideline issued by the government, but there is no specific law or regulation for that purpose.

29. Do individual government agencies have any discretion in making origin determinations?

RESPONSE Under the voluntary measures, the origin is determined according to the guideline issued by the government. Individual government agencies do not have discretion in making origin determinations.

30. How does origin criteria for goods differ from the origin criteria for services?

3.3.7 Intellectual property rights (IPRs) 3.3.7.1 Features and IP Strategy Page 107, paragraph 3.181: The Secretariat report notes "modifications to litigation procedures and damages calculations intended to facilitate the enforcement of IPRs."

31. Can the Secretariat reference the specific modifications to litigation procedures stated above? What were the changes to the calculations for damages?

RESPONSE 1. Strengthening of evidence collection procedures A system (inspection system) was established such that, if infringement of patent right is suspected, a neutral technical expert enters the plant or other premises of the alleged infringer to conduct necessary examinations and submit a report to court, under rigorous requirements. 2. Review of damages calculation method *Similar measures have also been taken for the Utility Model Act, Design Act and Trademark Act. (a) For the portion of the profits made by the infringer whose need for compensation was denied on the basis that it was beyond the patent rights-holder's production/sales capacity, etc., the revision has enabled the rights-holder to claim damages by deeming that it had licensed the portion to the infringer. WT/TPR/M/397/Add.1

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(b) The revision clearly states that damages calculation can take into consideration the amount likely to have been determined if negotiations were conducted assuming patent rights infringement when a court determines the amount equivalent to the amount of money to be received for the implementation of the patent invented.

32. Has the Secretariat tracked any recent court cases or decisions in which the new calculations were used in determining damages?

RESPONSE No. The revised act will come into force from 1 April 2020.

3.3.7.2 Policies on promotion and commercialization of innovation Page 109, paragraph 3.189: According to the Secretariat report, the JPO offers "super-accelerated examination" to start-ups, so they can obtain patent rights within one month for inventions that are already being worked.

33. What requirements must an entity satisfy to qualify as a "start-up"?

RESPONSE All or some of the applicants must satisfy any one of the following conditions from (i) to (iii) below. (i) a sole proprietorship which has not been established for over 10 years; (ii) the number of employees regularly employed are 20 or less (5 or less for businesses mainly composed of commercial and service-related businesses), 10 years have not passed since the establishment, and the corporation is not controlled by another corporate body; or (iii) the amount of capital fund or the total of financial contribution does not exceed 3 million yen, 10 years have not past since the establishment, and the corporation is not controlled by another corporate body. "Not controlled by another corporate body" means it is applicable to a. and b. below: a. No other single corporate body or person besides the applicant owns more than half of the authorized shares or total contribution in stocks or as invested funds. b. Several corporate bodies or persons other than the applicant do not own more than 2/3 of the authorized shares or total contribution in stocks or as invested funds.

34. How does the JPO define an invention that is "already being worked"? What must an Applicant provide to demonstrate that an invention is "already being worked"?

RESPONSE The JPO defines an "already being worked" invention as one which has already commercialized or is planned to commercialize within two years from the date of a request for super-accelerated examination. Applicants are required to explain that the invention is "already being worked" in the request form. Page 109, paragraph 3.189: According to the Secretariat report, in 2018, the JPO established the "IP acceleration programme for start-ups", which dispatches expert teams of venture capitalists, business consultants, and attorneys to provide hands-on support in the early stages of development to selected start-ups.

35. What criteria does the JPO use to select start-ups for the IP acceleration program? At present, how many applications have been received for admission into this program? At present, how many start-ups have been accepted?

RESPONSE Start-ups were selected based on some criteria such as the potential of business and the necessity of support to develop IP strategy. In FY2019, 111 start-ups applied for the program and 15 start- ups were selected.

36. Could Japan provide additional information about the specific services offered to selected start-ups?

RESPONSE The following types of support are offered in IPAS: 1. Diagnosis/development of business models and seeds strategies, etc.: WT/TPR/M/397/Add.1

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Identify customers and values provided and identify competitive advantages and specific policy of development. 2. IP strategies development support: Develop IP policies on protection, utilization, licenses, and so on. 3. Support for application strategies for seeds: Select seeds for which IP rights should be acquired and input appropriate process to file an application

37. Have participants favorably reviewed the program? Does the JPO plan to continue accepting new start-ups into the program?

RESPONSE The program has been highly reviewed with positive feedback. One of the participants commented, "We received beneficial advice based on a wealth of experience, including advice on the positioning of intellectual property in business strategy, application strategy and negotiation strategy". The program is planned to accept 15 new start-ups in FY2020.

Page 109, paragraph 3.190: According to the Secretariat report, Japan launched several initiatives in response to increasing disputes over standard essential patents (SEPs).

38. What initiatives have been launched to address the disputes over SEPs?

RESPONSE Please refer to paragraph 3.191 of the Secretariat Report (WT/TPR/S/397).

Page 109, paragraph 3.191: According to the Secretariat report, the JPO expanded its "Hantei" advisory opinion service on whether a patent claim reads on a product, to offer opinions on standard essentiality in April 2018.

39. How many advisory opinions on standard essentiality have been requested since the JPO began offering the opinion service in April 2018? How many advisory opinions on standard essentiality have been issued?

RESPONSE There is no request for Hantei (Advisory Opinion) for essentiality check at this time.

Page 110, paragraph 3.195: MAFF and MHLW recently developed policies and guidelines for agricultural products and foods derived from genome editing technology. These guidelines request product developers submit to a voluntary consultation and notify new products to MAFF and MHLW without legal obligation.

40. How will Japan ensure the equal execution of voluntary consultation and notification by developers with varied experience, resources, understanding, and who may not be aware of the guidelines?

RESPONSE MAFF (for safety of animal feed and protection of biodiversity), MHLW (for food safety) and the Ministry of Environment (for protection of biodiversity) have published guidelines requesting developers and users to notify the respective Ministry about organisms or products derived from genome editing technology. Organisms or products obtained through recombinant DNA technology are not subject to the notification. The competent authorities are going to continuously explain that such notification helps business operators and consumers to obtain a better understanding of the new technology to developers and users. The authorities will also instruct developers and users to submit the notification in case they are dealing with unreported organisms or products in Japan. Foreign developers and users handling such organisms or products to export them to Japan are also requested to submit the notification. The authorities make the notification procedures widely known by posting relevant information in English on their website and providing it to foreign embassies in Tokyo. It would be appreciated if the U.S. could inform the procedures to those who export such organisms or products to Japan of the procedures. The organisms that contain foreign nucleic acid or the products that contain foreign gene and its parts, even if they are derived from genome editing technology, are regulated under relevant acts on organisms or products obtained through recombinant DNA technology. In case such organisms WT/TPR/M/397/Add.1

- 59 - or products are found to be distributed illegally in Japan, penalties may be applied and the name of the violator may be made public.

3.3.7.5 Patents Page 114, paragraph 3.210: According to the Secretariat report, accelerated examination is available upon request for applications made by SMEs, applications that have been filed in more than one country, and applications for inventions that have already been put into practice.

41. How does the JPO determine whether an invention has "already been put into practice"? Is this standard different from the "already being worked" requirement for super-accelerated examination, discussed on page 109, paragraph 3.189 of the Secretariat report. If so, how?

RESPONSE The "already being worked" requirement for super-accelerated examination is identical to the "already been put into practice" requirement for accelerated examination.

3.3.7.9 Geographical indications Page 119, paragraph 3.234: According to the Secretariat Report, the 2018 amendments to the "2014 Act on Protection of the Names of Specific Agricultural, Forestry and Fishery Products and Foodstuffs" were enacted in response to the EU-Japan EPA and provide for a transition period, during which prior good faith use of an identical or similar GI may be continued for up to seven years following the registration or designation of a GI. The Secretariat Report also notes that the amendments provide for the co-existence of trademarks registered in good faith and later in time GIs.

42. What will happen to those goods which have been using a name in good faith that is identical or similar to a later GI? Will these products have to be renamed/relabeled or will they be pulled from the market? Please provide clarification on the policy reason for denying the continued use of a name that has been used in good faith and will now be phased out after seven years.

RESPONSE A name which is identical or similar to registered GI should be removed or erased seven years after the registration or designation of that GI even if that name has been used in good faith. This restriction is necessary to maintain high-level GI protection, through prevention of free-ride on GI including prior uses.

43. Will Japan consider evidence that a particular term is considered generic by the consumer as part of its analysis in determining whether to protect a term as a GI? If so, how does this analysis reconcile with the phasing out after seven years?

RESPONSE In examining GI registration and designation, we consider whether consumers recognize the applied names are used as generic term or not, taking into account the information in Japanese dictionaries, newspapers and websites, etc.

44. How will the exclusive rights of trademarks as guaranteed by Article 16.1 of the TRIPS Agreement be preserved if co-existence with a later in time GI is permitted?

RESPONSE In case of the application for registration or designation of a GI which is identical or similar to registered trademarks, the name is registered or designated as GI only when the consent of the trademark right holder (and exclusive licensee) was obtained.

3.3.7.1 Copyright Page 120, paragraph 3.239: The Secretariat's Report states that "new flexible limitations were introduced, to respond to digitization and networking." The Report continues by explaining that the amendments permit the "free use of a copyrighted work" to "test technology for the use of the copyright work; analyze information; or process information using a computer without human recognition." WT/TPR/M/397/Add.1

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45. Please explain how these uses comply with the three-step test, including how such use (i) does not conflict with a normal exploitation of the work and (ii) does not unreasonably prejudice the legitimate interests of the author. Moreover, it is our understanding that included in the new legislation was language indicating that the precise boundaries and scope of the new exception contained in Article 47-5 of the Copyright Act would be subject to a future Cabinet Order. Is that true/accurate? If yes, could you tell us whether that Cabinet Order has been drafted and released and, if so, summarize its substantive content?

RESPONSE As described in Articles 30-4, 47-4, and 47-5, these newly introduced articles are applicable only to certain purposes or cases. Therefore, they fall into "special cases" and satisfy the first step. In addition, since these purposes or cases are considered not to be normal usage of works, they do "not conflict with a normal exploitation of the work" and are consistent with the second step. Moreover, since each of these articles has a proviso that it does not apply if the action would unreasonably prejudice the interests of the copyright owner, they comply with the third step. Article 47-5 (1) (iii) defines an action subjected to limitation of rights as "an action that Cabinet Order prescribes as contributing to increased convenience in the lives of the citizenry by creating new knowledge or information through computerized data processing and making the results of this available". Since demand for new services can emerge upon further development of digitization and networking, this Article was introduced so that usage of works included in services, other than the usage defined in Article 47-5(1)(i) or Article 47-5(1)(ii), can be subject to limitation of rights by prescribing it in a Cabinet Order. No order regarding this subparagraph has been stipulated so far.

Page 120, paragraph 3.240: The Secretariat's Report mentions that a recent revision to the Copyright Act "enhances opportunities for persons with disabilities to access information." Please describe how "disability" is defined under the recent amendment and for what types of information is access enhanced.

46. If this language refers to the Marrakesh Treaty implementation, please describe the requirements to be an authorized entity under Japanese law and what exclusive rights are covered.

RESPONSE As pointed out in the question, this language refers to the Marrakesh Treaty implementation. Japan revised the Copyright Act regarding beneficiary person of the limitations provisions for persons with visual impairments, etc. (Article37(3) of the Copyright Act) in order to clarify that physically handicapped persons are subject to this paragraph, in addition to persons for whom it is difficult to perceive visual renderings due to a visual impairment or developmental disorders. Japan also revised the Act regarding an action subjected to the above limitations by adding sending by e-mail newly, in addition to the right of reproduction, transfer, and "automatic public transmission" (such as transmission over the Internet). Before the amendment, establishers of public facilities, for example facilities for persons with disabilities and libraries, and an organization individually designated by the Commissioner of the Agency for Cultural Affairs, etc. had been the body that could transliterate books for persons with visual impairments, etc. without permission of the copyright owners. Due to the amendment, the body who satisfies certain requirements without designation by the Commissioner of the Agency for Cultural Affairs was newly added to the subject of the provision in order to include volunteer organizations with appropriate systems in the organizations. In Japan, entities stipulated in each item of Article 2, paragraph (1) of the Enforcement Order of the Copyright Act constitute an "authorized entity", and specifically these include the following: libraries of universities and other higher education institutions, the National Diet Library, public libraries, libraries of schools or other equivalent institutions, facilities for children with disabilities, child developmental support centers, nursing homes for the elderly, and facilities for persons with disabilities as well as corporations that conduct the business of providing information to visually impaired persons etc. and which meet certain conditions.

Page 120, paragraph 3.242: The Secretariat's Report states that the Japanese Society for Rights of Authors, Composers and Publishers (JASRAC) "tried to revise royalty rules for the collection of WT/TPR/M/397/Add.1

- 61 - usage fees for music performed in music classes" but that JASRAC collected the fees "only from music classes that accepted the new royalty rules."

47. Please explain the reasoning behind collecting royalties only from these particular music classes.

RESPONSE The ACA did not suspend implementation of the new royalty rules in the arbitration of the Commissioner for Cultural Affairs. On the other hand, since the dispute between JASRAC and some of music classes as to whether a performance in a music class falls into the category of a performance stipulated in the Copyright Acts was in litigation, the Commissioner for Cultural Affairs provided administrative guidance to JASRAC to refrain from collecting royalties from the parties that did not accept the new royalty rules until the court would make the final decision. Therefore, JASRAC currently collects the fees only from music classes that accepted the new royalty rules.

Page 120, paragraph 3.243: The Secretariat's Report states that the reason for the high number of compulsory licenses granted by ACA for the legal use of orphan works (47,699 in FY 2016) is that "mass applications are made in batches every few years."

48. Please explain who is submitting such requests, for which purposes, and what the legal requirements are to grant such a license.

RESPONSE The National Diet Library submits a large number of requests for compulsory licenses every few years in order to archive digitally the old works from the late 1860s to early 1920s whose right holders are unknown. Article 67 of the Copyright Act permits a person to exploit a work in the manner provided for in a compulsory license issued thereto by the Commissioner of the Agency for Cultural Affairs, after depositing compensation for the copyright owner in a case in which the author of the work cannot be contacted even after a considerable effort.

4 TRADE POLICIES BY SECTOR 4.1.1 Agriculture, Forestry, and Fisheries Page 125, paragraph 4.1: The Secretariat Report's section on "Agriculture, Forestry, and Fisheries" does not include a "Forestry" section.

49. The Plywood, Lumber, and Glulam International Competitiveness Enhancement Measure was established in the 2018 supplemental budget. Please provide information on how the allocated budget was spent and how it affected Japan's wood production?

RESPONSE The budget for this measure was spent for some programs as below; - provide guidance and support for local communities to coordinate and integrate forest management areas/groups - provide guidance and support for wood processing mills to improve productivities and to shift their products to more value-added ones - conduct the surveys on Japanese wood-related business entities behaviors under the Clean Wood Act, Act on Promotion of Use and Distribution of Legally-Harvested Wood and Wood Products. With regard to the second question, it is difficult to evaluate how the measure has affected to Japan's wood production so far.

4.1.1.3 Institutional and legal framework Page 129, paragraph 4.12: The Secretariat's Report states that MAFF is responsible for agricultural policy, including agricultural insurance. Japanese vegetable farmers can access multiple crop insurance programmes, such as the Income Insurance Program, the Agricultural Mutual Aid, and Vegetable Price Stabilization Program.

50. Please provide detail on how these programmes differ.

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RESPONSE The three insurance policies are accessible to producers, but if a producer selects the Income Insurance Program, he/she cannot also select Agricultural Mutual Aid or the Vegetable Price Stabilization Program. The Income Insurance Program: all products are eligible. The income loss of individual producers will be compensated for various risks that cannot be avoided by individual producers, such as natural disasters and price declines, among others. The Agricultural Mutual Aid: The income loss from reduced harvest due to natural disasters and other risks. Vegetable Price Stabilization Program: The price gap will be compensated when actual wholesale market prices go below the average market price in the past. The coverage is only for pre-designated vegetables.

51. How much overlap is there among beneficiaries of these programs?

RESPONSE There is no overlap when a producer selects the Income Insurance Program as explained in the response to Question 50. There is no information available on the overlap between the Agricultural Mutual Aid and Vegetable Price Stabilization Program.

4.1.1.5.1 General support programmes Page 134, paragraph 4.30: According to the Secretariat Report, Japan's Agricultural Mutual Aid System (AMAS) "provides compensation for losses caused by natural disasters (including from extreme weather), diseases, and other events." The Revenue Insurance Program (RIP) "is a voluntary insurance system, designed to compensate farmers in the event of revenue decreases."

52. Japan's most recent domestic support notification to the WTO notifies the Agricultural Insurance Scheme and Crop Income Stabilization Payment programmes. Were either or both these programs replaced by the Revenue Insurance Program in 2019 or is RIP an additional crop insurance programme; if so, will it be notified in addition to these two programmes and when, e.g. in Japan's 2019 domestic support notification? If RIP is an additional crop insurance programme to the two aforementioned programs, how does it differ from those programmes?

RESPONSE The Revenue Insurance Program was additionally established, and the current two programs remain available they used to be. The new program, Revenue Insurance Program, will be notified in FY2018 DS1 notification that will cover domestic supports in FY2018, together with the two programmes.

4.1.1.5.3.1 Rice Page 138, paragraph 4.40: As a contingency reserve, the GOJ holds approximately one million metric tons of domestically produced rice by purchasing approximately 200,000 MT annually through tenders, holding it for five years, and selling the five-year-old rice for processing, feed, or donating it as food aid.

53. Can Japan explain how MAFF sets the purchasing price each year? Please include any measures governing administration including price determinations.

RESPONSE Purchase prices of rice for government stock are decided by the result of tendering. MAFF sets maximum purchase prices reflecting domestic market prices of rice for the predetermined purchasing quantity.

54. It is the United States understanding that MAFF regulates the use of rice for processing. Categorizing rice by (1) rice that has received support payments; (2) GOJ reserves; and (3) market access rice, all three types of rice may be used for all types of processed rice products, apart from one category. Why are GOJ reserve rice and market access rice excluded from use in the category named "Processed rice (sealed packaged retort rice and frozen rice, etc. containing 3 percent of meat, fish, crustacean, and mollusk)", which can be preserved more than two months?

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RESPONSE Rice imported under the SBS system as a part of Minimum Access rice is able to be used for "Processed rice such as sealed packaged retort rice and frozen rice" cited in the question. Government stock rice is basically not sold for processing use.

Page 138, paragraph 4.42: According to the Secretariat Report, the Government of Japan introduced the Rice Overseas Market Expansion Project, to mitigate the impact of decreasing domestic rice consumption on farmer's incomes.

55. Can Japan provide further detail on this project and how it is increasing Japanese rice exports?

RESPONSE MAFF has encouraged the export of rice by releasing the list of motivated exporters and producers to promote matching between production areas and exporters.

4.1.1.5.3.2 Other cereals, sugar beet, starch potatoes, buckwheat, and rapeseed Page 139, paragraph 4.44: Under CPTPP, the Japan-EU EPA and the U.S.-Japan Trade Agreement, MAFF has committed to reducing markups for state-traded wheat and barley. We understand that the GOJ revenue from markup collection is used to support domestic wheat and barley production.

56. Does the GOJ intend to maintain the level of support for domestic wheat and barley production despite the expected reduction in markup revenue?

RESPONSE Based on the Act on Payment of Grants to Farmers for Purpose of Stabilization of Farming Management, Japan intends to maintain the support for constant below-cost sales of domestic wheat and barley production.

4.1.1.5.3.5 Livestock and livestock products Page 140, paragraph 4.53: The Secretariat Report lists four categories of calves included in the administered prices payment system.

57. Why does the list not include "other beef breed" calves which have a guaranteed price of 314,000 yen per calf and a target rationalization price of 249,000 yen?

RESPONSE Being quite limited in the number of cases, the category for "other beef breed" calves was not covered in the report. The guaranteed price (314,000 yen) and the target rationalization price (249,000 yen) were correct in number, the latter of which is the revised price in FY2018 after the entry into force of TPP11.

Page 141, paragraph 4.54: According to the Secretariat Report, Japan increased support for domestic pork producers by expanding the Hog Growers Business Stabilization Measure.

58. Please confirm the last time payments were issued under the Hog Growers Business Stabilization Measure and the value of those payments.

RESPONSE There has been no actual payment made yet under the Hog Growers Business Stabilization Measure.

59. Can Japan please provide details of the Beef Livestock Stabilization Program =, any changes during the reporting period, the last time payments were issued, and the value of those payments?

RESPONSE The changes during the period are as follows: - compensation rate: 90% (80% originally), 1 April 2018 - legal status strengthened at the time of entry into force of TPP11, 30 December 2018 The most recent payments: 2203 million yen for the sales during July and September 2019.

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Page 141, paragraph 4.55: According to the Secretariat Report, payments are made to egg producers under contract, calculated as 90% of the difference between the baseline price (JPY 185/kg in FY2019) and the average trading price, multiplied by the quantity of eggs sold.

60. Can Japan please confirm the last time payments were issued under the Price Stabilization Fund for Eggs and the value of those payments? RESPONSE The amount paid until now under the Price Stabilization Fund in FY2019 (Apr-Mar) is 1.28 billion yen. These payments took place in April, May, June, July, August 2019 and January 2020. (Note) The payment for January is still being processed and is thus not included in the said amount of 1.28 billion yen.

4.1.1.5.3.6 Dairy Page 141, Paragraph 4.59: The Secretariat Report notes that TRQ fill rates in FY2017/18 were low for skimmed milk powder, prepared whey (for infant formula), and butter and butter oil.

61. Please provide the respective fill rates and any changes in measures or administration responsible for lower fill rates.

RESPONSE Some quotas, such as "skimmed milk powder for school lunches", "prepared whey (for infant formulas)" and "butter and butter oil", have been unfulfilled as the domestic consumption related to these quotas have not been increasing. Regarding the respective fill rates, please refer to Table 4.6. The reallocation scheme has been introduced and implemented.

Page 141, Paragraph 4.60: The Secretariat Report describes the farm business stabilization fund, which compensates producers of milk for processing whenever prices fall below the average for the previous three years.

62. Please confirm the last time payments were issued under this program and the value of those payments.

RESPONSE Under the farm business stabilization fund, the last payment was made in 2006 and the value was 2.6 billion yen.

4.1.2 Fisheries 4.1.2.2 Policy and institutional issues Page 146, paragraph 4.74: According to the Secretariat report Japan has set a self-sufficiency ration of 70% for fisheries. Japan aims to increase productivity to help industry grow through enhancing fisheries sustainable management.

63. How many of Japan's targeted fish stocks are now subject to an independent scientific stock assessment and management plan?

RESPONSE As of 2019, 87 stocks are subject to stock assessment. Based on these assessments, various resource conservation and management measures are taken at national, prefectural, and local levels.

64. How many of these fisheries that are targeted are underfished? 65. How many of these fisheries are fully or over fished?

RESPONSE ForQ64 and 65: In practice, fish stocks assessed are categorized into high, medium, and low stocks, taking account of the historical trend of the resource abundance index over more than 20 years. Out of these 87 stocks, as of 2019, 20 stocks are high, 30 stocks are medium, and 37 stocks are low level.

66. What percentage of this increase in self-sufficiency will be coming from aquaculture? a) What percentage will be coming from marine wild capture? WT/TPR/M/397/Add.1

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b) What percentage will come from access agreements with other countries or from shared stocks that are managed jointly with other countries?

RESPONSE There is no data available for detailed shares (percentages in the sub-categories) for the increase in self-sufficiency. Page 146, paragraph 4.77:

67. Why are the resource management plans voluntary?

RESPONSE The resource management plans in this context are developed and implemented by fishermen as a self-management initiative. This self-management is complementary to a series of fisheries regulations by the central government and prefectural governments.

68. How does the system of individual quotas and the total allowable catch relate to the fishing rights plan?

RESPONSE The fishery rights plans to be developed by the prefectural governor every five years prior to license fishery rights. Fishermen who operate based on fishery rights are also subject to the IQ and TAC systems.

69. What is the measure of control, e.g. how will Japan prevent overfishing, under the fishery rights plan if the prefectural governor only has to consider if a new plan would increase the fishery production in the waters of the prefecture?

RESPONSE For the purpose of preventing overfishing, the prefectural governor is not authorized under domestic law to develop any fishery rights plan which may obstruct reproduction of fishery resources.

70. To what extent do the Fisheries Cooperative Associations play a role in setting catch limits at the prefecture level? What happens when a Fisheries Cooperative Association disagrees with the catch limits recommended by a scientific assessment? How often are catch limits set above the catch limits recommended by the scientific assessment?

RESPONSE Minister of Agriculture, Forestry and Fisheries sets the national catch limit (TAC) based on the results of the scientific assessment. Fisheries Cooperative Associations, as one of the stakeholders, can make comments on the draft of catch limits. Since 2016, no catch limits have been set above the ones recommended by the scientific assessment.

71. How will individual quotas be enforced? What fisheries will not be subject to a TAC? How will IQs be determined?

RESPONSE Individual quotas will be enforced in accordance with the revised Fisheries Act. IQs are to be determined and allocated to fishermen based on the catch performance in the past fishing seasons and other factors as necessary. Consumption of IQs are monitored by the government during the fishing season. All fisheries are subject to the TAC system.

4.1.2.4 Stock management Page 146, paragraph 4.77: The Secretariat Report notes that Japan "promulgated the first substantial revision of the Fisheries Act" in 2018 and "The revised Act will enter into force at the latest on 14 December 2020."

72. How will the revision affect import quotas on fisheries products (page 67, Table 3.6)?

RESPONSE This revision as such does not affect import quotas on fisheries products.

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4.1.2.5 International agreements Page 147, paragraph 4.79:

73. Does the Japanese government provide any particular support solely to those fishers with private-sector-based access agreements?

RESPONSE No. The Japanese government does not provide such support.

74. Do the fishers with private-sector-based access agreements pay a market price for access rights? If so, how is the price for access determined?

RESPONSE Yes. Such fishers pay for access rights and the price is determined through negotiations with each country's private organization periodically.

Page 147, paragraph 4.82: Japan announced its withdrawal from IWC.

75. How many whales does Japan intend to harvest each year? What species and from where?

RESPONSE Catch quotas are set within the catch limits calculated in line with the scientific method developed and adopted by IWC. Catch quotas of each species for the commercial whaling are as follows; - Year 2020 initial quota (from 1 January to 31 December) are 120 for Minke whale, 150 for Bryde's whale and 25 for Sei whale. The whaling operations are conducted within Japan's territorial sea and its exclusive economic zone.

76. What actions is Japan taking over stockpiles of Sei whales that were introduced under Introduction from the Sea (IFS) certificates prior to Japan's agreement at CITES Standing Committee 70 that IFS of Sei whale meat and blubber from the North Pacific population was not in compliance with Article III, paragraph 5(c), of CITES. 77. What measures is Japan taking to ensure that remaining stockpiles of Sei whales are not being used for primarily commercial purposes?

RESPONSE for Q.76 and 77: Japan's explanation regarding the introduction from the sea of sei whale can be found in the Summary Record of the 70th meeting of the Standing Committee. Japan will report on the treatment of the specimens of sei whale meat and blubber introduced from the sea at CITES Standing Committee (SC) 73 as requested by the Standing Committee at SC71.

4.1.2.6 Border and domestic support measures Page 147, paragraph 4.85:

78. What benefits and subsidies do fish and fish products receive from the Japanese system of export support and promotion?

RESPONSE As shown in para 3.74, the Japan External Trade Organization (JETRO) promotes exports of food products from Japan, including fisheries products. In this regard, exporters of fisheries products can receive services from JETRO such information related to as overseas market and international trade fairs. As shown in para 3.69, Japan has no export subsidy programmes in place.

Page 148, paragraph 4.86; table 4.15: According to the Secretariat's report" Japan notified programs which, in its view, may not constitute subsidies under Article 1 of the SCM Agreement or may not be "specific" under Article 2 of the same Agreement."

79. Table 4.15 is significantly different from Japans prior notifications to the WTO. Can Japan explain what programs it is now including that were not included before and where the additional funding is directed? WT/TPR/M/397/Add.1

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RESPONSE Japan submitted a wider range of notification on fisheries subsidies in 2019 in order to enhance transparency in light of the notification obligation set out in paragraph 2 of Ministerial Decision in the 11th Ministerial Conference. This notification includes certain fisheries related government expenditures that may not constitute "subsidies" under Article 1 of the SCM Agreement or may not be "specific" under Article 2 of the Agreement in addition to the programs that had been notified in the prior notifications.

80. Are there subsidies tied to, or contingent upon distant water fishing? Overall, how much of the subsidies go to building fleet capacity in the Japanese fishing fleet?

RESPONSE The answer to the former question depends on the legal interpretation of "tied to, or contingent upon". With regard to the latter question, Japan has government support programs related to fishing vessels, but they are planned and implemented as a package of comprehensive measures of fisheries policy. Because the total amount of "subsidies go to building fleet capacity" depends on how such term is precisely defined and calculated accordingly, we cannot provide the definitive answer.

Page 148, paragraph 4.86: Promotion of regional development through fisheries

81. What type of subsidies are given to the "revitalization of fishing communities in remote islands" and what do they support?

RESPONSE For fishing communities in remote islands, Japan supports such as activities facilitating consultation among stakeholders for revitalization of fisheries, recruitment and settlement programs for new fishermen, and conservation and management of fishing grounds and stock enhancement.

Page 148, paragraph 4.86: The support of establishment of environmentally and economically sustainable fisheries

82. What specific types of structural reforms does the government support not related to catching fish?

RESPONSE For example, Japan supports programs such as scrapping of fishing vessels and cessation of fishing activities as a result of tightened resource management, as well as improvement of working and safety conditions of crews on board.

4.4 Services 4.4.4 Transport services 4.4.4.1 Maritime transport 4.4.4.1.1 Market overview Page 175, paragraph 4.211:

83. Per Table 4.22, can you confirm that the first sentence reflects the percentages of "merchandise" imports and exports, rather than total exports and imports.

RESPONSE Japan confirms that the first sentence reflects the percentage of imports and exports of merchandise.

4.4.6 Distribution services with a specific focus on e–commerce Page 187, paragraph 4.271:

84. Does Japan consider the 7-Eleven company to be "foreign owned"?

RESPONSE Japan does not consider 7-Eleven, Inc. as foreign-owned. Seven & i Holdings Co., Ltd. owns 100% of equity of 7-Eleven, Inc. Please see page 3 of financial statements of Seven & i Holdings Co., Ltd. https://www.7andi.com/en/ir/file/library/co/pdf/2019_01.pdf.

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85. How does Japan consider parent companies in determining whether companies are foreign or domestically owned?

RESPONSE Since this question is too vague for Japan to provide an answer, Japan requests to make it more specific. What kinds of regulations and what regulatory processes does it discuss in relation to the ownership of a company?

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BRAZIL

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT II TRADE POLICY REVIEW: TRADE AND INVESTMENT REGIMES Page 41 (Para 2.14 - 2.17)

RTAs

Questions: 1. Japan has adopted a very ambitious external trade policy during the last decade, having signed bilateral trade agreements with sixteen countries, besides the European Union and the Association of Southeast Asian Nations, as well as being a member of the Trans-Pacific Partnership. As a traditional partner in our bilateral relationship, Brazil congratulates Japan on its proactive stance in the promoting free trade. In that sense, the Brazilian delegation would be interested in hearing a prospect on which principles and goals will be guiding Japan's external trade agenda for the next decade, especially regarding trade agreements and market access.

RESPONSE Japan aims to take the lead in establishing comprehensive, balanced and high-level global rules through the conclusion and expansion of high-quality EPAs.

2. Would Japan consider entering a new bilateral agreement with other trading partners, in particular with Mercosur countries? What criteria will Japan take into account to assess which countries it wishes to negotiate future agreements with?

RESPONSE In general, Japan assesses new EPAs comprehensively from both an economic and diplomatic strategic perspective. It is important for Japan to further strengthen trade and investment relations with Mercosur countries with which Japan traditionally maintains friendly relations.

II TRADE POLICY REVIEW: TRADE POLICIES AND PRACTICES BY MEASURE Page 57 (Para 3.24 and its footnote 26)

Tariffs

Questions: 3. The average tariff for agriculture products raised from 16.3% in FY2016 to 17.9% FY20219. What are the reasons for this increasing and which tariff lines are responsible for most of the increase?

RESPONSE No changes have been made to the MFN rates of agricultural products from FY2016 to FY2019. While Japan has not been fully informed of how the Secretariat calculated the average tariff rates in the report, Japan considers that AVEs might be calculated for non-ad valorem duties. Therefore, the reason for the identified changes could be the changes in prices of the goods in question (not the changes in applied tariff rates themselves).

4. The simple average tariff for all AVEs is at 37.3%, significantly higher than the previous Review figure (32.7%). What are the reasons for this increasing and which AVEs are responsible for most of the increase?

RESPONSE Although it is not clear how "non-ad valorem duties" are calculated in the Secretariat Report, Japan had not changed specific duty rates from FY2016 to FY2019. Decrease in import unit values may have led to increase in the valorem equivalent rates.

5. Would Japan provide data for the 158 AVEs not included in the tariff analysis mentioned in paragraph 3.24 and its footnote 26?

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RESPONSE It is not clear how the Secretariat Report calculated the 648 AVEs, so our side is not able to identify what 158 AVEs are.

Page 87 (Para 3.124)

SPS Measures / OIE rules

Japan has stated that it has sought to make its SPS measures in line with international standards.

Question: 6. The delegation of Brazil kindly requests a clear and detailed description of requirements, including risk management measures, applied by the Japanese Government during sanitary risk assessments related to beef and pork imports from areas recognized by the OIE as free from foot- and-mouth disease with vaccination.

RESPONSE When receiving a request for import ban lifting of beef and/or pork, Japan conducts a risk assessment in accordance with the "Standard Procedure for Approval for Import of Designated Items into Japan to be Quarantined" and "Standard Operating Procedures for Approval for Import of Designated Items into Japan to be quarantined", which are consistent with SPS agreement and the OIE codes. The standard procedure and the standard operating procedures are published in English and available at: https://www.maff.go.jp/j/syouan/douei/eisei/sop/pdf/080401sop_eng.pdf. https://www.maff.go.jp/j/syouan/douei/eisei/sop/pdf/2010sop_en.pdf.

7. Could Japan explain its stance regarding the OIE mandate from the WTO to officially recognise disease-free areas of countries for trade purposes? How does Japan take into consideration such recognitions while performing its risk analysis?

RESPONSE Japan always gives due consideration to the OIE official disease status recognition when conducting a risk assessment in accordance with the designated procedures, which are consistent with SPS agreement and the OIE codes. Japan utilizes application document (dossier) submitted to OIE for official recognition whenever it is available.

Page 87 (Box 3.2)

SPS Measures / Agencies responsible for SPS measures

Question: 8. Japan has informed Brazil on several occasions that the national phytosanitary authorities cannot receive new requests relating to risk assessment for fresh fruits, being overwhelmed by several demands from different countries in that regard. The Brazilian delegation kindly inquires which measures are being undertaken by the Japanese Government in order to improve efficiency in phytosanitary risk assessments and ensure a timely conclusion to international requests.

RESPONSE When other members request Japan to lift a ban on plant import, Japan carries out its evaluation based on the scientific data. If other members establish a measure to prevent introduction and spread of pests, Japan will lift the ban on plant import. Japan has published the procedure for evaluation and the progress of individual case, to ensure its implementation under a full transparency.

Page 89 (Para 3.134 – 3.136)

SPS Measures / Livestock Infectious Diseases Control

Questions: 9. What is the average length of time needed by the MAFF to examine technical information submitted by a country seeking recognition of an FMD free area without vaccination? WT/TPR/M/397/Add.1

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RESPONSE So far, Japan has recognized two zones as FMD free without vaccination, the state of Santa Catarina of Brazil and the Patagonia region of Argentina. The length of time to examine the submission depends on the submitted information in terms of sufficiency. Japan might request additional information until Japan considers the information is sufficient for conducting the risk assessment. Therefore, the length of time significantly differs on a country-by-country basis.

10. Would Japan consider removing the age requirement of a maximum of 36 months for animals used as raw material for meat products? Is there sufficient scientific evidence justifying such import restriction?

RESPONSE In general, SPS measures of Japan are based on relevant international standards, or where its measures do not conform to relevant international standards, based on scientific risk assessment, in accordance with the SPS Agreement. The SPS Agreement requires that SPS measures conducted by WTO members are based on scientific principles. As for BSE regulations, MHLW requests risk assessment to FSCJ taking into account the OIE evaluation. For relaxing further age restrictions based on the international standards regarding beef from countries where BSE occurred, MHLW has already lifted the age restrictions for the U.S., Canada and Ireland in May 2019, and for France and Norway, we are discussing review of import conditions, based on results of risk assessments on lifting age restrictions by FSCJ. For Brazil, MHLW will request FSCJ for risk assessment when all the necessary information, such as more data collected by the risk management organizations and new scientific evidences, become available. Once FSCJ completes the assessment and notifies MHLW of the risk assessment result, MHLW will consider further relaxation of the beef import requirement based on the result of risk assessment.

II TRADE POLICY REVIEW: TRADE POLICIES BY SECTOR Page 128 (Para 4.7)

In comparison to the current Food, Agriculture and Rural Areas Basic Plan, Japan has set higher self- sufficiency targets for the next Plan's five-year period. Considering that the plan is to be published in 2020, could Japan provide the following information:

Questions: 11. Does Japan plan to adopt new domestic support policies that would be notified under article 6 of the AoA? If positive, could Japan provide details (for instance, on which box will the policy be notified, which products will be prioritized) on these policies?

RESPONSE At this stage, Japan does not foresee changes in its domestic support while such changes could take place as necessary, consistent with the relevant WTO rules.

12. Does Japan intend to increase the budget of current domestic support policies?

RESPONSE Under the commitment made in the UR agreement, Japan has promoted its agricultural policy reform and substantially reduced trade-distortive support. Its domestic support policies have been continuously adopted and reviewed to address various policy purposes in accordance with WTO rules. Although, it is not possible to clearly foresee the situation in the future, but Japan is maintaining the WTO consistency in implementing domestic support policies.

Page 132 (Para 4.23)

Table 4.6 (TRQ fill ratio, FY2017/18) demonstrates that several TRQs have fill rates below 65%, the threshold agreed upon in Bali by the Members as an indicator of the economic efficiency of TRQs as a means to promote trade.

Questions: 13. Could Japan provide specific information on these TRQs' administrations methods?

WT/TPR/M/397/Add.1

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RESPONSE For the tariff rate quota implementation, the specific natures of products are taken into account. For your reference, the relevant information on the implementation is publicly available on the official websites and through the WTO notifications.

14. Could Japan provide updated data regarding the decreased domestic demand of the products that can be imported through these TRQs?

RESPONSE Japan does not have a comprehensive data set on this purpose. Domestic demand (i.e. consumption) can be calculated for the products of your interest as production plus imports minus export. The relevant data is available at FAOSTAT.

Page 133 (Para 4.25)

Question: 15. Could Japan provide more details on the functioning of the simultaneous buy and sell (SBS) system? Could Japan include in its answer the economic rationale of the system, the goals it intends to achieve and the role of the government in mediating the transaction between the importer and the domestic user.

RESPONSE The SBS system is operated to meet specific needs of rice and wheat. Under the SBS system, a domestic user and an importer jointly bid for the tender held by MAFF. MAFF purchases imported rice and wheat from the importer and sells it to the user simultaneously based on the result of tender.

Page 134 (Para 4.30) Japan has recently revised its domestic legislation on agricultural revenue insurance, defining the program eligibility as a minimum income loss of 10% and establishing compensatory payments at 90% of producer's income loss.

Japan's latest DS:1 notification (G/AG/N/JPN/235) demonstrated that non-product-specific AMS outlays related to Agricultural Insurance Scheme amounted to 14.9 billion JPY (Supporting Table DS:9).

Questions: 16. Does Japan envision an increase in the amount of amber box domestic support provided under the Revenue Insurance Program (RIP)?

RESPONSE Japan will examine the categorization prior to the next DS1 notification.

17. Did Japan consider adopting the non- or minimally trade-distorting criteria established in Annex 2, paragraph 7 of the AoA for Government financial participation in income insurance?

RESPONSE See the response to Q.16 from Brazil.

Page 136 (Para 4.34 and 4.35)

Recent changes in Japan's agricultural policies, such as the abolition of the Direct Payment for Rice and of the administrative allocation of rice production volume targets and the abolition of administered prices for beef and pig meat, may have important implications on Japan's Blue Box and Amber Box expenditures. Rice was the main beneficiary of trade-distorting direct payments under production-limiting programmes and pig meat and beef were among the main beneficiaries of trade-distorting Amber box support.

Questions: 18. Does Japan foresee changes in its domestic support pattern regarding rice, beef and pig meat?

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RESPONSE At this stage, Japan does not foresee changes in its domestic support regarding rice, beef and pig meat, although such changes could take place as necessary in accordance with the relevant WTO rules.

19. Does Japan plan to adopt new substitute policies for rice, beef and pig meat?

RESPONSE At this stage, Japan does not have plans to adopt new substitute policies for rice, beef and pig meat, although such policy reviews/revisions could take place as necessary in accordance with the relevant WTO rules.

20. Is Japan's abolishment of its direct payment program for rice a sign that Japan understands that Blue Box support has already played its part as a transition program in the overall context of reform of its agricultural policy?

RESPONSE The abolishment of the program is simply the reflection of the policy change. Along with the abolition of administrative allocation of rice production volume targets, the Direct Payment for Rice was abolished in 2018.

21. Could Japan provide updated information on rice production (area and volume) during the period of implementation of its production-limiting programmes for rice?

RESPONSE Please refer to Crop Statistics for production area and production volume of rice as bellows. https://www.maff.go.jp/j/tokei/kouhyou/sakumotu/sakkyou_kome/index.html.

Page 152 (Chart 4.8)

Energy/Renewable energies

Questions: 22. Does Japan consider further expanding the share of renewable energy in the transport sector?

RESPONSE Based on the Plan for Global Warming Countermeasures (Cabinet decision on May 13, 2016), the Government of Japan continues to improve the introduction system including the introduction of biofuels and support for supply infrastructure, assuming sufficient GHGs reduction effects, stable supply, and economic efficiency. At the same time, the Government of Japan has no quantitative targets for increasing the use of renewable energy in the transport sector.

23. Is Japan willing to review its regulations concerning sustainability criteria of renewable fuels?

RESPONSE The sustainability of biomass fuel for power generation has been required as the approval criteria under the FIT in Japan. The sustainability criteria of biomass fuel for power generation has been under consideration in Japan, including the timing for update.

Page 170 (Box 4.5)

State ownership: NTT 35.9%

Question: 24. Does Japan have any plans to increase liberalisation of the telecom sector by reducing its participation in NTT?

RESPONSE The Government is obliged to own at least one third of the total issued shares of NTT (Nippon Telegraph and Telephone Corporation) and be its stable shareholder so as to ensure stable management and appropriate business operation of NTT, avoiding the situation that a specific person WT/TPR/M/397/Add.1

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Page 170 (Box 4.5)

Names and market shares of the leading companies for fixed telecom services (December 2018): NTT East and NTT West (combined market share for fixed telecom services, 23.2%); KDDI (17.9%); Optage (3.8%); Softbank (2.9%); various wholesalers using NTT East and West networks (31.7%)

Question: 25. Could Japan confirm the mention to "various wholesalers" in the abovementioned paragraph?

RESPONSE "Various Wholesalers," which account for 31.7％ of the retail market shares of the leading companies for fixed telecom services, receive FTTH's wholesale telecommunications services from NTT East and NTT West, and provide services for end users. NTT DoCoMo and SoftBank, both of which are mobile phone carriers, are the typical carriers to provide services in this manner. These two companies' share of the above 31.7% portion exceeds 70% in total.

Page 170 (Para 4.180)

Regarding the fixed interconnection regime, the leading companies (NTT West and NTT East) are now obliged to include their optical fibre lines, as well as their Internet Protocol core network "Next Generation Network", as designated facilities into their interconnection offer.

Questions: 26. Are the cited companies obliged to publish reference offers for their interconnection products?

RESPONSE NTT West and NTT East have no obligation to publish the names of products used for interconnection. However, in accordance with the Telecommunications Business Act, equipment types, interconnection charges for using the equipment, and terms and conditions of interconnection are published in the form of "general conditions of contracts for interconnection", together with evidence materials for calculating interconnection charges.

27. If so, how is price defined in those offers? Is there a cost orientation in such definition?

RESPONSE Based on the Telecommunications Business Act, interconnection charges are set on a cost basis, calculating a cost-plus reasonable profit under efficient management.

Page 170 (Para 4.182)

Apart from those minor technical amendments to the regime, and of the deployment of 5G LTE networks and of experimental programmes on the IoT and on AI, the government policy regarding telecommunications during the period under review was essentially focused on two issues: consumer protection, and the lowering of costs linked to the use of mobile handsets.

Questions: 28. Could Japan elaborate on the measures taken on the deployment of 5G and on the programs for fostering AI and IoT technologies?

RESPONSE When assigning 5G frequencies, Japan obliged mobile phone operators to start 5G services in all 47 prefectures within 2 years and install 5G advanced base stations in 50% or more mesh (10km square) of Japan within 5 years in order to promote the development in urban areas and local areas. In addition, subsidies will be provided for the installation of 5G base stations and superfast optical fibers supporting them in commercially challenging areas. With regard to the programs for fostering IoT technologies, Japan does not take any measures in order to foster the technologies of IoT. WT/TPR/M/397/Add.1

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With regard to the programs for fostering AI technologies, please see the AI Strategy 2019 from the URL below. https://www.kantei.go.jp/jp/singi/ai_senryaku/pdf/aistratagy2019en.pdf.

29. Is the establishment of a secondary market for frequencies in place one of those measures? If so, what is the rationale behind its implementation?

RESPONSE There is no secondary trading system and secondary market for frequencies in Japan.

Page 171 (Para 4.185)

As evidenced by its ranking in Table 4.21, telecommunications prices in Japan remain relatively high by international standards, especially for data access via fixed and mobile broadband.

Question: 30. Could Japan give more details on the causes behind the high prices verified in the country? By the nature of the actions recently taken by the government, would switching barriers for consumers be one of those reasons?

RESPONSE It is crucial for competition among carriers to ensure smooth transfer from one telecommunications carrier to another according to users' choice, and this also affects user charges. For example, in the field of mobile telecommunications, Japan tackles with promotion of fair competition among carriers; with the revision of the Telecommunications Business Act in May 2019, the system was developed for completely separating communication charges and terminal charges and correcting excessive enclosure such as term-bound contracts.

ADDITIONAL QUESTIONS

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT Page 10 (Para 2)

During the review period, trade-related structural reforms (e.g. in the areas of taxation, competition policy, corporate governance, and labour market policies) were undertaken. Both multi factor and labour productivity registered positive growth, and targets were set for the latter; SMEs' productivity in manufacturing remains relatively low compared to large firms. Monetary policy, involving, among others, Quantitative and Qualitative Monetary Easing (QQE) with negative interest rate, continued to provide a monetary stimulus to growth and help building a stable financial environment.

Question 1 Which mitigation measures did Japan adopt to control the negative effects of the main trading partners monetary policies movements since the last TPR?

RESPONSE The Bank of Japan conducts monetary policy in order to achieve the domestic mandate, price stability and financial stability, thereby contributing to the sound development of the national economy. In the process, the Bank closely monitors and assesses the development of overseas economies, including the policy actions of other central banks.

Page 43 (Para 2.23)

The EU-Japan Economic Partnership Agreement (EPA) was signed on 17 July 2018, and entered into force on 1 February 2019. It was notified to the WTO on 14 January 2019. It covers both trade in goods and services. It is the world's largest RTA, with signatories together accounting for nearly one third of world GDP.

Question 2 Are there any estimates of the overall impact of the Brexit on the Japanese economy in terms of its external accounts (exports and imports) and/or GDP?

WT/TPR/M/397/Add.1

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RESPONSE At this moment, there is no overall impact estimation of the Brexit on the Japanese economy.

Pages 160-1 (Para 4.146)

During the review period, the share of manufacturing in total exports declined slightly; it accounted for 86.8% of total merchandise exports in 2018 (87.2% in 2015), mainly automotive products (21.5%), non-electrical machinery (15.1%) and chemicals (10.7%). The import content of exports varies across manufacturing industries, but is high for the top exporters, illustrating the role that imports plays in supporting exports, and indicating the degree of GVC integration of these industries.

Question 3 How do the Japanese policy makers reconcile the current greater role for domestic, rather than imported, supply of inputs in the Japanese manufacturing industries with the growing Japanese trade integration into the Asia-Pacific region?

RESPONSE As stated in the Secretariat Report, the "import content of exports varies across manufacturing industries."

Question 4 By the way, is there any indicator of the exact position (backward and forward linkages) of the Japanese manufacturing industries within global/regional value chains in the Asia-Pacific rim?

RESPONSE The exact position of Japanese manufacturing industries within global/regional value chains varies on a case-by-case basis.

Page 166 (Para 4.156)

The intent of the supervisory approach is to put more emphasis on the business potential of borrowers rather than on their collateral or credit guarantees, and to prompt Japanese banks to utilize a "risk appetite framework" in light of the difficult environment born out of prolonged negative interest rates, worldwide political and economic uncertainties, and the emergence of online banking, e-payments and fintech.

Question 5 How exactly has the prolonged negative interest rates been affecting the Japanese banking system?

Please see our response to question 6.

Question 6 Have negative interest rates diminished the profitability of the Japanese banking system significantly?

RESPONSE A negative interest rate affects the profitability of Japanese banking system. The low-interest rate environment attribute to not only monetary policy but also other factors such as demographic change and competitions in Japan. In addition, it should be noted that the impact of domestic interest rate environment depends on banks' business model. That is, international banks may have oversea business opportunities to diversify business portfolio while regional banks largely rely on domestic businesses environment, being affected by low-interest rate environment in Japan. To enhance their profitability, Japanese banks are diversifying revenue sources including fee- business and alliance with non-financial businesses, reducing operational costs such as branch network, and proceeding digitalization.

Question 7 If so, is it a matter of concern for the Japanese monetary and/or financial supervision authorities?

RESPONSE Please see our response to question 6. WT/TPR/M/397/Add.1

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Question 8 How is a successful exit policy supposed to work in these circumstances?

RESPONSE At the present, as it is expected to take longer to achieve the price stability target, it is still premature to formulate a concrete exit policy. The exit policy would be discussed at an appropriate timing when it is foreseen that the 2 percent price stability target will be met.

Page 167 (Para 4.158)

In a longer-term perspective, the FSA set up a panel of experts in November 2017, i.e. the Study Group on the Financial System, in charge of developing a new approach to regulation. Regulation is by financial function rather than by type of actor, since, for instance, banks are diversifying in asset management and insurance, while fintech, including Internet and telecom companies, venture into e-payments and banking. This panel identified four key functions that should be regulated, regardless of the type of actor involved in them, namely: payment and settlement, lending, investment, and risk transfers. The aim is to maintain consumer protection, and to encourage financial innovation.

Question 9 How does regulatory and supervisory coordination work when economic agents (mainly banks) operate in two or more of the identified functions?

RESPONSE It would be much appreciated if you could elaborate the question a bit more and clarify how the question is related to the referred paragraph. The referred paragraph in the Secretariat Report describes the discussion held at the Study Group on the Financial System under the Financial System Council. Would you expect to see Japan's response to the development/outcome of the discussion so far? Or would you expect to learn about current regulatory/supervisory coordination on the case that a bank runs different functions (such as insurance and asset management)?

Page 168 (Para 4.166)

Regarding e-payments, Japan has been relatively slow to switch to cashless payments, and credits cards, for instance, are much less used than by other OECD countries. However, this is now changing very rapidly, due to e-payments (notably by mobile phones) and more marginally to cryptocurrencies. The Government set an objective of 40% of cashless payments by 2025.

Question 10 How is the e-payments statistics collected and processed? Is it disaggregated by type of e-payment? What was the growth rate observed for this type of payment since the last TPR?

RESPONSE In the analysis, "cashless payments" are defined as payments using credit cards, debit cards and e- money. The ratio of cashless payments to private final consumption expenditures has been growing, indicating 20.0% in 2016, 21.3% in 2017 and 24.1% in 2018.

Page 168 (Para 4.169)

In order to develop fintech, the FSA eased, in May 2016, the restrictions on banks' ownership of finance-related IT companies. However, such acquisitions remain subject to FSA approval. In September 2017, the FSA established the FinTech Proof of Concept (PoC) Hub. The main aim of the Hub is to support innovative projects improving user convenience and/or productivity of companies. For each selected PoC project, the FSA will set up a special working team, in cooperation with relevant authorities and/or industry associations, as necessary. A special working team will support a project, by giving advice on issues related to compliance and supervision, etc., that participants of the PoC project would like to clarify The newly formed (July 2018) Strategic Development and Management bureau of the FSA is in charge of this programme.

Question 11 What are the effects of this measure for the purpose of assessing banks' leverage under the Basel III limits? WT/TPR/M/397/Add.1

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RESPONSE Since there is no relevant description for the Basel III in the referred paragraph 4.169 of WT/TPR/S/397, it is difficult to understand properly what "this measure" means in your question. If you meant the implementation of the leverage ratio under the Basel III by "'this measure'', FSA has implemented the minimum requirement and disclosure requirement for the leverage ratio.

Page 168 (Para 4.170)

In April 2017, the FSA implemented the revised Payment Services Act, which introduced the registration system for exchange service providers of virtual currency for legal tender, and established the legal framework, such as security requirements and segregation rules between the operators' assets and the users' assets. After the Coincheck site was illegally accessed in January 2018, the FSA conducted a number of on-site inspections and business improvement orders, to try to improve their internal management structure and AML capabilities.

Question 12 How is the operation of non-residents in the virtual currency market in Japan regulated?

RESPONSE If a person operating a virtual currency exchange located outside of Japan seeks to provide its service to residents in Japan, it must be registered as Virtual Currency Exchange Service Provider under the Payment Services Act. As part of registration requirements, Foreign Virtual Currency Exchange Service Provider* is required to designate a representative person in Japan (limited to a person who is domiciled in Japan) and to have a business office in Japan. For further details of regulations applied to Virtual Currency Exchange Service Provider, please see our response to question 13. *A person who carries out a Virtual Currency Exchange Service in the course of trade in a foreign state under the same kind of registration as the one referred to in Article 63-2, pursuant to the provisions of laws and regulations of that foreign state equivalent to this Act (including permission or other administrative dispositions similar to that registration).

Question 13 What kind of specific measures were adopted by the FSA to avoid excessively risky operations by non-residents in Japanese markets?

RESPONSE As mentioned in our response to question 12, FSA requires a person, who operates a virtual currency exchange located outside of Japan and seeks to provide its service to residents in Japan, to be registered as Virtual Currency Exchange Service Provider under the Payment Services Act. The registered Virtual Currency Exchange Service Provider will be subject to relevant regulations under the law, including information security management, management of entrusted parties, measures for customer protection and management of users' property (tentative translation of the law is available at: http://www.japaneselawtranslation.go.jp/law/detail/?id=3078&vm=04&re=01). FSA supervises the Virtual Currency Exchange Service Provider to ensure appropriate business operation by applying the regulations. Please see para 4.4 of WT/TPR/G/397 for further information on the recent amendment of the law with respect to the Virtual Currency Exchange Service. FSA has conducted work on identifying and managing unregistered service providers. If a suspected business ignores requests for engagement with the FSA, then warnings are sent to the business and information is posted on the FSA website.

Page 169 (Para 4.171)

Following the crash of the bitcoin value (from USD 20,000 in December 2017 to USD 4,000 in December 2018) and two major thefts at virtual exchanges involving USD 500 million and USD 60 million, the FSA announced, in December 2018, its intention to strengthen applicable rules and to ensure user protection. This act was passed by the Diet in May 2019 and will be implemented by June 2020. The new Payment Services Act replaces the term "virtual currency" by "crypto-asset", to underline its speculative character, requires service providers to pre-notify the authority of plans to change a line of virtual currency products, and contains provisions forcing virtual currency exchanges to secure funds for repayments to customers in the case of theft or business failure.

WT/TPR/M/397/Add.1

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Question 14 Has the Government developed any programme envisaging greater financial education regarding crypto-assets? If yes, how was the advertising campaign implemented?

RESPONSE The FSA, in cooperation with Consumer Affairs Agency and National Police Agency, issued a series of notices to the public, which were made on September 2017, October 2018 and April 2019, to raise awareness on the crypt-assets, based on the cases collected through consultations. In addition, FSA issued a notice to the public on October 2017, in response to an increase of Initial Coin Offering, or ICO, which is a new way of fundraising with the use of crypt-assets, to raise awareness on the possibility of price decline and fraud.

The FSA, and other relevant authorities issued standard materials on financial literacy for university students and it is designed to raise awareness regarding crypto assets.

PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT

Page 3 (Para 1.1) The Japanese economy is recovering at a moderate pace. The private consumption and business investment are on the increase, supported by continued improvements in the employment and income situation and high corporate profits. However, due to the declining global demand for IT- related goods and slowdown of the Chinese economy exports in certain sectors remain weak since 2018. As a consequence, industrial production has been in a weak tone. Further attention shall be given to international trade issues and ambiguous economic trends and policies abroad, including the prospect of the Chinese economy.

Question 15 Are there any official estimates of the impact of the trade tensions between the US and China on the Japanese economy both in terms of its external sector (exports and imports) and GDP?

RESPONSE Although we have no such estimates, we will continue to pay close attention with a high level of interest to the impact of the trade tensions between US and China including on our country.

Question 16 Of what magnitude has been the impact of the downward trend of the Chinese economy on the Japanese one? Through which channels? Does it represent any major risk to the growth of the Japanese economy as the Chinese economy is expected to continue on a downward trend in the foreseeable future and as the two economies are becoming more intertwined over the years?

RESPONSE We continue to pay close attention to the Chinese economy as China is the world second largest economy and its economy has great influence not only on Japan's economy but also on the world economy.

Page 4 (Para 2.3)

Japan is currently a party to eighteen EPAs. Japan is aiming at the swift conclusion of RCEP negotiations among 16 countries, through which the FTA ratio1 will exceed 70%, as set out in the Growth Strategy 2019. Japan has also promoted its regional and bilateral trade policies as a means of complementing the multilateral trading system under the WTO and Japan believes that these agreements will serve as building blocks to achieve higher trade liberalization at the multilateral level.

Question 17 How exactly regional and bilateral trade agreements in which Japan takes part have been conceived as building blocks of the multilateral trade system? Does this mean that these agreements contain policies that go beyond what have been agreed so far at the multilateral level?

WT/TPR/M/397/Add.1

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RESPONSE Japan has concluded EPAs which include high-standard rules that go beyond those of the WTO, such as the TPP11 Agreement and Japan-EU EPA. Japan will continue to promote EPAs negotiations as a means of complementing the multilateral trading system under the WTO.

Page 6 (Para 2.13)

Maintaining and strengthening the multilateral trading system under the WTO has been a main pillar of Japan's external economic policy. At the same time, Japan has also promoted its regional and bilateral trade policies as a means of complementing the multilateral trading system, particularly through Economic Partnership Agreements that include elements of Free Trade Agreements and institution-building.

Question 18 To what extent Economic Partnership Agreements (EPAs) have been instrumental if at all to increase the integration of the Japanese economy into the Asian-Pacific rim?

RESPONSE The strengthening of global supply value chains can be anticipated through the conclusion of EPAs. For example, the TPP11 Agreement has adopted the full cumulation system, which enhances further economic integrations in the Asia-Pacific region, through establishing more efficient supply chains in the region.

Page 9 (Para 2.16)

At the APEC Economic Leaders' Meeting in 2016 in Lima, Peru, APEC economic leaders reaffirmed their pledge against protectionism by extending a standstill commitment until the end of 2020, and their commitment to rollback protectionist and trade-distorting measures, which weaken trade and slow down the progress and recovery of the international economy. The Lima Declaration remains the backbone of APEC's efforts in promoting free and open trade and investment. Against rising protectionism including unfair trade practices, Japan solidifies its resolve toward the promotion of free trade.

Question 19 In the Japanese authorities' assessment, what are the technical criteria that differentiate legitimate prudential measures to protect the national financial system from trade distortion measures or unfair trade practices?

RESPONSE The FSA does not have any such specific technical criteria to evaluate for the legitimate prudential measures but believes that FSA's understanding on prudential measures is consistent with general interpretation shared in the GATS FS Annex. *Please refer to the last sentence of paragraph 30 on page 8 of S/C/W/312 S/FIN/W/73 3 February 2010, "it seems reasonable to interpret the prudential carve-out as affording the Members a high level of discretion regarding measures for prudential reasons including, but not limited to, the ones listed, but at the same time not permitting measures that are purely or primarily protectionist in effect." **Please refer to third paragraph from the bottom of page 3 of "Coverage of prudential measures in the GATS", "The broad scope of the prudential measures in paragraph 2(a) covered by the Annex is confirmed in the WTO Appellate Body's view by the clause "notwithstanding any other provisions of the Agreement" spelling out in general terms the latitude provided for such measures."

On the other hand, it is difficult to prejudge how Japan shall tackle against trade distortion measures or unfair trade practices of the other member country. It is needed to carefully consider whether certain measures Japan takes are legitimate prudential measures, which highly depend on the concrete effect of the measures taken by that member country.

Page 9 (Para 2.17)

APEC's core mission continues to be further regional economic integration and expansion of trade in the Asia-Pacific region. The Leaders and the Ministers of APEC reiterate the commitment to build an open economy in the Asia-Pacific region at the Economic Leaders' Meetings and the Ministerial WT/TPR/M/397/Add.1

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Meetings respectively by advancing regional economic integration and addressing next-generation trade and investment issues, including through the measures for achieving comprehensive and high- quality Free Trade Area of the Asia-Pacific (FTAAP). In this regard, Japan has been taking the lead in working on initiatives related to quality infrastructure, which is one of the priority issues in various fora. Japan also has been taking an initiative to implement APEC projects including competition policy in FTAs/RTAs, services, digital economy and food security.

Question 20 Has regional economic integration been conceived within the framework of the constitution of global/regional value chains and therefore contributed to increase the participation of Japan into supply chains in the Asia-Pacific rim?

RESPONSE The development of global/regional value chains is important for Japan to increase participation in supply chains in the Asia-Pacific region. Therefore, Japan has contributed, and will continue to contribute to promoting regional economic integration in order to increase Japan's participation through working on strengthening connectivity and developing global value chains in the region, based on the respective APEC strategies below for example; APEC Connectivity Blueprint for 2015-2025(2014), APEC Strategic Blueprint for Promoting Global Value Chains 2020-2025(2019), APEC Suggested Framework for Phase Two of the Supply-Chain Connectivity Framework Action Plan 2017-2020 (SCFAP Phase II).

Page 10-1 (Para 2.27)

In 2007, for strategic economic dialogue at the ministerial level, Japan and China decided to establish the Japan-China High-Level Economic Dialogue. The fifth meeting was held in Beijing in April 2019 and both sides exchanged views regarding a wide range of topics including trade and investment, as well as protection of IP rights. At the Japan-China Summit meeting in June 2019 at the occasions of G20 Osaka Summit, the two leaders shared the view that, based on international standards and in the spirit of "from competition to cooperation," the two countries would enhance mutually beneficial working-level cooperation in areas that have potential, such as third country markets, innovations and protection of intellectual property, trade and investment including foods and agricultural products, finance and securities, medical and nursing care, energy conservation and environment, and tourism exchanges, as well as further develop a free and fair trading system. In addition, to promote further bilateral cooperation in the economic field, various dialogues between Japan and China have been held.

Question 21 How has the spirit of higher cooperation between Japan and China been reflected in the Belt and Road Initiative (BRI)?

RESPONSE Japan's position on China's "Belt and Road Initiative" is as follows: Japan hopes that the initiative contributes to the peace and prosperity of the region and the world by fully incorporating internationally established common frame of thinking such as openness, transparency, economic efficiency and debt sustainability. Japan continues to pay close attention to whether the initiative's projects are implemented in full accordance with such a common frame of thinking.

Question 22 As a consequence of the BRI is it reasonable to expect an even deeper economic interdependence between Japan and China?

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Japan continues to pay close attention to whether the initiative's projects are implemented in full accordance with such a common frame of thinking.

In May 2017, the Fourth Dialogue to Strengthen the Economic Relationship between Mercosur and Japan was held in Buenos Aires, Argentine. In this Dialogue, both sides exchanged information on the current situations of trade and investment between Japan and Mercosur. They also exchanged their opinions over measures taken by both sides to promote free trade, and over possible measures to encourage more investment between the two parties.

Question 23 What are the expected main areas of growth in the Japan-Mercosur bilateral trade flow in the case of a free trade agreement?

RESPONSE This hypothetical question goes beyond the scope of the trade policy review.

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EUROPEAN UNION

WT/TPR/S/397 – WTO Secretariat's Report

Section 2.3.2 Regional and preferential agreements; page 41

EU Question N° 1 On 7 October 2019, Japan signed a trade agreement with the United States. According to statistical data at our disposal, this agreement falls significantly short of providing for a liberalisation of substantially all trade between Japan and the US. How does Japan assess the WTO compliance of the Japan-US agreement in the light of Article XXIV of the GATT?

RESPONSE Paragraph 1 of Article 5 of the Japan-US Trade Agreement provides: "Further to the existing commitments by each Party under the WTO Agreement, unless otherwise provided for in this Agreement, each Party shall improve market access in accordance with Annex I or Annex II." By the implementation of this provision, the tariff elimination covering substantially all the trade between the two countries will be achieved. On that basis, Japan is of the view that the Japan- US Trade Agreement is consistent with Article XXIV of GATT.

Section 2.4.2. Business environment; para. 2.43, page 49.

EU Question N° 2 What measures is the Japanese government currently undertaking and/or planning to take against bribery in foreign activities of Japanese companies to improve the situation noted in the report?

RESPONSE Japan has published the Guidelines for the Prevention of Bribery of Foreign Public Officials. Please see the following website. https://www.meti.go.jp/policy/external_economy/zouwai/pdf/rGuidelinesforthePreventionofBribery ofForeignPublicOfficials.pdf.

Section 3.3.1.2 Subsidies and other assistance programmes; para 3.90, page 79.

EU Question N° 3 With regard to the developments in automotive sector and state support related to clean energy, does the Government of Japan have any overall preference of any particular new technology in its subsidy programmes, such as electric vehicles or hydrogen technology?

RESPONSE Japan set out the goal for making the ratio of next-generation vehicles among new sales 50 – 70% in 2030. To this end, Japan has been implementing following purchase support programs. These subsidies are not for the development of a specific industry. - BEVs (Battery Electric Vehicles): up to 400,000 JPY (*3,719 USD) - PHEVs (Plug-in Hybrid Electric Vehicles): up to 200,000 JPY (*1,859 USD) - FCEVs (Fuel Cell Electric Vehicles): up to 2,250,000 JPY (*2,0922 USD) *exchange rate: as of March 4, 2020

Section 3.3.2.3 Technical Regulations; para. 3.110, page 84.

EU Question N° 4 The EU and the EU industry in Japan consider that the Japanese government has an interest to adopt future-proof radio regulations for mobile equipment so that emerging technologies can be quickly deployed. It is worthwhile for the government to pursue technology neutral approaches, especially for unlicensed bands such as 5GHz. Could Japan indicate its willingness to adopt a technologically neutral position for radio equipment, such as the unlicensed band of 5GHz?

RESPONSE Japan takes a technologically neutral position for radio equipment on the band of 5GHz by adopting emerging technologies and private standards, as with Wi-Fi and Bluetooth on the band of 2.4GHz. WT/TPR/M/397/Add.1

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When technological standards are formulated, it is necessary to consider elements such as usage needs and usage situations of frequency bands in the country.

EU Question N° 5 The EU would like to request an update on the latest developments in the establishment of standards for automated driving.

RESPONSE Japan would like to provide the information as needed at the EU-Japan Bilateral meeting which are regularly held before The United Nations Economic Commission for Europe (UNECE) World Forum for Harmonization of Vehicle Regulations (WP.29) and at The Working Group on Motor Vehicles and Parts under the Agreement between the EU and Japan for an Economic Partnership.

Section 3.3.2.4 Conformity assessment and inspection; para. 3.113, page 84.

EU Question N° 6 According to the Secretariat's report "overseas manufacturers of electrical and consumer products may undergo conformity assessment and certification conducted in foreign countries by foreign- registered conformity assessment bodies, in accordance with relevant laws (e.g. the Electrical Appliances and Materials Safety Act and the Consumer Product Safety Act)."

The EU and Japan maintain different technical standards for the same products and, although the differences are not substantial, they lead to double testing and certification for manufacturers. The current EU-Japan MRA provides only for recognised certification organisations to test for both markets. Unfortunately, the Self Verification of Conformity (SVC) system in Japan is limited to wired telecommunications terminals in general and has not been expanded to other telecommunications equipment (except for3G/LTE and WiFi functions in mobile terminals), thus excluding radio base stations for mobile networks.

The EU and the EU industry in Japan consider that the Suppliers' Declaration of Conformity (SDoCs) issued by European producers could be accepted in Japan without further testing or administrative requirements, not only in respect of wired terminals, but also in respect of specified radio equipment. The application of SVC could be expanded to all equipment in the category, "Specified Radio Equipment". Can Japan indicate when it intends to revise relevant laws and regulations to accept SDoCs by European producers, and/or expand the application of SVC to all equipment in the category of "Specified Radio Equipment"?

RESPONSE Japan does not intend on either point at present.

Section 3.3.3.1 SPS measures; para.3.122, page 86.

EU Question N° 7 According to the Secretariat's report: "The key agencies responsible for SPS measures are contained in Box 3.2; there were no major changes to this institutional framework over the review period."

The report states that there has not been any major institutional change with regard the agencies responsible for SPS measures. However, within that framework, especially in agro-food sector and more specifically related to plants and vegetables, the approach followed by the responsible body is "one country-one product" as there are no resources to widen their activities. As a result, it is usual that the procedures to open the Japanese market for these products could take more than a decade.

Has Japan envisaged increasing resources to these agencies so that negotiations of bilateral protocols could not take so many years to be approved and enacted?

RESPONSE When a request for lifting a ban on plant import is made, evaluation is carried out based on the scientific data. The procedure for the evaluation and the progress of individual case are made public, being managed under a full transparency.

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Section 3.3.3.1 SPS measures; para. 3.124, page 87.

According to the report, Japan has lifted age restrictions to beef imported from some countries. However, currently other countries are not allowed to export beef if the animal is above 30 months age.

EU Question N° 8 Could Japan explain the scientific principles, not followed by the Organization for Animal Health, on the basis of which there should be a distinction between animals of 30 months of age when it comes to evaluate the risk assessment of BSE?

RESPONSE In general, SPS measures of Japan are based on relevant international standards, or where its measures do not conform to relevant international standards, based on scientific risk assessment, in accordance with the SPS Agreement. The SPS Agreement requires that the SPS measures conducted by WTO members are based on scientific principles. As for BSE regulations, MHLW requests risk assessment to FSCJ taking into account the OIE evaluation. For relaxing further age restrictions based on the international standards regarding beef from countries where BSE occurred, MHLW has already lifted the age restrictions for U.S., Canada and Ireland in May 2019, and for France and Norway, we are discussing review of import conditions, based on results of risk assessments on lifting age restrictions by FSCJ. For other countries, FSCJ will be able to complete the assessment when all the necessary information, such as more data collected by the risk management organizations and new scientific evidences, become available. After FSCJ notifies MHLW of the risk assessment result, MHLW will consider further relaxation of the beef import requirement based on the result of risk assessment.

EU Question N° 9 With regard to the ban for imports of poultry related to avian flu, will Japan apply the criteria of regionalisation for those countries who have requested so and are currently recognised as disease- free areas?

RESPONSE Upon applying regionalization for avian influenza on poultry import, Japan conducts risk analysis in accordance with the "Standard Procedure for Approval for Import of Designated Items into Japan to be Quarantined" and "Standard Operating Procedures for Approval for Import of Designated Items into Japan to be quarantined", which are consistent with SPS agreement and the OIE codes. Once the risk analysis is completed, Japan could apply the regionalization regardless of the disease status of the requesting country.

Section 3.3.3.1. SPS Measures; paragraph 3.124, page 87.

EU Question N° 10 While the EU welcomes the approval of two EU Member States for import of beef as well as the lifting of the age limit for Ireland, the EU would call Japan to enhance market access by better aligning to relevant animal health international standards as set by the OIE, which does not appear yet the case today. The EU would welcome information on when Japan will fully align its import requirements for beef and other bovine products with the OIE guideline both according to official BSE negligible risk status as well as lifting the age limitation.

The EU would like to recall that EU regulations are fully in line with the OIE international standards. In chapter 11.4 in OIE terrestrial Animal Health code there is a list of commodities that should not be traded, see section 11.4.14. (e.g. tonsils and distal ileum from any age, and brains, eyes, spinal cord, skull and vertebral column from cattle over 12 or 30 months depending on countries risk status). Those commodities are classified as Specific Risk Material under the EU legislation and therefore EU exports comply with this OIE provision.

RESPONSE The SPS Agreement requires that the sanitary or phytosanitary measures conducted by WTO Members are based on scientific principles. As for BSE regulations, the MHLW requests risk assessment to FSCJ taking into account the OIE evaluation. For raising further age restrictions based on the international standards regarding the beef, the MHLW has already lifted the age restrictions for U.S., Canada and Ireland in May 2019, and for WT/TPR/M/397/Add.1

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France and Norway, we are discussing review of import conditions, based on results of risk assessments on lifting age restrictions by FSCJ. For other countries, the MHLW will call target countries for data necessary for risk assessment by FSCJ and submit the collected data to FSCJ. After FSCJ notifies the MHLW of the risk assessment result, the MHLW will consider reviewing the beef import requirement based on the result of risk assessment. Since FSCJ conducts a risk assessment on the basis of the latest scientific findings of the time, the MHLW cannot prejudge a schedule and result of the risk assessments.

Section 3.3.3.2.3 On the Planet Protection Act; para. 3.131, page 89.

EU Question N° 11 The EU thanks Japan for the information provided on standard processing periods as per information under paragraph 3.129 on the Food Sanitation Act on MRL and food additives. Similarly, the EU would welcome information on the standard processing periods for conducting the risk assessment prior to approval of imports of fruits and vegetables for consumption.

RESPONSE When a request for lifting a ban on plant import is made, evaluation is carried out based on the scientific data. If a measure to prevent introduction and spread of pests is established, the ban will be lifted. The procedure for the evaluation and the progress of individual case are made public, being managed under a full transparency.

Section 3.3.3.2.4 Act on Livestock Infectious Diseases Control; para. 3.136, page 90

EU Question N° 12 With regard to Japan's List of Third Free Countries, the EU notes that in the Section "Poultry and Poultry meat, etc.", countries, regions or zones should be free from both HPAI and LPAI to be eligible to export to Japan. According to chapter 10.4 in OIE terrestrial Animal Health code, trade restrictions should be put in place only in case of outbreaks of HPAI in poultry, should be limited to the defined infected areas in the country concerned and should not include the whole territory of a country. The EU would like to ask Japan to provide the scientific rationale for imposing country-wide trade bans in case of detection of LPAI outbreaks.

RESPONSE SPS agreement allows SPS measures which result in a higher level of sanitary protection than would be achieved by measures based on the relevant international standards, and Japan applies the measures for LPAI which are justified by the scientific evidences. The rationale is given in peer- reviewed articles such as that written by Shibata et al (2018)2. In addition, upon request by the exporting countries, Japan implements LPAI zoning during the outbreak. For that purpose, Japan conducts risk assessment based on the established procedure3. Among the EU member countries, Japan has applied LPAI zoning on France, Germany, the Netherlands and Hungary so far and has been discussing with other several EU members countries.

Section 3.3.3.2.6 Other; page 90.

EU Question N° 13 What is Japan's safety assessment and plans regarding the handling of Treated Water at Fukushima Daiichi Nuclear Power Station?

RESPONSE On 10 February 2020, "the Subcommittee on handling ALPS treated water" published its report. Taking into account the report, the Government of Japan considers listening to the opinions from parties concerned including local communities, and then will decide the policy based on those opinions. Detailed schedule and the timing of the final decision have not been determined yet. In the report, ALPS subcommittee concluded that discharge into the sea and vapor release are practical options, and discharge into the sea can be implemented more reliably than vapor release. Additionally, in the report above mentioned, preliminary safety assessment is described as following;

2Shibata, A., Okamatsu, M., Sumiyoshi, R., Matsuno, K., Wang, Z., Kida, K., Osaka, H., Sakoda, Y. (2018). Repeated detection of H7N9 avian influenza viruses in raw poultry meat illegally brought to Japan by international flight passengers. Virology. 524. 10-17. doi: 10.1016/j.virol.2018.08.001. 3 Viewed at: https://www.maff.go.jp/j/syouan/douei/eisei/sop/pdf/080401sop_eng.pdf. WT/TPR/M/397/Add.1

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"By means of the UNSCEAR-specified method, the exposure impact has been studied for vapor release and discharge into the sea, which shows that if the total amount of the ALPS treated water stored in the tanks is disposed of every year, the impact will be no more than one-thousandth of the exposure impact of natural radiation (2.1 mSv/year)"

Figure: Comparison of radiation impacts between the releases of all amount the ALPS treated water disposed of every year and natural radiation

Detailed site-specific safety assessments should be conducted after the decision of the disposal method. [Reference] The Subcommittee on Handling of the ALPS Treated Water Report (10 February 2020) https://www.meti.go.jp/english/earthquake/nuclear/decommissioning/pdf/20200210_alps.pdf.

Section 3.3.6 Government procurement; para. 3.168, page 101.

According to the Secretariat's report: "[…] there has been concern over the apparently low share of foreign companies in public procurement; it seems that this is partly due to non-regulatory barriers […]"

EU Question N° 14 1. What was the foreign companies share (in %) of number of contracts awarded to them in 2018 and 2019: a) at central government level,

RESPONSE 2.4% for number of contracts awarded in 2018. Data for 2019 is not yet available. b) at sub-central level?

RESPONSE There is no available data for the foreign companies' share at sub-central level.

What is the trend over the last 5 years?

RESPONSE It was around 2-3% share at central government level.

EU Question N° 15 What actions does Japan undertake in order to increase the participation of foreign companies in the government procurement market in Japan, in particular to address the non-regulatory barriers mentioned in the report?

RESPONSE In terms of GPA covered procurement, the central government announces in advance the annual schedule of its procurement and holds a seminar on Japan's government procurement for foreign entities and diplomatic corps stationed in Tokyo.

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Section 3.3.7.2 Policies on promotion and commercialization of innovation; para. 3.191, page 109

EU Question N° 16 Could Japan provide data and elaborate on the actual use (number of cases) since their establishment of: (i) the advisory opinion service under the "Hantei" guidelines; and (ii) the IP International Arbitration Centre?

RESPONSE There is no request for Hantei (Advisory Opinion) for essentiality check at this time. The Government of Japan has no data of the IP International Arbitration Centre in Tokyo.

Section 3.3.7.5 Patents; para. 3.207, page 113.

EU Question N° 17 Could Japan explain in more detail how the "increased risk of involuntary disclosure" was determined for the extension of the grace period in Japan? Also, does Japan consider that the "increased risk of involuntary disclosure" outweighs the increased legal uncertainty due to a longer grace period?

RESPONSE With the progress of the Fourth Industrial Revolution, joint research and industry-academia collaboration by open innovation have become active, and IoT and AI have been applied to various technical fields. Under the progress of the open innovations that use technologies from other companies, the risk of involuntary disclosure by others is increasing. Individual inventors, SMEs, and university researchers who play an important part of the open innovations are not necessarily familiar with the intellectual property system, and it is necessary to provide a legal remedy appropriately for those people and to encourage their innovations.

Could Japan clarify if the amendment of the patent term extension in the event of procedural delays is an additional extension previously not provided in Japan? Is it applicable in all fields of technology? What is the rationale behind this extension considering that the JPO is claimed to be one of the fastest patent offices in the world (paragraph 3.209)?

RESPONSE The patent term extension in the event of procedural delays is an additional extension previously not provided in Japan. It is applicable in all fields of technology. JPO decided to introduce the new patent term extension in the event of procedural delays in order to accept the request of TPP12. Though the provision of the extension regarding unreasonable delays was suspended in TPP11, JPO introduced it in order to maintain the same high-standards of TPP12.

Is the fee reduction for SMEs, R&D organisations and start-ups applicable on a non-discriminatory basis, i.e. will third country entities be able to benefit from these reduced fees?

RESPONSE Foreign applicants are also eligible for the fee reduction program for SMEs, R&D organizations and start-ups if they satisfy the same requirements as those for domestic applicants.

Section 3.3.7.11 Copyright; para. 3.239, page 120.

EU Question N° 18 Could Japan provide more details on the background and the purpose of these amendments introducing new exceptions to the copyright law? Who are the potential beneficiaries of these exception, i.e. are they limited to scientific research? Could Japan describe the envisaged effects of these amendments?

RESPONSE Innovation driven by new technologies such as IoT, big data, and AI has been desired in Japan. On the other hand, since most of the statutory requirements for limitation in provisions of previous Copyright Acts were prescribed specifically to a certain degree, it had been pointed out that a new way of usage of works which does not fall into the requirements but does not substantially prejudice right holders' interests could be an infringement. WT/TPR/M/397/Add.1

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In this context, private sectors such as industrial companies requested flexible limitation provisions that apply to new ways of usage regarding new technologies in order to promote technological innovations. Therefore, the government decided to establish "flexible limitation provisions" at higher level of abstraction. Typical actions subject to the limitation are envisaged as follows; collecting data necessary for deep machine learning in building an AI, analyzing software for cybersecurity, services to search for the location of on "information being searched for" (Article 47-5), and services on data analysis. Regarding usage of works needed for innovations through technologies such as IoT, big data, and AI, the "flexible limitation provisions" are designed to keep certain amount of flexibility for those usages that do not harm the copyright market in order to smooth exploitation of works.

Section 3.3.7.11 Copyright; para. 3.242, page 120.

EU Question N° 19 Could Japan provide more background information on the way the disputes between the copyright holders and the users are settled in Japan? How is the representation of users determined in a specific case? Could Japan indicate the applicable rules on the royalty collection in cases where the users refuse the payment of the royalties?

Please also provide an update on the discussions in Japan concerning the remuneration of the holders of neighbouring rights, namely the performers and producers of phonograms, for the use of phonograms for broadcasting and communication to the public.

RESPONSE In the Law on Management Business of Copyright and Neighboring Rights, when there are conflicts between CMO and the representative of the users about the royalty rules, the Law first requires consultation among the concerned parties. If the consultation is not concluded successfully, upon the application from the participants, the Commissioner of the Agency for Cultural Affairs arbitrates. Under the Law, the representative means a group or an individual deemed representing the interests of users in consideration of the number of users constituting members compared with the total number of users and of other reasons. Regarding the use of phonograms, it is necessary to conduct a study based on the actual usage of commercial phonograms, feasibility of cost-effective mechanism of royalty collection and distribution and the opinion of the right holders as well as the users. Regarding such information collection and studies, Recording Industry Association of Japan (RIAJ), one of the stakeholders, plays a main role in organizing discussions with user organizations.

Section 3.3.7.12. Enforcement; para 3.244, page 121.

EU Question N° 20 What will be the Japanese government's next steps to address the problem of online piracy?

RESPONSE In October 2019, the Japanese government published the "Comprehensive measures and timeline against pirated contents on the Internet". Eleven items such as "Strengthening international cooperation and international enforcement", "Suppressing advertisements on pirated sites", and "Measures against Index Site" are listed as comprehensive measures, and the ministries and agencies in charge are specified. We will address this issue by these measures in accordance with the timeline.

Section 3.3.7.12 Enforcement; para. 3.244, 121.

EU Question N° 21 Could Japan elaborate on its efforts in recent years to tackle the serious issue of the offline and online counterfeiting and piracy? Has Japan taken steps to address the sale of counterfeit items on e-commerce and social networking sites?

As regards online piracy, is Japan envisaging particular actions to curb IPR infringements online, in particular by introducing effective procedures against online intermediaries in order to take down infringing content in cases where it is impossible to take action against the infringer directly (e.g. website blocking)?

WT/TPR/M/397/Add.1

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RESPONSE There are two approaches to take IPR enforcement measures in Japan. The first is governmental enforcement measures such as by Police, Customs and Consumer agencies. The second is private sector initiatives. The latter is Japanese characteristic online countermeasures. Because EC platformers do not directly infringe any IPR, it is difficult to impose responsibility for management of internet IP infringement on them from public initiatives as for now. For example, one group consisting of EC platformers and brand owners, voluntarily patrols the EC site, deletes counterfeit and pirated sites and reports to the relevant authorities. SNS operators also voluntarily take anti- counterfeit measures and report to the relevant authorities. The copyright holders' organization and the internet retrieval search service providers discuss to curb the display of infringing content on the internet information search service. The Agency for Cultural Affairs requests that the parties concerned take further measures to prevent copyright infringements on SNS and will follow up the situation and review the measures as necessary. Further, Japan plans to submit a Copyright Amendment bill to the ordinary session of the Diet in 2020, which includes new provision to regulate leech sites, sites directing users to infringing contents. In October 2019, the Japanese government published the "Comprehensive measures and timeline against pirated contents on the Internet". Eleven items such as "Strengthening international cooperation and international enforcement", "Suppressing advertisements on pirated sites", and "Measures against Index Site" are listed as comprehensive measures. One of these is "website blocking." It is stated that website blocking will be considered after an assessment of the other 10 measures' effectiveness.

Section 3.3.7.12 Enforcement; para. 3.246, 121.

EU Question N° 22 What is the procedure in Japan for the destruction of IPR infringing goods seized by customs authorities, in particular as regards small parcels?

RESPONSE Excluding exceptional goods (such as batteries), infringing goods seized and so determined by the customs authority are destroyed by burning（with environmentally friendly method). There is no difference between small parcels and container cargo.

Considering the growth in the number of infringing goods imported by post, is Japan considering any legislative or other action to address the current situation where goods indicated as imported for personal use are exempted from customs seizures?

RESPONSE We put this issue in the Intellectual Property Strategic Program 2018 and are considering the direction of specific responses with related agencies.

Intellectual Property Strategic Program 2018 (P24) https://www.kantei.go.jp/jp/singi/titeki2/kettei/chizaikeikaku2018_e.pdf.

Section 4.1.1.2, page 127 According to the Secretariat's report: "The overall goal for the sector is to make agriculture a growth industry, with greater private-sector participation"

EU Question N° 23 There seems to be no reference to sustainability or pollution reduction from agricultural activities as an objective for this sector. Is there no such goal or strategy? E.g. with a view to reduction of ammonia and methane (notably from rice production) emissions from agriculture into air, or nitrates pollution from agriculture into water. Trade relevance: to ensure a level playing field with European farmers who must contribute to compliance with the Ambient Air Quality and National Emission Ceilings Directives, as well as the Water Framework and Nitrates Directives.

RESPONSE Japan promotes sustainable agriculture, taking into account the reduction of impacts on the environment. Regarding emissions from agriculture, Japan implements reduction measures based on the Plan for Global Warming Countermeasures of the Ministry of Agriculture, Forestry and WT/TPR/M/397/Add.1

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Fisheries. Regarding water pollution by nitrogen, the Water Pollution Prevention Act regulates effluent from facilities devoted to agriculture.

Section 4.4.1 Financial services; para 4.157, page 166.

EU Question N° 24 How are SDGs incorporated in Japan's corporate governance policy? Does the JFSA have a plan to bring reporting requirements in line with the Task Force on Climate- related Financial Disclosures (TCFD) recommendations? If so, in what way?

RESPONSE Japan's Corporate Governance Code (revised on June 2018) articulates that "Companies should take appropriate measures to address sustainability issues, including social and environmental matters", and clearly indicated "diversity, including gender and international experience" on the board of directors as an important factor. In addition, Japan's Stewardship Code indicates that institutional investors should appropriately monitor investee companies with the aim of enhancing the medium- to long-term corporate value. As an example of factors to be considered in monitoring, it illustrates the investee companies' business risks and opportunities arising from social and environmental matters. The Code is now under revision, and the revision draft (published in December 2019) incorporates "the consideration of sustainability (medium- to long-term sustainability including ESG factors)." Regarding the TCFD recommendations, FSA, in cooperation with relevant ministries, will continue to support companies' voluntary initiatives to improve corporate disclosures aligned with the recommendations.

Section 4.4.1.1. Regulatory evolutions in the banking Sector; para. 4.163 and 4.164, page 167.

EU Question N° 25 How would the additional capital requirements under the final Basel III affect the Japanese banks and the economy as a whole?

Is cross-shareholdings expected to decline and consequently lead to more internationalisation of Japanese business?

RESPONSE Regarding finalized Basel III, FSA plans to smoothly implement the rule based on the internationally agreed implementation date, with adequate communication to stakeholders to mitigate negative impacts on banks and the Japanese economy. While it is difficult to accurately measure a direct impact of the cross-shareholdings on internationalization of Japanese business, the major banks have been working on reducing the cross- shareholdings for their risk management purposes, even before the development of the finalized Basel III.

Section 4.1.1.3 Institutional and legal framework; para. 4.15, page 129.

EU Question N° 26 Regarding the Act on the Support for Strengthening Agricultural Competitiveness – the objective of which is to "ensure the sustainable development of agricultural and agricultural production-related industries" – does Japan plan to undertake/adopt any actions or policies to mitigate the effects of climate change?

RESPONSE Japan does recognize the importance of mitigation of climate change effects in the areas of agriculture, forestry and fisheries as well as related industries, promoting the emission reduction and absorption increase of greenhouse gases, the use of renewable energy in rural areas, based on the Plan for Global Warming Countermeasures of the Ministry of Agriculture, Forestry and Fisheries.

Section 4.2.2.1.1, page 155 According to the Secretariat's report: "However, it emits a considerable amount of greenhouse gases, which runs counter to the reduction objectives undertaken in the context of the Paris Convention. The Government intends to keep coal as a major source of energy, since it is expected WT/TPR/M/397/Add.1

- 92 - to represent 25% of the total primary energy source in 2030 and 26% of electricity production, while encouraging the adoption of technologies reducing emissions, such as Integrated Gasification Combined Cycle, Ultra Super Critical pressure, and Carbon Capture Utilization and Storage."

EU Question N° 27 Please note that coal combustion is also a source of particulate matter and black carbon emissions into the air, with a significant impact on human health and on ecosystems. Air pollution is transported long distances, across borders. Are these health aspects be taken into account when considering the strategy for coal use and coal production ahead?

RESPONSE For domestic coal-fired power generation, under the current Basic Energy Plan, the companies are working on shifting to cleaner gas usage and fading out inefficient coal while promoting higher efficiency. Considering the next energy basic plan, the METI (Ministry of Economy, Industries and Trade) comprehensively considers aspects such as environmental issues, economic efficiency, stable energy supply, and safety. The METI is going to discuss with related ministries and agencies. In addition, new technologies for recycling CO2, such as artificial photosynthesis and concrete that absorbs CO2, have been developed. The government has set a goal of "Beyond zero," and will promote such innovation.

Section 4.1.1.2 Agricultural policy; para. 4.7, page 127

The report states that the overall goal for the sector is to make agriculture a growth industry, with greater private-sector participation. It also highlights that agricultural policy continues to emphasize self-sufficiency and sets self-sufficiency targets for FY2025 of 45% on a calorie basis and 73% on a production value basis.

EU Question N° 28 What indicators are going to be analysed to measure how the goal of greater private participation in this sector is being achieved?

RESPONSE The Ministry of Agriculture, Forestry and Fisheries (MAFF) analyses and publishes the numbers of legal entities of agriculture (i.e. farmland users and farmland holders). See the links below for further detailed information (in Japanese): - https://www.maff.go.jp/j/keiei/koukai/sannyu/attach/pdf/kigyou_sannyu-18.pdf. - https://www.maff.go.jp/j/keiei/koukai/sannyu/attach/pdf/kigyou_sannyu-21.pdf.

EU Question N° 29 Does Japan consider that the growth in the agricultural sector and the self-sufficiency targets are compatible with a scenario of declining ageing population which is especially taking place in the Japanese agricultural sector?

RESPONSE 1. It is recognized that the agriculture sector in Japan faces challenges including the declining and ageing population, associated market changes, and increasing uncultured land. 2. In addressing the challenges, Japan plans to strengthen the agriculture sector through farmland mobilization, innovative approaches, and collaboration with other sectors. All these efforts are in line with the self-sufficiency targets.

Section 4.2.2 Energy; para. 4.110, page 154.

EU Question N° 30 According to the report, the regulatory framework introduced in 2012 contributed to the growth of solar generation capacity from 0.9 GW in 2012 to 34.4 GW in 2017. However, this growth has come to an end and the relative share of the solar energy in the renewable energies for 2030 is expected to decrease.

Did the 2012 regulatory framework take into account the cost of dismantling photovoltaic power stations once they have ended their useful life? Who was envisaged that would bear the dismantling cost? WT/TPR/M/397/Add.1

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RESPONSE Since the introduction of the FIT scheme in 2012, the cost of disposing photovoltaic power stations has already been included in the FIT tariffs, and it is expected that the power generators bear the disposing cost.

Section 4.1.1.2 Agricultural policy, para. 4.9, page 128.

EU Question N° 31 In the 2017, as was mentioned in the WTO Trade Policy Review (WT/TPR/S/351), the Japanese government indicated that it would implement reform to enhance the competitiveness of its agriculture. Could Japan indicate what particular reform steps have been already taken within this package and can it already assess what effect they had on the competitiveness of the agricultural sector?

RESPONSE 1) Based on the Policy Package for Enhancing the Competitiveness of Agriculture, Japan has implemented the restructuring of distribution and processing industries as well as the production cost reduction through lowering prices of agricultural inputs. In this regard, 11 related acts were passed such as the Act on the Support for Strengthening Agricultural Competitiveness. 2) The resultant effects include simplification (e.g., 550 products to 25 products) and reduced prices of certain fertilizers (10-30% reduction) provided by National Federation of Agricultural Cooperative Associations.

Section 4.1.1.5.3.2, page 139.

EU Question N° 32 According to the Secretariat report, in section 4.1.1.5.3.2 (page 139) it appears that the aid for sugar beet has increased since the last review.

Could Japan clarify what are the reasons for the increase in the level of aid for sugar beet? What is the impact of this increase on the national production and imports?

RESPONSE As the payment rate is set at the level of the gap between the production cost and sales price, it varies depending on the year. For example, the payment rate in FY2017 was decreased from that of the preceding year. The level of the payment rate does not make differences in the income level, and therefore it does not affect domestic production or importation.

Section 4.1.1.4 Trade policies and border measures; table 4.6, page 132.

EU Question N° 33 According to the report by the Secretariat, the fill rate of Japan's TRQs ranges from 23.4% to 305.6%. Could Japan clarify how the fill rate of a TRQ, notably the one on "designated dairy products for general use" can be higher than 100%?

RESPONSE The imports of the TRQ for "designated dairy products for general use" are implemented by state- trading with a view to stabilizing supply-demand for dairy products.

Section 4.1.1.5.3.5 Livestock and livestock products; para. 4.54, page 141.

EU Question N° 34 According to the report by the Secretariat, "coinciding with the entry into force of the CPTPP in 2018, Japan increased support for domestic pork producers by expanding the Hog Growers Business Stabilisation Measure (also known as Marukin)".

Could Japan explain what is the public expenditure associated to this measure and its expected impact in terms of pork production and trade? Have these measures been (or will be) further enhanced after the conclusion of the EU-JAP EPA?

WT/TPR/M/397/Add.1

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RESPONSE - The expenditure in FY2019 was 16.8 billion yen (c.f. 10 billion yen in FY2018). The legal status for the measures was strengthened at the time of entry into force of TPP11, together with the compensate rate change (90% from 80% originally) as well as the subsidy rate change (75% from 50% originally). - As the purpose of the measures still remains to address the adverse effects due to exchange rate fluctuations, there are no trade distorting effects expected to pork production and the relevant trade. - These measures have not been changed after the JAPAN-EU EPA, and there is no foreseeable plan to do so.

Section 4.1.2.6 Border and domestic support measures for Fishery; page 147.

EU Question N° 35 Can Japan provide information regarding the functioning of IQ system for fishery products managed by METI?

RESPONSE This quantitative import restrictions (import quotas), which is administered by METI in cooperation with MAFF, play an important role in the conservation and management of fisheries resources in waters adjacent to Japan.

Section 4.2.2.1.1 Coal

EU Question N° 36 According to the Secretariat's report: "The Government intends to keep coal as a major source of energy, since it is expected to represent 25% of the total primary energy source in 2030". [Coal represents 25% of primary energy supply in FY2017 and FY 2030, according to Chart 4.7 on page 152]. In the view of Japan's commitments under the Paris Agreement, what are the plans of Japan concerning the reduction of the coal share as the primary energy supply?

RESPONSE The Government of Japan is committed to steady realization of the 2030 energy mix, which is consistent with the reduction target submitted to the United Nations Framework Convention on Climate Change Secretariat as Japan's NDC under the Paris Agreement. Specifically, the Government of Japan promotes conversion to high efficiency and next-generation coal thermal power generation and fadeout of inefficient coal power plants, as well as encouraging energy saving and maximum introduction of renewable energy.

Section 4.4.2 Telecommunication services; para. 4.177, page 169.

EU Question N° 37 MIC is the government agency primarily responsible for telecommunications policy and legislation, and for regulating the sector. The EU and the EU industry in Japan consider that it would be good practice to have an independent regulator reporting directly to the Japanese Parliament. This would ensure a decision-making process that is objective, transparent and accountable. Consequently, the EU would like to reiterate its previous question: Could Japan explain the measures it has taken to ensure independence of the regulatory function of MIC from the policy setting functions of MIC? This seems particularly relevant since the Japanese government acts as both the regulator and major shareholder in the Japanese telecommunications sector and has a 35.9% stake in NTT (WT/TPR/S/397, page 170).

RESPONSE About ensuring the independence of regulatory functions from the policy setting functions, the Constitution of Japan stipulates the Cabinet as a body exercising executive power, provides a parliamentary system of government, and regulates each ministry's responsibility for managing administration over each jurisdiction. In the field of telecommunication, given the rapid innovation of technologies and the necessity to handle this field based on the state strategy for maintaining state competition power, Japan thinks the system is appropriate where ministers take responsibilities and manage administration promptly through the ultimately single-person mechanism so that the ministry can perform flexible, united and comprehensive administrative tasks. The regulation in the field of telecommunication, based on the stipulated rules of relevant regulations (like the Telecommunication Business Act and the Radio Act), is implemented with transparency and WT/TPR/M/397/Add.1

- 95 - predictability. About NTT, the minister managing telecommunication administration is different from the minister having its stock.

Section 4.4.2 Telecommunication services; para. 4.178 (page 170) on changes in the telecoms regime; para. 4.182 (page 170) on government telecoms policy; and para. 4.185 (page 171) on telecoms prices.

EU Question N° 38 According to the Secretariat's report para. 4.182 (page 170), the government policy regarding telecommunications during the period under review was essentially focused on consumer protection and the lowering of costs linked to the use of mobile handsets. Yet, according to para. 4.185 of the report (page 171) telecommunications prices in Japan remain relatively high by international standards, especially for fixed and mobile broadband services. In that respect, the report notes (para. 4.178, page 170) that during the period under review there were no changes regarding, for instance, the mobile interconnection regime, facility sharing, or local loop unbundling. Could Japan indicate how it intends to promote competition and further entry into the Japanese telecommunications market with regard to: i) the level and transparency of calculation of access and interconnection charges, ii) the prohibition of undue discrimination between the incumbent's own businesses and those of competitors and the publication of separate accounts; iii) the avoidance of any cross-subsidisation in the universal service compensation; and iv) promoting further MVNO uptake in Japan?

RESPONSE i) According to the Telecommunications Business Act, telecommunications carriers running Category I designated telecommunications facilities and telecommunications carriers running Category II designated telecommunications facilities shall formulate and publish "general conditions of contracts for interconnection" on interconnection charges for each connection function and the terms and conditions of interconnection such as technical conditions required at interconnection points with other carriers' facilities. Regarding interconnection charges, the Ministry of Internal Affairs and Communications conducts verification based on the calculation and this process ensures the appropriate level of calculation. ii) According to the Telecommunications Business Act, telecommunications carriers running Category I designated telecommunications facilities and telecommunications carriers running Category II designated telecommunications facilities must not engage in discriminatory treatment and make the terms and conditions of interconnection disadvantageous for other facilities in comparison with their own telecommunications facilities. In addition, they shall keep and make publicly available accounts for interconnection. iii) At present, in the Order of the Ministry of Internal Affairs and Communications, subscribed telephone, public telephone and emergency call are defined as telecommunications services that are to be provided nationwide due to their indispensability to the lives of the people. In order to ensure the appropriate, fair and stable offer of these telecommunications services, there is a grant system to cover part of costs for these telecommunications services. iv) Japan improves fair competition environment of MNOs and MVNOs and promotes the spread of MVNO, by implementing various initiatives for ensuring appropriate network provision conditions and provision charges of MNOs to MVNOs such as the review of their calculation methods of interconnection charges appropriately in a timely manner, based on development trends of related technologies, status of discussion between MNOs and MVNOs, and requests from MVNOs.

Section 4.4.3 Postal, courier and express services; para. 4.209, Page 175.

EU Question N° 39 According to the Secretariat's report "…express carriers, domestic, foreign or Japan Post Co Ltd, do not compete under exactly the same regulatory conditions, in terms of customs valuation methods and de minimis thresholds, location of customs clearance, traffic fines, loading and unloading of shipments, and advance cargo information…" Please provide more information on the difference in treatment between Japan Post Express Mail Service (EMS) and the parcels delivered by private operators. According to para. 4.195 (page 173), EMS is under the obligation of the universal service together with letters and postcards. Please explain the reason why EMS is in the scope of the universal service? What are the differences between the items, which are allowed to be sent by EMS and by parcel delivery service of private operators? WT/TPR/M/397/Add.1

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RESPONSE (1) Difference between EMS and the parcels delivered by private operators EMS is a postal item that is delivered to Japan Post by a foreign postal business operator ("Designated Operator" of the UPU (Universal Postal Union)) through exchange and transit, in accordance with the Universal Postal Convention. Since Japan Post is unable to identify the content of the postal items posted by sender in detail, the Customs office will investigate the name of the item, price, etc. of postal items and decide the amount of customs duty (This system is called "official assessment system"). However, a private operator such as an international express service provider, who delivers the item from the sender to the recipient consistently, is able to identify the content of the item. Therefore, the private operator or the recipient declares the name of the item, price, the amount of Customs duty, etc. (This system is called "self-assessment system"). In Japan, the self- assessment system is also applied to international postal items including EMS in a case where the Customs value exceeds 200,000 yen, as is the case of commercial freights. There is no difference between EMS and the parcels delivered by private operators in terms of de minimis. Customs clearance procedures are also processed at Customs offices for both EMS and the parcels delivered by private operators. (2) Reason why EMS is in the scope of the universal services According to the Article 3, Paragraph 2 of the Universal Postal Convention, the details of the scope of universal service are entrusted to the domestic laws and regulations of each Member State. Under the postal domestic legal system of Japan, the entire postal service is considered as the universal service based on the Postal Act (Act No.165 of 1947). Since the universal service obligation, which is to provide service universally and fairly at a reasonable price is imposed on "international postal services", EMS is also a universal service, which is considered as a type of international postal services. (3) Differences between the items, which are allowed to be sent by EMS and by parcel delivery service of private operators Since EMS is one of international postal services, sender cannot include prohibited items in the Article 19 of Universal Postal Convention. On the other hand, each private service operator decides the prohibited items based on the IATA regulations and domestic legislation, etc. Therefore, the items that are allowed to be sent by parcel delivery services depend on the decision of each private operator.

WT/TPR/G/397 – Government's Report

Section 1.3 Trends in Foreign Direct Investment, page 3.

EU Question N° 40 According to OECD statistics (https://data.oecd.org/fdi/fdi-flows.htm#indicator-chart), Japan's outward Foreign Direct Investment has tripled in the period between 2010 and 2017. How do you explain this surge?

RESPONSE Under a low interest rate environment in Japan, Japanese companies have increased investments to expand their businesses, such as expansion of overseas business to take in foreign demand and M&As to acquire the latest technology in such areas as IT or automobile sectors, where technology is rapidly advancing. For these reasons, outward FDI has been expanding.

Section 2.1 Overview, page 4.

EU Question N° 41 What is the status of negotiations with regard to the Regional Comprehensive Economic Partnership? Is India expected to join the agreement?

RESPONSE As indicated in the Joint Leaders' Statement on the RCEP adopted on 4 November 2019 in Bangkok, Thailand, 15 RCEP Participating Countries have concluded text-based negotiations for all 20 chapters and essentially all their market access issues, and all RCEP Participating Countries are working together to resolve India's outstanding issues.

WT/TPR/M/397/Add.1

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Section 2.4.3 Japan's Bilateral Activities; para. 2.21, page 9.

EU Question N° 42 What is the status of negotiations for a second phase trade agreement between Japan and the US?

RESPONSE Please refer to paragraph 3 of the Joint Statement of Japan and the United States on 25 September 2019. (https://www.mofa.go.jp/mofaj/files/000520821.pdf)

Section 2.4.3 Japan's Bilateral Activities, para. 2.24, page 10

EU Question N° 43 Could Japan please provide figures for Foreign Direct Investment into the Russian Federation for the year 2018?

RESPONSE Japan's Foreign Direct Investment into the Russian Federation for the year 2018 was 38 billion Japanese yen.

Section 3.4 Tokyo International Conference on African Development; page 12.

EU Question N° 44 What are the next steps with regard to the initiative to match Japanese and African start-ups? Could Japan provide further details on its investment priorities across Africa?

RESPONSE On the occasion of the 7th Tokyo International Conference on African Development (TICAD7) in August 2019, the Japan External Trade Organization (JETRO), the Japan International Cooperation Agency (JICA) and the United Nations Development Programme (UNDP) signed a tripartite partnership agreement to promote innovations by Japanese and African entrepreneurs and start- ups and to contribute through business to the solution of social problems African countries are facing. As for the next steps, Japan will dispatch public and private joint missions to African countries every year and help facilitate business matching between Japanese and African SMEs, including start-ups. There are several priority areas for Japanese start-ups. For example, FinTech, logistics and solar energies are often cited as priorities.

TPR Japan - Minutes of the meeting (WT/TPR/M/351) - 8 and 10 March 2017

Section 4.16.

EU Question N° 45 Trading with Japan has also been facilitated by the introduction of Authorized Economic Operators or AEOs. We note that frequent use of the concept has been made in that SMEs account for over 40% of all AEOs. We do, however, feel that the overall number of 600 certified AEOs seems rather low given the size of the economy. Does Japan intend to pro-actively promote the use of AEOs, and, more importantly, increase the number significantly in the near future?

RESPONSE The government of Japan continues to encourage the utilization of AEO Programs by introducing measures, such as adding new benefits or simplifying Customs procedures for AEOs, based on the needs of Economic Operators. The government of Japan continues to implement an enthusiastic PR campaign to promote the AEO Program to Economic Operators (who are not authorized at the present time), including MSMEs, in order to increase the number of AEOs.

WT/TPR/M/397/Add.1

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CHINA

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT

Page 42，Para 2.16 In September 2019, Japan signed the Japan-United States Trade Agreement to eliminate or reduce tariffs on certain agricultural and industrial products, and the Japan-United States Digital Trade Agreement, which is intended to establish high standard rules in this area.

Question 1 Please elaborate on the proportion of products covered by the Japan-United States Trade Agreement in the trade (in terms of volume and tariff lines) of each side. Does this Agreement cover "substantially all the trade" between both sides as prescribed by the Article XXIV of the General Agreement on Tariffs and Trade (GATT)? Please explain the conformity of the Japan-United States Trade Agreement with the Article XXIV of the GATT.

RESPONSE There has been no common understanding among WTO Members on how to define the phrase "substantially all the trade" in Article XXIV of GATT. Article 5 of the Japan-US Trade Agreement provides: "Further to the existing commitments by each Party under the WTO Agreement, unless otherwise provided for in this Agreement, each Party shall improve market access in accordance with Annex I or Annex II." By the implementation of this provision, the tariff elimination covering substantially all the trade between the two countries will be achieved. On that basis, Japan is of the view that the Japan-US Trade Agreement is consistent with Article XXIV of GATT in itself.

Question 2 If the Japan-United States Trade Agreement is an "interim agreement", please elaborate on the plan and schedule for the final free trade agreement between Japan and the United States.

RESPONSE See the above response of Question1 of China.

Question 3 When will Japan notify this Agreement to the WTO Committee on Regional Trade Agreements (CRTA)?

RESPONSE Notification of the Japan-US Trade Agreement to the CRTA is under coordination with the U.S.

Page 125，Para 4.7 The overall goal for the sector is to make agriculture a growth industry, with greater private-sector participation. The agricultural policy is set out in the Food, Agriculture and Rural Areas Basic Plan, which is reviewed roughly every five years. The current Plan, adopted in March 2015, sets out the objectives of doubling incomes in agriculture and rural areas over the next ten years, by increasing domestic and export demand, improving value chains, reducing costs, promoting structural reform, and improving productivity… China appreciates the efforts made by the Japanese government to promote the development of agricultural sector and increase farmer's incomes, and would like to get more information on the detailed measures and the resulting achievements with a view to realizing the objective of doubling incomes in agriculture and rural areas set out in the Food, Agriculture and Rural Areas Basic Plan. Particularly, China would like more details on Japan's policies for reducing costs, promoting structural reform, and improving productivity.

Question 4 If possible, please elaborate on the changes of production costs (including core factors like the means of production, land rents and labor costs) in agricultural sector resulted from the implementation of the facilitation measures, and provide relevant data.

RESPONSE Various statistical information, which has been annually collected and analyzed for the policy planning and evaluation for agriculture, is available at the link below: https://www.maff.go.jp/e/data/stat/93th/index.html. WT/TPR/M/397/Add.1

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Question 5 If possible, in terms of the structural reform on distribution and processing of agricultural products, China expects Japan to provide detailed measures on the basis of The Policy Package for Enhancing Competitiveness of Japan's Agriculture (Outline) (https://www.maff.go.jp/e/policies/law_plan/attach/pdf/index-4.pdf).

RESPONSE Please refer to the following document (page 4-6, Japanese only): https://www.maff.go.jp/j/kanbo/nougyo_kyousou_ryoku/attach/pdf/index-1.pdf.

Question 6 Please specify Japan's practice, progress and achievements secured in the promotion of feed rice.

RESPONSE To promote feed rice production, MAFF is encouraging farmers to reduce production costs by introducing high-yielding varieties. Branding activity of livestock products using feed rice has been promoted in recent years, which aims to improve farmer's income by raising the transaction price of livestock products. As a result of these efforts, the cultivated area of feed rice has increased from 22,000 to 80,000 ha from 2013 to 2018 (the yield has increased from 110,000 to 430,000 tons)

Page 125，Para 4.7 …Agricultural policy continues to emphasize self-sufficiency, and the Plan sets self-sufficiency targets for FY2025 of 45% on a calorie basis and 73% on a production value basis, as well as a self-sufficiency target for feeds of 40% for FY2025. In 2017, self-sufficiency on a calorie basis was as 37%, under target due to climate change affecting the production of main crops such as wheat and soybeans. Self-sufficiency rates for individual products vary year-on-year but are consistently high (at 70% and above) for: unshu, rice; eggs; sweet potato; fungi; vegetables and tubers (Table A4.1).

Question 7 We have noticed that the Japanese government attaches great importance on the self-sufficiency of agricultural products. We would like to know the specific considerations for setting up the self- sufficiency targets of agricultural products, including targets based on calories and output value, and those for specific products (if any). Meanwhile, we have observed that Japan's self-sufficiency rate for rice is consistently high at over 97%.

RESPONSE The relevant act, the Food, Agriculture and Rural Areas Basic Act, stipulates that the target level of food self-sufficiency rate should be a guide for national agricultural production and food consumption. In line with the verification discussions in the Council of Food, Agriculture and Rural Area Policies, the Ministry set two principles: i) the demand estimates should be realistic for each commodity, and ii) the supply estimates should be based on such consumption levels and with proper consideration of realistic production conditions. Taking into account the principles and feasibility within the time scale, the Ministry decided the target level of 45% in 2025, which was raised from 39% in 2013.

Page 126，Para 4.11 …Key policy developments over the review period were the abolition of the Direct Payment for Rice and of the administrative allocation of rice production volume targets; the introduction of a new Revenue Insurance programme, applicable to almost all farm products…

Question 8 Please explain if there is a link between the abolition of the Direct Payment for Rice and the introduction of a new Revenue Insurance programme? After the abolition of the Direct Payment for Rice, if rice farmers can receive compensations or guarantees for their income based on the insurance programme?

RESPONSE There is no linkage between the two. Rice farmers cannot receive compensation for income loss caused by the abolition of the Direct Payment for Rice.

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Page 127，Para 4.21 …It estimates a total loss of JPY 112.5 billion for these products under the Japan-EU EPA, and of JPY 145.9 billion under the CPTPP. The agricultural products projected to be hardest hit are beef and dairy products under the Japan-EU EPA, and beef, dairy products and pig meat under the CPTPP. However, the Government is of the view that, despite this, domestic production volumes and farmer's incomes will be maintained through government measures.

Question 9 Please specify the measures to be adopted by the Japanese government to maintain farmer's incomes.

RESPONSE Japan is taking the following measures in order to help mindful producers engaged in agriculture, forestry and fisheries: i) "Enhancement of robustness" to support productivity improvement through development and extension of smart technologies, block resizing of farmland, etc. ii) "Stabilization of management" to support financial stability.

Page 130，Para 4.24 …Under all methods, the applicant for an allocation must meet criteria, such as end-use requirements, record as an importer, or planned usage…

Question 10 Please elaborate on the specific end-use requirements which shall be met by the applicants.

Page 131，Para 4.27 Japan's food assistance is provided under non-emergency programmes. It responds to requests from recipient countries or international organizations. Cash is provided for the purchase of food from the open market…

Question 11 Could Japan please indicate if there are any specific requirements for the use of the cash assistance? For example, whether it has to be spent on the purchase of food in the Japanese market? Is there any in-kind assistance in addition to cash?

RESPONSE Japan's food assistance is not in-kind but cash based. Japan provides funds for purchasing food based on the request of recipient countries or international organizations.

Page 131，Para 4.29 At the prefectural level, government-supported institutions are charged with promoting farmland consolidation. These prefectural institutions rent farmland, improve infrastructure (if necessary), and lease the land to core farmers. They had a total budget of JPY 22 billion in 2019. Farmers that increase farm size continue to be eligible to receive payments of up to JPY 10,000 for each additional 0.1 ha; payments of up to JPY 700,000 per household are available for the purpose of leasing land to farmers.

Question 12 Please explain how Japan determines the rent of land leased by prefectural institutions to farmers? Is there any connection among the rent and the cost/spending on improved infrastructure of land leased to farmers? How is the subsidy standard (10,000JPY/0.1ha) for tenant farmers being determined?

RESPONSE The rent is agreed to between the farmer and the institution, with proper consideration of local rent levels of farmlands. There is no clear connection with infrastructure related costs. The subsidy standard is wrongly described in the report, and the relevant subsidy has been abolished. WT/TPR/M/397/Add.1

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Page 131，Para 4.30 The Agricultural Disaster Compensation Act used to serve as the legal basis for the Agricultural Mutual Aid System (AMAS) that provides compensation from losses caused by natural disasters (including from extreme weather), diseases, and other events. In 2018, the Act was revised, and renamed the Agricultural Insurance Act. It introduces procedural efficiencies as well as a Revenue Insurance Program (RIP). The RIP, effective from 2019, operates in addition to the AMAS, and is applicable to all farm products and certain livestock products. It is a voluntary insurance system, designed to compensate farmers in the event of revenue decreases; farmers taking out insurance policies are paid back for 90% of the loss when the loss is more than 10%, based on five-year average farming income. The Government contributes 75% of the reserve fund and about 50% of the premiums (the insurance premium rate is 1.08%).

Question 13 Please specify how Japan plans to notify the new Revenue Insurance Program (RIP)? Which categories do the relevant subsidies fall into under the Article 6 and Annex 2 of the Agreement on Agriculture?

RESPONSE Japan will examine the categorization prior to the next DS1 notification.

Page 11，Para 4 …Notwithstanding some minor fluctuations in trade shares, Japan's main trading partners remain China, the United States and the European Union, whereas its main inbound/outbound foreign direct investment (FDI) partners were virtually the same, i.e. the United States, the British Cayman Islands, the European Union and the Republic of Korea. The FDI inbound stock continued to rise steadily and was largely held by European Union investors. Government initiatives to attract FDI have been focused on providing matching and advisory services. Over the review period, the main law governing FDI, the Foreign Exchange and Foreign Trade Act, was amended for reasons of security protection, by: expanding the scope of prior checking of unlisted stock transfers between foreign investors; and introducing a provision that unregistered foreign investors may be subject to executive orders, including orders to sell their holding stocks. Prior notification and approval requirements are in place for investments where there could be significant adverse effects on the smooth management of the national economy or on the grounds of public order, public safety or national security. FDI restrictions remain in place in the telecommunications, broadcasting and radio sectors.

Question 14 Please provide more information on how the Japanese Government focuses on providing matching and advisory services in order to attract FDI. Is there any relevant regulation or policy? If yes, please specify the details.

RESPONSE JETRO provides comprehensive support such as disseminating information on the Japanese business environment, discovering companies interested in investing in Japan, and supporting companies to establish and expand new business in Japan. For foreign/foreign-affiliated companies, JETRO actively engages on expansion of business with Japanese parties through providing business matching opportunities with Japanese companies, supporting companies to cooperate with local governments, and supporting secondary investment and expanding business. As a part of JETRO's activities to promote inward FDI, JETRO supports business setup through ISBC (Invest Japan Business Support Center) and provides advice services from specialists on business setups, legal, employment, and tax.

Question 15 Please elaborate on what kind of investments may cause significant adverse effects on the smooth management of the national economy or on the grounds of public order, public safety or national security.

RESPONSE Ministry of Finance and the competent ministries have released factors to be considered in the examination process as follows. 1. Maintenance of defense production and technological bases related to industries concerning national security (i.e. weapons, aircrafts, space and nuclear related industries, etc.) WT/TPR/M/397/Add.1

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2. Prevention of outflow of critical technologies to the national security. 3. Preservation of public services in an emergency and peacetime situations. 4. Protection of public safety. 5. Maintenance of stable supply of food or energy etc., sound stockpiling policy, preservation of national land, and productivity and continuity of specific domestic businesses, with respect to business types of which Japan has lodged a reservation pursuant to the provisions of Article 2-b of the Code of Liberalization of Capital Movements of the Organization for Economic Cooperation and Development, from the viewpoint of smooth management of the Japanese economy. 6. Characteristics of the investor and its affiliate party(ies), such as, their nature, financing plan and record of performance of their investment, etc. 7. Such other factors that need to be considered.

Page 11，Para 5 …Over the review period, Japan was involved in three new dispute settlement cases as complainant, and reserved its third-party rights in 34 cases. Japan maintained a strong record of notifications to the WTO, although up-to-date notifications on domestic support in agriculture and government procurement are outstanding. Since 2017, new regional trade agreements that have entered into force for Japan are: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Japan EPA. Japan also signed the First Protocol to Amend the Agreement on ASEAN-Japan Comprehensive Economic Partnership (AJCEP), which includes chapters on trade in services and on investment, as well as a trade agreement with the United States. Changes were made to the framework for graduation from Japan's GSP scheme, with a view to granting preferences to the economies that need those most. Key initiatives to improve the business environment include: introducing labour force reforms; improving corporate governance; and lowering corporate tax. Regulatory reform pilot schemes continue to be undertaken through the National Strategic Special Zone initiative.

Question 16 What were three new dispute settlement cases for which Japan was involved as complainant over the review period? What are the major concerns for the Japanese Government?

RESPONSE The three new dispute settlement cases Japan brought as complainant over the review period are the following: 1. Korea - Sunset Review of Anti-Dumping Duties on Stainless Steel Bars (DS553) On 18 June 2018, Japan requested consultations with Korea concerning Korea's determination to continue the imposition of anti-dumping duties on stainless steel bars from Japan, based on the conclusion of the third sunset review of anti-dumping duties on stainless steel bars. The measure appears to be inconsistent with Korea's obligations under WTO Agreements as, among others, the measure fails to take into account the lack of competitive relationships among the likely dumped imports from several sources and the domestic like product. 2. Korea - Measures Affecting Trade in Commercial Vessels (DS571) On 6 November 2018, Japan requested consultations with Korea concerning the measures affecting trade in commercial vessels such as (1) corporate restructuring measures to support Korean shipbuilders, (2) guarantees and other insurance for financing related to commercial vessel orders placed with Korean shipbuilders etc. These measures appear to be inconsistent with Korea's obligations under the WTO Agreements. Japan is concerned that these measures distort the shipbuilding market by, among others, enabling continued market presence of Korean shipbuilders in financial difficulties, prolonging periods of otherwise unsustainable low pricing, and stimulating sales of vessels built in Korea. 3. India - Tariff Treatment on Certain Goods (DS584) On 10 May 2019, Japan requested consultations with India regarding the tariff treatment that India accords to certain ICT related goods such as telephones for cellular networks or for other wireless networks and base stations etc. India set bound tariff rates for relevant ICT products at zero in its Schedule of Concessions and Commitments annexed to the GATT 1994. However, India imposes 10 - 20% tariffs on these products and therefore these measures appear to be inconsistent with India's obligations under the WTO Agreements, in particular Article II of the GATT 1994.

Question 17 Please provide more information regarding the changes made to the framework for graduation from Japan's GSP scheme. How does Japan identify the economies that need them most? Is there a fixed country-list as the most needed economies? WT/TPR/M/397/Add.1

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RESPONSE Please refer to 2.3.2.2 in the Trade Policy Review Report by the Secretariat.

Page 23，Para 1.11 Trade and domestic reform are considered intrinsically linked, and constitute the "third arrow" of Abenomics. Japan's ambitious structural reform agenda, inter alia, covering deregulation efforts in the gas and electricity markets, was aimed at lifting growth, including reflation. However, according to the IMF, bottlenecks remain in labour and product markets, and in the corporate sector.

Question 18 How does Japan think the overseas human resources could help to solve the bottlenecks in labor and product market?

RESPONSE Shortage of labour force in Japan, especially among small and medium-sized companies, is so increasing that there is a possibility to inhibit economic and social sustainability in Japan. Therefore, last April, the Government of Japan introduced a new status of residence (*) for foreign human resources who have a certain level of professional knowledge and skills in order to alleviate the shortage of labour force. While we introduce the new status of residence and accept more foreign human resources, we also need to increase labor productivity by equipment investment, innovation in technology, reformation of working practices, and so on, and promote labour participation of the elderly and women in Japan. (*) Status of residence The status of residence is a status granted by an immigration inspector in accordance with the foreign national's purpose of entry/stay (38 categories) when he/she enters Japan. Foreign nationals can engage in the activities within the scope of their status of residence.

Page 24，Para 1.15 Since its last Review, Japan undertook competition policy-related legislative amendments. The Antimonopoly Law was amended to fulfil its commitments under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) (Section 2.3.2.1.1) in 2018, and to revise the surcharge system in 2019. The Unfair Competition Prevention Law was amended to encourage businesses to utilize data and increase productivity from new information technologies.

Question 19 Please provide more details regarding the amendments for the Antimonopoly Law.

RESPONSE The amendment act of the Antimonopoly Act, which was promulgated in June 2019, introduced the system which allows the JFTC to reduce the amount of surcharges when enterprises submit information and documents which contribute to the fact-finding of the case, in addition to the reduction according to the order of application. Specifically, under the amended Antimonopoly Act, the JFTC will become able to reduce the amount of surcharges calculated based on the amount of sales of goods or services subject to cartels and predetermined rates by up to 40% for violators who apply for the leniency programme before the investigation start date, and up to 20% for violators who apply for the leniency programme on or after the investigation start date, in addition to the reduction according to the order of application. The amended Antimonopoly Act has also abolished the current limitation on the number of enterprises who can apply for the leniency programme. To be specific, while five enterprises can apply for the leniency programme under the current system, after the revision of the Antimonopoly Act, all the enterprises under the investigation will have the opportunity of cooperating in the JFTC's investigation voluntarily. In addition, the amendment includes the revision of calculation methods for surcharges, which expands the scope of surcharges. Specifically, the calculation period is extended back 10 years from the first date of the JFTC's investigation, and some elements (e.g. subcontract) are added to the basis of the calculation. The amendment will come into effect by December 25, 2020.

Page 46，Para 2.30 Japan is member of APEC, which accounted for 74% of its trade (imports and exports) in 2018. One of its objectives is free and open trade and investment by 2020. In APEC's 2018 Bogor Goals Progress Report, which monitors progress towards this target, it is noted that, while positive steps have been taken, there is a need for continuous improvement in various areas. With respect to WT/TPR/M/397/Add.1

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Japan specifically, the Report, inter alia, highlights tariff liberalization undertaken; relaxation of rules in some services sectors; initiatives to attract and facilitate foreign investment; trade facilitation measures; developments in the areas of government procurement and intellectual property rights; energy liberalization; and measures to facilitate entry of visitors into Japan. Attention was also drawn to FDI restrictions in TV broadcasting.

Question 20 According to APEC's report mentioned in this paragraph, the Japanese government has achieved improvement in various sectors related to trade and investment in the past few years. Please kindly elaborate Japan's further plan to make continuous progress in sectors mentioned above.

RESPONSE As a final push towards the Bogor Goals, whose deadline is this year, APEC is working on various initiatives such as domestic service regulation, APEC Index, manufacturing related services, environmental related services, and Japan is contributing through sharing of its knowledge. Japan believes that it is important to make steady efforts so that progress in each sectors can be advanced even after 2020, based on the outcome of the final report on Bogor Goals which is scheduled to be completed within this year. In addition to the contribution to APEC, Japan will promote further economic partnerships through the implementation of EPAs and investment agreements. Also, Japan aims for the signing of the RCEP Agreement by 16 countries by the end of this year.

Page 46，Para 2.31 In 2016, APEC leaders adopted the Lima Declaration on the Free Trade Area of the Asia Pacific (FTAAP), which envisages negotiations on a comprehensive RTA which would include "next- generation trade and investment issues". These negotiations would be held outside of APEC but in parallel with the APEC process, building upon regional undertakings such as the CPTPP and the Regional Comprehensive Economic Partnership. APEC members are now examining how current pathways could contribute to the realization of the FTAAP.

Question 21 Please elaborate on the Japanese government's measures to make contribution to the realization of the FTAPP.

RESPONSE TPP11, a "pathway" for the realization of FTAAP, can be seen as a model for 21st century trade and investment rules due to its high quality and comprehensiveness. Japan will continue to strive for steady implementation and expansion of such rules with other economies. With regard to the RCEP, Japan has been working on towards the signing of the agreement among 16 countries by the end of this year. In addition, Japan has been implementing capacity building initiatives without limiting areas, towards the realization of high quality and comprehensive FTAAP.

Page 47，Para 2.36 In 2017, the FEFTA was amended, inter alia, to expand the scope of a prior checking of unlisted stock transfers between foreign investors, and to introduce a provision that foreign investors investing in Japan without being registered may be subject to executive orders, including orders to sell their holding stocks; these measures were taken in order to protect Japan's essential security. There have been no further amendments since 2017.

Question 22 Please explain the reason that the FEFTA restricts on unlisted stock transfers between foreign investors.

RESPONSE Under the current globalized business environment, spread of critical technologies presents serious challenges to national security. In order to exercise strict control over critical technologies, FEFTA restricts on unlisted stock transfers between foreign investors.

Question23 Please clarify whether the Japanese government would make amendments to the FEFTA in future. WT/TPR/M/397/Add.1

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RESPONSE The Japanese Diet approved the amendment of the FEFTA last November. The amendment will become effective on the day provided by the cabinet order within six months from its promulgation.

Page 50，Para 2.43 Japan is ranked in 39th place out of 190 economies in the World Bank's 2019 Doing Business report; it scores well in the areas of resolving insolvency, getting electricity, dealing with construction permits, and registering a property. Its poorest rankings are for: starting a business, getting credit, and protecting minority investors.

Question 24 How will the Japanese government make improvement of current poor rankings related to business environment in the coming years?

RESPONSE Japan will regularly explain by video conferences and letters our improvement of related system and an erroneous assumption of the facts to the World Bank. In addition, Japan will hold the Business environment improvement liaison meeting of the ministry concerned and efforts to strengthen our Improvement of related system.

Page 65，Para 3.42 Goods subject to import approvals under the Import Trade Control Order are set out in Table 3.4. When there are changes to the items on this list, they are published as an "import notice" in the Official Gazette. Import approvals are generally valid for six months. Over the review period, import licensing requirements were removed for: (i) whales and their preparations in July 2019, due to Japan's withdrawal from the International Whaling Commission (IWC); and (ii) weapons and other items from Eritrea because sanctions were lifted by a UN Security Council resolution and, hence, the restrictions were removed.

Question 25 Why did Japan withdraw from IWC after being its member for 31 years? Is it because whaling has great effect on Japan's economic development or for other reasons?

RESPONSE Japan respected the IWC's 1986 "moratorium" on whaling for over 30 years, before exercising its legal right to withdraw from the IWC at the end of 2018. It did so reluctantly, after concluding that the "moratorium," which was adopted as a temporary measure, had become permanent due mainly to the politically-motivated objection not based on scientific facts by some member States, rather than legitimate environmental concerns. Please see the statement by the Chief Cabinet Secretary, dated December 26, 2018, for Japan's official position: https://japan.kantei.go.jp/98_abe/decisions/2018/_00008.html.

Question 26 How will the Government react to the international critics and oppositions about whaling?

RESPONSE Japan remains committed to international cooperation for proper management of marine living resources, as stated in the statement by the Chief Cabinet Secretary, dated December 26, 2018.

Question 27 Which countries will Japan export their whale products to?

RESPONSE Japan currently does not consider exporting whale products.

Page 77，Para 3.75 The Nippon Export and Investment Insurance (NEXI) and the Japan Bank for International Cooperation (JBIC) remain the official export credit agencies. As noted in previous Reviews, in providing financial services, Japan follows the terms and conditions of the OECD Arrangement on Officially Supported Export Credits.

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Question 28 Please explain the operation mechanism of the Nippon Export and Investment Insurance (NEXI).

RESPONSE After 16 years of history in acting as an Individual Administrative Agency, NEXI was transformed into a 100% government-owned special stock company in April 2017. NEXI continues to provide export credit which follows the terms and conditions of the OECD Arrangement on Officially Supported Export Credits as a Japanese official export credit agency.

Page 108，Para 3.179 …The 2018 IP Strategy Vision foresees Japan in 2025-30 as a "value design society", where innovation is driven by latent needs and wants rather than technology or markets. It identified the following steps towards achieving this goal: (i) fostering and accumulating human resources and organizations that generate values through innovation; (ii) establishing mechanisms that encourage the exchange and sharing of intellectual assets and expand values; and (iii) producing, disseminating, and developing values that will be shared globally.

Question 29 As is reported, China and Japan held the Dialogue on Innovation Cooperation Mechanism to discuss cooperation and intellectual property protection in Beijing in 2019. What will Japan do to promote the cooperation with respect to IP protection between China and Japan?

RESPONSE In the field of IP, the JPO and the CNIPA in particular have continuously held meetings regarding IP protection issues on patents, designs, trademarks, trials and appeals and development of human resources since 1994 when the 1st heads meeting between the JPO and the CNIPA was held. It is hoped that such close relationship with the CNIPA will be maintained.

Page 142，Para 4.41 The MAFF continues to provide direct payments to farmers who produce crops other than table rice in the paddy field, to optimize the use of paddy fields; according to the authorities, this scheme aims to maintain the favourable environment of paddy fields, and thus prevent floods or soil erosion, to cultivate water resources, and to preserve the natural environment through effective use of paddy field. The budgetary cost of payments was JPY 320.0 billion in 2017 and JPY 305.9 billion in 2018.

Question 30 Please clarify whether direct payment provided by the MAFF to farmers will have an impact on fair competition in the international grain market.

RESPONSE The direct payment in question is intended to maintain the favorable environment of paddy fields; and the amount of crops, which is produced through the scheme, is far smaller compared to what Japan imports. As such, Japan considers the impact is negligible (or minimal at most).

Page 172，Para 4.163 Regarding measures to implement the Basel Committee's core principles, in December 2017, the final Basel III (also commonly known as "Basel IV") standards were expanded to cover a wider range of capital requirements by 2022. A progress report issued by the Basel Committee in April 2019 indicated that Japan had adopted 14 of these standards, was in the process of adopting 3 more, was late in adopting 2 of them, and was planning to adopt 9 more by 2022. In addition, the draft rule of large exposure requirement was published in June 2019, and will be adopted from April 2020. Japan also transposed, in 2018, the Basel's Committee recommendations on the capital treatment of Interest Rate Risk in the Banking Book. For more on these standards and their state of implementation, see Table A4.3.

Question 31 Please elaborate on how the Japanese government puts the Basel Convention into force so as to regulate the capital requirements.

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Page 173，Para 4.169 In order to develop fintech, the FSA eased, in May 2016, the restrictions on banks' ownership of finance-related IT companies. However, such acquisitions remain subject to FSA approval. In September 2017, the FSA established the FinTech Proof of Concept (PoC) Hub. The main aim of the Hub is to support innovative projects improving user convenience and/or productivity of companies. For each selected PoC project, the FSA will set up a special working team, in cooperation with relevant authorities and/or industry associations, as necessary. A special working team will support a project, by giving advice on issues related to compliance and supervision, etc., that participants of the PoC project would like to clarify The newly formed (July 2018) Strategic Development and Management bureau of the FSA is in charge of this programme.

Question 32 Please clarify whether the Japanese government allows a foreign company to hold majority shares of a FinTech company.

RESPONSE Each case should be examined on a case-by-case basis under relevant laws and regulations.

Page 173，Para 4.171 Following the crash of the bitcoin value (from USD 20,000 in December 2017 to USD 4,000 in December 2018) and two major thefts at virtual exchanges involving USD 500 million and USD 60 million, the FSA announced, in December 2018, its intention to strengthen applicable rules and to ensure user protection. This act was passed by the Diet in May 2019, and will be implemented by June 2020. The new Payment services actt replaces the term "virtual currency" by "crypto-asset", to underline its speculative character, requires service providers to pre-notify the authority of plans to change a line of virtual currency products, and contains provisions forcing virtual currency exchanges to secure funds for repayments to customers in the case of theft or business failure.

Question 33 Please indicate which policies will be formulated by the FSA to regulate domestic market for virtual currency and protect interests of users in the coming years.

RESPONSE FSA has just established a monitoring system and self-regulatory function for crypto-assets (virtual currencies), and facilitating smooth implementation of the revised Payment Services Act and other acts. At the same time, FSA promotes establishing self-regulatory function through implementing assessment of certified self-regulatory organization for the newly-regulated derivative transaction with crypto-assets as well as strengthening cooperation with such self-regulatory organization including supervisory collaboration and periodical exchanges of information.

Page 173，Para 4.182 Apart from those minor technical amendments to the regime, and of the deployment of 5G-LTE networks and of experimental programmes on the IoT and on AI, the government policy regarding telecommunications during the period under review was essentially focused on two issues: consumer protection, and the lowering of costs linked to the use of mobile handsets.

Question 34 This paragraph sends out a message that the Japanese government attaches great importance to the cost performance of products and service providers in the telecommunication sector. Please indicate whether Chinese companies such as Huawei and ZTE are permitted to enter into telecommunication market in Japan from the perspective mentioned above.

RESPONSE Japan does not prevent telecommunications operators in Japan from purchasing equipment of specific countries or specific companies, although it is not clear enough for us what "telecommunication market" means in this context.

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Page 175，Para 4.196 The de jure monopoly of the Japan Post Company Ltd. includes letters (when containing "correspondence", see below) and postcards (between 2 and 6 g) and the following postal items: smart letters (i.e. up to A5 size and 1 kg throughout Japan at a fixed rate), letter packs (up to A4 size and 4 kg throughout Japan at a fixed rate) and express mail services items.

Question 35 Could the scope of Japan Post's exclusive services be understood as including 2 (General correspondence) + 3 (Correspondence postal items) + 5 (Non-correspondence postal items)?

RESPONSE Postal and correspondence delivery services provided by Japan Post are not exclusive services, including the items mentioned in the question.

Page 175，Para 2.202 Japan did not make any commitments regarding postal and express services either under the GATS or in the positive listing agreement with Singapore. However, it bound special correspondence services in most of its positive listing agreements with India, Brunei Darussalam, Thailand, Malaysia, Viet Nam, Indonesia and the Philippines, with a standstill commitment in the latter five.

Question 36 Are Japan's special correspondence services open to the outside world? At present, 538 enterprises licensed to operate this business are all Japanese private enterprises. What are the procedures for foreign-invested enterprises to obtain licenses?

RESPONSE There are no restrictions on foreign participation under the Act on Correspondence Delivery by Private Business Operators, thus, foreign companies are also allowed to participate in the market with the necessary permission as specified in the Act. Since there are no restrictions on foreign participation, whether or not to participate in the market is based on the business decision of each operator. The Act on Correspondence Delivery by Private Business Operators provides that those who wish to provide correspondence delivery service must obtain permission from the Minister of Internal Affairs and Communications, and that those who wish to obtain permission must submit an application form with necessary information filled in to the Minister of Internal Affairs and Communications.

Page 4，Para 13 Concerning SPS, the Food Sanitation Act was amended in order to reflect changing dietary patterns and the environment surrounding food in Japan, as well as to increase hygiene controls; with respect to imports, control processes applied to the competent authorities in the country of export have been strengthened. The Agricultural Chemicals Control Act was also amended, with a view to improving pesticide safety and contributes to more efficient agriculture. Japan sets some standards on food additives and maximum residue limits (MRLs) that are different from Codex standards and MRLs; these are apparently based on scientific evidence. Over the review period, Japan expanded the scope of animal quarantine for raw milk to also include milk products.

Question 37 Japan has set certain standards on food additives and maximum residue limits (MRLs) that are different from Codex standards and MRLs. For example, the Codex does not set limits for procymidone residues in broccoli, while a strict limit of 0.01 ppm has been set by Japan for procymidone residues in broccoli, which is divorced from the acceptable daily intake and the acute safe intake. What is the scientific basis for Japan's standard on this limit?

RESPONSE When there are no Codex maximum residue limits (MRLs) and no requests by domestic and foreign industries to set MRLs, Japan applies the uniform limit (0.01 ppm) which was established as the amount unlikely to cause damages to human health, based on the acceptable exposure level evaluated by JECFA (Joint FAO/WHO Expert Committee on Food Additives) and the United State Food and Drug Administration. As for procymidone, the Ministry of Health, Labour and Welfare of Japan (MHLW) has decided to delete the provisional MRLs in broccoli etc (i.e. apply the uniform limit (0.01 ppm) to them), because there were no Codex MRLs and no requests by domestic and WT/TPR/M/397/Add.1

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Page 11，Para 4 …Over the review period, the main law governing FDI, the Foreign Exchange and Foreign Trade Act, was amended for reasons of security protection, by: expanding the scope of prior checking of unlisted stock transfers between foreign investors; and introducing a provision that unregistered foreign investors may be subject to executive orders, including orders to sell their holding stocks. Prior notification and approval requirements are in place for investments where there could be significant adverse effects on the smooth management of the national economy or on the grounds of public order, public safety or national security. FDI restrictions remain in place in the telecommunications, broadcasting and radio sectors.

Question 38 We believe that amendment to the Foreign Exchange and Foreign Trade Act has actually set more restrictions on foreign investors. It is a manifestation of investment protectionism that may have a negative impact on economic globalization. Could Japan explain the motivation and considerations for doing so?

RESPONSE Under the current globalized business environment, spread of critical technologies presents serious challenges to national security. Aiming to exercise the strict control of critical technologies, Japan amended the act to: 1. add specified acquisition （a transfer of shares issued by non-listed companies between foreign investors） into the coverage of controlled targets under the system in which foreign investors are required to submit a prior notification and receive an examination. 2. establish a system in which government orders to take corrective measures (e.g., orders to sell stock) are imposed on a foreign investor who has made an illegal inward direct investment (e.g., without submitting a notification). In addition, please refer to our response to your question No.15 for the factors to be considered in the examination process that Ministry of Finance and the competent ministries released in 2017.

Page 13，Para 17 …Key developments over the review period were: the abolition of direct payments for rice and rice production volume targets (although direct payments to rice farmers remain in place for optimizing the use of paddy fields); the introduction of a new revenue insurance programme applicable to almost all farm products; a review of the Agricultural Mutual Aid system; the abolition of administered prices for beef and pig meat; increased support for domestic beef and pork producers; and the introduction of a modified support system for milk.

Question 39 How have relevant policy reforms on "the abolition of direct payments for rice and rice production volume targets (although direct payments to rice farmers remain in place for optimizing the use of paddy fields)" been implemented? What alternative policies have been adopted? And what is included in the direct payments to rice farmers?

RESPONSE The MAFF provides detailed market information to encourage farmers to take voluntary action in association with the abolition of direct payments to rice and the allocation of rice production volume targets in 2018. There are no alternative policies to the Direct Payment for Rice. As described in paragraph 4.41, the MAFF provides direct payment to farmers who produce crops other than table rice, such as wheat and soybeans, in order to make effective use of paddy fields.

Question 40 "The abolition of administered prices for beef and pig meat" and "the introduction of a modified support system for milk" are mentioned in the Report. What has Japan done to bring about these developments?

RESPONSE In terms of the support to beef and pig meat production, the price stabilization scheme was abolished as the direct payment was strengthened. The Act on Temporary Measures concerning WT/TPR/M/397/Add.1

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Compensation Price for Producers of Milk for Manufacturing Use was abolished, and the Act on Stabilization of Livestock management was revised in order to broaden marketing options and encourage the creative development of dairy farmers.

Question 41 Which agricultural products are covered under the "new revenue insurance programme applicable to almost all farm products", and what are the detailed rules for relevant policies?

RESPONSE In principle, any product can be covered under the new insurance programme. The programme cannot be combined with the similar schemes to compensate the income loss.

Page 97，Para 3.159 During the review period, state involvement in the economy remained relatively unchanged. State trading entities continued to engage in leaf tobacco, opium, rice, wheat, barley and milk products. Major commercial SOEs include those operating in energy, financial services, telecommunications and some transport-related activities. The State continues to wholly or partially own several companies, including large ones (Table 3.18), in the delivery of goods and services that the authorities believe would not be adequately provided by the private sector alone.…

Question 42 Please provide detailed information on the state-owned enterprises defined by the CPTPP, including the total number, the amount of assets and the number of employees with respect to state-owned enterprise respectively, etc.

RESPONSE Please refer to the following link (the official website of Ministry of Foreign Affairs of Japan). On this website, Japan has made publicly available a list of its state-owned enterprises pursuant to Article 17.10 (Transparency) of TPP11. Link: https://www.mofa.go.jp/mofaj/ecm/ep/page24_000968.html. Question 43: Please provide the 2018 version of the data listed in Table 3.18 (Financial Data Sheets of Major State-owned Enterprises in Japan, 2017).

RESPONSE The Government of Japan does not have financial statements of all major State-owned Enterprises in Japan included in Table 3.18. Therefore, we cannot provide the complete 2018 version of the data listed in Table 3.18.

Page 70，Para 3.51 As at end-October 2019, seven anti-dumping measures were in force, relating to four products and applying to two trading partners. Definitive duties were imposed for the first time during the review period on: polyethylene terephthalate from China; and carbon steel butt-welding fittings from China and the Republic of Korea (Table 3.7).

Question 44 As for the anti-dumping measures against electrolytic manganese dioxide, sunset review process has been initiated since 18 April, 2018, and the investigation process has continued for more than 12 months (Article 11.4 of the WTO Anti-dumping Agreement states that the sunset review process shall normally be concluded within 12 months of the date of initiation of the review), resulting in the continuous application of these measures beyond the original deadline. Could Japan explain if there is any ruling on the review, when to publish the results, and whether these measures will continue?

RESPONSE Please refer to G/ADP/N/328/JPN. The government of Japan would also like to point out that we have already notified the Embassy of the People's Republic of China in Japan of the result of the expiry review of anti-dumping duties on Electrolytic Manganese Dioxide originating in the People's Republic of China by the notification letter dated March 1, 2019.

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Page 159，Para 4.140 Following the 2016 liberalization of the retail market, and up to May 2019, the share of new power producers and suppliers of electricity in total retail sales rose from 5.0% to 14.2%. Entry into the retail market requires government approval…

Question 45 Please introduce the major steps and contents of Japan's reform on retail market liberalization in electric power and other sectors.

RESPONSE Since the Great East Japan Earthquake followed by the nuclear accident, many issues of the existing electricity system have been revealed. The Cabinet decided "The policy on Electricity System Reform" on April 2, 2013 which specified objectives and schedules of the reform. The drastic institutional reform is being implemented according to three stages scheduled by the cabinet decision. The first bill to revise the Electricity Business Act for expanding the cross-regional coordination for transmission operators and for determining the process of the electricity system reform by 2020 was enacted as the first stage on November 13, 2013. Moreover, the bill to revise the Electricity Business Act for introducing full retail competition was enacted as the second stage on June 11, 2014. The third bill to revise the Electricity Business Act for legal unbundling of transmission and distribution sectors was enforced as the third stage on June 17, 2015. Through the series of revision of the act, "full liberalization of electricity retail entry" was enforced in April 2016 so that competition was activated with the implementation and there were more than 600 entries. Moreover, the legal unbundling of transmission and distribution sector from retail and power generation sectors will be implemented in April 2020. Regarding as city gas businesses, please take a look at the attached document that shows gas market structure details and full liberalization of retail market.

Page 163，Para 4.153 During the review period, domestic support continued under several programmes (Section 3.3.1). The sector's non-industry-specific schemes included measures under the Subsidy Program for Global Innovation Centers, tax incentives for strengthening local business facilities, incentives regarding special zones, incentives based on the 2013 Industrial Competitiveness Enhancement Act, incentives under the 2018 Act on Special Measures for Productivity Improvement, the tax incentive system based on the Act on Strengthening a Framework for Regional Growth and Development by Promoting Regional Economy Advancement Projects, tax incentives for R&D, the tax incentive for wage and productivity improvement, incentives related to disaster recovery, and incentives of local governments for foreign-affiliated companies (e.g. subsidization of rent expenses, and incorporation/registration and other fees)…

Question 46 Please briefly introduce the substantive and procedural legal provisions for above incentives such as subsidies.

RESPONSE Regarding the incentives above, requirements and procedures are enacted in laws and subsidy guidelines. For example, an introduction to the Subsidy Program for Global Innovation Centers, including an outline of the program and details of the selected projects, can be found here, https://www.jetro.go.jp/en/invest/incentive_programs/info.html. The program was conducted from January 2016 to March 2017 under the 2015 supplementary budget. Information about the subsidies offered by local governments for foreign-affiliated companies can be found under Part II, Section B here, https://www.jetro.go.jp/en/invest/incentive_programs/. In addition to these programs, there are other programs such as Subsidy Program for Global Innovation Centers and Act on Strengthening a Framework for Regional Growth and Development by Promoting Regional Economy Advancement Projects.

PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT Page 6, Para 2.14 The data concerning the Economic Partnership Agreements is summarized in Table 2.1 below (as of December 2019).

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Questions 47 Please explain why the Japan-US trade agreement on the elimination or reduction of tariffs on certain agricultural and industrial products is not included in this table.

RESPONSE The Japan-US Trade Agreement, which eliminates or reduces tariffs on agricultural and industrial products, is different from what Japan generally calls an economic partnership agreement (EPA) which covers broader areas such as trade in services, investment and intellectual property and, therefore, this Agreement is not included in Table 2.1 on EPAs.

Questions 48 Has this agreement entered into force by now?

RESPONSE The Japan-US Trade Agreement entered into force on 1 January 2020.

Page 5，Para 2.10 …Japan continues to make best efforts towards the reform of the dispute settlement system, including the Appellate Body.

Question 49 Please introduce Japan' specific measures and working plans to facilitate the reform of the Appellate Body.

RESPONSE Our priority has always been to achieve a long-lasting reform of the Appellate Body, which is not limited to an interim solution. Japan believes that it would serve a better functioning dispute settlement system and an ultimate goal of securing a positive solution to a dispute. From this perspective, Japan has actively contributed to the Informal Process of solution-focused discussion on matters related to the functioning of the Appellate Body, under the auspices of the General Council. Japan submitted a proposal regarding the reform of the dispute settlement system jointly with Australia on 17 April 2019 (WT/GC/W/768). Subsequently, Chile also participated in the proposal (WT/GC/W/768/Rev.1). Japan stands ready to further proactively contribute to the discussion towards a better functioning dispute settlement system.

PART III: OTHER QUESTIONS

Question 50 Please brief us the practice of information exchange between the Japanese competition authorities and those of other countries in order to enhance cooperation in competition law enforcement. Are there any non-competition agencies or individuals that ask competition authorities in other countries about competition enforcement cases through diplomatic channels? Under what circumstances may Japanese competition authorities submit relevant information to the parliament or the court?

RESPONSE To enhance cooperation in competition law enforcement, for example, the Japan Fair Trade Commission (JFTC) and those of other countries utilize notification by which one authority notifies the other of its enforcement activities which may affect the important interest of the other and cooperation by which one authority renders various assistance, such as provision of information to the other, in accordance with the agreements, arrangements, and the memorandums of understanding (MoUs). Note that with regard to enforcement activities, the JFTC usually communicates with competition authorities in other countries. The JFTC submits relevant information to the parliament or the court to the extent consistent with laws and regulations of Japan and the agreements or the arrangements with other countries or other competition authorities when they require pursuant to law. The JFTC, however, must not submit relevant information to the court in criminal proceedings.

Question 51 Japanese Industrial Standards (JIS) are recommended standards. However, some standards are cited as enforceable by Japanese decrees, which will have a significant impact on market access. At present, Japan only discloses the JIS cited by Japanese decrees online in Japan, while overseas WT/TPR/M/397/Add.1

- 113 - enterprises could not obtain relevant information on a fair basis. This may lead to unfair trade. How does Japan ensure the implementation of the WTO's principle of national treatment in this regard?

RESPONSE The Japanese Industrial Standard development system follows the relevant TBT agreement clauses. Japan believe that current system does not lead to unfair trade as China indicated in the question. Regarding JIS, drafting committees of JIS own the copyright that must be protected appropriately by the organization concerned. Accordingly, the JIS must be purchased in electronic or paper/book form at the website below or at book shops. Regarding the sales of JIS, there is no preferential or discriminatory treatment between countries. Web: https://webdesk.jsa.or.jp/books/W11M0010.

Question 52 Japan's draft standards are currently also publicly available online for comments. However, the full texts of the drafts for comments are only available to IPs in Japan, and overseas interested parties have no access to relevant draft standard. Thus, foreign enterprises are unable to timely and effectively understand the changes to Japanese standards, resulting in unfair trade. In order to improve the transparency for setting standard, whether Japan will consider lifting restrictions on the draft standard for access abroad in terms of soliciting public comments.

RESPONSE Standards development system of Japan complies with the requirements stipulated in the TBT agreement, such as making SPS/TBT notifications, announcing the public commenting period in publicly available publications and/or websites, and providing copies of draft standards upon request to any interested party within the territories of a WTO member. Japan believes that current system of Japan does not lead to unfair trade as China indicated in the question.

Question 53 Please introduce the management system and the division of powers in Japan's civil aviation sector, and the legal system in the field of civil aviation.

RESPONSE While most of about 100 airports in Japan are under the administration of the government or local authorities, joint-stock companies run Narita International Airport, Chubu International Airport and New Kansai International Airport including Itami Airport. Shares of Narita International Corporation and New Kansai International Airport Co., Ltd., 49% of shares of Chubu International Airport are owned by the government, Aichi Prefecture and Nagoya City. The Government oversees such stock companies as stipulated by law, and may give the companies orders required for the supervision, when deemed necessary. The Government may also make them report on their business or make the government officers enter the work place such as sales office and business office, and inspect objects including accounting books and documents.

Question 54 How does Japan define public air transport and general aviation? Are there any different administrative measures as for public air transport and general aviation?

RESPONSE Air transport services are defined as "any business using aircraft to transport passengers or cargo for remuneration upon demand." Specific examples include scheduled air transport services, charter flights for passengers or cargo and sightseeing flights. In addition, regarding air transport services, there are the following restrictions on investments by foreign capital. First, the prior notification requirements under the Foreign Exchange and Foreign Trade Act shall apply to foreign investors who intend to acquire 1% or more shares of listed companies, or shares of unlisted companies, in air transport services in Japan. Second, permission of the Minister of Land, Infrastructure, Transport and Tourism for conducting air transport services as a Japanese air carrier is not granted to the following natural persons or entities applying for the permission: (a). a natural person who does not have Japanese nationality; (b). a foreign country or a foreign public entity, or its equivalent; (c). a legal person or other entity constituted under the laws of any foreign country; and WT/TPR/M/397/Add.1

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(d). a legal person represented by the natural persons or entities referred to in subparagraph (a), (b) or (c); a legal person of which more than one-third of the members of the board of directors are composed of the natural persons or entities referred to in subparagraph (a), (b) or (c); or a legal person of which more than one-third of the voting rights are held by the natural persons or entities referred to in subparagraph (a), (b) or (c). In the event that an air carrier falls into a natural person or an entity referred to in subparagraphs (a) through (d), the permission will lose its effect. The conditions for the permission also apply to companies, such as holding companies, which have substantial control over the air carriers. Third, a Japanese air carrier or a company having substantial control over such air carrier, such as a holding company, may reject the request from a natural person or an entity set forth in subparagraphs 2(a) through (c), who owns equity investments in such air carrier or company, to enter its name and address in the register of shareholders, in the event that such air carrier or company falls into a legal person referred to in subparagraph 2(d) by accepting such request. Fourth, foreign air carriers are required to obtain permission of the Minister of Land, Infrastructure, Transport and Tourism to conduct international air transport services. Fifth, permission of the Minister of Land, Infrastructure, Transport and Tourism is required for the use of foreign aircraft for air transportation of passengers or cargoes to and from Japan for remuneration. Last, a foreign aircraft may not be used for a flight between points within Japan.

Aerial work is defined as "any business using aircraft other than for the transport of passengers or cargo for remuneration upon demand". Specific examples include photo shoot, pesticide spray, advertisement and flight training. In addition, there are the following restrictions on foreign investment. First, the prior notification requirement under the Foreign Exchange and Foreign Trade Law applies to foreign investors who intend to make investments, such as acquiring stocks at least 1% ownership of shares in listed companies, or shares in unlisted companies, in aerial work business in Japan. Second, permission of the Minister of Land, Infrastructure, Transport and Tourism for conducting aerial work business is not granted to the following natural persons or entities applying for the permission: (a). a natural person who does not have Japanese nationality; (b). a foreign country, or a foreign public entity or its equivalent; (c). a legal person or other entity constituted under the laws of any foreign country; and (d). a legal person represented by the natural persons or entities referred to in subparagraph (a), (b) or (c); a legal person of which more than one-third of the members of the board of directors are composed of the natural persons or entities referred to in subparagraph (a), (b) or (c); or a legal person of which more than one-third of the voting rights are held by the natural persons or entities referred to in subparagraph (a), (b) or (c). In the event a person conducting aerial work business falls into a natural person or an entity referred to in subparagraphs (a) through (d), the permission will lose its effect. The conditions for the permission also apply to companies, such as holding companies, which have substantial control over the person conducting aerial work business. Last, a foreign aircraft may not be used for a flight between points within Japan.

Question 55 What kind of supporting policies does the Japanese government adopted for civil airports, regional aviation, international routes, general aviation, cargo aviation, and remote areas? Please briefly introduce the source, standards and methods of funds.

RESPONSE There are no supporting policies by the Japanese government for cargo aviation. As for civil airports, regional aviation, international routes, general aviation and remote areas, the Japanese government adopts the following supporting policies with the financial resources from the national budget. First, landing fee relief measures for regional airports to encourage expanding the number of inbound tourists as a supporting policy for regional aviation, international routes, general aviation and remote areas; Second, a supporting policy for civil airports in accordance with "Subsidy for development project of acceptance environment at regional airports" and "Subsidy for development of CIQ (Customs, Immigration, and Quarantine)"; and Third, the following two supporting policies for regional aviation and remote areas: WT/TPR/M/397/Add.1

- 115 - a) Subsidy for operation cost to ensure stable transport on remote islands air routes that play an important role in daily life of residents in remote islands; and b) Subsidy for a part of purchase cost of aircraft and parts thereof, which is in service on air routes to remote islands.

Question 56 Please clarify whether there are any policies to regulate subsidies on the domestic air transportation in Japan?

RESPONSE There are no restrictions on granting subsidies to domestic air carriers in Japan. However, regarding air transport services, there are following restrictions on investments by foreign capital. First, the prior notification requirements under the Foreign Exchange and Foreign Trade Act shall apply to foreign investors who intend to acquire 1% or more shares of listed companies, or shares of unlisted companies, in air transport services in Japan. Second, permission of the Minister of Land, Infrastructure, Transport and Tourism for conducting air transport services as a Japanese air carrier is not granted to the following natural persons or entities applying for the permission: (a). a natural person who does not have Japanese nationality; (b). a foreign country or a foreign public entity, or its equivalent; (c). a legal person or other entity constituted under the laws of any foreign country; and (d). a legal person represented by the natural persons or entities referred to in subparagraph (a), (b) or (c); a legal person of which more than one-third of the members of the board of directors are composed of the natural persons or entities referred to in subparagraph (a), (b) or (c); or a legal person of which more than one-third of the voting rights are held by the natural persons or entities referred to in subparagraph (a), (b) or (c). In the event that an air carrier falls into a natural person or an entity referred to in subparagraphs (a) through (d), the permission will lose its effect. The conditions for the permission also apply to companies, such as holding companies, which have substantial control over the air carriers. Third, foreign air carriers are required to obtain permission of the Minister of Land, Infrastructure, Transport and Tourism to conduct international air transport services. Fourth, permission of the Minister of Land, Infrastructure, Transport and Tourism is required for the use of foreign aircraft for air transportation of passengers or cargoes to and from Japan for remuneration. Last, a foreign aircraft may not be used for a flight between points within Japan. Incidentally, there is no plan on further liberalization.

Question 57 Please elaborate on Japan's administrative policies on flight schedule, and the methods and procedures for obtaining flight schedules.

RESPONSE Any foreign airlines shall, when it intends to operate a charter flight, obtain permission from the Minister of Land, Infrastructure, Transport and Tourism. Any foreign airlines shall, when it intends to operate a scheduled flight, obtain a license for international air transport services and approval for operation plan from the Minister of Land, Infrastructure, Transport and Tourism. In the approval procedures, Japan Civil Aviation Bureau (JCAB) confirms that the traffic rights and capacity are within the scope of the air service agreement.

Question 58 Please briefly introduce Japan's management system for airspace and the operation mode of air traffic management.

RESPONSE The Air Traffic Management (ATM) Center works to promote air traffic safety and to improve flight efficiency by integrating the functions of Airspace Management, which is to use airspace efficiently; Air Traffic Flow Management, which is to form smooth traffic flow by adjustment or other initiative; and Air Traffic Control services using new technologies.

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Question 59 Does Japan have any restrictions on market access for foreign investment in civil aviation transport services such as general aviation, civil airports, air traffic control and aviation fuel? Please introduce the legal basis for industry administration and market access administration on foreign investments in the above sectors? Are there any market access restrictions in civil aviation sectors other than those mentioned above, and their legal basis?

RESPONSE Japan has no restrictions on investment by foreign capital in general aviation, civil airports, air traffic control and aviation fuel.

Question 60 As for the anti-monopoly review in civil aviation sector, please elaborate on the scopes, responsibilities of competent authorities and legal basis.

RESPONSE The provision of paragraph (1), Article 105 of Civil Aeronautics Act stipulates that any domestic air carrier shall fix tariffs and charges for passengers and cargo, and notify the Minister of Land, Infrastructure, Transport and Tourism to that effect in advance. The Minister of Land, Infrastructure, Transport and Tourism shall order the domestic air carrier to change tariffs and charges, if they might create unfair competition against other domestic air carriers. (item (iii), paragraph (2) of the same Article). Any domestic air carriers who intend to operate international air transport services shall fix tariffs and charges for passengers and cargo, and obtain prior approval from the Minister of Land, Infrastructure, Transport and Tourism (paragraph (3) of the same Article), and the Minister of Land, Infrastructure, Transport and Tourism shall not grant approval, if the tariffs and charges might create unfair competition against domestic air carriers. Also, the Minister of Land, Infrastructure, Transport and Tourism shall order the domestic air carrier to change already approved tariffs and charges, if they might create unfair competition against other domestic air carriers (item (iii) of Article 112). When an airline company's activity violates the Anti-Monopoly Act (AMA), the Japan Fair Trade Commission may take a necessary measure based on the AMA unless they are exempt from the AMA under the Article 110 of the Civil Aeronautics Act.

Question 61 Are there any specific subsidy policies called "amber box", non-specific "amber box" or "blue box" for agricultural products in Japan? If so, please specify the agricultural products covered and detailed measures in this regard.

RESPONSE The requested information is available in the DS1 notification (G/AG/N/JPN/236). More specifically, the following supporting tables are relevant: - blue box: supporting table DS3 - amber box: supporting table DS4 - non-product specific AMS: supporting table DS9 DS1 notification for the supports in FY2017 is in preparation.

Question 62 We note that, since 2018, Japan has taken a series of measures in the revision of regulations regarding government procurement and the allocation of the spectrum resources of 5G communication networks, which has severely affected Chinese enterprises' businesses in Japan. These measures have in fact excluded the products of Chinese enterprises such as Huawei and ZTE, and are at odds with Japan's long-held ideas of openness, liberalization and facilitation. Please explain when Japan will revise the relevant regulations and provide a fair, transparent and predictable business environment for Chinese enterprises to carry out mutually beneficial cooperation with Japan?

RESPONSE Japan does not exclude any specific company from the government procurement and does not prohibit Japanese companies from procuring products of any specific company.

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Question 63 In recent years, Japan has continuously included Chinese enterprises, universities and research institutions in the End User List, which makes it impossible for enterprises of both sides to carry out normal trade and investment cooperation. Please explain whether Japan will remove relevant Chinese entities from the List as soon as possible so as to create a favorable policy environment for the trade and investment cooperation between the enterprises of our two countries?

RESPONSE For the purpose of enhancing the effectiveness of the catch-all control, the End User List provides exporters with referential information on foreign entities for which concern cannot be eliminated regarding involvement in activities such as the development of WMDs or other items. It is not an embargo list, and Japanese exporters can export goods to EUL-listed entities as long as it is apparent that the goods will not be used for WMD purposes. The listing of all entities is decided by the Government of Japan, taking into account various relevant information.

Question 64 Could Japan share its view on the impact of unilateral and protectionist measures on the international economic and trade environment and the multilateral trading system, and how to address long-standing issues in the WTO such as the abusive use of trade remedies?

RESPONSE Japan believes that a free and open economy is the cornerstone of peace and prosperity. Remuneration for trade restrictions does not benefit any nation, so it is important to maintain and strengthen a free, fair, non-discriminatory, rule-based trading system. Japan also believes that any trade measures should be consistent with WTO rules.

Question 65 Japan has committed to advance the reform on the transparency issues, together with other members, calling for submitting complete subsidy notification in a timely manner. However, the latest subsidy notification submitted by Japan is far from completed due to lack of subsidies on new energy vehicle, photovoltaic and coal sector, which are released by Japanese medias. Could Japan indicate when to notify above subsidies to the WTO?

RESPONSE Though it is not clear which measures China is referring to, Japan properly notified its subsidies according to notification obligation of the WTO agreement. We assume that the subsidies on new energy vehicle, photovoltaic and coal sector that China arguably pointed out are not subject to notification obligation under WTO agreement because those subsidies are, for example, either subsidies on services or having no specificity.

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ARGENTINA

Informe de la Secretaría (WT/TPR/S/397)

Question 1 Bajo el párrafo 4.276 del Informe se señala que en junio de 2017 se modificaron las Directrices interpretativas sobre comercio electrónico y comercio de bienes de información, elaboradas con el objetivo de mejorar la previsibilidad para las partes interesadas y facilitar el comercio aclarando cómo se aplican el Código Civil y otras leyes pertinentes sobre diversos aspectos jurídicos relacionados con el comercio electrónico y el comercio de bienes de información. Atento a ello, mucho se agradecerá si Japón pudiera compartir sus experiencias en la implementación de tales Directrices, así como las principales lecciones aprendidas en el tema.

RESPONSE Since the formulation of the original guidelines in March 2002, Ministry of Economy, Trade, and Industry (METI) has revised the guidelines as necessary, in accordance with situations in trade practices, trends in related technologies, and the development of international and internal rules surrounding electronic commerce and information property trading. The revision is realized with the cooperation of academic experts, related ministries and agencies, consumers, and the business community, and is called for public comments before the release.

Question 2 Con relación al "Paquete de Políticas para Fortalecer la Competitividad de la Agricultura Japonesa" mencionado en el punto 4.9 del Informe, se apreciará contar con mayores detalles sobre los resultados alcanzados tras la implementación de este Plan en términos de competitividad de los productos agrícolas.

RESPONSE The purpose of the plan is to provide a better environment for producers and to address the structural problems that are out of producers' capacity. The resultant effects include simplification (e.g. 550 products to 25 products) and reduced prices of certain fertilizers (10-30% reduction) provided by National Federation of Agricultural Cooperative Associations.

Question 3 Bajo el punto 3.3 del Informe se destaca que Japón estableció un Comité nacional de facilitación del comercio (la Conferencia de Enlace sobre Facilitación del Comercio), como un foro para el intercambio de información entre los ministerios y organismos pertinentes. Mucho se agradecerá si Japón pudiera compartir sus experiencias respecto del funcionamiento de este Comité así como conocer, en particular, si se han enfrentado dificultades en materia de coordinación entre los diferentes organismos involucrados y cómo se han superado.

RESPONSE In accepting the Trade Facilitation Agreement, Japan has established "Liaison Conference on Trade Facilitation (LCTF)" as its National Committee on Trade Facilitation referred to in paragraph 2 of Article 23, which consists of the following members: - Director-General, Economic Affairs Bureau, Ministry of Foreign Affairs - Director-General, Customs and Tariff Bureau, Ministry of Finance - Senior Assistant Minister for International Affairs, Ministry of Health Labour and Welfare - Director-General for International Affairs, Minister's Secretariat, Ministry of Agriculture, Forestry and Fisheries, and - Director-General, Trade Policy Bureau, Ministry of Economy, Trade and Industry. For the purposes of assisting the LCTF, the Government of Japan has also established a director- level secretariat under the LCTF which is responsible for coordinating the works of the parties concerned as necessary. The function of the LCTF is to facilitate both domestic coordination and implementation of the provisions of the TFA. The LCTF was established in April 2015 by arrangements among the ministries concerned and not by a law or regulation. The Government of Japan maintains close contacts and coordination among the said ministries for the implementation of the Agreement.

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NORWAY

Question 1 to paragraph 2.3.2.1.1 in the Report from the Secretariat and table 2.1 in Japan's Report. According to para 2.3.2.1.1. in the secretariat's report and table 2.1 in Japan's report the CPTPP entered into force for Japan on 30 December 2018. In light of the ongoing fisheries subsidies negotiations in the WTO, it would be useful if Japan could elaborate on which steps it will take to implement CPTPP's point 5 (a) in Article 20.16 on Marine Capture Fisheries, which reads as follows: (a) Subsidies for fishing that negatively affect fish stocks that are in an overfished condition; (b) For the purposes of this paragraph, "fishing" means searching for, attracting, locating, catching, taking or harvesting fish or any activity which can reasonably be expected to result in the attracting, locating, catching, taking or harvesting of fish. (c) The negative effect of such subsidies shall be determined based on the best scientific evidence available. (d) For the purposes of this Article, a fish stock is overfished if the stock is at such a low level that mortality from fishing needs to be restricted to allow the stock to rebuild to a level that produces maximum sustainable yield or alternative reference points based on the best scientific evidence available. Fish stocks that are recognized as overfished by the national jurisdiction where the fishing is taking place or by a relevant Regional Fisheries Management Organization shall also be considered overfished for the purposes of this paragraph.

RESPONSE Japan's fishing activities are properly managed by the government in accordance with relevant fisheries laws and regulations and are based on the scientific stock assessment. Japan's fisheries subsidies programs are implemented in a manner not to negatively affect overfished fish stocks.

Question 2 to paragraph 4.4.4.1. Maritime transport in the Report from the Secretariat. (1) We appreciate the information on the substantial size of the Japanese fleet in para 4.212, and furthermore on the open applied market access regime as well as on the commitments on maritime transport in WTO and free trade agreements in para 4.227 and 4.228. On that basis, we assume that maritime transport is a priority in trade agreements. We would appreciate to receive information on market access commitments in bilateral maritime transport agreements. (2) With reference to para 4.222 on tonnage tax it would be of interest to receive information on the number of vessels, including the number of vessels under foreign flag, included in the Japanese tonnage tax system.

RESPONSE (1) In the bilateral maritime transport agreements, there are various provisions about travel, residence, customs, and so on. The bilateral maritime transport agreements stipulate that foreign participation in international maritime services is not restricted but the coasting trade must be complied with the law of each country. (2) The number of vessels in the Japanese tonnage tax system is 312 which includes 57 deemed- Japanese-flagged vessels at the end of FY2018.

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INDONESIA

Report by the Secretariat WT/TPR/S/397 Page 10 Paragraph 3 3. …The authorities envisaged taking temporary and special offsetting/mitigating fiscal measures in the initial budgets for FY 2019 and FY 2020 to address concerns related to the increase in the consumption tax rate from 8% to 10% on 1 October 2019.

Question1 Please provide updates for the mentioned policies.

RESPONSE The "Basic Policy on Economic and Fiscal Management and Reform 2018" planned that temporary special measures were set to be taken in the initial budgets for FY 2019 and FY 2020 in order to respond flexibly to demand fluctuations accompanying the hike in the consumption tax rate. For the FY 2019 Budget, measures such as the "Point Reward Project for Consumers" and "Vouchers with premiums for the Low-income or child-rearing households" were implemented, amounting to approximately JPY 2 trillion. For the FY 2020 Budget, approximately JPY 1.8 trillion will be allocated for "Point Reward Project for Consumers using Cashless Payment" and "Measures for stimulating consumption using My Number scheme".

Page 11 Paragraph 7 7. Since 2017, there have only been minor changes to Japan's customs procedures. These include the introduction of: tougher penalties for failure to obtain the required import/export permissions; a new principle on cargo reporting; and flexibility to authorized economic operators to lodge their import/export declarations at any customs office, not just the one where their imports/exports are stored.

Question 2 Please elaborate the mechanism for penalties imposition for importers or exporters who fail to meet the requirements.

RESPONSE In recent years, gold smuggling aimed at evasion of import consumption tax has sharply increased. This indicates that the former penalties for unauthorized importation were not adequately effective in preventing gold smuggling. Therefore, to enhance the effectiveness of preventing gold smuggling, the amount of the fines for unauthorized importation was raised.

Question 3 Please explain the new principle that is underlying the reporting of a cargo.

RESPONSE The "new principle on cargo reporting" mentioned here is that the electronic reporting of advance information on air cargo through the computer system called NACCS became mandatory.

Page 12 Paragraph 13 13. Concerning SPS, the Food Sanitation Act was amended in order to reflect changing dietary patterns and the environment surrounding food in Japan, as well as to increase hygiene controls; with respect to imports, control processes applied to the competent authorities in the country of export have been strengthened. The Agricultural Chemicals Control Act was also amended, with a view to improving pesticide safety and contribute to more efficient agriculture. Japan sets some standards on food additives and maximum residue limits (MRLs) that are different from Codex standards and MRLs; these are apparently based on scientific evidence. Over the review period, Japan expanded the scope of animal quarantine for raw milk to also include milk products.

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Question 4 Please elaborate control procedure for imported products in the amendment to the food sanitation act and whether there are similar provisions or regulations for domestic products.

RESPONSE Please see the paragraph 3.128 of WT/TPR/S/397 regarding the amendment to the food sanitation act. These requirements related to imported food are also required of domestic products.

Question 5 Please elaborate further on the process of MRLs setting that are different from Codex but still within the limits of Codex and what is the scientific evidence used to apply these different MRLs?

RESPONSE Japan takes into account the Codex standards whenever reviewing MRLs for agricultural chemicals, in accordance with Article 3.1 of the WTO SPS Agreement. Considering the exposure assessment using the data of food intakes for both short and long periods, Japan, when necessary, sets food standards different from Codex standards based on scientific evidence such as the result of properly implemented residue trials. Japan's MRLs setting may be higher or lower than Codex standards.

Question 6 Please explain the policy on imported products from countries which are indicated with high risk disease status i.e. corona virus, ebola virus, salmonella bacteria, swine fever, avian influenza.

RESPONSE In terms of animal health based on Act on Domestic Animal Infectious Diseases Control, Japan prohibits import of the designated animal products from countries and regions where Japan does not recognize as free from the certain domestic animal diseases considered as especially virulent. More details are available at; http://www.maff.go.jp/aqs/english/news/im_prohibit.html

Question 7 What is the procedure for implementing risk analysis in your food safety policy?

RESPONSE The information of food safety regulatory framework is available following website of the Ministry of Health, Labour and Welfare (MHLW) and the Food Safety Commission of Japan (FSCJ). https://www.mhlw.go.jp/content/000535178.pdf. http://www.fsc.go.jp/english/what_we_do.html. http://www.fsc.go.jp/english/index.data/Broucher2018.pdf.

Page 80-81 Paragraph 3.90 3.90. Subsidies are available for the purchase of clean energy vehicles sold by car makers, and for building hydrogen fueling stations.97 The subsidy to promote clean energy vehicle purchases applies to the purchase of electric battery vehicles, plug-in hybrid electric vehicles, fuel-cell energy vehicles, and clean diesel vehicles (Table 3.13). The subsidy amount is calculated based on the grade of the clean energy vehicle, and is paid within the limits set per vehicle grade (it is not paid if the calculated amount is under JPY 15,000).

Question 8 Please explain the implementation of subsidies for the purchase of clean energy vehicles, especially for industries that use these subsidies

RESPONSE Japan set out the goal for making the ratio of next-generation vehicles among new sales 50 – 70% in 2030. To this end, Japan has been implementing following purchase support programs. These subsidies are not for a specific industry, but subsidies to support users who purchase next-generation vehicles. - BEVs (Battery Electric Vehicles): up to 400,000 JPY (*3,719 USD) - PHEVs (Plug-in Hybrid Electric Vehicles): up to 200,000 JPY (*1,859 USD) - FCEVs (Fuel Cell Electric Vehicles): up to 2,250,000 JPY (*20,922 USD) WT/TPR/M/397/Add.1

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*exchange rate: as of 4 March 2020

Question 9 Is there any contribution to increase in exports as the result of these subsidies mentioned?

RESPONSE These purchase subsidies are to promote the spread of next-generation vehicles in Japan, and do not support exports.

Page 82 Paragraph 3.104 3.104. In 2017, the Law Concerning Standardization of Agricultural and Forestry Products was amended, and was renamed the Act on Japanese Agricultural Standards. The overall aim of the amendments was to expand a standardization framework for contributing to the sound development of industries related to agriculture, forestry and fishery, and to help protect the interests of general consumers.

Question 10 Could you please explain in detail about your palm oil regulation?

RESPONSE Japan does not have national regulations specific to palm oil.

Question 11 Please explain the prospect of Indonesian Sustainable Palm Oil (ISPO) standard's acceptance in Japan.

RESPONSE Because Japan does not have national regulation on palm oil, Japan cannot make have any explanations on the prospect of ISPO's acceptance in Japan in relation with the Paragraph 3.104.

Page 104 Paragraph 3.170 3.170. Japan maintains a government procurement policy to promote environmental protection. The relevant legislation includes the Act on Promotion of Procurement of Eco-Friendly Goods and Services by the State and Other Entities (Act No.100 of 2000), the Act on Promoting Green Procurement, and the Act on Promotion of Contracts of the State and Other Entities, Which Show Consideration for Reduction of Emissions of Greenhouse Gases, etc. (Act No. 56 of 2007, "Green Contract Act").

Question 12 In June 2019, the Tokyo Metropolitan Government (TMG) has issued a revision of the Green Procurement Guide that every procurement of goods for paper and other products containing wood elements must have been verified by the Forest Stewardship Council (FSC). Has this policy revision been consulted with related trading partners?

RESPONSE Regarding consideration for procurement standards at the Tokyo Metropolitan Government (TMG), in order to further promote environmentally friendly procurement, TMG conducts market surveys including hearings from manufacturers and retailers, but the final decision of TMG is not necessarily dependent upon the consultation of individual firms and TMG's partners in international trade. TMG wishes to emphasize that TMG's decisions do not contradict any international treaties or Japanese national laws, and are aligned with and contribute to the SDGs, the Aichi Biodiversity Targets, and the goals of international society.

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MEXICO

I. INFORME DE LA SECRETARÍA (WT/TPR/S/397)

3. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.1. Medidas que afectan directamente a las importaciones 3.1.4. Aranceles 3.1.4.1 Arancel NMF aplicado

(Pág. 61) 3.21. El Arancel del Japón, que desde 2017 se basa en el SA de 2017, contiene 110 líneas arancelarias más que el basado en el SA de 2012. Establece tres clases diferentes de tipos: los tipos legales (que comprenden tipos generales y tipos temporales); los tipos consolidados en la OMC; y los tipos preferenciales (aplicables en el marco del SGP y de ACR). En el caso de los tipos legales, se aplica normalmente el tipo "temporal", que se revisa anualmente, en lugar del tipo general, más elevado; a los Miembros de la OMC se les aplica en régimen NMF el tipo más bajo entre el legal y el consolidado en la OMC, salvo cuando se aplican los tipos preferenciales. Cuando el tipo temporal, general o preferencial es superior al tipo consolidado en la OMC, se aplica este último a los Miembros de la Organización. Según indican las autoridades, los tipos generales se establecen con una perspectiva a largo plazo, atendiendo, entre otras cosas, a la situación de las ramas de producción nacionales. Los tipos temporales solo son aplicables durante un período determinado y sirven para modificar los tipos generales con el fin de cumplir objetivos de política o por otros motivos.

Question 1 ¿Puede Japón explicar más a detalle el funcionamiento de los tipos arancelarios legales (generales y temporales)?

RESPONSE Please refer to the following URL: https://www.customs.go.jp/english/c-answer_e/imtsukan/1105_e.htm.

3. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.1. Medidas que afectan directamente a las importaciones 3.1.4. Aranceles 3.1.4.5 Régimen de aranceles de retorsión

(Pág. 70) 3.36. En virtud del artículo 6 de la Ley Arancelaria, el Japón aplica un régimen de aranceles de retorsión en cuyo marco puede imponer aranceles adicionales en las siguientes situaciones: i) cuando es necesario aplicar impuestos para defender los intereses del Japón y cumplir el objetivo de un Acuerdo de la OMC; o ii) cuando el trato dispensado por una o varias Partes a los buques, las aeronaves y las cargas procedentes del Japón, o en tránsito por el país, es discriminatorio o desfavorable. Las autoridades han señalado que el Japón no impone actualmente aranceles de este tipo.

Question 2 ¿Puede Japón explicar en qué situaciones ha aplicado una medida de este tipo? ¿Esta medida también aplica a los países con los que Japón tiene un tratado de libre comercio vigente?

RESPONSE Please refer to 3.1.4.5 and footnote 33 in the Trade Policy Review Report by the secretariat. As the footnote states, the most recent occasion when Japan applied a retaliatory tariff was with respect to certain goods originating in the United States in relation to the Byrd Amendment. A retaliatory tariff has not been applied since September 2014, while Japan notified the WTO that it retains the right to impose this tariff. Temporary Tariff Measures Act maintains a retaliatory tariff system based on Economic Partnership Agreement. Under Article 7-10 of the Act, the Government of Japan has the authority to impose a retaliatory tariff, pursuant to the relevant articles of Economic Partnership Agreement, against the disputing country. However, no retaliatory tariff has been applied based on this Article.

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3. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.1. Medidas que afectan directamente a las importaciones 3.1.7. Medidas antidumping, compensatorias y de salvaguardia 3.1.7.1. Medidas antidumping

(Págs. 76-77) 3.50. Las investigaciones antidumping pueden iniciarse cuando el Gobierno lo considere necesario, cuando una rama de producción nacional formule una solicitud de investigación al Ministro de Hacienda o cuando existan pruebas suficientes. El Ministro de Hacienda da a conocer la decisión mediante la publicación de un aviso público en la Gaceta Oficial. Las investigaciones están a cargo de un equipo integrado por funcionarios de la Oficina de Asuntos relacionados con los Recursos Comerciales del Ministerio de Hacienda, la Oficina de Investigaciones sobre Recursos Comerciales del METI y el ministerio con competencias sobre la rama de producción de que se trate. La decisión definitiva de imponer un derecho antidumping se dicta como Orden del Consejo de Ministros. No podrán aplicarse medidas provisionales antes de transcurridos 60 días desde la fecha de iniciación de la investigación. En principio, las medidas provisionales se aplican durante un máximo de cuatro meses, aunque el plazo puede prorrogarse a petición de exportadores que representen un porcentaje significativo del comercio de que se trate. Los exportadores pueden comprometerse a revisar los precios o a poner fin a las exportaciones para eliminar el efecto perjudicial que el dumping causa a la rama de producción nacional. Los derechos antidumping pueden imponerse por un período no superior a cinco años, prorrogable posteriormente previo examen. Cada una de las prórrogas no excederá de cinco años.

Question 3 Japón menciona tres formas para iniciar investigaciones antidumping. La tercera de ellas se denomina "cuando existan pruebas suficientes". ¿Podría Japón confirmar si esa forma de iniciación es distinta de la iniciación a solicitud de parte y de la iniciación ex– officio? En caso de que así sea, ¿significa que en las otras dos formas de iniciación ("cuando el Gobierno lo considere necesario o cuando una rama de producción nacional formule una solicitud") no se requiere que existan pruebas suficientes? De igual forma, ¿en qué consiste esa iniciación "cuando existan pruebas suficientes"? ¿No hay una solicitud de la rama de producción nacional y tampoco se inicia ex–officio por el Gobierno? Si es así, ¿entonces cómo funciona esa modalidad?

RESPONSE To be precise, anti-dumping investigations may be initiated by (i) application from domestic industries or (ii) official authority (ex officio), when the government of Japan considers it necessary. Enough evidence is required in both cases. Please refer to the provisional translation of paragraphs 4 and 5 of Article 8 of Customs Tariff Law (G/ADP/N/1/JPN/2). So far, no ex officio investigation has been initiated.

3. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.1. Medidas que afectan directamente a las importaciones 3.1.7. Medidas antidumping, compensatorias y de salvaguardia 3.1.7.2. Medidas compensatorias

(Pág. 78) 3.53. Tal como se indicó en el examen anterior, según lo dispuesto en la Ley Arancelaria, las investigaciones pueden iniciarse cuando el Gobierno lo considere necesario, cuando la rama de producción nacional formule una solicitud o cuando haya pruebas suficientes de la importación de productos subvencionados y de la existencia de daño importante causado por tal importación a la rama de producción nacional, entre otras cosas. El Ministerio de Hacienda da a conocer la decisión de iniciar una investigación mediante la publicación de un aviso público en la Gaceta Oficial. La decisión definitiva de imponer un derecho compensatorio debe adoptarse en el plazo aproximado de un año. Los derechos compensatorios pueden imponerse por un período máximo de cinco años, y las prórrogas no podrán exceder de cinco años.

(Pág. 78) Pie de página 55: Como se señaló en el informe de la Secretaría sobre el anterior examen del Japón, el Ministro de Hacienda, el ministro con competencia sobre la rama de producción de que se trate y el Ministro de Economía, Comercio e Industria deben adoptar conjuntamente la decisión de iniciar la investigación.

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Question 4 Japón manifiesta que para iniciar una investigación debe ser decisión conjunta del Ministro de Hacienda, del ministro competente de la rama de producción y del Ministro de Economía. Al respecto, ¿podría Japón indicar si la decisión debe tomarse de forma unánime o por mayoría? En el segundo escenario, si la decisión es negativa, ¿existe la posibilidad de reconsiderarla?, de ser así ¿bajo qué circunstancias?

RESPONSE The investigation is initiated upon the unanimous agreement of the Ministers concerned.

3. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.3. Medidas que afectan directamente a la producción y al comercio 3.3.4 Política de competencia y controles de precios 3.3.4.1 Política de competencia

(Págs. 104-105) 3.146. Algunas actividades o prácticas empresariales permanecen fuera del ámbito de aplicación de la Ley Antimonopolio. La competencia en esos ámbitos puede regirse por otros instrumentos legislativos y estar sujeta a la supervisión de distintas instituciones (cuadro 3.16). No se ha introducido ninguna nueva exención desde 2017. Para garantizar la transmisión fluida y adecuada del impuesto sobre el consumo cuando se incremente el tipo de impuesto, en junio de 2013 se aprobó y promulgó la Ley de Medidas Especiales para Corregir las Prácticas que Impiden la Transmisión del Impuesto sobre el Consumo, entre otras, con el objetivo de Garantizar una Transmisión Fluida y Adecuada del Impuesto sobre el Consumo. La Ley, que entró en vigor el 1o de octubre de 2013, debía permanecer vigente hasta el 31 de marzo de 2017. En noviembre de 2016 fue modificada para prorrogar su vigencia hasta el 31 de marzo de 2021, debido a que se aplazó el aumento programado del tipo impositivo (secciones 1.1 y 1.2). La Ley prohíbe, entre otras, las siguientes conductas: eludir, mediante una reducción o subvaloración de los precios, el traslado de los impuestos sobre el consumo; y solicitar que, a cambio de aceptar el traslado de los impuestos sobre el consumo, se compren productos, utilicen servicios o confieran ventajas económicas. Y excluye del ámbito de aplicación de la Ley Antimonopolio a los cárteles de transmisión y los cárteles de representación entre empresas o asociaciones mercantiles si se cumplen los siguientes requisitos: presentación de una notificación previa a la JFTC; en lo que concierne a los cárteles de transmisión, que al menos dos terceras partes de las empresas participantes sean pequeñas y medianas empresas; las "decisiones relativas a un acuerdo sobre los precios" quedan excluidas de la exención; y, en lo que concierne a los cárteles de representación, solo está exenta la práctica concertada en relación con las decisiones sobre métodos de representación que afecten a los impuestos sobre el consumo.

Question 5 Dado este escenario, ¿existen casos en los que se requiera una cooperación o coordinación interinstitucional para el manejo de asuntos de competencia económica? De ser así, ¿Cómo y bajo qué términos se lleva a cabo esta cooperación y coordinación entre reguladores/autoridades?

RESPONSE A relevant minister is required to consult with the Japan Fair Trade Commission (JFTC), when he or she intends to grant approval for an agreement to be exempted from antitrust regulations under many of the legislations in Table 3.16. The JFTC expresses opinions mainly on whether the agreement would unfairly impair the benefits of users by eliminating competition in the consultation with the relevant minister.

(Pág. 107) 3.150. Para asegurar la observancia, el Japón cuenta con un procedimiento penal y una vía administrativa. La JFTC tiene la facultad exclusiva para dictar órdenes administrativas. Por lo que respecta a las sanciones penales, la JFTC solo tiene competencia para presentar denuncias penales ante el Ministerio Fiscal. Puede iniciarse una investigación sobre posibles infracciones de la Ley Antimonopolio cuando se recibe una denuncia al respecto del público en general, cuando WT/TPR/M/397/Add.1

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Question 6 ¿La exclusividad en facultades del JFTC limita de alguna manera el actuar de la autoridad? ¿Cómo es el proceso de coordinación con las autoridades penales para el seguimiento a denuncias? ¿Qué facultades tiene la JFTC y cómo realiza el seguimiento a los procedimientos penales?

RESPONSE (1) Under Article 96 of the Antimonopoly Act, a crime under Articles 89 to 91 of the Act can be prosecuted only after an accusation is filed by the JFTC. (2) The JFTC has set up the place to exchange opinions and information with the prosecutor's office before it files an accusation. (3) While the JFTC has the authority to file an accusation to the prosecutor's office, the prosecutor's office performs criminal proceedings after the JFTC's accusation.

(Pág. 107) 3.151. El Japón tiene un programa de indulgencia, establecido en 2005, en virtud del cual, desde 2009, hasta cinco infractores, o al menos dos pertenecientes a un mismo grupo de empresas, pueden presentar conjuntamente una solicitud de reducción del recargo o de inmunidad. En marzo de 2019 se presentó a la Dieta un proyecto de ley de modificación de la Ley Antimonopolio para reformar el programa de indulgencia. La modificación permite a la JFTC reducir la cuantía de los recargos cuando las empresas presentan información que contribuye al establecimiento de los hechos del caso. También suprime el actual límite del número de solicitantes de indulgencia. El proyecto de ley fue aprobado y promulgado en junio de 2019. La modificación entrará en vigor a más tardar el 25 de diciembre de 2020, en la fecha que se especifique mediante Orden del Consejo de Ministros.

Question 7 ¿Se cuentan con criterios para evaluar la calidad y utilidad de la información brindada por las empresas? ¿Dichos criterios son definitorios para otorgar la reducción de los recargos?

RESPONSE The JFTC shall establish the guidelines for the new leniency programme by the effective date of the amendment. The guidelines will show what kind of information the JFTC evaluates (e.g. the goods or services subject to cartels or bid-rigging, rule to decide the winner of bid, participants, the period of implementation of bid-rigging, implementation status, etc.), that the JFTC determines the reduction rates according to the content of the information, and so on.

Question 8 En el caso de los solicitantes de indulgencia, ¿Cuál es el nuevo límite de solicitantes? ¿El nuevo límite aplica solamente para solicitudes conjuntas?

RESPONSE The amendment act of the Antimonopoly Act, which was promulgated in June 2019, has not introduced any new limitations on leniency applicants. (The amendment act abolishes the current limitation on the number of leniency applicants.)

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3. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.3. Medidas que afectan directamente a la producción y al comercio 3.3.7. Derechos de propiedad intelectual 3.3.7.1. Características y estrategia de propiedad intelectual

(Pág. 122) 3.180. La Oficina Central de Estrategia de la Propiedad Intelectual publica cada año un programa estratégico para hacer realidad la Visión Estratégica de la Propiedad Intelectual. Define la estrategia de propiedad intelectual anual del Gobierno, en la que se incluyen todos los organismos y ministerios pertinentes. La Visión Estratégica de la Propiedad Intelectual de 2018 da prioridad a: i) el desarrollo de recursos humanos y empresas para satisfacer las necesidades futuras; ii) el fomento de actividades ambiciosas y creativas; y iii) el diseño de estructuras en nuevos campos. Esas prioridades clave incluyen: i) acelerar la innovación abierta; ii) apoyar a las empresas, las pymes y las empresas de capital de riesgo regionales; iii) crear un ecosistema de creación de contenidos sostenible; iv) reforzar la estrategia de propiedad intelectual con respecto a los datos, la inteligencia artificial y otros nuevos activos relacionados con los datos; y v) promover la innovación y la imagen de marca mediante la gestión del diseño.

Question 9 ¿Podría Japón compartirnos a qué se refiere con innovación abierta y contenidos sostenible?

RESPONSE Regarding the terms in your question, please kindly refer to the explanations below in the documents published by Intellectual Property Strategy Headquarters. (1) Open innovation; "(Growing Open Innovation and Challenges): In order to realize the complex innovation model mentioned above, open innovation which promotes innovation through cooperation among companies instead of a single company or with the society including broader users has become essential. This trend is expected to continue in the future." Intellectual Property Strategy Vision - Towards a "Value Design Society"-, p.4 https://www.kantei.go.jp/jp/singi/titeki2/kettei/chizai_vision_e.pdf. (2) Sustainable content creation ecosystem; "In order for high-quality content to continue to be produced in Japan, it is necessary to build a creative ecosystem that leads to the expansion of the overall content market by enabling creators to earn appropriate evaluations and revenue through the use of the content, and then to engage in new creative activities based on it." Intellectual Property Promotion Plan 2019, p.40 https://www.kantei.go.jp/jp/singi/titeki2/kettei/chizaikeikaku20190808_e.pdf.

(Pág. 122) 3.181. Existe un vínculo claro entre el Programa Estratégico sobre Propiedad Intelectual de 2018 y las modificaciones introducidas en las leyes sobre propiedad intelectual del Japón durante el período examinado, entre ellas la ampliación del alcance y la amplitud de la protección de dibujos y modelos, las nuevas protecciones de datos, las nuevas restricciones flexibles de los derechos de autor que responden al auge de la digitalización y la creación de redes, y las modificaciones de los procedimientos contenciosos y el cálculo de los daños a fin de facilitar la observancia de los derechos de propiedad intelectual. En el régimen de propiedad intelectual del Japón también inciden los compromisos internacionales, en especial la entrada en vigor del CPTPP y el AAE entre la UE y el Japón. Esos acuerdos entrañaron la introducción de algunas modificaciones significativas, como la ampliación del plazo de protección del derecho de autor de 50 a 70 años y la concesión de un alto nivel de protección a más de 200 indicaciones geográficas europeas.

Question 10 ¿Podría Japón explicarnos cuáles son las nuevas protecciones de datos introducidas en las leyes de propiedad intelectual? ¿Podría compartirnos cuáles son las nuevas restricciones flexibles de los derechos de autor?

RESPONSE 1. In order to develop an environment where data can be exchanged with confidence, the UCPA defines "protected data" as data that satisfies the requirements of "limited provision", "electromagnetic management" and "significant accumulation". Also, the UCPA defines unauthorized acquisition, use and disclosure of "protected data" as unfair competition and provides civil measures such as claims for injunctions and claims for compensation for loss or damages against unauthorized acquisition, use, disclosure, etc. of protected data. WT/TPR/M/397/Add.1

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The definition of "protected data" is as follows: Article 2(7) of the UCPA; The term "protected data" as used in this Act means technical or business information that is accumulated in a reasonable amount by electronic or magnetic means (meaning an electronic form, magnetic form, or any other form that is impossible to perceive through the human senses alone; the same applies in the following paragraph) as information provided to specified persons on a regular basis and that is managed (excluding information that is kept secret). 2. In order to respond flexibly to the change of society brought by the development of information and communication technologies, Japan introduced flexible legislation in regard to limitation of copyrights for a certain use of works which does not adversely affect the copyright market.

3. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.3. Medidas que afectan directamente a la producción y al comercio 3.3.7. Derechos de propiedad intelectual 3.3.7.9. Indicaciones geográficas

(Pág. 136) 3.232. La Ley de Protección de determinados Artículos y Productos Alimenticios procedentes de la Agricultura, la Silvicultura y la Pesca de 2014 introdujo un sistema sui generis de protección de las indicaciones geográficas de los productos alimenticios, las bebidas y los productos agropecuarios y marinos. Se prohíbe el uso directo o indirecto de una indicación geográfica en un producto que no sea originario, y se aplica el nivel de protección prescrito en el artículo 23 del Acuerdo sobre los ADPIC a todas las indicaciones geográficas registradas (no solo a los vinos y las bebidas espirituosas). La Ley se modificó en 2016 y 2018 para armonizarla con los compromisos internacionales contraídos por el Japón.

Question 11 ¿Podría Japón explicar el funcionamiento del sistema sui generis mencionado en el párrafo?

RESPONSE The system provides TRIPS Article 23 level protection to products of agriculture, forestry and fisheries and foodstuffs. Administrative actions are taken by the MAFF against GI infringements. As of February 2020, 88 GI products are registered, including one GI product of Italy.

3. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.3. Medidas que afectan directamente a la producción y al comercio 3.3.7. Derechos de propiedad intelectual 3.3.7.11. Derecho de autor

(Pág. 137) 3.239. En la Ley de Derecho de Autor se enumera una lista exclusiva de circunstancias en las que se permite el uso no autorizado (disposiciones en materia de restricciones de los derechos). Para dar respuesta al fenómeno de la digitalización y de la creación de redes, se han introducido nuevas limitaciones flexibles. La finalidad de las disposiciones es promover la innovación en el ámbito de la tecnología de la información y el desarrollo de tecnologías asociadas a la inteligencia artificial permitiendo, entre otras cosas, determinados usos no autorizados que no afecten, o que afecten solo levemente, a los intereses del titular del derecho de autor, así como fomentar servicios u otras funciones que utilicen macrodatos. En concreto, las modificaciones introducidas permiten la libre utilización de una obra protegida por el derecho de autor cuando sea necesario para i) probar tecnología que permita la utilización de la obra protegida por el derecho de autor; ii) analizar información; o iii) procesar información utilizando una terminal informática sin intervención humana. También se permite el uso no autorizado en caso de que sea necesario para asegurar la utilización sin trabas o eficiente de una obra protegida por el derecho de autor en un ordenador. El uso limitado de una obra en el marco de un proceso de tratamiento informático de información y el suministro de los resultados correspondientes tampoco requieren autorización.

Question 12 Podría Japón explicar: ¿Cuál sería una afectación leve a los derechos de autor? ¿Puede el titular de dicho derecho oponerse a esa limitación?

RESPONSE The exploitation of copyright works subject to a limitation under Article 47-5 (1), should be done to the extent considered to be necessary in light of the purpose of the action set forth in the WT/TPR/M/397/Add.1

- 129 - relevant item, e.g. using a computer to search for the location of "information being searched for", furnishing the results of computerized data analysis. Also it should be limited to exploitation that is minor in light of percentage it constitutes of the part of the work that has been provided for exploitation, the volume of the part of that work that has been provided for exploitation, the accuracy of indications made at the time it was provided for exploitation, and other elements. These actions are the exploitation deemed to be the actions which cause minor damages to the right holders' interest. A right holder can take legal countermeasures, either criminal or civil, if one judges the exploitation of the copyrighted work is not the case of limitations of copyright including Article 47-5.

II. INFORME DEL JAPÓN (WT/TPR/G/397)

4. POLÍTICAS INTERNAS DEL JAPÓN 4.4. Política de Competencia

(Pág. 19) 4.7. El 19 de junio de 2019, la Dieta Nacional aprobó en su 198a sesión ordinaria el proyecto de modificación de la Ley Antimonopolio; la Ley modificada fue promulgada el 26 de junio de 2019. El objetivo de la Ley modificada es disuadir eficazmente la "restricción injustificada del comercio", revitalizar la economía y promover los intereses de los consumidores por medio de una competencia leal y libre, reforzando los incentivos para que las empresas cooperen en las investigaciones de la Comisión de Comercio Leal del Japón (JFTC) e imponiendo recargos de cuantía apropiada en función de la naturaleza y alcance de la infracción. La Ley promulgada entrará en vigor antes de que hayan transcurrido un año y seis meses contados desde el 26 de junio de 2019, en la fecha que se especifique por medio de una Orden del Consejo de Ministros.

Question 13 ¿Qué tipo de incentivos fueron reforzados? ¿Cómo y bajo qué términos se da la cooperación entre empresas y la JFTC en investigaciones?

RESPONSE The amendment act of the Antimonopoly Act, which was promulgated in June 2019, has introduced the system which allows the JFTC to reduce the amount of surcharges when enterprises submit information and documents which contribute to the fact-finding of the case. Under the new system, the JFTC will confer and agree with an enterprise about the content of the enterprise's cooperation and the JFTC's reduction of surcharge.

4. POLÍTICAS INTERNAS DEL JAPÓN 4.4. Política de Competencia

(Pág. 19) 4.8. Con arreglo al Acuerdo de Asociación Transpacífico (TPP) y al Tratado Integral y Progresista de Asociación Transpacífico (CPTPP), se introdujo en la Ley Antimonopolio un sistema denominado de "procedimientos de compromiso" que entró en vigor el 30 de diciembre de 2018. Los procedimientos de compromiso permitirán a la JFTC y a los presuntos infractores, una vez iniciada la investigación, comunicarse a lo largo de todo el procedimiento. Se considera que los procedimientos de compromiso facilitarán la pronta resolución de las preocupaciones relacionadas con la competencia y contribuirán a una aplicación eficaz y eficiente de la Ley Antimonopolio, al permitir resolver un mayor número de casos mediante la cooperación entre la JFTC y los presuntos infractores. Para velar por la transparencia y la previsibilidad en la aplicación de las disposiciones legales en materia de procedimientos de compromiso, la JFTC ha establecido normas y políticas, como las Normas relativas a los procedimientos de compromiso de la Comisión de Comercio Leal y las Políticas en materia de procedimientos de compromiso.

Question 14 ¿Bajo qué términos se dará esta cooperación? ¿Se aplicará para todo tipo de investigaciones?

RESPONSE When the JFTC finds it appropriate to apply the Commitment Procedures to the activities leading to suspected violations of the provisions of the Antimonopoly Act, the JFTC may commence the Commitment Procedures by issuing a written notice to the enterprise. Pursuant to the provisions of the Antimonopoly Act, any suspected violation of the Act could be subject to the Commitment Procedures, but, under the "Policies Concerning Commitment WT/TPR/M/397/Add.1

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Procedures" stipulated by the JFTC, the following cases are not subject to the Commitment Procedures due to the need for strict enforcement by finding violation, and for promotion of free and fair competition: (i) Suspected Violations of the provisions of Article 3, Article 6, or Article 8, item (i) or item (ii) of the Antimonopoly Act, such as bid-rigging, price-fixing cartels, quantity-fixing cartels and others, and when such case falls under the provisions of Article 7-2, paragraph (1) of the Antimonopoly Act (including the provisions applied mutatis mutandis under Article 8-3 of the Antimonopoly Act) (ii) Cases in which an enterprise was subject to a Legal Measure pursuant to the same provision as one about the act related to a Suspected Violation (limited to when the Legal Measure has become final and binding) within ten years prior to the date on which the measure listed in Article 47, paragraph (1) of the Antimonopoly Act was taken for the first time regarding the act related to the Suspected Violation (iii)Cases recognized as constituting vicious and serious Suspected Violations which are considered to have widespread influence on people's livings, as a result of substantially restraining competition of a particular field of trade as described in the "JFTC Policies on Criminal Accusation and Compulsory Investigation of Criminal Cases Regarding Antimonopoly Violations' (JFTC, October 7, 2005).

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UNITED KINGDOM

WT/TPR/S/397 – WTO Secretariat Report

2. Trade and Investment Regimes 2.3 Trade Agreements and Arrangements 2.3.2 Regional and preferential agreements 2.3.2.1 Regional trade agreements (RTAs) 2.14, page 41

Japan is aiming for the swift conclusion of Regional Comprehensive Economic Partnership negotiations

Question 1 What is Japan's current view on the prospect of RCEP's completion in 2020?

3. Trade Policies and Practices by Measure 3.3 Measures Directly Affecting Production and Trade 3.3.6 Government procurement Para 3.163, page 99

The Secretariat Report refers to the procurement procedures followed by central Government, local Governments and public corporations.

Question 2 Is In addition to the measures referred to, is procurement also within the scope of the Act on Promotion of Private Finance Initiative.

RESPONSE A Private Finance Initiative project in Japan refers to a "Qualified Project", defined in the Act on Promotion of Private Finance Initiative as "a project (including an urban redevelopment project, a land readjustment project, and another urban development project) involving the provision etc. of Public Facility etc. (which mean construction, production, rehabilitation, maintenance or operation of Public Facility etc, or planning of them, and include provision of services to the citizens), which is carried out more efficiently and effectively by utilizing private finance, management abilities and technical capabilities". In terms of GPA, procurement with regard to a construction project within the scope of the Act on Promotion of Private Finance Initiative as of 30 November 2011 is covered by the agreement (please refer to the note to Annex 6 of Japan in the revised GPA).

Question 3 If so, could Japan add further clarifications on how they view the interaction between public private partnerships and government procurement?

RESPONSE In Japan, the term "public private partnerships" is not defined in laws and regulations and the Private Finance Initiative is implemented as defined in the above response to Question 2 of UK.

Question 4 Please can Japan clarify whether it publishes or has plans to publish a database of all contracts awarded by (a) central government entities, (b) sub-central government entities, (c) other entities?

RESPONSE In terms of GPA covered procurement, the Government of Japan makes public a result of contracts awarded by (a) central government entities and (c) other entities on JETRO's website, but the Government of Japan does not have any plans to publish a database of all the awarded contracts.

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3. Trade Policies and Practices by Measure 3.3 Measures Directly Affecting Production and Trade 3.3.6 Government procurement Para 3.168, page 101 According to the Secretariat Report, Japan maintains policies to promote the participation of SMEs in government procurement. The Secretariat Report also notes that the relevant legislation, specifically, the "Act No.97 on Ensuring the Receipt of Orders from the Government and Other Public Agencies by Small and Medium Sized Enterprise Operators of 1966", remained unchanged during the review period.

Question 5 In the period under review, what proportion of SMEs winning public procurement contracts were foreign SMEs?

RESPONSE The total value of procurement from SMEs is collected annually, but information on foreign SMEs is not collected.

Question 6 Does the Government have programmes in place to encourage Japanese SME participation in procurement opportunities abroad?

RESPONSE The Small and Medium Enterprise Agency has no policy to encourage Japanese SMEs to participate in overseas government procurement. The Ministry of Economy, Trade and Industry (METI) hopes that SMEs with excellent technologies and services and potential for overseas expansion will be able to take on overseas markets and take on overseas expansion in a form that fully reflects their strengths. METI provides meticulous support according to the stage of expansion as follows: (1) At the stage of collecting information with the aim of overseas expansion, METI provides information on available SME support measures on websites, etc. (2) In the specific planning and preparation stages, METI provides marketability research, business plan formulation, and support for product and service development. (3) At the stage of actually expanding into the local area, METI assists with searching for overseas partners, such as agents and buyers, and supports sales channel development at exhibitions and business meetings. (4) At the stage of stabilizing and expanding overseas business, METI works to support local legal and labor issues and other issues in anticipation of establishing local bases.

3. Trade policies and practices by measures 3.3 Measures Directly Affecting Production and Trade 3.3.6 Government procurement Para 3.168, page 101

The Secretariat Report notes that there has been some concern over the apparently low share of foreign companies in public procurement.

Question 7 What does the Government do to ensure procurement is conducted in a non- discriminatory, transparent and open manner?

RESPONSE As a basic policy, the Government of Japan creates and operates legislations and measures related to government procurement fully in line with the principle of non-discrimination, openness and transparency.

Question 8 Please can Japan outline whether they are taking measures to improve the share of foreign companies in Japanese public procurement? And if so, which measures are they taking?

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RESPONSE In terms of covered procurement, the central government announces the annual schedule of its procurement by holding a seminar once a year.

3. Trade policies and practices by measures 3.3 Measures Directly Affecting Production and Trade 3.3.6 Government Procurement Paragraph 3.174, page 105

The Secretariat Report notes that Japan maintains policies to promote the participation of SMEs in government procurement.

Question 9 Please can Japan clarify whether a UK SME would receive the same treatment as a Japanese SME in government procurement by a Japanese government entity?

RESPONSE Foreign suppliers are accorded the same treatment as Japanese suppliers receive with regard to the covered procurement specified in Japan's annexes to Appendix I of GPA. In addition, the Public Utility Law does not treat domestic and foreign SMEs differently.

3. Trade Policies and Practices by Measure 3. 3 Measures Directly Affecting Production and Trade 3.3.7 Intellectual Property Rights 3.3.7.1 Features of IP strategy 3.181, page 107

According to the Secretariat Report, modifications were made to Japan's IP laws during the review period, intended to facilitate the enforcement of IPRs.

Question 10 Does the Government have anything specific in place to support SMEs in accessing effective and affordable justice to enforce intellectual property rights?

RESPONSE The JPO operates the subsidy program to cover two thirds of the cost for legal consultations and litigations needed when SMEs are sued for infringement of IP rights overseas. In addition, the JPO subsidizes the premiums for SMEs enrolling in the overseas IP litigation insurance scheme by paying half of the cost (reduced to 1/3 from the 2nd year onwards, after renewal).

WT/TPR/G/397 – Government Report

2. Trade and Investment Policy 2.4 Other Regional/Bilateral Arrangements 2.4.1 Asia-Pacific Economic Cooperation (APEC) Paragraph 2.17, page 9

The report states that Japan has been taking an initiative to implement APEC projects including competition policy in FTAs/RTAs, services, digital economy and food security.

Question 11 Could Japan provide more information on what further reform(s) it is committed to undertaking to enhance the international competitiveness of its service sector?

RESPONSE Japan has signed and brought into force EPAs, which reduce or eliminate barriers on trade in services, to capture the vitality of the growing market overseas and strengthen the basis of the Japanese economy including the following: (1) Japan-EU EPA The Japan-EU EPA was signed in July 2018 and entered into force in February 2019. Under the Japan-EU EPA, all sectors of trade in services and investments are liberalized in principle, and reserved exceptional measures and areas are enumerated (Negative List). This EPA provides rules, WT/TPR/M/397/Add.1

- 134 - such as telecommunication services and regulatory cooperation on financial regulation, to meet the needs of Japanese businesses in Europe. Rules ensuring security and credibility of e-commerce, such as prohibition of imposing customs duties on electronic transmissions and prohibition of forced disclosure of source codes, are also provided. (2) TPP11 Eleven countries, namely Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Viet Nam, participated in the negotiations, and the TPP Agreement was signed in March 2018. This Agreement will establish rules for the 21st century in a wide range of areas, including tariffs, services, investments, intellectual property, and state-owned enterprises. It will provide Japanese companies with an opportunity to be more active in markets overseas, and will be a major driving force for the economic growth of Japan.

4. Japan's Domestic Policies 4.1 Abenomics Paragraph 4.1, pages 13-14

The report notes the positive impact of the promotion of Abenomics over the past seven years.

Question 12 Could Japan provide more information on recent reform of service sector regulation, such as through legislation, to make Japan's service sector more open to international service providers.

RESPONSE (1) New status of residence for acceptance of work-ready foreigners The Immigration Services Agency has introduced the following 2 new status of residence for acceptance of work-ready foreigners who possess certain expertise and skills in fields where labour shortages exist in Japan (effective in April 2019): - Status of residence of Specified Skilled Worker (i) – Based on the Basic Policy, this status of residence is applicable to foreigners who have successfully completed "Technical Intern Training (ii)" or who pass a qualifying test in 14 fields, many of which are service fields. The initial period of stay will be 1 year, 6 months or 4 months and can be renewed for a maximum of 5 years in total. - Status of residence of Specified Skilled Worker (ii) – This status of residence is applicable to foreigners who pass a higher-level qualifying test in 2 fields at the moment, including construction services. The initial period of stay will be 3 years, 1 year or 6 months and can be renewed without limitation. (2) Amendment to the Telecommunications Business Act Japan's Diet approved an amendment to the Telecommunications Business Act in May 2019 to facilitate fair competition in the mobile communication sector. The amendment prohibits mobile operators from offering discounts for retail communication charges at the time of sale of mobile handsets. It also prohibits conditions which unduly constrain subscribers from cancelling contracts.

Report by Secretariat (WT/TPR/S/397) 2. Trade and Investment Regimes 2.3 Trade Agreements and Arrangements 2.3.2 Regional and preferential agreements 2.3.2.1.2 EU-Japan Economic Partnership Agreement 2.25, page 43

According to the report, the EU-Japan Economic Partnership Agreement (EPA) includes provisions on inter alia, e-commerce; government procurement (Section 3.3.6); competition policy (Section 3.3.4); state-owned enterprises; enterprises granted special rights or privileges and designated monopolies; intellectual property (Section 3.3.7); trade and sustainable development; agricultural cooperation; and SMEs.

The United Kingdom notes that new provisions – which go beyond the GATS baseline – were included for short-term business visitors and investors in the EU-Japan EPA.

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Question 13 Given the difficulties in analysing mode 4 commitments, how does the Government plan to evaluate the impact of these provisions?

RESPONSE The section for entry and temporary stay of natural persons in the Japan-EU EPA provides for the grant of entry and temporary stay to natural persons for business purposes including short-term business visitors and investors, the requirements for granting entry and temporary stay, and the improvement of transparency in the procedures. Such provisions are expected to facilitate the immigration procedures for natural persons for business purposes from both Japan and EU countries, as well as to improve legal stability for the procedures. WT/TPR/M/397/Add.1

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UKRAINE

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT (WT/TPR/S/397) 1 ECONOMIC ENVIRONMENT 1.2 Recent Economic Developments 1.2.4 Structural policies 1.2.4.1 Tax reform Page 22 (Para 1.12) According to the Report the Diet approved legislation for the Government's tax reform proposals for 2019 on 27 March 2019 and one of the main measures affecting corporate and international taxation was tax treatment of virtual currencies.

Question 1 Would Japan kindly inform more on the tax reform, implemented with respect to tax treatment of virtual currencies, procedure of its taxation and legal status?

RESPONSE The tax reform related to virtual currency is below. 1. Improvement of compliance corresponding to divergence of economic transactions. 2. In order to ensure the appropriate taxation amidst the spread of digital economy and globalization of economic transactions including virtual currency transactions, provide statutory provisions on obtaining taxpayer's information from third party, which have been made in practice. 3. At the same time, provide National Tax Agency (NTA) with the authority to make inquiries into third parties about identity unknown taxpayer's information, in circumstances where it is particularly necessary to do so in order to identify taxpayers with high degree of non-compliance.

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.1 Measures Directly Affecting Imports 3.1.1 Customs procedures, valuation, and requirements Page 52 (Para 3.2) The Report notes, that over the review period, amendments to the Customs Act in 2017 and 2018, inter alia, integrated strengthened penalties for failure to obtain export and import permissions when required.

Question 2 Could Japan, please, elaborate on mentioned penalties and explain the policy rationale behind the necessity of its strengthening?

Page 54 (Para 3.11) The Report mentions advance rulings, that may be requested by importers or other interested parties (on tariff classification, customs valuation, the origin of goods, and duty relief/exemption for goods due for import), and are binding on Customs.

Question 3 Ukraine would appreciate if Japan could inform whether any information on advance rulings is publicly available and, if so, provide respective link.

RESPONSE Information on advance rulings are publicly available on the Customs website at: 1. Introduction to advance rulings (Classification) https://www.customs.go.jp/english/c-answer_e/imtsukan/1202_e.htm. (Valuation) https://www.customs.go.jp/english/c-answer_e/imtsukan/1402_e.htm. (Origin) https://www.customs.go.jp/english/c-answer_e/imtsukan/1522_e.htm. (Duty relief/exemption) https://www.customs.go.jp/tetsuzuki/c-answer/imtsukan/1607_jr.htm. (Japanese language only) 2. Advance rulings (Japanese language only) WT/TPR/M/397/Add.1

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(Classification) https://www.customs.go.jp/searchsv/jitsv001.jsp. (Valuation) https://www.customs.go.jp/zeikan/seido/kanzeihyouka/kaitoujirei.htm. (Origin) https://www.customs.go.jp/searchao/jaosv001.jsp. (Duty relief/exemption) https://www.customs.go.jp/zeikan/seido/genmenzei/kaitoujirei.htm.

Page 54 (Para 3.13) According to the Report Japan has signed agreements and arrangements for the exchange of customs information with 35 countries and regions.

Question 4 Would Japan, please, clarify how the requested information is protected?

RESPONSE Japan protects the requested information in accordance with the law and regulations, such as the National Public Service Act and the Act on the Protection of Personal Information Held by Administrative Organs, which set out the obligations of government officials with respect to the handling of information obtained in the course of their duties. The obligations include: preservation of the secrecy of obtained information, restriction on the use and sharing of information within the specified purposes, and implementation of security measures for protecting personal information.

3.1.4 Tariffs Page 55 (paragraphs 3.18-3.19) The Report states, that the tariff remains one of the main trade policy instruments and a minor source of tax revenue (in FY2019, customs duties amounted to 1.65% of central government tax revenue). The Customs Tariff Act provides for, inter alia, customs duty reductions and exemptions. The Temporary Tariff Measures Act provides for temporary exemptions to the Customs Act and the Customs Tariff Act to allow for customs duty adjustments, if needed, for the sound development of the national economy.

Question 5 Would Japan kindly elucidate what authorities are responsible for initiation of customs duty reductions and exemptions for the purposes of developing domestic industries, promoting trade and science, meeting requirements associated with social welfare?

RESPONSE Requests for tariff revision from parties located in Japan (as well as from foreign interested parties residing in Japan) are received by the government ministry or organization that holds jurisdiction over the request items involved. Tariff-revision requests from foreign governments are received by the Ministry of Foreign Affairs. Requests received from foreign governments by the Ministry of Foreign Affairs are sent to the relevant authorities that hold jurisdiction over the request items (although requests from foreign governments may also be made directly to the government ministry or organization that holds jurisdiction over the request items).

Question 6 What is the established mechanism for collaboration and communication with all stakeholders during this process?

RESPONSE Please refer to the following URL: https://www.customs.go.jp/english/c- answer_e/sonota/9702_e.htm.

Question 7 Could Japan, please, share its opinion concerning efficiency of Japan's systems for tariff reductions and exemptions and its contribution to the development of the national economy?

RESPONSE In general, tariffs have two major functions: (1) to protect domestic industries and (2) to serve as a source of financial revenue. Nowadays, they play a more important role protecting domestic industries than serving as a source of revenue in Japan. Japan believes that it is necessary to consider the points of view of industries, consumers, etc when changing tariff rates.

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3.1.4.1 MFN applied tariff Pages 55-56 (Para 3.22) Under the Report, "The structure of Japan's MFN applied tariff remains complex, with a total of 272 tariff rates (same as in FY2016)." According to data provided in Table 3.1, Japan's overall simple average applied MFN tariff rate rose slightly to 6.3% in FY2019 (up from 6.1% in FY2016), mainly due to higher AVEs and, to a much lesser extent, to a HS nomenclature change. The simple average tariff rate for agricultural products (WTO definition) is 17.9% compared with 3.5% for non-agricultural products.

Question 8 Could Japan kindly explain the grounds for increase of its simple average applied MFN tariff rates and application of higher peak rates (AVEs) during the period under review?

Question 9 What are Japan's plans concerning possible changes in its tariff policy, in particular with respect to simplification of tariff structure, reduction of tariff peaks and trade liberalization of its agriculture sector?

RESPONSE The changes of tariff rates are determined comprehensively based on a variety of points, including import demand and the status of ongoing FTAs. As for Japan's plans concerning possible changes to its tariff policy, Japan cannot announce the changes in advance, which would otherwise prejudge those points. Please refer to the following URL for the schedule of annual tariff revision process, https://www.customs.go.jp/english/c-answer_e/sonota/9702_e.htm.

3.2 Measures Directly Affecting Exports 3.2.5 Export finance, insurance, and guarantees Page 74 (Para 3.76) The Report points out that the Nippon Export and Investment Insurance (NEXI), one of Japan's official export credit agencies, was transformed from an incorporated administrative agency into a special stock company wholly owned by the Government of Japan, in order to strengthen NEXI's ties with the Government, to improve business management, and to better reflect the intentions of government policies in NEXI's business.

Question 10 Would Japan, please, inform, how transformation of the NEXI has influenced achievement of established policy objectives?

RESPONSE Even after the transformation, achievement of established policy objectives is one of NEXI's important management policies.

Question 11 Development of which industries was the most successful due to support of the NEXI?

RESPONSE NEXI has provided insurance especially in the following sectors: power generation; oil and gas; and infrastructure, such as seawater desalination, port rehabilitation, aircraft, ship and mining equipment.

3.3 Measures Directly Affecting Production and Trade 3.3.4 Competition policy and price controls 3.3.4.2 Price controls Pages 94-95 (Para 3.154) Under the Report, Japan maintains a price survey scheme on certain pharmaceutical products, based on a drug price standard. The actual purchase prices paid by medical institutions and pharmacies (prevailing market price) are surveyed (drug price survey), and the prices specified in the drug price WT/TPR/M/397/Add.1

- 139 - standard are revised periodically based on the results of the survey. All medicines covered by the National Health Insurance (approximately 20,000) are subject to the price survey. To control healthcare costs, the Government has been revising drug prices biennially, based on the actual purchasing price, leading to annual price cuts of 5% to 7% since 2017. The Report also shortly mentions the latest pricing reform in this field.

Question 12 Could Japan shortly describe its drug price survey process with indication of responsible authorities, methods and instruments used for monitoring of actual purchasing prices?

RESPONSE In order to obtain base data (market price, etc.) for the revision of the National Health Insurance Drug Price Standard, all drugs included in the Standard are surveyed by the Ministry of Health , Labour and Welfare for their selling price when sold by sellers of drugs to insurance-covered medical institutions and pharmacies, as well as for their purchasing price at medical institutions selected based on certain sampling rates.

Question 13 What are the tasks and expected effects of mentioned pricing reform?

RESPONSE Drugs prices would be adjusted to actual purchase prices through the revision, leading to reduction in healthcare cost.

4 TRADE POLICIES BY SECTOR 4.4 Services 4.4.1 Financial services Pages 164 - 169 The Report shows main economic indicators of the financial services sector of Japan and describes the regulatory changes in legal framework for banking and other financial services activities that have occurred during the period under review.

Question 14 Would Japan, please, describe the procedure for assessment of the ownership structure, business reputation and financial condition of a bank by the Financial Services Agency (FSA), in particular requirements to acquisition of qualifying holding in the regulated entities, indicators of non- transparency of the ownership structure?

RESPONSE When an application for the bank license under the Banking Act is made, FSA requires the applicant to submit statements which include applicant's financial conditions, earnings prospect, and detailed information about shareholders (regardless of the amount of voting rights). In this way, FSA assesses if the applicant is able to carry out the business of a Bank in sound and appropriate manner. For your reference, please look at para 2 of article 4-2 of the Act and para 3 of article 1-8 of the Ordinance for Enforcement of the Banking Act for further information. Japan assumes that the "qualifying holding" in the question above represents thresholds of shareholding of a bank. When an applicant wants to have voting rights of a bank, FSA requires the applicant, in accordance with the Banking Act, to submit a notification or obtain approval from the authority if the shareholding exceeds the following thresholds: (1) more than 5％ voting rights: need notification to FSA For your reference, please look at para 1 of article 34-2-47 of the Ordinance for further information. (2) 20% or more voting rights: need approval from FSA For your reference, please look at article 52-10 of the Act and article 34-6 of the Ordinance for further information. Tentative translation of the Banking Act: http://www.japaneselawtranslation.go.jp/law/detail/?id=1870&vm=04&re=01. Tentative translation of the Ordinance for Enforcement of the Banking Act: http://www.japaneselawtranslation.go.jp/law/detail_main?re=02&vm=&id=2691.

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Question 15 What are the conditions for authorization of non-banking financial institutions in Japan: types of activities, key requirements to applicants, approval procedure; verifying sources of funds for the formation of capital?

RESPONSE Although Japan is not exactly sure what Ukraine meant by "non-banking financial institutions", when a person intends to operate money lending business without a banking license, the person must be registered as a Money Lender under the Money Lending Business Act. For the conditions for authorization, please refer to Article 3 and Article 4 of the Act (tentative translation is available at the link below). http://www.japaneselawtranslation.go.jp/law/detail/?id=3224&vm=04&re=02new=1.

Question 16 What are the differences in prudential regulation and corporate governance requirements (if there are any) for city, trust, regional, tier II regional, Shinkin banks and credit cooperative banks?

RESPONSE Although FSA adopts a risk-based approach for the deposit-taking institutions listed above, the regulation and the requirements are not necessarily tailored for each category of the banks listed above, and are applied based on each institution's characteristics such as business model, scale and complexity of their operation. For instance, regarding governance, FSA requires the institutions to establish governance systems for sound and appropriate business operations based upon their business models and risks they take. Among these institutions, however, Japan specifically expect Global Systemically Important Banks (G-SIBs) to build a more robust governance system than other banks, based on its scale, complexity, international business operation, and interconnectedness.

Question 17 Could Japan kindly inform if there is any specific prudential regulation for state-owned banks?

RESPONSE Japan supervises government financial institutions based on each institution's settlement law* and imposes strict regulations such as authorization of business plans and inspections of the condition of business or documents, in addition to regulations at the same level with private financial institutions. *The Japan Finance Corporation Act, Okinawa Development Finance Corporation Law, The Japan Bank for International Cooperation Act, The Development Bank of Japan Inc. Act and The Shoko Chukin Bank Limited Act

PART II: QUESTIONS REGARDING THE REPORT BY JAPAN (WT/TPR/G/397) 4 JAPAN'S DOMESTIC POLICIES 4.1 Abenomics Page 14 (Para 4.1) According to the Report, one of the viewpoints that are taken into consideration in promoting the initiatives to reach the goal of the economic revitalization in Japan is to create a society in which everyone plays an active role and feels secure. It states, "In anticipation of the arrival of an era of "100-year life spans", to build a society in which everybody including elderly people and young people can play an active role regardless of age, it is essential not only to promote "Human development revolution" to improve the quality of each person as human resource, but also to establish the social security system for all generations, with revising the conventional ways of thought and systems so that age doesn't become the constraint in working, and expanding the supporters of social security by allowing them to freely select their workstyles regardless of age."

Question 18 Would Japan, please, elaborate on its policy measures, taken in mentioned direction, including trade- related actions?

RESPONSE Amidst the diversification of lifestyles, Japan has reviewed a series of reforms covering the entire spectrum of social security, including work style, so as to sustain the peace of mind not only of the elderly but also children, the childrearing generation and the current working generation, changing the stereotypical view taken of the elderly. WT/TPR/M/397/Add.1

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Last September, Japan launched the Council on Social Security Reform for All Generations to reform the social security system in a comprehensive manner, including work styles. The goal is to help all age groups— from old to young, including parenting families and working generations —lead their lives without worrying about their future. At the end of last year, Japan published an interim report based on the discussions held in the Council. In order to let more people move from the "supporting" side to the "supported" side, Japan deem it necessary to rebalance the "supporting" and "supported" sides, while aiming to provide sustainable and comfortable social security systems for all generations and to curb increasing fiscal burdens on the working generations. For example, Japan will ensure employment opportunities up to age 70 for elderly people with the desire to work. Japan will also enhance medical treatment and nursing care that place importance on prevention so that people may always stay healthy. As the wall separating permanent and non- permanent employment crumbles with equal pay for equal work, Japan will expand the scope of application of employee pensions, ensuring people's peace of mind after their retirement. Toward the publication of the final report in this summer, Japan will deepen discussions at the Council.

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COLOMBIA

Informe de la Secretaría - Documento WT/TPR/S/397

2. REGÍMENES DE COMERCIO E INVERSIÓN MARCO GENERAL

El párrafo 2.2 señala: "La política económica general del Japón se sigue rigiendo por el programa "Abenomics", que ha ido evolucionando y tiene dos objetivos fundamentales: lograr un crecimiento sostenible y hacer realidad la noción de Sociedad 5.0. En cuanto al primero de los objetivos, la meta es alcanzar un PIB nominal de JPY 600 billones gracias a un círculo virtuoso propiciado por el aumento de la producción, de los ingresos y del consumo. Los esfuerzos se centran en cuatro esferas: a) productividad de las personas; b) reglamentaciones y leyes inteligentes; c) oportunidades internacionales atractivas; y d) mayor competitividad empresarial.4 El objetivo perseguido mediante la Sociedad 5.0 es mejorar el bienestar de las personas y la sostenibilidad, y superar desafíos de carácter social, como la disminución de la tasa de natalidad, el envejecimiento de la población y problemas relacionados con el medio ambiente y la energía, mediante el desarrollo y el empleo de nuevas innovaciones, por ejemplo, la Internet de las cosas, los macrodatos, la inteligencia artificial, la robótica y la economía colaborativa.5

Question 1 ¿Podría el Gobierno de Japón describir ¿En qué consisten las "reglamentaciones y leyes inteligentes" que se indican en este párrafo?

RESPONSE Smart regulations and laws will help support innovation, stimulate new business, and open the door to new ideas. Examples to realize them include the Regulatory Sandbox, where cutting-edge businesses and technologies can develop in "sandboxes", which allows them to be tested and improved in real-life situations without existing restrictions , and the National Strategic Special Zones, regions selected to serve as laboratories to carry out advanced structural reforms. Other smart regulations and laws include rules for the digital market, the Data Free Flow with Trust concept, and rules for a decarbonized society. Additional information about these policies and achievements can be found here, https://www.japan.go.jp/abenomics/_userdata/abenomics/pdf/2001_abenomics.pdf.

El párrafo 2.3 menciona: "En el marco de la estrategia de ejecución del programa "Abenomics" se está aplicando la Estrategia de Revitalización del Japón de 2016. Esta lleva aparejadas reformas encaminadas a: … el fomento de la investigación conjunta por parte de la industria y el mundo académico; la introducción de un permiso japonés de residencia y trabajo para profesionales extranjeros altamente cualificados (véase infra); la prestación de apoyo a las empresas para que implanten tecnologías de la información y robots; la promoción de la tecnología en los ámbitos sanitario, medioambiental y energético; la creación de una cadena de suministro del hidrógeno a gran escala (para 2030); (…) y el aumento de la participación privada en los servicios y activos públicos. Con el fin de orientar algunas de estas iniciativas se establecieron varias nuevas entidades, entre ellas, el Consejo Público-Privado para la Cuarta Revolución Industrial, el Consejo de la Estrategia de Tecnología de Inteligencia Artificial y el Consejo de Promoción del Desarrollo de los Recursos Humanos en Respuesta a la Cuarta Revolución Industrial.

Question 2 ¿Podría el Gobierno de Japón ampliar la información sobre el tipo de apoyo brindado a las empresas para que implementen tecnologías de la información y robots? ¿A qué tipo de empresas está dirigido este apoyo? ¿Cuál es el tiempo previsto para proveer este apoyo?

RESPONSE Japan offers various schemes of assistance to companies operating in Japan so that they can cope with challenges in the era of connected industries. These schemes include providing subsidies, establishing industrial standards, sharing public data, tax exemptions and so on. The companies

4 Según han informado las autoridades, para lograr la meta del PIB nominal, también habrá que aplicar simultáneamente medidas en ámbitos muy diversos. 5 Government of Japan, Abenomics. Consultado en: https://www.japan.go.jp/abenomics/index.html. WT/TPR/M/397/Add.1

- 143 - eligible for these schemes and the time required for providing assistance vary by the specific schemes to which the companies apply.

Question 3 ¿Podría el gobierno de Japón indicar cuáles son las funciones específicas y los miembros que conforman el Consejo Público-Privado para la Cuarta Revolución Industrial, el Consejo de la Estrategia de Tecnología de Inteligencia Artificial y el Consejo de Promoción del Desarrollo de los Recursos Humanos en Respuesta a la Cuarta Revolución Industrial?

RESPONSE 1. Public-Private Council for the fourth Industrial Revolution Public-Private Council for the fourth Industrial Revolution The "Future Investment Council" plays the role of the "Public-Private Council for the fourth Industrial Revolution" in the "Japan Revitalization Strategy 2016". The Council was established under the "Headquarters for Japan's Economic Revitalization" (a committee all Ministers participated for overcoming the strong yen and deflation and revitalizing a strong economy in cooperation with the Council on Economic and Fiscal Policy for the economic revival) as the headquarters of growth strategies. It promotes bold investments in the fields contributing to future growth, including the Fourth Industrial Revolution, in a public-private partnership. The members of the meeting are as follows. Provided, however, that the chairperson may request the addition of members or the attendance of related persons when it deems necessary. Chair: Prime Minister Deputy Chair: Deputy Prime Minister Vice Chair: Minister of State for Economic and Fiscal Policy, Chief Cabinet Secretary, Minister of Economy, Trade and Industry Member: Persons appointed by the Prime Minister from among those with excellent insight regarding the "Investment in the Future" designated by the Prime Minister

Member list (as of 25 October2019)

Chair: ABE Shinzo Prime Minister Deputy Chair: ASO Taro Deputy Prime Minister Vice Chair: NISHIMURA Yasutoshi Minister of State for Economic and Fiscal Policy Minister in charge Economic Revitalization Minister in charge of Social Security Reform SUGA Yoshihide Chief Cabinet Secretary KAJIYAMA Hiroshi Minister of Economy, Trade and Industry Member: TAKAICHI Sanae Minister for Internal Affairs and Communications HAGIUDA Koichi Minister of Education, Culture, Sports, Science and Technology KATO Katsunobu Minister of Health, Labour and Welfare TAKEMOTO Naokazu Minister of State for Science and Technology Policy KITAMURA Seigo Minister of State for Regulatory Reform KANEMARU Yasuhumi Chairman and President, Group CEO, Future Corporation. GONOKAMI Makoto President, the University of Tokyo SAKURADA Kengo Group CEO, Director, President and Representative Executive Officer, Sompo Holdings, Inc. SHIGA Toshiyuki Chairman and CEO Member of the Board, INCJ, Ltd. TAKENAKA Heizou Professor at Toyo University, Professor Emeritus at Keio University NAKANISHI Hiroaki Chairman, KEIDANREN (Japan Business Federation) Executive Chairman, Hitachi, Ltd. NAMBA Tomoko Founder & Executive Chairman, DeNA Co., Ltd.

2. Strategic Council for AI Technology Based on instructions issued by the Prime Minister in "Public-Private Dialogue towards Investment for the Future" in April 2016, the Government of Japan established the "Strategic Council for AI Technology" which consists of the presidents of national institutes, founding agencies, universities and industries in order to consider AI strategy. Incidentally, the Council was reorganized to "AI strategy expert meeting for strength and promotion of the innovation" in 2018 and the discussion WT/TPR/M/397/Add.1

- 144 - of AI strategy was taken by the expert meeting. In 2019, the Government of Japan established "AI Strategy 2019" based on the proposal of the expert meeting.

3. Council for Promoting Human Resource Development to respond to the Fourth Industrial Revolution Based on the "Japan Revitalization Strategy 2016" (decided at the Cabinet Council on June 2, 2016), the Government of Japan established the "Council for Promoting Human Resource Development to respond to the Fourth Industrial Revolution" composed of relevant ministries and agencies: MIC, MEXT, MHLW and METI, industry, labor, educational institutions, vocational training institutions, and the human resources development industry, etc. Japan discussed the types of human resources that would be demanded in the fourth industrial revolution era and policies necessary to develop such human resources. Japan incorporated the results of these discussions in the "Investment for the Future Strategy 2017" (decided at the Cabinet Council on June 9, 2017), which specified revision of the indicator (IT skill standards) that systemized and clarified the necessary practical ability, system reform and policy support for higher education institutions such as universities to become important players in "IT and data skill training", implementation of IT/data education such as programming in primary and secondary education and so on.

Question 4 ¿A cuáles Ministerios o entidades están adscritos el Consejo Público-Privado para la Cuarta Revolución Industrial, el Consejo de la Estrategia de Tecnología de Inteligencia Artificial y el Consejo de Promoción del Desarrollo de los Recursos Humanos en Respuesta a la Cuarta Revolución Industrial?

RESPONSE The Public-Private Council for the Fourth Industrial Revolution, the Strategic Council for AI Technology and the Council for Promoting Human Resource Development to Respond to the Fourth Industrial Revolution are all inter-ministerial bodies that are coordinated by the Headquarters for Japan's Economic Revitalization, a Cabinet Office organization. Details of these councils are as follows: (1) Public-Private Council for the Fourth Industrial Revolution The Future Investment Council plays the role of the Public-Private Council for the Fourth Industrial Revolution in the Japan Revitalization Strategy 2016. The Council was established under the Headquarters for Japan's Economic Revitalization (a committee in which all Ministers participated for overcoming the strong yen and deflation and revitalizing a strong economy in cooperation with the Council on Economic and Fiscal Policy) as the headquarters of growth strategies. It promotes bold investments in fields contributing to future growth, including the Fourth Industrial Revolution, through public-private partnerships. (2) Strategic Council for AI Technology Based on instructions issued by the Prime Minister in the Public-Private Dialogue towards Investment for the Future in April 2016, Japan established the Strategic Council for AI Technology, which was reorganized to the AI Strategy Expert Meeting for Strength and Promotion of the Innovation in 2018, and the discussion of AI strategy was taken on by the expert meeting. In 2019, Japan established the AI Strategy 2019 based on the proposal of the expert meeting. (3) Council for Promoting Human Resource Development to Respond to the Fourth Industrial Revolution Based on the Japan Revitalization Strategy 2016 (decided at the Cabinet Council on June 2, 2016), Japan created the Council for Promoting Human Resource Development to Respond to the Fourth Industrial Revolution in December 2016 and held five conferences up to April 2017. The Council discussed the type of human resources that would be demanded in the Fourth Industrial Revolution era and policies necessary to develop such human resources. Japan incorporated the results of these discussions in the Investment for the Future Strategy 2017 (decided at the Cabinet Council on 9 June 2017), which specified revision of the indicator (IT skill standards) that systemized and clarified the necessary practical ability, system reform and policy support for higher education institutions such as universities to become important players in "IT and data skill training", implementation of IT/data education, such as programming in primary and secondary education, and so on.

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2.4 Régimen de Inversión 2.4.2 Entorno empresarial

El párrafo 2.44 indica: "… En julio de 2019 se promulgó la Ley de Fortalecimiento de la Gestión de las Pymes, cuya finalidad es reforzar la gestión de las pymes y apoyar la continuidad de sus actividades comerciales, en particular por motivo del envejecimiento de sus propietarios (…). Un consejo gubernamental puso en marcha en 2019 una iniciativa en materia de innovación para ayudar a las empresas emergentes a ser competitivas a escala mundial; se persigue el objetivo de duplicar el número de empresas emergentes innovadoras para 2024.

Question 5 ¿Podría el Gobierno de Japón ampliar la información sobre la: "iniciativa en materia de innovación" para ayudar a las empresas emergentes a ser competitivas a escala mundial?, Ej.: ejes fundamentales, herramientas que se aplicarán para su objetivo, entidades involucradas en la implementación de la iniciativa, recursos económicos destinados para ello, etc.?

RESPONSE Please see below URL for the details of this initiative. https://www8.cao.go.jp/cstp/openinnovation/ecosystem/beyondlimits_en.pdf.

Question 6 ¿Podría el Gobierno de Japón informar ¿A cuáles sectores económicos se aplica la "iniciativa en materia de innovación para ayudar a las empresas emergentes a ser competitivas a escala mundial"?

RESPONSE Please see below URL for the details of this initiative. https://www8.cao.go.jp/cstp/openinnovation/ecosystem/beyondlimits_en.pdf.

2.4.1 Marco de inversión

En el párrafo 2.37. De conformidad con la Ley de Promoción del Japón como Centro de Actividad Empresarial en Asia, de 2012, se otorgan incentivos para fomentar la inversión en el establecimiento de centros de investigación y desarrollo y sedes regionales.59 La Ley de Medidas Fiscales Especiales prevé la concesión de bonificaciones fiscales en relación con el impuesto sobre la renta de las personas físicas.60 Hay otros incentivos a la inversión, como los siguientes: ayuda para la recaudación por Small and Medium Business Investment and Consultation Co. Ltd. de fondos destinados a las pymes (incluidas las que son sociedades anónimas con un capital mínimo de JPY 300 millones); exámenes de patentes acelerados; procedimientos de inversión abreviados; y exámenes acelerados de la condición de residente.61 Como han indicado las autoridades, no se ha llevado a cabo ninguna evaluación de la eficiencia de estos programas de incentivos.

Question 7 Como parte de la Strategy of Global Outreach, existe una estrategia para pequeñas y medianas empresas que consiste en oficinas que ofrecen servicios de consultoria en el exterior para las empresas de Japón que quieran hacer negocios fuera del país, al respecto nos gustaría saber si se divulgaran?: Los instrumentos para fomento de la IED que tiene Colombia y que se están implementando y que podrían ayudar a Japón a aumentar su oferta de infraestructura a nivel internacional. El APRI entre Colombia y Japón.

RESPONSE The government of Japan does not know activities of small and medium enterprises consisting of offices providing consulting services overseas.

Question 8 También como parte de la política Strategy of Global Outreach se fomenta "COOL Japan", es importante conocer si esta estrategia sirve para intercambio de los contenidos creados en otros países, por ejemplo, en Colombia.

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RESPONSE Cool Japan strategy (policy) is to strengthen Japanese soft power by winning the hearts and minds of foreign people. Although the meaning of "exchanging content created in other countries" is not clear, if "the content created in other countries" are to serve the purpose of Cool Japan strategy, it could be a part of Cool Japan.

Question 9 Cómo funciona el procedimiento abreviado de inversiones y los criterios fijados para las notificaciones previas que deben hacerse según el tipo de inversión?

RESPONSE Refer to 'Act for Promotion of Japan as an Asia Business Center- Guideline' for more information on support measures, requirements to qualify and application procedures. https://www.meti.go.jp/english/policy/external_economy/investment/pdf/e-guideline.pdf.

3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.1 Medidas que afectan directamente a las importaciones 3.1.1 Procedimientos y requisitos aduaneros, y valoración en aduana

Párrafo 3.3. El Japón depositó en la OMC su instrumento de aceptación del Acuerdo sobre Facilitación del Comercio (AFC) en 2015. Ese mismo año estableció un comité nacional de facilitación del comercio (la Conferencia de Enlace sobre Facilitación del Comercio), que es un foro para el intercambio de información, a nivel de dirección general, entre los ministerios y organismos pertinentes. El Japón mantiene varios servicios de información, con arreglo a lo estipulado en el párrafo 3 del artículo 1 del AFC.3 En el período objeto de examen, el Japón notificó su asistencia y apoyo para la creación de capacidad correspondiente a los años 2015, 2016 y 20174; también presentó una notificación sobre la publicación y disponibilidad de la información, las formalidades en relación con la importación, la exportación y el tránsito, y la cooperación aduanera.

Question 10 ¿Existen restricciones normativas desde la óptica aduanera – diferentes a las acordadas en propiedad intelectual, reservas financieras, etc. - para intercambio o suministro de la información de los procesos productivos y de la información financiera que soporta los productos que, en su momento, se exporten a Colombia?

RESPONSE Please refer to G/TFA/N/JPN/2 and G/TFA/N/JPN/2/Corr.1.

3.3 Medidas que afectan directamente a la producción y al comercio 3.3.2 Normas y otras prescripciones técnicas

En el párrafo 3.99 se indica que: "El Japón tiene acuerdos de reconocimiento mutuo en vigor relativos a normas, reglamentos técnicos y procedimientos de evaluación de la conformidad con las Comunidades Europeas, Singapur, Filipinas, Tailandia, los Estados Unidos y el Taipei Chino."

Question 11 A Colombia le gustaría conocer ¿qué productos o sectores abarcan esos ARM y qué requisitos son necesarios cumplir para tener un ARM con ese país?

RESPONSE (1) Japan has MRAs with the EU and the United States for certain product fields. It also has chapters on mutual recognition regarding acceptance of the result of conformity assessment in the Economic Partnership Agreements with Singapore, the Philippines, and Thailand. However, there is no MRAs between Japan and Chinese Taipei. Instead, there is a Mutual Recognition Arrangement between nonofficial liaison organizations of both sides. Japan does not have MRAs concerning voluntary standards.

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MRAs Products covered by MRAs MRAs provisions stipulating products EU Agreement on Mutual ⚫ electrical products ⚫ Sectoral Annex on Recognition between Japan and ⚫ telecommunications Electrical Products the European Community terminal equipment and ⚫ Sectoral Annex on radio equipment Telecommunications ⚫ chemicals Terminal Equipment and ⚫ medicinal products Radio Equipment ⚫ Sectoral Annex on Good Laboratory Practice for Chemicals ⚫ Sectoral Annex on Good Manufacturing Practice for Medicinal Products Singapore Chapter 6 (Mutual Recognition) telecommunications terminal Section I of Part B of Annex III of the Agreement between equipment and radio equipment Japan and the Republic of Singapore for a New-Age Economic Partnership Philippines Chapter 6 (Mutual Recognition) electrical products Section 1 of Part 2 of Annex 4 of the Agreement between Japan and the Republic of Philippines for Singapore for an Economic Partnership Thailand Chapter 6 (Mutual Recognition) electrical products Section 1 of Part 2 of Annex 4 of the Agreement between Japan and the Kingdom of Thailand for an Economic Partnership The United Agreement on Mutual telecommunications terminal Section VI of Annex States Recognition of Results of equipment and radio equipment Conformity Assessment Procedures between Japan and the United States of America Chinese "Arrangement between the electrical products Section 1 of Part 2 of Annex Taipei Japan-Taiwan Exchange Association and the Association of Taiwan-Japan Relations for the Cooperation on Mutual Recognition" (Note: This is a Mutual Recognition Arrangement between nonofficial liaison organizations of both sides. There is no MRAs between Japan and Chinese Taipei.)

(2) Japan does not have any prioritized sectors or partners for MRAs. Rather, careful consideration is required to examine possibilities of additional MRAs. In such examination, equivalence of regulatory systems of partner countries, technical competence of their conformity assessment bodies, and economic needs and benefits of MRAs expressed by national industries would be included for the consideration.

3.3.2.3 Reglamentos técnicos En el párrafo 3.110 se indica que "Por lo que se refiere a la elaboración de reglamentos técnicos y normas JAS de carácter obligatorio, el proceso de elaboración/consulta es generalmente el siguiente: el organismo competente escucha la opinión de las partes interesadas, prepara el proyecto de reglamento técnico y lo presenta a su consejo consultivo pertinente, integrado por representantes de la industria, el mundo académico y los grupos de consumidores, para que lo examine. A continuación, el consejo consultivo examina el proyecto y prepara su propuesta, teniendo en cuenta las observaciones presentadas por todas las partes interesadas (incluidas las empresas extranjeras) durante el plazo de 60 días previsto al efecto. Con todo ello se elabora un informe que se envía al ministro competente. Por último, la norma obligatoria o reglamento técnico se dan a conocer mediante la publicación de un aviso público en la Gaceta Oficial.114 El procedimiento de revisión y retirada de los reglamentos técnicos es básicamente el mismo que se sigue para elaborarlos, adoptarlos y aplicarlos. Según las autoridades, no existen datos disponibles sobre el número de reglamentos técnicos en vigor."

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Question 12 A Colombia le gustaría conocer si antes de la elaboración de un proyecto de reglamento técnico, el Japón realiza un estudio de Análisis de Impacto Normativo - AIN, si es así, cuál o cuáles son las metodologías utilizadas por Japón y cómo determinan el alcance del AIN, esto último teniendo en cuenta que hay modificaciones que pueden ser aclaratorias de una medida pero otras son de fondo.

RESPONSE The regulatory authorities have generally assessed regulatory impacts of proposed technical regulations, referring to results of consultation and advices to external committee and gathering public comments.

Question 13 ¿Cómo es un AIN ex y un AIN post?

RESPONSE The regulatory authorities have assessed regulatory impacts of technical regulations after their adoption based on Government Policy Evaluations Act and its related guideline. 3.3.2.4 Evaluación de la conformidad e inspección

En el párrafo 3.113. Los fabricantes extranjeros de productos eléctricos y productos de consumo pueden someterse a la evaluación de la conformidad y la certificación por organismos de evaluación de la conformidad acreditados en el extranjero, con arreglo a las leyes pertinentes (por ejemplo, la Ley de Seguridad de los Aparatos y Material Eléctricos y la Ley de Seguridad de los Productos de Consumo). Por lo que se refiere a la Ley de Seguridad de los Productos de Consumo, hay un organismo de evaluación de la conformidad acreditado en el extranjero y seis organismos de evaluación de la conformidad acreditados en el país. En cuanto a la Ley de Seguridad de los Aparatos y Materiales Eléctricos hay siete organismos de evaluación de la conformidad acreditados en el extranjero y siete organismos de evaluación de la conformidad acreditados en el país.

Question 14 ¿Puede señalar el Japón su política de aceptación de certificados de evaluación de conformidad extranjeros distintos a los mencionados?

RESPONSE Regarding to Telecommunication equipment, Japan may accept conformity assessment result issued by foreign conformity assessment bodies which are registered in accordance with the law based on Mutual Recognition Agreement or other relevant laws.

Question 15 A Colombia le gustaría conocer como los reguladores determinar los riesgos que representa un producto para defender un objetivo legítimo y determinar el procedimiento de evaluación de la conformidad de acuerdo al nivel del riesgo.

RESPONSE Although the purpose of the question is unclear in relation to the designated paragraph, as a general answer, in consideration of the purpose of each act, regulated products are comprehensively determined based on the factors such as frequency/situation of accidents. Those with particularly high risk of danger require conformity assessment by the registered laboratories.

3.3.7.2 Políticas sobre promoción y comercialización de la innovación

En el párrafo 3.194. En 2018, el Consejo de Ministros adoptó la Estrategia Integrada de Innovación y creó el Consejo de Promoción de la Estrategia Integrada de Innovación. La reforma universitaria, los programas de I+D tecnológicamente punteros, los ecosistemas de empresas emergentes que se apoyan mutuamente y la promoción de la ciencia y la tecnología para lograr los ODS son algunos de los elementos más destacados de la Estrategia, que se aplicará horizontalmente en los ministerios y los organismos.

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Question 16 ¿Podría el Japón indicar cual es la metodología aplicada para llevar la Estrategia Integrada de Innovación a nivel transversal al interior del gobierno, y como lo concretará los resultados de cara a los beneficiarios del este tipo de programas?

RESPONSE The Government established the Integrated Innovation Strategy Promotion Council chaired by the Chief Cabinet Secretary, as an organization to coordinate between ministries and implement the Integrated Innovation Strategy.

4.3 Manufacturas 4.3.3 Medidas en Frontera El párrafo 4.152 dice: "Ha disminuido el promedio de los aranceles NMF aplicados a los productos manufacturados del 3,5% en el ejercicio económico de 2016 al 3,3% en el ejercicio de 2019 (definición del SA, cuadro 3.1). Han seguido aplicándose contingentes arancelarios a 62 partidas manufactureras (sobre la base del SA), de las cuales 32 correspondían al Capítulo 41 del SA (pieles y cueros), 5 al Capítulo 50 (seda) y 25 al Capítulo 64 (calzado). El calzado y las pieles y cueros permanecen sujetos a contingentes arancelarios, por lo que reciben la mayor protección arancelaria, con un promedio de los aranceles NMF aplicados del 27,3% y el 10,5%, respectivamente, a nivel del SA; las crestas arancelarias (EAV) afectaron al calzado (219,4%) y a la seda (97,9%). En el calzado de cuero, los tipos arancelarios aplicados fuera del contingente en los ejercicios económicos de 2017, 2018 y 2019 fueron del 30% o de JPY 2.400 o JPY 4.300 por par, si esta cuantía era más alta; según las autoridades, su tasa de utilización media del contingente en los ejercicios económicos de 2017 y 2018 fue del 66% y del 71,7%, respectivamente. Question17. ¿Podría el gobierno de Japón comentar porqué siendo ese país una de las economías de mayor desarrollo tecnológico del mundo, el calzado tiene una de las mayores protecciones arancelarias?

RESPONSE Tariff rates for footwear are determined appropriately, taking the needs of relevant domestic manufacturers into careful consideration.

Informe del Gobierno - Documento WT/TPR/G/397

2 POLÍTICA COMERCIAL Y DE INVERSIÓN 2.2 OMC 2.2.2 Solución de diferencias

En el párrafo "2.10. Una de las funciones más importantes que desempeña la OMC para mantener un sistema multilateral de comercio abierto y justo es la garantía de la observancia de las normas de la Organización a través del mecanismo de solución de diferencias. El Japón ha participado activamente en el mecanismo de solución de diferencias de la OMC, como parte o como tercero, para resolver diferencias. El Japón sigue haciendo todo lo posible por reformar el sistema de solución de diferencias, incluido el Órgano de Apelación. "

Question 18 Al respecto nos permitimos consultar, porque Japón no es miembro de la propuesta WT/DSB/W/609/Rev.14 por medio de la cual más de 120 miembros de la OMC han abogado por más de 3 años para lograr salvar el sistema de solución de diferencias, y el estado de derecho multilateral.

RESPONSE Our priority has always been to achieve a long-lasting solution to the reform of the Appellate Body, which would serve a better functioning dispute settlement system and an ultimate goal of securing a positive solution to a dispute. Japan stands ready to join the proposal, if the whole picture of the reform is crystallized.

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Question 19 Nos parece importante saber si Japón considera importante mantener el órgano de apelaciones de la OMC, si tiene intenciones de ser parte de esta propuesta; y si no tiene esa intención, las razones por las cuales considera que no es plausible acompañarla.

RESPONSE See the above response to the Question18 of Colombia.

Otras preguntas no clasificadas:

Question 20 ¿Podría el Japón ampliar la información sobre los avances del marco reglamentario seguro para los pagos electrónicos y las criptomonedas?

RESPONSE Regarding the e-payments, while there is no sole definition of e-payments, business operators have to comply with the relevant regulations subject to its type of business. The regulations include the following: [E-money] Under the "Payment Services Act", e-money (electronic money) and those are issued for prepaid/pre-loaded values fall within the category of prepaid payment instruments. Prepaid payment instruments are classified into the following two types: (1) those which can be used for purchase of goods and services only by the issuer of prepaid payment instruments (prepaid payment instruments for own business); and (2) those other than (1) (prepaid payment instruments for third-party business). *If the total amount of the outstanding balance of the prepaid payment instruments for one's own business prescribed in (1) exceeds 10 million yen on the record date (on March 31 and September 30 every year), the issuer shall give notification to the Local Finance Bureau within two months from the record date. *The issuer of the prepaid payment instruments for third-party business prescribed in (2) shall register with the Local Finance Bureau in advance. [Funds Transfer Service] When a person/entity engages in exchange transactions equivalent to one million yen or less in the course of trade, registration as a funds transfer service provider is required. For exchange transactions exceeding one million yen, a license for banking business pursuant to the "Banking Act" is required. Funds transfer service providers are subject to certain regulations, particularly those in which they are required to preserve not less than 100% of the outstanding amount of funds that are in the middle of being transmitted or are pending by means of deposits.

Regarding regulations on crypto assets (cryptocurrencies), the "Payment Services Act" stipulates that the following business activities are considered as "virtual currency exchange services," in which a service provider is required to register with the FSA: (1) Exchange between a virtual currency and a fiat currency, or exchange between a virtual currency with another virtual currency; (2) Intermediary, brokerage, or agency services for the business activities prescribed in (1); or (3) Management of users' money or virtual currency in connection with the business activities prescribed in (1) or (2). For user-protection and anti-money laundering, a registered virtual currency exchange service provider is under obligations including, but not limited to, the following: -To provide prior explanation and information to service users about the characteristics of a virtual currency, such as facts that (i) it is not a fiat currency; (ii) it is not backed by a fiat currency and its value may fall below the purchased price; and (iii) its value is not guaranteed; -To establish a system risk management framework; -To manage the money and virtual currency deposited by service users separately from its own money and virtual currency, as well as to undergo an audit by a certified public accountant or an audit firm, with regard to the state of segregation management; and -To perform the obligations under the "Act on Prevention of Transfer of Criminal Proceeds" such as customer identification at the time of transaction, preparation and keeping of transaction records, and reporting of suspicious dealings to the authorities. WT/TPR/M/397/Add.1

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Whether certain electronic data falls under "Virtual Currency" under the "Payment Services Act" will be determined on a case-by-case basis pursuant to Article 2 (5) of the "Payment Services Act." Please look at para 4.4 in WT/TPR/G/397 for further details on recent regulatory changes.

Question 21 ¿Podría el Japón indicar la forma en la que asigna responsabilidades a cada eslabón de la cadena del comercio electrónico y como diferencia los actores que hacen parte de la misma?

RESPONSE Since the question is unclear for Japan to provide an answer, Japan requests elaboration about the kind of business sector and the type of transaction considered in the question. Also, we would like to know more about what is meant by the terms "chain", "linkage", "responsibility", and "actor".

Question 22 ¿Podría Japón informar con mayor detalle cómo funciona en su legislación el cálculo de los daños en los procesos de reparación por infracción a los derechos de propiedad intelectual, y como las modificaciones en la legislación del cálculo de los daños en los procesos en mención, han facilitado en la practica la observancia de los derechos de propiedad intelectual?

RESPONSE Details about review of damages calculation method are below. (a) For the portion of the profits made by the infringer whose need for compensation was denied on the basis that it was beyond the patent rights-holder's production/sales capacity, etc., the revision has enabled the rights-holder to request damages by deeming that it had licensed the portion to the infringer. (b) The revision clearly states that damages calculation can take into consideration the amount likely to have been determined if negotiations were conducted assuming patent rights infringement when a court determines the amount equivalent to the amount of money to be received for the implementation of the patent invented.

Question 23 ¿Podría Japón informar con mayor detalle cómo ha adaptado su régimen de propiedad intelectual al manejo de los procesos relacionados al desarrollo de macrodatos, tecnologías de inteligencia artificial (IA) y la Internet de las cosas (IdC)?

RESPONSE Japan has been developing rules and systems to promote the proper utilization of data and AI. In order to promote utilization of big data and AI, and develop an environment where data can be exchanged with confidence, Japan amended the Unfair Competition Prevention Act (UCPA) in 2018. The revised Act defines "protected data" as data that satisfies "limited provision", "electromagnetic management" and "significant accumulation". Also, the UCPA defines unauthorized acquisition, use and disclosure of "protected data" as unfair competition and provides civil measures such as claims for injunctions and claims for compensation for loss or damages against unauthorized acquisition, use, disclosure, etc., of protected data. The definition of "protected data" is as follows:

[Article 2-7 of the UCPA: The term "protected data" as used in this Act means technical or business information that is accumulated in a reasonable amount by electronic or magnetic means (meaning an electronic form, magnetic form, or any other form that is impossible to perceive through the human senses alone; the same applies in the following paragraph) as information provided to specified persons on a regular basis and that is managed (excluding information that is kept secret).]

Innovation driven by new technologies such as IoT, big data, and AI has been desired in Japan. On the other hand, since most of the statutory requirements for limitation in provisions of previous Copyright Acts were prescribed specifically to a certain degree, it had been pointed out that a new way of usage of works which does not fall into the requirement but does not substantially prejudice right holders' interests can be an infringement. In this context, private sectors such as industrial companies requested flexible limitation provisions that apply to new ways of usage regarding new technologies in order to promote technological innovations. Therefore, the government decided to establish "flexible limitation provisions" at higher level of abstraction. WT/TPR/M/397/Add.1

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Typical actions subject to the limitation are envisaged as follows; collecting data necessary for deep machine learning in building an AI, analyzing software for cybersecurity, services to search for the location of on "information being searched for" (Article 47-5), and services on data analysis. Regarding usage of works needed for innovations through technologies such as IoT, big data, and AI, the "flexible limitation provisions" are designed to keep certain amount of flexibility for those usages that do not harm the copyright market in order to smooth exploitation of works.

Question 24 ¿Podría Japón informar con mayor detalle cómo tiene planeado desarrollar el marco jurídico donde se establezca responsabilidad a los proveedores de servicios de internet en los casos en que incluyen enlaces a contenidos que infringen los derechos de autor?

RESPONSE Although it is not a regulation on Internet service providers but on operators of leech sites and link providers, Japan is considering amendment of the Copyright Act so that (1) operating the leech site is subject to criminal penalty and (2) providing a link to infringing contents on leech sites is deemed to constitute infringement of copyright and thus lead to civil and criminal liabilities. However, platform service providers which do not directly operate the leech site or provide the leech application will be basically outside the scope of this regulation.

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PHILIPPINES

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT II. TRADE AND INVESTMENT REGIMES

Para 2.14 (Page 41) As set out in the METI's 2018 White Paper on International Economy and Trade, expanding free trade and promoting economic partnerships is central to Japan's trade policy. It is considered that tapping into the Asia-Pacific region's growth and large markets by creating a global web of economic partnerships is essential to the country's growth. In this regard, a target was set to raise free trade agreement (FTA) coverage to 70% by 2018. Japan is aiming for the swift conclusion of Regional Comprehensive Economic Partnership negotiations, through which the FTA ratio will exceed 70%, as set out in the Growth Strategy 2019 (Section 1).

Question 1 What is Japan's target for tariff and/or ROO liberalization/improvement in its existing bilateral FTAs in in view of ongoing general reviews and emerging regional agreements such as RCEP?

RESPONSE Japan aims to take the lead in establishing comprehensive, balanced and high-level global rules through the conclusion and expansion of high-quality EPAs.

Para 2.15 (Page 41) Japan has RTAs in force with: Australia; Brunei Darussalam; Chile; India; Indonesia; Malaysia; Mexico; Mongolia; Peru; the Philippines; Singapore; Switzerland; Thailand; Viet Nam; ASEAN Member economies; EU member economies; and participants in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). New developments over the review period were the entry into force of the CPTPP and the EU-Japan Economic Partnership Agreement (see below). Taken together, these economies accounted for 38.7% of Japan's merchandise imports and 34.8% of its merchandise exports in 2018. All agreements provide for liberalization of goods and services. An overview of the services provisions in RTAs is provided in Section 4. Japan's transition period in most of its RTAs lasts up to 15 years. However, in the RTAs with the European Union and the CPTPP, Japan has a transition period of 21 years, up to 2038. By the end of these transition periods, between 6% and 5%, respectively, of tariff lines remain subject to duties, most of which relate to agricultural products (Table 2.3). Most of the agreements have been considered in the WTO Committee on Regional Trade Agreements (CRTA) based upon factual presentations prepared by the WTO Secretariat, except for: the EU-Japan EPA, the CPTPP, and the ASEAN-Japan EPA (factual presentations for which are currently being prepared).

Question/Clarification 2 Generally, FTAs cover a 10-year period for tariff elimination. What is the rationale for the extended timelines under the EPA with EU and the CPTPP?

RESPONSE Such timelines are those agreed among the parties through the negotiations.

Para 2.8 (Page 35) All laws and regulations are published in the Government Gazette and are made available on the Internet; some have been translated into English on a separate site. The main laws and regulations relating to trade, and amendments since January 2017, are presented in Table 2.1.

Para 2.9 (Page 37) As indicated in a previous Review, under the 2001 Government Policy Evaluations Act (GPEA), the Cabinet Order for Enforcement of the Government Policy Evaluation Act, and the Basic Guidelines for Implementing Policy Evaluations (as revised in 2017), the Cabinet Office and ministries are required to evaluate policies before and after implementation, and to publish the results of these evaluations. According to the authorities, evaluation reports are published on each ministry's website, and they can also all be accessed (in Japanese only) through the Policy Evaluation Portal Site.

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Question 3 Are foreign companies located and operating in Japan considered stakeholders that can participate in the public comment procedures in policy evaluation? We have noted that policy evaluation results which can be accessed through the Policy Evaluation Portal Site are not translated into English. Is there a plan to share the results in English?

RESPONSE It depends on each administrative agency to decide whom and how it asks for opinions. The English translations of policy evaluation results are made available based on each administrative agency's decision. However, at this time, the Ministry of Internal Affairs and Communications has not decided to translate all the results into English.

III. TRADE POLICIES AND PRACTICES BY MEASURE

Para 3.5 and 3.6 (Page 52-53) Use of customs brokers is not mandatory. Online processing of procedures with customs and other related agencies is undertaken through the Nippon Automated Cargo and Port Consolidated System (NACCS), Japan's single electronic window. The NACCS Center collects usage fees. In 2018, around 99% of import/export declarations were processed through this System. According to the authorities, no consideration is currently being given to making submission of customs declarations through the NACCS compulsory. Importers can pay the assessed customs duty electronically through the NACCS, which is connected to a multi-payment network, which links teller institutions (government authorities) with private banks. The NACCS also provides various online logistics services to the private sector, the scope of which were expanded through the programme development and modification of the NACCS in 2017. Importers may submit documents to Customs before their cargo's arrival in Japan, so that they can be notified in advance as to whether a customs inspection of the cargo will be required. A pre-arrival declaration form must be submitted to the customs office that controls the customs bonded (hozei) area where the cargo is expected to be brought in (although this requirement does now not apply to Authorized Economic Operators (AEOs) (see below)). Inspection of a shipment under pre-arrival is conducted before the cargo is transferred into a hozei area.

Question 4 Can exporters/producers/manufacturers access the NACCS? How does this differ from METI's Japan Electronic Open Network Trade Control System?

RESPONSE They can make customs declarations through NACCS. Japan Electronic Open Network Trade Control System (JETRAS), which handles trade control procedures, used to be METI's independent system but now is integrated into NACCS.

Para 3.16 (Page 54) Japan also applies preferential rules of origin under the Generalized System of Preferences (GSP) and its various RTAs (Section 2.3 and Section 3.1.4). To benefit from preferential duties, certificates of origin need to be provided by authorized institutions in the exporting country or by approved exporters (in the case of some RTAs). In order to prove the origin of the product being imported, it generally has to have been "wholly obtained" or "substantially transformed" (e.g. change of tariff classification at the HS four-digit level or 40% of value-added) in the exporting country. For goods not wholly obtained, specific criteria based on change of tariff classification rules, processing rules, and value-added rules are applied, on a product-by-product basis.

Question 5 Japan has been proposing the parallel implementation of the origin certification and self-declaration regimes under its bilateral trade agreement with the Philippines. Given that Japan accepts certificates of origin by approved exporters under some of its RTAs, how would Japan assess the effectiveness and efficiency in the implementation and process of the same? Further, has Japan observed any difficulties in the implementation of the said system under its existing bilateral trade agreements with the same mechanism?

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- 155 - of Origin (CO) from the competent governmental authority, and the customs authority of the importing country can reduce the administrative cost to check the appearances, such as stamps and signatures, of the CO. In addition, regarding Self-Declaration by the importer under this system, verification procedures will be completed domestically between the customs authority of the importing country and importers. Therefore, the competent governmental authority of the exporting country and exporters will not be involved in the process, thus reducing their burden. In this way, Japan recognizes that Self-Declaration by importers, exporters and producers is very efficient for both traders and Customs, so it will contribute to promoting trade. Japan recognizes that it is necessary to inform customs officials and traders well about the system before introducing it in a country. In Japan, we held many explanatory meetings for customs officials and traders and educated them carefully before the entry into force of the Japan-Australia EPA, the CPTPP and the Japan-EU EPA. On the other hand, regarding the Approved Exporter Certification, Japan has also introduced it in three EPAs, but the number of approved exporters in Japan is only about less than hundred in each EPA, therefore its effectiveness is not so large.

Para 3.73 (Page 74-75) Japan operates International Logistics Hub Industry Development Zones (ILHIDZs) in Naha District (former a Free Trade Zone) and Uruma/Okinawa District. The ILHIDZs are special economic zones based on the Act on Special Measures for the Promotion and Development of Okinawa. Incentives offered to domestic and foreign companies include: a 40% deduction from corporation income tax for a ten-year period following the establishment of the business (domestic companies only); an investment tax credit; and a special depreciation system. With respect to customs duties, a selective system applies, and the customs bond permission fee is halved for customs warehouses and customs factories, customs display areas, and integrated bonded areas. Various local tax incentives are also offered. Subsidies of up to 25% are available for land and building expenses, and of up to 50% for transportation expenses related to the domestic transportation to and from Okinawa prefecture of materials (targeted at manufacturing companies). Additionally, low-interest, long term loans are offered to companies establishing in the ILHIDZs by the Okinawa Development Finance Corporation.

Question 6 The Philippines would appreciate if Japan can clarify the transport subsidies of up to 50% of expenses offered to domestic and foreign companies. Do the beneficiaries (manufacturing companies) produce agricultural products intended for local and international distribution?

RESPONSE This subsidy is also available to manufacturing companies that produce agricultural products. Applicable manufacturing companies of the subsidy are not conditioned by what they produce but where they produce, because one of the main purposes of this subsidy is to accelerate concentration and establishment of manufacturing companies within the former Special Free Trade Zone, a part of Uruma District. Note: The subsidy will be terminated at the end of March 2020.

Para 3.95 (Page 80) As set out in government budgets over the period FY2017-19, various new support programmes were introduced, namely: support for SME business succession; establishment of bases for revitalizing local economies; transition to the production phase towards post-"K-computer"; promotion of capital investment by local core companies; expansion of measures to assist business succession; support to information technology innovation and artificial intelligence system co- development; support for introducing leading-edge energy-saving equipment; grants to advance regional reinvigoration; and development and demonstration of smart agriculture technology. The authorities indicated that, while the type of support is mainly subsidies, these do not constitute "subsidies" and are not "specific" under the WTO Subsidies and Countervailing Measures Agreement.

Question 7 Can Japan provide further information on its "support for SME business succession" and the manufacturing sectors that are targeted.

RESPONSE In Japan, where the SME owners are aging, succession of SME business is an urgent issue. Ministry of Economy, Trade and Industry provides comprehensive support by taking the following measures. In particular, (1) "Business succession tax system" to reduce the tax burden upon business succession to substantially zero, (2) Conduct business succession diagnosis and dispatch experts WT/TPR/M/397/Add.1

- 156 - through the Business Succession Network in which business and industry associations and financial institutions participate, (3) Matching support provided by the Business Transfer Center located in 47 prefectures throughout Japan, (4) Support for capital investment, etc. related to successor's new initiatives by "Business Succession Subsidy". *The above-mentioned support measures are being implemented for all businesses, not limited to fields.

Para.3.141 (Page 90) In March 2011, soon after the accident at the Tokyo Electric Power Co. (TEPCO) Fukushima Daiichi Nuclear Power Station, Japan started decontamination of crop land and fruit trees and introduced controls over feeds and agricultural inputs. It also introduced a risk-based food monitoring scheme which is based on Codex standards for radioactive caesium in food but, apparently in practice, is even more stringently applied. Enforced by the national laws, food products that exceed this stringent maximum level are recalled and disposed of. As reported by the authorities, due to these measures, food products exceeding the Japanese maximum level drastically decreased after the accident, and detection rates have remained low and stable for many years. They further indicated that the purpose of sampling is to detect contamination or to remove restrictions; most detections were limited to the wild harvest monitored at areas where distribution is already restricted. The authorities reported that, since early 2013 (the last case in April), none of the farm products and fishery harvests have exceeded the Codex guideline level defined as safe for human consumption, and even the wild edible fungi, fern sprout and leaf buds have not exceeded the level for food for small-scale consumption. The only harvests which still exceed the level are certain game meat, although the detection rate is very low, and those detected are neither distributed nor exported.

Question 8 What are the additional risk-based food monitoring schemes stringently applied by JP that goes beyond the Codex standards?

RESPONSE As section 4.14 of Trade Policy Review Report submitted by Japan on 22 January 2020, Japan's national laws mandate that food products which exceed these stringent maximum levels be recalled and disposed of, and if exceeding cases are observed in a particular product over an area, their distributions be restricted on an area basis. Japan's regulatory framework thus ensures that food products exceeding the maximum level are neither distributed in domestic market nor exported to third countries. The latest monitoring scheme "Concepts of Inspection Planning and the Establishment and Cancellation of Items and Areas to which Restriction on Distribution and/or Consumption of Foods concerned Applies (Developed by the Nuclear Emergency Response Headquarters)" is available on the URL below, https://www.mhlw.go.jp/english/topics/2011eq/dl/food_revision_22March_2019.pdf

Para 3.163 (Page 99) During the review period, the basic rules on government procurement remained virtually unchanged. With regard to the procurement procedures, the central Government, local governments and public corporations follow their respective procedures established by different laws and regulations due to their autonomous status. For the central Government, the main laws and regulations include: the Accounts Law of 1947 (last amended in 2017, to align some wordings in accordance with the revised Civil Code); the Cabinet Order Concerning the Budget, Auditing and Accounting of 1947 (amended to change some article numbers in 2017 in accordance with the revision of the Gas Business Act, and in 2018 in accordance with the revision of the Civil Code); the Special Provisions for the Cabinet Order concerning the Budget, Auditing and Accounting of 1946; and the Regulations on the Management of Contract Administration (Ministry of Finance Ordinance No. 52 of 1962). The legal framework for local entities includes: the Local Autonomy Law of 1947; and the Ordinance for Enforcement of the Local Autonomy Law of 1947. Procurement procedures followed by public corporations are set out in their accounting or internal statutes. Ministers who oversee public corporations are responsible for ensuring the consistency of their procurement activities with the rules. According to the authorities, there are no differences among the procedures applying to different categories of entities.

Question 9 Where can the official English translation of the abovementioned laws and regulations be obtained?

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RESPONSE Please refer to the following website: The Accounts Law of 1947, http://www.japaneselawtranslation.go.jp/law/detail/?id=2044&vm=&re=. The Cabinet Order concerning the Budget, Auditing and Accounting of 1946, http://www.japaneselawtranslation.go.jp/law/detail/?re=01&kn%5b%5d=%E3%82%88&ky=%E6 %A0%AA%E5%BC%8F&page=2. Japan does not have official English translation for the other laws and regulations.

Question 10 Are the different procurement laws and regulations in Japan harmonized given the representations that there are no differences among the procedures applied to different categories of entities?

RESPONSE There are no separate rules and regulations applied to different categories of entities. However, the consistency of terms of the legislation and implementation is maintained.

Question 11 Is Japanese procurement rules considered principle based, such that entities are allowed to issue their own rules consistent with the procurement law? Or is there a governing body or board that issues the rules or if not, monitors compliance by the entities?

RESPONSE Japanese procurement rules are implemented in a principle-based manner by each government agency.

Para 3.165 (Page 100) Many of the EPAs signed between Japan and its trade partners contain chapters on government procurement (Section 2.3.2). During the review period, two more agreements with government procurement chapters were signed and subsequently came into force, namely the CPTPP (or TPP11) and the Japan-EU EPA. Japan's government procurement commitments under the CPTPP are roughly the same as its GPA commitments. While its undertakings under the Japan-EU EPA are built on its GPA commitments, the coverage of local government entities under this EPA is further expanded to local independent administrative agencies.

Question 12 How is the expansion of the coverage of local government entities to local independent administrative agencies under the said EPA?

RESPONSE In addition to procurements by the entities listed in Japan's Annex 2 to Appendix I to the GPA, Chapter 10 of the Japan-EU EPA applies to procurements of goods and services specified in Japan's Annexes 4 to 6 to Appendix I to the GPA by the local independent administrative agencies, and the thresholds for the procurement are as those set out in Japan's Annex 2 to Appendix I to the GPA. Here, "local independent administrative agency" means a local independent administrative agency which is covered by the Local Independent Administrative Agency Act (Law No. 118 of 2003), and established by a single entity listed in Japan's Annex 2 to Appendix I to the GPA or Kumamoto-shi under the Act.

Question 13 Other than the abovementioned, are there EPAs entered into by Japan pursuant to its GPA commitments?

RESPONSE There are six EPAs which provide a chapter for government procurement other than TPP11 and the Japan-EU EPA, namely, Japan-Chile, Japan-Switzerland, Japan-Peru, Japan-Australia, Japan- Singapore and Japan-Mexico.

Para 3.167 (Page 101) Open tendering, selective tendering and single tendering remain the main procurement methods, and follow the GPA thresholds for contracts under its coverage. The conditions and thresholds for selective tendering and single tendering in the central Government outside of the coverage of GPA WT/TPR/M/397/Add.1

- 158 - is stipulated in Cabinet Order on Budgets, the Settlement of Accounts, and Accounting. The conditions and thresholds for single tendering for local government procurement outside of the coverage of GPA is stipulated in the Ordinance for Enforcement of the Local Autonomy Law of 1947. During the review period, the threshold values for each method remained unchanged. Among the different procurement methods, open tendering is the basic procedure, and represents most of the central government procurement contracts and value (Table 3.20). Under open tendering, qualified suppliers are invited, through tender notices published in the official gazette "Kanpo", to participate in the tendering procedures. Under selective tendering, permanent lists of qualified suppliers are established by procuring entities. The procuring entity invites, from among the qualified suppliers, those considered capable of implementing the contract to participate in the tendering procedures. Interested suppliers need to apply to the procuring entity concerned for qualification. Efforts to achieve unified qualification across different central government entities have been made since 2001. In order to increase opportunities to participate in tender, suppliers are advised by the relevant authority to apply for qualification in advance. The single tendering corresponds to "limited tendering" in the GPA, and constitutes the second most important procurement method in terms of number of contracts and procurement value (Table 3.20). In 2017, 1,103 GPA-covered contracts, representing a value of more than SDR 2 billion, were awarded through single tendering, accounting for about one seventh of the contracts, or 18% of the total procurement value. The breakdown of contracts by procuring method at the central government and IAA (Section 3.3.5) level are contained in Table 3.20. Japan maintains special procurement procedures for individual sectors, such as supercomputers (since 16 July 1987), non-R&D satellites (since 14 June 1990), computer products and services (since 20 January 1992), telecommunications products and services and medical technology products and services (since 28 March 1994). The procedures are considered as voluntary measures to promote procurement based on non-discriminatory, transparent, fair and open competition. The use of overall-greatest-value method in tender evaluation is encouraged or obligatory under these measures. The measures are contained in the Operational Guideline on Procedures for Government Procurement etc. (Understanding among related ministries and agencies concerned in procurement, 31 March 2014).

Question 14 How is the overall-greatest-value method applied in tender evaluation?

RESPONSE The overall-greatest-value evaluation method is applied when it is difficult to determine the successful bidder by the value.

Question 15 When is the use of overall-greatest-value method in tender evaluation encouraged and when is it obligatory? Does it apply to all types of procurement?

RESPONSE The overall-greatest-value evaluation method is applied when the bidder's properties, including special knowledge, technique, and originality, make a considerable difference in the result of the business compared to the differences in bidding price.

Para 3.171 (Page 104) Government procurement based on the Act on Promoting Green Procurement is implemented through the Basic Policy for Promotion of Procurement of Eco-Friendly Goods and Services, decided by the Cabinet in February 2001; the Policy was last revised in February 2019. It designates goods and services, including those related to public construction works, which should be purchased and utilized by government entities and IAAs, etc. It also sets out evaluation criteria that procuring entities should use in bid assessment for purchasing designated products. The Policy provides that green procurement should not be an unnecessary impediment to international trade, and should comply with the GPA rules. It is revised as necessary. Since 2016, three revisions were made to it. These changes were notified to the WTO Committee on Government Procurement. After years of addition and adjustment, the current number of designated products has grown to 21 fields covering 276 items, from stationery to electronic appliances and vehicles, and from building materials to transportation and building cleaning services.

Question 16 How is Green Procurement implemented? Is this a mandatory component or requirement?

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RESPONSE The Government of Japan provides for the basic policy on promoting green procurement. The basic policy designates the types of eco-friendly goods and services which should be purchased and the evaluation criteria. Based on the basic policy, each organization makes the procurement policy which stipulates the procurement target of eco-friendly goods and services every year while giving consideration to the proper use of the budget, and procures these based on each procurement policy. Green procurement is mandatory for the government agencies.

Question 17 In furtherance of promoting Green Procurement, what is the evaluation criteria that procuring entities should use in bid assessment for purchasing designated products?

RESPONSE The evaluation criteria are defined in the basic policy, and for the details, please refer to the following website: http://www.env.go.jp/en/laws/policy/green/index.html. Question 18: Does the evaluation consider "green" technical specifications only or is a certification/accreditation for such products required?

RESPONSE The Government of Japan considers "green" technical specifications only. A certification or accreditation for such products is not required.

IV. TRADE POLICIES BY SECTOR

Para 4.8 (Page 128) As reported in Japan's previous Review, in May 2016, the MAFF developed the Strategy to Promote Exports of Agriculture, Forestry, Fisheries Products and Foods, under which governmental support includes: information to farmers on market trends; matching of producers and exporters; and participation in food fairs. In June 2016, the Cabined adopted the Japan Revitalization Strategy 2016 (Section 2), which sets the export target for major agriculture, forestry, and fisheries products and foods at more than JPY 1 trillion by 2019; according to the authorities, by end-2018, the value of exports of these products reached JPY 906.8 billion.

Question 19 Referring to the Strategy to Promote Exports of Agriculture, Forestry, Fisheries Products and Foods, what were the specific modes utilized by Japan to share information with farmers on market trends? Further, to what extent was ICT utilized for market information sharing and was there any capacity building component for the farmers in this mode?

RESPONSE The MAFF has specifically provided the farmers, fishermen, foresters and food manufactures who intend to export their products overseas with support such as export diagnosis and market information through the meetup and the community website.

Para 4.10 (Page 129) A Food Industry Strategy was issued in April 2018, which was developed by the Government and various agricultural stakeholders. It identifies the challenges and issues/changing trends facing the food industry along the food chain, as well as its potential strengths. It incorporates proposals and an Action Plan.

Question 20 What are the challenges identified with respect to trade? What have Japan done so far to address these challenges on trade for the food industry?

RESPONSE There are challenges for developing overseas markets, such as "lack of information on foreign laws and business customs" and "securing and developing human resources which could be assigned to expand overseas." Japan takes the following measures: (1) Investigation of the needs of overseas markets and catch up demand, (2) Strengthening of the consultation system for the food industry to develop sales channels, support for business exhibitions, (3) Improvement of logistics support such as cold chain development for overseas transport, (4) Negotiations to ease import restrictions at export destinations. WT/TPR/M/397/Add.1

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Para 4.29 At the prefectural level, government-supported institutions are charged with promoting farmland consolidation. These prefectural institutions rent farmland, improve infrastructure (if necessary), and lease the land to core farmers. They had a total budget of JPY 22 billion in 2019. Farmers that increase farm size continue to be eligible to receive payments of up to JPY 10,000 for each additional 0.1 ha; payments of up to JPY 700,000 per household are available for the purpose of leasing land to farmers.

Question 21 One of the Japan's objectives to increase incomes in agriculture and rural areas in 10 years is the reduction of production cost of farming activities; however, the fragmented and dispersed farmlands in Japan could pose some challenges. Current interventions are focused on providing incentives through payments for farmers who are able to continue increasing their farm size and households who are able to lease their land to farmers. In this regard, would Japan provide information on alternative approaches or programs to consolidate farmlands (e.g., organizing farmers to farm groups or cooperatives) and incentives given to those who participate in this alternative program, if any?

RESPONSE In order to advance the farmland consolidation, Japan has encouraged and supported transactions via Farmland Banks and promoted development of Farmers and Farmland Plans based on thorough discussions for future farmland use in regions. "Core Farmers", laid down in the plan as those engaged in sustainable management, are eligible for the support such as the introduction of agricultural machines or facilities and funds for new farmers.

Para 4.40 (Page 139) The Government's policy on rice evolved over the review period, with the abolition of the Direct Payment for Rice and the administrative allocation of rice production volume targets, in 2018. The payments made to rice farmers were linked to rice production volume targets assigned to each prefecture and each individual farmer based on MAFF estimates of supply and demand. As indicated by an external source, this policy change is expected to raise the competitiveness of the rice farm sector, by enabling farmers to plan their production, unrestricted by volume targets; the Government's role is now refocused on providing market information.

Question 22 Are there future plans to consider applying the same policy changes on other agricultural products with existing direct payment programmes?

RESPONSE Since Japan had "blue box" subsidies only for rice (Direct Payments under Production-Limiting Programmes), there are no future plans envisaged for other products.

Para 4.46 The Basic Policy for Fruit Industry Promotion of 2010 was last revised in 2015. The next revision to it will be issued in 2020. The objectives of the Policy include an emphasis on increasing domestic production, consumption, and processing of domestically produced fruits. Under the revised Policy, financial assistance is to be increased for converting production to more valuable fruits (defined as profitable fruits or highly valued varieties) and for on-farm improvements. The budget allocated to this assistance was JPY 5.6 billion in FY2019. Assistance to farmers that convert their production to more valuable fruits (e.g. from less valuable oranges to more valuable peaches/oranges/mangoes) remains JPY 230,000 per 10 are, while assistance to farmers that convert their production to more valuable deciduous fruit tree (e.g. apples) is JPY 170,000 per 10 are. Under the Policy, payments are made to support the planned fruits production programme, and processing of fresh fruits if the market price declines or is foreseen to decline. For vegetables, farmer price support payments are made based on the quantity of production of specific vegetables under contract, calculated as the difference between 90% of the average of wholesale market price of the past six years and the average of wholesale market prices for each vegetable season. Since the last Review, there was no change in the price control support scheme.

Questions 23 What were the challenges encountered by Japan in enticing their farmers to convert into the production of "more valuable fruits/more valuable deciduous fruit tree" amidst the provision of WT/TPR/M/397/Add.1

- 161 - incentives such as direct payments and financial assistance? Further, how did Japan address these challenges? Would Japan provide more information on its process of formulating the Fruits Production Restructuring Plan and Plan of Fruit Industry Promotion?

RESPONSE The challenges include the slow shift to better varieties because the improved income takes place only after a certain "non-income" period after the replanting fruits are perennial crops. In order to address the issue, Japan encourages the shift by providing financial support during the "non-income" period. Also, as fruits are produced in unfavored condition areas such as steep lands, it is not easy to improve labour productivity, which is one of the challenges. Regarding the planning process, the national government updates the Basic Policy of Fruit Production Promotion once every five years. Based on the principle, prefectural governments develop Plans of Fruit Industry Promotion, and accordingly each local production region establishes Fruits Production Restructuring Plans.

Question 24 Is there a distinction between the trade regime on the importation of fruits in general, and tropical fruits?

RESPONSE There is no distinction between the trade regime on the importation of fruits in general and tropical fruits. Japan has the schemes of Generalized System of Preference and LDC Preference, which have special tariff rates to address developing members' interests. Through these, lower rates are applied for certain products, including bananas, mangoes and papayas. The specific rates are available at the link below (Japan's Tariff Schedule, HS code Chapter 8: Edible fruit and nuts; peel of citrus fruit or melons): https://www.customs.go.jp/english/tariff/2020_1/data/e_08.htm.

Para 4.153 (Page 164) During the review period, domestic support continued under several programmes (Section 3.3.1). The sector's non-industry-specific schemes included measures under the Subsidy Program for Global Innovation Centers, tax incentives for strengthening local business facilities, incentives regarding special zones, incentives based on the 2013 Industrial Competitiveness Enhancement Act, incentives under the 2018 Act on Special Measures for Productivity Improvement, the tax incentive system based on the Act on Strengthening a Framework for Regional Growth and Development by Promoting Regional Economy Advancement Projects, tax incentives for R&D, the tax incentive for wage and productivity improvement, incentives related to disaster recovery, and incentives of local governments for foreign-affiliated companies (e.g. subsidization of rent expenses, and incorporation/registration and other fees). According to JETRO information, the sole activity-specific incentive is the Connected Industries Taxation System, involving special depreciation or tax deductions for software, apparatuses, equipment, machinery, and devices. Other activity-specific support includes that under the fuel-cell vehicles initiative (Section 3.3.1.2). According to the 2017 WTO notification to the Committee on Subsidies and Countervailing Measures covering FY2015/16, the activity-specific support schemes for manufacturing included the bekko (tortoiseshell) and ivory crafts industries, the leather and leather goods industries, and the manufacture of traditional craft products. According to its latest WTO notification covering the period 2016/17, activity-specific support schemes for manufacturing included leather and leather goods, traditional craft products, R&D for care robot equipment, and sochu manufacture are in place either at central or local government level (Table 4.20).

Question 25 Japan provides various forms of tax incentives and subsidy programs as domestic support for its manufacturing sector. What measures or guidelines does Japan have in place to ensure compliance with the relevant WTO rules and regulations on subsidies?

RESPONSE There is a prior consultation system that the subsidizing authority can consult with the WTO/EPA office of the Ministry of Economy, Trade and Industry whether a proposing tax or subsidy program is consistent with relevant WTO and EPA rules.

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Para 4.168 (Page 169) The Government is developing a regulatory framework for e-payment services, in order to protect consumers and boost innovation. The Banking Act was amended on 26 May 2017 to add a new chapter on electronic payment services (Chapter VII-5). This Chapter created a registration procedure office to operate such services. Foreign corporations and foreign individuals can register but must designate an agent in Japan. The definition of Electronic Settlement Intermediary Services Providers (ESISPs) encompasses both Payment Initiation Services Providers and Account Information Service Providers, and includes provisions regulating their business conduct. In particular, if such a provider seeks to be connected with a banking IT system to start fund remittances or gain access to information related to deposit accounts, it must enter into an agreement with said bank regarding matters such as security of information and the allocation of responsibilities in case of damages regarding the customer. Banks must publicly disclose to the ESISPs their standards of connectivity by March 2018, and try to establish a voluntary open Application Programming Interface system by 2020

Question 26 What is the legal regime on commercial presence in Japan for representative offices for purposes of cash remittances?

RESPONSE If a person, who does not have banking license under the Banking Act, wants to carry out exchange transactions in the course of trade, the person must be registered as "Funds Transfer Service Provider" under the Payment Services Act. As a registration requirement, the person must be a stock company or Foreign Funds Transfer Service Provider (*) that has a business office (not representative office) in Japan. For details of the registration, please look at Articles 38, 39 and 40 of the Act (tentative translation is available at http://www.japaneselawtranslation.go.jp/law/detail/?id=3078&vm=04&re=01) *"Foreign Funds Transfer Service Provider" as used in the Act means a person who carries out exchange transactions in the course of trade in a foreign state under the same kind of registration as the one referred to in Article 37 pursuant to the provisions of laws and regulations of that foreign state equivalent to this Act (including permission or other administrative dispositions similar to that registration).

Para 4.176 (Page 170) The commitments undertaken by Japan during the period under review regarding financial services in the CPTPP and in the EU-Japan EPA include some elements which differ from those already undertaken in its previous FTAs. The CPTPP contains GATS plus commitments on insurance intermediation, such as brokerage and agency, on securities-related transactions with financial institutions and other entities in Japan, and on sales of a beneficiary certificate of an investment trust or an investment security, through securities firms in Japan. The EPA with EU contains specific definitions, exceptions and disciplines on new financial services, self-regulating organizations, payment and clearing systems, transparency, and rules on insurance services provided by postal entities.

Question 27 What is the legal regime on the cross-border issuances of securities in Japan financial markets and on cross-border supply of insurance and pre-need policies/products to Japan?

RESPONSE 1. Cross-border issuance of securities Issuers located outside of Japan can issue the securities such as shares through Type I Financial Instruments Business Operator (securities companies) registered under the Financial Instruments and Exchange Act. 2. Cross-border supply of insurance Japan has maintained the position as "unbound" for Insurance and Insurance-Related Services except for obligations stipulated under paragraphs B3 and B4 of the "GATS Understanding on Commitment in Financial Services." For your information, Art. 185 of the Insurance Business Act provides that a foreign insurer may transact insurance business only in cases where it establishes a branch office, etc. in Japan and obtains a license, subject to exceptions outlined above.

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PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT

1. TRADE AND INVESTMENT POLICY Para. 2.3 (Page 4)

Japan is currently a party to eighteen EPAs. Japan is aiming for the swift conclusion of RCEP negotiations among 16 countries, through which the FTA ratio will exceed 70%, as set out in the Growth Strategy 2019. Japan has also promoted its regional and bilateral trade policies as a means of complementing the multilateral trading system under the WTO and Japan believes that these agreements will serve as building blocks to achieve higher trade liberalization at the multilateral level.

Question 28 What is Growth Strategy 2019? What policy directions are defined in this Strategy in relation to the Economic Partnership Agreements (EPAs) and the Free Trade Agreements (FTA) of Japan?

RESPONSE Japan issued the "Action Plan of the Growth Strategy" and the "Follow-up on the Growth Strategy" last June. These documents are referred to as the "Growth Strategy 2019". In regard to EPA/FTA, the "Follow-up on the Growth Strategy" states that "Japan, as flag-bearer of free trade, aims to take the lead in establishing comprehensive, balanced and high-level global rules through the conclusion and expansion of high-quality EPAs", and sets out a KPI to "aim to promptly conclude RCEP negotiations, upon which the FTA ratio will exceed 70%".

Para 2.6 (Page5) As the holder of the G20 Presidency in 2019, Japan hosted the G20 Osaka Summit and led the discussion on trade issues. The G20 leaders confirmed to strive to realize a free, fair, non- discriminatory, transparent, predictable and stable trade and investment environment, and to keep their markets open. They also reaffirmed their support for the necessary reform of the WTO to improve its functions.

Question 29 What did the G20 accomplished or contributed in terms of trade and investment policies and development during Japan's G20 Presidency in 2019?

RESPONSE There were several key accomplishments that came out of Japan's G20 Presidency in 2019. The G20 Trade and Digital Economy Ministers adopted a statement rich in substance with a view to realizing free, fair, and non-discriminatory trade. Ministers confirmed their willingness to work constructively with other WTO Members to undertake necessary WTO reform with a sense of urgency. Ministers also agreed that action is necessary regarding the functioning of the dispute settlement system consistent with the rules as negotiated by the WTO Members. G20 Leaders confirmed fundamental principles of free trade as a free, fair, non-discriminatory, and open market and level playing field. And G20 Leaders reaffirmed their support for the necessary reform of the WTO to improve its functions. Furthermore, the Osaka Track was launched in June 2019 as a process to promote international policy discussions on digital economy, inter alia, international rule-making on trade- related aspects of electronic commerce at the WTO.

Para 2.34 (Page 11) In March 2015, under the leadership of the Prime Minister, the Council for Promotion of Foreign Direct Investment in Japan adopted the "Five Promises for Attracting Foreign Businesses to Japan" as important items to be addressed going forward. In addition, in May 2016, this council adopted the "Policy Package for Promoting Foreign Direct Investment into Japan to Make Japan a Global Hub" to promote more FDI to make Japan an international trade and investment hub.

Question 30 Japan adopted its policy package for FDI promotion in May 2016, during which Japan's inbound FDI flows peaked at USD 19.4 billion. However, in the succeeding years, Japan's inbound FDI dropped to USD 11 and 9.9 billion for 2017 and 2018, respectively. Was Japan able to identify the factors leading to the substantial decline in investments, and if so, what measures were implemented to address or mitigate the same?

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RESPONSE Japan has not identified specific factors of such decline in investments so far.

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CHINESE TAIPEI

PART I: REGARDING THE SECRETARIAT REPORT (WT/TPR/S/397) 1 ECONOMIC ENVIRONMENT 1.3 DEVELOPMENTS IN TRADE AND INVESTMENT 1.3.2 TRENDS AND PATTERNS IN FOREIGN DIRECT INVESTMENT (FDI)

Page 29 (Para 1.26) FDI is not only an additional source of capital. It is also considered to bring with its entrepreneurship, management skills and, especially, new technology, which contribute to improved multi-factor productivity. Japan's inbound FDI stocks as a share of GDP (4% in 2016) are the lowest in the OECD, due to tradition-related challenges in certain areas (e.g. mergers and acquisitions, corporate governance, and labour market rigidities) that are being addressed by the authorities. FDI inflows peaked at USD 19.4 billion in 2016 (Table 1.5). During the review period, inflows were largely concentrated in the manufacturing of electric machinery, transportation equipment, and chemicals and pharmaceuticals, as well as in services, mainly finance and insurance (Tables 1.4 and 1.5); in 2018, they originated mainly in the United States, the Cayman Islands, the European Union and the Republic of Korea. The FDI inbound stock continued to rise steadily and was largely held by European Union investors (Table 1.7). Despite a decline in its share, the United States remains the second FDI stock-holder, followed by Singapore. Within the European Union, in 2017, the largest single stock holder remained the Netherlands, where around 80% of investment was in electrical machinery, followed by France, where over 70% of investment was in transportation equipment; around 80% of the stock from North America was in the non-manufacturing sector, with the majority in the finance and insurance industry.

Question 1 The ratio of Japan's inbound FDI stocks to GDP is the lowest among OECD members, due to tradition-related challenges in certain areas (e.g. mergers and acquisitions, corporate governance, and labour market rigidities). Please provide a more detailed explanation. What measures has Japan taken to tackle this issue?

RESPONSE The Annual Report on the Japanese Economy and Public Finance 2011 pointed out that Japanese companies' hesitation toward foreign companies was one of the reasons for deterring direct investment in Japan. In order to change the tendency of Japanese companies to hesitate to collaborate or work with foreign companies only on the ground that they are foreign companies, and to promote better understanding of doing business with foreign companies, Japan has made efforts such as dissemination of successful cases and promotion of mutual understanding among various stakeholders. (For your reference) Website of Council for Promotion of Foreign Direct Investment in Japan. http://www.invest-japan.go.jp/documents/en_index.html.

2 TRADE AND INVESTMENT REGIMES 2.2 TRADE POLICY FORMULATION AND OBJECTIVES

Page 35 (Para 2.6) The institutional framework for trade policy-making has not changed since Japan's previous Review. Overall coordination of trade policies rests with the Cabinet. The Ministry of Economy Trade and Industry (METI) and the Ministry of Foreign Affairs (MOFA) continue to formulate and implement trade policy. Several other ministries and official agencies have trade policy related responsibilities (Sections 3 and 4). The mandates of various of the legislature's (Diet) committees include trade (i.e. committees on economy trade and industry; financial affairs; forestry and fisheries; and fundamental national policies). As indicated in a previous Review, ministries and agencies receive inputs from the private sector concerning matters related to trade policies, through, inter alia, exchanging opinions with private entities and receiving petitions from them.

Question 2 How does the communication mechanism on trade policies between the public and private sectors function when the private sectors submit opinions, requests or petitions? Is this practice of exchanges between government and private sectors conducted periodically or when the need arises? Please elaborate. WT/TPR/M/397/Add.1

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RESPONSE The Government of Japan informs its trade policy through close communication with the public at various occasions including the Diet discussions and other explanatory sessions.

2.3 TRADE AGREEMENTS AND ARRANGEMENTS 2.3.2 REGIONAL AND PREFERENTIAL AGREEMENTS 2.3.2.1 REGIONAL TRADE AGREEMENTS (RTAS)

Page 41 (Para 2.15) Japan has RTAs in force with: Australia; Brunei Darussalam; Chile; India; Indonesia; Malaysia; Mexico; Mongolia; Peru; the Philippines; Singapore; Switzerland; Thailand; Viet Nam; ASEAN Member economies ; EU member economies ; and participants in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). New developments over the review period were the entry into force of the CPTPP and the EU-Japan Economic Partnership Agreement (see below). Taken together, these economies accounted for 38.7% of Japan's merchandise imports and 34.8% of its merchandise exports in 2018.

Question 3 Could Japan elaborate on the impacts that the new regional trade agreements that Japan has concluded since its last review period have had on changes in its imports and exports?

RESPONSE After the last review in March 2017, Japan has concluded the TPP11 Agreement and Japan-EU EPA. As for the trade trends after the entry into force of these agreements, for example, during the 1- year period, after the entry into force of TPP11, export of dairy products towards countries in which TPP11 has entered into force increased by more than 20%. During the 11-month period after the entry into force of Japan-EU EPA, beef export increased by more than 30%, as well as import of wine rose by 11 % in relation with the EU (The numbers above are in comparison with those from the same period of the previous year.).

2.3.2.1.1 CPTPP

Page 43 (Para 2.19) CPTPP signatories are: Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Viet Nam. As at July 2019, the CPTPP had not yet entered into force for: Brunei Darussalam, Chile, Malaysia, and Peru.

Question 4 Could Japan explain the criteria for other countries to join the CPTPP?

RESPONSE TPP11 establishes free and fair rules of the 21st century, and creates a single massive economic area consisting of a population of 500 million people, GDP of 10 trillion US dollars, and total trade of 5 trillion US dollars. It is the common aspiration of the TPP11 participating countries to spread its high-standard and balanced new rules of the 21st century worldwide. The TPP11 Agreement is open to all economies willing to meet the high standards of the Agreement. Please also refer to the Commission Decision of the Accession Process.

Question 5 To the best of Japan's knowledge, apart from the 11 CPTPP signatories, are there any other countries applying to join the CPTPP?

RESPONSE No economy has notified New Zealand (TPP11 depositary) of their formal request to commence negotiations on acceding to TPP11 so far.

Page 43 (Para 2.20) ...Upon entry into force of the agreement, 83.3% of tariff lines were duty free. The transition period is 21 years for Japan (i.e. ending in 2038). At the end of this period, 459 tariff lines will remain subject to duties. Tariff rate quotas, applied to 160 lines, are either CPTPP-wide or country-specific. Services commitments on investment and cross-border trade in services are scheduled on a negative WT/TPR/M/397/Add.1

- 167 - list basis, while commitments on the temporary entry of business persons are scheduled on a positive-list basis (Section 4.4).

Question 6 Since the CPTPP entered into force, has Japan conducted any quantitative impact assessments on its economy, investments, or trade? Are there any differences to date between the actual impacts of the CPTPP since it took effect and Japan's prior assessment?

RESPONSE Japan (Cabinet Secretariat) conducted the economic impact analysis of the CPTPP in December 2017. The analysis estimated that the implementation of the CPTPP would boost Japan's GDP by approximately 1.5%. Because it has been only about one year since the CPTPP entered into force, it is too early to evaluate the actual economic effects of the CPTPP to date.

2.3.2.3.1 ASIA-PACIFIC ECONOMIC COOPERATION (APEC)

Page 45 2.31. In 2016, APEC leaders adopted the Lima Declaration on the Free Trade Area of the Asia Pacific (FTAAP), which envisages negotiations on a comprehensive RTA which would include "next- generation trade and investment issues". These negotiations would be held outside of APEC but in parallel with the APEC process, building upon regional undertakings such as the CPTPP and the Regional Comprehensive Economic Partnership. APEC members are now examining how current pathways could contribute to the realization of the FTAAP.

Question 7 The Lima Declaration states that the FTAAP should be built upon ongoing regional undertakings, and through possible pathways including the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP). Could Japan share more on how the two mentioned pathways support the Lima Declaration on the realization of the FTAAP?

RESPONSE TPP11, a "pathway" for the realization of FTAAP, can be seen as a model for 21st century trade and investment rules due to its high quality and comprehensiveness. Japan will continue to strive for steady implementation and expansion of such rules with other economies. With regard to RCEP, Japan has been working on towards the signing of the agreement among 16 countries by the end of this year. Japan will continue to make efforts on trade and investment liberalization and facilitation and contribute to the realization of high quality and comprehensive FTAAP through these efforts for the pathways.

Question 8 In Japan's view, how should APEC member economies support the TPP and RCEP so as to complete and strengthen the pathways to realizing the FTAAP?

RESPONSE Japan has steadily contributed to set pathways towards the realization of FTAAP through its efforts to encourage TPP11 economies which have not entered into force to do so and to promote efforts towards the signing of RCEP among 16 countries by the end of this year. Additionally, Japan believes that the participation of more APEC members in the TPP11 will lead to the promotion of high-quality and comprehensive RTAs such as TPP11, and will lead to the eventual realization of high quality and comprehensive FTAAP.

2.4 INVESTMENT REGIME 2.4.1 INVESTMENT FRAMEWORK

Page 47 (Para 2.36) According to the news in Japan, in November of 2019, the National Diet of Japan newly passed amendment bill of the Foreign Exchange and Foreign Trade Act (FEFTA), under which the overseas investors are required to seek prior-notification from the Japanese government before obtaining a 1 percent or higher stake in Japanese companies engaged in business related to weapons, nuclear energy, semiconductors, railroads, etc., lowering the threshold from the current 10 percent. Relevant ordinance of the said amendment bill of FEFTA and the list of Japanese companies that require prior notification will be drafted at the beginning of 2020. WT/TPR/M/397/Add.1

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Question 9 Could the Japanese government elaborate more on the said amendment to FEFTA, relevant ordinance and how the list of Japanese companies will be organized?

RESPONSE Although Japan fails to see the point of this question, the industries subject to the requirement of the prior notification are specified in the public notice.

Question 10 Could the Japanese government elaborate more on its future Foreign Direct Investment policy relating to the sectors considered as national security? The Japanese Diet approved the amendment of the FEFTA last November. The amendment will become effective on the day provided by the cabinet order within six months from its promulgation.

RESPONSE At this moment, Japan does not have any specific future plans for further amendment of Foreign Direct Investment policy relating to such sectors other than the amendment above.

As for the Direct Investment policy, please refer to the factors to be considered in the examination process as follows:

1. Maintenance of defense production and technological bases related to industries concerning national security (i.e. weapons, aircrafts, space and nuclear related industries, etc.) 2. Prevention of outflow of critical technologies to the national security. 3. Preservation of public services in emergency and peacetime situations. 4. Protection of public safety. 5. Maintenance of stable supply of food or energy etc., sound stockpiling policy, preservation of national land, and productivity and continuity of specific domestic businesses, with respect to business types of which Japan has lodged a reservation pursuant to the provisions of Article 2-b of the Code of Liberalization of Capital Movements of the Organization for Economic Cooperation and Development , from the viewpoint of smooth management of the Japanese economy. 6. Characteristics of the investor and its affiliate party(ies), such as, their nature, financing plan and record of performance of their investment, etc. 7. Such other factors that need to be considered.

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.3 MEASURES DIRECTLY AFFECTING PRODUCTION AND TRADE 3.3.3 SANITARY AND PHYTOSANITARY (SPS) REQUIREMENTS 3.3.3.2 LEGISLATIVE FRAMEWORK 3.3.3.2.3 THE PLANT PROTECTION ACT

Page 89 (Para 2) 3.131. The Plant Protection Act, which falls under the responsibility of the MAFF, provides the legal basis for regulations on plant protection, including quarantine for local, imported and exported plants. There were no changes to the Act over the review period. The Act's main implementing regulation is the Ordinance for Enforcement of the Plant Protection Act. As notified by Japan to the WTO, revisions of the Ordinance's annex tables (relating to: quarantine pests; plants subject to field inspection in exporting countries; import prohibited plants; and plants subject to specific phytosanitary measures to be carried out in exporting countries) will enter into force in January 2020.

Question 11 We would like to ask Japan to give further explanation about the implementation of transparency obligation under the SPS Agreement with its plant quarantine measures. For example, are the notified amendments of phytosanitary requirements to the SPS Committee identical to the Japanese version posted on MAFF's Website?

RESPONSE Japan has provided public information on SPS measures including the one mentioned, in accordance with the transparency obligation under the SPS agreement. Information available to the public and that contained in the notifications are the same and the both are consistent with the SPS Agreement.

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4 TRADE POLICY BY SECTOR 4.2 MINING AND ENERGY 4.2.2 ENERGY

Page 153 (Para 4.109) The 2018 SEP indicates that the Government will propose measures aimed at utilizing solar power for residential consumption and as a distributed power source to carry out local production for local consumption. The support measures taken since application of the SEP include an annual JPY 2.8 billion subsidy scheme to support the construction of net zero energy houses equipped with storage batteries or electric vehicle charging/discharging facilities, and an annual JPY 2 billion subsidy scheme for companies constructing local micro grids i.e. energy systems which can be operated independently from large-scale electric power systems in case of blackout. The Government is also subsidizing the acquisition of storage batteries for residential and small factory use, based on a target/maximum eligible price system whose scales are described in Chart 4.9. Measures are also expected to be taken to ensure the proper recycling of used solar panels.

Question 12 Will foreign entities be allowed to apply SEP subsidies? If yes, what are the substantial terms regarding foreign entities? Is there any differential treatment between foreign and domestic entities?

RESPONSE Foreign entities can apply to SEP subsidies under the same condition as domestic entities as long as they meet the following conditions: 1. The pilot project for ZEH+ (Net-Zero Energy House +) Applicants shall be an owner of newly built house, buyer of ready-built new house, or house owner. 2. The pilot project for ZEH-M (Net-Zero Energy House for high-rise apartment) Applicants shall be self-employed individuals or corporations that run businesses in Japan. The ZEH- M project shall be carried out in Japan. 3. Local micro grid project Applicants shall be self-employed individuals or corporations that run businesses in Japan. 4. Subsidy for storage batteries for residential and small factory use Applicants shall be registered corporations in Japan, individuals or self-employed individuals who live in Japan.

Page 154 (Para 4.116) According to Japan's latest notification to the Committee on Subsidies and Countervailing Measures, during the review period, several schemes provided support, in form of subsidized loans and/or grants, to energy-related activities aimed at implementing the country's energy policy objectives regarding supply, stockpiling, renewable energy, energy efficiency, and environmental protection (Table 4.19).

Question 13 Significant subsidies and domestic supports are provided to hydrocarbons, although for the production/exploration and the supply-related activities rather than directly at the price level. While this would eventually contribute to the realization of the low-carbon hydrogen society in Japan, however, with sizeable volume of hydrocarbons needed by Japan, this may, in the interim, encourage the continued development of global fossil fuel industry, and hence result in increasing the carbon emissions considerably. What is Japan's stance on this?

RESPONSE The Pittsburgh Summit communiqué clarifies subsidies to be eliminated as "contributing to wasteful consumption." Japan has a stance that it does not have inefficient fossil fuel subsidies that promote wasteful consumption.

Page 157 (Para 4.132) In 2017, 65% of natural gas was imported by seven electricity companies for power generation. City-gas companies imported the remainder, with one third of their sales to individual consumers and more than half to industry. The city-gas industry is fragmented into many vertically integrated regional companies, the four largest having a combined market share of 71%. Under the provisions of the Foreign Exchange and Foreign Trade Act, foreign entities wishing to invest in gas utilities must notify their intention to the competent authorities, including the METI. The authorities state that WT/TPR/M/397/Add.1

- 170 - permission may be denied on grounds of, inter alia, public order. Foreign investments have effectively taken place in this sector.

Question 14 The city-gas industry is currently composed of vertically integrated regional companies. If taking achieving full market liberalization into consideration, is unbundling the city-gas industry necessary?

RESPONSE Although retail market has been fully liberalized, to encourage the participation of various businesses and to make retail market more effective, it is necessary to prepare a fair gas market by unbundling the city-gas industry and further securing the neutrality of business operations in the pipeline sector.

Question 15 Furthermore, please provide more detailed information regarding foreign investments, such as shareholding restrictions etc.

RESPONSE 1. Maintenance of defense production and technological bases related to industries concerning national security (i.e. weapons, aircrafts, space and nuclear related industries, etc.) 2. Prevention of outflow of critical technologies to the national security. 3. Preservation of public services in emergency and peacetime situations. 4. Protection of public safety. 5. Maintenance of stable supply of food or energy etc., sound stockpiling policy, preservation of national land, and productivity and continuity of specific domestic businesses, with respect to business types of which Japan has lodged a reservation pursuant to the provisions of Article 2-b of the Code of Liberalization of Capital Movements of the Organization for Economic Cooperation and Development, from the viewpoint of smooth management of the Japanese economy. 6. Characteristics of the investor and its affiliate party(ies), such as, their nature, financing plan and record of performance of their investment, etc. 7. Such other factors that need to be considered.

Question 16 Has any application proposed by foreign entity been rejected before?

RESPONSE No, it has not.

Page 157 (Para 4.134) Following the amendment of the 1954 Gas Business Act in April 2017, the full deregulation of the gas retail market was enforced on 1 April 2017. As a consequence of this reform, the share of new entrants rose in volume, from 8% to 14% between April and July 2019, the number of registered retail firms rose to 54 (as at April 2018), among which 18 directly served individual households. There are foreign operators among them. The number of consumers switching from one company to another rose from 60,000 in March 2017 to 840,000 in March 2018. The next stage of the reform, the legal separation of the pipelines business division from large gas suppliers, is scheduled for April 2022.

Question 17 In the next stage of the reform whereby the legal separation of the pipelines business division from large gas suppliers will be effective, will foreign investment and/or foreign operators be allowed to join pipelines business? If yes, what will be the terms and criteria of foreign entities participation?

RESPONSE In Gas Business Act, foreign operators are not prohibited from joining pipelines business. Conditions of permission for gas pipeline service business is equal regardless of nationality.

Question 18 Does the pipelines business include both transportation and distribution? What is the dispute settlement mechanism regarding obligations concerning third party access to the natural gas transmission sector?

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RESPONSE The gas pipeline business includes both transportation and distribution. Third party access to the gas pipeline is possible because the Gas Business Act obligates the gas pipeline business to provide transportation service and to formulate general provisions for transportation service that determine rates and other supply conditions and to make it public.

Page 158 (Para 4.137) Chart 4.11 describes the power-generation mix for FY2017, and the planned one for 2030.

Question 19 What is the total amount of electricity generated in 2017 and the forecasted amount in 2030?

RESPONSE 1060.5 billion kWh electricity was generated in 2017, and around 1065.0 billion kWh electricity will be generated in 2030 according to Japan's long-term energy supply and demand outlook (METI, July 2015).

Page 159 (Para 4.140) Following the 2016 liberalization of the retail market, and up to May 2019, the share of new power producers and suppliers of electricity in total retail sales rose from 5.0% to 14.2%. Entry into the retail market requires government approval. In addition, under the provisions of the Foreign Exchange and Foreign Trade Act, foreign entities wishing to invest in electric utilities (including retail operations) must notify their intention to the competent authorities, including the METI. The authorities state that permission may be denied on grounds of, inter alia, public order. The number of new entrants rose considerably, from 109 operators registered in October 2013 to 614 in September 2019. New options for consumers have appeared, such as bundled packages with gas and other services, loyalty schemes, and the provision of CO2-free electricity.

Question 20 To avoid the possible negative impacts on liberalization resulted from those new options for consumers, have the Japanese authorities implemented any measures on the retail market? If yes, please provide more details regarding the measures.

RESPONSE The Electricity and Gas Market Surveillance Commission established a consultation service in order to provide advice during times of market discord, such as contract disputes between consumers and retail electric power suppliers, in order to ensure proper electric power trade and the neutrality of network division. In implementing the full liberalization of retail in April 2016, the transitional measures on retail regulation fees for low-pressure consumers were taken in order to prevent the "non-regulated monopoly", and the measures as a transitional fees mechanism has retain only in the supply area designated by the Minister of Economy, Trade and Industry as being deemed particularly necessary to protect the interests of electricity users after April 2020. In case low- pressure consumers are not satisfied with "new options" and cancel the contracts, it is possible for them to contract the EPCOs again and be supplied at regulated rates while the regulations on household rates remain.

Question 21 Furthermore, please provide more detailed information regarding bundled packages with gas and other services and loyalty schemes.

RESPONSE Regarding to city gas businesses, mainly, gas retailers in the metropolitan area supply not only gas but electricity. They discount a price of electricity for the customers who have both gas contract and electricity contract and provide service that watch over daily life by grasping gas use situation. In some cases, across industries, city gas businesses and electricity businesses jointly invested and started a new company and are working on customer acquisition by providing various price menu and by improving the customer loyalty leveraging each advantage and know-how.

Question 22 Has any application proposed by foreign entity been rejected before? And the reason?

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RESPONSE There was one case that the Minister of finance and the Minister of Economy, Trade and Industries ordered a foreign Investor to discontinue its investment in Japanese electricity company. The decision of discontinuation is to avoid any negative impact on the stable supply of electric power, and on the construction plan of nuclear power plants which will become the core of Japan's nuclear fuel cycle policy.

Page 159 (Para 4.142) While consumers can now choose among a variety of services offered by the operator they selected, the prices for specific retail services remain regulated for the time being, so long as competition has not fully produced its effects.

Question 23 Why has competition not fully produced its effects?

RESPONSE The EPCOs had a monopoly in their respective service areas before the liberalization of the retail market and they still represent for the large part of the supply capacity.

Question 24 Does Japan plan to adopt any measures to further promote competition in the electricity market?

RESPONSE In order to realize stable and inexpensive power supply through competition among retailers, which is the purpose of the power system reform, it is indispensable to activate the wholesale market where retailers can procure necessary power for retail supply. Therefore, METI is discussing activities toward the wholesale market activation etc. Examples of the discussion are as follows: 1 Discussion of activation of the spot market by a gross bidding, etc. 2 Discussion of activation of forward market and intraday market

4.4 SERVICES 4.4.1 FINANCIAL SERVICES 4.4.1.1 REGULATORY EVOLUTIONS IN THE BANKING SECTOR

Page 168 (Para 4.168) The Government is developing a regulatory framework for e-payment services, in order to protect consumers and boost innovation. The Banking Act was amended on 26 May 2017 to add a new chapter on electronic payment services (Chapter VII-5). This Chapter created a registration procedure office to operate such services. Foreign corporations and foreign individuals can register but must designate an agent in Japan. The definition of Electronic Settlement Intermediary Services Providers (ESISPs) encompasses both Payment Initiation Services Providers and Account Information Service Providers, and includes provisions regulating their business conduct.

Question 25 In terms of market access, do foreign corporations and foreign individuals enjoy the same treatment (i.e., national treatment and non-discrimination) as Japanese ESISPs? Is there a significant difference between the qualification requirement of ESISPs and those of other WTO members?

RESPONSE There is no discriminatory treatment against foreign corporations and foreign individuals for the entry of ESIS. It is also applied among WTO members.

PART II: REGARDING THE GOVENMENT REPORT (WT/TPR/G/397) 2 TRADE AMD INVESTMENT POLICY 2.1 OVERVIEW Page 4 (Para 2.3) Japan is currently a party to eighteen EPAs. Japan is aiming for the swift conclusion of RCEP negotiations among 16 countries, through which the FTA ratio will exceed 70%, as set out in the Growth Strategy 2019. Japan has also promoted its regional and bilateral trade policies as a means of complementing the multilateral trading system under the WTO and Japan believes that these agreements will serve as building blocks to achieve higher trade liberalization at the multilateral level. WT/TPR/M/397/Add.1

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Question 26 We understand that India still has many concerns about unresolved RCEP issues and will make its final decision based on the members' resolution of these issues. It has been reported that RCEP members have begun to carry out related work, such as the legal scrubbing of texts, and RCEP members are also actively addressing India's concerns about unresolved issues. Could you please share with us the current progress of and schedule for RCEP negotiations, as well as the likelihood for India to jointly sign the RCEP in 2020?

Question 27 In addition to China and South Korea, Japan has signed FTAs with the remaining 14 RCEP members, and Japan is currently conducting negotiations on the "Japan-China-Korea FTA" with China and Korea. In Japan's opinion, what are the differences between RCEP and the Japan-China-Korea FTA?

RESPONSE Trilateral free trade agreement is to realize a comprehensive, high-quality and mutually beneficial agreement with its own value building upon the RCEP negotiations.

2.2 WTO Page 5 (Para 2.7) Furthermore, through the launch of the "Osaka Track" at the sideline of the G20 Osaka Summit, Japan seeks to achieve a high standard agreement on trade-related aspects of e-commerce with the participation of as many WTO Members as possible, aiming at achieving substantial progress by MC12.

Question 28 Could Japan please elaborate on the "Osaka Track" and how it might contribute to international rule- making on trade-related aspects of electronic commerce?

RESPONSE The Osaka Track was launched in June 2019 as a process to promote international policy discussions on digital economy, inter alia, international rule-making on trade-related aspects of electronic commerce at the WTO. The Osaka Track will contribute to enriching such existing endeavors by approaching digital economy from the following three viewpoints:1) discussing issues which need further intellectual works, to foster mutual understanding among WTO members participating in the on-going negotiations on electronic commerce at the WTO (hereinafter referred to as the "WTO negotiations"); 2) making best use of the accumulation of the best experiences and knowledge conducive to the WTO negotiations, gained through expert discussions in international fora other than the WTO; and 3) promoting holistic policy discussions on issues surrounding digital economy, not limited to those covered under the WTO negotiations.

2.3 FTA/EPAs Page 8 (Table2.1) After the United States withdrawing TPP (Trans-pacific Partnership Agreement), Japanese Government took the initiative to organize and accomplish the negotiation of CPTPP (Comprehensive and Progressive Agreement for Trans-pacific Partnership), pushing back against the rising trade protectionism.

Question 29 CPTPP has taken effect for more than one year. Could the Japanese government demonstrate the impact of CPTPP on Japan's trade, main industrial sectors and agriculture so far?

RESPONSE As for the trade trends after the entry into force of the TPP11 Agreement, for example, during the 1-year period after the entry into force of TPP11, export of dairy products towards countries in which TPP11 has entered into force increased by more than 20%.

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2.4.3 JAPAN'S BILATERAL ACTIVITIES Page 10 (Para 2.21) 2.21. Following this leaders' decision, Japan and the United States held bilateral negotiations, including eight ministerial-level negotiations between Minister Motegi and Ambassador Lighthizer in approximately five months. At the summit meeting in September 2019, the two leaders confirmed that the both sides reached final agreement on the Japan-United States Trade Agreement and the Japan-United States Digital Trade Agreement.

Question 30 Could Japan please give some examples of the provisions that contain high-standard commitments in the Japan-United States Digital Trade Agreement?

RESPONSE The Japan-United States Digital Trade Agreement, for example, includes high-standard commitments advanced from the TPP Electronic Commerce Chapter, such as the provisions with respect to prohibition of request for disclosure of cipher or algorithm.

2.5 INVESTMENT POLICY Page 12 (Para 2.35.) The Working Group for Revising Regulations and Administrative Procedures under the Council for Promotion of Foreign Direct Investment in Japan discussed issues impeding foreign investment in the economy and compiled the Final Report in 2017. In addition, the Council launched the Support Program for Regional Foreign Direct Investment in Japan in 2018 to advance regional revitalization through FDI. In 2019, the Council adopted the Program to Intensively Attract Foreign Direct Investment in Regional Japan to strengthen the Support Program and provide intensive support to priority local governments. In addition, the Japanese Government will work to further improve Japan's overall business environment. By following up the past plans and conducting those steadily, the Japanese Government aim to achieve the goal of doubling the inward FDI stocks to JPY 35 trillion by 2020.

Question 31 With regard to para 2.35 on Page 12 of the Trade Policy Review Report By The Secretariat, it is stated that the Council for Promotion of Foreign Direct Investment in Japan launched the Support Program for Regional Foreign Direct Investment in Japan in 2018 to advance regional revitalization through FDI. In 2019, the Council adopted the Program to Intensively Attract Foreign Direct Investment in Regional Japan to strengthen the Support Program and provide intensive support to priority local governments. As we understood that, in order to promote investment cooperation between foreign companies and local companies, measures have been taken to reduce corporate tax and assist foreign investors through financing and other systems. Does the government of JAPAN have any specified measures to promote further plans for attracting foreign investment, which measures in place have been offered to foreign investment incentives?

RESPONSE The further plan is under consideration and will be announced on the web site when it is decided.

4 JAPAN'S DOMESTIC POLICIES 4.1 ABENOMICS Page 14 (Para 4.1)

Since 5G is an essential social foundation for achieving "Society 5.0," it is extremely important to ensure that 5G telecommunication related systems is built up with trust, stability and safety. In light of the importance of dealing dissemination and promotion of 5G information and telecommunications infrastructure, "2020 Tax Reform Outline," under which a company can receive either a 15% tax credit or 30% bonus depreciation for qualifying 5G investments, was released by Japanese ruling coalition on 20th December 2019. Further, this new tax measure will also be introduced in accordance with the requirements of "Act on Promotion of Dissemination of Specified Advanced Information and Telecommunications System (tentative name)," which is still in draft stage now.

Question 32 Could the Japanese government elaborate more on its tax reform regarding 5G investment and qualifies for the incentives?

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RESPONSE The specific requirements for utilizing the 5G investment promotion tax system will be stipulated in the Bill of Promotion on Development, Supply, and Introduction of Specific Advanced Information and Communication Technologies Utilization Systems. Japan would like to refrain from answering this question as the bill is currently under consideration in the Diet and still not enacted.

4.4 COMPETITION POLICY Page 16 (Para 4.8) In accordance with the conclusion of the Trans-Pacific Partnership (TPP) agreement and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a scheme so- called "Commitment Procedures" was introduced into the Antimonopoly Act (AMA). It has been put into force since 30 December 2018. The Commitment Procedures would enable the JFTC and alleged violators to communicate with each other throughout all the procedures after the launch of the investigation. It is considered that the Commitment Procedure would facilitate early resolution of competition concerns and contribute to the effective and efficient enforcement of the AMA by resolving more cases through cooperation between the JFTC and alleged violators. Ensuring the transparency and the predictability regarding the enforcement of the law related to Commitment Procedures, the JFTC established rules and policies such as the "Rules on Commitment Procedures by the Fair Trade Commission" and the "Policies Concerning Commitment Procedures".

Question 33 Could Japan elaborate on the practical impacts of the Commitment Procedures? Are there any discrepancies with previous expectations?

RESPONSE The Japan Fair Trade Commission has approved only one Commitment Plan (submitted by Rakuten, Inc. and approved on October 25, 2019) so far, and thus the JFTC is not quite sure what kind of practical impacts Commitment Procedures have on the enforcement activities by the JFTC. In general, it is considered that, compared to the procedures regarding cease-and-desist orders or orders for payment of surcharges, Commitment Procedures will enable swifter elimination of competition concerns, broaden the range of cooperative problem-solving by the JFTC together with enterprises, and contribute to efficient and effective enforcement of the Antimonopoly Act.

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SWITZERLAND

Report by the Secretariat (WT/TPR/S/397)

1. ECONOMIC ENVIRONMENT

1.1 Main Features of the Economy

Question 1 According to para 1.1, small and medium-sized enterprises (SMEs) continue to play a considerable role in the economy. However, according to the OECD, despite public support, they face a productivity gap with large companies, and struggle to take advantage of international trade opportunities. How does Japan intend to improve the participation of its SMEs in the global economy?

RESPONSE The Ministry of Economy, Trade and Industry (METI) hopes that SMEs with excellent technologies and services and potential for overseas expansion will be able to take on overseas markets and take on overseas expansion in a form that fully reflects their strengths. The METI provides meticulous support according to the stage. In particular, (1) At the stage of collecting information with the aim of overseas expansion, provide information on available SME support measures on websites, etc. (2) In the specific planning and preparation stages, marketability research, business plan formulation, support for product and service development, (3) At the stage of actually expanding into the local area, searching for overseas partners such as agents and buyers, supporting sales channel development at exhibitions and business meetings, (4) At the stage of stabilizing and expanding overseas business, Japan is working to support local legal and labor issues and other issues in anticipation of establishing local bases.

1.2 Recent Economic Developments 1.2.4 Structural policies 1.2.4.3 Competition policy and corporate governance

Question 2 Unfair competition and the utilisation of data and information technology: in para 1.15, the report mentions that the Unfair Competition Prevention Law was amended to encourage businesses to utilize data and increase productivity from new information technologies. Can Japan elaborate which measures mentioned under Sections 2.1, 2.4.2 and 3.3.4.1 are being referred to here and how they relate to the increasing of productivity through the use of data and IT?

RESPONSE The promotion of the progress of new businesses using big data and the social implementation of "Society 5.0" is the key to increase Japan's productivity. Both the "Future Investment Strategy 2017" (referred in 2.4 of Section 2.1) and the "New Economic Policy Package" (referred in 2.5 of Section 2.1) declared the necessary measures to achieve those goals. The amendment of the UCPA in order to establish remedy measures for improper acquisition, use and provision of data, as one of those measures, was referred in these documents as follows: (Future Investment Strategy 2017) "The key to break the secular stagnation and achieve mid-and-long-term growth is to realize "Society 5.0" that resolves various social challenges by incorporating the innovations of the fourth industrial revolution (e.g., IoT, big data, artificial intelligence (AI), robot, and sharing economy), which has recently been taking place rapidly, into every industry and social life." "In order to develop an environment where data can be exchanged with confidence and appropriate considerations for data creation, collection, analysis, management, etc. can be obtained corresponding to the cost invested in the development, etc., the government will study measures also taking into consideration of a revision to the Unfair Competition Prevention Act to include prohibition of fraudulent acquisition of data, etc."

(New Economic Policy Package) "The appearance of new innovations such as the Internet of Things, big data, robots, artificial intelligence (AI), has enabled us to solve various social problems including energy-related environmental constraints, producing many innovative businesses and services. It has a significant potential to revolutionarily boost productivity not only by achieving business efficiency and labor- savings, but also by creating innovative added values in the era of Society 5.0. Supply System WT/TPR/M/397/Add.1

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Innovation is being well-noticed throughout the world. Aiming to achieve it in 2020 as a big target, Japan will take all the possible measures to realize it first in the world." "To promote the progress of new businesses using big data, the government will submit to the next ordinary session bills aiming to develop flexible regulations of restrictions on rights in the Copyright Act and to establish remedy measures for improper acquisition, use and provision of data in the Unfair Competition Prevention Act. "

3. TRADE POLICIES AND PRACTICES BY MEASURE

3.1 Measures directly affecting imports 3.1.4 Tariffs 3.1.4.1 MFN applied tariffs

Question 3 Paragraph 3.21 indicates that "temporary rates are applicable only for a certain period of time, in order to modify general rates to meet policy needs or for other reasons." Could Japan elaborate on those policy needs? Which are the other reasons for using temporary rates? What is the duration of the temporary rates?

RESPONSE The temporary rates can be applied to the products whose rates should be determined on an annual basis comprehensively from the point of view of domestic industry protection, import demand and the status of ongoing FTA's. The rates are applicable for one year and they are extended if necessary. For example, the temporary rate of Bio-polyethylene has been exempted since 2019. It was intended to promote and spread Bio-plastics, which is likely to be produced domestically in the future, as a measure against global warming. The other reason for using temporary rates is the tariff quota system, for instance.

Question 4 According to paragraph 3.22 the structure of Japan's MFN applied tariffs remains complex. As international trade is slowing and given the importance of access to inputs for the export oriented Japanese economy, which measures is Japan considering to simplify the complexity of its applied MFN tariffs?

RESPONSE Japan does not have such a simplification plan.

3.1.4.3 Tariff reductions and exemptions

Question 5 According to paragraph 3.30 Japan has a permanent and a temporary system of customs duty reduction and exemptions. The system is further explained in Chart 3.5. Could Japan explain, which are the conditions to benefit from the temporary duty reduction/exemption for parts of aircrafts? Could Japan provide the rationale for this measure?

RESPONSE Goods set forth in the following, if they are recognized as those difficult to be manufactured in Japan and if they are prescribed by Cabinet Order, shall, pursuant to the provision of Cabinet Order, be exempted from custom duty. (i) parts used for aircraft; (ii) materials used for manufacture of aircraft and parts thereof at a manufacturing factory approved by the Director General of Customs; (iii) artificial satellites, rockets for launching artificial satellites, appliances and instruments used for launching and tracking such satellites or rockets and other goods used for space development; (iv) materials used for manufacture of goods set forth in the preceding item at a manufacturing factory approved by the Director General of Customs. (Legal Basis: Article 4 of the Temporary Tariff Measures Act) This temporary duty exemption is introduced with a view to further develop the national aircraft/space craft industry.

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3.1.5 Other charges affecting imports

Question 6: The Secretariat does not include a chapter on excise duties, which is normally a standard chapter in the TPR reports by the Secretariat. Could Japan provide a list or an internet link of excise duties that are currently applied?

RESPONSE Please refer to Table A3.1 Taxation rates, November 2019.

3.3 Measures Directly Affecting Production and Trade 3.3.4 Competition policy and price controls 3.3.4.1 Competition policy

Question 7 In para. 3.147, the report mentions that Japan cooperates closely with foreign competition authorities through different types of agreements, including inter-agency memoranda of understanding (MoUs). During the review period, Japan concluded four MoUs (Canada, China, Mongolia and Singapore) but no agreements. Is there an explanation why Japan didn't conclude agreements in the same period which are generally legally binding and of larger application than MoUs? Can Japan explain what are the main characteristics of the four MoUs concluded?

RESPONSE There have already been agreements with Canada, Mongolia, and Singapore, and MoUs with competition authorities of these countries were signed to implement these agreements. As for China, the JFTC signed MoUs separately with the Ministry of Commerce of the People's Republic of China (MOFCOM), the National Development and Reform Commission (NDRC), and the State Administration for Industry and Commerce of the People's Republic of China (SAIC), which were all former competition authorities of China that were integrated into the State Administration for Market Regulation (SAMR): and thus the JFTC has signed the MoU with SAMR. In general, MoUs can be negotiated and signed in a shorter period compared to the agreements. While the MoUs with the competition authorities of China, Mongolia, and Singapore are almost the same as other MoUs in terms of provisions regarding notification, cooperation, coordination, etc., the MoU with the competition authority of Canada contains a provision which encourages one competition authority to consider providing the other competition authority with more sensitive information.

Question 8 Para 3.149 states that Japan and the European Union, in the context of the EU-Japan EPA, agree to promote cooperation and coordination between the competition authorities. How does the cooperation and coordination with the European competition authority work in practice? Is there a cooperation and coordination on specific cases (f.e. exchange of information), or is it more about general matters?

RESPONSE As stipulated in the Japan-EU EPA, under the framework of the Japan-EC Antitrust Cooperation Agreement, enforcement cooperation and coordination between the two competition authorities on individual cases are properly implemented. In merger cases, such cooperation and coordination contribute to consideration of market definition and remedy appropriately. Since specific cases or matters are not generally disclosed, we would like to refrain from mentioning them.

4. TRADE BY SECTORS

4.2 Mining and Energy 4.2.2 Energy 4.2.2.1 Hydrocarbons

Question 9 Table 4.19 as well as chapter 4.2.2.1 mention different support programmes for research, development or production of hydrocarbons (e.g. oil and gas). With a view of Japan's commitment to reform inefficient fossil fuel subsidies under the G7 and G20, is Japan considering reforming these support programmes?

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4.4 Services 4.4.6 Distribution services with a specific focus on e–commerce

Question 10 Para 4.275 reads as follows: "There is no specific general regulatory framework for e-commerce. The main relevant laws deal with consumer protection and e-payments." Japan is one of the leading and most important e-commerce markets in the world. Research, innovation and a business-friendly environment are crucial for sustainable success in modern electronic enabled trade. In 2009, Switzerland concluded its EPA with Japan containing substantial provisions on e-commerce. Switzerland is in a similar situation as Japan, as there is no specific e-commerce regulation in Switzerland. We would like to ask Japan, the following questions: Did Japan in the past make a systematic evaluation on the potential need for an e-commerce specific regulation? If yes, what were the main outcomes?

RESPONSE Since 2002, the relevant ministries, academic experts and the business community have evaluated and clarified how the Civil Code and other relevant laws are applied to various legal issues related to electronic commerce. The outcomes of the evaluation are revised and released annually in "Interpretative Guidelines on Electronic Commerce and Information Property Trading." The guideline is expected to enhance predictability for concerned parties and contribute to the facilitation of business activities.

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REPUBLIC OF KOREA

PART I: Questions Regarding the Secretariat Report

Page 46 (Para 2.36)

In 2017, the FEFTA was amended, inter alia, to expand the scope of a prior checking of unlisted stock transfers between foreign investors, and to introduce a provision that foreign investors investing in Japan without being registered may be subject to executive orders, including orders to sell their holding stocks; these measures were taken in order to protect Japan's essential security. There have been no further amendments since 2017.

Question 1 According to the Foreign Exchange and Foreign Trade Act (FEFTA) amended in 2017, a prior notification should be made to the Japanese government about unlisted stock transfers between foreign investors. The Act also states that the government of Japan can place limitations on the transfer of unlisted stocks when deemed essential for its national security. Could Japan elaborate on the criteria used for making such decisions? Is there a way for foreign investors to appeal against such decisions?

RESPONSE The criterion used for decisions is whether the specified acquisition is highly likely to cause a situation that would compromise national security. Foreign investors can request for review of an administrative disposition when an administrative agency orders investors to modify or discontinue the inward direct investment or equivalent action that is the subject of the notification.

Page 71 (Para 3.64.)

Changes were introduced in July 2019 to the licensing system, with the result that the relevant bulk licences for exports of three items (fluorinated polyimide, resist and hydrogen fluoride, and their relevant technologies) to the Republic of Korea are no longer applicable. According to the Japanese authorities, so far, these changes have had no impact on actual production or the global supply chain. Page 71 (Para 3.64.)

Question 2 Please provide the Japanese government's reason for excluding Korea from the white list in July 2019 and for changing the export license for three items (i.e., fluorinated polyimide, resist and hydrogen fluoride) from a comprehensive (negative system) one to an individual one (positive system).

RESPONSE In light of A.(i) of Annex 3 of the WTO Agreement and for the sake of credibility of TPR mechanism, taking into account Korea's submission on 18 June, 2020, of a request for the establishment of a WTO panel concerning the issues that appear to be closely related to the questions posed in this process, Japan would like to refrain from addressing the issue within the Trade Policy Review process and answering Question 2. (note) The matter at question has been discussed between Japan and Korea at the Export Control Policy Dialogue and other forms of communications.

Question 3 Were there specific cases that have caused Japan to restrict the export of the three items to Korea?

RESPONSE In light of A.(i) of Annex 3 of the WTO Agreement and for the sake of credibility of TPR mechanism, taking into account Korea's submission on 18 June, 2020, of a request for the establishment of a WTO panel concerning the issues that appear to be closely related to the questions posed in this process, Japan would like to refrain from addressing the issue within the Trade Policy Review process and answering Question 3. (note) The matter at question has been discussed between Japan and Korea at the Export Control Policy Dialogue and other forms of communications.

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Question 4 Which penalties have been imposed on Japanese companies for inappropriate export management? What kind of efforts did Japan make before implementing export restriction to minimize the negative impact of trade restrictions? If no effort has been made to minimize the impact of trade restrictions, what was the urgent cause that led to taking such a drastic measure against Korea?

RESPONSE In light of A.(i) of Annex 3 of the WTO Agreement and for the sake of credibility of TPR mechanism, taking into account Korea's submission on 18 June, 2020, of a request for the establishment of a WTO panel concerning the issues that appear to be closely related to the questions posed in this process, Japan would like to refrain from addressing the issue within the Trade Policy Review process and answering Question 4. (note) The matter at question has been discussed between Japan and Korea at the Export Control Policy Dialogue and other forms of communications.

Question 5 At the time of imposing restrictions on exports to Korea, did the Japanese government conduct a comprehensive and overall inspection and assessment on its export management for the world's major countries? If it did, which countries were reviewed? What standard did Japan use in reviewing the export management system? Did no country other than Korea pose a problem?

RESPONSE In light of A.(i) of Annex 3 of the WTO Agreement and for the sake of credibility of TPR mechanism, taking into account Korea's submission on 18 June, 2020, of a request for the establishment of a WTO panel concerning the issues that appear to be closely related to the questions posed in this process, Japan would like to refrain from addressing the issue within the Trade Policy Review process and answering Question 5. (note) The matter at question has been discussed between Japan and Korea at the Export Control Policy Dialogue and other forms of communications.

Question 6 How long did it take the Japanese government to decide whether to permit the export of the three items to Korea? Please provide the respective amount of time before and after the export control was put in place (starting from the date of receipt of the application). If it varies case by case, we would like to know the average time taken.

RESPONSE In light of A.(i) of Annex 3 of the WTO Agreement and for the sake of credibility of TPR mechanism, taking into account Korea's submission on 18 June, 2020, of a request for the establishment of a WTO panel concerning the issues that appear to be closely related to the questions posed in this process, Japan would like to refrain from addressing the issue within the Trade Policy Review process and answering Question 5. (note) The matter at question has been discussed between Japan and Korea at the Export Control Policy Dialogue and other forms of communications.

Question 7 Please provide data on the amount of export for each of the three items to Korea during the period from July 2019 to December 2019. Also, please give a detailed explanation to support Japan's argument that the export control will have little impact on actual production or the global supply chain.

RESPONSE In light of A.(i) of Annex 3 of the WTO Agreement and for the sake of credibility of TPR mechanism, taking into account Korea's submission on 18 June, 2020, of a request for the establishment of a WTO panel concerning the issues that appear to be closely related to the questions posed in this process, Japan would like to refrain from addressing the issue within the Trade Policy Review process and answering Question 7. (note) The matter at question has been discussed between Japan and Korea at the Export Control Policy Dialogue and other forms of communications.

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Page 72 (Para 3.65.)

[…] Recent changes to the system resulted in the Republic of Korea now being listed under "Group B" countries and regions.71

Question 8 Regarding the revision of Appendix 3 of the Export Trade Control Order, has Japan established transparency and a clear standard based on which countries shall be grouped into categories ranging from A to D? Considering some countries have no explicit catch-all regulations on conventional weapons (such as Canada) and are still included in Japan's white list of countries (which is currently Group A countries), please provide the reason Japan singled out Korea (which does have a catch-all control framework and de facto catch-all regulations on conventional weapons) and removed it from the white list.

RESPONSE In light of A.(i) of Annex 3 of the WTO Agreement and for the sake of credibility of TPR mechanism, taking into account Korea's submission on 18 June, 2020, of a request for the establishment of a WTO panel concerning the issues that appear to be closely related to the questions posed in this process, Japan would like to refrain from addressing the issue within the Trade Policy Review process and answering Question 8. (note) The matter at question has been discussed between Japan and Korea at the Export Control Policy Dialogue and other forms of communications.

Page 119 (Para 3.236.)

The Unfair Competition Prevention Act (UCPA) protects trade secrets and prohibits unfair competition. A METI study group, tasked with identifying an IP system that is responsive and supportive of the Fourth Industrial Revolution, reported, in 2017, that then-existing measures were insufficient to prevent the unfair use of data. Accordingly, 2018 amendments to the UCPA, which took effect on 1 July 2019, establish civil remedies for the wrongful acquisition, disclosure, and use of "data for limited provision" – information that is valuable to business and society but does not qualify as a trade secret or for copyright protection. This includes technical or business information accumulated in a reasonable amount, managed by electronic or magnetic means, and regularly provided to specific persons. The law is reportedly the first in the world to attempt to protect Big Data. The METI published new Guidelines on Protected Data on 23 January 2019, which offer practical guidance on the amendments, including examples of targeted behaviours.

Question 9 The term "data for limited provision" mentioned in the Secretariat's report was not found in the 2018 amendments to the UCPA. Instead, the term "protected data" was used. It is the same for the notification of laws and regulations under Article 63.2 of the TRIPS Agreement. Could you confirm whether these two terms are the same in meaning?

RESPONSE The meanings of the terms of "data for limited provision" and "protected data" are the same. The UCPA (Article 2(7)) defines "protected data" as follows: The term "protected data" as used in this Act means technical or business information that is accumulated in a reasonable amount by electronic or magnetic means (meaning an electronic form, magnetic form, or any other form that is impossible to perceive through the human senses alone; the same applies in the following paragraph) as information provided to specified persons on a regular basis and that is managed (excluding information that is kept secret).

Question 10 The term "data for limited provision" is described in the Secretariat's report as "information that is valuable to business and society but does not qualify as a trade secret." Can Japan explain in more detail the difference between "data for limited provision" and "trade secret"? What parts of Article 39.2 of the TRIPS Agreement have been relaxed to be categorized as "data for limited provision"? WT/TPR/M/397/Add.1

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RESPONSE "Protected data" is information designed to be provided exclusively to specific outsiders satisfying certain conditions, while "trade secrets" are information that is reasonably controlled by business operators as secret, and the definitions of these terms are different. In order to avoid overlaps between them, "trade secrets" are excluded from "protected data" as defined in Article 2 (7) of the UCPA. Also, "protected data" is not correspond to "undisclosed information" in Article 39.2 of the TRIPS Agreement because the meaning of "protected data" is different from that of "trade secrets".

Article 2(6) of the UCPA The term "trade secrets" as used in this Act means technical or business information useful for business activities, such as manufacturing or marketing methods, that are kept secret and that are not publicly known.

Article 2(7) of the UCPA The term "protected data" as used in this Act means technical or business information that is accumulated in a reasonable amount by electronic or magnetic means (meaning an electronic form, magnetic form, or any other form that is impossible to perceive through the human senses alone; the same applies in the following paragraph) as information provided to specified persons on a regular basis and that is managed (excluding information that is kept secret).

Page 135 (Para 4.30)

The Agricultural Disaster Compensation Act used to serve as the legal basis for the Agricultural Mutual Aid System (AMAS) that provides compensation from losses caused by natural disasters (including from extreme weather), diseases, and other events. In 2018, the Act was revised, and renamed the Agricultural Insurance Act. It introduces procedural efficiencies as well as a Revenue Insurance Program (RIP). The RIP, effective from 2019, operates in addition to the AMAS, and is applicable to all farm products and certain livestock products. It is a voluntary insurance system, designed to compensate farmers in the event of revenue decreases; farmers taking out insurance policies are paid back for 90% of the loss when the loss is more than 10%, based on five-year average farming income. The Government contributes 75% of the reserve fund and about 50% of the premiums (the insurance premium rate is 1.08%).23

Question 11 The Revenue Insurance Program (RIP), effective since 2019, seems to be one of the notable changes in Japan's agricultural policy. What is the percentage of farms that applied for the RIP in 2019?

RESPONSE The RIP in 2019 covered 23,000 farming entities. The farmers who file a blue returns (the tax declaration based on double book keeping system) are qualified for the RIP, and the number of all the qualitied farmers was 460,000 in 2018.

Question 12 Since the RIP covers all farm products, according to the Report, it appears that some products may benefit from both the newly introduced RIP and other existing insurance programs that compensate for losses resulting from natural disasters. Is it possible for farmers planting certain crops to receive payments from more than one program at the same time?

RESPONSE A farmer who is covered by the RIP cannot take similar schemes to compensate the income loss (such as Agricultural Mutual Aid).

Question 13 It seems the RIP does not meet the requirements stated in Annex 2 in the Agreement on Agriculture. Under which category has Japan notified (or plans to notify) the newly adopted support in DS:1 notification? Approximately how much was the total spending amount in 2019?

RESPONSE Japan will examine the categorization prior to the next DS1 notification. The budget for the RIP in FY2019 is approximately 20 billion JPY.

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Question 14 According to the report, the Japanese government contributes about 50% of the premiums and 75% of the reserve fund toward the revenue insurance that needs to be paid by farmers. Are these support measures consistent with the Agreement on Agriculture's rules which limit the government's financial participation in income insurance to less than 70% of the producer's income loss?

RESPONSE See the response to Q.13 from Republic of Korea.

Page 136 (Para 4.34)

All spending notified under the Blue Box was for the rice income stabilization program. Over the period FY2012-16, spending levels fluctuated, from a high of JPY 155.9 billion in 2013 to a low of JPY 70.8 billion in FY2016.

Question 15 Has Japan continued to spend for the rice income stabilization programme under the Blue Box after FY2017?

RESPONSE The Direct Payment for Rice was abolished in 2018.

Page 138 (Para 4.40)

The Government's policy on rice evolved over the review period, with the abolition of the Direct Payment for Rice and the administrative allocation of rice production volume targets, in 2018. The payments made to rice farmers were linked to rice production volume targets assigned to each prefecture and each individual farmer based on MAFF estimates of supply and demand. As indicated by an external source, this policy change is expected to raise the competitiveness of the rice farm sector, by enabling farmers to plan their production, unrestricted by volume targets; the Government's role is now refocused on providing market information.28

Question 16 According to the report, Japan abolished direct payments on rice in 2018. It is known that rice- producing farmers account for a large portion of Japan's agriculture. Is there any other subsidy policy, other than the support for agricultural insurance premiums, that will replace the policy of Direct Payment for Rice?

RESPONSE No subsidy policy to replace the Direct Payment for Rice.

Page 148 (Para 4.86)

Japan reshuffled the presentation of its subsidy schemes in its notification. In its previous WTO notification in 201754 (covering FY2014 and 2015), it notified only two national programmes: the Fisheries Modernization Fund Interest Subsidy and the Fund for the Measure to Recovery Fishery Resources. Table 4.15 contains the support programmes for fisheries as notified by Japan to WTO in July 2019. The total amount of subsidies rose significantly. It was JPY 73.2 billion for FY2016 and JPY 68.7 billion for FY2017, compared with JPY 1.7 billion for FY2014 and JPY 1.3 billion for FY2015. According to the authorities, this increase can be explained by the fact that, for the sake of transparency in the ongoing negotiations on fisheries subsidies, Japan notified programmes which, in its view, may not constitute subsidies under Article 1 of the SCM Agreement or may not be "specific" under Article 2 of the same Agreement.

Question 17 Under paragraph 4.86, Japan explained to the WTO that the support programs for fisheries, in its view, may not constitute subsidies under the Agreement on Subsidies and Countervailing Measures (SCM Agreement). Please clarify Japan's position regarding the following question: Does the Japanese government consider all of the four notified programs as not related to fisheries subsidies? Or which of the four programs has the nature of support for fisheries? What is the total amount of fisheries subsidies? Also, could Japan clarify why it explained that the notified programs may not constitute subsidies? WT/TPR/M/397/Add.1

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RESPONSE Since the fisheries subsidies to be notified are not clear in terms of their definitions, scope, and specificity, Japan's notification in this regard was limited to the ones which were highly presumed to be specific. In 2019, Japan submitted a wide range of notification in order to enhance transparency in light of the notification obligation set out in paragraph 2 of the Ministerial Decision in the 11th Ministerial Conference. This notification includes certain fisheries related government expenditures that may not constitute "subsidies" under Article 1 of the SCM Agreement or may not be "specific" under Article 2 of the Agreement. Please refer to the cover page of G/SCM/N/343/JPN for more detailed information. Although the nature of Japan's notified programs this time support fisheries sectors in a general sense, they may include government expenditures that may not be subsidies in the sense of ASCM. Because of such premise of notification noted above, the total amount of notifications encompassing four programs can be regarded as a possible maximum amount of fisheries subsidies.

PART II: Questions Regarding the Government Report

Page 17 (Para 4.12., 14.)

4.12. Japan, shortly after the accident at the Tokyo Electric Power Co. (TEPCO) Fukushima Daiichi Nuclear Power Station (NPS) in March 2011, has taken a comprehensive set of measures such as decontamination of the farm land and fruit trees, control over feeds and agricultural inputs and introduced a risk-based food monitoring scheme.

4.14. Japan's national laws mandate that food products which exceed these stringent maximum levels be recalled and disposed of, and if exceeding cases are observed in a particular product over an area, their distributions be restricted on an area basis. Japan's regulatory framework thus ensures that food products exceeding the maximum level are neither distributed in domestic market nor exported to third countries.

Question 18 Could Japan elaborate on the scope and the methodology of its food monitoring program regarding the food produced in Fukushima Prefecture including its sampling plans? Also, will Japan maintain the current level of monitoring and its methodology in the future?

RESPONSE As section 4.14 of the Trade Policy Review Report submitted by Japan on 22 January 2020, Japan's national laws mandate that food products which exceed these stringent maximum levels be recalled and disposed of, and if exceeding cases are observed in a particular product over an area, their distributions be restricted on an area basis. Japan's regulatory framework thus ensures that food products exceeding the maximum level are neither distributed in domestic market nor exported to third countries. The latest monitoring scheme "Concepts of Inspection Planning and the Establishment and Cancellation of Items and Areas to which Restriction on Distribution and/or Consumption of Foods concerned Applies (Developed by the Nuclear Emergency Response Headquarters)" is available on the URL below, https://www.mhlw.go.jp/english/topics/2011eq/dl/food_revision_22March_2019.pdf. In order to conduct inspections more rationally and effectively, the consideration is to be carried on annually by the competent authorities while assessing the state of the transition of the concentration monitoring data, an accumulation of new scientific knowledge, cases of cancelling the restriction on distribution and/or consumption, and others.

PART III: Other Questions

Question 19 Due to the differences in vehicle standards between in Korea and in Japan and other safety reasons, Japan has not allowed Korean vehicles carrying live fish to drive on roads in Japan for a long period of time. In accordance with current regulations in Japan, transshipment to Japanese live-fish vehicle is required when delivering Korean live fish to fish markets in Japan. In this process, Korean exporters are burdened with additional logistics cost and suffering from deteriorating quality of goods due to the increased transportation time. On the principle of reciprocity, Korea requests Japan to WT/TPR/M/397/Add.1

- 186 - acknowledge the results of vehicle safety inspections carried out based on the Korean standard and to allow live-fish vehicles to drive in Japan as Korea allows.

RESPONSE To ensure road traffic safety and environmental protection in Japan, Japan needs to thoroughly check the differences of vehicle regulations between two countries, conduct a detailed investigation on the potential safety and environmental impacts of road traffic based on the differences of the regulations, and take necessary measures to eliminate potential safety or environmental concerns, taking into account the need for Korean live-fish vehicles to enter Japan. In addition to taking such measures, it is necessary to confirm that vehicles entering Japan meet safety and environment regulations one by one, which could be practically difficult to do in the current system, and another system such as new bilateral agreements would be necessary. Therefore, in order to ensure road traffic safety and environmental protection in Japan, the results of vehicle safety inspections conducted in accordance with Korean regulations cannot be approved in Japan.

Question 20 In order to export a vehicle to Japan, the vehicle must be registered on the list of imported vehicles for Japan. And a certification for conformity with technical standards including safety evaluation results such as crash test is required for registration. MSMEs have difficulties exporting vehicles because such a safety test is conducted only in Europe. Moreover, there is no competent authority to inquire the specific criteria, information and evaluation methods related to safety evaluation. It is thus necessary to establish an arrangement that recognizes safety evaluation conducted in Korea. We would also like to request Japan a clear description of the safety evaluation process and to provide information on the Japanese agency responsible for safety evaluation.

RESPONSE The "Agreement concerning the Adoption of Harmonized Technical United Nations Regulations for Wheeled Vehicles, Equipment and Parts which can be Fitted and/or be Used on Wheeled Vehicles and the Conditions for Reciprocal Recognition of Approvals Granted on the Basis of these United Nations Regulations" (1958 Agreement), which Japan and Korea have acceded, and have been used internationally, can be used in exporting Korean vehicles to Japan.

Question 21 Since Japanese construction law delegates to local governments the administrative authority to approve foreigners' construction business, the requirements for construction businesses vary by region. Some local authorities require full-time executives to have more than five years of experience in managing offices. In this context, it is difficult for MSMEs to send abroad manager-level workers who meet this requirement. Also, some local authorities require supervisory engineers to be equipped with level 1 national qualification. It is difficult for foreign companies to meet this requirement because it is almost impossible to acquire this qualification outside Japan. Therefore, it is necessary to alleviate the qualification requirements of full-time executives and to recognize qualifications granted by foreign governments as the qualification of supervisory engineers.

RESPONSE First of all, the requirements for managing officers are the same all over Japan. Japan has revised the Construction Business Act last June and is now planning to require managing officers to: ① meet conditions currently required to be a managing officer, ② have experience in construction management or administrative position for more than 5 years, ③ have experience in management for an industry other than construction for more than 5 years, ④prepare a supporter, who has somehow experienced some management in construction, for a company officer, ⑤ enroll in appropriate social insurance. There are three patterns in order to become a managing officer: satisfy (1) ① and ⑤, (2) ②, ④and ⑤ or (3) ③, ④ and ⑤.

Moreover, for supervisory engineers, there are some foreign qualifications which allow foreign workers to work as supervisory engineers in Japan as long as they get certification from the Minister of Land, Infrastructure, Transport and Tourism. For those who have experience as supervisory engineers in their own country, by having an individual check by the Minister of Land, Infrastructure, Transport and Tourism, they could work as supervisory engineers in Japan.

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CANADA

Secretariat Report – Japan (S397) Part I. Economic Environment: Main Features of the Economy Paragraph 1.1, page 15: The Secretariat report notes that "[s]mall and medium-sized enterprises (SMEs) continue to play a considerable role in the economy". In respect to the SME segment of Japan's business community:

Question 1 How are SMEs (MSMEs) defined for the purposes of statistical and policy analysis?

RESPONSE SMEs generally fall into one of the following categories: It is described in the following article. (1) Any entity which is a company whose capital or total amount of investment does not exceed three hundred million yen (300,000,000 yen), or a company or an individual whose regular workforce does not exceed three hundred persons, and which is principally engaged in manufacturing, construction, transportation or any other category of business (except those categories of business mentioned in any of items (2) to (4) below); (2) Any entity which is a company whose capital or total amount of investment does not exceed one hundred million yen (100,000,000 yen), or a company or an individual whose regular workforce does not exceed one hundred persons, and which is principally engaged in the wholesale trade; (3) Any entity which is a company whose capital or total amount of investment does not exceed fifty million yen (50,000,000 yen), or a company or an individual whose regular workforce does not exceed one hundred persons, and which is principally engaged in the service industry; (4) Any entity which is a company whose capital or total amount of investment does not exceed fifty million yen (50,000,000 yen), or a company or an individual whose regular workforce does not exceed fifty persons, and which is principally engaged in the retail trade.

Question 2 Please provide any readily available statistics on the role of SMEs in Japan's economy and participation in international trade, specifically: (i) total number of SMEs in Laos; (ii) percentage of businesses that are SMEs; (iii) employment profile of SMEs, e.g. percentage of total employment generated by SMEs; (iv) exports and imports by SMEs, e.g. percentage of all exports and imports for SMEs, total number of SMEs that are exporting and importing.

RESPONSE Please see the following figures. WT/TPR/M/397/Add.1

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SMEs in Japan

Source: "2016 Economic for Business Activity" (Ministry of Internal Affairs and Communications, Ministry of Economy, Trade and Industry) (rearranged and processed).

Changes in the Number of Exporting Companies and the Ratio of Exporting Companies

Source: Ministry of Economy, Trade and Industry "Basic Survey on Corporate Activities".

Question 3 Does Japan collect statistics on SME ownership by diverse groups (e.g., women, youth, etc.)? If so, please provide this information.

RESPONSE Please refer to the results of basic survey of small and medium-sized enterprises (2018 report) as the following website. https://www.e-stat.go.jp/stat- search/files?page=1&layout=datalist&toukei=00553010&tstat=000001019842&cycle=7&tclass1=0 00001132003&tclass2=000001132004&stat_infid=000031849189

Question 4 Does Japan include provisions in its Regional Trade Agreements in support of SMEs in cross-border trade, e.g. cooperation, investment? If so, please provide an overview of these provisions. WT/TPR/M/397/Add.1

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RESPONSE There is nothing that corresponds to that.

Part I. Economic Environment: Main Features of the Economy; Tax Reform Paragraph 1.12, page 23: It is noted that Japan's 2019 tax reform includes the creation of a Forest Environment Tax (provisional) and a Forest Environment Transfer Tax (provisional).

Question 5 Could Japan explain how the funds raised through the Forest Environment Tax will be allocated? In particular, please clarify if this revenue will be used to support Japan's forest industry to promote the production of domestic forest products.

RESPONSE The Forest Environment Transfer Tax will be allocated to municipalities and prefectures according to objective standards (the total area of private planted forests, number of forestry workers, and population). The Forest Environment Transfer Tax does not aim at promoting the production of domestic forest products. Instead, the tax aims at maintaining and enhancing the multiple functions of forests for the public benefits that result in achieving the greenhouse gas emissions reduction target under the framework of the Paris Agreement and protecting citizens from disasters.

Question 6 Could Japan explain what the word "provisional' means in this context?

RESPONSE It indicates that the name of the tax and the transfer tax was yet to be officially decided before the enactment of the Act, however, it has been established by the enactment.

Part II. Trade and Investment Regimes: Trade Policy Formulation and Objectives

Paragraph 2.7, page 35: The Government of Japan's "comprehensive trade policy" includes promoting the use of economic partnership agreements (EPAs), the establishment in 2016 of a Consortium for New Export Nation, and measures to increase food exports.

Question 7 In its comprehensive trade policy, does Japan envision a policy that ensures that the benefits of trade are more widely shared across the economy, similar to Canada's policy on inclusive trade?

RESPONSE To realize that the appropriate distribution of benefits of trade across the economy and well-balanced economic growth, Japan has been implementing policy to promote and support companies' business in foreign countries more actively. In comprehensive trade policy, providing a huge opportunity for Second-tiers and SMEs that have refrained from overseas business is one of the priorities. The Ministry of Economy, Trade and Industry has been working to create an environment where women can work with motivation. In addition to providing financial support, such as financing by the Japan Finance Corporation to promote businesses conducted by women, 10 networks which aim to support female entrepreneurs were built across Japan. In doing so, the system for supporting women is being enhanced. The Act Promoting Measures to Achieve a Society in which the Pride of Ainu People is Respected, enacted in April 2019, aims to advance regional, industrial and tourism promotion, in addition to previous welfare measures and cultural promotion. The Act provides for new subsidies to support projects implemented by municipalities.

Paragraph 2.9, page 37: It is noted that under the 2001 Government Policy Evaluations Act (GPEA), the Cabinet Order for Enforcement of the Government Policy Evaluation Act, and the Basic Guidelines for Implementing Policy Evaluations (as revised in 2017), the Cabinet Office and ministries are required to evaluate policies before and after implementation, to publish the results of these evaluations, and have discretion to ask for the opinions of stakeholders and the public.

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Question 8 Does the requirement to evaluate policies before and after implementation extend to trade agreements? If so, how is the evaluation undertaken?

RESPONSE Administrative organs must carry out the evaluation when regulations are enacted, revised or abolished by laws or cabinet orders.

Question 9 Does Japan consult widely, i.e. with stakeholders and the public, on their comprehensive trade policy and trade policy positions in regard to specific trade agreements? Does Japan have best practices or lessons learned to share in this area?

RESPONSE The Government of Japan informs its trade policy through close communication with the public at various occasions, including the Diet and other explanatory sessions.

Part II. Trade and Investment Regimes: Investment Regime; Business Environment Paragraph 2.44, page 50: The Government of Japan continues to implement various policy measures to assist MSMEs, including financing support; measures to realize wage increases; and productivity-improvement assistance.

Question 10 Are the effects (intended or unintended) of policy measures on MSMEs a consideration in any mandated review process for new or revised legislation or regulation? Is this process implemented when the new or revised legislation or regulation is not directly related to assisting MSMEs, in contrast to the examples above?

RESPONSE The effect of policy measures on SMEs is a consideration in the process of evaluating new or revised SME-related laws and regulations.

Question 11 Are there targeted policies and programs to help establish Indigenous-owned MSMEs (Ainu peoples) or women-owned MSMEs and to help them engage in international trade?

RESPONSE The Act Promoting Measures to Achieve a Society in which the Pride of Ainu People is Respected, enacted in April 2019, aims to advance regional, industrial and tourism promotion, in addition to previous welfare measures and cultural promotion. The Act provides for new subsidies to support projects implemented by municipalities. The Ministry of Economy, Trade and Industry has been working to create an environment where women can work with motivation. In addition to providing financial support, such as financing by the Japan Finance Corporation to promote businesses conducted by women, 10 networks which aim to support female entrepreneurs were built across Japan. The network for support system for female is being enhanced.

Question 12 Are there specific policy measures/programs at the national or sub-national levels for Indigenous- owned MSMEs (Ainu peoples) that seek to remove barriers and improve their capacity to engage in international trade? Including in the industry and tourism sectors?

RESPONSE In order to promote Ainu SMEs, Ministry of Economy, Trade and Industry provides subsidies for Ainu folk crafts to develop sales channels, support sales promotion, and secure and develop human resources.

Paragraph 2.45, page 50: The Government of Japan is actively trying to promote women's participation in the work force.

Question 13 Does Japan have best practices or lessons learned to share regarding: (a) targeted support programs and/or policies to encourage women-owned MSMEs to grow domestically and/or export WT/TPR/M/397/Add.1

- 191 - internationally? (b) policies and programs aimed at promoting the participation of Indigenous peoples (Ainu peoples) in the workforce?

RESPONSE Japan does not have best practices or lessons learned to share regarding their programs or policies.

Paragraph 2.46, box 2.2, page 51: It is noted that Japan has launched regulatory reform pilot schemes under the National Strategic Special Zone initiative. Box 2.2 notes a pilot scheme on reform in agriculture and forestry in Senboku City Zone.

Question 14 Could Japan provide details on the forestry reform and agriculture reform pilot projects undertaken in Senboku City Zone?

RESPONSE Under a national regulation, a forester can borrow less than 5 hectares of national forest land. A forestry reform project undertaken in Semboku City, however, allows large-scale forestry by utilizing up to 10 hectares of national forests. In this project, Semboku City puts pigs to graze, promoting the food industry as well as the forest industry. Another project in Semboku City relaxes the requirements for membership of agricultural production corporation provided by the Agricultural Land Law. Under this regulatory exception, a farming cooperation was founded and produces Kiku- imo, a kind of Japanese potato that is supposed to be beneficial for health. Because this project has been successful, it led to a revision of the Agricultural Land Law.

Part III. Trade Policies and Practices by Measure: Measures Directly Affecting Production and Trade; Incentives; Taxation Paragraph 3.87, page 77 and Table 3.11, page 78: Japan provides various tax incentives, including to companies located in Special Zones. It is noted that Japan has different types of Special Zones: National Strategic Special Zone and Comprehensive Special Zones.

Question15 Could Japan explain the difference between National Strategic Special Zone and Comprehensive Special Zones?

RESPONSE (1) National Strategic Special Zones: The aim of National Strategic Special Zones is to conduct pilot experiments in a "Sandbox" environment, thereby advancing regulatory reforms across various sectors that could boost the economic growth of Japan. (2) Comprehensive Special Zones: Comprehensive Special Zones not only implement regulatory reforms, but also provide fiscal support and tax benefits in order to comprehensively and strategically address the challenges in the regions.

Question 16 Are any of these two Zones addressed to industries or sectors of the economy and if so, which ones?

RESPONSE (1) National Strategic Special Zones: National Strategic Special Zones are not addressed to specific industries or sectors, and regulatory reforms realized in the zones include a wide range of areas including urban regeneration, business environment, foreign human resources, tourism, medical and child care, agriculture, forestry and fishery, employment, and education. (2) Comprehensive Special Zones: Comprehensive Special Zones are not addressed to specific industries or sectors. But a variety of sectors participate in the zones such as global business, ecological business, healthcare, manufacturing, tourism, agriculture, and town development.

Paragraph 3.88, page 78 and Table A3.2, page 200: Over the review period, revisions were made to the tax system for R&D. These revisions are discussed in Table A3.2. The following questions relate to the gross R&D cost base and the special R&D cost-based credit.

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Question 17 Under the gross R&D cost base, the limitation of credit is set at 25% of corporate tax before credit. In 2019, this limitation of credit was raised to 40% for "a certain scope of start-ups conducting R&D". Could Japan clarify what this entails and what are the industries or sectors that are eligible for this 40% limitation of credit?

RESPONSE In order to assist certain start-ups (※) and encourage innovative R&Ds, Japan changed the R&D tax law. Any industry or sector can use the R&D cost-based credit. Note: Certain start-ups: Companies established within the previous 10 years and which have loss carry forwards which will be carried over into the next fiscal year are eligible. Subsidiaries of large enterprises, etc. are excluded.

Question 18 Similarly, in 2019, the scope of the special R&D cost-based credit expanded, with the addition of "certain types of research". Could Japan clarify what this entails and what are the industries or sectors that are eligible for the special R&D cost-based credit?

RESPONSE Research consigned to a large enterprise had not been eligible. However, in 2019, to encourage innovative R&D, Japan made it eligible for a large enterprise. For the same reason, we also included open innovation for venture companies. Although, any industry or sector is eligible for the program, it is limited to basic research, applied research and R&D for the purpose of utilizing intellectual property/ Mere consignment of R&D operations are excluded.

Part III. Trade Policies and Practices by Measure: Standards and Other Technical Requirements Paragraphs 3.104 and 3.109, page 82: These paragraphs discuss developments related to Japan Agriculture Standards (JAS).

Question 19 Is Japan considering expanding the scope of its JAS graded lumber promotion so that it applies to other lumber suitable for use in construction in Japan? If not, please provide reasons for this position.

RESPONSE As Canada mentioned, while the MAFF has made efforts to promote utilization of JAS graded lumber in construction in Japan, non-JAS graded lumber is not included in these efforts.

Part III. Trade Policies and Practices by Measure: Sanitary and Phytosanitary (SPS) Requirements; SPS Measures Paragraph 3.124, page 87:

Question 20 Can Japan please provide information on its anticipated future sanitary and phytosanitary initiatives that will impact Canadian exports to Japan? Such as the adoption of, or amendments to, sanitary and phytosanitary legislation and regulations and significant sanitary and phytosanitary policies.

RESPONSE If a proposed sanitary and phytosanitary regulation may have a significant effect on trade of other Members including Canada, Japan will notify the proposed sanitary or phytosanitary regulation in accordance with the SPS Agreement.

Part III. Trade Policies and Practices by Measure: Measures Directly Affecting Production and Trade; Government Procurement Paragraph 3.168, page 101: The Secretariat Report notes: "Japan has no restrictions on the place of origin of products or the nationality of suppliers in government procurement. The principle of non-discrimination is pursued in all procurement activities. However, there has been concern over the apparently low share of foreign companies in public procurement; it seems that this is partly due to non-regulatory barriers, the geographical distance from certain overseas markets, and a lack of knowledge of the local market."

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Question 21 Has the Government of Japan taken any measures to encourage the participation of foreign companies in its public procurement market?

RESPONSE Yes. In terms of GPA covered procurement, the central government announces in advance the annual schedule of its procurement and holds a seminar on Japan's government procurement for foreign entities and diplomatic corps stationed in Tokyo.

Question 22 If yes, what are these measures?

Paragraph 3.174, page 105: Regarding the promotion of the participation of MSMEs in government procurement, the Secretariat Report notes: "The central Government, IAAs and national university corporations set their own procurement target value from SMEs every fiscal year. The target amount for micro, small and medium-sized enterprises (MSMEs), set at 55.1% of the total budget of "public demand', stood at JPY 3.8 trillion in 2017 and JPY 4.0 trillion in 2018. Local governments follow the policies of the central Government on an "endeavour basis.'"

Question 23 Could Japan clarify if the 55.1% procurement target applies only to Japanese MSMEs, or if it also applies equally to foreign MSMEs?

RESPONSE In setting the target for the contract ratio for small and medium-sized enterprises in the total public budget of the national government, conditions such as domestic and overseas distinction are not set for small and medium-sized enterprises.

Question 24 Could Japan explain the meaning of "total budget of "public demand'" as used in this paragraph?

RESPONSE The "total budget for "public demand'" refers to the total public and public demand budget of the country, and indicates the total amount of budget for public procurement of the country.

Part III. Trade Policies and Practices by Measure: Intellectual Property Rights (IPRs); Features and IP Strategy Paragraph 3.176, page 105: In the Secretariat Report, it is noted that the Japan Patent Office (JPO) found a correlation between patent rights and operating profits on sales for SMEs. The Report also notes that over the five year period ending in December 2017, revenue from IP increased over 74%.

Question 25 Can Japan provide additional information on the correlation between patents and firms' economic performance?

RESPONSE 2018FY Basic Survey on IP Activities by Small and Medium Enterprises in Japan provides data on the presence or absence of patent rights, utilization of patent rights and operating profit margin. It is linked below; https://www.jpo.go.jp/resources/report/chiiki-chusho/report_chusho_chizai.html (Japanese version only). Please note that there is no further information regarding the above.

Question 26 Did Japan conduct inferential analyses to assess the correlation?

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RESPONSE The Japan Patent Office (JPO) did not conduct such analyses.

Question 27 With respect to the revenue generated by IP, can Japan provide additional details on how it measures the revenue from IP? For example, is it based on royalties and licensing revenue, or does it also include revenue from the sale of IP rights?

RESPONSE Japan's Balance of Payments Statistics comply with the sixth edition of the Balance of Payments Manual (BPM6) published by the International Monetary Fund (IMF) and the data are compiled primarily based on reports which are submitted under the Foreign Exchange Act. In the statistics, "Charges for the use of intellectual property n.i.e." is further divided into "charges for the use of industrial property n.i.e." and "charges for the use of copyrights n.i.e.". "Charges for the use of industrial property n.i.e." consists of royalties and licensing revenue. It does not include revenue from the sale of IP rights.

Paragraph 3.178, page 106: Chart 3.7 in the Secretariat report presents the growth in charges for the use of IP since 1996. The chart is separated by charges for the use of industrial property and copyrights.

Question 28 Chart 3.7 indicates that Japan is a net importer of copyrights; however, the revenue from industrial property offsets this negative IP trade balance. Can Japan provide information on whether it is a net exporter or net importer of patents?

RESPONSE Japan cannot provide the details of patents because there is no breakdown of "Charges for the use of industrial property n.i.e." in the statistics.

Paragraph 3.179-3.180, page 107: In the Secretariat Report, it is noted that Japan's 2018 IP Strategy Vision foresees Japan as a "value design society" with innovation driven by latent needs and wants. It is further clarified that the Government intends to pursue this vision by "strengthening IP strategy relating to data, artificial intelligence, and other new data-related assets".

Question 29 Could Japan elaborate on how their approach to artificial intelligence IP strategy aligns with their goal of "value design"?

RESPONSE It is conceivable that big changes beyond assumption of the traditional industrial field happen by analyzing big data collected via IoT, which connects everything, by AI. Effective utilization of resources by AI has led to dramatic improvement of productivity. Promoting business development based on consumer behavior and potential demand grasped by various data has been a source of competitiveness. Those strategies will lead to the realization of a value design society.

Part III. Trade Policies and Practices by Measure: Intellectual Property Rights (IPRs); Policies on Promotion and Commercialization of Innovation Paragraph 3.188, page 108: The Secretariat report notes that SMEs are provided comprehensive IP Support Service Counters in all 47 prefectures of Japan. The support counters provide free-of-charge assistance from experts on legal matters, branding, business development, agriculture, and geographical indications. Additionally, under the Global IP Producers programme, support is offered for establishing and protecting intellectual property rights abroad including an insurance scheme, where half the cost of overseas IP litigation is covered.

Question 30 Is the cost of overseas IP litigation governed by the JPO or other external organisations?

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RESPONSE The JPO governs the cost. The JPO will subsidize the premiums for SMEs enrolling in the overseas IP litigation insurance scheme by paying half of the cost (reduced to 1/3 from the 2nd year onwards, after renewal).

Paragraph 3.187-3.189, page 108-109: The Secretariat Report notes that Japan has recently prioritized IP education and awareness as a part of their strategy to encourage innovation. The JPO in collaboration with the National Center for Industrial Property Information and Training (INPIT) has debuted a number of programs to spread IP awareness and education, such as consultations with patent examiners and IP support services.

Question 31 Can Japan provide information on the early benefits and challenges that have arisen from these programmes?

RESPONSE The JPO considers that IP awareness and literacy have developed through these programs. The JPO will continue these programs so that IP awareness can spread more broadly.

Question 32 Has the JPO witnessed a direct correlation between the increased support of start-ups with programs such as "super-accelerated examination" and the number of patent filings?

RESPONSE Although the number of patent filings applied by start-ups has not been aggregated, the number of average monthly applications of "super-accelerated examination" for start-ups has yearly increased, presuming that the number of patent filings applied by start-ups increased.

Paragraph 3.190, page 109: The Secretariat Report notes that Japan is adapting its IP regime and associated processes to the development of Big Data, artificial intelligence (AI) technologies, and the Internet of Things (IoT).

Question 33 Based on the measures already implemented to modernize/adapt the IP regime and associated processes as it relates to the development of Big Data, artificial intelligence (AI) technologies, and the Internet of Things (IoT), in Japan's opinion what measures have been most and least effective?

RESPONSE Japan is of the opinion that to adapt the rapid change of the IP regime caused by the development of the new emerging technologies (NET), constant review of current IP system is important and effective. As a result of the constant review, Japan has considered and will consider appropriate measures to adapt the NET and all of them are important and effective. As a reference, some examples of such measures are shown below: ・Addition of AI and IoT case examples to the Patent Examination Guidelines; ・Creation of new patent classifications for IoT technologies; ・Organizing an IoT Examination Team; ・Hosting the "International Symposium on Patent Examination Practices on AI-related Inventions" (Nov. 2019 in Tokyo); and ・Amendment of the Japan Patent Act (Establishment of inspection system).

Paragraph 3.194, page 110: The Secretariat Report notes that in 2018, the Cabinet adopted an Integrated Innovation Strategy, and established an Integrated Innovation Strategy Promotion Council. University reforms, technologically disruptive R&D programmes, supportive start-up ecosystems, and the promotion of science and technology for the achievement of SDGs are among the "hallmarks of the Strategy," which is to be implemented horizontally across ministries and agencies.

Question 34 Have there been any challenges faced with the implementation of the Integrated Innovation Strategy, if so, what were the key challenges and how were they overcome?

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RESPONSE Though Japan is facing various challenges, Japan is co-working to implement this strategy, coordinating between related ministries and agencies. The Integrated Innovation Strategy Promotion Council has been held since 2018 in order to fulfill the cross-cutting and substantial coordination between ministries or agencies.

Part III. Trade Policies and Practices by Measure: Intellectual Property Rights (IPRs); General Regulatory Framework

Paragraph 3.209-3.210, page 113- 114: The Secretariat Report notes that the JPO aims to provide the "world's fastest and utmost quality patent examinations", to respond to the accelerated cycle of creating, establishing, and utilizing IPRs and to facilitate acquisition and protection of rights abroad… The JPO outsources prior art searches, plans to employ AI technology to improve speed and quality, and has introduced design-driven management principles to improve the quality of its services to users.

Question 35 Could Japan elaborate on the process of implementing AI technology to improve the speed and quality of patent examinations? What have been the most significant challenges and advantages that Japan has already witnessed?

RESPONSE JPO formulated an "Action Plan" in FY2017 with a view to utilizing artificial intelligence technology in the future, and revised the Action Plan in November 2018. JPO has conducted PoC projects in accordance with this Action Plan. JPO has examined the feasibility of introduction and developed business support tools based on the verification results. Significant challenges are the advancement and growth in the complexity of cutting-edge technologies of applications and the expansion of the scope of prior art searches. JPO considers that developing an examination support tool to streamline examination work and solving these challenges are the advantages of AI technology development.

Part III. Trade Policies and Practices by Measure: Intellectual Property Rights (IPRs); Designs Paragraphs 3.220 – 3.222, page 116: The Secretariat Report notes that the term of protection for all design rights has been extended from 20 years from the registration date to 25 years from the filling date. There has also been an expansion of examination procedures in order to improve the speed and quality of examination. Despite these improvements, the number of design applications and registrations has stabilized.

Question 36 Despite the significant improvements in design laws and examination procedures domestic Japanese design applications have been falling over time, can Japan provide additional information to explain this trend?

RESPONSE In regard to the decrease in the number of domestic design applications in recent years, according to some major companies in Japan, it seems that one of the reasons for this trend is that they nowadays tend to consider carefully whether or not to file domestic design applications in accordance with their domestic business strategy within their budgetary constraint for IP, while they increase the number of design applications filed abroad along with globalization of their businesses. Please note, however, that to what extent the revised Design Act will affect the number of domestic design applications is not sure at the moment since the revised Design Act including the extension of the duration of design rights will come into force in April 1, 2020.

Part III. Trade Policies and Practices by Measure: Intellectual Property Rights (IPRs); Trademarks Paragraph 3.224, page 117: The Secretariat Report notes that Japan's Trademark Act was revised during the review period for a number of reasons including with respect to statutory damages for trademark infringement, "prompted by the CPTPP."

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Question 37 Can Japan provide additional information on how statutory damages work in trademark infringement cases, both generally, and in light of this new revision?

RESPONSE For claiming damages, Article 38 of Japan's Trademark Act provides presumption clauses to reduce burden of proof of the amount of damages. Article 38 para (1) provides the calculation method for the amount of damages, para (2) provides that the amount of profits gained by the infringer shall be presumed to be the amount of damages and para (3) provides that the amount the right holder would have been entitled to receive for the use of a registered trademark can be claimed as the amount of damages. In order to comply with the CPTTP Agreement appropriately, statutory damages for trademark infringement cases was newly introduced into Japan's Trademark Act as Article 38 (4) which enables claiming pre-established damages which is available on the election of the right holder. The amount of statutory damages may be presumed to be the amount equivalent to the expenses normally required for the acquisition and maintenance of the trademark right. The "amount equivalent to the expenses normally required for the acquisition and maintenance of the trademark right" includes at least application and registration fee.

Paragraph 3.224, page 117: Per the Secretariat report notes that a 2019 amendment to Japan's Trademark Act would permit the owner of a famous mark representing the nation, a local government or agency, or a public interest non-profit to grant non-exclusive licenses. The revision was intended to facilitate the use of such marks by industries and businesses in collaboration with public or non-profit entities, such as universities.

Question 38 Would Japan please further explain the mechanics of the new legal provision regarding non-exclusive licenses for this type of famous mark be further explained?

RESPONSE Japan's Trademark Act permits to register a mark which is identical with, or similar to, a famous mark representing (i) the nation, (ii) a local government, (iii) an agency thereof, (iv) a non-profit organization undertaking a business for public interest, or (v) a non-profit enterprise undertaking a business for public interest, provided that an applicant of the mark corresponds to the authorities itself (Article 4(2)). For this purpose, before the revision, it was not allowed to license those public famous marks for third parties. However, in recent years, local governments and universities often use such marks for the purpose of regional revitalization or other promotional activities in collaboration with business entities and there has been a growing demand to liberalize the restriction for licensing. Taking into account of this situation, we decided to allow non-exclusive licenses for those marks by removing the sentence after "provided" in Article 31 of the Japan's Trademark Act. - Article 31(1) The holder of trademark right may grant to another person a non-exclusive right to use to the trademark to which he/she holds the right; provided, however, that this provision shall not apply to the trademark right pertaining to an application for trademark registration provided in Article 4 (2).

Paragraph 3.228, page 118: The Secretariat Report notes that the JPO outsourced and computerized examination processes and increased the number of assistants for examiners.

Question 39 Can Japan provide additional information on what elements of the process were outsourced and computerized, and how they are computerized? For example, is the JPO using AI-based solutions?

RESPONSE The JPO mainly outsources preliminary trademark search. The main outsourced items are as follows: (i) search on unclear designated goods and services; (ii) search on the meaning of words which constitute trademarks; and (iii) search on prior figure trademarks that are similar to the filed figure trademarks. Also, all documents are digitized and trademark examinations are performed on a computer basis, but no AI-based trademark examinations are currently conducted.

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Part III. Trade Policies and Practices by Measure: Intellectual Property Rights (IPRs); Geographical Indications Paragraph 3.234, page 119: Amendments regarding GIs were enacted in 2018 that permitted good-faith use of an identical or similar GI for up to seven years following the registration or designation of a GI. These amendments also provide for the co-existence of trademarks registered in good faith, prior to the date of registration or designation of a GI. Lastly, the amendments expand the regulatory scope beyond products and packages, to include advertisements, price lists, and transaction documents.

Question 40 Can Japan further explain the mechanics of expanding the regulatory scope beyond products and packages and including advertisements, price lists and transaction documents?

RESPONSE The 2014 Act provided for the regulatory scope before the 2018 amendments as follows: affixing a GI to (1) the registered products, (2) its package, container or invoice. The 2018 amendments expanded that regulatory scope as follows: using a GI of (1) the registered products or (2) its package, container, advertisement, price list or transaction document (including information on these provided through electro or magnetic means (which means electronic means, magnetic means, or any other means that cannot be perceived by the human perceptions)).

Part III. Trade Policies and Practices by Measure: Intellectual Property Rights (IPRs); Copyright Paragraph 3.239, page 120: The Secretariat report describes limitations in Japan's copyright law to support the development of artificial intelligence (AI) technologies. Articles 30-4 (Exploitation without the Purpose of Enjoying the Thoughts or Sentiments Expressed in a Work), 47-4(1) (Exploitation of Works Incidental to the Exploitation of Works on a Computer) and 47-5 (Minor Exploitation Incidental to Computerized Data Processing and the Provision of the Results Thereof) of Japan's Copyright Act appear to all be related to the development of AI technologies.

Question 41 Could you please provide additional explanation of the differences in the purpose of these three articles, and how the three exceptions work together to support AI?

RESPONSE Under Japan's circumstances that certain amount of stakeholders in Japan prefer clarity to flexibility in provisions, it is suitable to have a multi-layered solution with several provisions balanced in clarity and flexibility rather than highly flexible and general single provision. Article 30-4 and 47-4 are more flexible provisions than Article 47-5 and these two articles apply to certain actions that are not normal use of works and usually considered not to prejudice right holders' interest. Article 30-4 prescribes limitation for exploitation without the purpose of enjoying the thoughts or sentiments expressed in a work. This article applies to actions such as collecting data necessary for machine learning in developing AI and providing those data to third parties. Article 47-4 prescribes limitation for exploitation of works incidental to the exploitation of works on a computer. This article applies to actions such as generating cache data in computers and storing data as backup. Article 47-5 is a flexible provision for actions which are not normal use of works and only slightly prejudice right holders' interest. Article 47-5 prescribes limitation for minor exploitation incidental to computerized data processing and the provision of the results thereof. This article applies to actions such as undertaking computerized data analysis and furnishing the results of that analysis. The combination of these provisions leads to smooth exploitation of works in a suitable way for Japan's circumstance and then promotes innovations.

Part IV. Trade Policies by Sector: Agriculture; Agricultural Policy Paragraph 4.8, page 128: As part of Japan Revitalization Strategy 2016, the export target for major agriculture, forestry and fisheries products was set at more than JPY 1 trillion by 2019.

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Question 42 What proportion of this export target is specifically dedicated to agricultural products, forestry products, and fishery products respectively?

RESPONSE The export target is for the total value only; there are no product-specific targets.

Paragraph 4.9, page 128: The Secretariat report notes that in 2017, Japan released a Policy Package for Enhancing the Competitiveness of Japan's Agriculture. The policy package aims to increase farmer's competitiveness through 13 actions. One of the actions is to reduce the price of farming inputs.

Question 43 Could Japan elaborate as to how it will reduce the price of farming inputs and which inputs would be eligible?

RESPONSE Japan recognizes the importance of promoting cost reduction of agricultural production in order to raise farmers' income. Japan promotes business restructuring or entry into a business against agricultural production-related business, based on the "Act on the Support for Strengthening Agricultural Competitiveness'. Accordingly, Japan has been certifying business restructuring plans and business entry plans and allowing certified enterprises to receive financial support based on the certified plan. The eligible farming inputs are fertilizers, agricultural chemicals, animal feed, agricultural machines, seeds and seedlings.

Part IV. Trade Policies by Sector: Agriculture; Trade Policies and Border Measures Paragraph 4.21, page 130: It is noted that the Japanese Government considers that, as a result of the full implementation of the CPTPP and the Japan-EU EPA, prices are expected to be affected for certain agricultural, forestry and fisheries products. It estimates a total loss of JPY 112.5 billion for these products under the Japan-EU EPA, and of JPY 145.9 billion under the CPTPP due in part to price declines for certain agricultural, forestry and fisheries products. The agricultural products projected to be hardest hit are beef and dairy products under the Japan-EU EPA, and beef, dairy products and pig meat under the CPTPP. However, the Government is of the view that, despite this, domestic production volumes and farmers' incomes will be maintained through government measures.

Question 44 Could Japan describe the government measures aimed at mitigating these losses in the agricultural sector, forestry sector, and fisheries sector respectively?

RESPONSE Japan is taking the following measures in order to help mindful producers engaged in agriculture, forestry and fisheries: (1) For agriculture: development and extension of smart technologies, resizing and versatile enhancement of farmland, (2) For forestry: providing guidance and support to coordinate and integrate forest management areas/groups, and (3) For fisheries: support to transform fishing operating system to sustainable cost-effective one.

Question 45 What share of these losses are related respectively to agricultural products, forestry products, and fisheries products?

RESPONSE The shares are as follows: The Japan-EU EPA ・Agricultural products: approximately 60％・Forestry products: approximately 32％・Fisheries products: approximately 8％ CPTPP ・Agricultural products: approximately 75％・Forestry products: approximately 14％・Fisheries products: approximately 10％ WT/TPR/M/397/Add.1

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Question 46 Are there any government measures provided to the forest sector that aim to overcome this loss?

RESPONSE See the response to Q44 from Canada.

Part IV. Trade Policies by Sector: Agriculture; Domestic Support Paragraph 4.30, page 134: The Secretariat report notes that in 2018, the Agricultural Insurance Act was revised and one of the changes was the introduction of the Revenue Insurance Program (RIP), which is applicable to all farm products and certain livestock products. This is a voluntary insurance system which compensates farmers in the event of declines in revenue.

Question 47 Could Japan elaborate as to which livestock products are eligible for RIP?

RESPONSE Eligible for the RIP is the sales income of all the animal products except beef cattle and calves, hogs and poultry for eggs.

Question 48 Could Japan provide the payments to-date under the RIP

RESPONSE The information on the amounts paid under the RIP are not yet available as the payment has just started in February 2020.

Table 4.19, page 155: It is noted that Japan has a subsidy for promoting business reorganization and resilience of petroleum industrial complexes.

Question 49 Could Japan expand on the details of this program and speak to its outcomes?

RESPONSE (1) Promoting business reorganization It supports investment in facilities that multiple companies can utilize in cooperation in the petroleum industrial complexes. It aims to contribute to the stable supply of oil. (2) Resilience of petroleum industrial complexes Since oil will be an energy source of "last resort" in the event of large-scale disasters, such as The Great East Japan Earthquake, it is necessary to further strengthen the resilience of oil supply networks. As part of it, to maintain a sufficient shipping function even in the event of large-scale disasters, METI will support the refining oil companies to install emergency power generation facilities, assess resilience, and take measures to strengthen resilience at refineries and oil terminals.

Part IV. Trade Policies by Sector: Mining and Energy; Gas Paragraph 4.131, page 157: It is noted that the State does not appear to be involved in the ownership of gas exploration, production, liquefaction or distribution companies.

Question 50 Could Japan clarify if it is involved in the ownership of such companies?

RESPONSE (1) Gas exploration, production or liquefaction companies: The Government of Japan owns a part of shares of some Japanese gas exploration, production or liquefaction companies. (2) Gas distribution companies: The Government of Japan doesn't own any Japanese gas distribution companies.

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Part IV. Trade Policies by Sector: Mining and Energy; Electricity Paragraph 4.137, Chart 4.11, page 158: According to Chart 4.11, Japan's planned power generation mix for 2030 calls for renewable power from biomass to approximately double from 2017 levels by 2030. As well, in the primary energy supply mix (Chart 4.7 and 4.8, page 152) woody biomass is set to increase by 6% to account for 19% of all renewables by 2030.

Question 51 Considering this transition, is Japan planning an update to its sustainability requirements for biomass fuels? If so, can Japan provide further details, including the timing for such an update?

RESPONSE The sustainability of biomass fuel for power generation has been required as the approval criteria under the FIT (Feed-in Tariff) in Japan. The sustainability criteria of biomass fuel for power generation has been under consideration by the working group which consists of experts in Japan, including the timing for update.

Paragraph 4.140, page 159: It is noted that permission to engage in the electricity sector may be denied government approval on the grounds of "public order'.

Question52 Could Japan outline what is meant by "public order'?

RESPONSE Industries such as electric and gas utility, water supply and railway transport could be those related to 'public order.' Whether it falls under the investment that would compromise public order is determined on a case-by-case basis.

Part IV. Trade Policies by Sector: Services; Financial Services Paragraph 4.155, box 4.1, page 164-165: It is noted that in April 2019, the deposit cap for Japan Post-Bank was doubled, with a limit of JPY 13 million each for ordinary savings accounts and fixed-term deposit accounts.

Question 53 Could Japan elaborate on whether there is a plan to similarly increase Japan Post Insurance's per-person deposit and coverage limits?

RESPONSE There are no specific plans to increase the insurance limit at Japan Post Insurance.

Paragraph 4.161, page 167: It is noted that a third sale of shares towards the privatization of Japan Post Holdings has not been decided yet.

Question 54 Could Japan elaborate on possible timelines for the third sale of Japan Post Holdings (JPH) shares in furtherance of the privatization of Japan Post Bank?

RESPONSE Please refer to Para 4.161 in the Trade Policy Review Report by the Secretariat.

Paragraph 4.162, page 167: It is noted that when Japan Post Holdings will have sold 50% or more of the shares of JPB, the new business implemented by JPB will no longer be subject to approval but simply to the notification system.

Question 55 Could Japan elaborate on whether this notification process will apply uniquely to Japan Post Holdings or all banks in Japan?

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RESPONSE The notification system is applied only to Japan Post Bank and Japan Post Insurance. Part IV. Trade Policies by Sector: Agriculture, Forestry, and Fisheries; Services Paragraph 4.258, box 4.8, page 185-186: It is noted that one of the main objectives of the regulations overseeing waste management services is to achieve a circular economy.

Question 56 Could Japan explain how recycling and waste management activities designed to increase circularity in Japanese supply chains will affect trade in raw materials.

RESPONSE The main objectives of waste management and recycling policy are achieving a circular economy by limiting the volume of waste disposal; reducing the consumption of natural resources; and promoting sustainable use of resources to ensure healthy and cultured living for both the present and future generations. Regarding question No.56, recycling and waste management activities may have potential linkages with import and export of raw materials, but at the same time, the transition to the circular economy may bring new opportunities for utilization of raw materials. On this point, waste management and recycling policies are designed to avoid both setting unnecessary barriers to international trade and causing undesirable health and environmental effects.

Government Report - Japan (G397) Part II. Trade and Investment Policy; Overview Paragraph 2.3, page 4: It is noted that Japan is aiming for the swift conclusion of RCEP negotiations among 16 countries.

Question 57 Will Japan proceed with its signature of RCEP without India or any one of the other 16 countries referenced?

Part II. Trade and Investment Policy: Other Regional/Bilateral Arrangements; Japan's Bilateral Activities Paragraph 2.20, page 9-10: It is noted that Japan and the United States reached a final agreement on the Japan-U.S. Trade Agreement and the Japan-U.S. Digital Trade Agreement in September 2019.

Question 58 Will Japan formally submit notification to the WTO of its agreements with the United States?

RESPONSE Notification of the Japan-US Trade Agreement to the CRTA is under coordination with the U.S.

Question 59 What are the timelines for the second round of negotiations with the United States?

RESPONSE Please refer to paragraph 3 of the Joint Statement of Japan and the United States on 25 September 2019. (https://www.mofa.go.jp/mofaj/files/000520821.pdf)

Question 60 In the absence of outcomes from the second round of negotiations, is it Japan's view that the Japan- United States Trade Agreement is in compliance with WTO GATT Article XIV obligations?

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Question 61 Is Japan considering measures to compensate its agricultural industry following the implementation of the Japan-United States Trade Agreement? If so, what type of measures?

RESPONSE Japan is taking following measures in order to help mindful producers engaged in agriculture, forestry and fisheries: i) "Enhancement of robustness" to support productivity improvement through development and extension of smart technologies, block resizing of farmland, etc. ii) "Stabilization of management" to support financial stability for specific products, such as Marukin described in section 4.54.

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RUSSIAN FEDERATION

REPORT BY JAPAN (WT/TPR/G/397)

2 TRADE AND INVESTMENT POLICY 2.2 WTO 2.2.2 Dispute settlement Page 5, para 2.10 Observing the compliance with the WTO rules through dispute settlement is one of the most important and critical roles played by the WTO to maintain an open and fair multilateral trading system. Japan has actively engaged in the WTO dispute settlement mechanism to resolve disputes as both a party and a third party to a dispute. Japan continues to make best efforts towards the reform of the dispute settlement system, including the Appellate Body.

Question 1 Which initiatives with regard to the reform of the dispute settlement system does Japan support? Will Japan participate in arbitration agreement in accordance with Article 25 of the DSU?

RESPONSE Our priority has always been to achieve a long-lasting solution to the reform of the Appellate Body, which is not limited to an interim solution. Japan believes that it would serve a better functioning dispute settlement system and an ultimate goal of securing a positive solution to a dispute. From this perspective, Japan has actively contributed to the Informal Process of solution-focused discussion on matters related to the functioning of the Appellate Body under the auspices of the General Council. Japan submitted a proposal regarding the reform of the dispute settlement system jointly with Australia on 17 April 2019 (WT/GC/W/768). Subsequently, Chile also participated in the proposal (WT/GC/W/768/Rev.1). Japan stands ready to further proactively contribute to the discussion towards a better functioning dispute settlement system. In Japan's view, any attempt to adopt measures of interim nature, including certain Members' effort on arbitration agreement arrangement, must serve the ultimate purpose of finding a long-lasting solution to the functioning of the Appellate Body.

4 JAPAN'S DOMESTIC POLICIES 4.4 Competition Policy Page 14, para 4.4 Japan has enacted the law for Partial Revision of the Payment Services Act, etc., to address the Diversification of Financial Transactions based on Advances in Information Technology (enacted on 31st May 2019). The law intends to address greater diversification on financial transaction amid the development of the digital technology, and to enhance the credibility of financial function while securing user protection. The law stipulates regulations on crypto-asset Exchange Service Providers, derivative /financing transactions using crypt-assets, and clearing a margin on OTC derivatives. The law also allows financial institutions to engage in the business of providing data held to a third party.

Question 2 Please specify regulatory regime for retail payment services, including regulatory framework, licensing criteria, capital requirements, prudential regulations, specific provisions etc.

RESPONSE While there is not sole definition of retail payment services, business operators have to comply with the relevant regulations on payments subject to its type of business. The regulations include the following: 【E-money】 Under the "Payment Services Act", e-money (electric money) and those issued for prepaid/pre- loaded values fall within the category of prepaid payment instruments. Prepaid payment instruments are classified into the following two types: 1． those which can be used for purchase of goods and services only from the issuer of prepaid payment instruments (prepaid payment instruments for own business); and 2． those other than 1 (prepaid payment instruments for third-party business). *If the total amount of the outstanding balance of the prepaid payment instruments for one's own business prescribed in 1 exceeds 10 million yen on the record date (on March 31 and September 30 every year), the issuer shall give notification to the Local Finance Bureau within two months from the record date. WT/TPR/M/397/Add.1

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*The issuer of the prepaid payment instruments for third-party business prescribed in 2．shall register with the Local Finance Bureau in advance.

(Funds Transfer Service) When a person/an entity engages in exchange transactions equivalent to one million yen or less in the course of trade, registration as a funds transfer service provider is required. For exchange transactions exceeding one million yen, a license for banking business pursuant to the "Banking Act" is required. Funds transfer service providers are subject to certain regulations, particularly those in which they are required to preserve not less than 100% of the outstanding amount of funds that are in the middle of being transmitted or are pending by means of deposits.

For further details, please look at the Payment Services Act. Tentative translation of the Act is available at: http://www.japaneselawtranslation.go.jp/law/detail/?id=3078&vm=04&re=01.

REPORT BY THE SECRETARIAT (WT/TPR/S/397)

1 ECONOMIC ENVIRONMENT 1.2 Recent Economic Developments 1.2.1 Growth, income, and employment Pages 17-18, para 1.4 Since 2016, the overall sectoral pattern of Japan's GDP and employment has remained virtually unchanged (Table 1.2). According to OECD data, the annual growth rate of multi-factor productivity in the economy was -0.05% (2014), 1.05% (2015), -0.02% (2016) and 1.20% (2017); the annual growth rate of labour productivity forecast stood at 0.99% (2014), 1.00% (2015), 0.99% (2016), 1.00% (2017) and 0.99% (2018 and 2019). According to the OECD, since 2012, labour productivity growth has slowed to an annual pace of 1.0%; the Government set a goal to double productivity growth to 2% by 2020, including by promoting artificial intelligence and robots, as well as measures for the Supply System Innovation under the 2017 New Economic Policy Package (Sections 2.1 and 2.4.2). Furthermore, according to the OECD, despite a high level of public support for SMEs, in financial year (FY) 2017, productivity in large firms was 2.5 times higher than in SMEs in manufacturing, a large gap by international standards (Sections 1.1, 1.2.4.1, 1.2.4.3, 1.2.4.4 and 3.3.1.2). Nevertheless, according to the World Economic Forum's Global Competitiveness report for 2018, Japan was the world's fifth most competitive nation out of 140 countries (Section 2.4.2). According to United Nations Conference on Trade and Development (UNCTAD) estimates, in 2017, Japan ranked 19th (17th in 2010) among the world's 25 top exporting economies by global value chain (GVC) participation rate, as its average GVC participation growth was zero in the period 2010-17 compared to 9% between 2000 and 2010; its GVC participation in exports (48%) stood below the average level of both the developed (60%) and developing (56%) exporting economies.

Question 3 What are the reasons for low SMEs productivity in manufacturing compared to large firms? What measures should be implemented to change the situation in the manufacturing sector? What international opportunities can be open to SMEs in order to maximize their productivity?

RESPONSE Factors in the difference between the productivity of SMEs and large companies in the manufacturing field are due to their aggressiveness in capital investment (IT investment) and the amount of investment. Japan will support efforts to improve productivity, such as capital investment, more efficient back-office operations, and expansion of sales channels, through the IT introduction subsidy and the sustaining subsidy, which were taken with the supplementary budget.

1.3 Developments in Trade and Investment 1.3.2 Trends and patterns in foreign direct investment (FDI) Pages 29-30, para 1.26 FDI is not only an additional source of capital. It is also considered to bring with it entrepreneurship, management skills and, especially, new technology, which contribute to improved multi-factor productivity. Japan's inbound FDI stocks as a share of GDP (4% in 2016) are the lowest in the OECD, due to tradition-related challenges in certain areas (e.g. mergers and acquisitions, corporate governance, and labour market rigidities) that are being addressed by the authorities. FDI inflows peaked at USD 19.4 billion in 2016 (Table 1.5). During the review period, inflows were largely concentrated in the manufacturing of electric machinery, transportation equipment, and chemicals WT/TPR/M/397/Add.1

- 206 - and pharmaceuticals, as well as in services, mainly finance and insurance (Tables 1.4 and 1.5); in 2018, they originated mainly in the United States, the Cayman Islands, the European Union and the Republic of Korea. The FDI inbound stock continued to rise steadily and was largely held by European Union investors (Table 1.7). Despite a decline in its share, the United States remains the second FDI stock-holder, followed by Singapore. Within the European Union, in 2017, the largest single stock holder remained the Netherlands, where around 80% of investment was in electrical machinery, followed by France, where over 70% of investment was in transportation equipment; around 80% of the stock from North America was in the non-manufacturing sector, with the majority in the finance and insurance industry.

Question 4 Are there any measures taken to compensate the "tradition-related challenges" in certain areas that negatively affect inbound FDI? Do you create any incentives, which offset existing problems and stimulate the inflow of FDI to Japan?

RESPONSE While it is difficult to specify the measures that are taken to compensate the "tradition-related challenges", Japan established the Council for Promotion of Foreign Direct Investment in Japan to stimulate the inflow of FDI. For further information, please see the website below. http://www.invest-japan.go.jp/en_index.html.

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.3 Measures Directly Affecting Production and Trade 3.3.5 State trading, state-owned enterprises (SOEs), and privatization Pages 96-97, para 3.159 During the review period, state involvement in the economy remained relatively unchanged. State trading entities continued to engage in leaf tobacco, opium, rice, wheat, barley and milk products. Major commercial SOEs include those operating in energy, financial services, telecommunications and some transport-related activities. The State continues to wholly or partially own several companies, including large ones (Table 3.18), in the delivery of goods and services that the authorities believe would not be adequately provided by the private sector alone. Ownership is maintained either directly or via Incorporated Administrative Agencies (IAAs), which are public- sector corporations with a separate legal personality; as at 1 April 2019, there were 87 IAAs (88 in 2017). As at 31 December 2016 (latest data available), there was a total of 228 (234 in 2015) entities with government capitalization; the total amount of capitalization stood at JPY 76.0 trillion (JPY 80.1 trillion as at 31 March 2015). Based on the OECD definition of SOEs, Japan identified 1 majority-owned listed enterprise (Japan Post Holdings Co., Ltd, 218,312 employees, valued at USD 55.8 billion), 7 majority-owned non-listed enterprises (37,953 employees, valued at USD 26.5 billion), 2 minority SOEs (Japan Tobacco Inc., 63,968 employees (as at 31 December 2018) and Nippon Telegraph and Telephone Corporation, 303,350 employees (as at 31 March 2019)) and no statutory corporations or quasi-corporations. In 2014, based on the OECD definition of SOEs, Japan had identified 26 SOEs: 2 minority-owned listed enterprises, 8 majority- owned non-listed enterprises, and 16 statutory corporations or quasi-corporations.185 Market monopolies continue to be retained in domestic manufacturing of tobacco and the importation of leaf tobacco.

Question 5 What is the share of governmental participation in Japanese railway market, including infrastructure, rolling stock, hauling operations?

RESPONSE Most railway companies in Japan are private, and most of them own both infrastructure and rolling stock and operate on their own. To be specific, there are 216 railway operators in Japan and three of them, JR Hokkaido, JR Shikoku, JR Freight, are held by JRTT, a governmental agency. Thirteen others are operated or owned by local government; Sapporo, Hakodate, Sendai, two in Tokyo, Yokohama, Nagoya, Kyoto, Osaka, Kobe, Fukuoka, Kumamoto and Kagoshima. Others are private companies. The total passenger-km in Japan is about 437 B (passenger-km, 2017) while the total passenger-km of those public-held companies is about 49 B (passenger-km, 2017), which means that most of the passengers are carried by private railway companies. WT/TPR/M/397/Add.1

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Page 97, table 3.18

Question 6 Why isn't the Japan Railway Construction, Transport and Technology Agency added into the list of large state enterprises? What are the rules applicable to Agency's operations? What is Agency's influence over Japanese railway market?

RESPONSE Although there is no precise definition of state-owned enterprises (SOEs) in Japan, in Table 3.18, Japan has provided information on "special public corporations" whose ratios of investment by the government is more than 50%. Although the revenue size of the Japan Railway Construction, Transport and Technology Agency (JRTT) is relatively large, it is not included in the list since it is an independent administrative agency, not a special public corporation. There is an original law for establishing JRTT, and its operation is based on the law. Its purpose is to establish a transportation system based on modes of mass transportation by constructing railways; to provide assistance for the development of railway infrastructure by railway companies, maritime transport companies and others; and to provide other assistance so that JRTT can contribute to the stable development of the national economy and improvement of Japanese lifestyles. One of its main businesses is to construct new Shinkansen lines (High-speed Rail in Japan).

3.3.6 Government procurement Pages 99-100, paras 3.164-3.165 3.164. As a party to the WTO Agreement on Government Procurement (GPA), Japan implements the GPA rules and other international agreements through: the Cabinet Order Stipulating Procedures for Government Procurement of Products or Specified Services; the Cabinet Order Stipulating Procedures for Government Procurement of Products or Specified Services in Local Governments Entities; and the Ministerial Ordinance Stipulating Special Procedures for Government Procurement of Products or Specified Services. To implement the Japan-EU EPA (Section 2.3.2 and below), the Cabinet Order Stipulating Procedures for Government Procurement of Products or Specified Services was revised on 19 December 2018 (Cabinet Order No. 340 of 2018) and the Cabinet Order Stipulating Procedures for Government Procurement of Products or Specified Services in Local Governments Entities on 21 and 27 December 2018 (Cabinet Order No.347 and No.353 of 2018). On 6 November 2016, with the agreement of other parties to the GPA, Japan withdrew the Kyushu Railway Company from its GPA schedule as the result of the privatization of the company. 3.165. Many of the EPAs signed between Japan and its trade partners contain chapters on government procurement (Section 2.3.2). During the review period, two more agreements with government procurement chapters were signed and subsequently came into force, namely the CPTPP (or TPP11) and the Japan-EU EPA. Japan's government procurement commitments under the CPTPP are roughly the same as its GPA commitments. While its undertakings under the Japan-EU EPA are built on its GPA commitments, the coverage of local government entities under this EPA is further expanded to local independent administrative agencies.

Question 7 Can Japan elaborate more on preferences given to Japan and provided by Japan as part of the government procurement deal in railway sector within the EU-Japan FTA? Under which terms can Japan get access to the EU railway market and vice versa?

RESPONSE Procurements of goods and services related to the operational safety of transportation by the entities listed in Japan's Annex 2 to Appendix I to the GPA covered by Note 4 to that Annex and the entities listed in Japan's Annex 3 to Appendix I to the GPA covered by Note 3.a. to that Annex (Hokkaido Railway Company, Japan Freight Railway Company, Japan Railway Construction, Transport and Technology Agency, Shikoku Railway Company and Tokyo Metro Co., Ltd.) shall be open to suppliers of the European Union. This commitment entered into force on 2 February 2020. The thresholds for the procurement by the entities listed in Japan's Annex 2 to Appendix I to the GPA are those set out in that Annex, while the thresholds for the procurement of goods and services (other than construction services and architectural, engineering and other technical services) by the abovementioned five entities referred to in the first sentence of this paragraph are 400,000 SDR. As to the preference given to Japan by the EU in the railway sector, please refer to Paragraph 4 of Section A of Part 2 of Annex 10 of the Japan-EU EPA.

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Page 100, para 3.166 In addition to the market access commitments undertaken under the GPA and various EPAs, Japan maintains various "voluntary measures", the outcome of bilateral negotiations with the United States in the past, to facilitate foreign suppliers' opportunities to access its government procurement markets. These access opportunities are applied at multilateral level. They included the lowering of the thresholds of contract value above which the procurement would be open to international competition, the extension of the period for tenderers to submit their tenders, and an increase in the number of procuring entities whose procurements are open to international competition. However, due to the fact that the 2014 revised GPA has "caught up" with voluntary measures as compared to the GPA 1994, the benefits that can be drawn from these voluntary measures have become marginal. Details on the remaining value added of these voluntary measures is essentially of a procedural nature as indicated in the previous TPR Report of Japan.

Question 8 Japan refers to the so called "voluntary measures" providing easier government procurement access, in addition to Japan's international obligations. Do such measures exist in relation to the railway sector and which measures, if any?

RESPONSE The "voluntary measures" provide easier government procurement access in such areas as supercomputers and non-R&D satellites as sector-specific voluntary measures (Please refer to the Table 3.24 of WT/TPR/S/351/Rev.1.). However, there are no "voluntary measures" which apply specifically to the railway sector.

Page 101, para 3.168 Japan has no restrictions on the place of origin of products or the nationality of suppliers in government procurement. The principle of non-discrimination is pursued in all procurement activities. However, there has been concern over the apparently low share of foreign companies in public procurement; it seems that this is partly due to non-regulatory barriers, the geographical distance from certain overseas markets, and a lack of knowledge of the local market. Foreign participation in government procurement is described in Tables 3.21 and 3.22.

Question 9 Japan notes that its government procurement market does not set origin-based restrictions. It also notes that the level of foreign procurement is quite low, which is connected, according to Japan, to geographical factors and bad market awareness. Which measures does Japan take to eliminate this barrier?

Page 101, table 3.23

Question 10 According to information presented by Japan, foreign share in government procurement for railway vehicles and associated equipment amounts to 0.4% in 2017 and to 0% in 2016. What is the reason for zero foreign share in railway government procurement sector, in Japan's view? What is the reason for a minimal raise of share in 2017? We note that the previous Japan's trade policy review indicated that foreign share in railway equipment government procurement amounted to 45.9% in 2014. What is the reason for such a substantial decrease?

RESPONSE Japan has an "Operational Safety Clause" in the GPA, so Japanese railway operators do not have to procure railway vehicles and associated equipment in compliance with the GPA. There was procurement from foreign suppliers in 2017. The GPA had applied to three big Japanese railway operators, JR East, JR West, and JR Central, and they have procured railway equipment from not only Japanese suppliers but also foreign suppliers. However, they were delisted from Japan's Appendix I to the GPA in 2014.

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4 TRADE POLICIES BY SECTOR 4.1 Agriculture, Forestry, and Fisheries 4.1.1 Agriculture 4.1.1.2 Agricultural policy Pages 127-129, paras 4.7-4.11

Question 11 In July 2019, Japanese companies stopped any purchases of grain from the Russian Federation due to the African pig cholera breakout. Could Japan please elaborate further according to which legislative act this ban has been applied, as well as its correlation with the WTO rules, as well as with agricultural policies of Japan mentioned in the Report.

RESPONSE The actions are of private contract nature. There is no import prohibition as official measures of Russian Federation grains due to African Swine Fever.

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DOMINICAN REPUBLIC

DOCUMENTO WT/TPR/S/397

1 ECONOMIC ENVIRONMENT 1.3 Developments in Trade and Investment 1.3.2 Trends and Patterns in Foreign Direct Investment (FDI) Pág. 30 Párrafo 1.27. "Japan remains not only one of the major exporters of goods, but also of capital. Monetary easing in Japan and "search-for-yield" by Japanese investors continued to support FDI outflows and overseas diversification by institutional investors. FDI outflows peaked in 2017 and then dropped by an overall 14.4% in 2018 (Table 1.5). Unlike inflows, during the review period, outflows were largely concentrated in services (communications, and finance and insurance) and manufacturing (chemicals and pharmaceuticals, and transportation equipment) (Table 1.5). At the same time, the main individual destinations were the European Union, the United States (albeit a decline) and the Cayman Islands. Similar to the inbound stock, the outward FDI stock continued to rise steadily, with the United States and the European Union remaining the main destinations (Table 1.7)."

Question 1 ¿Está interesado el gobierno de Japón en promover la IED en El Caribe? ¿Se visualiza un empresariado interesado en potenciar las inversiones de capital hacia la República Dominicana en un futuro cercano? ¿En algún sector en particular?

RESPONSE At this time, Japan has no specific information about Japanese companies interested in investing in the Dominican Republic in the near future. Meanwhile, Japan is aware of the potential advantages of doing business in the Dominican Republic since it is located in the center of the Caribbean Sea; has good access to North America, Central America and South America, and especially to the North American market; and has the Dominican Republic-Central America FTA (CAFTA-DR).

2 TRADE AND INVESTMENT REGIMES 2.3 Trade Agreements and Arrangements 2.3.2 Regional and preferential agreements 2.3.2.2 Preferential trade agreements (PTAs) Pág. 43 Párrafo 2.26. "Japan offers preferential tariff treatment to 128 developing economies and five territories under its GSP scheme. This includes all least developed countries (LDCs) who qualify for more extensive product coverage (98% of tariff lines) and duty-free and quota-free treatment. In 2017, Japan notified to the WTO its preferential rules of origin for LDCs. Product coverage under the duty-free, quota-free scheme for LDCs and the GSP scheme is reviewed each year as part of the annual tariff revision. The GSP scheme itself is revised every ten years, with the next revision in March 2021."

Question 2 ¿Es posible conocer las revisiones arancelarias anuales del esquema de preferencias GSP, posteriores a las realizadas en 2017? ¿Pueden suministrarnos información sobre dicho esquema, con más detalle que la suministrada en el link https://www.customs.go.jp/?

RESPONSE Please refer to 2.3.2.2 in the Trade Policy Review Report by the Secretariat and FAQs from 1501 to 1508 on the following webpage. https://www.customs.go.jp/english/c-answer_e/customsanswer_e.htm.

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MALAYSIA

QUESTIONS FROM MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY (MITI)

SECRETARIAT REPORT

2.3.1 WTO

Page 38

2.13 Over the review period, Japan submitted several notifications under different WTO agreements (Table 2.2); notifications are outstanding in the areas of domestic support in agriculture and government procurement.

Question 1 Could Japan update the information related to its domestic support policies for the agriculture sector?

RESPONSE The most recent DS1 notification was made last year, including domestic supports in FY2016. The next DS1 notification is in preparation.

Question 2 When does Japan plan to submit its pending notification for domestic support?

RESPONSE Please refer to the answer to Question1 from Malaysia

3.3.1 Incentives

Page 78 3.88 Over the review period, new or revised tax incentives for companies were, inter alia, designed to: promote business investment by local SMEs, promote business succession of SMEs, and spur wage hikes and productivity, including through revisions to the tax system for R&D (Table A3.2).96 According to the authorities, no studies were undertaken over the review period on the effectiveness of tax (and non-tax) incentives.

Question 3 Malaysia would like to enquire whether the Japanese Government has any plans to review the current incentives scheme?

RESPONSE Please refer to the link below regarding tax reform for FY2020. https://www.mof.go.jp/english/tax_policy/tax_reform/fy2020/02keyhighlight.pdf.

4.4.6 Distribution services with a specific focus on e–commerce

Page 187

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Question 4 Can Japan elaborate more on the current regulation dealing with e-payments and the challenges faced in its implementation?

E-money Under the "Payment Services Act", e-money (electronic money) and those are issued for prepaid/pre-loaded values fall within the category of prepaid payment instruments. Prepaid payment instruments are classified into the following two types: (1) those which can be used for purchase of goods and services only by the issuer of prepaid payment instruments (prepaid payment instruments for own business); and (2) those other than (1) (prepaid payment instruments for third-party business). * If the total amount of the outstanding balance of the prepaid payment instruments for one's own business prescribed in (1) exceeds 10 million yen on the record date (on March 31 and September 30 every year), the issuer shall give notification to the Local Finance Bureau within two months from the record date. * The issuer of the prepaid payment instruments for third-party business prescribed in (2) shall register with the Local Finance Bureau in advance.

Funds Transfer Service When a person/entity engages in exchange transactions equivalent to one million yen or less in the course of trade, registration as a funds transfer service provider is required. For exchange transactions exceeding one million yen, a license for banking business pursuant to the "Banking Act" is required. Funds transfer service providers are subject to certain regulations, particularly those in which they are required to preserve not less than 100% of the outstanding amount of funds that are in the middle of being transmitted or are pending by means of deposits.

Regarding the challenges, FSA recognizes the following: -Since funds transfer service providers' scales and business models are very diverse, their internal control systems and risk profiles are also different. As the use of cashless payments improves further and the number of foreign users increases, new trends, such as entries of new providers, development of new services and significant changes in risks regarding fund transfer business, are expected. -In order to ensure that the services are appropriately provided and users are protected, it is important to further encourage providers to enhance business management and internal control systems which will enable them to respond to changes in the business environment and risks in a timely manner.

To respond to these, FSA is working on: - Analyzing the providers' business models and usage by foreigners. Monitoring with a risk-based approach taking into account new business development and changes in risks. - Strengthening monitoring and dialogue with the providers for enhancement of their internal control systems particularly in the area of the maintenance management of remittance funds, IT system risk management, and AML/CFT with due consideration to each provider's size and characteristics.

1.4.7 Legal services Page 189

4.283. There is no specific track or procedure for requalification of foreign lawyers, already qualified abroad, in Japanese law. The whole cursus must be followed. In addition, a commercial presence in Japan is required. That may explain why foreign lawyers almost never practice as bengoshi.

Question 5 Can Japan further elaborate the registration/licensing process for foreign lawyers in order to practice legal service in Japan? Are foreign lawyers allowed to employ or establish a partnership or joint legal services with Japanese lawyers (bengoshi)?

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RESPONSE A service supplier must be recognized as "Gaikoku-Ho-Jimu-Bengoshi (Registered Foreign Lawyers)" by the Minister of Justice and register with the Japan Federation of Bar Associations. The conditions for granting recognition by the Minister of Justice are as follows: (a) The service supplier must be qualified as a lawyer in that jurisdiction. (b) The service supplier must have been engaged as a lawyer for at least 3 years in that jurisdiction. (c) The service supplier is not subject to such conditions of disqualification in that jurisdiction which, would disqualify the Bengoshi. (d) The service supplier possesses the intention to undertake the profession in good faith. (e) The service supplier must possess plans, residence and financial basis to perform his functions properly and steadily. (f) The service supplier must possess capability to compensate for damage caused to the client, if any. A Registered Foreign Lawyer or a Registered Foreign Lawyer Corporation and an Attorney at Law or a Legal Professional Corporation may jointly operate under a partnership contract or other continuous contract for the purpose of providing legal services. A Registered Foreign Lawyer or a Registered Foreign Lawyer Corporation can employ Japanese lawyers.

GOVERNMENT REPORT

2.2 WTO

Page 5

2.7. Strengthening and maintaining the multilateral trading system, which forms the basis of global trade, is a main pillar of Japan's trade policy. Since the last review, Japan has always fully engaged in bringing about progress in the multilateral trading system under the WTO. While respecting the principles of openness, transparency, non-discrimination and inclusiveness, Japan is setting out to offer new ideas and approaches to advance the trade negotiations under the WTO. In the lead up to the successful conclusion of the 11th WTO Ministerial Conference (MC11) in Buenos Aires in 2017, Japan has made significant contributions to the launch of the Joint Statement Initiative on Electronic Commerce based on the Joint Statement issued at MC11 (WT/MIN(17)/60). In this statement, signatories agreed to jointly initiate exploratory work toward future WTO negotiations on trade- related aspects of electronic commerce. Japan, as a co-convener, has led exploratory work toward future WTO negotiations in 2018. In January 2019, another Joint Statement (WT/L/1056) was issued in Davos, in which 76 WTO Members confirmed their intention to commence WTO negotiations on trade-related aspects of electronic commerce. As of December 2019, the latter Joint Statement has been joined by 82 Members, and building on that, the like-minded Members have observed positive and effective progress in the negotiation. Furthermore, through the launch of the "Osaka Track" at the sideline of the G20 Osaka Summit, Japan seeks to achieve a high standard agreement on trade-related aspects of e-commerce with the participation of as many WTO Members as possible, aiming at achieving substantial progress by MC12.

Question 6 As the co-convener of the Joint Statement Initiative on Electronic Commerce, how does Japan see the process moving into Twelfth WTO Ministerial Conference (MC12) in Kazakhstan? What would be envisaged as an anticipated outcome in MC12?

RESPONSE As stated in the co-conveners' joint media release issued on 24 January, Japan agreed at the informal meeting of ministers on the WTO electronic commerce negotiations in Davos, along with other members participated in the meeting, to develop a consolidated negotiation text by MC12 and also affirmed its commitment to a high standard outcome with the participation of as many WTO members as possible. See: https://www.mofa.go.jp/mofaj/files/000560874.pdf

Question 7 Malaysia notes the launching of the Osaka Track at the sideline of the G20 Osaka Summit in Japan. Malaysia is interested to know how the Osaka Initiative works in parallel to the on-going JSI in developing digital trade rules?

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RESPONSE The major purpose of the Osaka Track is to give political impetus to the WTO negotiations by the Leaders' level for the first time and it will also contribute enriching existing endeavors by approaching digital economy from the following three viewpoints. 1) discussing issues which need further intellectual works, to foster mutual understanding among WTO members participating in the on-going negotiations on electronic commerce at the WTO (hereinafter referred to as the "WTO negotiations"); 2) making best use of the accumulation of the best experiences and knowledge conducive to the WTO negotiations, gained through expert discussions in international fora other than the WTO; and 3) promoting holistic policy discussions on issues surrounding digital economy, not limited to those covered under the WTO negotiations. Also, Japan add that the "Osaka Track" does not replace the JSI, nor does it intend to prejudge the WTO negotiations.

2.5 Investment Policy

Page 12

2.5.1 Outlook 2.35. The Working Group for Revising Regulations and Administrative Procedures under the Council for Promotion of Foreign Direct Investment in Japan discussed issues impeding foreign investment in the economy and compiled the Final Report in 2017. In addition, the Council launched the Support Program for Regional Foreign Direct Investment in Japan in 2018 to advance regional revitalization through FDI. In 2019, the Council adopted the Program to Intensively Attract Foreign Direct Investment in Regional Japan to strengthen the Support Program and provide intensive support to priority local governments. In addition, the Japanese Government will work to further improve Japan's overall business environment. By following up the past plans and conducting those steadily, the Japanese Government aim to achieve the goal of doubling the inward FDI stocks to JPY 35 trillion by 2020.

Question 8 Malaysia is interested to know further on the Support Program for Regional Foreign Direct Investment?

RESPONSE It is essential for municipalities of Japan to determine their regions' strengths (such as unique industrial clusters, agriculture, forestry and fishery products and tourism resources) and to connect these strengths with sales channels, technologies, human resources and know-how of overseas companies. In May 2018, the Council for Promotion of Foreign Direct Investment in Japan, a body organized by the government, decided to implement the support program (secretariat: Ministry of Economy, Trade and Industry (METI) and JETRO), which aims to advance efforts to attract overseas companies to regional areas of Japan in a strategic manner by taking advantage of the uniqueness of such areas. To this end, this program supports municipalities in developing their strategies and encourages them to effectively make use of related measures and advance specific activities for attracting overseas companies in accordance with the strategies by uniting the efforts of all ministries and agencies of the government. METI and JETRO have selected 28 successful municipalities to be supported under the support program so far, and they have supported the selected municipalities in formulating strategies that take advantage of regional strengths and in advancing specific activities for attracting overseas companies.

3. Trade and Development

Page 12

3.1 Aid for Trade Japan's Development Initiatives for Trade 3.3. Given the successful results of the above-mentioned first initiative, Japan announced a new AfT strategy, "Development Initiative for Trade 2009" in July 2009. Its main pillar was USD 12 billion of financial assistance for trade-related projects including trade, production and distribution infrastructure for 3 years from 2009 to 2011. During the designated period (2009-11) of this initiative, the total sum of financial assistance amounted to USD 23.36 billion, which reached 195% of the target, well surpassing the amount of the first initiative. Despite the fact that no additional WT/TPR/M/397/Add.1

- 215 - development initiative has been launched since then, Japan has continuously expanded its assistance. Since the adoption of the "Hong Kong Declaration" in 2005, Japan has provided approximately USD 72 billion worth of Aid for Trade related assistance as of 2017. This is representative of Japan's strong commitment to AfT, which Japan considers as important to help beneficiary countries meet the new challenges they face in the regional and global economy.

Question 9 Can Japan elaborate further on the Japan Development Initiative for Trade and its benefits to other countries, for example, Malaysia?

RESPONSE Japan announced the "Development Initiative for Trade", prior to the WTO Ministerial Conference in Hong Kong, China in December 2005. This initiative featured: (a) implementation of Duty-Free and Quota Free Market Access for essentially all products originating from LDCs, (b) provision of US$10 billion of financial assistance including trade, production, and distribution infrastructure for three years (2006-08), and (c) as part of (b), the exchange of a total of 10,000 trainees and experts in trade-related fields over the same period, the targets of which were fully achieved. During the designated period (2006-08) of the initiative, the total sum of financial assistance amounted to US$17.66 billion, greatly exceeding the target at 177%.

On 21 May 2015, Prime Minister Abe announced the "Partnership for Quality Infrastructure" on the occasion of the 21st International Conference on the Future of Asia, which was held in Tokyo. With this Partnership, the Government of Japan promotes "quality infrastructure investment" in collaboration with other countries and international organizations. To that end, Japan and the strengthened Asian Development Bank will provide approximately US$ 110 billion for quality infrastructure development in Asia over the next five years. Subsequently, in May 2016, at the 24th meeting of the Management Council for Infrastructure Strategy, Prime Minister Abe delivered an initiative titled "Expanded Partnership for Quality Infrastructure" which was directed toward the G7 Ise-Shima Summit meeting 2016. Through the initiative, Japan will aim to provide financing of approximately 200 billion USD in the next five years to infrastructure projects across the world, including those for natural resources, energy, etc. In addition, at the G20 Osaka Summit in June 2019, under Japan's leadership, G20 countries endorsed the "G20 Principles for Quality Infrastructure Investment" which includes the elements of Japan's priority such as openness, transparency, economic efficiency, and debt sustainability. Japan promotes the importance of Quality Infrastructure based on the G20 Principles, as a part of international standardization of Quality Infrastructure, in leaders and ministerial meetings related to G7, G20, UN, APEC, ASEAN, and so on.

As for Japan's new Development Initiative for Trade, please refer to the website of the Ministry of Foreign Affairs of Japan (https://www.mofa.go.jp/policy/economy/wto/min05/initiative.pdf).

As for Malaysia specific supports, please see the websites of JICA (https://www.jica.go.jp/malaysia/english/index.html), JETRO (https://www.jetro.go.jp/malaysia/), and JBIC (https://www.jbic.go.jp/en/index.html).

Question10 Malaysia is interested to enquire whether the initiative will be extended further?

RESPONSE Regarding the "Development Initiative for Trade", Japan continues to lead international discussion in order to implement and reflect on individual projects and disseminate and settle the G20 Principles. Not limited to these initiatives, Japan continuously expands its supports; through the WTO alone, Japan contributes to the Doha Development Agenda Global Trust Fund, the Enhanced Integrated Framework Trust Fund, as well as the International Trade Center.

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SECRETARIAT REPORT QUESTIONS FROM MINISTRY OF HEALTH (MOH)

Page 111-112

3.3.7.3 International cooperation and harmonization

3.200. The JPO also supports the development of IPRs and systems in emerging and developing countries in Asia, the Pacific, Africa, and the Middle East, by collaborating with ASEAN, the African Regional Intellectual Property Organization (ARIPO), the Gulf Cooperation Council (GCC), and member country IP offices both bilaterally and multilaterally. Its initiatives include providing training on examination practices, accepting trainees from other countries, supporting efforts to accede to international application systems (e.g. Madrid Protocol and Hague Agreement) and regional IP systems (e.g. ARIPO and African Intellectual Property Organization (OAPI)), cooperating in the revision and preparation of patent examination manuals and guidelines, and promoting the commercialization and awareness of IP and counterfeit products. The JPO coordinates particularly closely with ASEAN IP Offices, with which it executed a Memorandum of Cooperation in 2012.

Question11 With regards to quality patents examinations practices, does the Japan Patent Office consults with the Pharmaceuticals and Medical Device Agency (PMDA) or Ministry of Health, Labour and Welfare (MHLW) on patents applications of pharmaceuticals?

RESPONSE Based on Article 194(2) of the Japanese Patent Act, examiners can consult with the PMDA or MHLW if necessary. (Reference: Article 194(2) of the Japanese Patent Act) The Commissioner of the Japan Patent Office or the examiner may request the relevant administrative agency, educational institution or any other organizations to conduct an investigation that is necessary to the examination.

QUESTIONS FROM MALAYSIAN INVESTMENT DEVELOPMENT AUTHORITY (MIDA)

SECRETARIAT REPORT

2.4.1 Investment framework

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2.40. The Government's investment goals are to increase the inward FDI stock to JPY 35 trillion by 2020. By end-2018, the inward FDI stock reached JPY 30.7 billion. Since its previous Review, the Council for Promotion of Foreign Direct Investment has continued to undertake initiatives to attract inward investment, through the 2016 Policy Package for Promoting Foreign Direct Investment into Japan to Make Japan a Global Hub. Specific programmes were adopted. Firstly, the Support Program for Regional Foreign Direct Investment in Japan (Support Program) was adopted in May 2018. Under this Program, relevant ministries and agencies are to: help local governments formulate plans to attract foreign companies; provide support in matching foreign and local companies; advise local governments on the effective use of available measures to attract foreign companies; and advise foreign companies and local governments on regulations and administrative procedures. This Program is designed to ensure FDI inflows, which are currently concentrated in Tokyo, have broader geographical reach. Secondly, the Program to Intensively Attract Foreign Direct Investment in Regional Japan was adopted in April 2019; this Program includes strengthening of the Support Program, and efforts to further improve Japan's business environment. Other programmes aimed at increasing the FDI stock are the Basic Policy on Economic and Fiscal Management and Reform 2017, a Council on Economic and Fiscal Policy initiative decided by the Cabinet, the Japanese Revitalization Strategy 2016, and the Cabinet's 2019 Growth Strategy (Section 1).

Question 12 What are the main areas promoted under the initiatives to attract inward investment, through the 2016 Policy Package for Promoting Foreign Direct Investment into Japan?

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RESPONSE There are no specific areas promoted in the 2016 Policy Package.

2.4 Investment Regime

2.4.1 Investment framework

Page 49

2.42. From a domestic perspective, Japan considers that there is a strong need for tax and investment-related treaties to support and protect its increasing levels of investment abroad, and to encourage investment into Japan. Guided by the Action Plan Aiming to Facilitate an Investment Environment Through Promoting the Conclusion of Investment-Related Treaties, formulated in 2016, the Government plans to accelerate the conclusion of investment-related treaties and the revision of existing ones; its target is to have in force investment-related treaties with 100 countries and regions by 2020. It is also considering inclusion of trade in services and e-commerce in these agreements, to reflect economic and social developments.

Question 13 What types of facilitation services are offered by the government in the Action Plan Aiming to Facilitate an Investment Environment?

RESPONSE "The Action Plan Aiming to Facilitate an Investment Environment through Promoting the Conclusion of Investment-Related Treaties" is a basic guideline for accelerating the conclusion of investment- related treaties including the revision of existing treaties.

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THAILAND

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT

2. Trade and Investment Regimes 2.4 Investment Regime Paragraph 2.42 (Page 49) From a domestic perspective, Japan considers that there is a strong need for tax and investment- related treaties to support and protect its increasing levels of investment abroad, and to encourage investment into Japan. Guided by the Action Plan Aiming to Facilitate an Investment Environment Through Promoting the Conclusion of Investment Related Treaties, formulated in 2016, the Government plans to accelerate the conclusion of investment-related treaties and the revision of existing ones: its target is to have in force investment-related treaties with 100 countries and regions by 2020. It is also considering inclusion of trade in services and e-commerce in these agreements, to reflect economic and social developments.

Question1 The investment goal of Japan is to increase the inward FDI stock to JPY 35,000,000 by 2020. Therefore, Japan considers that there is a strong need for tax and investment-related treaties to support and protect its increasing levels of investment abroad, and to encourage investment into Japan. Which countries and regions that Japan plans to conclude the investment related treaties within 2020? What are the elements that Japan want to revise regarding the existing investment- related treaties? Could Japan elaborate more on the inclusion of trade in services and e-commerce in investment-related treaties regarding additional elements? Lastly, how would this help to promote the FDI in Japan and protect Japan's outward investment?

RESPONSE Japan promotes negotiations on investment-related treaties based on "The Action Plan Aiming to Facilitate an Investment Environment through Promoting the Conclusion of Investment-Related Treaties." Japan expects that the conclusion of such investment-related treaties will contribute to protect Japan's outward investment including overseas operation of Japanese companies by improving transparency of the investment environments, legal stability and predictability in negotiating countries.

3. Trade Policies and Practices by Measures 3.1 Measures Directly Affecting Imports Paragraph 3.2 (Page 52) The report by Secretariat states that "The Customs Act remains the principal piece of legislation covering customs procedures and documentation. Over the review period, amendments to the Customs Act in 2017 and 2018, inter alia, integrated a new principle regarding reporting on matters related to cargoes in electromagnetic records, and strengthened penalties for failure to obtain export and import permissions when required. Other regulations governing customs procedures are: Cabinet Order No. 150 of 1954 (Order for Enforcement of the Customs Act) and the Ministry of Finance Ordinance for Enforcement of the Customs Act (No. 55 of 1966)."

Question2 It would be appreciated if Japan could kindly clarify the detail of strengthened penalties for failure to obtain export and import permission when required.

3. Trade Policies and Practices by Measures 3.2 Measures Directly Affecting Exports Paragraph 3.74 (Page 74) The report by Secretariat indicates that "JETRO established the Japan Agricultural and Foodstuff Exports as a new service in its Trade Tie-up Promotion Programme; this provides an Internet matching services for Japanese agricultural and food products. In the same year, it also established the Japan Food Product Overseas Promotion Center, in order to promote branding and marketing of WT/TPR/M/397/Add.1

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Japanese agricultural, forestry, fishery and food products in overseas markets. Since 2019, JETRO has strengthened its support to promote innovation, expansion of Japanese start-ups overseas, and inward FDI in Japan, corresponding to global acceleration of cutting-edge technologies and the digital economy."

Question3 Please share the outcome of the internet matching services for Japanese agricultural and food products.

RESPONSE Since JAFEX started, about 710 selling offers and 180 buying offers are registered on average. As of the end of January 2020, the numbers of registrations for each product category are as shown in the table below. On this system, about 180 messages for the registered matter are exchanged per month.

Product Category The Numbers of Registrations Selling Offer Buying Offer Processed Food 379 73 Beverages, Water 79 11 Alcoholic Beverage 51 14 Livestock and Their Products 25 11 Rice 26 5 Fruits and Vegetables 43 6 Ornamental Plants 7 0 Forestry Products 31 11 Fishery Products 120 44 Others 46 18 Total 807 193

3. Trade Policies and Practices by Measure 3.3 Measures Directly Affecting Production and Trade 3.32 Standards and other technical requirements Paragraph 3.118 (Pages 85-86) The Food Labelling Standard covers all food and drink sold in Japan. Importers are responsible for ensuring that their products are properly labelled (standard- compliant product labelling is not required at the time of customs clearance). An amendment to the Food Labelling Standard in September 2017 (Cabinet Office Ordinance No. 43 of 2017) introduced the requirement to indicate on the label the place of origin of the heaviest ingredient of those contained in the final product; this applies to all processed foods domestically produced and sold, with the exception of a few items, for which separate standards apply. There is a transition period for compliance, which ends in 2022. Previously, the requirement was for specified processed foods to be labelled with the place of origin of the heaviest ingredient, provided it was over 50% of the product's weight. For imported processed foods, the country of origin of the product must be labelled (labelling the place of origin of ingredients is not required). In May 2018, a further amendment to the Standard introduced a new labelling method for aseptic filling tofu; introduced labelling requirements for fungicides used for food; expanded the foods for which fungicides (fludioxonil) can be used; and provided for "Mortadella Bologna" to be labelled as "Bologna sausage" as the generic term of the product.

Question 4 Does Japan have any English version of documents or guidelines for food labelling standard for foreign exporters? It is clearly stated that importers are responsible for ensuring that the products are properly labelled under The Food Labelling Act. However, the exporters sometimes need to participate in preparing the labels and packaging which requires an understanding of the food labelling standard.

RESPONSE Japan does not have any English version of documents or guidelines for Food Labelling Standard.

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3. Trade Policies and Practices by Measures 3.3 Measures Directly Affecting Production and Trade 3.3.3 Sanitary and phytosanitary (SPS) requirements Paragraph 3.129 (Page 88) Under the Act, the MHLW is responsible for establishing MRLs for agricultural chemicals (pesticides, feed additives and veterinary drugs). Foreign countries may apply to the MHLW to establish or revise MRLs for newly approved agricultural chemicals used in/on foods exported to Japan. In this regard, an application must be made to the MHLW, and risk assessments are undertaken by the FSCJ. Some concerns were expressed about the length of the review process for the registration of new pesticides and the establishment of MRLs. In this connection, Japan indicated that it has decided to streamline an approval process for pesticides and food additives by utilizing a unified application and deliberation process. Notifications on standard processing periods are published online. For items where no MRLs have been established, Japan maintains a positive list system for agricultural chemicals, so as to generally prohibit the distribution of foods that contain agricultural chemicals above a certain level. As indicated by the authorities, when violations of MRL standards are found in imported foods, Japan clarifies the increased surveillance measures for the targeted food and the requirements for lifting them. In so doing, it takes in consideration the test results and the status of control for pesticide residues in the exporting country; measures are based on the relevant Codex guidelines, and try to minimize the burden on the exporting country. Since Japan's previous Review, the following standards of pesticide residues and additives in food have been established, revised or revoked: colistin sulfate and virginiamycin; salinomycin; L-carnitine; alkaline protease; chlorpropham; and guanidinoacetic acid.

Question 5 During the establishment or revision of MRLs for agricultural chemicals, does Japan conduct any analyses or predictions of the effects of the establishment/ revision of MRLs will have on currently imported commodities to Japan?

RESPONSE Japan does not conduct any analyses of the effect on current trade. However, Japan revises MRLs if stakeholders provide the data when they were informed about a proposal for the revision of MRL through the public comment procedure or WTO SPS notification.

4. Trade Policies by Sector 4.1 Agriculture, Forestry, and Fisheries Paragraph 4.1.1.5.3.1 (Page 138) In September 2017, the Government introduced the Rice Overseas Market Expansion Project, to mitigate the impact of decreasing domestic rice consumption on farmer's incomes. 30, A JPY 60 billion target was set for exports of rice and rice products for calendar year 2019, to be achieved through enhanced links between three groups: (i) exporters working on the strategic expansion of rice exports ("strategic exporters"); (ii) businesses working on the stable production of rice for export, which include rice producers and collecting organizations/groups ("strategic production areas for export"); and (iii) strategic exporters' target export destinations (China; Chinese Taipei; Hong Kong, China; Macau, China; Singapore; Thailand; Viet Nam; Malaysia; Mongolia; the United States; Canada; the European Union; Switzerland; Australia; the Russian Federation; the Middle East; and India). Government assistance includes support to attend some international exhibitions to promote Japanese rice products, and the organization of some matching events between producers and exporters.

Question 6 Is there any other governmental assistance for rice export besides supporting businesses to attend international exhibitions in order to promote Japanese rice products and business matching activities? Are there any programs such as mandatory production for export or tax benefits for exporters and producers of rice?

RESPONSE The MAFF has encouraged the export of rice by releasing the list of motivated exporters and producers to promote matching between production areas and exporters. There are no programs such as mandatory production for export or tax benefits for exporters and producers of rice.

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4. Trade Policies by Sector 4.4 Services 4.4.6 Distribution services with a specific focus on e–commerce Paragraph 4.275 (Page 188) Similarly, there are no GATS-type restrictions on e-commerce. There is no specific general regulatory framework for e-commerce. The main relevant laws deal with consumer protection and e-payments. The most significant among them is the Act on Special Provisions to the Civil Code on Electronic Consumer Contracts and Electronic Acceptance Notice (Act No. 95 of 29 June 2001). This Act provides special provisions to the Civil Code (Act No. 89 of 1896) in cases where there are certain mistakes in the elements comprising an electronic consumer contract, or where an electronic acceptance notice is dispatched by a consumer under a contract made at a distance. The Consumer Contracts Act (Act No. 61 of 12 May 2000) permits a consumer to rescind his/her intention to offer or accept a contract when s/he has misunderstood, or was distressed by, certain acts of the business operator. It also nullifies any clauses (in whole or in part) that exempt business operators from liability for damages, or that otherwise unfairly harm the interests of consumers.

Question 7 According to the report, Japan has no specific general regulatory framework for e-commerce but has relevant laws and regulations to regulate various issues including e-payments. Does Japan plan to enact any specific legal framework to accommodate the development of e-commerce in the future?

RESPONSE In February 2020, The Ministry of Economy, Trade and Industry has submitted a new bill on improving transparency and fairness of specified digital platforms to the Diet.

PART II: QUESTIONS REGARDING THE GOVERNMENT REPORT

2. Trade and Investment Policy 2.4 Other Regional/ Bilateral Agreements Paragraph 2.20 - 2.21 (Pages 9-10) The report by Japan states that "Following this leaders' decision, Japan and the United States held bilateral negotiations, including eight ministerial-level negotiations between Minister Motegi and Ambassador Lighthizer in approximately five months. At the summit meeting in September 2019, the two leaders confirmed that the both sides reached final agreement on the Japan-United States Trade Agreement and the Japan-United States Digital Trade Agreement. Those agreements were signed in October and approved by the Japan's Diet in December 2019. Japan and the United States are conducting their domestic procedures respectively, aiming at the early entry into force of the agreements."

Question 8 • Does Japan-United States Trade Agreement serve as a part of negotiation related to U.S. concerns about the imports of automobiles and certain automotive parts which the President has instructed the U.S. Trade Representative (USTR) to negotiate agreements with Japan and others? • Do Japan and the U.S. have any plan to further negotiate a trade deal regarding trading in automobiles and parts in the near future?

RESPONSE As for the first question, the Japan-US Trade Agreement is not related to the U.S. President's instruction on the imports of automobiles and certain automotive parts. As for the second question on further negotiations, please refer to paragraph 3 of the Joint Statement of Japan and the United States on 25 September 2019. (https://www.mofa.go.jp/mofaj/files/000520821.pdf).

2. Trade and Investment Policy 2.5 Investment Policy Paragraph 2.36 (Page 12) Japan has actively promoted the conclusion of investment agreements as they create stable, equitable, favourable and transparent conditions for greater investment through the removal of barriers to investment and provision of investor protections. In the Japan Revitalization Strategy, the Japanese Government set the goal of signing and/or achieving entry into force of investment- related agreements (investment agreements and economic partnership agreements with investment WT/TPR/M/397/Add.1

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Question 9 Japanese Government sets the goal of signing and/or achieving entry into force of investment- related agreements covering 100 countries/regions by 2020. What are the criteria that the Japanese Government has adopted in selecting country/region to be the partner for an Investment-related Agreement?

RESPONSE "The Action Plan Aiming to Facilitate an Investment Environment through Promoting the Conclusion of Investment-Related Treaties" lists four main criteria for selecting countries to negotiate. (1) Investment performance and prospects of increase in investment from Japan to partner countries/regions, (2) Request from the Japanese industry, (3) Consistency with Japanese diplomatic policy, (4) Needs and situations of partner countries/regions.

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NEW ZEALAND

REPORT BY THE WTO SECRETARIAT (WT/TPR/S/397)

SECTION 2: TRADE AND INVESTMENT REGIMES 2.3.2 Regional and preferential agreements 2.3.2.1 Regional Trade Agreements WT/TPR/S/397, page 41

Paragraph 2.16 of the Secretariat's report notes that Japan signed the Japan-United States Trade Agreement, eliminating or reducing tariffs on certain agricultural and industrial products. Questions • 1. When will Japan notify the WTO Committee on Regional Trade Agreements of the Japan- United States Trade Agreement? RESPONSE Notification of the Japan-US Trade Agreement to the CRTA is under coordination with the U.S. • 2. What is Japan's plan and timetable for completing a comprehensive trade agreement with the United States, as required by GATT Article XXIV? RESPONSE Article 5 of the Japan-US Trade Agreement provides: "Further to the existing commitments by each Party under the WTO Agreement, unless otherwise provided for in this Agreement, each Party shall improve market access in accordance with Annex I or Annex II. "By the implementation of this provision, the tariff elimination covering substantially all the trade between the two countries will be achieved. On that basis, Japan is of the view that the Japan-US Trade Agreement is consistent with Article XXIV of GATT in itself. For further negotiations, please refer to paragraph 3 of the Joint Statement of Japan and the United States on 25 September 2019. (https://www.mofa.go.jp/mofaj/files/000520821.pdf). SECTION 3: TRADE POLICIES AND PRACTICES BY MEASURE 3.1.4 Tariffs 3.1.4.1 MFN applied tariff WT/TPR/S/397, page 55

Paragraph 3.22 of the Secretariat's report notes that "The structure of Japan's MFN applied tariff remains complex, with a total of 272 tariff rates (same as in FY2016); there are 136 different ad valorem rates, 75 different specific rates, 29 different alternate rates, and 24 different compound rates, as well as 8 different other types of duty".

Questions • 3. What steps has Japan taken to simplify its tariff structure? RESPONSE In the process of the tariff revision, Japan has often merged tariff lines. In 2017, for example, several tariff lines were merged with regard to toys as well as sanitary goods in order to reduce the burdens on importers and custom brokers. Furthermore, in 2018, Japan reduced 105 lines in total in Japan's tariff schedule from Chapter 61 to 63 (textile products).

• 4. What steps does Japan intend to take to simplify its tariff structure? RESPONSE Japan does not have such a simplification plan.

• 5. What plans, or regular programmes, are in place to review applied tariff levels? WT/TPR/M/397/Add.1

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RESPONSE The changes of tariff rates are determined comprehensively from several points of view, including import demand and the status of ongoing FTAs. As for Japan's plans concerning possible changes in its tariff policy, the Government of Japan cannot announce the changes in advance, which would otherwise prejudge those points. Please refer to the following URL for the schedule of the annual tariff revision process, https://www.customs.go.jp/english/c-answer_e/sonota/9702_e.htm.

• 6. What policies are in place that would allow Japan to increase or lower its applied tariffs in general or in specific circumstances?

SECTION 4: TRADE POLICIES BY SECTOR 4.1 Agriculture and Fisheries 4.1.1.2 Agricultural Policies WT/TPR/S/397, pages 128

Paragraph 4.8 of the Secretariat report notes that in May 2016 the Ministry of Agriculture Forestry and Fisheries developed the Strategy to Promote Exports of Agriculture, Forestry, Fisheries Products and Foods.

Questions: • 7. How has Japan carried this strategy out? RESPONSE The Government established "the Plan for Empowering Export on Agriculture, Forestry and Fisheries" in May 2016 to support agricultural, forestry, fishery and food businesses in several measures, for example: − establish the Headquarters for Export of Agricultural, Forestry and Fisheries Products and Food to further improve the domestic export-related procedures, such as the issuance procedures for various certificates; − enhance the consulting and advice systems of Japan External Trade Organization (JETRO) and the overseas promotions of Japan Food Product Overseas Promotion Center (JFOODO); − provide the farmers, fishermen, foresters and food manufactures who intend to export their products overseas with supports such as export diagnosis and market information through the meetup and the community website.

As a result, the total value of exports of Japanese agricultural, forestry and fisheries products and foods reached JPY 912.1 billion in 2019.

• 8. Can Japan provide an update on how this strategy is progressing? RESPONSE Please see the response to question 7. Paragraph 4.9 notes that in 2017 Japan released a Policy package for enhancing the competitiveness of Japan's farmers through 13 actions, including through reducing the price of farming inputs and the introduction of a revenue insurance system.

Questions • 9. Can Japan provide further information on how the price of farming inputs will be reduced and specify the farming inputs targeted?

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production-related business, based on the "Act on the Support for Strengthening Agricultural Competitiveness'. Accordingly, Japan has been certifying business restructuring plans and business entry plans, allowing the relevant enterprises to receive financial supports based on the certified plan. The eligible farming inputs are, fertilizers, agricultural chemicals, animal feed, agricultural machines, seeds and seedlings.

• 10. Can Japan provide further information about the revenue insurance system provided to farmers?

RESPONSE Regarding the details of the revenue insurance system, see paragraph 4.30. WT/TPR/S/397, pages 128-129 Paragraph 4.11 outlines a number of changes to Japan's agricultural policies including increased support for domestic beef and pork producers and a new type of residency status for foreigners in sectors that need more workers, including the agricultural sector, implemented April 2019.

Questions • 11. Can Japan provide further detail on the increased support offered to beef and pork producers?

RESPONSE Regarding the details of supports for pork producers, see paragraph 4.54. For the supports for beef producers, the payment for beef covers 90% of the cost gap and beef producers pay 25% (no change) of the grant amount from the reserve fund.

• 12. How many foreign nationals have been granted residency status to work in Japan's agricultural sector since the implementation of this policy?

RESPONSE 292 foreign residents have been granted residency status to work in the agricultural sector as of December 2019.

• 13. What impact has the introduction of the new type of residency status had on increasing labour supply, particularly the agricultural sector? RESPONSE Certain sectors had difficulties to secure stable human resources, including agriculture, fishery, food and drink manufacturing industry, and restaurant industry. With the new type of residency status, more supply of labour with expertise and technique has become available to these sectors. The number of such expertised foreigners has been steadily increasing since April 2019 and is expected to further increase as the initial challenges are properly addressed for the system.

4.1.1.4 Trade policies and border measures WT/TPR/S/397, page 130 Paragraph 4.20 notes that the simple average tariff on agricultural products has increased to 17.9% in FY2019 from 16.3% in FY2016, and that tariffs on agricultural products are higher than tariffs on non-agricultural products, with an average of 17.9% for the former and 3.5% for the latter. Tariffs also vary considerably between agricultural products with less than one quarter of products being duty-free and a maximum tariff of 499.7%.

Questions • 14. What steps has Japan taken to simplify and adjust its agriculture tariff structure, given the complex agricultural tariff system and increased average agricultural tariff?

RESPONSE Japan's tariff structure for agricultural products is fully transparent and predictable and is set out in Japan's Tariff Schedule (publicly available).

No changes have been made to the MFN rates of agricultural products from FY2016 to FY2019. While Japan has not been fully informed of how the Secretariat calculated to obtain the average tariff rates in the report, seemingly AVEs were calculated for non-ad valorem duties and the reason for the WT/TPR/M/397/Add.1

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identified changes could be the changes in prices of the goods in question (not the changes in applied tariff rates itself).

• 15. What steps does Japan intend to take to simplify and adjust its agriculture tariff structure?

RESPONSE Japan does not have any intention to change its tariff structure at least for the time being.

• 16. What plans, or regular programmes, are in place to review applied agriculture tariff levels?

RESPONSE Please refer to the following URL as of the schedule of annual tariff revision process, https://www.customs.go.jp/english/c-answer_e/sonota/9702_e.htm.

• According to paragraph 4.21 government measures will ensure domestic production volumes and farmer's incomes in the agricultural, forestry and fisheries sectors will be maintained through government measures, despite the estimated impact of the CPTPP and Japan-EU EPA.

Questions • 17. What government measures will Japan make to maintain production volumes and farmer's incomes?

RESPONSE Japan is taking following measures in order to help mindful producers engaged in agriculture, forestry and fisheries with ease: i) "Enhancement of robustness" to support productivity improvement through development and extension of smart technologies, block resizing of farmland among others. ii) "Stabilization of management" to support financial stability.

Japan's domestic support policy is consistent with the relevant WTO agreements.

• 18. Has Japan considered whether these measures will distort trade?

RESPONSE Please see the response to Question 17.

WT/TPR/S/397, section 4.1.1.4 p.132, para 4.24

The Secretariat report notes "The method of administering TRQs varies from one item to another, although the competent authority for administering for all but one quota is the MAFF (the exception being "designated dairy products for general use", where the competent authority is the Agriculture Livestock Industries Corporation, a state trading enterprise). One quota (prepared edible fat) is partially allocated to a supplying country. Under all methods, the applicant for an allocation must meet criteria, such as end-use requirements, record as an importer, or planned usage. There were no substantive changes to quota administration methods since 2009." Questions • 19. As this statement indicates the quota system Japan administers is complex. Does Japan have any intention to change this? RESPONSE Japan's tariff structure for agricultural products is fully transparent and predictable. Regarding the details of TRQ administration, please refer to MA1 notification. The main reason seems decreased domestic demand. There might be other reasons but not identified specifically. • 20. As noted on p.132, paragraph 4.23, there is significant variations in fill rates in tariff quotas varying from 23.4% to 305.6%. Authorities have indicated that low fill rates for some products were mainly due to decreased domestic demand. What other factors have contributed to the low fill rates? RESPONSE Please see the response to Question 19. WT/TPR/M/397/Add.1

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4.1.1.5.2 Support Levels WT/TPR/S/397, section 4.1.1.5.2.2 p.137, para 4.37 The secretariat report notes "as reported by the OECD, support to producers remains high, at 2.5 times higher than the OECD average. According to OECD calculations, market price support remains the main element of producer support, and is mainly sustained by border measures, for rice, pork and milk." Questions • 21. Please explain what structural reforms Japan is planning to undertake over the next 5 year intended to reduce the trade-distorting forms of support currently provided to Japan's agriculture sector? RESPONSE Based on the result of the Uruguay Round negotiations, Japan has revised its market price support policies and introduced and expanded direct payments. Japan will continue to consider structural reform taking into account the agricultural situation in Japan, in accordance with the WTO Agreement on Agriculture.

SECTION 4.1.2 Fisheries WT/TPR/S/397, page 148, table 4.15 Table 4.15 on page 148 sets out the list of fisheries subsidies notified by Japan in July 2019 for FY2016 and FY2017. Questions • 22. New Zealand commends Japan for demonstrating transparency and commitment to the Buenos Aires Ministerial Statement on fisheries subsidies. How does Japan intend to ensure that its fisheries subsidies do not contribute to illegal, unreported and unregulated fishing; or to overfishing and overcapacity consistent with the United Nations Sustainable Development Goal 14.6? RESPONSE Japan's fishing activities are properly managed by the government in accordance with relevant fisheries laws and regulations based on the scientific stock assessment, and adequate monitoring, control and surveillance (MCS) measures in place to prevent IUU fishing. To our best knowledge, none of Japanese fishing vessels has been listed on IUU fishing vessels by RFMOs. Japan's fisheries subsidies programs are implemented in a manner not to contribute to IUU fishing or overfishing and overcapacity.

4.2 Mining and Energy 4.2.2 Energy WT/TPR/S/397, page 152, paragraph 4.103 Section 4.1.2, paragraph 4.103 states that "The 2030 energy mix factors in Japan's commitments (Nationally Determined Contribution) for the reduction of greenhouse gases submitted to the United Nations Framework Convention on Climate Change under the Paris Agreement; these include a reduction by FY2030 of 26% of emissions compared to FY2013." Questions • 23. New Zealand commends Japan for its commitment to reduce greenhouse gas emissions, the largest global source of which is the burning of fossil fuels. How does Japan intend to rationalise any inefficient fossil fuel subsidies that encourage wasteful consumption in line with the United Nations' Sustainable Development Goal 12(c) and the G20 commitment so as to contribute to the reduction of greenhouse gas emissions? RESPONSE There are no inefficient fossil fuel subsidies that encourage wasteful consumption in Japan. In general, reducing wasteful consumption of fossil fuels through the price effect of rationalizing and phasing out inefficient fossil fuel subsidies contributes to proper allocation of resources, measures against global warming, and easing supply and demand in the energy market. We recognize that it is important to support such efforts further.

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REPORT BY JAPAN (WT/TPR/G/397) SECTION 4 Japan's Domestic Policies WT/TPR/G/397, page 11, paragraph 4.1

The Japan report states that a dramatic improvement in productivity is necessary to boost potential growth rates and reach Japan's goal of reaching nominal GDP of JPY 600 trillion around 2020.

Questions • 24. Can Japan advise what measures they are putting in place to increase productivity?

RESPONSE In 2015, Prime Minister Abe launched the nation's effort to tackle the issue of the declining birth rate and aging population, with the targets of "the largest nominal GDP in post-war history of 600 trillion yen," "a desirable birth rate of 1.8," and "no one forced to leave their jobs for nursing care." In June 2016, "The Japan's Plan for Dynamic Engagement of All Citizens," which includes specific measures to achieve these targets, was compiled. In order to promote related measures, deciding when to take what kind of specific measures, with respect to each topic, with concrete deadlines, and continually reviewing them, the Government of Japan drafted the roadmaps of these measures. The detailed roadmaps are provided at: http://www.kantei.go.jp/jp/singi/ichiokusoukatsuyaku/pdf/plan2.pdf.

• 25. Can Japan update us on the outcomes of these initiatives?

Information about planned measures and the outcomes of these initiatives can be found at: https://www.japan.go.jp/abenomics/_userdata/abenomics/pdf/2001_abenomics.pdf.

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AUSTRALIA

Report by the Secretariat (WT/TPR/S/397) 2 Trade and Investment Regimes 2.4 Investment Regime 2.4.1 Investment framework Pages 46-49, Paragraphs 2.33-2.42 and Report by Japan (WT/TPR/G/397) 2 Trade and Investment Policy 2.5 Investment Policy 2.5.1 Outlook Pages 11-12, Paragraphs 2.33-2.35

We appreciate the information on Japan's Investment Framework in the Report by the Secretariat and on Japan's Investment Policy Outlook in the Report by Japan.

Question 1 Could Japan provide information on the changes to Japan's inwards foreign investment screening regime under the amendments to the Foreign Exchange and Foreign Trade Act enacted in November 2019 which are expected to take effect in 2020 and indicate the rationale for those changes.

RESPONSE The Amendment Bill aims to: - Further promote foreign direct investment (FDI) conducive to sound economic growth; and - Ensure minimal review of FDI that could pose risks to national security. Particularly, the Bill introduces exemption from the prior-notification requirement and adjusts the coverage of FDI. More details are as follows: The threshold for prior notification of purchasing listed companies' stocks will be lowered from 10% to 1%. This is accompanied by a system, where foreign investors can be exempted from prior- notification requirement if (i) they or their closely-related persons will not become board members of the investee company; (ii) they will not propose transfer or disposition of critical business domain of the investee company to the general shareholders' meeting; and (iii) they will not access to non- public information about the investee company's technology that can impact national security. State- owned enterprises are not eligible for the exemption in principle. Certain foreign investors' actions after stock purchases will be subject to prior notification. These are the following: (i) foreign investors or closely related persons become board members of the investee company; and (ii) foreign investors propose transfer or disposition of critical business domain of the investee company at shareholders' meetings. Legal provisions have been added to permit the Japanese authorities to exchange information among domestic intelligence agencies and with foreign authorities.

Report by the Secretariat (WT/TPR/S/397) 3 Trade Policies and Practices by Measure 3.3 Measures Directly Affecting Production and Trade 3.3.7 Intellectual Property Rights 3.3.7.2 Policies on promotion and commercialisation of innovation Page 108, Paragraph 3.187-3.189

The report states that the Japan Patent Office, in collaboration with other agencies, launched new support programmes designed to address the needs of SMEs and others.

Question 2 How effective has the SME program been, and how much have SMEs used it?

RESPONSE These are assessments of three new support programmes launched in 2017 and after. INPIT-KANSAI office has been working to ensure more appropriate protection and utilization of outstanding technology by offering exports' advice to help SMEs develop IP strategies and go abroad while utilizing IP, and providing a venue to conduct interview examinations in order to promote face to face dialogue between applicants and examiners. WT/TPR/M/397/Add.1

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In FY 2018, the number of SMEs used the provided support for sophisticated and specialized for IP matters by experts was 320 in western Japan and had increased twice compared to in FY 2016 (before it established). IPAS has been highly reviewed with positive feedback. One of the participants commented, "We received beneficial advice based on a wealth of experience, including advice on the positioning of intellectual property in business strategy, application strategy and negotiation strategy". 25 start-ups have taken part in the program since its launching in FY 2018. In FY 2020, the program is planned to accept 15 new start-ups. IP-BASE, a community website for start-ups and their supporters including IP experts, has been playing a key role to disseminate information such as IP knowledge, support programs etc. and raise awareness on IPs in Japanese start-up ecosystem. The website has been accessed tens of thousands of times.

Question 3 Can Japan please elaborate on what support is provided by the Global IP Producers programme?

RESPONSE The Global IP Producers programme provides an IP consultancy service by experts in the IP field, "Global IP Producers", free of charge. Global IP producers, who worked for private sector enterprises before INPIT and have overseas work experience, give advice on IP risk management and IP strategy to the service users based on their abundant experience and practical knowledge in the IP field. For example, Global IP Producers take into consideration each user's business and situation they are in and give them advice on how to obtain, protect and utilize IPRs.

Report by the Secretariat (WT/TPR/S/373) 4 Trade Policies by Sector 4.1 Agriculture, Forestry, and Fisheries 4.1.1 Agriculture 4.1.1.4 Trade Policies and border measures Page 133, Paragraph 4.25

The report states a simultaneous buy and sell (SBS) system for rice and wheat remains in place.

Question 4 What, if any, plans does Japan have to reform its SBS system to ensure it does not result in barriers to trade?

RESPONSE The SBS system does not create any trade barrier inconsistent with the WTO rules, and there is no plan to modify this system.

Question 5 Can Japan describe how, and on what basis, it manages its price and mark-up settings for products subject to the SBS system?

RESPONSE Under the SBS system, a domestic user and an importer jointly bid for the tender held by MAFF. MAFF purchases imported rice and wheat from the importer and sells it to the user simultaneously based on the result of tender. The purchasing and selling prices as well as the mark-up, which is the difference between those prices, are determined as a result of bidding by the importer and the domestic user.

Question 6 Has Japan assessed the economic impact of the SBS system, in particular the impact on consumer prices and the economic cost on Japanese consumers?

RESPONSE The SBS system provide direct transaction in substance between a domestic user and an importer in accordance with commercial considerations. It contributes to meet consumers' specific needs of imported agricultural products.

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Report by the Secretariat (WT/TPR/S/397) 4 Trade Policies by Sector 4.1 Agriculture, Forestry, and Fisheries 4.1.1 Agriculture Page 125, Paragraph 4.2 and

Report by the Secretariat (WT/TPR/S/397) 4 Trade Policies by Sector 4.1 Agriculture, Forestry, and Fisheries 4.1.1 Agriculture 4.1.1.5 Domestic Support 4.1.1.5.3 Specific Products 4.1.1.5.3.1 Rice Page 138, Paragraphs 4.41 to 4.42

The report states that MAFF continues to provide direct payments to farmers who produce crops other than table rice in the paddy field. The budgetary cost of payments was JPY 320.0 billion in 2017 and JPY 305.9 billion in 2018; and under page 138 paragraph 4.42, the report states that since September 2017, Japan has introduced a Rice Overseas Market Expansion Project under which a JPY60 billion target was set for exports of rice and rice products for CY2019. Under section 4.1.1 Agriculture, page 125 paragraph 4.2, the report also states that nearly half of commercial farm households are mainly engaged in rice production, and well over half of cultivated land is under rice production; and under Table 4.9 Food assistance FY2013-FY2016, the report states that Japan continues to provide food assistance in the form of rice (FY2016 totalled 59,508 tonnes).

Question 7 Noting the measures in place to support the development of an export market for Japanese-produced rice, coupled with the continued provision of rice for food assistance, can Japan explain how its measures to incentivise diversification away from rice production are progressing in the desired manner/direction?

RESPONSE As described in paragraph 4.41, MAFF provides to direct payment to farmers who produce crops other than table rice, such as wheat and soybeans, in order to make effective use of paddy fields

Question 8 Can Japan provide advice with respect to the Rice Overseas Market Expansion Project and how it is fully consistent with Japan's Export Competition obligations under the Agreement on Agriculture and the 2015 Nairobi Decision on Export Competition? For example, is access to the ROMEP in any way contingent on meeting the JPY60 billion target set for exports of rice and rice products for CY2019?

RESPONSE MAFF has encouraged the export of rice by releasing the list of motivated exporters and producers to promote matching between production areas and exporters. The support which the MAFF provides in relation to this project is for widely available export promotion and advisory services and does not constitute an export subsidy as described in the Agreement on Agriculture and agreed in Nairobi Package.

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(HS: 040120190) was applied for ten months from 01/06/2017 to 31/03/2018, i.e. just two months into Japan's Financial Year reporting period.

Question 9 While acknowledging that the Agreement on Agriculture allows a Member to apply SSG's with an automatic trigger, given 25 years has passed since Japan set its SSG commitments and the mentioned SSG saw imports prohibited for ten months in that reporting year, has Japan reviewed the practical market impact of these SSGs, or whether the continued application of automatic volume-based SSGs remains in the spirit of the Agreement on Agriculture and support of a fair, market-oriented trading system?

RESPONSE Given Special Safeguards was introduced in compensation for tariffication on the UR agreement and the reform process is still ongoing, Japan will continue to use it properly in a manner consistent with the Agreement on Agriculture.

Report by the Secretariat (WT/TPR/S/397) 4. Trade Policies By Sector 4.2 Mining and Energy 4.2.2 Energy Page 153, Paragraph 4.107

The report states that, "The New SEP sets as a goal for 2050 the realization of the "hydrogen society", hydrogen being an efficient energy source, with no greenhouse gas emissions'. Australia notes the leading role that Japan is playing to build hydrogen production, capabilities and a demand market. Building on the long history of successful energy and resources trade, Australia is playing a leading role in building a production base to meet both future export demand and fostering domestic demand.

Question 10 What domestic and international measures is Japan introducing to create demand for hydrogen?

RESPONSE Subsidies for the introduction of FCVs, buses and forklifts, have been implemented.

(domestic and international) Technologies for various types of hydrogen mobility, including trucks and ships, power to gas, hydrogen power generation, and hydrogen-reduced steel production have been developed to expand the introduction of hydrogen in the future. Model for local consumption of hydrogen derived from renewable energy was constructed in Fukushima Prefecture.

Question 11 What trade facilitation measures does Japan intend to create or amend to achieve its goal of a "hydrogen society" by 2050?

RESPONSE In the hydrogen roadmap, Japan aims to bring the price of hydrogen to the same level as fossil fuels by around 2050, and to introduce a supply chain for the production, transportation and storage of hydrogen derived from unused energy overseas by around 2030. Japan is developing technologies such as liquefied hydrogen carrier for hydrogen trade and conducting demonstration projects. A decision will be made based on the progress of the demonstration project. Based on the progress of the demonstration project, Japan will decide whether to formulate trade promotion measures.

Question 12 What is Japan's approach to the establishment of clean hydrogen certification?

RESPONSE A working group consisting of industry, government, and academia has been discussing the direction of future plans for CO2-free hydrogen supply in the future.

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SINGAPORE

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT

QUESTIONS

2 Trade and Investment Policy Page 48 (Para 2.40)

1. We note that Japan is promoting more foreign investment into the various Japanese regions outside of popular FDI destinations such as Tokyo through various support programs for Regional Foreign Direct Investment. The same programmes were referred in Para 2.35 (page 12) of the Government Report.

• What are the respective priority areas identified for economic revitalisation in the other Japanese regions outside of Tokyo?

RESPONSE There are the municipalities selected under the Support Program for Regional Foreign Direct Investment in Japan such as Hokkaido, Miyagi-ken, Fukushima-ken, Ibaraki-ken, Chiba-ken, Kanagawa-ken, Aichi-ken, Mie-ken, Kyoto-fu, Wakayama-ken, Fukuoka-ken, Kumamoto-ken, Okinawa-ken, and other 15 municipalities.

• Can Japan highlight the key policies to improve the business environment in these regions for foreign investors?

RESPONSE Key policies are different for each municipality. For example, Kyoto-fu launched the Kyoto Overseas Business Center as a hub for supporting Japanese companies in overseas business development and attracting overseas companies to Kyoto under the framework of All-Kyoto initiatives. Since then, the prefecture has been proactively advancing such efforts. Taking advantage of the support program, the prefecture will deploy strategic activities for attracting overseas companies in the field of tourism, with the ultimate goal of attracting greater numbers of overseas tourist, targeting foreign-invested hotels, travel agencies, travel-tech companies and other overseas companies as efforts to increase services to respond to the recent influx of overseas tourists to Kyoto. Through these activities, the prefecture will strive to attract more overseas tourists to various areas of the prefecture and to encourage such overseas tourists to visit every corner of the region dispersively. Moreover, the prefecture will endeavor to promote efforts to attract more overseas companies to the region in the field of smart cities(e.g., AI, IoT, robotics and mobility), taking advantage of the wide range of networks among clusters of research and development institutes in the Kansai Science City (commonly called "Keihanna Science City"), Kyoto Smart City Expo, an annual international conference on smart cities and other opportunities.

• What are the results of these programs so far?

RESPONSE In some of the municipalities selected under the Support Program for Regional Foreign Direct Investment in Japan such as Hokkaido, Sendai-shi and Fukushima-ken, the Ministry of Economy, Trade and Industry (METI) and the Japan External Trade Organization (JETRO) have held a series of Regional Business Conferences (RBC) projects in which municipalities and other entities invite senior managers and other representatives of overseas companies to Japan, explained the synergies between such companies and the regions, and hold business matching events between these companies and regional companies. METI and JETRO adopted new RBC projects involving such business matching event as follows:

-FY2018 projects https://www.meti.go.jp/english/press/2018/0516_001.html -FY2019 projects https://www.meti.go.jp/english/press/2019/0416_001.html

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PERU

Informe de la Secretaría de la OMC: WT/TPR/S/397 2.4.2 Business environment – párrafo 2.45.

1.- El Perú saluda los avances del Japón en materia de empoderamiento económico de la mujer, así como el copatrocinio del Japón de la Declaración Conjunta en materia de Comercio y Empoderamiento Económico de la Mujer en el marco de la Conferencia Ministerial de la OMC en Buenos Aires. El informe de la Secretaría de la OMC hace referencia al "Women's Empowerment Act" del Japón. En este sentido, ¿podría Japón señalar si dicha ley u otros actos públicos prevén el fomento de la participación de la mujer en el comercio internacional? De no ser el caso, ¿contempla Japón fomentar la participación de la mujer en el comercio internacional en el futuro? De ser el caso, ¿por qué medios y bajo qué formato fomentaría Japón este tipo de participación?

RESPONSE At this point, there is no provision in Japanese law which encourages women to participate in international trade. However, the Government of Japan is committed to women's socio-economic empowerment. For detailed measures and policies, please refer to the official website of the Government of Japan.(https://www.japan.go.jp/diversity/women/index.html).

2.- ¿Realiza Japón actividades de cooperación con terceros países con miras a fomentar el empoderamiento económico de la mujer a través del comercio? De ser el caso, ¿podría Japón describir brevemente dichas actividades?

RESPONSE No.

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DOMINICAN REPUBLIC

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.3.4 Competition policy and price controls 3.3.4.2 Price controls Pág. 94-95 Párrafo 3.154. "Japan maintains a price survey scheme on certain pharmaceutical products, based on a drug price standard. The reimbursement price of medicines used/dispensed under the National Health Insurance is defined by the MHLW since 1950s. The actual purchase prices paid by medical institutions and pharmacies (prevailing market price) are surveyed (drug price survey), and the prices specified in the drug price standard are revised periodically based on the results of the survey. All medicines covered by the National Health Insurance (approximately 20,000) are subject to the price survey. To control healthcare costs (Section 3.3.7), the Government has been revising drug prices biennially, based on the actual purchasing price, leading to annual price cuts of 5% to 7% since 2017. The latest pricing reform in April 2018 added pressure; for example, the scope of the price-maintenance premium (PMP), introduced in 2010 to delay biennial price cuts, was narrowed to drugs deemed truly innovative, which numbered 560 in 2018 as opposed to 823 in 2016. From 2021, annual price revisions will begin for drugs with a large yakkasa (dispenser margin). However, the 2018 honebuto, or Basic Policy on Economic and Fiscal Management and Reform, called for price revisions of all products in 2019, the year of the consumption tax rate hike (Sections 1.1 and 1.2), that would bring forward the de facto shift to annual revision that is planned as from the year 2021."

1. ¿Puede Japón señalar cuando y como fueron hechos ajustes a los impuestos de los productos farmacéuticos?

RESPONSE Japan has determined the reimbursement price of medicines, adding the prevailing market price, the amount equivalent to the consumption tax, and its adjustment (Reasonable zone). The consumption tax of medical drugs used by medical institutions and pharmacies is included in drug price as an amount equivalent to the consumption tax.

3.3.5 State trading, state-owned enterprises (SOEs), and privatization Pág. 96 Párrafo 3.159. "During the review period, state involvement in the economy remained relatively unchanged. State trading entities continued to engage in leaf tobacco, opium, rice, wheat, barley and milk products. Major commercial SOEs include those operating in energy, financial services, telecommunications and some transport-related activities. The State continues to wholly or partially own several companies, including large ones (Table 3.18), in the delivery of goods and services that the authorities believe would not be adequately provided by the private sector alone. Ownership is maintained either directly or via Incorporated Administrative Agencies (IAAs), which are public- sector corporations with a separate legal personality; as at 1 April 2019, there were 87 IAAs (88 in 2017). As at 31 December 2016 (latest data available), there was a total of 228 (234 in 2015) entities with government capitalization; the total amount of capitalization stood at JPY 76.0 trillion (JPY 80.1 trillion as at 31 March 2015). Based on the OECD definition of SOEs, Japan identified 1 majority-owned listed enterprise (Japan Post Holdings Co., Ltd, 218,312 employees, valued at USD 55.8 billion), 7 majority-owned non-listed enterprises (37,953 employees, valued at USD 26.5 billion), 2 minority SOEs (Japan Tobacco Inc., 63,968 employees (as at 31 December 2018) and Nippon Telegraph and Telephone Corporation, 303,350 employees (as at 31 March 2019)) and no statutory corporations or quasi-corporations. In 2014, based on the OECD definition of SOEs, Japan had identified 26 SOEs: 2 minority-owned listed enterprises, 8 majority- owned non-listed enterprises, and 16 statutory corporations or quasi-corporations. Market monopolies continue to be retained in domestic manufacturing of tobacco and the importation of leaf tobacco."

2. ¿Es posible conocer la lista de todas las empresas estatales del sector tabaco?

RESPONSE Regarding "Large state enterprises", please refer to Table 3.18 in the Trade Policy Review Report by the Secretariat. Regarding "State-trading enterprises", please refer to Table 3.19 in the Trade Policy Review Report by the Secretariat. WT/TPR/M/397/Add.1

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PHILIPPINES

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT III. TRADE POLICIES AND PRACTICES BY MEASURE Para 3.18 (Page 55)

The main laws governing the setting of tariffs are the Customs Tariff Act (which, inter alia, provides for customs duty rates through the appended Tariff Schedule, customs duty reductions and exemptions, and the application of tariff rate quotas) and the Temporary Tariff Measures Act (which provides for temporary exemptions to the Customs Act and the Customs Tariff Act to allow for customs duty adjustments, if needed, for the sound development of the national economy). Over the review period, the Customs Tariff Act was amended several times, inter alia, to extend the effective periods of temporary rates of customs duty and the related exemption system; review customs duties on individual items; extend special tariff measures in the Okinawa prefecture; and apply duty-free rates to certain products (as a result of the revision of the preferential tariff system.

Question/s 1. Which Office or Ministry in the Japanese Government has the specific mandate on the administration and transposition of Japanese tariff schedules to reflect changes in the HS nomenclature? Can Japan elaborate on the procedures involved in modifying/suspending/eliminating tariffs?

RESPONSE The Customs and Tariff Bureau, the Ministry of Finance has the mandate on the administration and transposition of Japanese tariff schedules to reflect changes in the HS nomenclature. It is responsible for the elaborate tariff revision.

Para 3.49 (Page 68) 3.49. Japan's legislative framework for anti-dumping duties is the Customs Tariff Act, the Cabinet Order Relating to Anti-Dumping Duties, and the Guidelines for Procedures Relating to Anti-Dumping Duty. In 2017, the Cabinet Order and Guidelines were amended to change the definition of "interested parties for domestic industry", and reduce the burden for applicants requesting the imposition of an anti-dumping duty by easing the conditions for making such a request. With respect to the latter, before the amendment, it was not clear to what extent an applicant was required to substantiate the impact of the dumped product on domestic industry; the amendment specifies that such impact is to be indicated "by reasonably available information". Moreover, under the previous regime, the applicant was requested to show that the degree of support of the request for the imposition of an anti-dumping duty in the domestic industry satisfied the requirement; amendments authorize the minister in charge of the industry to confirm such degree of support. These amendments were notified to the WTO; no questions related to these changes were raised in the WTO Committee on Anti-Dumping Practices.

Question/s 2. What alternative actions does the Japanese Government consider if an applicant does not provide the required information (or substantiate) on the impact of the dumped product on domestic industry for reason of non-availability?

RESPONSE At least an applicant is expected to be able to indicate the impact of the dumped product on his/her own business by reasonably available information. If the applicant is not able to obtain and present any information that shows the impact, an anti-dumping investigation is not initiated upon such application and he/she is informed in writing accordingly.

3. What parameters does the Minister in charge of the industry use in confirming the degree of support of the domestic industry?

RESPONSE In accordance with the Guidelines for Procedures Relating to Anti-Dumping Duty (G/ADP/N/1/JPN/Suppl.6), (i) the collective domestic output of the like products of the imported product concerned by interested producers, in support of the said request for the imposition of duty, or (ii) the collective number of labours engaged in the domestic production of the said product who WT/TPR/M/397/Add.1

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Para 3.50 (Page 68) 3.50. Anti-dumping investigations may be initiated when the Government considers it necessary, when an application for investigation is submitted by a domestic industry to the Minister of Finance, or when there is enough evidence. The decision is published as a public notice in the Official Gazette, by the Minister of Finance. Investigations are carried out by a team comprised of officials from the Ministry of Finance Office of Trade Remedy Affairs, the METI's Office for Trade Remedy Investigations, and the ministry in charge of the relevant industry. The final decision to impose an anti-dumping duty is issued as a Cabinet Order. Provisional measures may be applied no earlier than 60 days from the initiation of the investigation, if affirmative preliminary determinations are made. Provisional measures are, in principle, applied for up to four months, although a longer time-frame may apply upon request by exporters representing a significant percentage of the trade involved. Exporters may offer an undertaking to revise prices or cease exports, so that the injurious effect of the dumping on the domestic industry is eliminated. Anti-dumping duties can be imposed for a period not exceeding five years, and may be extended thereafter following a review. Each extension of the measure may not be longer than five years.

Question/s 4. Can Japan elaborate on how it handles computations of normal values, export prices, and appropriate dumping margins/duties from voluminous transactions?

RESPONSE For details of how to calculate the said items, please refer to the paragraph 7 of the Guidelines for Procedures relating to Anti-Dumping Duty (G/ADP/N/1/JPN/2/Suppl. 6). For sampling, which may be used in accordance with the provisions of paragraph 10 of Article 6 of the Anti-Dumping Agreement, please refer to the paragraph 11 of the Guidelines for Procedures relating to Anti- Dumping Duty (G/ADP/N/1/JPN/2/Suppl.6 and G/ADP/N/1/JPN/2/Suppl.10).

Question/s 5. Which agency administers the review of anti-dumping duties? Can Japan provide a link on an online portal for the public where its updated anti-dumping procedures, including review of an anti- dumping duties, may be accessed?

RESPONSE Agencies in charge of the review of anti-dumping duties are the same as those for original investigations. For information on anti-dumping procedures in Japan, please refer to the following address: https://www.customs.go.jp/tokusyu/index.htm (Japanese language only).

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THAILAND (ADDITIONAL)

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT

4. Trade Policies by Sector 4.1 Agriculture, Forestry, and Fisheries 4.1.1.2 Agricultural policy Paragraph 4.7 (Page 127) The overall goal for the sector is to make agriculture a growth industry, with greater private-sector participation. The agricultural policy is set out in the Food, Agriculture and Rural Areas Basic Plan, which is reviewed roughly every five years. The current Plan, adopted in March 2015, sets out the objectives of doubling incomes in agriculture and rural areas over the next ten years, by increasing domestic and export demand, improving value chains, reducing costs, promoting structural reform, and improving productivity.4 In September 2019, the Ministry of Agriculture, Forestry and Fisheries (MAFF) launched the process of developing the next five-year plan, to be released in 2020.5 Agricultural policy continues to emphasize self-sufficiency, and the Plan sets self-sufficiency targets for FY2025 of 45% on a calorie basis and 73% on a production value basis, as well as a self- sufficiency target for feeds of 40% for FY2025. In 2017, self-sufficiency on a calorie basis was as 37%, under target due to climate change affecting the production of main crops such as wheat and soybeans.6 Self-sufficiency rates for individual products vary year-on-year but are consistently high (at 70% and above) for: unshu, rice; eggs; sweet potato; fungi; vegetables and tubers (Table A4.1). Agricultural policies are reviewed annually in the MAFF's Annual Report/White Papers on Food, Agriculture and Rural Areas in Japan.

Question Could Japan explain more on this Self-Sufficiency Agricultural Policy; for example, how to set each category in self-sufficiency targets?

RESPONSE The relevant act (Food, Agriculture and Rural Areas Basic Act) stipulates that the target level of food self-sufficiency rate should be a guide for national agricultural production and food consumption. In line with the verification discussions in Council of Food, Agriculture and Rural Area Policies, the Ministry set two principles: i) the demand estimates should be realistic for each commodity, and ii) the supply estimates should be based on such consumption levels and with proper consideration of realistic production conditions. Taking into account the principles and feasibility within the time scale, the Ministry decided the target level of 45% in 2025, which was raised from 39% in 2013.

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GUATEMALA

Informe de Gobierno.

3 COMERCIO Y DESARROLLO 3.1 Ayuda para el comercio Asistencia al movimiento "Una aldea, un producto" 3.5. El movimiento "Una aldea, un producto" es uno de los proyectos típicos de las iniciativas de la Ayuda para el Comercio. "Una aldea, un producto" es un movimiento de apoyo a las economías locales mediante la elaboración, mejora y promoción de productos locales (alimentos, bebidas, productos textiles y prendas de vestir, entre otros) con la participación de la población local. El movimiento se inició en una prefectura del sur del Japón a finales del decenio de 1970 y posteriormente se extendió a las demás prefecturas. Se ha introducido en otros países asiáticos y ha contribuido al desarrollo de las economías locales.

Pregunta ¿Podría el Gobierno de Japón proporcionarnos más información sobre este proyecto y que estrategias ha utilizado para su implementación?

RESPONSE The "A village, a product" project started in February 2006 by Ministry of Economy Trade and Industry (METI) and Japan External Trade Organization (JETRO) under the Development Initiative for Trade, which Japan released at the 6th WTO Ministerial Conference in Hong Kong. The project aims to create a competitive product in domestic and global markets in the course of looking for specialty products, sophisticating them and promoting sales, and consequently to vitalize local economy in developing countries. In detail, as of March 2020, JETRO opens two stores in Narita International Airport and Kansai International Airport and they sell food and beverages, artwork, textiles and clothing, among others, to people visiting Japan from around the world. Local products sold in the stores also distributed in Japan. These stores have the role to help sales promotion for Japanese market and increase recognition on products and their countries of origin.

Informe de la Secretaría

3.3.7 Derechos de propiedad intelectual (DPI) 3.3.7.2 Políticas sobre promoción y comercialización de la innovación 3.186. La Red Universitaria de Innovación y Transferencia de Tecnología (UNITT) controla el sistema de transferencia de tecnología y promueve la creación de asociaciones entre el mundo académico y las empresas. Su encuesta anual más reciente de universidades y organizaciones para la concesión de licencias de tecnología revela que los ingresos totales en concepto de licencias superaron los JPY 3.000 millones en el ejercicio económico de 2016, una cuantía que triplica la generada en el ejercicio de 2005, pero que es muy inferior a los USD 3.140 millones notificados en 2017 por instituciones similares en los Estados Unidos. Las universidades y los organismos públicos de investigación del Japón tradicionalmente han colaborado estrechamente con las grandes empresas, con las que comparten la propiedad de las invenciones y pueden conceder licencias libres de regalías. Ello puede repercutir no solo en los ingresos, sino también en la frecuencia con la que esas innovaciones impulsan la creación de nuevas empresas.220 El porcentaje de organismos encuestados que pusieron en marcha empresas emergentes en el ejercicio económico de 2016 fue del 26,5%, mientras que en los Estados Unidos ascendió al 79,6%.221

Pregunta ¿Podría el Gobierno de Japón, ampliar la información con respecto a las estrategias utilizadas en la promoción de innovación en el sector académico?

RESPONSE The Government of Japan (CSTI: Council for Science, Technology and Innovation) formulates the "Integrated Innovation Strategy" based on the Science and Technology Basic Plan every year to promote innovation policies in an integrated manner from basic research to social implementation.

For more details, please refer to the link below CSTI https://www8.cao.go.jp/cstp/english/index.html WT/TPR/M/397/Add.1

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Integrated innovation strategy https://www8.cao.go.jp/cstp/english/doc/integrated_main.pdf https://www8.cao.go.jp/cstp/english/doc/integrated_outline.pdf

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ICELAND

Question 1 What is the participation of women in the economy of Japan?

RESPONSE The number of female workers has increased by approximately 3.3 million from 2012 to 2019, and the number of female board members at listed companies has increased 3.4 times in the same time period. In addition, the employment rate of women in the child raising period (aged 25 to 44) has increased from 67.7% in 2012 to 77.7% in 2019, and the proportion of women in managerial positions (private companies with over 100 employees) has increased from 6.9% in 2012 to 9.9% in 2018. Furthermore, the rate of women continuing to work after having their first babies has increased from 38.0% in 2011 to 53.1% in 2016.

Question 2 Have specific barriers that limit women's participation in trade been identified?

RESPONSE No specific barriers have been identified by the Government of Japan.

Question 3 Has Japan implemented any specific measures to encourage women's participation in trade and promote women's entrepreneurship, or are such measures being developed?

RESPONSE Women's entrepreneurship is an important way for women to remain in, enter, or re-enter the workforce. To help women overcome the challenges of starting a business, the Ministry of Economy, Trade and Industry (METI) has been working to establish a network of systems that can provide appropriate follow-ups to female entrepreneurs who have just started a business. This project has been expected to increase the number of female entrepreneurs by providing the know-how to properly support women in the process before starting business. Additionally, Japan has passed legislation and implemented projects to advance women's full participation in economic life across all sectors. Measures include the Act on the Promotion of Female Participation and Career Advancement in the Workplace, revision of the Act on Securing, Etc. of Equal Opportunity and Treatment between Men and Women in Employment, the Act on the Arrangement of Related Acts to Promote Work Style Reform, the revision of the Child Care and Family Care Leave Act, the formulation of Guidelines for Initiatives to Promote Women's Activity and Work-life Balance of National Public Employees, and the Act on Promotion of Gender Equality in the Political Field.

Source: https://www.meti.go.jp/english/press/2019/0419_002.html.

Question 4 Are the effects of trade policy on women and men measured and monitored, and if so how?

RESPONSE The Government of Japan does not measure or monitor the effects of trade policy on men and women.

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RUSSIAN FEDERATION

REPORT BY THE SECRETARIAT (WT/TPR/S/397)

3 TRADE POLICIES AND PRACTICES BY MEASURE 3.3 Measures Directly Affecting Production and Trade 3.3.3 Sanitary and phytosanitary (SPS) requirements 3.3.3.1 SPS measures Pages 86-87

Question 1 We would appreciate a more detailed explanation of the functioning of the Animal Health Advisory Committee, responsible, inter alia, for the recognition of regionalization of the importing country's territory. Please specify the legal and institutional frameworks that guide the Committee in its work and decision-making, procedures for appointing its membership, as well as the timeframes for the consideration of the requests received by the Committee.

RESPONSE Upon applying regionalization for AI on import of poultry products, Japan conducts risk assessment in accordance with the "Standard Procedure for Approval for Import of Designated Items into Japan to be Quarantined" and "Standard Operating Procedures for Approval for Import of Designated Items into Japan to be quarantined", which are consistent with SPS agreement and the OIE codes. The standard procedure and the standard operating procedures are published in English and available at: https://www.maff.go.jp/j/syouan/douei/eisei/sop/pdf/080401sop_eng.pdf. https://www.maff.go.jp/j/syouan/douei/eisei/sop/pdf/2010sop_en.pdf.

As a part of risk assessment, an assessment report needs to be consulted with the Committee of Animal Health, which is composed of experts including university professors, representative of producers and consumers, local government veterinary officers. Once the risk assessment results are considered appropriate by the Committee, Japan could apply the regionalization. For your reference, the Committee is established based on Food, Agriculture and Rural Areas Basic Act. English translation of the Act is available at: http://www.japaneselawtranslation.go.jp/law/detail_main?vm=&id=102.

4 TRADE POLICIES BY SECTOR 4.1 Agriculture, Forestry, and Fisheries 4.1.1 Agriculture 4.1.1.3 Institutional and legal framework Page 132, para 4.23 According to its most recent notification on imports under tariff quotas (for FY2017/18) to the WTO Committee on Agriculture, Japan applies 18 tariff rate quotas (TRQs) covering 101 tariff lines at the HS six-digit level. Fill rates varied considerably from one quota to another, ranging from 23.4% to 305.6% (Table 4.6). The authorities indicated that low fill rates for some TRQ products were mainly to decrease domestic demand.

Question 2 We would appreciate if you could describe the procedure of tariff quotas allocation in more detail. Are there any intentions to increase the volumes of tariff quotas for goods that have a high fill rate?

RESPONSE Regarding the procedure of tariff quota allocation, see the MA1 notification. The volumes of tariff quotas are described in the Schedule, and Japan does not foresee amendments of the Schedule at this stage.

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TURKEY

SECRETARIAT REPORT

Summary, pg.10, 2.

It is stated in the Secretariat Report that "During the review period, trade-related structural reforms (e.g. in the areas of taxation, competition policy, corporate governance, and labour market policies) were undertaken. Both multi factor and labour productivity registered positive growth, and targets were set for the latter; SMEs' productivity in manufacturing remains relatively low compared to large firms. Monetary policy, involving, among others, Quantitative and Qualitative Monetary Easing (QQE) with negative interest rate, continued to provide a monetary stimulus to growth and help building a stable financial environment."

Question 1 Could Japan provide information regarding measures taken to ensure that the stimulative monetary and fiscal policies have positive impact on its economy?

RESPONSE In September 2016, the Bank of Japan conducted a "Comprehensive Assessment" of the effects of "QQE" and "QQE with a Negative Interest Rate." For more information, please refer to (https://www.boj.or.jp/en/announcements/release_2016/k160921b.pdf). In terms of the current situation, please refer to (https://www.boj.or.jp/en/mopo/outlook/gor2007a.pdf).

Summary, pg. 10, 5.

It is stated in the Secretariat Report that "Japan aims to develop "free, fair and high-level trade rules" domestically, with key trading partners and in international fora (including the WTO), as well as to make progress in reinforcing economic ties and cooperation with emerging economies. Its 2018 White Paper on International Economy and Trade includes promoting exports and the use of Economic Partnership Agreements (EPAs). Trade-related policy objectives are also contained in various other strategies also being implemented, including: the evolving Abenomics programme; the 2016 Japan Revitalization Strategy; the Future Investment Strategy; the New Economic Policy Package; and the 2019 Growth Strategy. Over the review period, Japan was involved in three new dispute settlement cases as complainant, and reserved its third-party rights in 34 cases. Japan maintained a strong record of notifications to the WTO, although up-to-date notifications on domestic support in agriculture and government procurement are outstanding. Since 2017, new regional trade agreements that have entered into force for Japan are: the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Japan EPA. Japan also signed the First Protocol to Amend the Agreement on ASEAN-Japan Comprehensive Economic Partnership (AJCEP), which includes chapters on trade in services and on investment, as well as a trade agreement with the United States. Changes were made to the framework for graduation from Japan's GSP scheme, with a view to granting preferences to the economies that need them most. Key initiatives to improve the business environment include: introducing labour force reforms; improving corporate governance; and lowering corporate tax. Regulatory reform pilot schemes continue to be undertaken through the National Strategic Special Zone initiative."

Question 2 Could Japan provide further information on its plan for extending FTA network in the near future? Which bilateral FTA's and/or regional trade agreements does Japan plan to conclude/sign in 2020?

RESPONSE Japan will continue to work on the steady implementation and expansion of the TPP11 Agreement and the steady implementation of the Japan-EU EPA, and to promote negotiations of other EPA/FTAs including RCEP and a new economic partnership between Japan and the UK as well as Japan-Turkey EPA. Japan aims to conclude the RCEP Agreement by the end of this year. Moreover, both Japan and UK leaders confirmed their intention to ensure a new Japan-UK economic partnership will be established as soon as possible, taking into account the transition period will end at the end of this year. Japan will also continue working on the Japan-Turkey EPA toward the early conclusion of the negotiation.

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Question 3 Could Japan elaborate more on the outcomes and performance of the Abenomics program and other structural programs?

RESPONSE Since late 2012, the Government of Japan unveiled comprehensive policy packages to revive the Japanese economy from two decades of deflation, all while maintaining fiscal discipline. As a result, many economic indicators have improved since then, such as nominal GDP, corporate pre-tax profit, unemployment rate. (It should be noted that the Japanese economy is currently in severe situation due to the COVID-19, but it is showing movements of picking up recently.) The Government of Japan tries to achieve sustainable growth and realize Society 5.0. For these purposes, the Government of Japan is implementing various policies, such as encouraging innovation, promoting work-style reform and human resources development, as well as promoting economic partnerships.

For more detail, please see https://www.japan.go.jp/abenomics/index.html.

1. Economic Environment, 1.1. Main Features of the Economy, pg.15, 1.1.

It is stated in the Secretariat Report that "Japan's highly-developed, high-income and market- oriented economy, with a population of 126.2 million (as at 1 March 2019), remains the world's third largest, behind the United States and China, in gross domestic product (GDP) terms.1 According to the World Bank economic complexity index, it remains the world's most diverse economy, due to the sophistication of its exports, with the services sector constituting the backbone of the economy. Japan has an ageing population, and the highest ratio of public debt (gross financial liabilities of general government) to GDP of any developed nation. Small and medium-sized enterprises (SMEs) continue to play a considerable role in the economy. However, according to the Organisation for Economic Co-operation and Development (OECD), despite public support, they face a productivity gap with large companies, and struggle to take advantage of international trade opportunities (Section 1.2.1). The Government continued to support growth (Table 1.1) by easing financial conditions, reducing the fiscal deficit, and raising employment and female labour force participation, thus ensuring Japan's longest economic expansion in the post-war era. According to latest available data, between 2012 and 2015, Japan's income inequality and poverty gap remained virtually unchanged."

Question 4 Given that Japan is the world's third largest economy, what is its strategy to avoid any negative effects from the trade tension between the United States and China?

RESPONSE At present, with the spread of COVID-19, it is extremely important for the United States and China, which are the world's first and second largest economies, to build a stable relationship from the perspective of the peace and stability of the international community.

While promoting a variety of cooperation with our ally, the United States, based on the strong relationship of trust, Japan would like to hold close communication with China and encourage it to fulfill its responsibilities as a major power. In this context, Japan would like to play a proactive role in maintaining and promoting a free, open and fair order based on international rules.

1. Economic Environment, 1.1. Main Features of the Economy, pg. 15, 1.2.

It is stated in the Secretariat Report that "Despite an estimated growth above the potential growth (Section 1.2.1), as at May 2019, risks to the outlook were skewed to the downside. Endogenous risks involving macro-financial vulnerabilities, fiscal consolidation needs, and limited monetary policy space make the economy vulnerable to adverse shocks. The intertwined challenges of rapid population ageing, involving a sharp rise in social spending, and high government debt (gross financial liabilities of general government) intensified during the review period. Risks have also risen from deteriorating global conditions. Exogenous risks involve developments in overseas economies, including the consequences of protectionist moves, developments in the Chinese economy, and progress in global adjustments in IT-related goods."

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Question 5 Could Japan explain its policies against challenges coming from rapid population ageing and sharp rise in social spending? Does Japan have any immigrant policy for integrating migrants to the labor system?

RESPONSE Japan has aimed at realizing a type of society where individuals can all be important participants through "Dynamic Engagement of All Citizens." To make this happen, the Abe administration is implementing measures such as bolstering support for child-rearing generations, securing employment opportunity up to the age of 70, improving working environments for those who wish to take on multiple jobs, expanding the range of the timing for when a person can start to draw old-age pension benefits, increasing preventive healthcare and nursing care incentives. As a policy of improving foreign workers' employment management, the government is implementing several measures such as holding seminars and providing consultation support for business employing foreigners.

1. Economic Environment, 1.2. Recent Economic Developments, 1.2.1. Growth, income and employment, pg.17, 1.3.

It is stated in the Secretariat Report that "During the review period (2016-18), the annual average GDP growth rate stood at 1.1%, a minor slowdown compared to the average of 1.2% over the period 2013-15 (Table 1.1). Growth above its estimated potential rate continued to be supported by the "three arrows" of Abenomics, and by both domestic and external demand, where corporate profits and fixed business investment remain favourable, even after accounting for recent natural disasters. An increase in private consumption, which was supported by improvement in employment and income conditions, constituted another factor that stimulated growth. Nevertheless, output growth slowed since 2017, reflecting weaker exports as world trade decelerated. As at May 2019, Japan's economy was likely to continue on a moderate expanding trend, despite being affected by the current slowdown in overseas economies. According to the IMF, underlying growth is to remain solid, notwithstanding the effects of the October 2019 consumption tax rate hike from 8% to 10% (Section 1.2.4.1), and growth will move closer to its estimated potential over the medium term. According to the OECD, output growth is expected to remain close to 0.75% through 2020, as shortages of labour and capacity, combined with record-high profits, continue to support business investment and wages."

Question 6 Could Japan provide detailed information about its 2020 and 2021 GDP growth ratio forecasts and ongoing commitment to pursuing ambitious structural (Third Arrow) reforms to develop its business environment?

RESPONSE Based on the "Mid-Year Economic Projection for FY2020" (Cabinet Office on July 30, 2020), Japan's real GDP for FY2020 is projected to contract by approximately 4.5%, while that for FY2021 is projected to grow by approximately 3.4%. If you want to know detailed tabular statements, please refer to the following URL: https://www5.cao.go.jp/keizai1/outlook-e.html

To reform Japan's business environment, Japan has set a new KPI "By 2030, rank first among the G20 in the World Bank Doing business rankings" in April 2020. Based on this newly-set KPI, Japan is taking the following measures ・Realization of one-stop service for corporation: ・Electronization and automation of tax and social insurance procedures ・Promotion of adoption of IT in court procedures. ・Reformation of trade procedures and port logistics ・Digitalization of real estate related information and service. Throughout these measures, Japan aims to realize a country that is most favorable for companies to conduct business activities.

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1. Economic Environment, 1.2. Recent Economic Developments, 1.2.2. Price, pg. 20, 1.6.

It is stated in the Secretariat Report that "During the review period, CPI inflation remained considerably below the Bank of Japan's target, picking up from -0.1% (2016) to 1.0% in 2018, inter alia, on the back of soaring vegetable prices, higher energy prices, high raw materials prices, and personnel expenses reflected in firms' prices, as well as quantitative and qualitative monetary easing, accompanied by yield curve control and negative interest rates since 2016 (Table 1.1, Section 1.2.3.1). According to the authorities, sluggish inflation was also partly due to firms' preference to invest in labour-saving technology rather than raise prices and wages. According to the IMF, under current policies, including the 2.2% hike in unit labour costs in 2018, a consumption tax-induced spike expected in 2020 and the provision of free childcare for children aged three to five, with the output gap remaining positive, inflation is likely to rise gradually but to remain below target."

Question 7 Could Japan elaborate more on the measures taken to ensure the targeted inflation rate in 2020 and 2021?

RESPONSE The Bank of Japan will continue with "Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control," aiming to achieve the price stability target of 2 percent, as long as it is necessary for maintaining that target in a stable manner. It will continue expanding the monetary base until the year-on-year rate of increase in the observed consumer price index (CPI, all items less fresh food) exceeds 2 percent and stays above the target in a stable manner. The Bank will continue to support financing mainly of firms and maintain stability in financial markets through (1) the Special Program to Support Financing in Response to the Novel Coronavirus (COVID- 19), (2) an ample provision of yen and foreign currency funds without setting upper limits mainly by purchasing JGBs and conducting the U.S. dollar funds-supplying operations, and (3) active purchases of ETFs and J-REITs. For the time being, the Bank will closely monitor the impact of the novel coronavirus (COVID-19) and will not hesitate to take additional easing measures if necessary, and also it expects short- and long-term policy interest rates to remain at their present or lower levels.

1. Economic Environment, 1.3. Developments in Trade and Investment, 1.3.2. Trends and patterns in foreign direct investment (FDI), pg. 30, 1.27.

It is stated in the Secretariat Report that "Japan remains not only one of the major exporters of goods, but also of capital. Monetary easing in Japan and "search-for-yield" by Japanese investors continued to support FDI outflows and overseas diversification by institutional investors. FDI outflows peaked in 2017 and then dropped by an overall 14.4% in 2018 (Table 1.5). Unlike inflows, during the review period, outflows were largely concentrated in services (communications, and finance and insurance) and manufacturing (chemicals and pharmaceuticals, and transportation equipment) (Table 1.5). At the same time, the main individual destinations were the European Union, the United States (albeit a decline) and the Cayman Islands. Similar to the inbound stock, the outward FDI stock continued to rise steadily, with the United States and the European Union remaining the main destinations."

Question 8 Japan is one of the major capital exporters all across the world and total amount of Japanese FDI outwards peaked as 164.7 billion USD in 2017. The Japanese FDI outflow largely concentrated in services and manufacturing industries majorly located in the US and EU. Could Japan explain the factors that might have influenced its FDI outflow policy? Does Japan have any policy to increase the amount of Japanese outward FDI and diversify sectors or main destination countries?

RESPONSE The Government of Japan launched the "action plan aiming to facilitate an investment environment through promoting the conclusion of investment-related treaties" in May 2016. This action plan provides the goal to sign and enact investment-related treaties with 100 economies by 2020. Japan will continue to actively advance investment-related treaties from the perspective of incorporating the growth of emerging economies through overseas investment and attracting foreign investment into the Japanese market. As of June 2020, Japan has signed 51 investment-related treaties and they cover 78 countries and regions. WT/TPR/M/397/Add.1

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Question 9 Could Japan provide information about whether there is a link between the destination of the Japanese FDI outflows and its FTA partners? If so, could Japan provide data on this linkage (before and after)?

RESPONSE The conclusion of investment related treaties including the Investment Chapters of EPA/FTAs does not guarantee immediate increase of FDI outflows in partner countries, as investments are made based on each investor's individual management decisions with consideration for various elements. Meanwhile, the conclusion of investment related treaties promotes the creation and development of positive FDI environments. It may serve as one of important factors for companies to decide their investment destinations.

2. Trade and Investment Regimes, 2.1. General Framework, pg. 34, 2.2.

It is stated in the Secretariat Report that "As part of the implantation strategy for the Abenomics programme, the 2016 Japan Revitalization Strategy is being pursued. This involves reforms to: cultivate new promising markets; engender a productivity revolution to mitigate supply-side constraints and impending workforce shortages; and enhance the capability of individuals to facilitate industrial transformation. Initiatives being implemented are: the launch of the 10 Strategic Public- Private Joint Projects (an initiative to cultivate new markets and for knowledge- and strategy-sharing between the public and private sectors); the introduction of a road-map method for the back calculation of goals; regulatory reforms to reduce administrative costs for businesses; education/skills/workforce reforms; encouraging joint research between industry and academia; the introduction of a Japanese Green Card for Highly-Skilled Foreign Professionals (see below); support to business to introduce information technology and robots; promotion of technology in the fields of health care, the environment and energy; development of a large-scale hydrogen supply chain (by 2030); development of the sports sector in connection with the 2020 Olympic Games; measures to improve the productivity of the services sector (Section 4.4); continued reform of the agriculture sector (Section 4.1); measures to enhance and promote tourism; encouragement of National Strategic Special Zones utilization (see below); corporate governance reforms (see below); measures to ensure vibrant financial/capital markets (Section 4.4.1); and expansion of private participation in public services and assets. Various new entities were established to guide some of these efforts, namely, the Public-Private Council for the Fourth Industrial Revolution, the Artificial Intelligence Technology Strategy Council; and the Council for Promoting Human Resource Development to Respond to the Fourth Industrial Revolution."

Question 10 Could Japan provide detailed information about 10 strategic Public-Private Joint Projects? Which sectors are included in these projects?

RESPONSE The content of "10 strategic Public-Private Joint Projects" is as follows. (1) Promotion of the fourth industrial revolution (IoT, Big Data, artificial intelligence) (2) Promotion of world-leading healthcare nation (3) Overcoming environment-energy constraints and expansion of investments (4) Transformation of Sports sector to a growth industry (5) Revitalization of existing housing and housing-renovation market (6) Improvement of productivity in service industry (7) Renovation of mid-ranking companies, SMEs and microenterprises (8) Promotion of proactive agriculture, forestry and fishery and strengthened export (9) Promotion of tourism nation (10) Stimulation of consumer appetite by public-private collaboration

2. Trade and Investment Regimes, 2.1. General Framework, pg. 35, 2.4.

It is stated in the Secretariat Report that "In 2017, the Government released its Future Investment Strategy, which identifies five areas for the promotion of investment in order to achieve Society 5.0, namely: the extension of a healthy lifespan; the realization of a mobility revolution; creating next- generation supply chains; building and developing pleasant infrastructure and towns; and advancing FinTech."

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Question 11 Could Japan elaborate more on the "Future Investment Strategy" and its five areas for the promotion of investment in order to achieve Society 5.0.?

RESPONSE The Growth Strategy 2017 states that the Government of Japan should choose and focus on promising "strategic fields" to achieve Society 5.0. In order to identify and choose these strategic fields, the following perspectives should be taken into account:  Whether or not it is a field where Japan can take advantage of its strengths (aptitude for manufacturing goods, innovativeness and scale of social challenges, and likelihood of acquiring and utilizing real data);  Whether or not growth is expected in the field both domestically and internationally; and  Whether or not it is a field appealing to the world which can be used as a model case of a country with advanced challenges. Based on these perspectives, the policy resources of Japan should be concentrated on the following five fields to promote future investment. "Extension of healthy lifespan" Japan is among the very first in the world to head toward an aging society. However, Japan does have rich data, as Japan has a universal healthcare system and nursing care insurance system. The Government of Japan aims to establish a "new system of health, medical care, and nursing care" with an emphasis on health management, prevention of diseases and nursing, and self-support. With this system, the Government of Japan aims to further extend healthy lifespan and will realize ahead of the world a society where everyone can be active throughout his/her life.

"Realization of mobility revolution" Although Japan is facing social challenges such as labor shortage in logistics and lack of means of transportation for elderly people in local communities, Japan has strengths in manufacturing for AI as well as approximation of data and hardware. Japan is also able to acquire mass travel data on automobiles. The Government of Japan will expand the range and opportunities of day-to-day activities of each individual by streamlining logistics and sophisticating transportation services to reduce traffic accidents, resolve labor shortage in local communities, and eradicate the issue of transportation- vulnerable people.

"Creating of next-generation supply chains" Japan has already had a pioneering approach called Kanban system (just-in-time inventory management system). In addition to the in-depth "approximation", which is one of the strengths unique to Japan, Japan has abundant data from plants as well as distribution data with a focus on convenience stores. This will enable us to create innovative products and services which meet demands of individual customers and consumers.

"Building and developing comfortable infrastructure and towns" While Japan has conspicuous problems of aging of skilled workers and labor shortage, there is also a great demand, including construction of Olympic/Paralympic-related facilities, renovation of worn- out facilities, and disaster-prevention measures. Services created by integration of competitive construction machines and data has a sales potential. The Government of Japan will balance efficiency and safety without being bothered by labor shortage or cost increase, and penetrate stable maintenance, management and update into the market.

"FinTech" Japan still has higher rate of cash transaction compared to other developed countries, and the use of IT by small and medium-sized companies is still limited. This is why Japan can expect to have a profound effect by introducing FinTech. The Government of Japan will dramatically improve the convenience of finance-related services for users and drastically improve the fund-raising capacity of companies as well as their productivity and earning capacity.

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2. Trade and Investment Regimes, 2.3. Trade Agreements and Arrangements, 2.3.2. Regional and preferential agreements, 2.3.2.1 Regional trade agreements (RTAs), pg. 41, 2.16.

It is stated in the Secretariat Report that "In February 2019, Japan signed the First Protocol to Amend the Agreement on ASEAN-Japan Comprehensive Partnership, which includes chapters on trade in services and investment. In September 2019, Japan signed the Japan-United States Trade Agreement to eliminate or reduce tariffs on certain agricultural and industrial products, and the Japan-United States Digital Trade Agreement, which is intended to establish high standard rules in this area".

Question 12 Could Japan give further information regarding the context of Japan-United States Digital Trade Agreement especially in terms of provisions on cross-border e-commerce?

RESPONSE The Japan-United States Digital Trade Agreement which entered into force in January 2020 aims at promoting digital trades and e-commerce between the two countries, establishing a legal foundation to promote smooth and reliable free digital trades. The agreement stipulates that neither party shall impose customs duties on electric transmissions and require the transfer of, or access to, source code, an algorithm and any information relating to cryptography.

It is stated in the Secretariat Report that "The EU-Japan Economic Partnership Agreement (EPA) was signed on 17 July 2018 and entered into force on 1 February 2019. It was notified to the WTO on 14 January 2019. It covers both trade in goods and services. It is the world's largest RTA, with signatories together accounting for nearly one third of world GDP."

Question 13 Could Japan provide data demonstrating the impacts of Japan-EU EPA on trade in agricultural and industrial goods since the beginning?

RESPONSE About a year and a half has passed since the Japan-EU EPA entered into force, and trade between Japan and the EU has been expanding in such goods as wine and automobile. Looking at the trade in its first year before the Covid-19 pandemic (February 2019 to January 2020), imports of wine from the EU increased 13% year-on-year, and exports of automobile to the EU grew by 14% year- on-year.

2. Trade and Investment Regimes, 2.3. Trade Agreements and Arrangements, 2.3.2. Regional and preferential agreements, 2.3.2.1. Regional trade agreements (RTAs), 2.3.2.1.2. EU-Japan Economic Partnership Agreement, pg. 43, 2.25. It is stated in the Secretariat Report that "The CPTPP has provisions on, inter alia: trade facilitation; e-commerce; government procurement; competition policy; state-owned enterprises and designated monopolies; intellectual property rights (Section 3.3.7); labour; environment; competitiveness and business facilitation; development; SMEs; regulatory coherence; and transparency and anti-corruption" and "The EPA has provisions on, inter alia, e-commerce; government procurement (Section 3.3.6); competition policy (Section 3.3.4); state-owned enterprises; enterprises granted special rights or privileges and designated monopolies; intellectual property (Section 3.3.7); trade and sustainable development; agricultural cooperation; and SMEs".

Question 14 Could Japan give further information regarding the context of e-commerce provisions in the abovementioned trade agreements and whether provisions on e-commerce in CPTPP and EPA cover different aspects of cross-border e-commerce such as logistics, customs procedures, taxes and duties?

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RESPONSE The provisions on e-commerce in trade agreements such as the TPP11 Agreement and the Japan- EU EPA stipulate rules on measures affecting trade by electronic means and measures related to cross border e-commerce. For instance, in Article 14.3 (Customs Duties) of the TPP11 Agreement, the rule is set not to impose customs duties on electronic transmissions. In addition, Article 14.9 (Paperless Trading) of the TPP11 Agreement sets rules on trade administration documents.

2. Trade and Investment Regimes, 2.3. Trade Agreements and Arrangements, 2.3.2. Regional and preferential agreements, 2.3.2.2. Preferential trade agreements (PTAs), pg. 44, 2.27.

It is stated in the Secretariat Report that "Under the GSP scheme, preferential tariff rates apply to 400 tariff lines at the nine-digit level in Chapters 1 to 24 (agriculture and fisheries) (excluding in- quota rates), and to 2,621 tariff lines in Chapters 25 to 97 (industrial products). The main exclusions are rice and rice products, meat and meat products, fish, dairy products, pineapples, cereal products, textiles and clothing, leather and leather products, and footwear. The preferential margin varies from one product to another.

Question 15 Could Japan explain the main factors for excluding the textiles and clothing, leather and leather products, and footwear from the GSP Scheme?

RESPONSE Due to taking the needs of domestic manufacturers into careful consideration, some products like textiles and clothing, leather and leather products, and footwear are not subject to GSP. In order to support least developed countries (LDCs) more effectively, products originating from LDCs are given special wider preferential treatment. They are basically given duty-free, quota-free (DFQF) market access.

The lists of products under GSP treatment and special preferential treatment for the LDCs are as below, o List of products under the GSP treatment at: http://www.mofa.go.jp/policy/economy/gsp/product.pdf o List of products for which duty-free, quota-free market access is granted to LDCs at: http://www.mofa.go.jp/policy/economy/gsp/dfqf.pdf」

2. Trade and Investment Regimes, 2.4. Investment Regime, 2.4.2. Business environment, pg. 49, 2.44.

It is stated in the Secretariat Report that "The authorities indicated that efforts are also being made by the SME Agency Japan to help these companies deal with structural transformation challenges, such as ageing business owners, labour shortages, natural disaster prevention, and mitigation measures. In July 2019, the Act on the Strengthening of the Management of SMEs was enacted; this aims to strengthen SME management, and support the continuation of their business activities, particularly in light of the ageing of business owners. In order to help SMEs prepare for natural disasters, the Government established a plan approval system for specific measures SMEs should take before natural disasters, and strengthened the support systems of the Society of Commerce and Industry and the Chamber of Commerce and Industry. Additionally, to cope with ageing of business owners, the Government expanded coverage of special arrangements under the Civil Code in terms of a statutory reserved portion to include individuals, to effectively carry out the Tax System for Individual Business Succession, established in 2019. In 2019, an innovation initiative was set up by a government council to assist start-ups become globally competitive; it is aimed at doubling the number of innovative start-ups by 2024."

Question 16 Could Japan elaborate further on ageing of business owners? What kind of measures does it plan to take?

RESPONSE In Japan, where the Small and Medium Enterprise (SME) owners are aging, succession of SME business is an urgent issue. SME Agency provides various support measures such as providing WT/TPR/M/397/Add.1

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Question 17 Could Japan provide additional information on its plan to support small and medium-sized businesses?

RESPONSE METI, Ministry of Economy, Trade and Industry considers to provide necessary measures for the issue with consultation of stake holders in Japan.

3. Trade Policies and Practices by Measure, 3.2. Measures Directly Affecting Exports, 3.2.4. Export support and promotion, ｚ3.2.4.1. Export subsidies, pg. 73, 3.69.

It is stated in the Secretariat Report that "According to the authorities, Japan has no export subsidy programmes in place; over the review period, it notified the WTO Committee on Agriculture that it had not provided export subsidies for the fiscal years 2016 and 2017".

Question 18 Does Japan have any supportive project or action instead of export subsidies at joint federal and provincial/territorial policy framework?

RESPONSE Japan has no supportive project or action instead of export subsidies (except for widely available export promotion and advisory services) at joint federal and provincial/territorial policy framework.

3. Trade Policies and Practices by Measure, 3.2. Measures Directly Affecting Exports, 3.2.4. Export support and promotion, 3.2.4.4. Export promotion, pg. 74, 3.74.

It is stated in the Secretariat Report that "The Japan External Trade Organization (JETRO) remains the official agency responsible for promoting exports through information, research, support for, and participation in international trade fairs, and other activities to promote exports from, and investment in, Japan; it has 74 overseas offices in 54 countries. Since 2016, JETRO has been providing export-related services under the Consortium for the New Export Nation; these include advice to Japanese SMEs on their exports and overseas investment, for example, in terms of foreign country regulations and contractdrafting in English. In 2017, JETRO established the Japan Agricultural and Foodstuff Exports as a new service in its Trade Tie-up Promotion Programme; this provides an Internet matching services for Japanese agricultural and food products. In the same year, it also established the Japan Food Product Overseas Promotion Center, in order to promote branding and marketing of Japanese agricultural, forestry, fishery and food products in overseas markets. Since 2019, JETRO has strengthened its support to promote innovation, expansion of Japanese start-ups overseas, and inward FDI in Japan, corresponding to global acceleration of cutting-edge technologies and the digital economy".

Question 19 Could Japan provide detailed information about regulations and operations of the Japan Food Product Overseas Promotion Center and the Japan Agricultural and Foodstuff Exports mechanisms established by the JETRO?

RESPONSE As for the outline of Japan Food Product Overseas Promotion Center (JFOODO), please see the following website; https://www.jetro.go.jp/en/jfoodo/ For more information on the Japan Agricultural and Foodstuff Exports (JAFEX), a matching site for export of agricultural, forestry, fishery products and food of Japan, please see the following website; https://www.jetro.go.jp/ttppoas/special/agri/agris.html

Question 20 Could Japan provide further information about the export-related services under the Consortium for the New Export Nation?

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RESPONSE The JETRO offers advice to Japanese firms so that they can cope with different business practices and rules, and support their business transactions with foreign firms under the Consortium for the New Export Nation.

3. Trade Policies and Practices by Measure, 3.3. Measures Directly Affecting Production and Trade, 3.3.1. Incentives, 3.3.1.2. Subsidies and other assistance programmes, pg. 79, 3.89.

It is stated in the Secretariat Report that "In its latest notification to the Committee on Subsidies and Countervailing Measures under Article XVI:1 of GATT 1994 and Article 25 of the Agreement on Subsidies, Japan listed 51 subsidy schemes provided by central or local governments, largely for fiscal years 2016 and 2017; support was mainly targeted at the following activities/sectors: crafts; mining and energy; beverages (sake and shochu); agriculture; fisheries; leather; and R&D for next- generation technology. In most cases, subsidies took the form of grants. Interest subsidies and loans were also used to subsidize some economic activities. The most significant subsidy programmes in value terms were (i) loans for purchasing petroleum and liquefied petroleum gas for stockpiling by private companies (JPY 517.9 billion in FY2016 and JPY 335.2 billion in FY2017); and (ii) grants for rice production, which have since been abolished (subsidy of JPY 98.7 billion in FY 2015 and JPY 70.8 billion in FY 2016). No new subsidy programmes were introduced over the reporting period covered by Japan's notification, but several were terminated".

Question 21 Is there a subsidy control system at federal or state level that ensures that subsidies do not distort or threaten to distort competition in Japan? If so, how do the different agencies at different levels (federal, state, local) coordinate the necessary procedures for control of granting subsidies?

RESPONSE Each government agency implements their subsidy programs in a WTO-consistent manner and thus ensures to undertake the necessary procedures under the WTO agreement.

3. Trade Policies and Practices by Measure, 3.3. Measures Directly Affecting Production and Trade, 3.3.1. Incentives, 3.3.1.2. Subsidies and other assistance programmes, pg. 79, 3.90.

It is stated in the Secretariat Report that "Subsidies are available for the purchase of clean energy vehicles sold by car makers, and for building hydrogen fueling stations.97 The subsidy to promote clean energy vehicle purchases applies to the purchase of electric battery vehicles, plug-in hybrid electric vehicles, fuel-cell energy vehicles, and clean diesel vehicles (Table 3.13). The subsidy amount is calculated based on the grade of the clean energy vehicle, and is paid within the limits set per vehicle grade (it is not paid if the calculated amount is under JPY 15,000). The budgetary allocation for this subsidy scheme was JPY 16 million in 2019. The upper limit of the subsidy scheme for building hydrogen stations is from JPY 180 million to JPY 390 million. The upper limit on the subsidy for the operation of hydrogen stations is from JPY16 million to JPY 26 million. These limits depend on the type of machines involved".

Question 22 Could Japan elaborate more on the subsidies provided for the purchase of clean energy vehicles in terms of maintaining its competition policy among other stakeholders in the automotive industry?

RESPONSE In Japan, the transportation sector accounts for 20% of total CO2 emissions, and it is important to reduce CO2 through the introduction of clean energy vehicles. While these vehicles have excellent environmental performance, there is a challenge for demand generation since clean energy vehicles are much more expensive for consumers than conventional ones, because of the very high costs of vehicle production, such as in-vehicle batteries, which are reflected in the vehicle prices. Therefore, Japan has maintained financial incentives to provide subsidies for the purchase of PHEVs (up to JPY 200 000 [USD 1 800]), BEVs (up to JPY 400 000 [USD 3 700]) and FCEVs (up to JPY 2 250 000 [USD 20 800]) regardless of country of origin. PHEVs, BEVs, FCEVs, NGVs (Natural Gas Vehicles), CDVs (Clean Diesel Vehicles) and other vehicles with high fuel efficiency are exempt from the purchase tax and a part of the weight tax. In addition, a lower annual vehicle ownership tax is applied to these vehicle types. These financial and tax incentives have been provided considering WT/TPR/M/397/Add.1

- 253 - their environmental performance, in a manner to ensure a fair and free competition among all stakeholders in the automotive industry.

3. Trade Policies and Practices by Measure, 3.3. Measures Directly Affecting Production and Trade, 3.3.1. Incentives, 3.3.1.2. Subsidies and other assistance programmes, pg. 79, 3.89.

4. Trade Policies by Sector, 4.2. Mining and Energy, 4.2.1. Mining, pg. 150, 4.91.

"The State appears not to be involved in the ownership of mines, and does not provide specific subsidies or support to the mining sector. There are no programmes to help the reconversion of areas affected by the closure of mines."

Question 23 In the first paragraph, it is stated that Japanese Government provides subsidies to the mining sector. However, in the second paragraph, it is stated that Japan does not provide specific subsides or support to mining sector.

Could Japan kindly explain its subsidy policy in the mining sector?

RESPONSE The secretariat report mentions "mining and energy" because it simply cites the chapter title. There are no subsides directly provided by the government in the field of mineral resources.

3. Trade Policies and Practices by Measure, 3.3. Measures Directly Affecting Production and Trade, 3.3.1. Incentives, 3.3.1.2. Subsidies and other assistance programmes, pg. 80, 3.91.

It is stated in the Secretariat Report that "Various subsidies to encourage the establishment of foreign-affiliated businesses are also provided at the local level. These subsidies, inter alia, relate to rent costs; expenses; depreciable assets; investments; employment; and research costs".

Question 24 Could Japan elaborate more on subsidies allocated for foreign-affiliated businesses?

RESPONSE As for the outline of various incentives and support exclusively for foreign-affiliated companies and foreign companies that are planning to open an office in Japan, please see the following website; https://www.jetro.go.jp/en/invest/incentive_programs.html

4. Trade Policies by Sector, 4.4. Services, 4.4.1. Financial services, 4.4.1.2. Regulatory evolution in other financial services sectors, pg. 169, 4.174.

It is stated in the Secretariat Report that "Regarding stock markets, on 31 May 2019, the Financial Instruments and Exchange Act was amended, to subject high-speed traders to a registration requirement, as of 31 May 2020. Foreign high-speed traders are also subject to this registration requirement. The conditions for registration do not include the establishment of an office in Japan but require the designation of a representative or an agent in Japan."

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Question 25 Could Japan provide information about the exact requirements for registration? In Japan's understanding, could these requirements constitute any inconsistency with Japan's commitments on National Treatment in financial services?

RESPONSE For details of the requirements, please refer to Article 66-50 to Article 66-70 of the Financial Instruments and Exchange Act. http://www.japaneselawtranslation.go.jp/law/detail/?ft=1&re=01&dn=1&x=0&y=0&co=01&ia=03 &ja=04&ky=%E9%87%91%E8%9E%8D%E5%95%86%E5%93%81%E5%8F%96%E5%BC%95% E6%B3%95&page=6 Please note that the date of the amendment made was on 17 May 2017, not 31 May 2019. Japan understands that the requirements are consistent with our commitments on NT in financial service, as it does not set any discriminatory treatment foreign to financial service suppliers.

4. Trade Policies by Sector, 4.4. Services, 4.4.2. Telecommunication services, pg. 170, 4.179.

It is stated in the Secretariat Report that "Regarding number portability, a major change occurred. The enforcement, in May 2019, of the "telecommunication Number Plan (public notice No. 6 of the Ministry of Internal Affairs and Communications (2019))" required telecommunications operators to take the necessary measures to enable number portability among them by the end of January 2025."

Question 26 Could Japan provide information on the coverage of "telecommunications operators"? Do they also include mobile operators and, if so, could Japan provide information on the current availability and conditions for number portability among mobile operators? Is the current situation consistent with Japan's existing obligations under its bilateral or regional agreements?

RESPONSE Currently, the Telecommunication Business Act requires number portability to all mobile telecommunications operators and NTT East/West among fixed telecommunications operators. In addition, the "Telecommunication Number Plan", which came into effect in May 2019, requires all fixed telecommunications operators to enable number portability among them by the end of January 2025. This situation is consistent with regional or bilateral agreements including CPTPP and Japan- EU EPA.

GOVERNMENT REPORT

1. Trade and Economic Environment, 1.1. Japan's Economic Environment, Pg. 3, 1.1.

It is stated in the Government Report that "The Japanese economy is recovering at a moderate pace. The private consumption and business investment are on the increase, supported by continued improvements in the employment and income situation and high corporate profits. However, due to the declining global demand for IT-related goods and slowdown of the Chinese economy exports in certain sectors remain weak since 2018. As a consequence, industrial production has been in a weak tone. Further attention shall be given to international trade issues and ambiguous economic trends and policies abroad, including the prospect of the Chinese economy"

Question 27 Could Japan provide detailed information about expected impact of COVID-19 pandemic on Japan economy?

RESPONSE The Japanese economy has been severely affected owing to the impact of the COVID-19. The economy was in an extremely severe condition from April to May as economic activities were suppressed under the state of emergency to prevent the spread of the infectious disease. Economic activity has gradually resumed since the state of emergency was lifted in late May, and private consumption is picking up and exports are bottoming out, although the influence of the infectious disease remains. As a whole, although the Japanese economy is still in a severe condition, it is showing movements of picking up. WT/TPR/M/397/Add.1

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Concerning future prospects, it is expected that the economy will continue to show movements of picking up supported by the effects of government policies, while socio-economic activities will resume gradually with measures to prevent the spread of the infectious disease. However, full attention should be paid to the impact of the infectious disease on domestic and overseas economies.

2. Trade and Investment Policy, 2.1. Overview, pg. 4, 2.3.

It is stated in the Government Report that "Japan is currently a party to eighteen EPAs. Japan is aiming for the swift conclusion of RCEP negotiations among 16 countries, through which the FTA ratio will exceed 70%, as set out in the Growth Strategy 2019. Japan has also promoted its regional and bilateral trade policies as a means of complementing the multilateral trading system under the WTO and Japan believes that these agreements will serve as building blocks to achieve higher trade liberalization at the multilateral level."

Question 28 Could Japan explain how it reconciles its emphasis on protecting Japan's domestic markets, especially some agricultural and textile products, with its aim to reach a higher level of trade liberalization through bilateral or multilateral initiatives?

RESPONSE Japan aims to take the lead in establishing comprehensive, balanced and high-level global rule through the conclusion and expansion of high-quality EPA/FTAs while taking into account both the offensive and defensive aspects.

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UNITED KINGDOM

Question 8 Please can Japan outline whether they are taking measures to improve the share of foreign companies in Japanese public procurement? And if so, which measures are they taking?

RESPONSE In terms of covered procurement, the central government announces the annual schedule of its procurement by holding a seminar once a year.

FOLLOW-UP QUESTION: Could Japan further explain how this seminar works and what sorts of businesses typically attend these.

RESPONSE At these seminars, the central government announces (1) general overview of the Japanese Government Procurement Procedures and (2) the annual schedule of the expected procurements. These seminars are open to domestic and foreign suppliers and members of foreign missions / representative offices interested in the Japanese Government Procurements. Various types of businesses attend these seminars; Electric Appliances, Telecommunications, Healthcare, etc. For foreign participants, the seminar held by the MOFA (Ministry of Foreign Affairs) is conducted in Japanese, with simultaneous translation into English. The participants get detailed information on covered procurement through these seminars.

FOLLOW-UP QUESTION The United Kingdom would like to ask Japan to expand on its response to Question 12 related to domestic reforms in the services sector. Specifically, we are interested to know the extent to which legal services are covered by these and related reforms. We understand that new rules governing legal services offered by foreign legal services providers are to enter into force later this year. Can you please provide details about these new rules?

RESPONSE The bill of Act on the Amendment Part of the Act on Special Measures concerning the Handling of Legal Services by Foreign Lawyers was passed in May 2020. The revised law has three main features: 1 The amendment expands the definition of the term "international arbitration cases", in which registered foreign lawyers and qualified foreign lawyers are permitted to provide procedural WT/TPR/M/397/Add.1

- 257 - representation. The amendment also establishes provisions on "international mediation cases", in which registered foreign lawyers and qualified foreign lawyers are able to provide representation. 2 The amendment prescribes that a maximum of two total years (the previous Act prescribed a total of one year) of employment in Japan by an attorney at law or other such person while providing services based on knowledge of the laws of a person's jurisdiction of qualification following that person's qualification to practice in a foreign jurisdiction will be deemed to constitute professional experience as a foreign lawyer, and counted toward the requirement of professional experience to become a registered foreign lawyer (at least three years of relevant experience is required following a foreign lawyer's qualification to practice in a foreign jurisdiction). 3 The amendment creates a system for joint corporations (attorney at law/registered foreign lawyer joint corporations) whose scope of practice is to provide full legal services, consisting both of attorneys at law and registered foreign lawyers. (1 and 2: effective on 29 August 29 2020) (3: effective within two years and six months from the date of promulgation)

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MEXICO

INFORME DE LA SECRETARÍA (WT/TPR/S/397)

3 POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.3 Medidas que afectan directamente a la producción y al comercio 3.3.4 Política de competencia y controles de precios 3.3.4.1. Política de competencia

(Págs 103-104) 3.142. La política de competencia se sigue rigiendo por la Ley de Prohibición de los Monopolios Privados y Fomento del Comercio Leal de 1947 (la Ley Antimonopolio) (modificada por última vez en 2019, véase infra), cuyo objetivo general es promover, entre otras cosas, la competencia libre y leal, estimular la iniciativa creativa de los empresarios y fomentar las actividades empresariales para mejorar las perspectivas de desarrollo económico y el bienestar de los consumidores.160 La Comisión de Comercio Leal del Japón (JFTC) es el organismo encargado de la aplicación de la Ley Antimonopolio. Para garantizar una mayor transparencia en la aplicación de la legislación y aumentar la previsibilidad para las empresas, la JFTC ha publicado directrices sobre diversas cuestiones relativas a los monopolios y el comercio desleal, entre otras, tratadas en la Ley Antimonopolio, así como normas detalladas para las investigaciones. Toda la legislación y las normas de aplicación están publicadas en el sitio web oficial de la JFTC.161

1. ¿Cuáles son los sectores que regula la Comisión de Comercio Leal de Japón?

RESPONSE The Antimonopoly Act (AMA), which the JFTC enforces, prohibits acts by enterprises or trade associations restraining competition regardless of business fields.

3. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 3.3. Medidas que afectan directamente a la producción y al comercio 3.3.4. Política de competencia y controles de precios 3.3.4.1 Política de competencia

(Págs. 104-105) 3.146. Algunas actividades o prácticas empresariales permanecen fuera del ámbito de aplicación de la Ley Antimonopolio. La competencia en esos ámbitos puede regirse por otros instrumentos legislativos y estar sujeta a la supervisión de distintas instituciones (cuadro 3.16). No se ha introducido ninguna nueva exención desde 2017. Para garantizar la transmisión fluida y adecuada del impuesto sobre el consumo cuando se incremente el tipo de impuesto, en junio de 2013 se aprobó y promulgó la Ley de Medidas Especiales para Corregir las Prácticas que Impiden la Transmisión del Impuesto sobre el Consumo, entre otras, con el objetivo de Garantizar una Transmisión Fluida y Adecuada del Impuesto sobre el Consumo. La Ley, que entró en vigor el 1º de octubre de 2013, debía permanecer vigente hasta el 31 de marzo de 2017. En noviembre de 2016 fue modificada para prorrogar su vigencia hasta el 31 de marzo de 2021, debido a que se aplazó el aumento programado del tipo impositivo (secciones 1.1 y 1.2). La Ley prohíbe, entre otras, las siguientes conductas: eludir, mediante una reducción o subvaloración de los precios, el traslado de los impuestos sobre el consumo; y solicitar que, a cambio de aceptar el traslado de los impuestos sobre el consumo, se compren productos, utilicen servicios o confieran ventajas económicas. Y excluye del ámbito de aplicación de la Ley Antimonopolio a los cárteles de transmisión y los cárteles de representación entre empresas o asociaciones mercantiles si se cumplen los siguientes requisitos: presentación de una notificación previa a la JFTC; en lo que concierne a los cárteles de transmisión, que al menos dos terceras partes de las empresas participantes sean pequeñas y medianas empresas; las "decisiones relativas a un acuerdo sobre los precios" quedan excluidas de la exención; y, en lo que concierne a los cárteles de representación, solo está exenta la práctica concertada en relación con las decisiones sobre métodos de representación que afecten a los impuestos sobre el consumo.

2. ¿Cuáles son las actividades o prácticas empresariales que permanecen fuera del ámbito de aplicación de la Ley Antimonopolio?

RESPONSE The Antimonopoly Act does not apply to the following acts: acts found to constitute an exercise of rights under certain laws such as the Copyright Act (Article 21); certain acts by a partnership (Article 22); and certain resale price contracts (Article 23). Moreover, as of March 2020, there are WT/TPR/M/397/Add.1

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16 laws other than the AMA that stipulate the exemptions of the Antimonopoly Act regarding certain enterprises or acts of trade associations.

3. ¿ Existe algún tipo de relación o coordinación entre las distintas instituciones que supervisan temas de competencia?

RESPONSE The JFTC holds consultations with an administrative agency to ensure coordination from the viewpoint of the Antimonopoly Act and competition policy when the agency plans to enact or amend a law or ordinance.

4. POLÍTICAS COMERCIALES, POR SECTORES 4.4. Servicios 4.4.2. Servicios de telecomunicaciones

(Págs. 194-195) 4.179. Cabe reseñar un cambio importante en relación con la portabilidad numérica. Desde la entrada en vigor del Plan de Números de Telecomunicaciones (Aviso público Nº 6 del Ministerio de Asuntos Internos y Comunicaciones (2019)), en mayo de 2019, se exige a los operadores de telecomunicaciones que adopten las medidas necesarias para permitir la portabilidad de los números entre ellos a más tardar a finales de enero de 2025.

4. ¿Cuáles son las medidas que se le han exigido a los operadores para permitir la portabilidad de números entre ellos?

RESPONSE The "Telecommunication Number Plan", which came into effect on May 2019, requires telecommunications operators who use fixed telephone numbers for the telecommunications services to enable mutual number portability by the end of January 2025. The details on how to realize this fixed telephone number portability are to be discussed among the telecommunications operators. Also, mobile number portability has been available among mobile telecommunications operators since October 2006. In introducing mobile number portability, the Ministry of Internal Affairs and Communications issued the guidelines in May 2004 for the matters regarding number portability such as cost burden and implementation methods including the network connection method and the number management method.

4. POLÍTICAS COMERCIALES, POR SECTORES 4.4. Servicios 4.4.2. Servicios de telecomunicaciones

(Pág. 195) 4.182. Aparte de esas pequeñas modificaciones técnicas del régimen de telecomunicaciones y de la implantación de redes 5G-LTE y de programas experimentales sobre la Internet de las cosas y la inteligencia artificial, la política gubernamental en materia de telecomunicaciones durante el período examinado se ha centrado en dos aspectos fundamentales: la protección del consumidor y la reducción de los costos relacionados con el uso de los teléfonos móviles.

5. ¿Cómo ha sido la reducción de los costos relacionados con el uso de los teléfonos móviles?

RESPONSE Regarding mobile phone charges, Japan has been facilitating a fair competition environment including by the amendment to the Telecommunication Business Act in October 2019, which separates the connection fee from the price of mobile phone handsets and bans excessive customer capture. Japan expects that both the connection fee and the price of mobile phone handsets will decrease as there will be more competition in the market. Please refer to 4.187 of the report by the secretariat for the details of the revised Telecommunication Business Act enforced in October 2019.

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4. POLÍTICAS COMERCIALES, POR SECTORES 4.4. Servicios 4.4.2. Servicios de telecomunicaciones

(Pág. 195) 4.187. Primeramente, en mayo de 2019 se revisó la Ley de Telecomunicaciones (mediante una ley de modificación parcial de la Ley de Telecomunicaciones, la Ley Nº 5 de 2019), a fin de prohibir la aplicación de descuentos en las tarifas de conexión y de los teléfonos móviles cuando se vendan la conexión y el dispositivo conjuntamente, a partir de septiembre de 2019. El descuento sobre los teléfonos móviles cuando se vende la conexión y el teléfono de manera conjunta, y el aplicado a los teléfonos móviles para los nuevos clientes, se limita a JPY 20.000 (esta limitación figura en la Orden Ministerial de aplicación de la ley que estipula la cantidad específica de beneficios que se pueden otorgar si se ofrecen condiciones ventajosas a los clientes). La Ley también dispone que la diferencia máxima entre el plan de precios con limitación temporal y el plan sin limitación temporal será de JPY 170 mensuales. Esta norma se aplica a los tres principales operadores de telefonía móvil (NTT DOCOMO Inc., SoftBank Corp. y KDDI Corp.) y a Rakuten, la empresa de comercio electrónico que entró en el mercado de la telefonía móvil. El objetivo de estas medidas es lograr que la tarifa de conexión esté totalmente desvinculada del precio de los teléfonos móviles y prohibir la captación excesiva de clientes.

6. Además de las mejoras y el fortalecimiento en las normas de protección al usuario. ¿qué otras modificaciones se realizaron a la Ley de Telecomunicaciones en 2019?

RESPONSE The amendment to the Telecommunications Business Act in 2019, in addition to the details described in 4.189 of the report by the secretariat, introduced the notification system for sales agents in order to ensure the properness of the business by sales agents and protect the interests of users. Moreover, the amendment prohibits telecommunications operators or sales agents from soliciting consumers without telling their name or letting the customers know that it is a solicitation in advance.

II. INFORME DEL JAPÓN (WT/TPR/G/397)

4 POLÍTICAS INTERNAS DEL JAPÓN 4.3 Reforma financiera (Pág. 17) 4.5. En respuesta a la evolución de la tecnología de la información y a sus repercusiones en los servicios financieros, el Japón ha adoptado la Ley de Revisión Parcial de la Ley de Banca (promulgada el 26 de mayo de 2017) a fin de promover la cooperación y colaboración adecuadas entre las instituciones financieras y las empresas de tecnología de la información relacionadas con el sector financiero, así como para asegurar la protección de los usuarios. La Ley establece disposiciones relativas a los proveedores de servicios de pago electrónico. Entre las medidas previstas figuran las siguientes: 1. Medidas aplicadas a los proveedores de servicios de pago electrónico para la implantación de un sistema de protección y un mecanismo de control seguro de la información: • Implantar un sistema para la protección de los usuarios; • Garantizar un control seguro de la información; • Asegurar una base financiera suficiente. 2. Conclusión de un contrato con instituciones financieras: • Concluir un contrato que prevea los siguientes aspectos: ➢ La responsabilidad compartida del banco y del proveedor de servicios de pago electrónico respecto a la obligación de compensar por toda pérdida o daño que puedan sufrir los usuarios de los servicios de pago electrónico; ➢ La gestión adecuada y el control seguro de la información sobre los usuarios. 3. Medidas destinadas a las instituciones financieras para la promoción de la innovación abierta: • Formular y dar a conocer los planes de cooperación y colaboración con el proveedor de servicios de pago electrónico; • Formular y dar a conocer las normas relativas a la conexión con el proveedor de servicios de pago electrónico; • Procurar la implantación de un sistema de API abierta. 4. Otras medidas • Permitir que las sucursales de bancos extranjeros en el Japón escojan el ejercicio económico (de 1º de abril a 31 de marzo del año siguiente, o bien el mismo período que abarca el ejercicio económico del banco extranjero) para la presentación reglamentaria de informes con arreglo a la WT/TPR/M/397/Add.1

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Ley de Banca. • Suprimir el requisito de notificación relativa a los agentes bancarios en caso de cambio temporal del domicilio de la oficina comercial.

7. En relación a la Ley de Revisión Parcial de la Ley de Banca, ¿se podría brindar mayor información sobre las medidas aplicadas para la protección del usuario y garantizar un control seguro de la información?

RESPONSE Please refer to Chapter VI-5 of the Banking Act in the following link. http://www.japaneselawtranslation.go.jp/law/detail/?id=3534&vm=04&re=02&new=1 For further information, please refer to Chapter IX of the Comprehensive Guidelines for Supervision of Major Banks, etc. in the link below (only available in Japanese). https://www.fsa.go.jp/common/law/guide/city/09.html

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EU FOLLOW-UP QUESTIONS

WT/TPR/S/397 – WTO Secretariat's Report

Section 3.3.3.1 SPS measures; para.3.122, page 86. Initial EU question N° 7 According to the Secretariat's report: "The key agencies responsible for SPS measures are contained in Box 3.2; there were no major changes to this institutional framework over the review period." The report states that there has not been any major institutional change with regard the agencies responsible for SPS measures. However, within that framework, especially in agro-food sector and more specifically related to plants and vegetables, the approach followed by the responsible body is "one country-one product" as there are no resources to widen their activities. As a result, it is usual that the procedures to open the Japanese market for these products could take more than a decade. Has Japan envisaged increasing resources to these agencies so that negotiations of bilateral protocols could not take so many years to be approved and enacted? Reply When a request for lifting a ban on plant import is made, evaluation is carried out based on the scientific data. The procedure for the evaluation and the progress of individual case are made public, being managed under a full transparency.

➢ EU follow-up question 1 The EU welcomes the transparency on the procedure. The EU would, however, welcome also a reply on whether Japan has envisaged increasing resources to these agencies and/or adopting any other measures so that negotiations of bilateral protocols could be shortened and not result in long delays?

RESPONSE Bilateral consultations with regard to SPS measures are carried out based on scientific data with available resources.

Section 3.3.3.1 SPS measures; para. 3.124, page 87. Initial EU Question N° 8 According to the report, Japan has lifted age restrictions to beef imported from some countries. However, currently other countries are not allowed to export beef if the animal is above 30 months age. Question N° 8: Could Japan explain the scientific principles, not followed by the Organization for Animal Health, on the basis of which there should be a distinction between animals of 30 months of age when it comes to evaluate the risk assessment of BSE? Reply In general, SPS measures of Japan are based on relevant international standards, or where its measures do not conform to relevant international standards, based on scientific risk assessment, in accordance with the SPS Agreement. The SPS Agreement requires that the SPS measures conducted by WTO members are based on scientific principles. As for BSE regulations, MHLW requests risk assessment to FSCJ taking into account the OIE evaluation. For relaxing further age restrictions based on the international standards regarding beef from countries where BSE occurred, MHLW has already lifted the age restrictions for U.S., Canada and Ireland in May 2019, and for France and Norway, we are discussing review of import conditions, based on results of risk assessments on lifting age restrictions by FSCJ. For other countries, FSCJ will be able to complete the assessment when all the necessary information, such as more data collected by the risk management organizations and new scientific evidences, become available. After FSCJ notifies MHLW of the risk assessment result, MHLW will consider further relaxation of the beef import requirement based on the result of risk assessment. WT/TPR/M/397/Add.1

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➢ EU follow-up question 2 Could Japan please explain the scientific rationale for not allowing import to Japan of beef from animal above 30 months age? RESPONSE SPS measures of Japan are in general based on relevant international standards or scientific risk assessment, where the measures do not conform to relevant international standards, in accordance with the SPS Agreement. The SPS Agreement requires that the sanitary or phytosanitary measures conducted by WTO Members are based on scientific principles. As for BSE regulations, the MHLW requests risk assessment to FSCJ taking into account the recognition of OIE. In relation with relaxing further age restrictions based on the international standards regarding beef from countries where BSE occurred, the MHLW has already lifted the age restrictions for U.S., Canada and Ireland in May 2019, and, is discussing about review of import conditions, based on results of risk assessments on lifting age restrictions by FSCJ in January 2020, with France and Norway. For other countries, FSCJ will be able to complete the assessment when all the necessary information, such as more data collected by the risk management organizations and new scientific evidences, become available. After FSCJ notifies the MHLW of the risk assessment result, the MHLW will consider further relaxation of the beef import requirements based on the result of risk assessment.

Section 3.3.3.2.3 On the Planet Protection Act; para. 3.131, page 89. Initial EU Question N° 11 The EU thanks Japan for the information provided on standard processing periods as per information under paragraph 3.129 on the Food Sanitation Act on MRL and food additives. Similarly, the EU would welcome information on the standard processing periods for conducting the risk assessment prior to approval of imports of fruits and vegetables for consumption. Reply When a request for lifting a ban on plant import is made, evaluation is carried out based on the scientific data. If a measure to prevent introduction and spread of pests is established, the ban will be lifted. The procedure for the evaluation and the progress of individual case are made public, being managed under a full transparency ➢ EU follow-up 3 The EU welcomes the transparency on the procedure. However, the EU would also welcome information on the standard processing periods (approximate time needed) for conducting the risk assessment prior to approval of imports of fruits and vegetables for consumption.

RESPONSE As evaluation is carried out based on scientific data and each case takes different time, it is difficult to anticipate and indicate the "standard processing period".

Section 3.3.6 Government procurement; para. 3.168, page 101 Initial EU Question N° 14 1. What was the foreign companies share (in %) of number of contracts awarded to them in 2018 and 2019: a) at central government level, Reply 2.4% for number of contracts awarded in 2018. Data for 2019 is not yet available. b) at sub-central level? Reply There is no available data for the foreign companies' share at sub-central level. What is the trend over the last 5 years? Reply It was around 2-3% share at central government level. WT/TPR/M/397/Add.1

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➢ EU follow-up question 4 The EU thanks Japan for the information - at central government level - regarding the foreign companies share (in %) of number of Government Procurement contracts in 2018 (2019) and the trend over the last 5 years. At the same time, the EU would be grateful for such information regarding the sub-central level (per prefecture).

RESPONSE There is no available data for the foreign companies' share at the sub-central level (per prefecture).

Initial EU Question N° 15 What actions does Japan undertake in order to increase the participation of foreign companies in the government procurement market in Japan, in particular to address the non-regulatory barriers mentioned in the report? Reply In terms of GPA covered procurement, the central government announces in advance the annual schedule of its procurement and holds a seminar on Japan's government procurement for foreign entities and diplomatic corps stationed in Tokyo. ➢ EU follow-up question 5 The EU would welcome the information regarding Japan's actions undertaken at sub- central level in order to increase the participation of foreign companies in the government procurement market. RESPONSE At sub-central level as well, in order to increase the participation of foreign companies in the government procurement market, Japan has established, on a voluntary basis, non-discriminatory, fair and transparent procedures that surpass the level of obligations stipulated in the GPA under the domestic laws and ordinances. For foreign supplier's convenience, "Suggestions for Accessing the Government Procurement Market of Japan" is published in English on MOFA's website https://www.mofa.go.jp/files/000037391.pdf, and Japan has established a single-access database of the Government Procurement at the JETRO's website so that everyone is able to access the tender information (summary) in English (https://www.jetro.go.jp/en/database/procurement/ ). Section 4.1.1.4 Trade policies and border measures; table 4.6, page 132 Initial EU Question N° 33 According to the report by the Secretariat, the fill rate of Japan's TRQs ranges from 23.4% to 305.6%. Could Japan clarify how the fill rate of a TRQ, notably the one on "designated dairy products for general use" can be higher than 100%? Reply The imports of the TRQ for "designated dairy products for general use" are implemented by state- trading with a view to stabilizing supply-demand for dairy products. ➢ EU follow-up question 6 The EU would welcome more clarification on how the fill rate of a TRQ, notably the one on "designated dairy products for general use" can be higher than 100%. RESPONSE The imports of "designated dairy products for general use" are implemented by state-trading to meet the domestic demand. The fill rate in the report is calculated based on the quantity established as the result of Uruguay Round negotiation. Since then, the demand has increased and accordingly actual imports as well. This is reflected in the calculated fill rate in question, which apparently goes beyond 100%.

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Section 4.1.2.6 Border and domestic support measures for Fishery; page 147 Initial EU Question N° 35 Can Japan provide information regarding the functioning of IQ system for fishery products managed by METI? Reply This quantitative import restrictions (import quotas), which is administered by METI in cooperation with MAFF, play an important role in the conservation and management of fisheries resources in waters adjacent to Japan. ➢ EU follow-up question 7 The EU would like to receive more clarifications regarding the functioning of IQ system for fishery products managed by METI in cooperation with MAFF. RESPONSE Quantitative import restrictions (import quotas) play an important role in the conservation and management of fisheries resources in waters adjacent to Japan. The import quotas for these resources complement Japan's fisheries management measures such as total allowable catch (TAC) scheme, which manages catch of these fish species. This system is consistent with the 1994 GATT (Article XI 2(c) and Article XX(g)), and was notified to the WTO. The government of Japan will continue to implement this system in an appropriate manner.

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CHINA FOLLOW-UP QUESTIONS

PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT Page 108，Para 3.181 There is a clear link between the 2018 IP Strategic Programme and the modifications that were made to Japan's IP laws during the review period, including expansions in the scope and breadth of protection for designs, new data protections, new flexible copyright restrictions that account for the rise of digitization and networking, and modifications to litigation procedures and damages calculations intended to facilitate the enforcement of IPRs. Japan's IP regime was also influenced by international commitments, particularly the entry into force of the CPTPP and the EU Japan EPA. These agreements prompted some significant amendments, including an extension of the copyright term of protection from 50 to 70 years, and high-level protection for more than 200 European geographical indications (GIs).

Questions 1. What are the specific contents of Japan's modifications to the damages calculations to facilitate the enforcement of the IPRs?

RESPONSE Details about review of damages calculation method are below. *Similar measures have also been taken for the Utility Model Act, Design Act and Trademark Act. 1. For the portion of the profits made by the infringer whose need for compensation was denied on the basis that it was beyond the patent rights-holder's production/sales capacity, etc., the revision has enabled the rights-holder to request damages by deeming that it had licensed the portion to the infringer.

2. The revision clearly states that damages calculation can take into consideration the amount likely to have been determined if negotiations were conducted assuming patent rights infringement when a court determines the amount equivalent to the amount of money to be received for the implementation of the patent invented.

2. What other specific impacts do the aforementioned international agreements have on Japan's IP laws?

RESPONSE In accordance with conclusion of CPTPP and the Japan-EU EPA, amendments were made to relevant provisions of the Copyright Act, the Patent Act, the Trademark Act and the Act on Protection the Names of Specific Agricultural, Forestry and Fishery Products and Foodstuffs (Act No.84 of June25, 2014) ("the GI Act") as follows;

The Copyright Act 1. Extending the duration of copyright and related right from 50 to 70 years 2. Introducing measures to prevent the circumvention of access controls 3. Ex officio prosecution of certain criminal infringement 4. Right to remuneration for secondary use of sound recordings 5. Addition of a new method using a collective management organization royalty rule to calculate compensatory damages

The Patent Act 1. Extending the period for claiming an exception to lack of novelty of invention, during which novelty of an invention is not denied by publication resulting from the act of, against the will of the person having right to obtain a patent prior to the filing of a patent application, from six months to one year 2. Introducing the system of patent term extension in cases where the establishment of the patent right is registered after 5 years from the filing date of an application, or 3 years from the filing date of a request for examination, whichever is later

The Trademark Act Introducing a statutory damages system pertaining to trademark counterfeiting

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The GI Act Introducing provision to enable mutual protection of geographical indications through international agreements with foreign countries

Amendment in accordance with Japan-EU EPA The GI Act 1. Limiting the prior use period up to 7 years 2. Expanding the regulatory scope to the use of GIs on advertisement materials, price list or transaction document 3. Regulating suggestive means which mislead public including the combination of text and figure

3. Please elaborate on the details of Japan's high-level protection for more than 200 European geographical indications (GIs).

RESPONSE 71 European geographical indications (GIs) for agricultural products are in high-level protection which applies to labelling on the products, advertisement, and description on internet as well as other similar actions. Regarding use of GI not meeting relevant requirements of GI specification, the use of GI is prohibited when the use misleadingly indicates that the product is an authentic GI products. Prohibition applies to use of GI even where a) the origin is correctly indicated, b) the GI is in translation or transliteration and c) the GI is accompanied with "kind", "type", "style", "imitation", or the like.

139 European GIs for alcoholic beverages are in high-level protection. (https://www.nta.go.jp/taxes/sake/yushutsu/pdf/chiritekihyouji.pdf)

Page 109，Para 3.185 Compared with the United States, Japan has only recently initiated a legal framework for promoting the commercialization of government-financed innovations and public-private collaboration. In 1998, Japan introduced technology licensing organizations (TLOs) at universities, to promote the transfer of technology to industry, followed one year later by the Act on Special Measures Concerning Revitalization of Industry and Innovation in Industrial Activities (Japan's analogue to the 1980 US Bayh Dole Act), which transferred rights associated with government funded research results from the Government to individual researchers. Then, in 2004, following the privatization of national universities, universities gained the right to own and license patents associated with the results of research generated by their professors.

Questions 4. Please brief on the implementation effect of the Act on Special Measures Concerning Revitalization of Industry and Innovation in Industrial Activities.

RESPONSE A study shows that the effect that the utilization rate of patents obtained under the act is higher than that of government-owned patents.

5. What are the benefits of the Act? Which parts of the Act need be improved?

RESPONSE The benefit is that Japan can vitalize technology-related research and development activities and promote effective utilizations of the results thereof in business activities. Japan is of the view that any improvements are not necessary at this stage.

Page 109，Para 3.189 In 2018, the JPO established the "IP acceleration programme for start-ups", which dispatches expert teams of venture capitalists, business consultants, and attorneys to provide hands-on support in the early stages of development to selected start-ups. The JPO also offers "super accelerated examination" to start-ups, so they can obtain patent rights within one month for inventions that are already being worked. Most recently, the JPO launched IP Base, an online community providing essential information on IP strategies, JPO support, event information, and access to IP experts for start-ups. Start-ups can also expect to benefit from government procurement programmes, set forth in the 2018 IP Strategy Vision, to promote partnerships between start-ups and existing businesses.

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Questions 6. What are the conditions and specific procedures for obtaining services related to "super accelerated examination"?

RESPONSE The conditions are that the applications for inventions "that have already been put into practice and that are also filed in one or more other countries," or "that are applied by startups and that have already been put into practice." A request for a super-accelerated examination will be made by submitting a form of"written explanation of the needs of the super-accelerated examination." It is necessary to describe circumstances related to a filing of a super-accelerated examination, disclosures of the prior art documents and explanations of the comparisons with the invention and the prior art, etc. in the form of "written explanation of the needs of the super-accelerated examination."

7. Can foreign applicants enjoy the services related to "super-accelerated examination"?

RESPONSE Foreign applicants can enjoy the services related to "super-accelerated examination."

Page 109，Para 3.190 Japan is adapting its IP regime and associated processes to the development of Big Data, artificial intelligence (AI) technologies, and the Internet of Things (IoT). Standard essential patents (SEPs), which are essential to implement standards in fields such as wireless communications, have become critical to the development and implementation of new technologies, and licences are increasingly sought by companies in previously distinct industries with diverse sets of technical knowledge and corporate cultures. In response to increasing disputes over SEPs, Japan launched several initiatives during the review period. Page 110，Para 3.191 First, the JPO published a non-binding Guide to Licensing Negotiations Involving Standard Essential Patents, in order to enhance transparency and predictability, facilitate negotiations, and help prevent or quickly resolve disputes. The Guide draws upon relevant court decisions in various countries, and thus attempts to articulate global norms. Second, the JPO expanded its "Hantei" advisory opinion service on whether a patent claim reads on a product, to offer opinions on standard essentiality in April 2018. Although the opinions are non-binding, they are influential in licensing negotiations, and facilitate dispute resolution. Third, a new specialized IP International Arbitration Centre opened in Tokyo in 2018. Although it can handle a range of matters, it claims to be uniquely capable of resolving complex disputes involving SEPs.

Questions 8. In addition to the JPO, which Japanese government authorities are also responsible for SEP- related affairs?

RESPONSE As a national standard body, JISC (Japanese Industrial Standards Committee) provides a guidance that asks a declaration of a patent right inclusion in the standard by the stakeholders at its developing stage. JISC sets such general guidance following the Common Patent Policy for ITU- T/ITU-R/ISO/IEC. However, the JPO and JISC are not responsible for any disputes related to SEP issues.

9. Does Japan have binding laws, regulations or other provisions related to SEPs?

RESPONSE As the JPO, we are not aware of any binding laws, regulations or other provisions specific to SEPs.

10. What is the nature of the new IP International Arbitration Centre? What is the relationship between the JPO and the new IP International Arbitration Center?

RESPONSE International Arbitration Centre (IACT) is an independent private institution. The JPO, if necessary, cooperates with IACT, as with other arbitration institutions, for activation of international arbitrations.

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Page 117，Para 3.218 Except for an adjustment to the calculation of infringement damages, discussed in Section 3.3.7.12, there were no significant amendments to the Utility Model Act or the process for registering a UM, during the review period. Applications and registrations of UMs continued their decades-long decline. Almost all applications lead to grant (Table 3.27), and are registered faster than patents since there is no substantive examination.

Questions 11. What is the reason for the continued decline in the number of applications of UMs in Japan?

RESPONSE Patents are registered through substantive examinations, and patent term is 20 years from the filing date. On the other hand, UMs are registered without substantive examinations, and the term of the right is 10 years from the filing date. In terms of the enforceability, applicants may prefer patent to UM.

12. How long is the examination cycle for UMs?

RESPONSE There is no substantive examination in UM system.

13. Based on the current status of the UM system, does Japan have any relevant considerations or plans for the future development of the UM system?

RESPONSE There is an opinion in Japan that it should be applied to technologies with short life cycles. However, at this time, the JPO has no plans to change the UM system.

Page 119，Para 3.229 Japan's Regional Collective Trademark System (RCT), introduced in 2006 and managed by the JPO, co-exists with the sui generis system of GI protection introduced in 2015 under the authority of the MAFF (Section 3.3.7.9).

Questions 14. Are there any conflicts between Japan's Regional Collective Trademark System and the sui generis system of GI protection during the processes of implementation? If so, in what ways? How to resolve these conflicts?

RESPONSE In order to avoid conflicts between Japan's Trademark Act and GI Act*, we have introduced provisions to coordinate the trademark right and the protection of GI by each law. In case of an application for registration of a GI which is identical or similar to a registered trademark, the GI is registered only if the applicant has obtained the approval of the trademark right holder (and exclusive licensee) pertaining to the registered trademark with regard to the registration of the GI. Meanwhile, the Trademark Act provides that a trademark right shall have no effect against the legitimate use of a protected GI. *Act on Protection of the Names of Specific Agricultural, Forestry and Fishery Products and Foodstuffs

15. Has Japan's sui generis system of GI protection been adjusted due to the EU-Japan EPA? If so, what are the specific changes?

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16. With regard to the sui generis system of GI protection, does Japan apply the same legal system to both domestic and foreign products?

GIs for alcoholic beverages are protected under the National Tax Agency Notice No. 19 of 2015 (Notice on Establishing Indication Standards Concerning Geographical Indications for Liquor) based on Act Concerning Liquor Business Associations and Measures for Securing Revenue from Liquor Tax (Act No. 7 of 1953). This protection applies to both domestic and foreign products.

Page 120，Para 3.235 Applications for all GIs except those applied to alcoholic beverages are handled by the MAFF. Applications for GIs for alcoholic beverages are submitted to the Commissioner of the National Tax Agency, and designated in accordance with the Indicating Standards Concerning Geographical Indications for Liquor…

Question 17. Are GIs for alcoholic beverages and other GIs protected under the same laws?

RESPONSE GIs for alcoholic beverages are protected under the National Tax Agency Notice No.19 of 2015 (Notice on Establishing Indication Standards Concerning Geographical Indications for Liquor) based on Act Concerning Liquor Business Associations and Measures for Securing Revenue from Liquor Tax (Act No.7 of 1953).

18.Are the tort liabilities of the two groups of GIs the same? If not, what are the differences?

RESPONSE The two groups of GIs are under different acts. Regarding illicit use of GIs for agricultural products, illicit use of GI marks, and breach of the producer's duty, in accordance with GI Act, MAFF orders to stop illicit use of GIs etc. If they don't follow, they will be subject to the penalties. In case of illicit use of GIs, the penalty is as follows: (a) any person who has violated the provisions is imprisoned no more than 5 years or is fined no more than 5 million yen and (b) any corporation and the like which has violated the provisions is fined no more than 300 million yen.

GIs for alcoholic beverages are protected by the administrative action for illicit use based on Act Concerning Liquor Business Associations and Measures for Securing Revenue from Liquor Tax (Act No.7 of 1953). The details of the administrative action are as follows:

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Page 77，Para 3.80 Total central government tax revenue in Japan in FY2019 was JPY 62,495 billion, with the biggest contributions from: income tax, the consumption tax, and corporation tax. Revenue from customs duties accounted for 1.65% of the total in the same year (Table 3.10).

Page 77，Para 3.86 National and local taxes on tobacco are being raised by JPY 3 per cigarette in a three-phased period (JPY 1 per cigarette in each phase) which started in 1 October 2018. A new tax category was created for heat-not-burn tobacco products, and the taxation system will be revised in consideration of the products' characteristics. The phase-out of the preferential tax treatment for Japanese-produced "third class cigarettes" was completed in 2019; all cigarettes are now taxed at the same rates.

Question 19. Please explain the composition of Japan' tax rate on cigarettes. Please evaluate the effect of raising the tobacco tax?

RESPONSE Please refer to figures below about tobacco tax rates and the effect of raising the tobacco tax in FY2018 tax reform.

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20. Does "CONSUMPTION TAX" in Table 3.10 "Japan's tax revenue, FY2015/19" include the tax revenue from cigarettes? What is the difference from the "TOBACCO TAX" in a line below it of the same table?

RESPONSE "CONSUMPTION TAX" in Table 3.10 include the consumption tax revenue from cigarettes. "CONSUMPTION TAX" is value-added tax (VAT), whereas "TOBACCO TAX" is excise tax.

Page 99，Para 3.160 According to Japan's latest WTO notification pursuant to the provisions of Article XVII: 4(a) of the GATT 1994 and paragraph 1 of the understanding on the interpretation of Article XVII and covering the period 2015-17, four state-trading enterprises remained operational (Table 3.19).

Page 126，Para 4.5 Imports of agricultural products are widely spread across many different tariff lines, with the top ten products representing 41% of total agricultural imports (Table 4.3).

Page 127，Para 4.6 Agricultural exports tend to be processed products; in almost all top ten export categories, there was a steady increase in both volume and value terms over the period 2014-18, with the notable exception of cigars, cheroots, cigarillos and cigarettes, which saw a marked decline (Table 4.4).

Page 141，Para 4.50 For 2019, the total area is set at 6,886 ha (down 4.8% from 2018) and grower prices are set at JPY 1,912.3 per kg (up 1.3% from 2018).

Question 21. According to Table 4.3 "Imports of agricultural products, 2014-2018" and Table 4.4 "Exports of agricultural products, 2014-2018", the import volume and value of the raw materials of leaf tobacco increased year by year, while the import and export volumes and values of tobacco products such as cigarettes (including cigars) declined dramatically during the same period. The cost of domestically produced leaf tobacco in Japan far exceeded the international market price and is several times higher than that in China. JT imported a large amount of leaf tobacco from other countries, while the import and export volumes of cigarettes decreased during the same period. While the imports of raw materials increased and the production of tobacco products also increased theoretically, please explain the decline in import and export volumes of cigarettes.

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RESPONSE As for raw materials of tobacco products, we depend on the import of them to some degree due to the decline in the number of tobacco farmers. These raw materials are used for the domestic consumption of tobacco products.

As for the export of tobacco products, JT strengthens the export from overseas factories. As for the import of tobacco products, the domestic demand for tobacco products is shrinking in Japan. For these reasons, the import and the export of tobacco products are declining.

Page 75，Para 3.74 In the same year, it also established the Japan Food Product Overseas Promotion Center, in order to promote branding and marketing of Japanese agricultural, forestry, fishery and food products in overseas markets.

Question 22. What measures have been taken to promote the exports of Japanese agricultural exports since the establishment of the Japan Food Product Overseas Promotion Center? How effective have these measures been?

RESPONSE The outline of Japan Food Product Overseas Promotion Center (JFOODO)is available at: https://www.jetro.go.jp/en/jfoodo/

As various other factors are relevant, it is not possible to see the effect exclusively from those measures. It may be the useful fact, however, that the total value of exports of Japanese agricultural, forestry and fisheries products and foods reached JPY 912.1 billion in 2019.

Page 132，Para 4.23 According to its most recent notification on imports under tariff quotas (for FY2017/18) to the WTO Committee on Agriculture, Japan applies 18 tariff rate quotas (TRQs) covering 101 tariff lines at the HS six-digit level. Fill rates varied considerably from one quota to another, ranging from 23.4% to 305.6% (Table 4.6). The authorities indicated that low fill rates for some TRQ products were mainly to decrease domestic demand.

Question 23. We note that the fill rates of TRQs of some varieties were low, e.g. 38.4% for skimmed milk (for other purposes), and 25.5% for barley and its processed products. Please explain the reason and provide the domestic market prices of products with low fill rates of TRQs.

RESPONSE The reason of low fill rate is due to the decrease of domestic demand as described in the Secretariat report. Regarding barley, the fill rate appears low because the import from Australia is excluded from the notification, which is subject to Japan-Australia Economic Partnership Agreement, as is mentioned in the footnote of Japan's MA2 notification and several previous COA meetings. The domestic market price of the products in question can be found in Japan's state trading notification.

Page 134，Para 4.25 A simultaneous buy and sell (SBS) system for rice and wheat remains in place. Its purpose is to meet specific needs, such as imports of small quantities of rice (maximum 100,000 tonnes) and wheat. Under this system, an importer and a domestic user make a joint bid to the MAFF, submitting the government purchase price from the importer and the government sale price on the domestic Japanese market. The MAFF collects the difference in the prices. Since the previous Review, there have been no changes in SBS system. The volume of imports for both products fluctuated (Table 4.8). The "ordinary tender system" is used for large-quantity imports.

Question 24. Why is the SBS limited to wheat and rice trading?

RESPONSE These products are imported under the state trading, to which the SBS system is applied, within the access commitments as a result of the GATT UR agreement.

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25. The purpose of the SBS system is to meet specific needs. In addition to imports of small quantities of wheat and rice mentioned in the report, what are the other specific needs?

RESPONSE There are "specific needs" for particular purposes or varieties such as Jasmine rice and durum wheat.

26. How are the transaction prices of rice and wheat in the SBS system determined? Do they comply with the market operation law?

RESPONSE Under the SBS bidding system, importers and domestic users jointly bit to imports specific wheat and rice at specified prices. Government of Japan (or MAFF) will choose the bid with the largest spread in prices of the purchase price and selling price. This goes until the planned contract amounts are filled.

27. Which types of agricultural products are traded through the "ordinary tender system"? Why are large-quantity imports traded through the "ordinary tender system" instead of the SBS system? What are the differences between these two systems?

RESPONSE While the MAFF conducts large-quantity imports for major varieties based on the domestic demand with the ordinary tender system, small-quantity imports as well as those for special needs are conducted with the SBS system, in which varieties are determined by bidders.

Page 142，Para 4.54 Coinciding with the entry into force of the CPTPP in 2018, Japan increased support for domestic pork producers by expanding the Hog Growers Business Stabilization Measure (also known as Marukin). The Marukin payment system for pork meat covers 90% of the cost gap. Pork producers pay 25% of the grant amount from the reserve fund (down from 50% prior to the expansion of the system).

Question 28. In order to deal with the impact of the CPTPP on agriculture, has Japan adopted similar measures upon other agricultural products (such as beef and rice, etc.)?

RESPONSE The similar measure (covers 90% of the cost gap) was adopted to beef under the Beef Livestock Stabilization Program before the time of the entry into force of TPP11.

Page 17，Para 24 The air transport regime remains basically unchanged, except for the concession process of airports which was accelerated. Japan signed several air services agreements, liberalizing additional frequencies and capacities, during the review period. Regarding maritime transport, the ports concession process was also accelerated, and support for the Japanese merchant fleet was prolonged and extended. Japan imposes no restrictions on foreign carriers, except for access to the flag and cabotage. The port sector remains open to foreign investment.

Question 29. In terms of Japan's civil aviation special development fund, please brief on the method and standard for collection, and the scope of support.

RESPONSE It is unable to answer the question because the term of "Japan's civil aviation special development fund" described by China is not clarified.

30. Please brief on Japan's relevant tax incentives for airlines and airports.

RESPONSE Japan has no tax incentives to attract new airline or airport services.

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"value design society" to be realized in the future, where a variety of values that go beyond economic value are subsumed, where various individualities fully demonstrate multifaceted abilities, make good use of Japanese characteristics, make new values, and gain empathy of the world. Japan will actively and creatively design the concrete systems to achieve the above-mentioned society.

Question 31. How is the vision elaborated on?

RESPONSE In "The Intellectual Property Strategy Vision", it is described as follows. The following shapes of society which embraces a mechanism for intellectual assets will be illuminated as the future vision of Japan. The first shape of society is one where people who are edgy or assuming challenges (eccentric people) and have diverse abilities are born in Japan and also gather from around the world. The second shape of society is one where the time and place for individuals to exercise their multiple abilities or realize their multiple ideas are dispersed according to their respective needs and such abilities and ideas are combined with those of others, thereby enabling exercise of abilities and realization of ideas. The third shape of society is one which can actively accept foreign supporters and"fans"who feel empathy on the characteristics of the society or culture of Japan or any of the elements in its future direction. For details, refer to the following URL. https://www.kantei.go.jp/jp/singi/titeki2/kettei/chizai_vision_e.pdf.

Page 16, Para 3.7 On 19 June 2019, the Antimonopoly Act (AMA) Amendment Bill was approved in the 198th ordinary session of the Diet, and the enacted act was promulgated on 26 June 2019. The purpose of the amended act is to deter "unreasonable restraint of trade", etc. effectively, invigorate the economy, and enhance consumer interests by fair and free competition, through increasing incentives for enterprises to cooperate in the Japan Fair Trade Commission (JFTC)'s investigation and imposing an appropriate amount of surcharges according to the nature and extent of the violation. The enacted act shall come into effect on the date specified in the Cabinet Order within one year and six months from 26 June 2019.

Question 32. Please brief on the application scope of the amendment (government monopoly or private monopoly) and the nature of the JFTC.

RESPONSE The outlines of the amendment in 19 June 2019, are as follows: (1) Amendment of leniency program − Introducing a system which allows the JFTC to reduce the amount of surcharges when enterprises submit information and documents that contribute to the fact finding of the case, in addition to the reduction according to the order of application, − Abolishing the current limit on the number of applicants in the leniency programme (2) Revision of the calculation methods − Addition of the basis of calculation of surcharges, and extension of the calculation term, etc. (3) Revision of Penal Provisions − - Raising the limit of the amount of criminal fine for juridical person charged with the offense of obstructing investigation

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CANADA FOLLOW-UP QUESTIONS

1. In Question 5, Canada requested an explanation from Japan regarding how the funds raised through the Forest Environment Tax will be allocated. Canada also asked if revenue from this tax will be used to support Japan's forest industry to promote the production of domestic forest products. Japan replied as follows: The Forest Environment Transfer Tax will be allocated to municipalities and prefectures according to objective standards (the total area of private planted forests, number of forestry workers, and population). The Forest Environment Transfer Tax does not aim at promoting the production of domestic forest products. Instead, the tax aims at maintaining and enhancing the multiple functions of forests for the public benefits that result in achieving the greenhouse gas emissions reduction target under the framework of the Paris Agreement and protecting citizens from disasters.

Question1 Could Japan please provide details regarding allocations to its forestry industry of revenues generated by this tax? For instance, what are the "multiple functions of forests" that the tax promotes and to what extent are they funded through the revenue that it generates?

RESPONSE The Forest Environment Transfer Tax is not allocated to forestry industry directly. It is allocated to municipalities and prefectures for the purpose of maintaining and enhancing the multiple functions of forests for the public benefits. The "multiple functions of forest for the public benefits" include the contribution by well-managed forests to the greenhouse gas emissions reduction target under the framework of the Paris Agreement and to disaster prevention.

2. In Question 19, Canada asked whether, "Japan [is] considering expanding the scope of its JAS graded lumber promotion so that it applies to other lumber suitable for use in construction in Japan? If not, please provide reasons for this position." Japan replied as follows: "MAFF has made efforts to promote utilization of JAS graded lumber in construction in Japan, non-JAS graded lumber is not included in these efforts".

Question2 Will Japan consider expanding this program so that it applies to lumber that, like JAS graded lumber, conforms with building laws and regulations and is suitable for use in construction in Japan? If not, what is the basis for the exclusion of such lumber from the program?

RESPONSE As Canada mentioned, certain lumber that is not JAS graded can be used as building materials under the Building Standard Laws and related regulations in Japan. Ministry of Agriculture, Forestry and Fisheries (MAFF) Japan is promoting the use of JAS graded lumber in order to disseminate JAS as the national fundamental standard. JAS system is open to any country.

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UNITED STATES FOLLOW-UP QUESTIONS Questions based on the Secretariat Report (WT/TPR/S/397) 1 ECONOMIC ENVIRONMENT 1.2 Recent Economic Developments Tax reform Page 23, paragraph 1.12: The Secretariat report references the "creation of Forest Environment Tax (provisional) and Forest Environment Transfer Tax (provisional)."

1. Please provide details on how the revenue generated from these taxes will be used.

2. Will this tax revenue be used to support Japan's forestry industry and Japan's goal of increasing the domestic wood supply from 30 million cubic meters to 40 million cubic meters by 2025? RESPONSE 1. The ways of using the revenue are prescribed by the "Act on Forest Environment Tax and Forest Environment Transfer Tax". Under this Act, municipalities shall expense the Tax for undertaking and promoting forest management, and prefectures shall expense it mainly for supporting municipalities' activities. 2. The Forest Environment Transfer Tax does not aim at increasing the domestic wood supply. Instead, the tax aims at maintaining and enhancing the multiple functions of forests for the public benefits that result in achieving the greenhouse gas emissions reduction target under the framework of the Paris Agreement and protecting citizens from disasters. U.S. Follow-Up to Questions 1-2 • Question 1: Will timber extraction from Japan's forests be among "municipalities' activities" supported by the "Act on Forest Environment Tax and Forest Environment Transfer Tax"? RESPONSE The Forest Environment Transfer Tax is solely used for the promotion of forest management which aims at maintaining and enhancing the multiple functions of forests for the public benefits. It is not intended to be used for timber extraction for commercial benefits. • Question 2: If so, will the timber and woody biomass extracted under the programme be distributed in the market? RESPONSE See the answer to Question 1. • Question 3: How will Japan monitor and distinguish between non-commercial outcomes of the programme (e.g., greenhouse gas emission reduction, water storage, biodiversity, prevention of soil erosion, etc.) and commercial benefits (e.g., timber sales)?" RESPONSE Japan will evaluate the outcome of this program from the perspective of maintaining and enhancing multiple functions of forests for the public benefits. As answered in Q1, Japan has no intention to monitor the commercial benefits, since such activities are not conducted through the program.

3. TRADE POLICIES AND PRACTICES BY MEASURE 3.2 Measures Directly Affecting Exports 3.2.4 Export support and promotion Page 73, paragraph 3.69: According to the Secretariat Report, Japan has no export subsidy programmes in place; over the review period, it notified the WTO Committee on Agriculture that it had not provided export subsidies for the fiscal years 2016 and 2017. In the WTO Committee on Agriculture the United States has asked questions regarding Japan's program called "Subsidies for the Creation of Production Areas". Specifically, the United States has asked about eligibility criteria for receiving payments. Japan responded generally in AGIMS91158 that "The eligibility of products and the levels of payment to farmers are determined by the criteria which local agricultural councils decide, including those in the prefectures cited in the question. Those criteria are established based on their individual situations, regardless of the unit amounts of funding allocation set by the national government, and payment is made according to such criteria." WT/TPR/M/397/Add.1

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8. Please provide specific criteria used by major rice producing prefectures, such as Niigata, Hokkaido, and Akita. RESPONSE A variety of criteria are set forth under "Grants for Production Areas". Payments are made to farmers in accordance with the eligibility of products and the levels of payments which local agricultural councils establish on their own initiative in their respective plans with other requirements reflecting diverse agricultural situations in the major rice producing prefectures cited in the questions. U.S. Follow-Up to Question 8 Through the Grants for Production Areas, prefectural governments and local agricultural councils provide support payments to farmers who produce rice for exports, and this rice is exported under the Guidelines for Promotion of Rice Production and Sales in Accordance with Demand. These Guidelines require that Rice for Processing and Rice for New Demand are produced, distributed, and used for intended purposes by requiring producers to submit sales contracts with buyers that indicate actual shipment and/or sales volume. • Question 4: Is our understanding correct? If not, please clarify. RESPONSE The Grant for Production Areas is a program which aims to support diverse local initiatives for agricultural development including the production of crops other than rice. Local agricultural councils determine specific criteria of payments to farmers under the program. Rice for new demand consists of rice for feed, rice for flour, rice plant for whole crop silage, early harvested rice plant for feed, rice plant for straw and rice for new market development, and does not distinguish whether it is for domestic or overseas markets. The guideline mentioned in the question requires the submission of a sales contract in order to confirm that it is for non-table rice use, such as processing use and new demand. 9. For what duration is this program authorized and upon expiration, will it be eligible for renewal or automatically terminated? RESPONSE MAFF's budget, including the expenditure on the program "Grants for the Production Area," is considered in the annual budget compilation process. The draft budget for FY2020 includes the allocation to the program and is currently under parliamentary discussions for approval. U.S. Follow-Up to Question 9 • Question 5: What is the total amount allocated through MAFF's Grants for Production Areas by prefectural governments and local agricultural councils to growers of rice for exports? • Question 6: Do prefectural governments report the allocation of the Grants to MAFF? RESPONSE for Q.5 and Q.6 As described in the answer to Q.4, rice for new demand consists of rice for feed, rice for flour, rice plant for whole crop silage, early harvested rice plant for feed, rice plant for straw and rice for new market development and does not distinguish whether it is for domestic or overseas markets. Prefectural governments report to the MAFF the total amount of funding allocated to each local agricultural council. 3.3. Measures Directly Affecting Production and Trade 3.3.2.2 Standards Page 83, paragraph 3.109: According to the Secretariat Report, "For non-compulsory JASs, a 30- day public comment period is provided for." 14. Does Japan offer an English translation of proposed non-compulsory JASs during the public comment period? RESPONSE For non-compulsory JAS, only the Japanese version is available. U.S. Follow-Up to Question 14 • Question 7: Does Japan provide an English language translation for all compulsory JAS? WT/TPR/M/397/Add.1

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RESPONSE The provisional English translations of the compulsory JASs are available at: https://www.maff.go.jp/e/policies/standard/specific/organic_JAS.html#Organic Standards. • Question 8: How does Japan define "compulsory" and "non-compulsory" JASs? RESPONSE JASs for organic food products are compulsory because the use of "organic" labelling requires the JAS certification and logo mark. The compulsory JASs have been defined by the Order for Enforcement of the Act on Japanese Agricultural Standards (Article 17). 3.3.2.5 Labelling requirements Page 85, paragraph 3.117: The Secretariat Report recognizes concerns that Japan's classification of chemical substances as pesticides or food additives based on the time of application "places more burden on trading partners than on Japanese producers." Yet, Japan continues to classify post- harvest fungicides (PHF) as food additives that require labeling. The same chemical applied pre- harvest is not required to carry such labeling 15. Please explain the scientific basis for Japan's designation of PHF as food additives? RESPONSE The reason why so-called post-harvest, which is used for the purpose of preventing mold on harvested crops, is designated as a food additive is based on the Japanese legal system. The Food Sanitation Act stipulates that food additives are "substances which are used by being added, mixed or infiltrated into food or by other methods in the process of producing food or for the purpose of processing or preserving food." U.S. Follow-Up to Question 15 • Question 9: As both pre-harvest and post-harvest fungicides are added for the purpose of preserving food by killing fungi, what is the scientific basis (not legal basis) for classifying post- harvest, but not pre-harvest, fungicides as food additives? RESPONSE Post-harvest fungicides are scientifically the same as pre-harvest fungicides in terms of fungicidal effects. In Japan, however, the Acts that apply to fungicides differ depending on whether they are used at the pre-harvest or post-harvest stage. As a result, post-harvest fungicides are classified as food additives. Japan implements a streamlined approval process for fungicides that may be applied to both pre-harvest and post-harvest stage by utilizing a unified application and deliberation process for pesticides and food additives. • Question 10: What is the scientific (not legal) basis for requiring products treated with a post- harvest fungicide to be labeled at the point of sale with a statement indicating a list of chemicals applied? RESPONSE As mentioned above, it is understood that post-harvest fungicides are scientifically the same as pre- harvest fungicides in terms of fungicidal effects. In Japan, however, food additives specified by the Ordinance for Enforcement of the Food Sanitation Act are obliged to be labeled as information for facilitating consumers' choice. 3.3.3.1 SPS measures Page 87, paragraph 3.124: According to the Secretariat Report, Japan has started reviewing the portion of commodities to which MRLs apply, with a view to harmonizing them with Codex standards. 16. Can Japan provide examples of portions of commodities to which MRLs apply that are harmonized to Codex standards? RESPONSE For example, MRLs of some agricultural products such as Satsuma mandarin were set only for the pulp excluding peels. Japan has begun to establish MRLs for these agricultural products for whole commodities, including peels, for each pesticide. U.S. Follow-Up to Question 16: Currently, Japan's harmonization to Codex standards for a portion of commodities is limited to some selected commodities, such as Satsuma mandarin in Japan's example above. • Question 11: Does Japan plan to expand the list of target commodities? If so, when does Japan WT/TPR/M/397/Add.1

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anticipate completing the harmonization? RESPONSE Japan is intending to expand harmonization to Codex standard for other commodities in the future, but does not have any specific timeline at the moment. Japan harmonized a portion of some commodities such as satsuma mandarin from the MRLs set in 2019. Now we are examining how much burden may be added to the laboratories by this change. • Question 12: Please provide the expected timeline and proposed list of target commodities. RESPONSE Japan is intending to expand harmonization to Codex standard for other commodities in the future, but does not have any specific timeline at the moment. Japan harmonized a portion of some commodities such as satsuma mandarin from the MRLs set in 2019. Now we are examining how much burden may be added to the laboratories by this change. Page 87, paragraph 3.124: The Secretariat Report notes that risk assessments undertaken by the Food Safety Commission of Japan (FSCJ) are available on its website. However, most risk assessments are only available in Japanese. Also, the Secretariat Report notes that since the last TPR, Japan has allowed beef imports from Austria and the United Kingdom, and lifted age restrictions to beef imported from Canada, Ireland, and the United States. However, the import requirements for U.S. beef are still not aligned with the OIE recommendation that the United States is negligible risk for BSE. 17. Will the FSCJ conduct another risk assessment to consider the removal of remaining BSE- related restrictions on U.S. beef (including those related to specified risk materials). JRESPONSE MHLW has already requested risk assessment on review of the range of specific risk materials for domestic beef to FSCJ. For imported beef including from the U.S., MHLW will consider it based on the result of the risk assessment for domestic beef. U.S. Follow-Up to Question 17 • Question 13: Has Japan considered completing an import risk assessment simultaneously with the domestic risk assessment? RESPONSE Yes. Japan has considered proceeding the risk assessments for imported and domestic beef together as much as possible by conducting consultations for risk assessments of those two categories of beef for example.

• Question 14: Alternatively, will the domestic decision immediately apply to imports without the need for a separate assessment? RESPONSE Regarding control measures for BSE, the MHLW requests risk assessment to FSCJ, taking into account the status of risk management in Japan for domestic beef, and the status of risk management in exporting countries for imported beef. Then the MHLW reviews the domestic control measures and import requirements based on the results of the assessments by FSCJ. • Question 15: Regardless of the FSCJ's domestic risk assessment conclusion, will the FSCJ risk assessment of imports be conducted consistent with the relevant OIE risk classification for BSE in the country of question? RESPONSE When the FSC conducts the risk assessment of imports, it will consider the relevant OIE risk classification on BSE for the risk assessment of the country concerned. 3.3.3.2.2 The Food Sanitation Act Page 88, Paragraph 3.128: Japan notes that amendments were made to the Food Sanitation Act (the Act) during the review period, and that new provisions directly related to imports and exports include: (i) tightened sanitary regulations for utensils, containers and packaging for food and food additives. 18. Will Japan provide a transition period for these tightened sanitary regulations? WT/TPR/M/397/Add.1

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RESPONSE During the period, apparatus, containers and packaging made of synthetic resins which are considered to be the same as those marketed in Japan at the point of the effective date, are allowed to be sold, produced or imported even if the substances used in those apparatus, containers and packaging are not listed in the Positive List. U.S. Follow-Up to Question 18 Question 16: Can substances be added to the Positive List during the 5-year transition period? RESPONSE The Positive List (PL) for food utensils, containers, and packaging (UCP) is specified as Appended Table 1 of the Specifications and Standards for Foods, Food Additives, Etc. pursuant to Article 18 of the Food Sanitation Act. Public Notice of the MHLW No. 196 (April 28, 2020) specifies transitional measures for the PL System. The measures allow, during five years from the enforcement date (until the end of May 2025), the substances being used as raw material of UCP ,which are regarded as being listed in Appended Table 1 before the enforcement date in Japan (substances subject to the transitional measures). For substances subject to the transitional measures, to add a substance to Appended Table 1 or revise existing specifications for a substance in the same Table, please make a request and provide required information in writing to the Food Safety Standards and Evaluation Division, Pharmaceutical Safety and Environmental Health Bureau, MHLW. The MHLW will not accept the information if it fails to demonstrate that the substance has been used since before the enforcement date. Please refer to the URL below for the details of the provision of the information. An English translation will be posted later. The procedures to revise the Positive List (Appended Table 1) https://www.mhlw.go.jp/stf/newpage_11487.html In case that Appended Table 1 were revised and substances subject to the transitional measures were not contained in revised Appended Table 1 after five years, UCP would not be allowed to be manufactured using such substances or UCP made of synthetic resins containing such substances would not be allowed to be imported into Japan. Page 88, paragraph 3.129: The Secretariat Report notes that when violations of MRL standards are found in imported foods, Japan clarifies the increased surveillance measures for the targeted food and the requirements for lifting them. In doing so, it takes into consideration the test results and the status of control for pesticide residues in the exporting country; measures are based on the relevant Codex guidelines and try to minimize the burden on the exporting country. 20. Can Japan explain how any increased inspection and testing measures are risk- based? RESPONSE As for the reinforcement of inspections of residual agricultural chemicals, in order to grasp the level of the use of agricultural chemicals, etc. by the exporting country, the MHLW will carry out monitoring inspections on a higher proportion for the imported food and inspection item of concern so that violations of the Food Sanitation Act may be detected with a certain level of reliability from statistical viewpoint. The enhanced monitoring inspection will be lifted when the MHLW determines that there is no longer a fear that the food violating the Act will be exported into Japan. Also, in principle, when more than one violations have been detected with regard to residual agricultural chemicals as a result of the monitoring inspection of the imported food manufactured/processed by the same manufacturer/processor from the same exporting country, all or part of the imported food in question will be subjected to an inspection order, taking into account the regulations and sanitary controls being implemented in the exporting country, the historical compliance record and other factors. The inspection order will be lifted when the MHLW determines that there is no longer a fear that the food violating the Act will be exported into Japan. U.S. Follow-Up to Question 20 • Question 17: Would Japan explain how the following measures are risk-based: 1) increasing inspection rate to 30% for all imports of a product from a country when there is one violation of an MRL, and 2) applying 100 percent hold and test on all imports of a product from a country when there are two violations of an MRL by two different exporters? WT/TPR/M/397/Add.1

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RESPONSE As for the reinforcement of inspections of residual agricultural chemicals, the MHLW is carrying out more monitoring inspections in order to grasp the level of the use of and the control over agricultural chemicals by the exporting country. When the MHLW deems it necessary in order to prevent any food sanitation hazards that may arise out of an imported food with a high risk of violation of the Food Sanitation Act, the MHLW will order importers to have the imported food inspected. • Question 18: How does Japan take into account the historical compliance record of the exporting country? RESPONSE The MHLW considers that a compliance record of the exporting country is one of the measures to verify the control system for residual agricultural chemicals in the exporting country. 3.3.7 Intellectual property rights (IPRs) 3.3.7.9 Geographical indications Page 119, paragraph 3.234: According to the Secretariat Report, the 2018 amendments to the "2014 Act on Protection of the Names of Specific Agricultural, Forestry and Fishery Products and Foodstuffs" were enacted in response to the EU-Japan EPA and provide for a transition period, during which prior good faith use of an identical or similar GI may be continued for up to seven years following the registration or designation of a GI. The Secretariat Report also notes that the amendments provide for the co-existence of trademarks registered in good faith and later in time GIs. 42. What will happen to those goods which have been using a name in good faith that is identical or similar to a later GI? Will these products have to be renamed/relabeled or will they be pulled from the market? Please provide clarification on the policy reason for denying the continued use of a name that has been used in good faith and will now be phased out after seven years. RESPONSE A name which is identical or similar to registered GI should be removed or erased seven years after the registration or designation of that GI even if that name has been used in good faith. This restriction is necessary to maintain high-level GI protection, through prevention of free-ride on GI including prior uses. U.S. Follow-Up to Question 42: Japan has responded to Question 42 noting that a term that is identical or similar to a registered GI should be removed or erased seven years after the GI registration, even where the prior term was used in good faith. Japan has further noted in its response to Question 43 that when analyzing whether a term seeking protection as GI could be generic, or components of it could be generic, that Japan will consider "whether consumers recognize the applied names are used as generic term or not, taking into account the information in Japanese dictionaries, newspapers and websites, etc." • Question 19: Can Japan clarify the policy reasons for removing a term identical or similar to a registered GI from use in the marketplace, even when the term has been used in good faith? If used in good faith previously, how can a term "free-ride" on the GI, as Japan has alleged? RESPONSE It is important to ensure the validity of GIs thorough the high-level GI protection in order for consumer protection. To avoid consumer confusion, Japanese GI act does not allow the use of a term identical or similar to the registered GI to any products which do not meet the requirements in the specifications after seven years from GI registration. The transitional period of seven years is provided for preparing the change of the name so as to protect prior users in good faith at maximum level. • Question 20: Can Japan provide an explanation as to why prior use, when in good faith, is not sufficient to deny a term protection as a GI? RESPONSE It is important to stipulate the rule of the prior use of a term identical or similar to the GI for the high-level GI protection. The use of identical or similar name to GI on products which do not meet the requirements in the specifications causes consumer confusion, and therefore prior use is restricted. WT/TPR/M/397/Add.1

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43. Will Japan consider evidence that a particular term is considered generic by the consumer as part of its analysis in determining whether to protect a termお9 as a GI? If so, how does this analysis reconcile with the phasing out after seven years? RESPONSE In examining GI registration and designation, we consider whether consumers recognize the applied names are used as generic term or not, taking into account the information in Japanese dictionaries, newspapers and websites, etc. U.S. Follow-Up to Question 43 • Question 21: Can Japan confirm that it will deny a term protection as a GI where there is evidence that the Japanese public perceives the name to be a common name, as recognized in Japan? RESPONSE Correct. The determination whether a term is a common name or not is based on how the term is publicly recognized in Japan. This is in accordance with Article 24.6 of TRIPS, which stipulates that "Nothing in this Section shall require a Member to apply its provision in respect of a geographical indication of any other Member with respect to goods or services for which the relevant indication is identical with the term customary in common language as the common name for such goods or services in the territory of that Member." • Question 22: Besides the evidence it has indicated such as "Japanese dictionaries, newspapers, websites, etc.", what other types of evidence of the term being used as a common name will Japan consider? For example, will Japan consider whether the term is used in relevant international standards to refer to a type or class of goods, or whether the term is used in relevant international standards to refer to a production method? RESPONSE In case that an international standard is applied in Japan, and consequently the name defined in the standard is widely used in Japan, Japan takes such facts into account. The determination whether a term is a common name or not is based on how the term is publicly recognized in Japan thorough a comprehensive consideration on any relevant facts including the above. • Question 23: Will Japan consider other relevant information of genericness from outside its territory? RESPONSE As mentioned in Question 21 and Question 22, Japan considers public recognitions in the country.

4. TRADE POLICIES BY SECTOR 4.1.1 Agriculture, Forestry, and Fisheries Page 125, paragraph 4.1: The Secretariat Report's section on "Agriculture, Forestry, and Fisheries" does not include a "Forestry" section. 49. The Plywood, Lumber, and Glulam International Competitiveness Enhancement Measure was established in the 2018 supplemental budget. Please provide information on how the allocated budget was spent and how it affected Japan's wood production? RESPONSE The budget for this measure was spent for some programs as below: - provide guidance and support for local communities to coordinate and integrate forest management areas/groups - provide guidance and support for wood processing mills to improve productivities and to shift their products to more value-added ones - conduct the surveys on Japanese wood-related business entities behaviors under the Clean Wood Act, Act on Promotion of Use and Distribution of Legally-Harvested Wood and Wood Products. With regard to the second question, it is difficult to evaluate how the measure has affected to Japan's wood production so far. WT/TPR/M/397/Add.1

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U.S. Follow-Up Question • Question 24: Within the 2018 and 2019 Plywood, Lumber, Glulam International Competitiveness Enhancement Measure, what proportion of the allocated budget do the three programmes above represent? RESPONSE The budget which is allocated for "the surveys on Japanese wood-related business entities behaviors under the Clean Wood Act" is approximately 60 million yen per year. The budget allocation of other two programs is not available, because prefectures have the authority to decide the allocation of specific amounts to each program within the fund provided from the Government. • Question 25: Japan's Forestry Agency has stated that the goal of this measure is to increase the domestic wood supply from 30 million cubic meters to 40 million cubic meters by 2025. In light of this goal and the constituent program to support improved productivity (per Japan's response above), how will Japan evaluate the impact of the "Plywood, Lumber, and Glulam International Competitiveness Enhancement Measure" on Japan's wood production? RESPONSE Since this goal is set to be achieved by 2025, the evaluation on the impact of this measure on Japan's wood production is difficult at the moment. 4.1.1.3 Institutional and legal framework 1.1. Page 129, paragraph 4.12: The Secretariat's Report states that MAFF is responsible for agricultural policy, including agricultural insurance. Japanese vegetable farmers can access multiple crop insurance programs, such as the Income Insurance Program, the Agricultural Mutual Aid, and Vegetable Price Stabilization Program. 51. How much overlap is there among beneficiaries of these programs? RESPONSE There is no overlap when a producer selects the Income Insurance Program as explained in the response to Q.50. There is no information available on the overlap between the Agricultural Mutual Aid and Vegetable Price Stabilization Program. U.S. Follow-Up to Question 51 • Question 26: In light of Japan's lack of information about the potential recipient overlap between the Agricultural Mutual Aid and Vegetable Price Stabilization Program, will such information be collected? RESPONSE The Agricultural Mutual Aid basically does not cover vegetables. As is mentioned in the answer to US's initial question No.50, these programs differ in objectives and compensation coverage and there is no plan for collection of the information to compare beneficiaries for each programmes. The effectiveness of the programs will be confirmed when their objectives are achieved. • Question 27: How will Japan evaluate the effectiveness of these programs? RESPONSE The Agricultural Mutual Aid basically does not cover vegetables. As is mentioned in the answer to US's initial question No.50, these programs differ in objectives and compensation coverage and there is no plan for collection of the information to compare beneficiaries for each programmes. The effectiveness of the programs will be confirmed when their objectives are achieved. 4.1.2.4 International agreements Page 147, paragraph 4.82: Japan announced its withdrawal from IWC. 75. How many whales does Japan intend to harvest each year? What species and from where? RESPONSE Catch quotas are set within the catch limits calculated in line with the scientific method developed and adopted by IWC. Catch quotas of each species for the commercial whaling are as follows: WT/TPR/M/397/Add.1

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- Year 2020 initial quota (from 1 January to 31 December) are 120 for Minke whale, 150 for Bryde's whale and 25 for Sei whale. The whaling operations are conducted within Japan's territorial sea and its exclusive economic zone. U.S. Follow-Up to Question 75 • Question 28: Is the Government of Japan providing subsidies support to whaling operations that are conducted within Japan's territorial sea and its exclusive economic zone? If so, please describe how the support is allocated and implemented. RESPONSE In consideration of 30-year absence from commercial whaling in Japan, during which only special permit whaling for scientific research were conducted, the Government of Japan currently allocates its expenditures to whaling companies, which conduct trial operations including searching whaling grounds, and for the improvement of hunting and processing skills of large whales. 4.1.2.5 Border and domestic support measures Page 148, paragraph 4.86; table 4.15: According to the Secretariat's report" Japan notified programs which, in its view, may not constitute subsidies under Article 1 of the SCM Agreement or may not be "specific" under Article 2 of the same Agreement." 80. Are there subsidies tied to, or contingent upon distant water fishing? Overall, how much of the subsidies go to building fleet capacity in the Japanese fishing fleet? RESPONSE The answer to the former question depends on the legal interpretation of "tied to, or contingent upon". With regard to the latter question, Japan has government support programs related to fishing vessels, but they are planned and implemented as a package of comprehensive measures of fisheries policy. Because the total amount of "subsidies go to building fleet capacity" depends on how such term is precisely defined and calculated accordingly, we cannot provide the definitive answer. U.S. Follow-Up to Question 80: We regret any confusion provoked by this question. We hope the following more specific questions can help Japan produce the salient information. • Question 29: Please describe how Japan's fisheries subsidies for fishing in Korean and Russian EEZ's currently are allocated and implemented. RESPONSE Regarding Japan's fishing access to Korean EEZ, while we have bilateral mutual fisheries access agreement with Korea, as shown para. 4.78 of Secretariat Report (WT/TPR/S/397), currently there is no fishing operations by Japanese fishing vessels in Korean EEZ. This is because the parties did not reach an agreement on operational conditions for mutual access to each party's EEZ. In this regard, while it is possible that in near future the Japanese fishing vessels with some support by the Government of Japan may enter into Korean EEZ for fishing if mutual access is resumed, there is no subsidy on the condition recipients to operate fishing in Korean EEZ. Regarding Japan's fishing access to Russian EEZ, for example, since the Russian government banned drift net fishing in Russian EEZ in 2016, the Government of Japan has supported research and trial for alternative fishing gears to drift net in order to mitigate the impacts by that decision on Japanese fishing vessels concerned. • Question 30: Please describe the extent to which Japan's fisheries subsidies support building, improving, or repairing vessels. RESPONSE As shown fisheries subsidies notification submitted by Japan for 2017 (G/SCM/N/343/JPN), as a part of comprehensive measures for Japan's fisheries policies, the Government of Japan extended a variety of supports to its fishermen, which includes turnover loans to fishermen in distress and promotion of structural reform of fisheries sectors. Regarding the extent of support for vessels among a variety of support items, the exact figure is not available because such expenses have not been extracted and aggregated item by item.

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4.4 Services 4.4.6 Distribution services with a specific focus on e–commerce Page 187, paragraph 4.271: 84. Does Japan consider the 7-Eleven company to be "foreign owned"? RESPONSE Japan does not consider 7-Eleven, Inc. as foreign-owned. Seven & i Holdings Co., Ltd. owns 100% of equity of 7-Eleven, Inc. Please see page 3 of financial statements of Seven & i Holdings Co., Ltd. https://www.7andi.com/en/ir/file/library/co/pdf/2019_01.pdf. U.S. Follow-Up to Question 84: We thank Japan for the clarifying response.

85. How does Japan consider parent companies in determining whether companies are foreign or domestically owned? RESPONSE Since this question is too vague for Japan to provide an answer, Japan requests to make it more specific. What kinds of regulations and what regulatory processes does it discuss in relation to the ownership of a company? U.S. Follow-Up to Question 85: The question was asked in the event that Japan affirmed the Secretariat report's statement that 7-Eleven, Inc was foreign owned. However, given Japan's clarifying response, no follow-up is required. Additional Question based on the Secretariat Report (WT/TPR/S/397) 1.2.4.2 Privatization Page 23, paragraph 1.14: Section 1.2.4.2 notes the reduction of government shareholding in Japan Post Holdings during the review period. 1. When does Japan expect to conduct the third sale of shares for Japan Post Holdings? RESPONSE As for the timelines for the selling of the shares of Japan Post Holdings (JPH), please refer to Paragraph 4.161 in the Trade Policy Review Report by the Secretariat.

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