Japan: The Legal 500 Country Comparative Guides 2023- Japan: International Trade

1. What has been your jurisdiction's historical level of interaction with the WTO (e.g. membership date for the GATT/WTO, contribution to initiatives, hosting of Ministerials, trade policy reviews)?

Japan had been a member of GATT since September 10, 1955 and has been a WTO member since January 1, 1995.

The 7th multilateral trade negotiations from 1973 to 1979 were held in Tokyo, Japan. In the Tokyo round, the participating countries discussed the reduction of tariffs. Also, they reached an agreement regarding non-tariff issues, which interprets and clarifies existing GATT rules.

These days, Japan is one of the co-conveners of the WTO Join Statement Initiative on E-commerce. The members expect to reach a substantial conclusion of the agreement by the end of 2023 and Japan has been playing a major role in this negotiation process. Also, Japan is actively participating in negotiations regarding the WTO reforms including a dispute settlement issue.

The trade policy review is conducted every three years, and the 15th review was conducted in March 2023. In this review, Japan's contribution to the WTO, such as leadership in the E-commerce negotiations and being a first contributor to the fund under the Agreement on Fisheries Subsidies, was highly appreciated by other member countries. Also, member countries, especially developing countries, emphasized the importance of Japan's efforts in the form of development assistance, such as assistance for trade, generalized system of preferences to LDC, and assistance by JICA.

2. Are there any WTO agreements to which your jurisdiction is not party (e.g. Government Procurement Agreement)? Is your jurisdiction seeking to accede to these agreements?

There are no WTO agreements to which Japan is not a party. Japan is a member state both to the Agreement on Governmental Procurement and the Agreement on Trade in Civil aircraft of Annex 4.

3. Is your jurisdiction participating in any ongoing WTO negotiations (e.g. E-Commerce Joint Initiative) and what has been its role?

Japan has led the process of crafting high level rules including the liberalization of data flow as one of the co-conveners of the WTO Join Statement Initiative on E-commerce ("Data Free Flow with Trust (DFFT)"). DFFT was proposed by ex-Prime minister Shinzo Abe at the annual meeting in Davos. In Osaka G20 in 2021, the "Osaka Track", a process to promote international policy discussions for international rule-making on E-commerce and data flow, was declared. In addition, at the G7 Digital and Tech Ministers' Meeting in April 2023, they confirmed that they would advance international policy discussions to utilize the full potential of cross-border data flows under the banner of DFFT.

On January 20, 2023, the co-convenors of the JSI released a ministerial statement affirming their commitment to achieve a substantial conclusion by the end of 2023.

As for the Agreement on Fisheries Subsidies, Japan became the first contributor to the fund established under the agreement.

4. Has your jurisdiction engaged in the WTO dispute settlement system in the past 5 years? If so, in which disputes and in which capacity (as a party to a dispute or as a third party)?

Since January 2019, Japan has engaged in four dispute settlement procedures as a complainant (i.e., Korea — Sunset Review of Anti-Dumping Duties on Stainless Steel Bars (DS553), Korea — Measures Affecting Trade in Commercial Vessels (Japan) (DS571/594), India — Tariff Treatment on Certain Goods (DS584), China — Anti-Dumping measures on stainless steel products from Japan (DS601).)

In addition, Japan had engaged in a dispute settlement procedure as a respondent. The case is Japan — Measures Related to the Exportation of Products and Technology to Korea (DS590), which Korea has withdrawn on March 23, 2023.

As for the current status and URL for each case, please see the table below:

5. Has your jurisdiction expressed any views on reform of the WTO, in particular, the dispute settlement system and the Appellate Body?

Regarding the reform of the dispute settlement system of WTO, Japan has submitted a joint proposal with the EU on "procedures for the lifting of countermeasures," for the "sequence (determining whether the losing state of a dispute has implemented the recommendations of the Dispute Settlement Body (DSB)", and for "imposing sanctions on the losing state of the winning state for failing to implement the recommendations."

Pursuant to the Appellate Body issue, Japan submitted with Australia and Chile in May 2019 a joint proposal including, for example, that "Members confirm that the Appellate Body shall (not review the panel's fact-finding, but shall) review issues of law", and "Members confirm that the Appellate Body shall not change the rights and obligations of member states."

Also, on March 10, the Japanese Cabinet approved Japan's participation in the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) and notified WTO of its intent to join the MPIA. Therefore, Japan is now one of the parties to the MPIA.

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Originally published by The Legal 500.

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