WTO Trade Policy Review: Japan

by Ulrika Lomas, Tax-News.com, Brussels

20 February 2009

The WTO has released a report on Japan's trade policy in advance of its trade policy review, and highlights the fact that trade liberalization continues, notwithstanding the global financial crisis.

Since its previous Trade Policy Review, Japan has introduced measures aimed at further liberalizing its trade and investment regimes. Japan has not introduced new trade measures to protect its market since the onset of the global financial crisis in September 2008. Indeed, it has subscribed to commitments taken at the highest political level in the context of the G-20, APEC and the summit meeting between Japan, China and Korea to refrain over the next 12 months from raising new barriers to trade and investment, imposing new export restrictions, or implementing WTO inconsistent measures to stimulate exports, according to a WTO Secretariat report on the trade policies and practices of Japan.

The authorities continue to promote structural reforms, including regulatory reforms and strengthening competition policy. Structural reforms could help reduce the cost of doing business and thereby increase Japan’s attractiveness to inward FDI. This should result in increased competition and productivity, the report notes.

The report also says that labour productivity lags behind that of other major industrialized countries and that Agriculture remains a sector relatively protected from foreign competition, and this acts as a drag on Japan’s growth. The report also states that Japan’s medium and long-term growth prospects will depend on its ability to strike a balance between monetary and fiscal policies in tandem with further structural reforms.

The WTO report, along with a policy statement by the Government of Japan, was the basis for the Trade Policy Review of Japan by the Trade Policy Review Body of the WTO on 18 and 20 February 2009.

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