RESTRICTED
WORLD TRADE G/SG/Q1/JPN/3
23September 1996
ORGANIZATION(96-3757)
Original: English Committee onSafeguards
NOTIFICATION OFLAWS AND REGULATIONS UNDER
ARTICLE 12.6OFTHE AGREEMENT
Replies ofJAPAN1toquestions posed bythe
EUROPEAN COMMUNITY2
Thefollowing communication, dated 11September 1996, hasbeenreceived fromthePermanent
Mission ofJapan.
_______________
1. Ingeneral
Q1.1 Mayanimport restriction beimposed onthebasis ofArticle 52oftheForeign Exchange and
Foreign Trade Control Lawwithout complying withthecriteria oftheWTO Safeguard Agreement?
A1.1 Import restrictions forasafeguard measure willbeimposed inaccordance with"Regulations
toGovern Emergency Measures tobeTaken inResponse toanIncrease intheImportation ofGoods"
which wasenacted incompliance withtheAgreement onSafeguards asthesecondary legislation of
Article 52ofthe"Foreign Exchange andForeign Trade Control Law".
Q1.2 What isthelegal status oftheWTO Safeguard Agreement under Japanese law? Mayits
provisions beinvoked byprivate parties innational courts toprevent theapplication ofdomestic rules
which arecontrary totheAgreement?
A1.2 Japan hasincorporated therequirements which areprovided forintheAgreement onSafeguards
intoitsdomestic legislation. Except fortheprovisions intheAgreement onSafeguards which regulate
theinternationalobligationsbetweenMemberStates,suchasnotificationstotheCommitteeonSafeguards
andprior consultations withMembers having substantial interest.
Japan,however,interpretsitsdomesticlegislationinaccordancewithprovisionsoftheAgreement
onSafeguards when noexplicit provisions existinthedomestic legislation.
Regarding thesecond question, asthisisthematter tobedecided byacourt, wecannot give
anexact answer.
Q1.3 TheJapanese legislation makes adistinction between twotypes ofsafeguard measures, i.e.
import quotas andtariffincreases, which aregoverned byadifferent setofrules(Regulations togovern
1G/SG/N/1/JPN/2 +Corr.1
2G/SG/W/89G/SG/Q1/JPN/3
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emergency measures tobetaken inresponse toanincrease intheimportation ofgoods; Customs Tariff
Law,Article 9).Canasafeguard procedure bebased onbothtypesofrules, ormustachoice bemade
already atthetimeofopening oftheinvestigation? Howisachoice made between bothtypes of
measures?
A1.3 Investigationsforimportrestrictionsandtariffincreasesassafeguardmeasureshavetobeinitiated
andconcluded jointly andcollectively, andthefindings oftheinvestigations shallbeprocessed inthe
same manner.
When, asaresult oftheinvestigations, safeguard measures areconsidered necessary tobe
taken, either animport restriction measure oratariffmeasure ischosen bytheconsensus oftheMinistry
ofFinance, theMinistry ofInternational Trade andIndustry andtheMinistry having jurisdiction over
theproduct concerned.
2. Substantive conditions forsafeguard action
Q2.1 Under Article 2(1)oftheSafeguard Agreement, asafeguard measure maybeapplied onlywhen
"aproduct isbeing imported insuchincreased quantities [...],andunder suchconditions astocause
orthreaten tocause serious injury [...]" (emphasis added). Where isthisimportant requirement
mentioned intheJapanese legislation? Does Japan consider thatthereference tothedecrease inthe
market price oftheproduct under investigation inanyforeign market (Article 2oftheRegulations to
govern emergency measures tobetaken inresponse toanincrease intheimportation ofgoods, Article 9
oftheCustoms Tariff Law) complies withArticle 2(1)oftheSafeguard Agreement?
A2.1 Weunderstand thattheincreased imports caused byunforeseen price decrease isoneofthe
typical examples oftheconditions which could cause orthreaten tocause serious injury.
Q2.2 Article4(2)(a)oftheSafeguardAgreementlistsrelevantfactorshavingabearingonthesituation
ofthedomestic industry (market share, production, ...). Where arethose factors mentioned inthe
Japanese legislation? Onthebasisofwhich precise factors mayasafeguard measure beadopted under
Japanese law?
A2.2 Suchfactors arenotprovided inthedomestic legislation. However, wewillevaluate allthe
factors listed inArticle 4.2(a) oftheAgreement onSafeguards, when wedetermine theserious injury
orthreat thereof.
Q2.3 Article 4(1)(b) oftheSafeguard Agreement defines theconcept of"threat ofinjury". Howis
thisdefinition implemented intheJapanese legislation?
A2.3 Thisisnotdefined inthedomestic legislation. However, weinterpret "threat ofserious injury"
based ontheAgreement onSafeguards.
Q2.4 TheJapanese legislation doesnotappear tocontain aspecific provision onthecausal link.
Inparticular, theimpact offactors other thanincreased imports (Article 4(2)(b) oftheSafeguard
Agreement) isnotmentioned.
A2.4 Article 2ofthe"Regulations toGovern Emergency Measures tobeTaken inResponse toan
Increase intheImportation ofGoods" andArticle 9.1ofthe"Customs Tariff Law" require causal
linkbetween increased imports oftheproduct concerned andserious injury orthreat thereof.
When factors other thanincreased imports arecausing injury tothedomestic industry atthe
same time, suchinjury shallnotbeattributed toincreased imports.G/SG/Q1/JPN/3
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Q2.5 What isthemeaning oftheexpression "necessary forthenational economy" mentioned in
Article 2oftheRegulations togovern emergency measures andArticle 9-1oftheCustoms Tariff Law?
A2.5 The"necessity forthenational economy" istheadditional requirements fortheinvocation of
safeguard measures. Safeguard measures cannot betaken unless "itisurgently necessary forthenational
economy".
Theexistence ofsuchnecessity isdetermined withdueaccount being taken oftheeffects which
possible safeguard measures mayhaveonusers, sellers andconsumers oftheproduct concerned, on
international relationship, onstructural adjustment planintheindustry concerned, andonemployment
inaspecific region, etc.
3. Procedure
Q3.1 Article 2infineoftheRegulations togovern emergency measures refers toArticle 3(1)ofthe
ImportTradeControlOrder.Underthelatterprovision,theMinisterofInternationalTradeandIndustry
mayfindappropriate nottopublish certain import restrictions. Howcanthisprovision bereconciled
withthetransparency requirement oftheSafeguard Agreement?
A3.1 Inthecaseofimport quotas forsafeguard measures, Article 17oftheRegulations isapplied.
Article 17oftheRegulations requires theMinister ofInternational Trade andIndustry togive, inthe
Official Gazette, public notification withregard tohis/her decision ontheEmergency-Import-Quota-
related matters.
Q3.2 Whocanfileacomplaint forasafeguard action?
A3.2 Theoneswhohavelegitimate interests against specific safeguard measures mayrequest judicial
review.
Thisisthematter tobedecided byacourt pursuant totheadministrative disputes legislation.
Q3.3 Dotherepresentatives ofanexporting country haveaccess totheevidence collected during
theinvestigation? Dotheyhavethestatus of"interested party" forthepurpose oftheprocedure?
A3.3 Wedonotbelieve thattherepresentatives ofanexporting country havethestatus of"interested
party".
Q3.4 Under Article 12(6) oftheRegulations togovern emergency measures andArticle 4(6)ofthe
Cabinet Order relating toemergency duties, theinvestigating authority maydisregard confidential
information when nonon-confidential summary hasbeensubmitted norastatement setting forthwhy
asummary isnotpossible. Under Article 3(2)oftheSafeguard Agreement, suchconfidential information
musthowever beaccepted when itcanbedemonstrated fromappropriate sources thattheinformation
iscorrect.
A3.4 Weaccept suchconfidential evidence inaccordance withArticle 3.1oftheAgreement on
Safeguards. Thearticles concerned ofthe"Regulations" andthe"Order" onlystatethat"theMinisters
may(N.B. not"shall") disregard suchconfidential evidence". Therefore these articles donotconflict
withrequirements ofthisarticle oftheAgreement.
Q3.5 Under Article 13(2) oftheRegulations togovern emergency measures andArticle 5(2)ofthe
Cabinet Order relating toemergency duties, theright ofaccess tothefileismade conditional upon
awritten statement setting forththetitleoftheparticular itemoritems oftheavailable evidence whichG/SG/Q1/JPN/3
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theinterested party wishes toinspect. Howcananinterested party know which items areincluded
intheavailable evidence? Howisafulldisclosure ofthefileorganized inpractice bytheinvestigating
authority?
A3.5 Wenotify thetitle(s) oftheitem(s) toaninterested party upon itsenquiry. Theinterested
party mayinspect theevidence withawritten request describing thetitle(s) oftheitem(s).
4. Measures
Q4.1 Under Article 7(1)oftheSafeguard Agreement, asafeguard measure maybeapplied onlyfor
suchperiod oftimeasmaybenecessary toprevent orremedy serious injury andtofacilitate adjustment.
Howisthisrequirement oftheSafeguard Agreement implemented intheJapanese legislation?
A4.1 Weabide bytherequirements intheprovisions oftheAgreement onSafeguards. Thenon-
existence oftherelevant provision doesnotmean thattheadministrative authority disregards such
requirements.
Q4.2 Under Article 5(1)oftheRegulations togovern emergency measures, thelevelofanimport
quota maybedifferent fromtheaverage ofthelastthree years ifsuchisrequired forthepurposes
of"sustaining thenational economy". Under Article 5(1)oftheSafeguard Agreement, suchadeviation
isonlyauthorized when necessary "toprevent orremedy serious injury". Howcanthisdifference be
explained?
A4.2 Weinterpret "sustaining thenational economy" ashaving thesamemeaning as"when necessary
toprevent orremedy serious injury".
Q4.3 InArticle 5(5)oftheRegulations togovern emergency measures, noreference ismade to
consultations under theauspices oftheWTO Committee onSafeguards.
A4.3 Inter-governmental obligations, suchasnotifications totheCommittee onSafeguards andprior
consultations withother WTO Members, provided forintheAgreement onSafeguards neednotbe
stipulated inthedomestic legislation. Ofcourse, without explicit provisions inthedomestic legislation,
theJapanese Government willnegotiate under theauspices oftheCommittee onSafeguards based on
theAgreement.
Q4.4 Under Article 9-1(1) oftheCustoms Tariff Law, asafeguard measure onaproduct cantake
theformofanadditional duty"inanamount equal toorlessthantheamount corresponding tothe
difference between thecustoms value ofthesaidproduct andthewholesale price inJapan oflikeor
similar product". Howcansuchanamount bedeemed tobealways appropriate inthelightofthe
Safeguard Agreement?
A4.4 Themeasures tobetaken under subparagraph 1ofParagraph 1ofArticle 9oftheCustoms
Tariff Lawarenotmeasures taken under theAgreement onSafeguards. Under thissubparagraph,
theauthority mayincrease itsstatutory tariff rateeither within bound rateorwhen noconcession is
granted bytheWTO Agreement.
Safeguard measures which raisetariff ratesinexcess ofthebound rateswillbetaken under
subparagraph 2ofParagraph 1ofArticle 9oftheCustoms Tariff Law.
Q4.5 InArticle 6oftheRegulations togovern emergency measures andArticle 9-1oftheCustoms
Tariff Law, areference ismade todeveloping countries whose shares ofimports oftheproduct under
investigation are"small". Whyhasthe3-9percentlimitofArticle 9(1)oftheSafeguard AgreementG/SG/Q1/JPN/3
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notbeenimplemented intheJapanese legislation? Whyisthere norequirement forthedeveloping
country tobeamember oftheWTO intheRegulations togovern emergency measures?
A4.5 BothArticle 6ofthe"regulations" andArticle 9.1ofthe"Customs Tariff Law" donotconflict
withArticle 9.1oftheAgreement, andwewillinterpret "thetreatment fordeveloping country members"
inaccordance withtheAgreement onSafeguards. Asforthe"Regulations", Article 6provides for
thespecial treatment ofthedeveloping country Members oftheWTO. Ournotification inadvertently
omitted thewords "Member(s) oftheWTO" (seeG/SG/N/1/JPN/2/Corr.1).
Q4.6 Under Article 9-1(8) oftheCustoms Tariff Law,provisional safeguard measures maybetaken
when "itisdeemed urgently necessary intheinterest ofthenational economy". Howcanthisprovision
bereconciled withArticle 6(1)oftheSafeguard Agreement, which requires "critical circumstances
where delay would cause damage which itwould bedifficult torepair"?
A4.6 Weinterpret "thecasewhere itisdeemed particularly andurgently necessary intheinterest
ofthenational economy" referred toinparagraph 8ofArticle 9oftheCustoms Tariff Lawashaving
thesame meaning as"thecritical circumstances where itwould bedifficult torepair" referred toin
Paragraph 1ofArticle 6oftheAgreement onSafeguards.