Comments and Questions from China
30 October 2002
China welcomes this sixth Trade Policy Review of Japan by the WTO and its members. As Japan’s second largest trading partner and one of the primary destinations of Japanese products, services and investment, China has always been attaching great importance to Sino-Japan trade relations, and strengthening of the communications and contacts between our two countries in the multilateral trading system is certainly one significant part of it. China believes that through this review process, Japan would understand better China’s concerns over the direction in which the trade policy of Japan is evolving, and also China’s concerns regarding some of the specific issues in our bilateral trade relations at this stage. At the mean time, China would like to seek some clarifications regarding some aspects of Japan’s trade regime. It is our hope that this exchange of views will contribute to satisfactory solutions to some of the problems and further promotion of the trade relations between our two countries.
Apart from that, please note that the comments and questions presented here are not exhaustive and may be supplemented with follow-up questions and comments.
I. Inspection and quarantine measures and technical regulations
China notes that there has been increasing and frequent use of TBT and SPS measures by Japan in recent years. Recognizing that Japan has the legitimate right to apply these measures on a reasonable and necessary ground, as is stated in the SPS and TBT Agreements, however, China has to express its great concerns when looking at the justifications of many of these measures and their severe negative impact on trade. At this moment, the negative effects from this kind of measures on export of Chinese agricultural products are what we are most concerned.
1. On 31 July 2002, the revised Food Sanitation Law was adopted in Japan, and after that, the Ministry of Health adopted the Guideline for Implementing the Revised Food Sanitation Law. According to these legislation, import of a food product shall all be prohibited if 5% or more of the inspected commodities fail to conform to relevant standards of Japan.
- Article 7, Annex A and B of the SPS Agreement states that if “the content of a proposed sanitary or phytosanitary regulation is not substantially the same as the content of an international standard, guideline or recommendation, and if the regulation may have a significant effect on trade of other Members”, Members shall notify the regulation “at an early stage, when amendments can still be introduced and comments taken into account”. China deeply regrets that Japan didn't fulfil its obligation in this case and would like to request Japan to provide justifications.
- As stated in Article 10.2, paragraph 2 of Annex B of the SPS Agreement and the Decision on Implementation-Related Issues and Concerns at the Doha Ministerial Conference, a period of no less than six months for compliance shall be accorded between publishing and implementing a SPS measure on products of interest to developing members, so as to maintain opportunities for their exports. China takes the view that the revision of Food Sanitation Law wasn't an urgent case and would therefore like to know how Japan is going to fulfil this obligation. In view of the tremendous potential impact of this revision to Food Sanitation Law on exports of China and many other developing members, China would like to request that a period of 12 months for compliance be provided for all the developing members.
- The revised Food Sanitation Law replaces the case by case treatment concerning food sanitation with an overall prohibition of all imports on single finding of inconformity. Please explain how this revision conforms to Article
2.2, 3.1, 5.1 and 5.4 of the SPS Agreement.
- The Guideline for Implementing the Revised Food Sanitation Law by the Ministry of Health sets forth conditions for application of prohibition on import of food products, items to be inspected, criteria for judgment as to whether the prohibition should be invoked, procedures to invoke and lift the prohibition, etc., but does not state clearly the time frame for lifting the prohibition. Please provide the time frame for lifting the prohibition.
2. On question concerning Pesticide Residue Level, Japan requests that the Chiorpyifos Residue Level of spinach imported from China shall be maintained under 0.01ppm, which is far stricter than relevant international standard as well as that of US and EU. Meanwhile, Japan permits a 300 times looser level of 3ppm for radish, which is widely planted and consumed in the country, and 1ppm for cabbage and 0.5ppm for tomato. China views that such a difference is not justifiable.
- Please explain whether such a difference is in conformity with the national treatment principle.
- Please explain whether such a requirement as Chiorpyifos Residue Level is consistent with the provisions set forth in Article 2.2, 3.1, 5.4 and 5.6 of the SPS Agreement, as well as the relevant international standards and guidelines.
- The competent authorities in China would like to request that Japan provide test reports and other related scientific evidences for proposing Chiorpyifos Residue Level, and explain whether there is evidence, if any, to justify that the existing international standard is insufficient to achieve the expected protection level.
3. The Ministry of Agriculture, Forestry and Fishing (MAFF) of Japan instructed that since 1 April 2001, quarantine institutions at the Customs and airports where fresh vegetable is imported shall set a quantitative limit on the maximum inspections they deal with per day, and those applications beyond the set limit shall be postponed. China believes that such a measure has dramatically increased the cost and risk of exporters, and constitutes disguised restriction on trade.
- Please provide justifications for consistency of such a measure with Article 2.2 and 2.3 of the SPS Agreement.
- When the workload of some inspection institutions increases, to avoid inspections being postponed, it is the normal international practice that inspection staff shall be transferred from other institutions. That was also the practice in Japan before the MAFF’s instruction. China would like to request that Japan change its current practice so as to eliminate the restrictive effects to trade.
4. On 11 April 2002, Japan suspended import of straw from China due to the inspection result discovering in two containers shipped to Japan the living grubs of striped rice borer, which is also widely found in Japanese rice stalks. Direct loss resulted from this suspension is USD 4 million around per month. The Chinese enterprises affected took effective measures promptly to make improvement and relevant investigation results have been available for quite some time. However, China hasn’t received an explicit timing for lifting the suspension yet.
- China believes that this is not in line with the principle of minimum negative effect of SPS measures on trade and therefore would like to request an explicit time frame for lifting of the suspension.
5. In Japan, it is illegal to use food additives not approved by the Japanese government, and the production and sale of such food is prohibited, according to Article 6 of the Food Sanitation Law of Japan.
- Please explain the procedures for approving food additives. How long does each step take? What are the charges or fees involved?
- Is Japan considering approving those additives that have been prevalently used internationally or have been assessed by relevant international organizations to be safe? Will the approving procedures be simplified and the time for approval shortened?
6. China is deeply concerned with those inspection measures that exceed the necessary level on Chinese products like eel, poultry meat, vegetable and etc. For example, Japan requires examinations on 11 antibiotics with eel. But some of these antibiotics have never been used for eel. Restrictive technical measures applied by Japan are raising concerns among Members, and have affected Members’ export to Japan, especially the agricultural products. Statistics show that from January to July this year the export volume of live eel to Japan dropped by 23% in comparison with the same period last year, and that of frozen chicken by 41%,fresh vegetable by 20%. China therefore would like to request that Japan re-examine the rational of these inspection and quarantine measures, abide by the multilateral principles set forth in provisions relevant to inspection, quarantine and technical regulations, and take effective measures to eliminate the negative effect of these measures on trade so as to facilitate a healthy development of bilateral economic and trade relations. China will follow closely future development in this regard and keep contact with Japan through both bilateral and multilateral channels.
7. On 2 August, 2002, the Ministry of Health prohibited the use of DEHP and DINP in the packaging materials for toys and utensils by its No.267 Decree. Though the related enterprises in China have already started using environmental-friendly and non-polluting materials for the toy production, it’s our view that, the arbitrary initiation of the long-term import bar against toys containing DEHP or EINP is not consistent with WTO principle and may have negative effects on the trade with China.
II. Safeguard measures
On 16 April 2001, the Ministry of Economy, Trade and Industry and Ministry of Finance of Japan launched a safeguard investigation against towels of HS lines of 5802.110, 5802.19, 6301.30-090, 6302.60, and the investigation period has been extended three times on 16 October 2001 and 16 April 2002.
- Japan requested that China maintain the export to be “at least lower than the current level”, which is, in China’s view, inconformable with the increase level provided in Article 6.13 of the Agreement on Textiles and Clothing. China would like to request Japan’s explanation in this regard.
- The government of China believes that the initiation and repeated extensions of the investigation were based on inadequate evidence, and has created barriers against the normal bilateral trade in towels. We hope that Japan can provide reasons for initiation of these measures and the three extensions, and in the same vein, take immediate actions to eliminate the WTO inconsistent measures.
III. Trade in services
1. Foreign shipping companies are only permitted to rent wharves in Japan, rather than providing services of loading and unloading. However, Japan’s Law of Port and Shipping doesn’t have any restrictions on the nationality of service suppliers.
- Please explain the legal basis for the restriction that foreign shipping companies are unable to provide loading and unloading services at the Japanese ports.
- In view of the ongoing round of the services negotiations, does Japan plan to open the operation of wharves to foreign services suppliers, with loading and unloading services including?
2. It is noted that the Japanese government permits freight-forwarding agency companies of other WTO Members to issue their own B/L. However, principle of reciprocity is applied to 100% Chinese-invested freight-forwarding agency companies, that is, Japan will not permit these Chinese companies to issue their own B/L unless China approves certain Japanese companies in China to issue relevant B/L.
- Please confirm whether the situation mentioned above is true and provide related detailed background information.
IV、State trading
It is said that Japan imports rice in two ways, namely, general import and SBS.
- Please provide detailed background information regarding how these two ways of import operate in practice.
- After importation, how is the rice imported by way of SBS priced for domestic sale?
- In both of the two SBS bidding invitations this year, the amount of winning are lower than that of offering. Furthermore, in the second bidding invitation, even the amount of bidding is lower than that of offering. Please explain why this situation happened.
- Please provide a list of all the products which are subject to state trading in Japan.
____________



