One of the most significant developments in the area of study of the GPC took place on December 7, 1979 when a "Joint Statement on Standards, Testing and Certification Activities" was issued by the governments of Japan and the United States. The complete text has been incorporated in Appendix B. The Joint Statement deals with the question of who may apply for approvals in the last sentence of section 3, which reads, "It is recognized that, for reasons of accountability (emphasis added), the importing country may require that, in place of a supplier in the exporting country, a representative in the importing country file the formal application. " While the GPC considers the several new procedures described above to be significant improvements, we are still hopeful that appropriate legislation to permit direct applications in accordance with the GPC's interpretation of the Standards Code can be enacted. In any case, the GPC will continue to study and monitor this problem, and will develop specific recommendations in the future. CUSTOMS MATTERS In addition to standards and testing, a third major area in which fore.gn exporters to Japan have encountered significant problems is customs valuation, classification and administration. The recently adopted GATT Code of Conduct includes 2 Code on Conduct of Customs Valuation, scheduled to go into force January 1, 1981. Its principle thrust is towards making the value for customs the same as the "transaction value," that is, the invoice cost plus relevant charges for freight and insurance. It should be noted that this Code will apply to customs valuation and not to other taxes such as commodity taxes on automobiles. The Code define relationships which might exist between the buyer and seller which could alter the invoiċe price. Further, it provides alternative methods for establishing the value in cases in which the buyer and seller are interrelated. It is hoped that implementation of the Customs Code in Japan will minimize application of "customs uplifts," which in past cases have caused the buyer to be uncertain as to the customs and commodity tax obligations involved. Customs classification is a second major problem area. Not only do ambiguities in terminology result in products being classified in categories with higher duties, they may also cause goods to be classified in categories subject to quotas. Vagueness in the administration of quotas has aroused strong feelings, and customs classification is regarded by foreigners as a serious non-tariff barrier (see the Processed Foods section of this report). Unfortunately, the new GATT Code of Conduct does not deal with customs classification. Customs administration is a third area of concern. There is no workable appeals procedure in practice in Japan. It would seem advisable to establish a Court of Customs Appeals in Japan such as exists in the United States. This court or similar body could be authorized to handle matters of customs classification as well as customs valuation (the Customs Valuation Code requires such a tribunal). Finally, efforts should also be exerted to minimize the number of ambiguities and "miscellaneous" listings in the Tariff Tables since miscellaneous categories are notorious for creating misunderstandings. RECOMMENDATIONS As indicated above, the GPC is aware that the Japanese and U.S. governments issued a Joint Statement on improving import procedures, including standards and testing procedures, on December 7, 1979 (see Appendix B for full text). We also understand that the governmentbusiness Manufactured Products Import Council on December 21, 1979 presented recommendations to the Japanese government for the improvement of the testing system for imported goods. We welcome these efforts made by the two governments and by private circles. Although some of the following recommendations may be similar to those already put forth by organizations outside of the TSG, because of their importance we have included them in our recommendations. 1. Invite foreign scholars, experts and representatives of interested parties to present their views to JISC and other official standardswriting bodies whose decisions may in any way affect foreign products in the Japanese market. Japanese standards must be continuously compared to similar foreign standards in order that the former may reflect international trends over time. The electrical appliances case provides an example of what can be done in other industries. 2. Publicly announce standards changes sufficiently in advance so that comments from all interested parties may be reflected in final standards. Work with JETRO, the U. S. Department of Commerce and ACCJ in ensuring that such notices get the widest possible dissemination among interested foreign parties. 3. Make JIS and JAS readily available to foreign manufacturers. To ensure availability of JIS and JAS as a practical matter, it will be necessary to develop a means of qualifying and periodically inspecting. foreign factories, or of relying on some official or private foreign organization for this purpose. .- 18 4. Provide a periodical publication containing up-to-date information about changes in laws, regulations and procedures affecting exporters to Japan, indexed in a manner readily understandable by foreigners. 5. Develop a system whereby foreign manufacturers will not be prevented from making a free choice of agents and importers because of the Japanese system of awarding product import approvals to importers only. 6. Permit use of foreign test results wherever possible. 7. Develop and implement a customs valuation system based on "transaction value" in accordance with the GATT Customs Code as soon as possible. 8. Create new customs classifications where necessary to cover newly developed foreign products. 9. Increase transparency of quota administration, particularly with respect to indicating actual quotas currently held by trading comparies and others. * 10. Revitalize the appeals system for customs matters. Mere existence of applicable laws and statutes is insufficient. The regulations must be accompanied by an open, impartial and quick-responding implementing system staffed by people with sufficient expertise to bring about practical and authoritative settlements. It may be worth considering the establishment of a Central Court of Customs Appeals within the judicial branch of the Japanese governSuch a court would have the authority to adjudicate matters of customs classification and valuation, and could be freely utilized by domestic and foreign firms alike. ment. 11. Create an advisory center to which foreign firms can go to seek information, advice and assistance with respect to any problem they may have concerning Japanese regulations, procedures or practices. 12. Expeditiously pass and implement the necessary legislation to comply with the new GATT Code agreed to as part of the MTN agreements. * Japanese authorities take the position that it is inappropriate to disclose quotas held by individual importers. This information is considered confidential information relating to the business concerned. The GATT and the Agreement on Import Licensing Procedures explicitly provide that such disclosure is not required. FUTURE PROGRAMS Aside from continuing to analyze specific problem areas such as those outlined above, and providing assistance to the various Products' task forces, the GPC regards the compilation and provision to all interested foreign parties of comprehensive and up-to-date information about existing Japanese laws, regulations and procedures as one of its most important future tasks. * In this regard, there is a crying need for reference sources, including written materials and a reference center, from which a potential exporter can learn about Japanese regulations and procedures affecting the marketability of his product in Japan. The written materials need not be so comprehensive as to provide all such regulations and procedures in detail, but should be sufficient to alert the manufacturer to conduct a more thorough investigation in certain specific areas prior to attempting market entry. The GPC believes that such reference sources would assist the Japanese government in complying with sections 10 and 11 of the Standards Code. We look forward to working with JETRO, appropriate officials of the Japanese government and other concerned parties in creating them. Financial resources for translation and printing are presently inadequate. The existence of "transparent standards" will accomplish little if American industry remains "blind" due to the language problem. |