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An extract from The International Trade Law Review, 8th Edition

Historically, the Japanese government has not been very active in initiating trade remedy investigations or imposing trade remedy measures on imports from other countries.

To date, the Japanese government has conducted only eight anti-dumping investigations. As of June 2022, there are duties being imposed on six types of goods. Specifically, anti-dumping duties are being imposed on: (i) potassium carbonate from South Korea; (ii) tris(chloropropyl) phosphate from China; (iii) carbon steel butt-welding pipe fittings from South Korea and China; (iv) polyethylene terephthalate having a high polymerisation degree imported from China; (v) potassium hydroxide from South Korea and China; and (vi) electrolytic manganese dioxide from China. Moreover, two additional cases are being investigated. One of those investigations relates to galvanised iron wires imported from China and South Korea and is planned to be completed by 13 December 2022, following the extension of the period of investigation by six months as boron-added galvanised iron wires were added to the scope of investigation. The other investigation aims to assess whether to extend the period of duties currently imposed on polyethylene terephthalate imported from China (item (iv) above), which will expire on 27 December 2022.

Countervailing duties have been imposed only in one case in the past, namely on dynamic random-access memory (DRAM) imported from South Korea. Those duties expired in April 2009. Similarly, only one investigation for safeguard duties was conducted in the past, which pertained to leeks, raw shiitake mushrooms, and tatami surface matting. This investigation did not result in the final imposition of any duties.

Besides trade remedy measures, Japan has been recently introducing a wide range of economic sanctions against Russia under the Foreign Exchange and Foreign Trade Act, in response to Russia's military action against Ukraine since February 2022. Those sanctions have been adopted and implemented in close cooperation with the United States, the European Union and other like-minded countries and are the most extensive economic sanctions ever imposed by Japan. The measures include (among others): a ban on exports of luxury goods and list-controlled and other items; a ban on imports of alcohol, timber and other items; asset freezes; and the suspension of MFN treatment.

The main domestic legislation regarding trade remedies includes the following law and three orders:

In addition, there are guidelines for trade remedy proceedings published by the Ministry of Economy, Trade and Industry (METI) (in Japanese).

The Customs Tariff Act, related cabinet orders, and other applicable regulations generally reflect the relevant provisions of the WTO agreements, including Article VI of the GATT 1994, the Anti-dumping Agreement, the Agreement on Subsidies and Countervailing Measures, and the Agreement on Safeguards. As such, trade remedy legislation in Japan is largely based on these agreements.

With regard to the authorities in charge of trade remedy proceedings, anti-dumping, countervailing, and safeguard duties (emergency duties) are imposed by the METI in accordance with the Foreign Exchange and Foreign Trade Act, relevant cabinet orders and relevant ministry notices. Investigations are conducted jointly by the MOF, the METI and other government ministries in charge of the industries concerned.

Proceedings for determining anti-dumping or countervailing duties may be initiated by those who have interests in Japanese industries (domestic producers or organisations of producers of particular goods that produce at least 25 per cent of the total domestic production of those goods, or labour unions that account for 25 per cent or more of the total number of workers engaging in the production of those goods in Japan) by requesting the Minister of Finance to impose those duties. Proceedings may also be initiated by the decision of authorities who are vested with the power to initiate investigations of trade remedies under the Customs Tariff Act.

In order to make a request to initiate an investigation, the petitioner must submit a document stating the necessary information provided in the cabinet orders, accompanied by sufficient evidence of imports of dumped or subsidised goods and of material injury to the Japanese industries caused by such imports, pursuant to Article 7, Paragraph 1 of the Cabinet Order on Anti-dumping Duties and Article 4, Paragraph 1 of the Cabinet Order on Countervailing Duties.

Once a request is made or there is sufficient evidence, the authorities will begin an investigation of the facts regarding dumped or subsidised imports and material injury caused thereby.

Although there is no statutory system that allows domestic industries to request safeguard duties or quotas, any of the interested parties prescribed under either Article 12, Paragraph 1 of the Regulations on Emergency Measures for Increased Imports or Article 4, Paragraph 1 of the Cabinet Order on Emergency Duties may submit evidence or give testimony with respect to the facts regarding increased imports of particular goods and serious injury caused to Japanese industries, following the initiation of an investigation.

According to the guidelines on anti-dumping and countervailing duties, the authorities will determine whether to initiate an investigation usually within about two months from submission of the application. The investigation of anti-dumping, countervailing, or safeguard duties or quotas will normally be completed within one year after commencement pursuant to the Customs Tariff Act and the Regulations on Emergency Measures for Increased Imports, with the final determination of anti-dumping/countervailing duties or safeguard measures normally being provided within the same period.

The interested parties may submit evidence and give testimony regarding dumped, subsidised, or increased imports and material injury (or serious injury in terms of safeguard duties) to the Japanese industries affected by the imports and make written representations of their opinions regarding the investigation within the time limit specified by the authorities, after the initiation of the investigation is announced. With regard to the time limit, the relevant guidelines on anti-dumping and countervailing duties state that the parties are normally required to submit evidence and an opinion within three and four months, respectively, after the commencement of the investigation.

Japan has been a member of the GATT 1947 since 1955 and a member of the World Trade Organization (WTO) since January 1995. As a major trading country, Japan has benefited from the multilateral trading system that it has been an avid supporter of up until now.

However, as rule negotiations at the WTO reached a de facto deadlock, Japan shifted the focus of its efforts for trade liberalisation away from the multilateral trade organisation in favour of economic partnership agreements (EPAs; also referred to as free or regional trade agreements). After Japan concluded its first EPA with Singapore in 2002, it has eagerly negotiated more EPAs with numerous other countries, and as of January 2022, Japan has concluded 20 bilateral and plurilateral EPAs. The most significant recent developments include the following.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), also known as TPP 11, was signed among 11 countries (i.e., Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam) in March 2018 and entered into force in December 2018. The agreement accounts for approximately 13 per cent of global GDP. It evolved from the Trans-Pacific Partnership (the original TPP), which was signed among 12 countries (the 11 countries of the CPTPP plus the United States) in 2016 but never came into force due to the United States' withdrawal the following year.

After the United States' withdrawal from the original TPP in 2017, the Trade Agreement between Japan and the United States (the Japan–US Trade Agreement) and the Agreement between Japan and the United States Concerning Digital Trade (the Japan–US Digital Trade Agreement) were signed in October 2019 and entered into force in January 2020.

The Japan–US Trade Agreement eliminates or reduces tariffs on agricultural and industrial products in order to expand bilateral trade between the two countries, which together account for approximately 30 per cent of the world's GDP. Specifically, the agreement stipulates that the United States will eliminate or reduce tariffs mainly on industrial products and Japan will do the same on certain agricultural products and processed foods.

Meanwhile, the Japan–US Digital Trade Agreement provides rules to strengthen economic ties regarding digital trade and to promote smooth, reliable, and free digital trade between the two countries. In addition to provisions similar to those in the original TPP, this agreement includes new elements that further strengthen TPP rules, such as the prohibition of disclosure requirements for algorithms and ciphers, as well as provisions regarding civil liability for service providers such as social networking services.

In February 2019, the Agreement between the European Union and Japan for an Economic Partnership (the Japan–EU EPA) came into force. The European Union is one of Japan's largest trade partners, and the Japan–EU EPA accounts for approximately a quarter of global GDP and one-third of world trade.

In addition, after the United Kingdom's withdrawal from the European Union in January 2020, the Japan–UK Comprehensive Economic Partnership Agreement was signed in October that year and came into force in January 2021. The agreement is aimed at maintaining access to the UK market as previously enjoyed under the Japan–EU EPA and guaranteeing improved access for certain items such as rolling stock and auto parts. In addition, the agreement provides more advanced rules in some areas than the Japan–EU EPA does, such as in e-commerce and financial services.

In January 2022, the Regional Comprehensive Economic Partnership (RCEP) came into force. It is the world's largest EPA and was concluded among 15 Asia-Pacific nations (i.e., Australia, Brunei, Cambodia, China, Indonesia, Japan, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, South Korea, Thailand, and Vietnam). These countries account for approximately 30 per cent of the world's population and global GDP. The RCEP improves market access and introduces new rules in various areas, including intellectual property and e-commerce, across a diverse group of countries at different stages of development. The partnership is Japan's first EPA with China and South Korea and is expected to have a significant impact on trade among the three countries.

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