Date: Tue, 04 May 1999 13:50 -0400 From: The White House <Publications-Admin at Pub.Pub.WhiteHouse.Gov> Subject: 1999-05-03 Fact Sheet on US-Japan on Deregulation and Competition
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THE WHITE HOUSE
Office of the Press Secretary ________________________________________________________________________ For Immediate Release May 3, 1999
FACT SHEET
U.S.-Japan Enhanced Initiative on Deregulation and Competition Policy
Today, President Clinton and Prime Minster Obuchi of Japan unveiled new measures under the U.S.-Japan Enhanced Initiative on Deregulation and Competition Policy. Launched in June 1997, this initiative created a bilateral process to address regulatory and anti-competitive barriers for both foreign and domestic firms in Japan. Since then, both the United States and Japan have agreed on new measures to substantially deregulate Japan's telecommunications, housing, medical devices, pharmaceuticals, distribution, financial services and energy sectors. The two sides have also agreed to address competition policy and transparency issues.
The Enhanced Initiative is an important component of the Clinton Administration's strategy to further open the Japanese market, and is designed to complement on-going bilateral enforcement efforts with respect to such issues as steel, insurance, flat glass, automobiles, and government procurement. It also reinforces our effort to reduce Japanese trade barriers through the World Trade Organization and Asia Pacific Economic Cooperation forum.
New deregulation commitments announced today include the following key measures:
Telecommunications
Japan has committed to specific new measures to more effectively introduce competition into its $130 billion telecommunications sector by:
Ensuring that interconnection rates -- the rates charged competitors of
NTT to access the majority of Japanese customers -- are set below
retail rates; Defining measures that will make NTT DoCoMo's (cellular service
provider) interconnection rates are more fairly priced by being
purely based on costs; Providing a new interconnection "clearinghouse" for new entrants in the
Japanese market which will dramatically speed market entry; Permitting and developing detailed terms and conditions that will allow
carriers to enter into flexible network arrangements, thus allowing
businesses to build out their networks more rapidly and efficiently; Improving methods to ensure that new entrants have fair and
non-discriminatory access through interconnection arrangements,
including access to international cable landing stations; and Opening-up Cable TV to one hundred percent foreign investment.
Housing
Currently, U.S. manufacturers supply only $1.5 billion of Japan's $42 billion residential building materials industry. New commitments by Japan under the Initiative should create new opportunities for American businesses by:
Accelerating the introduction of performance-based standards for
three-story, multi-family wood housing in urban residential areas
from Japan Fiscal Year 2000 to May 1, 1999; Adopting open public comment procedures in the formulation and
implementation of revisions to Japan's Building Standards Law; Working cooperatively to build acceptance of U.S.-style building
materials and methods in Japan through a series of jointly sponsored
seminars; and Ensuring that imported building materials are not discriminated against
from use in any of its government housing programs
Medical Devices and Pharmaceuticals
Japan has pledged to inaugurate new competition in the areas of medical devices and pharmaceuticals by:
Agreeing to recognize the role of the market, as well as the value of
innovation, as it continues to study pharmaceutical pricing reform;
Assuring that the U.S. pharmaceutical industry will have meaningful
input into Japan's reform process;
Creating new approval processes for pharmaceuticals and expanding these
procedures to cover medical devices;
Improving the transparency of its medical device reimbursement system by
issuing requirements in writing and allowing firms to engage in
pre-filing consultations with Japanese regulators; and
Promoting the liberalization of nutritional supplements by treating such
products as foods for regulatory purposes.
Financial Services
New commitments announced today by the Japanese government will expand opportunities for international financial service providers to reach customers in Japan by:
Liberalizing use of securities derivatives; Easing the registration process for new securities companies; Promoting a more vigorous asset-backed securities market; Sharply expanding the scope of financial activities and products allowed
to banks and securities firms, including mutual fund products; Introducing stock options; Fully liberalizing brokerage commissions; Substantially widening the scope of activities allowed to banks and bank
subsidiaries; Allowing investment advisory companies to grant discretionary authority
to other fund managers; Simplifying the transfer of assets between fund managers; and Strengthening accounting and disclosure rules, including a switch to
consolidated accounting.
Energy
Japan has agreed to take the following steps to deregulate its energy sector:
Amending its Electric Utility Industry Law to shift from a permit and
approval system to a notification system for construction or
upgrading of all power generating facilities; Simplifying regulations and launching work to harmonize various Japanese
standards with international standards for energy-related equipment,
such as turbines, compressors, and standby generator sets; Working toward the harmonization of its standards regarding self-serve
gas pumps with international standards and to make other related
regulatory changes; and Easing the costly and time-consuming process required to obtain approval
for installing self-service gasoline pumps.
Distribution
Japan's new commitments to address distribution issues and bottle-necks entail:
Establishing nationally applicable guidelines regarding environmental
factors, such as traffic and noise, for use by large-scale retail
store operators;
Expediting customs clearance processing, and completing a study on
linking the Customs Administrations' and Transportation Ministry's
computer systems, while supporting multilateral efforts to promote
the use of harmonized, simplified and streamlined cargo processing
systems; and
Introducing a maritime container cargo system to expedite the clearance
of goods arriving by ship.
Competition Policy
In the area of competition policy, Japan has committed to increased deregulation and new market reforms, including:
Launching proactive steps under competition policy advocacy by creating
a model Antimonopoly Act Compliance Program for private firms; Using various means, including public hearings, to actively expand
public involvement and address deregulation and competition policy
issues; Reviewing business entry regulations and "supply/demand adjustment"
regulations and, where appropriate, propose removing such
regulations; Reviewing competition-restricting regulations on the central and local
government level and, in appropriate cases, propose abolishing or
revising such regulations; Actively filing criminal accusations with the Prosecutor's Office in
anticartel cases; and Amending its Bidding Instructions to make clear that firms bidding on
public works contracts cannot consult with competitors about prices
in bidding on public works projects.
Transparency
With respect to transparency and other government practices, Japan has committed to:
Creating formal Public Comment Procedures for Formulating, Amending or
Repealing Regulations (a cornerstone of the U.S. regulatory system
for more than 50 years); Advancing legislation to establish an Information Disclosure Act; and Reduced the standard processing period for the issuance of licenses,
permits and approvals; Providing for use of fair methodologies in
local government procurement
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