366. Airgram From the Embassy in Japan to the Department of State 0

A-827

SUBJECT

  • Japan’s Import Liberalization: Further Steps

With the removal of import quota restrictions on 230 items on October 1, 1962, the Government of Japan came within two percentage points of the 90% liberalization target which it had committed itself to attain by that date. A further slight gain was registered on November 21, with the liberalization of an additional eight items. Since the 68% liberalization level at the time of the first meeting of the US-Japan Committee on Economics and Trade in November 1961, successive transfers from the restrictive Fund Allocation System have shifted some 728 items to the Automatic Fund Allocation System or to the Automatic Approval list. Two hundred and fifty-four (254) items remain unliberalized.

Despite the substantial progress indicated above, Japan still maintains a greater degree of import restrictions than any other major trading nation in the Free World. The measure of liberalization employed by the Government of Japan, through the bias of a weighting system based on [Page 764] 1959 imports, seriously understates the proportion of import trade still subject to quota restrictions. A somewhat more realistic measure of the relative importance of the restricted sector of imports is given by the proportion of the most recent commodity import budget under the Fund Allocation System. For the period October 1, 1962—March 31, 1963, 26% of the commodity import budget falls under FA control.

Although Japan has made some progress in the liberalization of manufactured goods, many of the manufactured items which offer the greatest possibilities to American exporters remain on the Negative List. In some of these cases, import license can often be obtained fairly readily, but in others licenses are not obtainable at all or only with much difficulty. It is obvious that in general the remaining controls offer a substantial impediment to American exports.1

[Here follows a detailed description of the degree of import restriction on items on which the Embassy had previously made representations, together with suggestions for future representations.]

For the Ambassador:
A.Z. Gardiner

Minister for Economic Affairs
  1. Source: Department of State, Central Files, 494.0012/12-2862. Official Use Only. Drafted by Andrew B. Wardlaw, Commercial Attache; Millard L. Gallop, Commercial Officer; and Clyde R. Keaton, an attache in the Agricultural Section.
  2. Among the items listed in the portion of the airgram not printed as being still subject to heavy quotas and other import restrictions were bulldozers; turbines, compressors and some other heavy machinery items; digital computers, typewriters and electric cash registers; color film; antibiotics and most insulins; automobiles; industrial and chemical testing equipment; private aircraft; and a wide variety of agricultural products such as fresh lemons, hog and cattle breeding stock, nonfat dry milk, and fruit juices.