1999-05-03 Fact Sheet on US-Japan on Deregulation and Competition Policy (fwd)

[Robert Weissman <rob@essential.org>]

                            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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