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| 6th Report of Market Access Ombudsman Council (March 16, 2000) |
1. Complainant: Korean Embassy
2. Ministry concerned: Ministry of Agriculture, Forestry and Fisheries, Ministry of International Trade and Industry
3. Complaint:
At working level meetings on trade in fishery products between Japan and the Republic of Korea held in 1998, it was agreed to end the Japan Laver Importers Association's monopolistic import system and to change to a quota-based import system.
Though, under the new import system for laver, two-thirds of the quota is allocated to users, since eligibility for application is restricted to the Laver Association, this does nothing to amend the Laver Association's monopoly on imports and constitutes a de facto limitation on imports. In addition, the import ratio of dried laver to seasond laver is fixed (in 1999, the ratio was 80% for dried laver and 20% for flavored laver).
Accordingly, importers and exporters in the two countries should be allowed to conduct transactions freely within the scope of the import quota.
Further, qualifications for application under the first-came first-served quota established in FY1998 require applicants to have done import business valued at $100,000 or more. This requirement should be relaxed.
Additionally, the Ministry of International Trade and Industry makes a public announcement of laver imports in February each year, but this should take place in December each year, in order that exporters in the Republic of Korea make prior preparations for product export volume in December, the laver havest season.
4. Corresponding Policy of the Ministries concerned:
(1) Laver being one of the main products of coastal fisheries in Japan, it is subject to import quotas, to prevent unrestricted imports of laver from giving a negative impact on the livelihood of fishery house hold.
(2) In response to a complaint by the Korean Embassy in 1997 concerning import procedures for laver, the matter was discussed at working level meetings on trade in fishery products between Japan and the Republic of Korea held in January and September 1998. Based on discussions at those meetings, the changes in import procedures described below were made in February 1999. At a further working level meeting in March 1999, the Republic of Korea expressed its thanks to Japan for having incorporated its requests in many of the changes made to the system.
1) Regarding the import quota volume (announced in February 1999), this was set at 69 million sheets (a 33% increase compared to the previous year's import volume), based comprehensively on previous import volume, increase in imports and on domestic conditions for accepting imports, in accordance with actual supply and demand trends in Japan's laver market.
2) The requirement that originals and copies of contracts for buying and selling imported laver be submitted to the ministries concerned was eliminated, and handling of imports solely through the Japan Laver Importers Association was abolished.
3) A first-come first-serve quota of 5 million sheets was established for parties wishing to enter the business, to allow transactions to take place freely, and from the viewpoint of respecting import performance, a quota of 18 million sheets was allocated to traders with an established record and a quota of 46 million sheets to the users.
(3) When the Republic of Korea has complaints regarding trade in fishery products between Japan and the Republic of Korea, the two countries have agreed to discuss these issues further at regular working level meetings on trade in fishery products held as they have been until now.
(For reference)
1) Traders quota with an established record: quota allocated to traders with a track record of importing Korean-produced laver
2) First-come first-served quota: quota allocated to traders wishing to enter the business for the first time
3) Users quota: in order to obtain a stable supply of Korean-produced laver for processing required by processors or laver distributors, a quota is allocated to the associations to which these parties belong. Associations which have been g allocated a quota order the quantities of laver they need from importers and after receiving it, distribute it to their members.
5. Remarks
On February 1, 2000 the Ministry of International Trade and Industry announced the following measures to improve the system, which the complainant accepted:
(1) the 1999 import quota of 69 million sheets has been increased to 120 million sheets (a year on year increase of 74%), and within this quota, the total volume for the demand side quota was reduced from 67% to 63%, while a five-fold increase was made in the quota on a first-come, first-served basis.
(2) the requirement that applicants for the first-come, first-served basis quota have done $100,000 or more import business has been eliminated.
(3) the timing of the ministry's announcement was moved up from the end of February to the beginning of February.